EXHIBIT 99.5
EXECUTION COPY
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Administration Agreement
between
Education Funding Capital Trust-III
as Issuer
and
Education Lending Services, Inc.
as Administrator
dated as of October 1, 2003
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Administration Agreement (Trust)
Table of Contents
Page
Section 1. Definitions......................................................1
Section 2. Indenture and Related Documents..................................1
Section 3. Master Servicing Agreement.......................................3
Section 4. Transfer and Sale Agreements.....................................4
Section 5. Higher Education Act.............................................5
Section 6. Other Duties with Respect to the Indenture and Master
Servicing Agreement..............................................5
Section 7. Other Administrative Services....................................6
Section 8. Exceptions.......................................................7
Section 9. Employees; Offices...............................................7
Section 10. Non-Ministerial Matters..........................................7
Section 11. Compensation.....................................................8
Section 12. Representations and Warranties of the Issuer.....................8
Section 13. Representations and Warranties of the Administrator..............9
Section 14. Term............................................................10
Section 15. Obligation to Supply Information................................10
Section 16. Annual Statement as to Compliance...............................10
Section 17. Annual Independent Public Accountant's Report...................10
Section 18. Liability of Administrator......................................10
Section 19. Merger or Consolidation of, or Assumption of the Obligations
of, the Administrator...........................................12
Section 20. Administrator Default...........................................12
Section 21. Appointment of Successor........................................13
Section 22. Reliance on Information Obtained from Third Parties.............14
Section 23. Notices.........................................................14
Section 24. Amendment.......................................................15
Section 25. Assignment......................................................15
Section 26. Independence of Administrator...................................15
Section 27. No Joint Venture................................................15
Section 28. Other Activities of Administrator...............................15
Section 29. No Petition.....................................................16
Section 30. Governing Law...................................................16
Section 31. Entire Agreement................................................16
Section 32. Successors; Counterparts........................................16
Section 33. Third Party Beneficiaries.......................................16
Section 34. Captions........................................................16
Administration Agreement (Trust)
Administration Agreement
This Administration Agreement (this "Administration Agreement") is made as
of October 1, 2003 between Education Funding Capital Trust-III (the "Issuer")
and Education Lending Services, Inc., a Delaware corporation, as administrator
(the "Administrator") under the circumstances set forth below.
Recitals
A. The Issuer is engaged in the acquisition from the Depositor of
Financed Student Loans.
B. In connection with the acquisition of Student Loans, the Issuer has
executed and delivered that certain Indenture of Trust dated as of October 1,
2003 (the "Indenture") among the Issuer, Fifth Third Bank, as indenture trustee,
and Fifth Third Bank, as trust eligible lender trustee.
C. Pursuant to the Indenture and the other Basic Documents to which the
Issuer is a party (collectively, the "Issuer Documents"), the Issuer is
obligated to perform certain duties and responsibilities under the Indenture and
in connection with the assets and obligations thereunder.
D. The Issuer has requested that the Administrator provide advice and
assistance to the Issuer and perform various services for and duties of the
Issuer, including the duties and responsibilities of the Issuer under the
Indenture and in connection with the assets and obligations thereunder.
E. The Issuer desires to avail itself of the experience, advice and
assistance of the Administrator and to have the Administrator perform various
financial, statistical, accounting and other services for and duties of the
Issuer, and the Administrator has the capacity and is willing to furnish such
services on the terms and conditions set forth herein.
Now Therefore, in consideration of the mutual promises and covenants set
forth herein and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms that are not otherwise defined
in this Administration Agreement shall have the meanings ascribed thereto in
Appendix A to the Indenture.
Section 2. Indenture and Related Documents. The Administrator shall cause
the duties and responsibilities of the Issuer under the Indenture to be
performed, including but not limited to the actions set forth below. The
Administrator shall advise the Issuer when action by the Issuer is necessary to
comply with the Issuer's duties under the Indenture and the agreements relating
thereto. The Administrator shall prepare for execution, if required, by the
Issuer, or shall cause the
Administration Agreement (Trust)
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. In furtherance of
the foregoing, the Administrator shall take all appropriate action, including
but not limited to, the following:
(a) obtaining and preserving the Issuer's legal right to do business in
any jurisdiction in which such qualification is or shall be necessary
to protect the validity and enforceability of the Indenture, and each
instrument and agreement included in the Trust Estate;
(b) preparing all supplements, amendments, financing statements,
continuation statements, instruments of further assurance and other
instruments, in accordance with the relevant provisions of the
Indenture, necessary to protect the Trust Estate;
(c) arranging for the delivery of any opinions of counsel and certificates
of officers of the Issuer and other statements required under the
relevant provisions of the Indenture;
(d) preparing and obtaining documents and instruments required for the
release of the Issuer from its obligations under the Indenture;
(e) monitoring the Issuer's obligations as to the satisfaction and
discharge of the Indenture and preparing any certificates of officers
of the Issuer and obtaining any opinions of counsel required in
connection therewith;
(f) preparing, obtaining or filing the instruments, opinions and
certificates and other documents required for the release of
collateral;
(g) taking such actions as may be required of the Issuer under the
Indenture upon the occurrence and continuance of an Event of Default;
(h) 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;
(i) causing the directions of the Issuer to be carried out in connection
with opening one or more accounts in the Issuer's name, preparing any
orders of the Issuer and certificates of officers of the Issuer and
obtaining opinions of counsel required, and taking all other actions
necessary, with respect to investment and reinvestment of moneys in
the Accounts in accordance with the investment criteria and
requirements of the Indenture and applicable investment policies.
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(j) preparing any requests of the Issuer and certificates of officers of
the Issuer and obtaining any opinions of counsel required for the
release of the Trust Estate;
(k) preparing all certificates of officers of the Issuer, and coordinating
obtaining opinions of counsel as required with respect to any requests
by the Issuer of the Indenture Trustee to take any action under the
Indenture;
(l) preparing orders of the Issuer and obtaining opinions of counsel as
necessary or required for the execution of any amendments or
supplements to the Indenture;
(m) preparing and delivering certificates of officers of the Issuer, if
necessary, for the release of property from the lien of the Indenture;
(n) preparing and delivering to the Indenture Trustee any agreements with
respect to notice provisions;
(o) preparing and delivering investment instructions to the Indenture
Trustee, as necessary or required under the terms of the Indenture and
in accordance with the applicable investment policy, adopted from time
to time; and
(p) taking such actions as may be required of the Issuer under any
agreement between the Issuer and other parties relating to the
Indenture.
Section 3. Master Servicing Agreement. The Administrator shall cause the
duties and responsibilities of the Issuer under each of the Financed Student
Loans and the Master Servicing Agreement to be performed, including but not
limited to the duties set forth below. The Administrator shall advise the Issuer
when action by the Issuer is necessary to comply with the Issuer's obligations
under the Financed Student Loans and the Master Servicing Agreement. The
Administrator shall prepare for execution, if required, 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 Financed Student Loans
and the Master Servicing Agreement. In furtherance of the foregoing, the
Administrator shall take all appropriate action, including but not limited to
the following:
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(a) pursuant to the Master Servicing Agreement, providing to the Master
Servicer (or the Master Servicer's bailee) from time to time, as
necessary, and requiring that the Master Servicer (or the Master
Servicer's bailee) maintain physical custody and possession of,
documentation and information relating to the Financed Student Loans
and, on and after each applicable date on which Student Loans are to
be purchased (the "Loan Purchase Date"), Student Loans sold and
transferred to the Issuer on each such Loan Purchase Date, including
the documents evidencing such Student Loans and such additional
documentation or information relating to such Student Loans as is
reasonably required for the Student Loans to be properly serviced by
the Master Servicer;
(b) cause to be paid solely from the Trust Estate, all amounts to be paid
by the Issuer pursuant to the Transfer and Sale Agreements;
(c) promptly after each Loan Purchase Date and with respect to Student
Loans originated under the Act, ensuring that notification as required
under the Act and by the applicable Guaranty Agencies is made to the
borrower under each such Student Loan and to the Secretary of
Education and the applicable Guaranty Agencies, as appropriate;
(d) promptly after each Loan Purchase Date, providing the Master Servicer
with all information as may be required under the Master Servicing
Agreement;
(e) causing to be paid to the Master Servicer on behalf of the Issuer, but
solely from the Trust Estate, all fees required to be paid by the
Issuer pursuant to the Master Servicing Agreement;
(f) performing all audits of records and accounts that the Issuer from
time to time may be permitted or required to perform under the Master
Servicing Agreement;
(g) preparing all other documents, reports, filings, instruments,
certificates and opinions as it is the duty of the Issuer to prepare,
file or deliver pursuant to the Master Servicing Agreement; and
(h) in the event of the default of the Master Servicer under the Master
Servicing Agreement, or default of any other party to any other Issuer
Document, taking all reasonable steps available to enforce the
Issuer's rights under such documents in respect of such default.
Section 4. Transfer and Sale Agreements. The Administrator shall take the
actions necessary to cause the duties of the Issuer to be carried out under the
provisions of the Transfer and Sale Agreements and any of the rights or
obligations thereunder. The Administrator also shall enforce the rights of the
Issuer under the applicable provisions of the Transfer and Sale
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Agreements to require the Depositor to repurchase certain Student Loans that
have been transferred to the Issuer, including but not limited to providing
notice to the Master Servicer of each such repurchase request, endorsing to the
Master Servicer each Student Loan to be repurchased by the Depositor and taking
all other actions necessary to enforce the Issuer's rights of recourse against
the Depositor.
Section 5. Higher Education Act. The Administrator shall take all actions
that are necessary to cause the Issuer to comply with the requirements of the
Act and the applicable Guaranty Agencies with respect to Student Loans
originated under the Act.
Section 6. Other Duties with Respect to the Indenture and Master Servicing
Agreement.
(a) In addition to the duties of the Administrator set forth above, the
Administrator shall perform such calculations and 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 or the Master Servicing Agreement, and shall take all appropriate
action that it is the duty of the Issuer to take pursuant to the Indenture or
the Master Servicing Agreement. The Administrator shall administer, perform or
supervise the performance of such other activities in connection with the Trust
Estate (including the Master Servicing Agreement) as the Issuer is obligated to
perform and are not covered by any of the foregoing provisions and as are
reasonably within the capability of the Administrator.
(b) In carrying out the foregoing duties or any of its other obligations
under this Administration Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided 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.
(c) The Administrator shall provide copies of the following reports to the
Indenture Trustee commencing March 1, 2004 and on the fist day of each calendar
quarter thereafter:
(i) debt cost schedule;
(ii) Master Servicer reporting schedule;
(iii) Issuer activity schedule;
(iv) premium amortization schedule;
(v) financial statements;
(vi) general ledger; and
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Administration Agreement (Trust)
(vii) any tax records.
Section 7. Other Administrative Services. The Issuer hereby authorizes the
Administrator, as its agent, to perform, and the Administrator hereby agrees to
perform, all administrative services necessary or desirable in connection with
the Issuer's existence as a bankruptcy-remote Delaware statutory trust holding
the assets described hereunder, including but not limited to the following:
(a) subject to the directions of the authorized representatives of the
Issuer, carrying out and performing the day to day business activities
of the Issuer;
(b) providing, or causing to be provided, all clerical and bookkeeping
services necessary and appropriate for the Issuer, including, without
limitation, the following services:
(i) maintaining general accounting records of the Issuer, and
preparing for audit such periodic financial statements as may
be necessary or appropriate;
(ii) maintaining records of the Accounts, authorizing withdrawals
from the Accounts on behalf of the Issuer and taking all other
actions on behalf of the Issuer as may be necessary with
respect to the Accounts;
(iii) (A) preparing for execution by the Issuer and causing to be
filed on behalf of the Issuer such income, franchise or other
tax returns of the Issuer as shall be required to be filed by
applicable law, and (B) causing to be paid by the Issuer,
solely out of moneys of the Issuer, any taxes required to be
paid by the Issuer by applicable law;
(iv) assisting in preparing for execution by the Issuer amendments
to and waivers under the Master Servicing Agreement and any
other documents or instruments deliverable by the Issuer
thereunder or in connection therewith;
(v) holding, maintaining and preserving executed copies of the
Master Servicing Agreement and other documents or instruments
executed by the Issuer thereunder or in connection therewith;
(vi) assisting in giving such other notices, consents and other
communications that the Issuer may from time to time be
required or permitted to give under the Master Servicing
Agreement or other documents executed by the Issuer thereunder
or in connection therewith;
(vii) causing an annual audit by independent certified public
accountants of national presence of (A) the financial
statements of the Issuer, or (B) the
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consolidating financial statements of Seller (which include
the Issuer), to be prepared and to be provided to the
Indenture Trustee;
(viii) engaging independent certified public accountants of national
presence to review and verify the reports provided in
accordance with Section 11.04 of the Indenture on a quarterly
basis; and
(ix) taking such other actions as may be incidental or reasonably
necessary to accomplish the actions of the Administrator
authorized under this subsection (b);
(c) assisting the Issuer in carrying out the investment and reinvestment
of the moneys of the Issuer in accordance with applicable investment
policies; and
(d) undertaking such other administrative services as may be required by
the Issuer.
If the Administrator or the Issuer deems it necessary or desirable, any of
the foregoing administrative services may be subcontracted by the Administrator.
Costs and expenses associated with such subcontracting incurred by the
Administrator shall be paid by the Issuer in accordance with Section 11 hereof.
Section 8. Exceptions. Notwithstanding anything to the contrary in this
Administration Agreement, the Administrator shall not be obligated to, and shall
not, (1) make any payments to the holders of the Notes, (2) sell the Trust
Estate to unrelated third parties, or (3) take any other action that the Issuer
directs the Administrator not to take on its behalf.
Section 9. Employees; Offices. All services to be furnished by the
Administrator under this Administration Agreement may be furnished by an officer
or employee of the Administrator or any other person or agent designated or
retained by the Administrator.
The Administrator agrees to provide office space, together with appropriate
materials and any necessary support personnel, for performing the day to day
business activities of the Issuer, all for the compensation provided in Section
11 hereof.
Section 10. 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 Issuer of the proposed
action and the Issuer 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;
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Administration Agreement (Trust)
(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 Student
Loans);
(c) the amendment, change or modification of the Master Servicing
Agreement;
(d) the appointment of successor Indenture Trustee pursuant to the
Indenture or the appointment of successor administrators or successor
servicers, or the consent to the assignment by the Indenture Trustee
of its obligations under the Indenture; and
(e) the removal of the Indenture Trustee.
Section 11. Compensation. Subject to Section 4.03(c) of the Indenture, on
or before each Monthly Expense Payment Date, the Issuer shall pay to the
Administrator, as compensation for its services specified hereunder, a fee in
the amount of 0.05% (on a per annum basis) of the average principal balance of
the Financed Student Loans during the preceding calendar month (the
"Administration Fee"). If at any time the Issuer requests the Administrator to
perform any additional services not specified hereunder, the Issuer shall pay
the Administrator such additional fees in respect thereof as shall be agreed to
by the Issuer and the Administrator. The Issuer agrees to reimburse the
Administrator for all reasonable expenses, disbursements and advances incurred
or made by the Administrator in connection with the performance of this
Administration Agreement, including, but not limited to, the fees and expenses
of subcontracting, any independent accountants and outside counsel, which
reimbursement shall relate to amounts incurred in a calendar month and shall be
payable by the Issuer to the Administrator on the next succeeding Monthly
Expense Payment Date.
The Issuer and the Administrator agree that payments to the Administrator
shall be made out of the Distribution Account or the Collection Account.
Section 12. Representations and Warranties of the Issuer. The Issuer makes
the following representations:
(a) Creation. The Issuer is duly formed and validly existing 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 Issuer has the power and authority to execute
and deliver this Administration Agreement and to carry out its terms, and the
execution, delivery and performance of this Administration Agreement have been
duly authorized by the Issuer by all necessary action.
(c) Binding Obligation. This Administration Agreement constitutes a legal,
valid and binding obligation of the Issuer enforceable in accordance with its
terms, subject to applicable
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Administration Agreement (Trust)
bankruptcy, insolvency, reorganization and similar laws relating to creditors'
rights generally and subject to general principles of equity.
(d) No Proceedings. There are no proceedings or investigations pending
against the Issuer or, to its best knowledge, threatened against the Issuer,
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Issuer or its properties: (i)
asserting the invalidity of this Administration Agreement, (ii) seeking to
prevent the consummation of any of the transactions contemplated by this
Administration Agreement or (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the performance
by the Issuer of its obligations under, or the validity or enforceability of,
this Administration Agreement.
(e) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other governmental instrumentality required to be obtained, effected
or given by the Issuer in connection with the execution and delivery by the
Issuer of this Administration Agreement and the performance by the Issuer of the
transactions contemplated by this Administration Agreement have been duly
obtained, effected or given and are in full force and effect.
Section 13. Representations and Warranties of the Administrator. The
Administrator makes the following representations:
(a) Organization and Good Standing. The Administrator is duly organized
and validly existing and in good standing 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 power and authority to
execute and deliver this Administration Agreement and to carry out its terms,
and the execution, delivery and performance of this Administration Agreement
have been duly authorized by the Administrator by all necessary company action.
(c) Binding Obligation. This Administration Agreement constitutes a legal,
valid and binding obligation of the Administrator enforceable in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization and
similar laws relating to creditors' rights generally and subject to general
principles of equity.
(d) No Proceedings. There are no proceedings or investigations pending
against the Administrator or, to its best knowledge, threatened against the
Administrator, before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Administrator or its
properties: (i) asserting the invalidity of this Administration Agreement, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
this Administration Agreement or (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 Administration Agreement.
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Administration Agreement (Trust)
(e) All Consents. All authorizations, consents, orders or approvals of or
registrations or declarations with any court, regulatory body, administrative
agency or other governmental instrumentality required to be obtained, effected
or given by the Administrator in connection with the execution and delivery by
the Administrator of this Administration Agreement and the performance by the
Administrator of the transactions contemplated by this Administration Agreement
have been duly obtained, effected or given and are in full force and effect.
Section 14. Term. Subject to the terms hereof, the Administrator may resign
at any time. The Administrator or the Issuer may terminate this Administration
Agreement upon at least 45 days' prior written notice to the other party.
Notwithstanding the foregoing, no resignation or termination shall be effective
until 45 days after written notice has been delivered to the Indenture Trustee.
Section 15. Obligation to Supply Information. The Issuer shall prepare and
supply, or cause the other parties to the Indenture or the Master Servicing
Agreement to prepare and supply, the Administrator with such information
regarding the performance of the Indenture or the Master Servicing Agreement as
the Administrator may from time to time reasonably request in connection with
the performance of its obligations hereunder.
Section 16. Annual Statement as to Compliance. The Administrator will
deliver to the Issuer, the Indenture Trustee, the Trust Eligible Lender Trustee
and each Counterparty, on or before March 31 of each year, beginning with March
31, 2004, a certificate stating that (a) a review of the activities of the
Administrator during the preceding calendar year and of its performance under
this Agreement has been made under the supervision of the officer signing such
certificate and (b) to the best of such officer's knowledge, based on such
review, the Administrator has fulfilled all its obligations under this Agreement
throughout such year, or, there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof.
Section 17. Annual Independent Public Accountant's Report. On or before
March 31 of each year, beginning March 31, 2004, the Administrator at its
expense shall cause an independent public accountant that is a member of the
American Institute of Certified Public Accountants to furnish a statement to the
Issuer, the Indenture Trustee, the Trust Eligible Lender Trustee and each
Counterparty to the effect that such accountant has examined certain documents
and records relating to the Administrator's performance (during the preceding
fiscal year) under this Agreement and that, on the basis of such examination,
the Administrator has complied with the terms of this Agreement, except for such
significant exceptions or errors in records that, in the opinion of such
accountant, requires it to report and that are set forth in such report.
Section 18. Liability of Administrator. The Administrator shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Administrator under this Administration Agreement.
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The Administrator shall indemnify, defend and hold harmless the Issuer, and
all of the officers, directors, employees, trustees and agents of the Issuer,
from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that any such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon the Issuer through, the gross
negligence, willful misfeasance or bad faith of the Administrator in the
performance of its duties under this Administration Agreement or by reason of
reckless disregard of its obligations and duties hereunder or thereunder. The
Issuer shall notify the Administrator promptly of any claim for which it may
seek indemnity. The Administrator shall defend the claim and the Administrator
shall not be liable for the legal fees and expenses of the Issuer after it has
assumed such defense.
For purposes of this Section 18, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 21 hereof) pursuant to Section 14 hereof or the resignation by such
Administrator pursuant to this Administration Agreement, unless the Issuer
elects not to appoint a successor Administrator, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 21 hereof.
Indemnification under this Section 18 shall survive the termination of this
Administration Agreement and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Administrator has made any indemnity
payments pursuant to this Section 18 and the Issuer thereafter collects any of
such amounts from others, the Issuer promptly shall repay such amounts to the
Administrator, without interest.
Neither the Administrator nor any of its directors, officers, employees or
agents shall be under any liability to the Issuer except as provided under this
Administration Agreement for any action taken or for refraining from the taking
of any action pursuant to this Administration Agreement or for errors in
judgment; provided 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
Administration Agreement; provided, however, these provisions shall not protect
the Indenture Trustee, as Administrator, in the event that the Indenture Trustee
shall be the Administrator pursuant to Section 21 hereof, or any of its
directors, officers, employees or agents 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 Administration Agreement. The Administrator and any of its
directors, officers, employees or agents may rely in good faith on the advice of
counsel or on any document of any kind, prima facie properly executed and
submitted by any person respecting any matters arising hereunder.
Except as provided in this Administration 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 hereunder and that in its
opinion may involve it in any expense or liability; provided that the
Administrator may undertake any reasonable action that it may deem necessary or
desirable in respect of this Administration Agreement, the Indenture, and the
other Issuer Documents and the
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rights and duties of the parties to this Administration Agreement, the
Indenture, and the other Issuer Documents and the interests of the holders of
the Notes.
Section 19. Merger or Consolidation of, or Assumption of the Obligations
of, the 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 hereunder without the execution or filing of any documents
or any further act by any of the parties to this Administration Agreement;
provided that the Administrator hereby covenants that, if the surviving
Administrator is other than Education Lending Services, Inc. or an Affiliate, it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Administrator executes an agreement of
assumption to perform every obligation of the Administrator under this
Administration Agreement, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 13 hereof
has been breached and no Administrator Default (as defined below), and no event
that, after notice or lapse of time, or both, would become an Administrator
Default has occurred and is continuing, (iii) the surviving Administrator has
delivered to the Indenture Trustee a certificate of an officer of the surviving
Administrator and an opinion of counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
19 and that all conditions precedent, if any, provided for in this
Administration Agreement relating to such transaction have been complied with,
and (iv) such transaction will not result in a material adverse Federal or state
tax consequence to the holders of Notes under the Indenture. Anything in this
Section 19 to the contrary notwithstanding, subject to the Rating Agency
Condition, the Administrator may at any time assign its rights, obligations and
duties under this Administration Agreement to an Affiliate.
Section 20. Administrator Default. The occurrence and continuance of any
one of the following events shall constitute an "Administrator Default":
(a) any failure by the Administrator to direct the Indenture Trustee to
make any distributions from the Accounts pursuant to Indenture, which failure
continues unremedied for a period of five days after the date on which written
notice of such failure has been given to the Administrator by the Issuer;
(b) any failure by the Administrator duly to observe or to perform in any
material respect any covenant or agreement of the Administrator set forth in
this Administration Agreement, which failure continues unremedied for a period
of 60 days after the date on which written notice of such failure has been given
to the Administrator by the Issuer;
(c) (i) having entered involuntarily against it an order for relief under
the federal bankruptcy laws or any similar state or federal law, (ii) not
paying, or admitting in writing its inability to pay, its debts generally as
they become due or suspending payment of its obligations, (iii) making an
assignment for the benefit of creditors, (iv) applying for, seeking, consenting
to, or acquiescing in, the appointment of a receiver, custodian, trustee,
conservator, liquidator or similar
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official for it or any substantial part of its property, (v) instituting any
proceeding seeking to have entered against it an order for relief under the
federal bankruptcy laws or any similar state or federal law, to adjudicate it
insolvent, or seeking dissolution, winding up, liquidation, reorganization,
arrangement, marshaling of assets, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization, or relief of
debtors or failing to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vi) failing to contest in
good faith any appointment or proceeding described in Section 20(d) hereof or
(vii) taking any action in furtherance of any of the foregoing purposes;
(d) the appointment of a custodian, receiver, trustee, conservator,
liquidator or similar official for the Administrator or any substantial part of
the property of the Administrator, or the institution of a proceeding described
in Section 20(c)(v) hereof against the Administrator, which appointment
continues undischarged or which proceeding continues undismissed or unstayed for
a period of 60 or more days; or
(e) any representation or warranty made by the Administrator in this
Agreement or in any other Basic Document shall prove to be untrue or incomplete
in any material respect.
In the case of any Administrator Default, so long as such Administrator
Default has not been remedied, the Indenture Trustee, or the holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, may, by
written notice to the Administrator of such Administrator Default, terminate all
of the rights and obligations (other than the obligations set forth in Section
18 hereof) of the Administrator under this Administration Agreement with respect
to the Indenture. On or after the receipt by the Administrator of such written
notice, all authority and power of the Administrator under this Administration
Agreement shall, without further action, be carried out by the Indenture Trustee
or shall pass to and be vested in such successor Administrator as may be
appointed under Section 21 hereof; and, without limitation, the Indenture
Trustee is hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Administrator, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination. The predecessor Administrator shall cooperate with the successor
Administrator, the Indenture Trustee, the Issuer, and the Trust Eligible Lender
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Administrator under this Administration Agreement. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
amending this Administration Agreement to reflect such succession as
Administrator pursuant to this Section 20 shall be paid by the predecessor
Administrator upon presentation of reasonable documentation of such costs and
expenses.
Section 21. Appointment of Successor.
(a) Upon receipt by the Administrator of notice of termination pursuant to
Section 14 hereof, or the resignation by the Administrator in accordance with
the terms of this Administration Agreement, the predecessor Administrator shall
continue to perform its functions as Administrator under this Administration
Agreement, in the case of termination, only until the date specified in
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Administration Agreement (Trust)
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 date a successor Administrator is appointed. In the event of the termination
or resignation hereunder of the Administrator, all authority and power of the
Administrator under this Administration Agreement shall, without further action,
be carried out by the Indenture Trustee. If the Indenture Trustee is unwilling
or unable to act, it may appoint, or petition a court for the appointment of, a
successor Administrator whose regular business includes the servicing or
administration of Student Loans and subject to the receipt by the Indenture
Trustee of a Rating Confirmation regarding the successor Administrator;
provided, however, the Indenture Trustee shall continue to act as Administrator
until a successor Administrator has been so appointed. Any such successor
Administrator shall accept its appointment by a written assumption.
(b) Upon appointment, the successor Administrator shall be the successor
in all respects to the predecessor Administrator and shall be subject to all of
the responsibilities, duties and liabilities placed on the predecessor
Administrator that arise thereafter or are related thereto and shall be entitled
to payment of compensation in accordance with the terms of this Administration
Agreement, or such other terms as are agreed to by the Indenture Trustee, and
all of the rights granted to the predecessor Administrator by the terms and
provisions of this Administration Agreement.
Section 22. Reliance on Information Obtained from Third Parties. The Issuer
recognizes that the accuracy and completeness of the records maintained and the
information supplied by the Administrator hereunder is dependent upon the
accuracy and completeness of the information obtained by the Administrator from
the parties to the Indenture and the other Issuer Documents and other sources
and the Administrator shall not be responsible for any inaccuracy in the
information so obtained or for any inaccuracy in the records maintained by the
Administrator hereunder which may result therefrom.
Section 23. Notices. All notices, demands, instructions and other
communications required or permitted to be given to or made upon either party
hereto shall be in writing (including by facsimile transmission) and shall be
personally delivered or sent by guaranteed overnight delivery or by facsimile
transmission (to be followed by personal or guaranteed overnight delivery) and
shall be deemed to be given for purposes of this Administration Agreement on the
date that such writing is received by the intended recipient thereof in
accordance with the provisions of this Section 23. Unless otherwise specified in
a notice sent or delivered in accordance with the foregoing provisions of this
Section 23, notices, demands, instructions and other communications in writing
shall be given to or made upon the respective parties thereto at their
respective addresses as follows:
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Administration Agreement (Trust)
The Issuer:
Education Funding Capital Trust-III
c/o Fifth Third Bank
MD 10AT60
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Telephone: ▇▇.▇▇▇.▇▇▇.▇▇▇▇
Facsimile: ▇▇.▇▇▇.▇▇▇.▇▇▇▇
The Administrator:
Education Lending Services, Inc.
▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Section 24. Amendment. This Administration Agreement may be amended in
writing by the Administrator and the Issuer. Promptly after the execution of any
such amendment, the Administrator shall furnish written notification of the
substance of such amendment to the Indenture Trustee.
Section 25. Assignment. Except as provided in Section 19 hereof or as
contemplated by the Indenture, this Administration Agreement may not be assigned
by either party hereto without the prior written consent of the other party;
provided, however, so long as Education Lending Services, Inc. is the
Administrator, subject to the Rating Agency Condition, the Administrator may
assign its duties and obligations to an Affiliate.
Section 26. Independence of Administrator. For all purposes of this
Administration Agreement, the Administrator shall be an independent contractor.
Unless expressly authorized by the Issuer, the Administrator shall have no
authority to act for or represent the Issuer in any way and shall not otherwise
be deemed an agent of the Issuer.
Section 27. No Joint Venture. Nothing contained in this Administration
Agreement shall constitute the Issuer and the Administrator as members of any
partnership, joint venture, association, syndicate, unincorporated business or
other separate entity or shall be deemed to confer on either of them any
express, implied or apparent authority to incur any obligation or liability on
behalf of the other.
Section 28. Other Activities of Administrator. Nothing herein shall prevent
the Administrator or its Affiliates from engaging in other business or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other Person even though such Person may engage in business activities similar
to those of the Issuer.
15
Administration Agreement (Trust)
Section 29. No Petition. The Administrator covenants and agrees that,
notwithstanding the termination of this Administration Agreement, the
Administrator will not institute against, or join in instituting against the
Issuer, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law ordering the winding up or liquidation of the Issuer's affairs or appointing
a receiver, liquidator, trustee, or other similar official, of the Issuer or any
substantial part of its property, for one year and a day after the termination
of this Administration Agreement. This Section 29 shall survive the termination
of this Administration Agreement.
Section 30. Governing Law. This Administration Agreement shall be governed
by and construed in accordance with the laws of the State of Ohio, without
regard to its conflict of law provisions.
Section 31. Entire Agreement. This Administration Agreement constitutes the
entire agreement between the parties hereto with respect to the matters covered
hereby and supersedes all prior agreements and understandings between the
parties.
Section 32. Successors; Counterparts.
(a) This Administration Agreement shall be binding upon, inure to the
benefit of and be enforceable by the respective successors and assigns of each
of the Issuer and the Administrator.
(b) This Administration Agreement may be executed in several counterparts,
each of which shall be deemed an original hereof and all of which taken together
shall constitute one and the same instrument.
Section 33. Third Party Beneficiaries. Each of the Owner Trustee and the
Co-Owner Trustee shall be deemed a third party beneficiary of this
Administration Agreement.
Section 34. Captions. The captions in this Administration Agreement are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
[Remainder of page intentionally left blank - signatures begin on next page]
16
Administration Agreement (Trust)
In Witness Whereof, the parties hereto have caused this Administration
Agreement to be executed as of the day and year first above written.
Education Funding Capital Trust-III
By Fifth Third Bank, not in its
individual capacity, but solely as
Co-Owner Trustee, on behalf of the
Issuer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
Title: Assistant Vice President and
Senior Trust Officer
Education Lending Services, Inc.,
as Administrator
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President-Finance
Fifth Third Bank, as the Indenture Trustee under the Indenture, hereby
agrees to take such actions and execute such documents as may be reasonably
requested by the Administrator in order for the Administrator to provide the
services and perform its duties and responsibilities under the foregoing
Administration Agreement.
Fifth Third Bank,
as Indenture Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇
Title: Assistant Vice President and
Senior Trust Officer
Administration Agreement (Trust)
