EXHIBIT 4.3
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ISSUER ELIGIBLE LENDER TRUST AGREEMENT
between
PHEAA STUDENT LOAN TRUST I
as Grantor
and
MANUFACTURERS AND TRADERS TRUST COMPANY
as Eligible Lender Trustee
Dated as of ______________, 2003
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ISSUER ELIGIBLE LENDER TRUST AGREEMENT
THIS ISSUER ELIGIBLE LENDER TRUST AGREEMENT is made on ________, 2003,
by and between PHEAA STUDENT LOAN TRUST I (the "Grantor") and MANUFACTURERS AND
TRADERS TRUST COMPANY, as eligible lender trustee (the "Eligible Lender
Trustee").
W I T N E S S E T H:
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WHEREAS, the Grantor is not an eligible lender under the Higher
Education Act of 1965, as amended, or related regulations promulgated by the
U.S. Secretary of Education (collectively, the "Act") and, as such, cannot hold
loans made and reinsured under Title IV of the Act as an eligible lender;
WHEREAS, it is the intention of the parties that certain loans ("Student
Loans") reinsured under Title IV of the Act made to persons for post-secondary
education at eligible institutions be acquired from time to time by the Eligible
Lender Trustee on behalf of the Grantor (hereinafter collectively referred to as
the "Portfolio");
WHEREAS, the Eligible Lender Trustee is an eligible lender under and as
defined in the Act;
WHEREAS, the Eligible Lender Trustee has agreed to hold legal title to
the Student Loans for the benefit of the Grantor;
WHEREAS, the Eligible Lender Trustee and certain Guarantors have entered
or will enter into Contracts of Guarantee with respect to the Student Loans; and
WHEREAS, the Grantor intends to provide the Eligible Lender Trustee with
written instruction on all aspects of the management of the Student Loans;
NOW, THEREFORE, for and in consideration of the promises and of the
mutual covenants contained herein, and for other valuable consideration, the
receipt of which is hereby acknowledged, and intending to be legally bound, the
Grantor covenants and agrees with the Eligible Lender Trustee as follows:
Section 1. Definitions.
Capitalized terms used herein and not otherwise defined shall have the
meanings specified in this Section 1.
"Administration Agreement" shall mean the Administration Agreement,
dated ____________, 2003, by and among the Grantor, the Indenture Trustee and
The Pennsylvania Higher Education Assistance Agency, as administrator.
"Contract of Guarantee" shall mean a contract between a Guarantor and
the Eligible Lender Trustee providing for, or a certificate or other evidence
of, the guarantee of one or more Student Loans pursuant to the Act.
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"Custody Agreement" shall mean the Custody Agreement, dated as of
____________, 2003, by and among the Grantor, the Eligible Lender Trustee and
the Pennsylvania Higher Education Assistance Agency, as custodian.
"Guarantor" shall mean any body or organization which has entered into a
federal reinsurance agreement with the Secretary of Education pursuant to the
Act.
"Indenture" shall mean Indenture of Trust, dated as of ____________,
2003, by and among the Grantor, the Eligible Lender Trustee and the Indenture
Trustee.
"Indenture Trustee" shall mean Manufacturers and Traders Trust Company,
as indenture trustee, pursuant to the Indenture.
"Interest Subsidy Payments" shall mean the interest subsidy payments
authorized to be made by the Secretary of Education pursuant to Section 428 of
the Act, or similar subsidies authorized from time to time by federal law or
regulation.
"Person" shall mean an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated organization or a
government, or any agency or political subdivision thereof.
"Secretary of Education" shall mean the Secretary of Education, the
United States Department of Education, or any other officer, board, body,
commission or agency succeeding to the functions thereof under the Act.
"Servicer" shall mean the Pennsylvania Higher Education Assistance
Agency, its successors and permitted assigns.
"Servicing Agreement" shall mean the Servicing Agreement, dated
_________, 2003, by and between the Grantor and the Pennsylvania Higher
Education Assistance Agency, as servicer.
"Special Allowance Payments" shall mean special allowance payments
authorized to be made by the Secretary of Education pursuant to Section 438(b)
of the Act, or similar allowances authorized from time to time by federal law or
regulation.
Section 2. Creation of the Trust Estate.
(a) The Grantor hereby assigns, transfers and sets over to the Eligible
Lender Trustee, in trust for the benefit of the Grantor, all of the Grantor's
right, title and interest in and to the Student Loans that at any time may
comprise the Portfolio, the receipt of which right, title, and interest is
hereby acknowledged by the Eligible Lender Trustee and which trust is hereby
accepted by the Eligible Lender Trustee, upon the following express terms and
conditions and with the powers and limitations hereinafter conferred and set
forth.
(b) The Portfolio and any other properties held in trust hereunder are
collectively referred to herein as the "Trust Estate."
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Section 3. Servicing Agreements.
Servicing of loans included in the Portfolio shall be carried out by an
eligible third-party servicer of federally guaranteed Student Loans pursuant to
a servicing agreement executed with such entity. At the time of creation of the
Trust Estate, each loan to be included in the Trust Estate shall be a loan
serviced by the Servicer or by another servicer or sub-servicer mutually agreed
to in writing by the parties hereto.
Section 4. Eligible Lender Trustee's Execution of Agreements Pertaining to Loans
Solely in Capacity as Eligible Lender Trustee.
The Grantor shall cause all agreements for the origination, purchase,
servicing, financing or sale of Student Loans in the Trust Estate to which the
Eligible Lender Trustee is a party to indicate clearly that the Eligible Lender
Trustee is executing each such agreement solely in its capacity as Eligible
Lender Trustee. This provision is not intended to apply, however, to Contracts
of Guarantee executed by the Eligible Lender Trustee pursuant to Section 7
hereof, or to limit the Eligible Lender Trustee's legal responsibility to the
Secretary of Education under 34 CFR Section 682.203(b).
Section 5. Dispositive Provisions.
The Eligible Lender Trustee shall pay to the Indenture Trustee, promptly
upon receipt thereof, any and all income and payments (other than payments made
by the Grantor) received by the Eligible Lender Trustee in connection with the
Trust Estate, including without limitation the following payments to be received
with respect to Student Loans: scheduled payments of principal, interest, late
fees and penalties by borrowers, prepayments of principal and interest by
borrowers; all grants, subsidies, donations, Interest Subsidy Payments, and
Special Allowance Payments, and all default and other claim payments made by any
Guarantor.
Section 6. Reserved Rights of Invasion.
The Grantor expressly reserves and retains the right, at any time and
from time to time, by a notice in writing signed by an authorized officer of the
Grantor and delivered to the Eligible Lender Trustee, to withdraw from the
corpus of the Trust Estate any or all of the Trust Estate, so long as such
withdrawal will not adversely affect any of the benefits that the Student Loans
are entitled to under the Act. Subject to the terms of the Indenture, the
Administration Agreement, the Custody Agreement and the Servicing Agreement, it
is an express provision and term of this trust that any of the powers which the
Grantor reserves to itself are to be exercised only by the Grantor in its sole
discretion, and not as a power to be subject to exercise by any other Person, or
under any process of law for the Grantor's benefit, or for the benefit of the
Grantor's creditors by any other Person or court whatsoever.
Section 7. Eligible Lender Trustee's Duties and Powers.
The Eligible Lender Trustee and any successor Eligible Lender Trustee or
Eligible Lender Trustees shall have only the following powers and duties:
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(a) It shall accept and hold as herein set forth all such right, title
and interest to the Student Loans that are transferred and assigned to it by the
Grantor or that are originated and made by it in its name on behalf of the
Grantor pursuant to this Agreement.
(b) Upon receipt of written instructions from the Grantor, the Eligible
Lender Trustee shall execute and deliver all written instruments and take any
and all other actions that the Grantor may direct in order to (i) maintain all
Contracts of Guarantee covering the Portfolio, (ii) enter into and take other
actions with respect to further agreements as required by the Grantor for the
benefit of the Trust Estate, and (iii) enforce the rights of the Eligible Lender
Trustee under all such Contracts of Guarantee and other agreements.
(c) Upon receipt of written instructions from the Grantor, the Eligible
Lender Trustee shall execute and deliver all written instruments and take any
and all other actions as may be, in the judgment of the Grantor, required from
time to time in connection with the application for and receipt of grants,
subsidies, donations, Interest Subsidy Payments, Special Allowance Payments, and
default and other claim payments with respect to the Trust Estate.
(d) The Eligible Lender Trustee shall meet the qualifications set forth
in Section 14 hereof at all times during which it holds legal title to the
Student Loans comprising the Portfolio.
(e) Upon receipt of written instructions from the Grantor, the Eligible
Lender Trustee shall sell, exchange or liquidate all or any portion of the Trust
Estate. The Eligible Lender Trustee shall dispose of any proceeds of such sale,
exchange or liquidation as the Grantor shall, by written instructions to the
Eligible Lender Trustee, direct.
(f) The Eligible Lender Trustee shall report to the Grantor all claims
for taxes, insurance premiums and other legal assessments, debts, charges or
claims of any type made against any money or other assets belonging to the Trust
Estate, or which may be due and owing in connection with the Trust Estate. When
directed in writing by the Grantor, the Eligible Lender Trustee shall satisfy
approved claims out of any money belonging to the Trust Estate[, but the Grantor
expressly reserves the right to satisfy Trust Estate debts with non-Trust Estate
assets].
(g) Subject to the indemnification rights set forth in Section 10
hereof, with the Grantor's express written approval and indemnification, the
Eligible Lender Trustee shall compromise, settle, arbitrate or defend any claim
or demand in favor of or against the Trust Estate, and shall enter such
contracts and agreements and make such compromises of debts, claims or
controversies respecting the Trust Estate as the Grantor shall direct by written
instructions to the Eligible Lender Trustee.
(h) The Eligible Lender Trustee may execute any of the trusts or powers
hereof and perform any of its duties by or through attorneys, agents, receivers
or employees and shall not be answerable for the conduct of the same if
appointed with due care hereunder, and shall be entitled to advice of counsel
concerning all matters of trusts hereof and duties hereunder, and may in all
cases pay such reasonable compensation to any attorney, agent, receiver or
employee retained or employed by it in connection herewith. The Eligible Lender
Trustee may act upon the opinion or advice of an attorney or accountant selected
by it in the exercise of reasonable care or, if selected or retained by the
Grantor, approved by the Eligible Lender Trustee in the exercise of such care.
The Eligible Lender Trustee shall not be responsible for any loss or damage
resulting from any action or nonaction based on its good faith reliance upon
such opinion or advice.
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(i) The Eligible Lender Trustee shall enter into and maintain Contracts
of Guarantee with each Guarantor where it acts on behalf of the Grantor.
Section 8. Limitation on Eligible Lender Trustee's Duties.
(a) The Eligible Lender Trustee shall perform only those duties as may
be required from time to time under the terms of this Agreement in connection
with the Eligible Lender Trustee's holding of Student Loans that comprise the
Trust Estate. The Eligible Lender Trustee shall have no obligation to the
Grantor to administer, service or collect such Student Loans or to maintain or
monitor administration, servicing or collection procedures followed in
connection with such Student Loans, except (i) insofar as specific functions in
that regard are required of the Eligible Lender Trustee pursuant to the express
terms of Section 7 hereof and appropriate written instructions of the Grantor if
required by such Section 7, and (ii) insofar as specific functions in that
regard are required of the Eligible Lender Trustee pursuant to the Act. The
Eligible Lender Trustee shall not be required to expend any of its own funds in
connection with this Agreement or its duties hereunder or under any related
documents or agreements pertaining to the Trust Estate.
(b) Notwithstanding any other provisions in this Agreement, nothing in
this Agreement shall be construed to limit the Eligible Lender Trustee's legal
responsibility to the Secretary of Education in its capacity as Eligible Lender
Trustee for any violations of statutory or regulatory requirements that may
occur with respect to Student Loans in the Portfolio, pursuant to 34 CFR Section
682.203(b) or any successor provision thereto. The Eligible Lender Trustee
agrees not to delay paying any liability the Eligible Lender Trustee owes to the
Secretary for any reason, including a failure to first be indemnified by the
Grantor for such payment.
(c) The Eligible Lender Trustee shall not be responsible for any recital
herein or for the recording or re-recording, filing, re-filing of any document
or any supplement or amendment thereto, or the filing of financing statements,
or for the validity of the execution by the Grantor of this Agreement, or of any
supplemental agreements or instruments of further assurance, or for the value or
title of the property herein conveyed or otherwise as to the maintenance of the
security hereof.
(d) The Eligible Lender Trustee shall be protected in acting in
reasonable reliance upon any notice, order, requisition, request, consent,
certificate, order, opinion (including an opinion of counsel, which may be
counsel for the Grantor or the Eligible Lender Trustee's in-house counsel),
affidavit, letter, telegram or other paper or document in good faith deemed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons.
(e) As to the existence or non-existence of any fact or as to the
sufficiency or validity of any instrument, paper or proceeding, the Eligible
Lender Trustee shall be entitled to rely upon a certificate signed by an
authorized officer on behalf of the Grantor as sufficient evidence of the facts
therein contained.
(f) The permissive right of the Eligible Lender Trustee to do things
enumerated in this Agreement shall not be construed as a duty.
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Section 9. Administration and Servicing of Portfolio.
(a) The Servicer is hereby appointed by the Eligible Lender Trustee as
its agent to originate, manage, service, administer, and make collections on
Student Loans in the Portfolio pursuant to the Servicing Agreement. The Servicer
shall perform its duties with reasonable care, following its customary
standards, policies and procedures and using that degree of skill and attention
that the Servicer exercises with respect to all comparable loans that it
originates, services, or administers for itself or others. Without limiting the
generality of the foregoing, the Servicer is authorized and empowered by the
Eligible Lender Trustee to execute and deliver, on behalf of itself, the
Eligible Lender Trustee or both of them, any and all instruments of satisfaction
or cancellation, or partial or full release or discharge, and all other
comparable instruments, with respect to the Student Loans in the Portfolio,
except as otherwise required by the Act. The Eligible Lender Trustee will
furnish the Servicer with any powers of attorney or other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
(b) The Servicer may at any time, without notice or consent, delegate
any or all of its duties under this Agreement to any Person; provided that the
Servicer shall at all times retain full responsibility for the duties performed
by any such Person.
(c) To assure uniform quality in origination and servicing of the
Student Loans and to reduce administrative costs, the Eligible Lender Trustee
hereby agrees to enter into the Custody Agreement with respect to the Student
Loans in the Portfolio, which are hereby constructively delivered to the
Eligible Lender Trustee.
Section 10. Compensation and Indemnification of Eligible Lender Trustee.
The Eligible Lender Trustee shall be entitled to reasonable compensation
for all services rendered by it in the execution of the trust created hereunder
and in the exercise and performance of any of the powers and duties of the
Eligible Lender Trustee hereunder. The Eligible Lender Trustee shall also be
entitled to reimbursement from the Grantor for all reasonable costs and
out-of-pocket expenses incurred by the Eligible Lender Trustee. Such costs and
expenses shall be billed to the Grantor at the cost of the Eligible Lender
Trustee. Such expenses shall include all expenses, disbursements and advances
incurred or made by the Eligible Lender Trustee in accordance with the duties
required under any of the provisions of this Agreement (including the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) and those duties expressly required by law
that may not be transferred to the Grantor.
The Grantor hereby agrees to promptly indemnify the Eligible Lender
Trustee for, and to hold it harmless against, any loss, liability, expense or
advance incurred or made without negligence or bad faith on the part of the
Eligible Lender Trustee, including without limitation reasonable attorneys' fees
and expenses, arising out of or in connection with the acceptance or
administration of its duties and obligations with respect to the Trust pursuant
hereto, including without limitation, the servicing of the Portfolio by
third-party servicers pursuant to Section 3 above. Such indemnification by the
Grantor shall survive the termination of this Agreement and/or resignation or
removal of the Eligible Lender Trustee and shall include, without limitation,
any loss, liability, expense or advance incurred or made by the Eligible Lender
Trustee as a result of the acts or omissions of any servicer in the origination,
administration or servicing of any of the Student Loans.
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Section 11. Resignation and Removal of Eligible Lender Trustee and Appointment
of Successor Eligible Lender Trustee.
(a) The Eligible Lender Trustee may at any time resign by giving written
notice to the Grantor. Upon receiving such notice of resignation, the Grantor
shall promptly appoint a successor Eligible Lender Trustee by an instrument in
writing. If no successor Eligible Lender Trustee shall have been so appointed
and have accepted appointment within 90 days after the giving of such notice of
resignation, the Grantor shall have an additional 180 days to secure a successor
Eligible Lender Trustee for the Trust Estate. If the Grantor has not appointed a
successor Eligible Lender Trustee within 270 days after the Eligible Lender
Trustee has given its notice of resignation, the Eligible Lender Trustee shall
have the authority to petition, at the expense of the Grantor, a court of
competent jurisdiction to appoint a successor Eligible Lender Trustee.
(b) The Grantor may at any time remove the Eligible Lender Trustee and
appoint a successor Eligible Lender Trustee by written instrument.
(c) Any resignation or removal of the Eligible Lender Trustee and
appointment of a successor Eligible Lender Trustee, pursuant to any of the
provisions of this section, shall become effective only upon the effective date
of appointment of the successor Eligible Lender Trustee.
Section 12. Assignment; Corporate Changes in Eligible Lender Trustee.
Any bank, corporation or other entity into which the Eligible Lender
Trustee may be merged or converted or with which it may be consolidated; any
bank, corporation or other entity resulting from any merger, conversion or
consolidation to which the Eligible Lender Trustee shall be a party; and any
bank, corporation or other entity to which the Eligible Lender Trustee's rights
and obligations hereunder are assigned, shall be the Eligible Lender Trustee
under this Agreement without any further act, provided the resulting bank,
corporation, assignee or other entity at all times meets the qualifications set
forth in Section 14 hereof. The Eligible Lender Trustee's rights and obligations
hereunder may not be assigned to an entity that would not meet the
qualifications set forth in Section 14 hereof upon receipt of such assignment.
The Eligible Lender Trustee shall take responsible steps to ensure that an
entity that becomes a successor Eligible Lender Trustee under this section meets
the qualifications set forth in Section 14 at all times during which such
successor Eligible Lender Trustee holds legal title to the Student Loans
comprising the Portfolio. The Eligible Lender Trustee shall use its best efforts
to give the Grantor at least 120 days' prior written notice of any corporate
change described in this Section 12.
Section 13. Termination.
The Grantor may at any time, in accordance with the provisions of
Section 6 hereof, direct the Eligible Lender Trustee to distribute all of the
assets then held in the Trust Estate to the Grantor or such other Person as the
Grantor may designate in writing, and upon such distribution this Agreement and
the Trust Estate created hereunder shall terminate.
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Section 14. Qualifications of Eligible Lender Trustee and Successor Eligible
Lender Trustee.
The Eligible Lender Trustee, and any successor Eligible Lender Trustee,
shall at all times during which it holds legal title to the Student Loans
comprising the Portfolio maintain:
(a) eligible lender status under the Act;
(b) an eligible lender identification number, as eligible lender trustee
for the Grantor, issued by the Secretary of Education;
(c) at the written direction of the Grantor, all Contracts of Guarantee
with all Guarantors on loans as to which it holds legal title in its capacity as
Eligible Lender Trustee hereunder; and
(d) all corporate powers and governmental licenses, authorizations,
consents, and approvals required for it to act as Eligible Lender Trustee and
hold legal title to the Student Loans comprising the Portfolio.
Section 15. Quarterly Reports to Eligible Lender Trustee.
Not later than 60 days following the end of each calendar quarter during
the term hereof, the Grantor shall provide to the Eligible Lender Trustee a
report setting forth the total dollar amount of loan disbursements made or
acquired for the Trust Estate during such calendar quarter.
Section 16. Governing Law.
This Eligible Lender Trust Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania, without giving effect to principles of
conflicts of law.
Section 17. Miscellaneous Provisions.
All covenants and agreements herein and statements delivered pursuant
hereto shall bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns. This agreement supersedes all
previous agreements and understandings between the parties with respect to the
subject matter hereof. The Agreement may only be changed, modified, or
discharged, and any rights or obligations hereunder may only be waived, by a
written instrument signed by a duly authorized officer of the party against whom
enforcement any such waiver, change, modification or discharge is sought.
Section 18. Notice.
All communications, notices and approvals provided for hereunder shall
be in writing and personally delivered or mailed by registered or certified
mail, return receipt requested, or by facsimile, to the Grantor at PHEAA Student
Loan Trust I, c/o Wachovia Bank of Delaware, National Association, Xxx Xxxxxx
Xxxxxx, Xxxxx 000, 000 Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attn: Corporate
Trust Administration, Facsimile No. (302) 888 - 7544; to the Eligible Lender
Trustee at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, Attn: Corporate Trust
Services, Facsimile No. (717) 231 - 2608, or at such other address as either
party may hereafter designate by notice to the other party. Notice given in any
such communication shall be deemed to have been given upon receipt.
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Section 19. Partial Invalidity.
Any provisions of this Eligible Lender Trust Agreement that are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
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.
Section 20. Counterparts.
This Eligible Lender Trust Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Eligible
Lender Trust Agreement on the day and year first above written.
PHEAA STUDENT LOAN TRUST I,
as Grantor
By WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION,
as Owner Trustee
By
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Name:
Title:
MANUFACTURERS AND TRADERS TRUST COMPANY,
as Eligible Lender Trustee
By
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Name: Xxxx X. Xxxxx
Title: Vice President
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