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Exhibit 10.4
ELIGIBLE LENDER TRUST AGREEMENT
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This Eligible Lender Trust Agreement (the "Agreement") is entered into
as of March 15, 1999 (the "Effective Date"), between STUDENT LOAN FUNDING
1998-A/B TRUST (the "Issuer") and FIRSTAR BANK, NATIONAL ASSOCIATION, as
eligible lender trustee (the "Eligible Lender Trustee") for the benefit of the
Issuer. All references to the Issuer or Student Loan Funding 1998-A/B Trust
shall be deemed to be references to FIRSTAR BANK, NATIONAL ASSOCIATION, not in
its individual capacity, but solely as Co-owner Trustee (the "Co-Owner Trustee")
under the Trust Agreement dated as of March 1, 1999 (the "Trust Agreement").
WITNESSETH:
WHEREAS, the Eligible Lender Trustee is an "eligible lender" under the
Higher Education Act; and
WHEREAS, the Issuer desires the Eligible Lender Trustee to hold all of
the Issuer's right, title and interest in and to certain Financed Student Loans
in trust for the benefit of the Issuer upon the transfer and sale of such
Financed Student Loans to the Issuer;
WHEREAS, such Financed Student Loans are, and upon transfer to the
Eligible Lender Trustee will continue to be, pledged to secure payment of
certain Student Loan Senior Asset Backed Notes, Series 1998A and Student Loan
Subordinate Asset-Backed Notes, Series 1998B-3 under the Indenture (as defined
in Section 2.3 hereof); and
WHEREAS, in order to consummate the transactions contemplated by the
Trust Agreement, the parties hereto desire and intend to create the trusts set
forth herein and the Eligible Lender Trustee agrees to be charged with and
accept its trusts and duties set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein the parties hereto hereby agree as follows:
ARTICLE I
Creation of Trust for Benefit of the Issuer and
Authority to Enter Into and
Execute Documents; Acceptance of Trust
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SECTION 1.1. PURPOSE. The trust created by Article I of this Agreement
is formed, entered into and intended by the Issuer and the Eligible Lender
Trustee to create a trust for the purpose of (a) the Eligible Lender Trustee
holding all right, title and interest to the Financed Student Loans for the
benefit of the Issuer (b) the Eligible Lender Trustee entering into, and
complying with, the terms of any agreement, document or certificate required
under the Trust Agreement and this Agreement and (c) the Eligible Lender Trustee
complying with the requirements of the Higher Education Act, if applicable.
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SECTION 1.2. CREATION AND ACCEPTANCE OF TRUST FOR THE BENEFIT OF THE
ISSUER. The Issuer may from time to time cause title to the Financed Student
Loans to be conveyed to the Eligible Lender Trustee; which Financed Student
Loans shall be held, administered and pledged and the proceeds thereof
distributed by the Eligible Lender Trustee for the benefit of the Issuer as set
forth in the Indenture, the Trust Agreement and herein. At the request of the
Issuer hereunder, the Eligible Lender Trustee hereby agrees to accept and hold
title to such Financed Student Loans (without liability or responsibility at
acceptance for the condition or validity of such right, title and interest) in
trust, as hereinafter set forth for the use and benefit of the Issuer.
SECTION 1.3. AUTHORITY TO ENTER INTO AND EXECUTE DOCUMENTS.
(a) The Issuer hereby authorizes and directs the Eligible Lender
Trustee to enter into, execute and deliver any and all agreements, documents and
certificates which may be required in connection with performing its duties and
obligations with respect to the Financed Student Loans under this Agreement
including, without limitation, the Trust Agreement, the Transfer Agreement and
the Indenture.
(b) The Issuer hereby authorizes and directs the Eligible Lender
Trustee to enter into, execute and deliver, from time to time as the Issuer may
request, any and all agreements, documents or certificates which may be required
in connection with the Trust Agreement, including, without limitation, the
Transaction Documents, Servicing Agreements or Federal Loan Program Documents,
with respect to the Financed Student Loans held on behalf of the Issuer under
this Agreement.
SECTION 1.4. DUTIES OF THE ELIGIBLE LENDER TRUSTEE. The Eligible Lender
Trustee, by the execution hereof, covenants, represents and agrees that:
(a) it shall accept and hold as herein set forth all such right, title
and interest to the Financed Student Loans that are transferred and assigned to
it at the request of the Issuer;
(b) it is, and shall be, an "eligible lender" as defined in 20
U.S.C.ss.1085(d) under the Higher Education Act;
(c) it shall enter into and maintain a Contract of Guarantee with each
Guarantor;
(d) if requested by the Issuer (with respect to the Financed Student
Loans held on behalf of the Issuer under this Agreement) in a reasonably
detailed writing that sets forth sufficient information and instructions, it
shall execute, deliver and perform Federal Loan Program Documents, Servicing
Agreements, Transaction Documents, and all other agreements, documents or
certificates required under the Trust Agreement and any other agreements,
instruments, or documents relating, directly or indirectly, to the making,
acquisition or consolidation of the Financed Student Loans or the servicing,
administration, sale, exchange, assignment or transfer of the Financed Student
Loans;
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(e) it shall sell, exchange or otherwise deal with such Financed
Student Loans in accordance with the Trust Agreement and the Indenture;
(f) it shall enter into, and thereafter comply with the terms thereof,
any agreement or other document relating to the Trust Agreement and take such
actions as are necessary and reasonably requested to convey, transfer, assign,
pledge and xxxxx x xxxx on and a security interest in all of its right, title
and interest in and to the Financed Student Loans in accordance with the
Indenture;
(g) it shall take such actions, at the request of the Issuer as are
necessary or appropriate in order for the Issuer to obtain the full value and
benefits of the Financed Student Loans under this Agreement, the Indenture and
the Trust Agreement;
(h) it shall hold all data, materials and information pertaining to the
Financed Student Loans confidential, and it agrees not to use such data,
materials or information for any purpose other than for the limited purpose of
performing its obligations under this Agreement or the Trust Agreement; and
(i) following the discharge or other termination of the transactions
contemplated by the Indenture and the Trust Agreement, it shall (i) continue to
hold all right, title and interest in and to the Financed Student Loans for the
benefit of the Issuer pursuant to the terms and conditions of this Agreement
until otherwise directed by the Issuer and (ii) shall execute such agreements
and documents as requested by the Issuer providing for the administration of and
receipt by the Issuer of the cash flows and other interests in such Financed
Student Loans.
SECTION 1.5. DUTIES OF THE ISSUER. The Issuer, by the execution hereof,
covenants, represents and agrees that:
(a) it shall accept, hold and maintain the beneficial interest in each
Financed Student Loan free of any claims, liens or encumbrances, except the
rights of the Eligible Lender Trustee and any trustee or other secured party
under the Indenture;
(b) it shall promptly take all necessary actions to perform its
obligations hereunder and to support the Eligible Lender Trustee, in the prompt
and full performance of its obligations hereunder.
SECTION 1.6. ACCEPTANCE OF DUTIES. The Eligible Lender Trustee accepts
the trusts hereby created and agrees to perform the duties and only the duties
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into the trust created hereby against the Eligible
Lender Trustee. The Eligible Lender Trustee shall not be answerable or
accountable under any circumstances except for its gross negligence or willful
misconduct.
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SECTION 1.7. RELIANCE ON CERTAIN DOCUMENTS, OTHER PERSONS. The Eligible
Lender Trustee shall not incur any liability in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. In the
administration of its duties hereunder, the Eligible Lender Trustee may execute
any of the trusts or powers hereof and perform its powers and duties hereunder
directly or through other agents or attorneys and may, at the expense of the
Issuer seek advice of counsel, accountants and other skilled persons to be
selected and employed by it, and the Eligible Lender Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the advice or opinion of any such counsel, accountants or other skilled persons.
SECTION 1.8. SECURITY FOR ACTION. No provision hereof shall require the
Eligible Lender Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
SECTION 1.9. CAPACITY. In accepting the trust hereby created, the
Eligible Lender Trustee acts solely as trustee hereunder and not in its
individual capacity.
SECTION 1.10. COMPENSATION. The Issuer shall pay to the Eligible Lender
Trustee from time to time reasonable compensation for all services rendered by
it hereunder with respect to the Financed Student Loans held on behalf of the
Issuer under this Agreement, and also all of its reasonable expenses, charges,
and other disbursements and those of its attorneys, agents, and employees
incurred in and about the administration and execution of the trust hereby
created with respect to the Financed Student Loans held on behalf of the Issuer
under this Agreement. Such payment shall be made solely out of the Collection
Fund as defined in and held under the Indenture.
SECTION 1.11. QUALIFICATION. The Eligible Lender Trustee, including any
successor, shall at all times (a) be a trust company or bank having the powers
of a trust company within the state in which it is located, (b) be an "eligible
lender" as defined in 20 U.S.C. ss. 1085(d) under the Higher Education Act of
1965, as amended, and (c) have entered into, and maintain in force, a Contract
of Guarantee with each Guarantor.
SECTION 1.12. SUCCESSORS. (a) The Eligible Lender Trustee or any
successor thereto may resign at any time without cause by giving at least 90
days' prior written notice, such resignation to be effective upon the acceptance
of the trusts created by Article I hereunder by any successor Eligible Lender
Trustee meeting the requirements of Section 1.11 hereof and payment in full of
all amounts due the Eligible Lender Trustee. In addition, the Issuer may at any
time remove the Eligible Lender Trustee with or without cause by an instrument
in writing delivered to the Eligible Lender Trustee, such removal to be
effective upon the acceptance of the trusts hereunder by a successor Eligible
Lender Trustee meeting the requirements of Section 1.11 hereof and payment
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in full of all amounts due the Eligible Lender Trustee. If no successor Eligible
Lender Trustee has been appointed within 90 days after notice of resignation or
removal, as the case may be, the Eligible Lender Trustee may request a court of
competent jurisdiction to (i) require the Issuer to appoint a qualified
successor Eligible Lender Trustee meeting the requirements of Section 1.11
hereof within 3 days of the receipt of citation or notice by the court, or (ii)
appoint a successor Eligible Lender Trustee meeting the requirements of Section
1.11 hereof;
(b) Any successor Eligible Lender Trustee shall execute and deliver to
the predecessor Eligible Lender Trustee an instrument accepting such appointment
and, in cooperation with the predecessor Eligible Lender Trustee, shall take
such further actions to ensure (i) that title to the Financed Student Loans has
been assigned to such successor Eligible Lender Trustee and (ii) that the
beneficial interest of the Issuer in the Financed Student Loans is maintained;
thereupon such successor Eligible Lender Trustee, without further act, shall
become vested with all the estates, properties, rights, powers, duties and
trusts of the predecessor Eligible Lender Trustee in the trusts hereunder with
like effect as if originally named as the Eligible Lender Trustee herein;
(c) Any bank, corporation or other entity into which the Eligible
Lender Trustee may be merged or converted or with which it may be consolidated,
or any bank, corporation or other entity resulting from any merger, conversion
or consolidation to which the Eligible Lender Trustee shall be a party, or any
bank, corporation or other entity to which substantially all the corporate trust
business of the Eligible Lender Trustee may be transferred, shall be the
Eligible Lender Trustee under this Agreement without any further act, provided
the resulting bank, corporation or other entity meets the qualification
requirements of Section 1.11 hereof.
SECTION 1.13. SERVICING OF THE FINANCED STUDENT LOANS. The Issuer
acknowledges that pursuant to the Federal Loan Program, due diligence must be
used in the origination, servicing and collection of the Financed Student Loans
and collection practices must be used no less extensive and forceful than those
generally in use among financial institutions with respect to other consumer
debt. In fulfillment of these obligations, the Issuer has entered into a Master
Servicing Agreement with Student Loan Funding Resources, Inc. as Master
Servicer. The Issuer acknowledges that the Eligible Lender Trustee is not
required to monitor the actions taken by the Servicers. The Issuer will cause an
annual certification to be provided to the Eligible Lender Trustee that
servicing of the Financed Student Loans by the Servicers has been conducted in
accordance with the terms of the respective agreements that the Issuer or the
Master Servicer has with each Servicer.
SECTION 1.14. INDEMNIFICATION BY THE ISSUER OF THE ELIGIBLE LENDER
TRUSTEE. The Issuer hereby agrees and does hereby indemnify and hold harmless
the Eligible Lender Trustee from and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs, expenses
or disbursements (including legal fees and expenses) of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Eligible
Lender Trustee in any way relating to or arising out of this Agreement or any
document, or the performance or enforcement of any of the terms of any provision
thereof, or in any way relating to or arising out of the
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administration of the trust estate or the action or inaction of the Eligible
Lender Trustee hereunder, except only in the case of willful misconduct or gross
negligence on the part of the Eligible Lender Trustee in the performance of its
duties hereunder; provided, that the Issuer's indemnification with respect to
each Financed Student Loan shall be limited to the period of time that the
Eligible Lender Trustee holds such Financed Student Loans in trust on behalf of
the Issuer. Such indemnification shall be payable solely out of the Trust Estate
as defined in and held under the Indenture.
SECTION 1.15. TERMINATION. This Agreement and the trusts created hereby
shall terminate with respect to the Issuer, upon the sale, transfer, final
disposition, maturity, final payment or assignment by the Issuer of all Financed
Student Loans held by the Eligible Lender Trustee on behalf of the Issuer.
ARTICLE II
MISCELLANEOUS
SECTION 2.1. DEFINITIONS. Capitalized terms used herein shall have the
same meaning given below and if not given below shall have the same meaning
given in the Trust Agreement:
"Consolidation Loans" shall mean the Financed Student Loans
authorized under Section 428C of the Higher Education Act of 1965, as
amended, or any successor provision.
"Contract of Guarantee" shall mean a contract with a Guarantor
providing for, or a certificate or other evidence of, the guarantee of
the Financed Student Loans.
"Federal Loan Program" shall mean a program that makes moneys
available for Federal Loans.
"Federal Loan Program Documents" shall mean any agreement,
document or certificate relating to the terms and conditions of the
Federal Loans under a particular Federal Loan Program, including but
not limited to any Contract of Guarantee, and any amendments or
supplements thereto.
"Federal Loans" shall mean Xxxxxxxx Loans, PLUS Loans or
Consolidation Loans.
"Financed Student Loans" shall mean Student Loans which become
subject to this Agreement.
"Guarantee" or "Guaranteed" shall mean, with respect to a
Federal Loan, the guarantee by the applicable Guarantor of the
principal of and accrued interest on such Federal Loan and the coverage
of such Federal Loan by a federal reinsurance agreement
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providing, among other things, for reimbursement to the Guarantor for
losses incurred by it on defaulted Federal Loans guaranteed by the
Guarantor as provided by the Higher Education Act from time to time.
"Guarantor" shall mean any guarantee agency as is agreed to in
writing by the Issuer and the Eligible Lender Trustee with respect to
the Financed Student Loans held in trust by the Eligible Lender
Trustee.
"Higher Education Act" shall mean the Higher Education Act of
1965, as amended from time to time, and all regulations and directives
promulgated thereunder from time to time.
"Master Servicing Agreement" shall mean the agreement dated as
of March 15, 1999, entered into between the Issuer and the Master
Servicer.
"Master Servicer" shall mean Student Loan Funding Resources,
Inc.
"PLUS Loans" shall mean the Financed Student Loans authorized
under Section 428B of the Higher Education Act of 1965, as amended, or
any successor provision.
"Servicer" shall mean a servicing entity selected to provide
servicing of the Financed Student Loans, including but not limited to
application review, disbursement, collection, due diligence and claims
services.
"Servicing Agreement" shall mean an agreement with a Servicer
for the servicing of the Financed Student Loans.
"Xxxxxxxx Loans" shall mean the Financed Student Loans
authorized under Section 427 and 428 of the Higher Education Act of
1965, as amended, or any successor provision, including Unsubsidized
Xxxxxxxx Loans, but not including PLUS Loans.
"Student Loans" shall mean loans made to or for the benefit of
students for the purpose of financing part or all of the costs of
higher education.
"Transaction Documents" shall mean any agreement, document or
certificate relating to the terms and conditions of the Trust
Agreement, including but not limited to an indenture of trust, security
agreement, bailment agreement, UCC financing statements, and any
amendments or supplements thereto.
"Transfer Agreement" means Transfer and Sale Agreement, dated
as of March 15, 1999, by and among Student Loan Funding LLC
("Funding"), Firstar Bank, National Association as eligible lender
trustee for the benefit of Funding, the Issuer, the Eligible
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Lender Trustee and Firstar Bank, National Association as indenture
trustee (the "Indenture Trustee") under the Indenture.
"Unsubsidized Xxxxxxxx Loans" shall mean student loans
authorized under Section 428H of the Higher Education Act of 1965, as
amended, or any successor provision.
SECTION 2.2. NOTICES. All notices shall be in writing, mailed by
regular mail, postage prepaid, (i) if to the Eligible Lender Trustee, addressed
to Firstar Bank, National Association, 000 Xxxxxx Xxxxxx, XX0000; X.X. Xxx 0000;
Xxxxxxxxxx, Xxxx 00000-0000, Attention: Corporate Trust Division, or to such
other address as may have been filed in writing with the Issuer; and (ii) if to
Issuer, addressed to Firstar Bank, National Association, 000 Xxxxxx Xxxxxx,
XX0000; X.X. Xxx 0000; Xxxxxxxxxx, Xxxx 00000-0000, Attention: Corporate Trust
Division, or to such other address as may have been filed by the Issuer in
writing.
SECTION 2.3. LENDER IDENTIFICATION NUMBER. The parties acknowledge that
Lender Identification Number 829626 shall be used in connection with the Student
Loans financed under the First Amended and Restated Indenture of Trust, together
with the First Amended and Restated Terms Supplement, each dated as of March 15,
1999, and each by and among the Issuer, the Eligible Lender Trustee and the
Indenture Trustee (the "Indenture") as the same may be amended from time to
time.
SECTION 2.4. PARTIAL INVALIDITY. Any provisions of this Agreement which
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 2.5. AMENDMENT. No term or provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party or other person against whom enforcement of the
change, waiver, discharge or termination is sought; and any waiver of the terms
hereof shall be effective only in the specific instance and for the specific
purpose given.
SECTION 2.6. COUNTERPARTS. This 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.
SECTION 2.7. TRUST BINDING UPON SUCCESSORS AND ASSIGNS. All covenants
and agreements contained herein shall be binding upon, and inure to the benefit
of, the Issuer and its successors and assigns and the Eligible Lender Trustee
and its permitted successors and assigns.
SECTION 2.8. HEADINGS. The headings of the various articles and
sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
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SECTION 2.9. GOVERNING LAW AND PLACE OF ENFORCEMENT. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Ohio and all suits and actions arising out of this Agreement shall be instituted
in a court of competent jurisdiction in the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the date first above written.
STUDENT LOAN FUNDING FIRSTAR BANK, NATIONAL
1998-A/B TRUST ASSOCIATION
By Firstar Bank, National Association, as Eligible Lender Trustee
not in its individual capacity, but
solely as Co-Owner Trustee, of
the Issuer
By: /s/ Brain X. Xxxxxxx By: /s/ Brain X. Xxxxxxx
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Title: Brain X. Xxxxxxx Title: Brain X. Xxxxxxx
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Vice President & Trust Officer Vice President & Trust Officer
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