EXHIBIT 3.1
================================================================================
AMENDED AND RESTATED TRUST AGREEMENT
Relating to
[EDUCATION FUNDING CAPITAL TRUST-__]
Dated as of ___________, 20__
among
EDUCATION FUNDING CAPITAL I, LLC,
as Depositor,
and
-----------------------------,
acting hereunder not in its individual capacity, but solely
as Owner Trustee,
and
--------------------------,
not in its individual capacity, but solely
as Co-Owner Trustee,
and acknowledged and agreed to by
-------------------------,
acting hereunder not in its individual capacity, but solely
as Trust Eligible Lender Trustee
================================================================================
Table of Contents
Page
INTRODUCTION ........................................................................................ 1
ARTICLE I DEFINITIONS .................................................................... 1
Section 1.1 Definitions .................................................................... 1
Section 1.2 Usage of Terms ................................................................. 4
Section 1.3 Section References ............................................................. 4
ARTICLE II FORMATION OF THE TRUST ......................................................... 5
Section 2.1 Formation of the Trust ......................................................... 5
Section 2.2 Office ......................................................................... 5
Section 2.3 Purposes and Powers ............................................................ 5
Section 2.4 Appointment of Owner Trustee and Co-Owner Trustee .............................. 6
Section 2.5 Initial Capital Contribution of Trust Property ................................. 6
Section 2.6 Declaration of Trust ........................................................... 6
Section 2.7 Liability of a Certificateholder ............................................... 7
Section 2.8 Title to Trust Property ........................................................ 7
Section 2.9 Situs of Trust ................................................................. 7
Section 2.10 Representations and Warranties of the Depositor ................................ 8
Section 2.11 Federal Income Tax Allocations. ................................................ 9
Section 2.12 Covenants of Certificateholder ................................................. 9
Section 2.13 Covenants of Depositor .........................................................10
Section 2.14 Covenants of the Owner Trustee .................................................10
ARTICLE III THE CERTIFICATE ................................................................11
Section 3.1 Initial Ownership ..............................................................11
Section 3.2 The Certificate ................................................................11
Section 3.3 Authentication of Certificate ..................................................11
Section 3.4 Registration of Transfer and Exchange of Certificate ...........................11
Section 3.5 Mutilated, Destroyed, Lost or Stolen Certificate ...............................12
Section 3.6 Person Deemed Certificateholder ................................................13
Section 3.7 Maintenance of Office or Agency ................................................13
Section 3.8 Appointment of Paying Agent ....................................................13
ARTICLE IV ACTIONS BY OWNER TRUSTEE, CO-OWNER TRUSTEE AND TRUST ELIGIBLE LENDER TRUSTEE ...15
Section 4.1 Restriction on Power of Certificateholder ......................................15
Section 4.2 Prior Notice to Certificateholder with Respect to Certain Matters ..............15
Section 4.3 Action by Certificateholder with Respect to Bankruptcy .........................15
Section 4.4 Restrictions on Certificateholder's Power ......................................15
Section 4.5 Rights of Certificateholder ....................................................16
i
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES .....................................17
Section 5.1 Certificate Contribution Account; Certificate Distribution Account .............17
Section 5.2 Application of Funds in Certificate Distribution Account and Certificate
Contribution Account ...........................................................18
Section 5.3 Method of Payment ..............................................................18
Section 5.4 No Segregation of Moneys; No Interest ..........................................19
Section 5.5 Accounting; Reports; Tax Returns ...............................................19
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE, CO-OWNER TRUSTEE AND TRUST
ELIGIBLE LENDER TRUSTEE ........................................................20
Section 6.1 General Authority ..............................................................20
Section 6.2 General Duties .................................................................20
Section 6.3 Action upon Instruction ........................................................20
Section 6.4 No Duties Except as Specified in this Agreement or in Instructions .............21
Section 6.5 No Action Except under Specified Documents or Instructions .....................22
Section 6.6 Restrictions ...................................................................22
Section 6.7 Administration Agreement .......................................................22
ARTICLE VII CONCERNING THE OWNER TRUSTEE, THE CO-OWNER TRUSTEE AND THE TRUST
ELIGIBLE LENDER TRUSTEE ........................................................24
Section 7.1 Acceptance of Owner Trustee, Co-Owner Trustee and Trust Eligible
Lender Trustee .................................................................24
Section 7.2 Furnishing of Documents ........................................................25
Section 7.3 Representations and Warranties .................................................25
Section 7.4 Reliance; Advice of Counsel ....................................................27
Section 7.5 Not Acting in Individual Capacity ..............................................28
Section 7.6 Owner Trustee Not Liable for Certificate, Notes or Financed Student Loans ......28
Section 7.7 Owner Trustee, Co-Owner Trustee and Trust Eligible Lender Trustee May
Own Certificate and Notes ......................................................29
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE, THE CO-OWNER TRUSTEE AND TRUST
ELIGIBLE LENDER TRUSTEE ........................................................30
Section 8.1 Fees and Expenses of Owner Trustee, Co-Owner Trustee and Trust Eligible
Lender Trustee .................................................................30
Section 8.2 Indemnification ................................................................30
Section 8.3 Non-recourse Obligations .......................................................31
ARTICLE IX TERMINATION ....................................................................32
Section 9.1 Termination of the Trust .......................................................32
ARTICLE X SUCCESSOR OWNER TRUSTEES, CO-OWNER TRUSTEES AND TRUST ELIGIBLE LENDER TRUSTEES .34
Section 10.1 Eligibility Requirements for Owner Trustee, Co-Owner Trustee and
Trust Eligible Lender Trustee ..................................................34
Section 10.2 Resignation or Removal of Owner Trustee, Co-Owner Trustee and Trust
Eligible Lender Trustee ........................................................34
ii
Section 10.3 Successor Trustee ..............................................................35
Section 10.4 Merger or Consolidation of Owner Trustee, Co-Owner Trustee or
Trust Eligible Lender Trustee ..................................................36
Section 10.5 Appointment of Additional Co-Trustee or Separate Trustee .......................36
ARTICLE XI MISCELLANEOUS PROVISIONS .......................................................39
Section 11.1 Amendment ......................................................................39
Section 11.2 No Recourse ....................................................................40
Section 11.3 Governing Law ..................................................................40
Section 11.4 Severability of Provisions .....................................................40
Section 11.5 Certificate Nonassessable and Fully Paid .......................................41
Section 11.6 Third-Party Beneficiaries ......................................................41
Section 11.7 Counterparts ...................................................................41
Section 11.8 Notices ........................................................................41
SIGNATURES .......................................................................................... 1
EXHIBIT A - FORM OF TRUST CERTIFICATE
EXHIBIT B - FORM OF PURCHASER'S LETTER
iii
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT, dated as of _____________, 20__
(this "Agreement"), is made among EDUCATION FUNDING CAPITAL I, LLC, a Delaware
limited liability company (together with its permitted successors and assigns,
the "Depositor"), _____________________, a __________ organized under the laws
of the __________, acting hereunder not in its individual capacity, but solely
as Owner Trustee of the Trust formed hereunder (in such capacity, the "Owner
Trustee"), and __________________, a __________ organized under the laws of
__________, acting hereunder not in its individual capacity, but solely as
co-owner trustee of the Trust formed hereunder (in such capacity, the "Co-Owner
Trustee"), and is acknowledged and agreed to by, for purposes of any provision
relating to __________________, a __________ organized under the laws of the
__________, not in its individual capacity, but solely as trust eligible lender
trustee for the benefit of the Co-Owner Trustee (in such capacity, the "Trust
Eligible Lender Trustee").
WHEREAS, the Depositor, the Owner Trustee and the Co-Owner Trustee are
parties to that certain Trust Agreement dated as of _________, 20__ (the
"Original Trust Agreement"), pursuant to which [Education Funding Capital
Trust-__] was formed;
WHEREAS, the Depositor, the Owner Trustee and the Co-Owner Trustee desire
to amend and restate the Original Trust Agreement in its entirety on the terms
and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
and other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Original Trust Agreement is amended and restated to
read in its entirety, and the parties hereto agree, as follows:
Article I
Definitions
Section 1.1 Definitions. Capitalized words and phrases used as defined
words and phrases and not otherwise defined herein shall have the meanings given
such words and phrases in the Indenture (defined below in this Section). The
following words and phrases, unless otherwise specified, shall have the
following meanings:
"Agreement" or "this Agreement" shall mean this Amended and Restated
Trust Agreement, all amendments and supplements hereto and all exhibits and
schedules to any of the foregoing.
"Authentication Agent" shall mean ________________ or its successor in
interest, and any successor authentication agent appointed as provided in
this Agreement.
"Benefit Plan" shall have the meaning given to such term in Section
3.4.
"Business Day" shall mean any day on which the Owner Trustee, Co-Owner
Trustee and the Paying Agent, if any, at their respective addresses set
forth in or for purposes of this Agreement, are open for commercial banking
business and on which the New York Stock Exchange is open.
"Certificate" shall mean a certificate executed by the Trust and
authenticated by the Authentication Agent evidencing an undivided interest,
whether fractional or whole, in the Trust.
"Certificate Contribution Account" shall mean the account designated
as the Certificate Contribution Account in, and which is established and
maintained pursuant to, Section 5.1.
"Certificate Distribution Account" shall mean the account designated
as the Certificate Distribution Account in, and which is established and
maintained pursuant to, Section 5.1.
"Certificate Register" shall mean the register maintained by the
Certificate Registrar pursuant to Section 3.4.
"Certificate Registrar" shall mean the registrar appointed pursuant to
Section 3.4.
"Certificateholder" or "Holder" shall mean the Person in whose name
the Certificate is registered in the Certificate Register; provided,
however, that if no Certificate has been issued by the Trust, the Depositor
shall be deemed to be the Certificateholder for purposes of this Agreement.
"Certificateholder's Distribution Date" shall mean the date on which
amounts in the Certificate Distribution Account are disbursed by the
Co-Owner Trustee to the Certificateholder, which Date shall be the last
Business Day of each calendar month in which a deposit has been made to the
Certificate Distribution Account at least one day prior to such last
Business Day.
"Closing Date" shall mean _____________, 20__.
"Corporate Trust Office" shall mean (i) with respect to the Owner
Trustee, the principal office of the Owner Trustee at which, at any
particular time, its corporate trust business shall be administered, which
office at the Closing Date is located at ________________________; the
telecopy number for the Corporate Trust Office on the date of the execution
of this Agreement is ______________; (ii) with respect to the Co-Owner
Trustee, the principal office of the Co-Owner Trustee at which, at any
particular time, its corporate trust business shall be administered, which
office at the Closing Date is located at _____________________________; the
telecopy number for the Corporate Trust Office on the date of the execution
of this Agreement is __________________; and (iii) with respect to the
Trust Eligible Lender Trustee, at the principal office of the Trust
2 of 41
Eligible Lender Trustee at which, at any particular time, its corporate
trust business shall be administered, which office at the Closing Date is
located at __________________________________; the telecopy number for the
Corporate Trust Office of the Trust Eligible Lender Trustee on the date of
the execution of this Agreement is _________________.
"Delaware Statutory Trust Act" shall have the meaning given to such
term in Section 2.6.
"Depositor Eligible Lender Trust Agreement" shall mean the Eligible
Lender Trust Agreement dated as of ___________, 20__ between the Depositor
and the Depositor Eligible Lender Trustee, as originally executed and as
from time to time amended or supplemented.
"Depositor Eligible Lender Trustee" shall mean ______________________,
as the eligible lender trustee under the Depositor Eligible Lender Trust
Agreement, and its lawful successors and assigns.
"ERISA" shall have the meaning assigned to such term in Section
3.4(e).
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture of Trust to be dated as of
____________, 20__, among the Trust, the Trust Eligible Lender Trustee and
the Indenture Trustee, as amended, supplemented or restated from time to
time.
"Instructing Party" shall have the meaning assigned to such term in
Section 6.3(a)
"Original Trust Agreement" shall mean the Trust Agreement dated as of
___________, 20__ among Depositor, the Owner Trustee and the Co-Owner
Trustee, pursuant to which the Trust was formed.
"Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.8, which initially shall be
__________________.
"Percentage Interest" shall mean that percentage of the total
beneficial interest in the Trust that is held by the Certificateholder,
which Percentage Interest with respect to the initially issued Certificate
shall be 100%.
"Record Date" shall mean, with respect to the Certificateholder's
Distribution Date, the close of business on the last Business Day
immediately preceding such Certificateholder's Distribution Date.
3 of 41
"Responsible Officer" shall mean a duly appointed officer in the
corporate trust department of the Owner Trustee, the Co-Owner Trustee or
the Trust Eligible Lender Trustee having responsibility for performance of
the respective obligations of the Owner Trustee, the Co-Owner Trustee or
Trust Eligible Lender Trustee hereunder.
"Transferor" shall mean, collectively, the Depositor or its successor
in interest, and the Depositor Eligible Lender Trustee or its successor in
interest, if and to the extent that the Depositor Eligible Lender Trustee,
on behalf of the Depositor, holds legal title to Financed Student Loans to
be transferred in trust to the Trust Eligible Lender Trustee.
"Trust" shall mean the Delaware statutory trust formed pursuant to the
Original Trust Agreement and designated "[Education Funding Capital
Trust-__]", the estate of which consists of the Trust Property.
"Trust Property" shall mean the property and proceeds of every
description conveyed to the Trust and, but solely with respect to legal
title to Financed Student Loans originated under the Act, the Trust
Eligible Lender Trustee (i) initially pursuant to Section 2.5 and (ii)
hereafter pursuant to the Depositor Transfer and Sale Agreement, together
with all amounts deposited in the Certificate Contribution Account and the
Certificate Distribution Account (including all Eligible Investments
therein and all proceeds therefrom).
"Trustee" shall mean any one of the Trustees.
"Trustees" shall mean, collectively, the Owner Trustee, the Co-Owner
Trustee and the Trust Eligible Lender Trustee (although the Trust Eligible
Lender Trustee is not a trustee of the Trust).
Section 1.2 Usage of Terms. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation." To the extent that definitions are contained in this Agreement, or
in any such certificate or other document, such definitions shall control.
Section 1.3 Section References. All references to Articles, Sections,
paragraphs, subsections, exhibits and schedules shall be to such portions of
this Agreement unless otherwise specified.
4 of 41
Article II
Formation of the Trust
Section 2.1 Formation of the Trust. The trust formed by the Original
Trust Agreement and continued hereby shall be known as "[Education Funding
Capital Trust-__]," under which and in which name, but solely to the extent
provided in this Agreement, the Owner Trustee and the Co-Owner Trustee may
conduct business, make and execute contracts and other instruments and xxx and
be sued.
Section 2.2 Office.
Except as otherwise provided in this Agreement with respect to the Owner
Trustee for purposes of performance of the duties of the Owner Trustee set forth
herein, the office of the Trust shall be in care of the Co-Owner Trustee at its
Corporate Trust Office or at such other address in the State of __________ as
the Co-Owner Trustee may designate by written notice to the Owner Trustee, the
Certificateholder and the Depositor.
Section 2.3 Purposes and Powers.
(a) The purpose of the Trust is, and the Owner Trustee and the Co-Owner
Trustee on behalf of the Trust, but each only to the extent provided in this
Agreement, shall have the power and authority, to engage in the following
activities:
(i) to issue and sell the initial Certificate pursuant to this
Agreement and to pay the organizational, start-up and transactional
expenses of the Trust from amounts on deposit in the Certificate
Contribution Account;
(ii) to execute and deliver the Depositor Transfer and Sale
Agreement, whereby the Depositor and the Depositor Eligible Lender Trustee
shall transfer and assign to the Trust and the Trust Eligible Lender
Trustee all of the Trust Property;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Property to which it holds title and all of its right, title and
interest in the Depositor Transfer and Sale Agreement to the Indenture
Trustee for the benefit of the Noteholders (and to execute (by any one or
more of the Trustees) and file UCC financing statements as deemed necessary
or appropriate to evidence the same) and to hold, manage and distribute to
the Certificateholder pursuant to the terms hereof any portion of the Trust
Property released from the lien of, and remitted to the Co-Owner Trustee
for deposit in the Certificate Distribution Account pursuant to, the
Indenture;
(iv) to issue and sell one or more series of the Notes;
(v) to enter into and perform its obligations under the Basic
Documents to which it is a party;
5 of 41
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation of
the Trust Property and the making of distributions to the
Certificateholder.
(b) Except as otherwise expressly provided herein with respect to the
Owner Trustee and the Trust Eligible Lender Trustee, the Co-Owner Trustee is
hereby authorized to engage in the foregoing activities. The Co-Owner Trustee
shall not engage in any activity other than in connection with the foregoing or
other than as required or expressly authorized by the terms of this Agreement or
the Basic Documents.
Section 2.4 Appointment of Owner Trustee and Co-Owner Trustee. The
Depositor hereby confirms the appointment of the Owner Trustee as trustee of the
Trust and the Co-Owner Trustee as co-trustee of the Trust, effective as of the
date hereof, to have all the respective rights, powers and duties set forth
herein. Each of the Owner Trustee and the Co-Owner Trustee hereby accepts its
respective appointment.
Section 2.5 Initial Capital Contribution of Trust Property. The Co-Owner
Trustee hereby acknowledges receipt in trust from the Depositor, as of the date
of the Original Trust Agreement, of the sum of one dollar, which shall
constitute the initial Trust Property and shall be deposited in the Certificate
Contribution Account. To the extent not otherwise provided for by amounts on
deposit in the Certificate Contribution Account, the Depositor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender
Trustee, promptly reimburse the Owner Trustee, the Co-Owner Trustee or the Trust
Eligible Lender Trustee for any such expenses paid by the Owner Trustee, the
Co-Owner Trustee or the Trust Eligible Lender Trustee.
Section 2.6 Declaration of Trust. Each of the Owner Trustee and the
Co-Owner Trustee hereby declares that it will hold the Trust Property in trust
upon and subject to the conditions set forth herein for the use and benefit of
the Certificateholder, subject to the interests and rights in the Trust Property
granted to other Persons by the Basic Documents. The Trust Eligible Lender
Trustee hereby acknowledges and agrees that it is holding legal title to that
part of the Trust Property constituting Financed Student Loans originated under
the Act in trust upon and subject to the conditions set forth herein. It is the
intention and agreement of the parties hereto that the Trust constitute a
statutory trust under Chapter 38 of Title 12 of the Delaware Code (the "Delaware
Statutory Trust Act") and that this Agreement constitute the governing
instrument of the Trust. Pursuant to Section 3810 of the Delaware Statutory
Trust Act, the Owner Trustee and Co-Owner Trustee filed a certificate of trust
with the Delaware Secretary of State on the date of the Original Trust Agreement
to form the Trust. It is the intention and agreement of the parties hereto that,
solely for income and franchise tax purposes, the Trust, having at all times but
a single Certificateholder, shall be treated as a "disregarded entity", i.e.,
the Trust will be disregarded as an entity separate from the Certificateholder
(or, if the Certificateholder is also a "disregarded entity," both the Trust and
Certificateholder will be disregarded as entities separate from the sole owner
of
6 of 41
the Certificateholder). Unless otherwise required by appropriate tax
authorities, the Trust will file or cause to be filed all required annual or
other necessary returns, reports and other forms consistent with the
characterization of the Trust as a "disregarded entity" for such tax purposes.
Effective as of the date hereof, each of the Owner Trustee, the Co-Owner Trustee
and the Trust Eligible Lender Trustee shall have all rights, powers and duties
set forth herein and in the laws of the State of Delaware with respect to
accomplishing the purposes of the Trust.
Section 2.7 Liability of a Certificateholder.
(a) The Certificateholder, in its capacity as such, shall not be liable
directly to indemnify an injured party for any losses, claims, damages,
liabilities and expenses of the Trust, to the extent not paid out of the Trust
Property. The Certificateholder shall not be liable for any losses incurred by a
Noteholders in the capacity of an investor in the Notes.
(b) The Certificateholder, in its capacity as such, shall not have any
personal liability for any liability or obligation of the Trust or by reason of
any action taken by the parties to this Agreement pursuant to any provisions of
this Agreement or any Basic Document. The Certificateholders shall be entitled
to the same limitations on personal liability extended to stockholders of
corporations organized for profit under the Delaware General Corporation Law.
Section 2.8 Title to Trust Property.
(a) Legal title to all the Trust Property (other than Financed Student
Loans originated under the Act) shall be vested at all times in the Trust as a
separate legal entity except where applicable law in any jurisdiction requires
legal title to any part of such Trust Property to be vested in another trustee
or trustees, in which case, after the appropriate actions under Section 10.5
shall have been taken, legal title shall be deemed to be vested in such other
co-trustee and/or separate trustee, as the case may be. Legal title to all Trust
Property consisting of the Financed Student Loans originated under the Act shall
be vested at all times in the Trust Eligible Lender Trustee, not in its
individual capacity but solely as Trust Eligible Lender Trustee pursuant to the
Trust Eligible Lender Trust Agreement for the benefit of the Trust; provided,
however, that the Trust Eligible Lender Trustee shall be at all times an
Eligible Lender.
(b) The Certificateholder shall not have legal title to any part of the
Trust Property. The Certificateholder shall be entitled to receive distributions
with respect to its undivided beneficial interest therein only in accordance
with Articles V and IX of this Agreement. No transfer, by operation of law or
otherwise, of any right, title or interest by the Certificateholder of its
ownership interest in the Trust Property shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Trust Property.
Section 2.9 Situs of Trust. The chief executive office and principal
place of business of the Trust will be located at the Corporate Trust Office of
the Co-Owner Trustee. The Trust shall at all times be administered in the State
of __________. All bank accounts shall be maintained by the Co-Owner Trustee and
shall be located in the State of __________. The Trust shall not have any
employees in any state; provided, however, that nothing herein shall restrict or
prohibit the Owner
7 of 41
Trustee, the Co-Owner Trustee, the Trust Eligible Lender Trustee, the Depositor,
the Administrator, the Servicer or any agent of the Trustees from having
employees within or without the State of Delaware or the State of __________.
Payment will be received by the Co-Owner Trustee only in the State of
__________, and payments will be made by the Co-Owner Trustee only from the
State of __________.
Section 2.10 Representations and Warranties of the Depositor. By execution
of this Agreement, the Depositor makes the following representations and
warranties on which the Owner Trustee, the Co-Owner Trustee and the Trust
Eligible Lender Trustee each relies in accepting the Trust Property in trust and
issuing the Certificate:
(a) Organization and Good Standing. It has been duly organized and is
validly existing as a limited liability company in good standing under the laws
of the State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and as such business
is currently conducted and is proposed to be conducted pursuant to this
Agreement and the Basic Documents.
(b) Due Qualification. It is duly qualified to do business as a limited
liability company in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its property,
the conduct of its business and the performance of its obligations under this
Agreement and the Basic Documents requires such qualification.
(c) Power and Authority. It has the power and authority to execute and
deliver this Agreement and the Basic Documents to which it is a party and to
perform its obligations pursuant thereto, and the execution, delivery and
performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by all necessary company action.
(d) No Consent Required. No consent, license, approval or authorization or
registration or declaration with, any Person or with any governmental authority,
bureau or agency is required in connection with its execution, delivery or
performance of this Agreement and the Basic Documents to which it is a party,
except for such as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the Basic Documents to which it is a party and the
fulfillment of its obligations under this Agreement and the Basic Documents to
which it is a party shall not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice, lapse of time or
both) a default under, its certificate of formation or limited liability company
agreement, or any indenture, agreement, mortgage, deed of trust or other
instrument to which it is a party or by which it or any of its properties is
bound, or result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement, mortgage,
deed of trust or other instrument, or violate any law, order, rule or regulation
applicable to it of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over it or any of its properties.
(f) No Proceedings. There are no proceedings or investigations pending or,
to its knowledge, threatened against it before any court, regulatory body,
administrative agency or other
8 of 41
tribunal or governmental instrumentality having jurisdiction over it or its
properties (i) asserting the invalidity of this Agreement or any of the Basic
Documents, (ii) seeking to prevent the issuance of the Certificate or the Notes
or the consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents, (iii) seeking any determination or ruling that might
materially and adversely affect its performance of its obligations under, or the
validity or enforceability of, this Agreement or any of the Basic Documents, or
(iv) seeking to adversely affect the federal income tax or other federal, state
or local tax attributes of the Certificate.
Section 2.11 Federal Income Tax Allocations. Net income of the Trust for
any month as determined for federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof) shall be
allocated to the Certificateholder, as of the Record Date for such month, in an
amount equal to the amount distributable for such month to such
Certificateholder.
Section 2.12. Covenants of Certificateholder. The Certificateholder agrees:
(a) to be bound by the terms and conditions of the Certificate and of this
Agreement, including any supplements or amendments hereto, and to perform the
obligations of the Certificateholder as set forth therein or herein, in all
respects as if it were a signatory hereto. This undertaking is made for the
benefit of the Owner Trustee, the Co-Owner Trustee, the Trust Eligible Lender
Trustee and any other future Certificateholder;
(b) to hereby appoint the Administrator as such Certificateholder's agent
and attorney-in-fact to sign any federal income tax information return filed on
behalf of the Certificateholder with respect to this Agreement and that, if
requested by the Co-Owner Trustee, it will sign such federal income tax
information return in its capacity as holder of an interest in the Trust. The
Certificateholder also hereby agrees that in its tax returns it will not take
any position inconsistent with those taken in any tax returns filed by the
Administrator on behalf of the Certificateholder;
(c) to notify the Owner Trustee and the Co-Owner Trustee of any transfer
by it of the Certificate in a taxable sale or exchange, within 30 days of the
date of the transfer, provided, however, that notwithstanding anything to the
contrary in this Agreement, the Certificateholder shall not transfer the
Certificate so long as there are any Notes outstanding unless the transfer is
related to (i) the adjudication of the Certificateholder as bankrupt or
insolvent, (ii) the reorganization or relief of the Certificateholder under any
applicable federal or state law relating to bankruptcy, (iii) the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Certificateholder or a substantial part of its property, or
(iv) an assignment by the Certificateholder for the benefit of its creditors;
and
(d) not to, for any reason, institute proceedings for the Trust to be
adjudicated as bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trust or a substantial part
9 of 41
of its property, or cause or permit the Co-Owner Trustee or the Trust Eligible
Lender Trustee to make any assignment for the benefit of its creditors, or admit
in writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any action in furtherance of
any such action.
Section 2.13. Covenants of Depositor. The Depositor agrees not to, for any
reason, institute proceedings for the Trust to be adjudicated as bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against the Trust, or file a petition seeking or consenting to reorganization or
relief under any applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or a substantial part of
its property.
Section 2.14. Covenants of the Owner Trustee. The Owner Trustee agrees not
to, for any reason, institute proceedings for the Trust to be adjudicated as
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against the Trust, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or a substantial
part of its property.
10 of 41
ARTICLE III
THE CERTIFICATE
Section 3.1. Initial Ownership. Pursuant to the contribution by the
Depositor described in Section 2.5, and in the absence of the issuance of the
initial Certificate, the Depositor shall be the sole beneficiary of the Trust.
Section 3.2. The Certificate. A single Certificate registered in the name
of the Depositor and representing the whole beneficial interest in the Trust
shall be initially issued in accordance with the provisions of Section 3.3. The
Certificate shall be substantially in the form of Exhibit A to this Agreement
with such changes as are necessary or appropriate and not inconsistent with this
Agreement. The Certificate shall be executed by the Trust by manual or facsimile
signature of any authorized signatory of the Co-Owner Trustee on behalf of the
Trust. A Certificate bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures were affixed, authorized to sign on
behalf of the Owner Trustee shall be validly issued and entitled to the benefits
of this Agreement, notwithstanding that such individuals or any of them have
ceased to be so authorized prior to the authentication and delivery of such
Certificate.
Section 3.3. Authentication of Certificate. Simultaneously with the
assignment and transfer to the Trust of the Transferred Assets (as defined in
the Depositor Transfer and Sale Agreement) pursuant to the Depositor Transfer
and Sale Agreement and the delivery to the Trust Eligible Lender Trustee and the
Co-Owner Trustee of the Financed Student Loans and the other Trust Property,
respectively, the Co-Owner Trustee shall execute the Certificate and shall cause
the Certificate to be authenticated by the Authentication Agent and delivered to
or upon the order of the Depositor. No Certificate shall entitle its Holder to
any benefit under this Agreement, or shall be valid for any purpose, unless
there shall appear on such Certificate a certificate of authentication, executed
by the Authentication Agent, by manual signature; such authentication shall
constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. The Co-Owner Trustee is hereby initially
appointed Authentication Agent. The Certificate shall be dated the date of its
authentication.
Section 3.4. Registration of Transfer and Exchange of Certificate.
(a) The Certificate Registrar shall maintain, or cause to be maintained,
at the office or agency maintained pursuant to Section 3.7, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Co-Owner Trustee shall provide for the registration of the Certificate and
of transfers and exchanges of the Certificate as provided in this Agreement. The
Co-Owner Trustee is hereby initially appointed Certificate Registrar for the
purpose of registering the Certificate and transfers and exchanges of the
Certificate as provided in this Agreement. No transfer of a beneficial interest
in the Trust or a Trust Certificate shall be made unless such transfer is made
pursuant to an effective registration statement under the Securities Act and
state securities laws, or is exempt from the registration requirements of the
Securities Act and state securities laws. Further, no transfer of a beneficial
interest in the Trust or Trust Certificate or any rights or benefits with
respect thereto (including the right to receive distributions hereunder) shall
be permitted unless the Co-Owner Trustee shall have received an opinion of
counsel to the
11 of 41
effect that such transfer will not cause the Trust to be treated for federal
income tax purposes as an association (or publicly-traded partnership) taxable
as a corporation, and will not adversely affect the federal income tax treatment
of the Noteholders in any material respect.
(b) Subject to the provisions of paragraph (c) of Section 2.12 of this
Agreement and paragraph (e) of this Section 3.4, the Depositor, as the
registered Holder of the initial single Certificate, may transfer (but solely to
the extent not otherwise limited or prohibited in the Certificate or this
Agreement), or exchange for other Certificates aggregating Percentage Interests
equal to 100%, the initial Certificate upon surrender of such Certificate to be
transferred or exchanged at the office or agency of the Co-Owner Trustee
maintained pursuant to Section 3.7. Upon surrender for registration of transfer
of any Certificate at the office or agency of the Co-Owner Trustee maintained
pursuant to Section 3.7, the Co-Owner Trustee shall cause the Owner Trustee to
execute, and the Authentication Agent shall authenticate and deliver in the name
of the designated transferee, one or more new Certificates in an aggregate
amount equal to the surrendered Certificate, each dated the date of
authentication.
(c) Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Co-Owner Trustee and the Certificate Registrar, duly
executed by the Holder or its attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange shall be
canceled and subsequently disposed of by the Co-Owner Trustee in accordance with
its customary practice.
(d) No service charge shall be made for any registration of transfer or
exchange of a Certificate, but the Co-Owner Trustee or the Certificate Registrar
(if different from the Co-Owner Trustee) may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer or exchange of a Certificate.
(e) No Certificate may be acquired by or for the account of (i) an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Code, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Certificateholder thereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.
Section 3.5 Mutilated, Destroyed, Lost or Stolen Certificate. If (a) any
mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (b) there is delivered to the Owner
Trustee, the Certificate Registrar (if different from the Co-Owner Trustee) and
the Co-Owner Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Certificate
Registrar, the Co-Owner Trustee or the Owner Trustee that such Certificate has
been acquired by a bona fide purchaser, the Co-Owner Trustee shall cause the
Owner Trustee to execute, and the Authentication Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and amount. In connection
with the issuance of any new Certificate under this Section 3.5, the Co-Owner
Trustee may require the payment of a sum sufficient to cover
12 of 41
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Co-Owner Trustee, the
Owner Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section 3.5 shall constitute conclusive
evidence of beneficial ownership in the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.
Section 3.6. Person Deemed Certificateholder. Prior to due presentation of
a Certificate for registration of transfer, the Co-Owner Trustee, the
Certificate Registrar (if different from the Co-Owner Trustee) and any agent of
the Co-Owner Trustee or the Certificate Registrar may treat the Person in whose
name any Certificate is registered as the holder of such Certificate for the
purpose of receiving distributions pursuant to Section 5.2 and for all other
purposes whatsoever, and neither the Owner Trustee, the Co-Owner Trustee, or the
Certificate Registrar nor any agent of the Owner Trustee, the Co-Owner Trustee
or the Certificate Registrar shall be affected by any notice to the contrary.
Section 3.7. Maintenance of Office or Agency.
(a) The Co-Owner Trustee shall maintain in _______________ an office or
offices or agency or agencies where a Certificate may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Co-Owner Trustee in respect of such Certificate and the Basic Documents may
be served. The Co-Owner Trustee initially designates its Corporate Trust Office
for such purposes. The Co-Owner Trustee shall give prompt written notice to the
Owner Trustee, the Depositor, the Trust Eligible Lender Trustee and the
Certificateholder of any change in the location of the Certificate Register or
any such office or agency.
(b) The Owner Trustee shall maintain in _____________, Delaware an office
or offices from which it shall perform its obligations under this Agreement and
at which all service of process with respect to this Agreement shall be made.
The Owner Trustee initially designates its Corporate Trust Office for such
purposes. The Owner Trustee shall give prompt written notice to the Co-Owner
Trustee, the Depositor, the Trust Eligible Lender Trustee and the
Certificateholder of any change in the location of such office or agency.
(c) The Trust Eligible Lender Trustee shall maintain in _______________,
__________ an office or offices from which it shall perform its obligations
under this Agreement and at which all service of process with respect to this
Agreement shall be made. The Trust Eligible Lender Trustee initially designates
its Corporate Trust Office for such purposes. The Trust Eligible Lender Trustee
shall give prompt written notice to the Owner Trustee, the Co-Owner Trustee, the
Depositor and the Certificateholder of any change in the location of such office
or agency.
Section 3.8. Appointment of Paying Agent. The Paying Agent shall make
distributions to the Certificateholder from the Certificate Distribution Account
pursuant to Section 5.2 and shall report the amounts of such distributions to
the Owner Trustee and Co-Owner Trustee (if different from the Paying Agent). Any
Paying Agent (if different from the Co-Owner Trustee) shall have the revocable
power to withdraw funds from the Certificate Distribution Account for the
purpose of making the distributions referred to above. The Co-Owner Trustee (if
different from the Paying
13 of 41
Agent) may revoke such power and remove the Paying Agent if the Co-Owner Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material respect. The Paying
Agent shall initially be __________________, and any co-paying agent chosen by
______________. _______________ shall be permitted to resign as Paying Agent
upon 30 days' written notice to the Co-Owner Trustee and the Owner Trustee. In
the event that _________________ shall no longer be the Paying Agent, the
Co-Owner Trustee with the written consent of the Owner Trustee, shall appoint a
successor to act as Paying Agent (which shall be a bank or trust company). The
Co-Owner Trustee shall cause such successor Paying Agent or any additional
Paying Agent appointed by the Co-Owner Trustee to execute and deliver to the
Co-Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Co-Owner Trustee that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholder in trust for the
benefit of the Certificateholder entitled thereto until such sums shall be paid
to such Certificateholder. The Paying Agent (if different from the Co-Owner
Trustee) shall return all unclaimed funds to the Co-Owner Trustee and upon
removal of a Paying Agent such Paying Agent shall also return all funds in its
possession to the Co-Owner Trustee (if different from the Paying Agent). The
provisions of Sections 7.1, 7.3, 7.4 and 8.2 shall apply to the Co-Owner Trustee
also in its role as Paying Agent, for so long as the Co-Owner Trustee shall act
as Paying Agent and, to the extent applicable, to any other paying agent
appointed hereunder. Any reference in this Agreement to the Paying Agent shall
include any co-paying agent unless the context requires otherwise.
14 of 41
ARTICLE IV
ACTIONS BY OWNER TRUSTEE,
CO-OWNER TRUSTEE AND TRUST ELIGIBLE LENDER TRUSTEE
Section 4.1. Restriction on Power of Certificateholder. The
Certificateholder shall not have any right to vote or in any manner otherwise
control the operation and management of the Trust except as expressly provided
in this Agreement.
Section 4.2. Prior Notice to Certificateholder with Respect to Certain
Matters. Neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall take any of the following actions, unless at least 30 days
before the taking of such action, the Owner Trustee, the Co-Owner Trustee or the
Trust Eligible Lender Trustee, as the case may be, shall have notified the other
Trustees and the Certificateholder in writing of the proposed action and the
Certificateholder shall not have notified the Owner Trustee or the Co-Owner
Trustee, as the case may be, in writing prior to the 30th day after such notice
is given that such Certificateholder has withheld consent or provided
alternative direction:
(a) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required unless such
amendment would not materially adversely affect the interests of the
Certificateholder, the Owner Trustee, the Co-Owner Trustee or the Trust Eligible
Lender Trustee; or
(b) the amendment, change or modification of the Administration Agreement,
unless such amendment would not materially adversely affect the interests of the
Certificateholder, the Owner Trustee, the Co-Owner Trustee or the Trust Eligible
Lender Trustee.
Section 4.3. Action by Certificateholder with Respect to Bankruptcy.
Neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible Lender
Trustee shall have the power to commence a voluntary proceeding in bankruptcy
relating to the Trust, if otherwise permitted by applicable law, without the
prior approval of the Certificateholder and the delivery to the Owner Trustee
and the Co-Owner Trustee by such Certificateholder of a certificate certifying
that such Certificateholder reasonably believes that the Trust is insolvent.
Section 4.4. Restrictions on Certificateholder's Power. The
Certificateholder shall not have any right by virtue or by availing itself of
any provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement or any Basic
Document, unless the Certificateholder previously shall have given to the Owner
Trustee and the Co-Owner Trustee a written notice of default and of the
continuance thereof, as provided in this Agreement, and unless also the
Certificateholder shall have made written request upon the Owner Trustee and the
Co-Owner Trustee to institute such action, suit or proceeding in their own
respective names as Owner Trustee and Co-Owner Trustee under this Agreement and
shall have offered to the Owner Trustee and Co-Owner Trustee such reasonable
indemnity as each may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee and Co-Owner Trustee, for 30
days after their receipt of such notice, request, and offer of indemnity, shall
have neglected or refused to institute any such action, suit, or proceeding
15 of 41
and during such 30-day period, no request or waiver inconsistent with such
written request has been given to the Owner Trustee and Co-Owner Trustee
pursuant to and in compliance with this Section or Section 6.3.
Section 4.5. Rights of Certificateholder. Notwithstanding anything to the
contrary in the Basic Documents, without the prior written consent of the
Certificateholder, neither the Owner Trustee, the Co-Owner Trustee nor the Trust
Eligible Lender Trustee shall (i) remove the Administrator, (ii) initiate any
claim, suit or proceeding under this Agreement or compromise any claim, suit or
proceeding brought pursuant to this Agreement or (iii) authorize the merger,
conversion or consolidation of the Trust with or into any statutory trust or
other entity (other than in accordance with the Indenture).
16 of 41
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1. Certificate Contribution Account; Certificate Distribution
Account.
(a) The Co-Owner Trustee, for the benefit of the Certificateholder, shall
establish and maintain the Certificate Contribution Account, in the name of the
Trust for the benefit of the Certificateholder. The Certificate Contribution
Account shall be a segregated trust account hereunder established by the
Co-Owner Trustee and maintained at the Corporate Trust Office of the Co-Owner
Trustee. The Co-Owner Trustee shall deposit in the Certificate Contribution
Account all amounts received from the Depositor pursuant to Section 2.5.
(b) The Co-Owner Trustee, for the benefit of the Certificateholder, shall
establish and maintain the Certificate Distribution Account in the name of the
Trust for the benefit of the Certificateholder. The Certificate Distribution
Account shall be a segregated trust account hereunder established and maintained
by and with the Co-Owner Trustee at its Corporate Trust Office. The Co-Owner
Trustee shall deposit in the Certificate Distribution Account all amounts
received from the Indenture Trustee as and when received.
(c) The Co-Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Contribution Account
and the Certificate Distribution Account and in all proceeds of each.
(d) All amounts held in the Certificate Distribution Account shall, to the
extent permitted by applicable laws, rules and regulations, be invested by the
Co-Owner Trustee in Eligible Investments that mature not later than one Business
Day prior to the Certificateholder's Distribution Date to which such amounts
relate. Investments in Eligible Investments shall be made in the name of the
Co-Owner Trustee, and such investments shall not be sold or disposed of prior to
their maturity. Any investment of funds in the Certificate Distribution Account
shall be made in Eligible Investments held by a financial institution with
respect to which (a) such institution has noted the Co-Owner Trustee's interest
therein by book entry or otherwise and (b) a confirmation of the Co-Owner
Trustee's interest has been sent to the Co-Owner Trustee by such institution,
provided that such Eligible Investments are (i) specific certificated
securities, and (ii) either (A) in the possession of such institution or (B) in
the possession of a clearing corporation in New York, registered in the name of
such clearing corporation, not endorsed for collection or surrender or any other
purpose not involving transfer, not containing any evidence of a right or
interest inconsistent with the Co-Owner Trustee's interest therein, and held by
such clearing corporation in an account of such institution. Subject to the
other provisions hereof, the Co-Owner Trustee shall have sole control over each
such investment and the income thereon, and any certificate or other instrument
evidencing any such investment, if any, shall be delivered directly to the
Co-Owner Trustee or its agent, together with each document of transfer, if any,
necessary to transfer title to such investment to the Co-Owner Trustee in a
manner which complies with this Section 5.1. All interest, gains upon sale and
other income from, or earnings on investment of funds in the Certificate
Distribution Account shall be distributed on the next Certificateholder's
Distribution Date pursuant to Section 5.2.
17 of 41
Section 5.2. Application of Funds in Certificate Distribution Account and
Certificate Contribution Account.
(a) On each Certificateholder's Distribution Date, the Co-Owner Trustee
shall distribute to the Certificateholder the Certificateholder's pro rata
amount of the aggregate undistributed amounts deposited in the Certificate
Distribution Account pursuant to Section 5.1.
(b) On each Certificateholder's Distribution Date, the Co-Owner Trustee
shall send to the Certificateholder any statement received from the Indenture
Trustee pursuant to the Indenture.
In the event that any withholding tax is imposed on the Co-Owner Trustee's
distribution (or allocations of income) to the Certificateholder, such tax shall
reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section. The Co-Owner Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to such
Certificateholder sufficient funds for the payment of any tax that is legally
owed on account of the Trust (but such authorization shall not prevent the
Co-Owner Trustee from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to
such Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Co-Owner Trustee may, in its sole discretion, withhold
such amounts in accordance with this paragraph (b). In the event that such
Certificateholder wishes to apply for a refund of any such withholding tax, the
Co-Owner Trustee shall reasonably cooperate with such Certificateholder in
making such claim so long as such Certificateholder agrees to reimburse the
Co-Owner Trustee for any out-of-pocket expenses incurred.
(c) On any Business Day on which there are due and payable organizational,
start-up and transactional expenses pursuant to this Agreement, the Co-Owner
Trustee shall, to the extent of available amounts in the Certificate
Contribution Account, pay such expenses from the Certificate Contribution
Account; provided, however, that if an insufficiency in the Certificate
Contribution Account exists or would exist upon payment of such expenses, the
Co-Owner Trustee shall notify the Depositor in writing of such insufficiency and
the Depositor shall immediately pay to the Co-Owner Trustee an amount at least
equal to such insufficiency. To the extent that there are amounts on deposit in
the Certificate Distribution Account pending distribution on any such Business
Day, the Co-Owner Trustee, with the consent of the Certificateholder, may
transfer a portion or all of such amounts from the Certificate Distribution
Account to the Certificate Contribution Account and such amounts shall be
applied to the payment of the expenses payable from amounts in the Certificate
Contribution Account.
Section 5.3. Method of Payment. Subject to Section 9.1(c), distributions
required to be made to the Certificateholder on any Certificateholder's
Distribution Date shall be made to such Certificateholder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if such Certificateholder shall have provided to the
Certificate Registrar appropriate
18 of 41
written instructions at least five Business Days prior to such Distribution Date
and the amount of such distribution is not less than $50,000 or, if not, by
check mailed to such Certificateholder at the address of such Holder appearing
in the Certificate Register.
Section 5.4. No Segregation of Moneys; No Interest. Subject to Sections
5.1 and 5.2, moneys received by the Co-Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law and may be
deposited under such general conditions as may be prescribed by law, and the
Co-Owner Trustee shall not be liable for any interest thereon.
Section 5.5. Accounting; Reports; Tax Returns.
(a) The Administrator has agreed pursuant to the Administration Agreement
that the Administrator shall (i) maintain (or cause to be maintained) the books
of the Trust on a fiscal year basis on the accrual method of accounting (such
fiscal year initially being the fiscal year of the Depositor), (ii) deliver to
the Certificateholder, as may be required by the Code and applicable Treasury
Regulations, such information as may be required to enable such
Certificateholder to prepare its Federal and state income tax returns, (iii)
file or cause to be filed such tax returns, if any, relating to the Trust, and
direct the Co-Owner Trustee to make such elections as may from time to time be
required or appropriate under any applicable state or Federal statute or rule or
regulation thereunder so as to maintain the Trust's characterization as a
"disregarded entity," (iv) collect or cause to be collected any withholding tax
as described in and in accordance with Section 5.2(b) with respect to income or
distributions to the Certificateholder, and (v) file or cause to be filed all
documents required to be filed by the Co-Owner Trustee with the Commission and
otherwise take or cause to be taken all such actions as are required for the
Trust's compliance with all applicable provisions of state and federal
securities laws.
(b) The Co-Owner Trustee shall make all elections pursuant to this Section
5.5 as directed in writing by the Certificateholder.
(c) The Co-Owner Trustee shall sign any tax returns relating to the Trust,
unless applicable law requires the Certificateholder to sign such documents, in
which case such documents shall be signed by the Certificateholder qualified to
sign such return, or such Certificateholder's law agent or attorney-in-fact. In
signing any such tax return, the Co-Owner Trustee shall rely entirely upon, and
shall have no liability for, information or calculations provided by the
Administrator.
19 of 41
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE,
CO-OWNER TRUSTEE AND TRUST ELIGIBLE LENDER TRUSTEE
Section 6.1. General Authority. The Co-Owner Trustee is authorized and
directed to execute and deliver on behalf of the Trust, and the Co-Owner Trustee
authorizes and directs the Trust Eligible Lender Trustee to execute, not in its
individual capacity but solely as eligible lender trustee for the benefit of the
Trust, and deliver, the Basic Documents to which the Trust and the Trust
Eligible Lender Trustee is to be a party and each certificate or other document
attached as an exhibit to, or contemplated by, the Basic Documents to which the
Trust is to be a party and any amendment thereto. In addition to the foregoing,
the Co-Owner Trustee is authorized, but shall not be obligated, to take all
actions required of the Trust pursuant to the Basic Documents. The Co-Owner
Trustee is further authorized hereunder to enter into the Administration
Agreement, to appoint, with the prior written consent of the Depositor, a
successor Administrator and to take from time to time such action as the
Administrator recommends with respect to the Basic Documents so long as such
actions are consistent with the terms of the Basic Documents.
Section 6.2. General Duties. It shall be the duty of the Co-Owner Trustee
(and not the Owner Trustee) to discharge (or cause to be discharged through the
Administrator or such agents as shall be appointed by the Administrator) all of
its responsibilities pursuant to the terms of this Agreement and the Basic
Documents and to administer the Trust in the interest of the Certificateholder,
subject to the Basic Documents and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the Co-Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator has agreed in the Administration
Agreement, or the Trust Eligible Lender Trustee has agreed in the Co-Owner
Eligible Lender Trust Agreement, to perform any act or to discharge any duty of
the Co-Owner Trustee hereunder or under any Basic Document, and the Co-Owner
Trustee shall not be liable for the default or failure of the Administrator or
the Trust Eligible Lender Trustee, as the case may be, to carry out its
obligations under the Administration Agreement or Co-Owner Eligible Lender Trust
Agreement, respectively.
Section 6.3. Action upon Instruction.
(a) Subject to Article IV of this Agreement, the Administrator (the
"Instructing Party") shall have the exclusive right to direct the actions of the
Co-Owner Trustee in the management of the Trust, so long as such instructions
are not inconsistent with the express terms set forth herein or in any Basic
Document. The Instructing Party shall not instruct the Co-Owner Trustee in a
manner inconsistent with this Agreement or the Basic Documents.
(b) Neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall be required to take any action hereunder or under any Basic
Document if they, or any one of them, shall have reasonably determined, or shall
have been advised by counsel, that such action is contrary to the terms hereof
or of any Basic Document or is otherwise contrary to law.
20 of 41
(c) Whenever the Owner Trustee, the Co-Owner Trustee or the Trust Eligible
Lender Trustee is unable to decide between alternative courses of action
permitted or required by the terms of this Agreement or any Basic Document, the
Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee, as the
case may be, shall promptly give notice (in such form as shall be appropriate
under the circumstances) to the Instructing Party requesting instruction as to
the course of action to be adopted, and to the extent the Owner Trustee, the
Co-Owner Trustee or the Co-Owner Eligible Lender acts in good faith in
accordance with any written instruction received from the Instructing Party,
neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible Lender
Trustee, as the case may be, shall be liable on account of such action to any
Person. If the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender
Trustee shall not have received appropriate instruction within ten days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances), it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Certificateholder, and shall have no liability to any Person
for such action or inaction.
(d) In the event that the Owner Trustee, the Co-Owner Trustee or the Trust
Eligible Lender Trustee is unsure as to the application of any provision of this
Agreement or any Basic Document or any such provision is ambiguous as to its
application, or is, or appears to be, in conflict with any other applicable
provision, or in the event that this Agreement permits any determination by the
Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee or is
silent or is incomplete as to the course of action that the Owner Trustee, the
Co-Owner Trustee or the Trust Eligible Lender Trustee is required to take with
respect to a particular set of facts, the Owner Trustee, the Co-Owner Trustee,
or the Trust Eligible Lender Trustee may give notice (in such form as shall be
appropriate under the circumstances) to the Instructing Party requesting
instruction and, to the extent that the Owner Trustee, the Co-Owner Trustee
and/or the Trust Eligible Lender Trustee acts or refrains from acting in good
faith in accordance with any such instruction received, neither the Owner
Trustee, the Co-Owner Trustee nor the Trust Eligible Lender Trustee shall be
liable on account of such action or inaction to any Person. If the Owner
Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee shall not
have received appropriate instruction within 10 days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholder, and shall have no liability to any Person for such action or
inaction.
Section 6.4. No Duties Except as Specified in this Agreement or in
Instructions. Neither the Owner Trustee, the Co-Owner Trustee nor the Trust
Eligible Lender Trustee shall have any duty or obligation to manage, make any
payment with respect to, register, record, sell, dispose of or otherwise deal
with the Trust Property, or to otherwise take or refrain from taking any action
under, or in connection with, any document contemplated hereby to which any one
of them is a party, except as expressly provided by the terms of this Agreement
(including as provided in Section 6.2), in any Basic Document or in any written
instruction received by the Co-Owner Trustee or Trust Eligible Lender Trustee
pursuant to Section 6.3; and no implied duties or obligations shall be read into
this Agreement or any Basic Document against the Owner Trustee, the Co-Owner
Trustee or the Trust Eligible Lender Trustee. Neither the Owner Trustee, the
21 of 41
Co-Owner Trustee nor the Trust Eligible Lender Trustee shall have any
responsibility for preparing, monitoring or filing any financing or continuation
statements in any public office at any time or otherwise to perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
record this Agreement or any Basic Document. Each of the Owner Trustee, the
Co-Owner Trustee and the Trust Eligible Lender Trustee, nevertheless, agrees
that it will, at its own cost and expense (and not at the expense of the Trust),
promptly take all action as may be necessary to discharge any liens on any part
of the Trust Property that are attributable to claims against the Owner Trustee,
the Co-Owner Trustee or the Trust Eligible Lender Trustee in its individual
capacity, respectively, that are not related to the ownership or the
administration of the Trust Property.
Section 6.5. No Action Except under Specified Documents or Instructions.
Neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible Lender
Trustee shall manage, control, use, sell, dispose of or otherwise deal with any
part of, the Trust Property except (i) in accordance with the powers granted to
and the authority conferred upon the Owner Trustee, the Co-Owner Trustee or the
Trust Eligible Lender Trustee, respectively, pursuant to this Agreement, or, in
the case of the Trust Eligible Lender Trustee, the Co-Owner Eligible Lender
Trust Agreement, (ii) in accordance with the Basic Documents and (iii) in
accordance with any document or instruction delivered to the Owner Trustee, the
Co-Owner Trustee or the Trust Eligible Lender Trustee, respectively, pursuant to
Section 6.3 or Section 6.4.
Section 6.6. Restrictions. Neither the Owner Trustee, the Co-Owner Trustee
nor the Trust Eligible Lender Trustee shall take any action (i) that is
inconsistent with the purposes of the Trust set forth in Section 2.3 or (ii)
that, to the actual knowledge of the Owner Trustee, the Co-Owner Trustee or the
Trust Eligible Lender Trustee would result in the Trust's becoming taxable as a
corporation for Federal income tax purposes. The Certificateholder shall not
direct the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender
Trustee to take action that would violate the provisions of this Section.
Section 6.7. Administration Agreement.
(a) The Administrator is authorized to execute on behalf of Co-Owner
Trustee as trustee of the Trust all documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Co-Owner Trustee to
prepare, file or deliver pursuant to the Basic Documents. Upon written request,
the Co-Owner Trustee shall execute and deliver to the Administrator a power of
attorney appointing the Administrator its agent and attorney-in-fact to execute
all such documents, reports, filings, instruments, certificates and opinions.
(b) If the Administrator shall resign or be removed pursuant to the terms
of the Administration Agreement, the Co-Owner Trustee may, and is hereby
authorized and empowered to, subject to obtaining the prior written consent of
the Depositor, appoint or consent to the appointment of a successor
Administrator pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Co-Owner Trustee
may, and is hereby authorized and empowered to, subject to obtaining the prior
written consent of the Depositor, appoint or consent to the appointment of a
Person to perform substantially the same
22 of 41
duties as are assigned to the Administrator in the Administration Agreement
pursuant to an agreement containing substantially the same provisions as are
contained in the Administration Agreement.
(d) The Co-Owner Trustee shall promptly notify the Certificateholder of
any default by or misconduct of the Administrator under the Administration
Agreement of which the Co-Owner Trustee has received written notice or of which
a Responsible Officer has actual knowledge.
23 of 41
ARTICLE VII
CONCERNING THE OWNER TRUSTEE, THE CO-OWNER TRUSTEE
AND THE TRUST ELIGIBLE LENDER TRUSTEE
Section 7.1. Acceptance of Owner Trustee, Co-Owner Trustee and Trust
Eligible Lender Trustee; Duties. Each of the Owner Trustee and the Co-Owner
Trustee accepts the trusts hereby created and the Trust Eligible Lender Trustee
accepts the duties and obligations herein contained and each of the Owner
Trustee, the Co-Owner Trustee and the Trust Eligible Lender Trustee agrees to
perform its respective duties hereunder with respect to such trusts but only
upon the terms of this Agreement. The Co-Owner Trustee also agrees to disburse
all moneys actually received by it constituting part of the Trust Property upon
the terms of the Basic Documents and this Agreement. Neither the Owner Trustee,
the Co-Owner Trustee nor the Trust Eligible Lender Trustee shall be answerable
or accountable hereunder or under any Basic Document under any circumstances,
except that the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender
Trustee , as applicable, shall be answerable or accountable hereunder (i) for
its own willful misconduct or gross negligence, (ii) in the case of the
inaccuracy of any representation or warranty given by it contained in Section
7.3, (iii) for liabilities arising from its failure to perform obligations
expressly undertaken by it in the last sentence of Section 6.4, (iv) for any
investments issued by it or any branch or affiliate thereof in its commercial
capacity, and (v) for taxes, fees or other charges on, based on or measured by,
any fees, commissions or compensation received by it in connection with any of
the transactions contemplated by this Agreement or any Basic Document. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall be liable for any error of judgment made in good faith by
an authorized officer of the Owner Trustee or the Co-Owner Trustee,
respectively;
(b) neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall be liable with respect to any action taken or omitted to be
taken by either in good faith in accordance with the instructions of the
Instructing Party;
(c) no provision of this Agreement or any Basic Document shall require the
Owner Trustee, the Co-Owner Trustee and/or the Trust Eligible Lender Trustee to
expend or risk funds or otherwise incur any financial liability in the
performance of its rights or powers hereunder or under any Basic Document if
they shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured or
provided to them;
(d) under no circumstances shall the Owner Trustee, the Co-Owner Trustee
or the Trust Eligible Lender Trustee be liable for indebtedness evidenced by or
arising under this Agreement or any of the Basic Documents, including the
principal of and interest and any carryover interest on the Notes;
24 of 41
(e) neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall be responsible for or in respect of the validity or
sufficiency of this Agreement or for the due execution hereof by the Depositor
or each other hereunder or for the form, character, genuineness, sufficiency,
value or validity of any of the Trust Property or for or in respect of the
validity or sufficiency of the Basic Documents, other than with respect to the
Co-Owner Trustee, the certificate of authentication on a Certificate, and
neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible Lender
Trustee shall in any event assume or incur any liability, duty, or obligation to
each other, the Administrator, the Indenture Trustee, any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in the Basic
Documents;
(f) neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall be liable for the default or misconduct of each other, the
Administrator, the Indenture Trustee or the Depositor under any of the Basic
Documents or otherwise and neither the Owner Trustee, the Co-Owner Trustee nor
the Trust Eligible Lender Trustee shall have any obligation or liability to
perform the obligations under this Agreement or the Basic Documents that are
required to be performed by the Administrator under the Administration
Agreement, by the Indenture Trustee under the Indenture or by the Servicer under
the Servicing Agreement; and
(g) neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall be under any obligation to exercise any of the rights or
powers vested in it by this Agreement, or to institute, conduct or defend any
litigation under this Agreement or otherwise or in relation to this Agreement or
any Basic Document, at the request, order or direction of the Instructing Party,
unless such Instructing Party has offered to it security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by it therein or thereby. The right of the Owner Trustee, the Co-Owner
Trustee or the Trust Eligible Lender Trustee to perform any discretionary act
enumerated in this Agreement or in any Basic Document shall not be construed as
a duty, and neither the Owner Trustee, the Co-Owner Trustee nor the Trust
Eligible Lender Trustee shall be answerable for other than its own gross
negligence or willful misconduct in the performance of any such act.
Section 7.2. Furnishing of Documents. The Co-Owner Trustee shall furnish
to the Certificateholder promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to it under the Basic
Documents unless such Certificateholder has previously received such items.
Section 7.3. Representations and Warranties.
(a) The Owner Trustee hereby represents and warrants to the Depositor and
the Certificateholder that:
(i) It is a __________ duly organized and validly existing in
good standing under the laws of __________. It has all requisite
corporate power and authority and all franchises, grants,
authorizations, consents, orders and approvals from all governmental
authorities necessary to execute, deliver and perform its obligations
under this Agreement.
25 of 41
(ii) It has taken all corporate action necessary to authorize the
execution and delivery by it, not in its individual capacity but
solely as trustee of the Trust, of this Agreement and the Certificate,
and this Agreement has been executed and delivered by one of its
officers who is duly authorized to execute and deliver this Agreement
on its behalf.
(iii) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or __________ law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee
or any judgment or order binding on it, or constitute any default
under its charter documents or by-laws or any indenture, mortgage,
contract, agreement or instrument to which it is a party or by which
any of its properties may be bound or result in the creation or
imposition of any lien, charge or encumbrance on the Trust Property
resulting from actions by or claims against the Owner Trustee
individually that are unrelated to this Agreement or the Basic
Documents.
(b) The Co-Owner Trustee hereby represents and warrants to the Depositor
and the Certificateholder that:
(i) It is a __________ duly organized and validly existing in
good standing under the laws of __________. It has all requisite
corporate power and authority and all franchises, grants,
authorizations, consents, orders and approvals from all governmental
authorities necessary to execute, deliver and perform its obligations
under this Agreement and each Basic Document to which it, not in its
individual capacity but solely as co-owner trustee of the Trust, is a
party.
(ii) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and each Basic Document
to which it, not in its individual capacity but solely as trustee of
the Trust, is a party, and this Agreement and each Basic Document will
be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement and each Basic
Document on its behalf.
(iii) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or __________ law, governmental rule or
regulation governing the banking or trust powers of the Co-Owner
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound or result in the creation
or imposition of any lien, charge or encumbrance on the Trust Property
resulting from actions by or claims against the Co-Owner Trustee
individually that are unrelated to this Agreement or the Basic
Documents.
(c) The Trust Eligible Lender Trustee hereby represents and warrants to
the Depositor, the Co-Owner Trustee and the Certificateholder that:
26 of 41
(i) It is a __________ duly organized and validly existing in
good standing under the laws of __________. It has all requisite
corporate power and authority and all franchises, grants,
authorizations, consents, orders and approvals from all governmental
authorities necessary to execute, deliver and perform its obligations
under this Agreement and each Basic Document to which it, not in its
individual capacity but solely as eligible lender trustee for the
benefit of the Co-Owner Trustee, is a party.
(ii) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement and each Basic
Document to which it, not in its individual capacity but solely as
trustee of the Trust, is a party, and this Agreement and each Basic
Document will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement and each Basic
Document on its behalf.
(iii) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or __________ law, governmental rule or
regulation governing the banking or trust powers of the Trust Eligible
Lender Trustee or any judgment or order binding on it, or constitute
any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound or result in the creation
or imposition of any lien, charge or encumbrance on the Trust Property
resulting from actions by or claims against the Trust Eligible Lender
Trustee individually that are unrelated to this Agreement or the Basic
Documents.
(iv) It is and will use its best efforts to remain an Eligible
Lender.
Section 7.4. Reliance; Advice of Counsel.
(a) Neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible
Lender Trustee shall incur any liability to anyone 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. The Owner Trustee,
the Co-Owner Trustee and the Trust Eligible Lender Trustee may accept a
certified copy of a resolution of the board of directors or other governing body
of any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee, the Co-Owner Trustee and the Trust
Eligible Lender Trustee may for all purposes hereof rely on a certificate,
signed by the president or any vice president or by the treasurer or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee, the Co-Owner
Trustee and Trust Eligible Lender Trustee, respectively, for any action taken or
omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and the
performance of its respective duties and obligations under this Agreement or the
Basic Documents, each of the Owner Trustee, the Co-Owner Trustee and the Trust
Eligible Lender Trustee (i) may act directly or
27 of 41
through its agents or attorneys pursuant to agreements entered into with it, and
neither the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible Lender
Trustee shall be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by it with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it. Neither
the Owner Trustee, the Co-Owner Trustee nor the Trust Eligible Lender Trustee
shall be liable for anything done, suffered or omitted in good faith by it in
accordance with the written opinion or advice of any such counsel, accountants
or other such persons and not contrary to this Agreement or any Basic Document.
Section 7.5. Not Acting in Individual Capacity.
(a) Except as provided in this Article VII, in accepting the trusts hereby
created, ____________________ acts solely as Owner Trustee hereunder and not in
its individual capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Trust Property for payment or satisfaction
thereof.
(b) Except as provided in this Article VII, in accepting the trusts hereby
created ________________________ acts solely as Co-Owner Trustee hereunder and
not in its individual capacity and all Persons having any claim against the
Co-Owner Trustee by reason of the transactions contemplated by this Agreement or
any Basic Document shall look only to the Trust Property for payment or
satisfaction thereof
(c) Except as provided in this Article VII, in accepting the duties and
obligations herein contained, ________________________ acts solely as Trust
Eligible Lender Trustee hereunder and not in its individual capacity all Persons
having any claim against the Trust Eligible Lender Trustee by reason of the
transactions contemplated by this Agreement or any Basic Document shall look
only to the Trust Property for payment or satisfaction thereof.
Section 7.6. Owner Trustee Not Liable for Certificate, Notes or Financed
Student Loans. The recitals contained herein and in each Certificate (other than
the signature of the Co-Owner Trustee, as Authentication Agent, on each
Certificate) shall be taken as the statements of the Depositor, and neither the
Owner Trustee, the Co-Owner Trustee nor the Trust Eligible Lender Trustee
assumes any responsibility for the correctness thereof. Neither the Owner
Trustee, the Co-Owner Trustee nor the Trust Eligible Lender Trustee makes any
representations as to the validity or sufficiency of this Agreement, of any
Basic Document or of the Certificate (other than representations of the Co-Owner
Trustee, as Authentication Agent, regarding its signature on the certificate of
authentication on the Certificate) or the Notes, or of any Financed Student Loan
or related documents. Neither the Owner Trustee, the Co-Owner Trustee nor the
Trust Eligible Lender Trustee shall at any time have any responsibility or
liability for or with respect to the legality, validity and enforceability of
any Financed Student Loan, or the perfection and priority of any security
interest created under the Indenture in any Financed Student Loan or the
maintenance of any such perfection and priority of any such security interest or
the maintenance of any such perfection and priority, or for or with respect to
the sufficiency of the Trust Property or its ability to generate the payments to
be distributed to the Certificateholder under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, status and
28 of 41
ownership of any Financed Student Loan; the existence and enforceability of any
insurance or guarantee thereon; the existence and status of any Financed Student
Loan on any computer or other record thereof; the validity of the sale or
assignment of any Financed Student Loan originated under the Act to the Trust
Eligible Lender Trustee or of any intervening sale or assignment; the validity
or sufficiency of any Guarantee; the completeness of any Financed Student Loan;
the performance or enforcement of any Financed Student Loan; the compliance by
the Administrator or the Servicer with any warranty or representation made under
any Basic Document or in any other related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee, the
Administrator or the Servicer taken in the name of the Trust, the Owner Trustee,
the Co-Owner Trustee or the Trust Eligible Lender Trustee.
Section 7.7. Owner Trustee, Co-Owner Trustee and Trust Eligible Lender
Trustee May Own Certificate and Notes. The Owner Trustee in its individual or
any other capacity, the Co-Owner Trustee in its individual or any other
capacity, and the Trust Eligible Lender Trustee in its individual or any other
capacity, or any one of them, may become the owner or pledgee of a Certificate
or Notes and may deal with the Depositor, the Indenture Trustee, any Guarantee
Agency and the Servicer in banking or other transactions with the same rights as
it would have if it were not Owner Trustee, Co-Owner Trustee or Trust Eligible
Lender Trustee, respectively.
29 of 41
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE,
THE CO-OWNER TRUSTEE AND TRUST ELIGIBLE LENDER TRUSTEE
Section 8.1. Fees and Expenses of Owner Trustee, Co-Owner Trustee and
Trust Eligible Lender Trustee.
(a) The Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Depositor and the Owner Trustee, and the Owner Trustee shall be
entitled to be reimbursed by the Depositor for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Owner Trustee may
reasonably determine are necessary to employ in connection with the exercise and
performance of its rights and its duties hereunder.
(b) The Co-Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Depositor and the Co-Owner Trustee, and the Co-Owner Trustee shall
be entitled to be reimbursed by the Depositor for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Co-Owner Trustee may
reasonably determine are necessary to employ in connection with the exercise and
performance of its rights and its duties hereunder.
(c) The Trust Eligible Lender Trustee shall receive as compensation for
its services hereunder such fees as have been separately agreed upon before the
date hereof between the Depositor and the Trust Eligible Lender Trustee, and the
Trust Eligible Lender Trustee shall be entitled to be reimbursed by the
Depositor for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Trust Eligible Lender Trustee may reasonably
determine are necessary to employ in connection with the exercise and
performance of its rights and its duties hereunder.
Section 8.2. Indemnification. The Depositor shall be liable as primary
obligor for, and shall indemnify each of the Owner Trustee in its individual
capacity and its successors, assigns, agents and servants, the Co-Owner Trustee
in its individual capacity and its successors, assigns, agents and servants and
any other co-trustee and the Trust Eligible Lender Trustee in its individual
capacity and its successors, assigns, agents and servants and any other
co-trustee (collectively, the "Indemnified Parties") from and against, any and
all liabilities, obligations, losses, damages, taxes, claims, actions and suits,
and any and all reasonable costs, expenses and disbursements (including
reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may, at any time, be imposed on, incurred by,
or asserted against the Owner Trustee, the Co-Owner Trustee, the Trust Eligible
Lender Trustee or any other Indemnified Party in any way relating to or arising
out of this Agreement, the Basic Documents, the Trust Property, the
administration of the Trust Property or the action or inaction of the Owner
Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee hereunder;
provided, however, that the Depositor shall not be liable for or required to
indemnify the Owner Trustee, the Co-Owner Trustee or the
30 of 41
Trust Eligible Lender Trustee from and against Expenses arising or resulting
from any of the matters described in the third sentence of Section 7.1; and,
provided further that, notwithstanding anything in this Agreement to the
contrary, the indemnification provided herein shall be payable solely from the
Trust Property. The indemnification contained in this Section shall survive the
resignation or termination of the Owner Trustee, the Co-Owner Trustee or the
Trust Eligible Lender Trustee, or any of them, or the termination of this
Agreement.
Section 8.3. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic Document to the contrary, each of the Owner Trustee, the
Co-Owner Trustee and the Trust Eligible Lender Trustee agrees in its individual
capacity and in its respective capacity as Owner Trustee, Co-Owner Trustee or
Trust Eligible Lender Trustee of the Trust that all obligations under this
Agreement to the Owner Trustee, the Co-Owner Trustee or the Trust Eligible
Lender Trustee, individually or as Trustees, respectively, of the Trust shall be
recourse to the Trust Property only and specifically shall not be recourse to
the assets of the Certificateholder.
31 of 41
ARTICLE IX
TERMINATION
Section 9.1. Termination of the Trust.
(a) This Agreement (other than Article VIII) shall terminate and the Trust
shall dissolve and terminate and be of no further force or effect and the Trust
Property shall, subject to compliance with Section 3808 of the Delaware
Statutory Trust Act, be distributed to the Certificate holder in accordance with
the terms of this Agreement and the Basic Documents by the Co-Owner Trustee upon
the later to occur of (i) the maturity or other liquidation of the last Financed
Student Loan (including the auction sale by the Indenture Trustee of the
remaining Financed Student Loans in the Trust as described in the Indenture and
the subsequent distribution of amounts in respect of such auction sale as
provided in the Indenture and the other Basic Documents) and (ii) the payment to
the Noteholders of all amounts payable pursuant to the Indenture.
(b) Neither the Depositor nor the Certificateholder shall be entitled to
revoke or terminate the Trust.
(c) Within five Business Days of receipt by the Co-Owner Trustee of notice
from the Indenture Trustee given pursuant to Section 10.01 of the Indenture of
final distribution to the Co-Owner Trustee of amounts held under the Indenture,
the Co-Owner Trustee shall mail written notice to the Certificateholder,
specifying (i) the Certificateholder's Distribution Date upon which final
distribution of amounts received hereunder shall be made upon presentation and
surrender of such Certificateholder's Certificate at the office of the Paying
Agent therein specified, (ii) the amount of any such final payment, and (iii)
that the Record Date otherwise applicable to such Certificateholder's
Distribution Date is not applicable, payments being made only upon presentation
and surrender of such Certificate at the office of the Paying Agent therein
specified. The Co-Owner Trustee shall give such notice to the Certificate
Registrar (if different from the Co-Owner Trustee) at the time such notice is
given to such Certificateholder. In the event such notice is given, the Co-Owner
Trustee shall make deposits into the Certificate Distribution Account in
accordance with Section 5.1(a). Upon presentation and surrender of the
Certificate, the Paying Agent shall cause to be distributed to such
Certificateholder the amount distributable on such Certificateholder's
Distribution Date pursuant to Section 5.2.
(d) In the event that the Certificateholder shall not surrender its
Certificate for cancellation within six months after the date specified in the
above-mentioned written notice, the Co-Owner Trustee shall give a second written
notice to such Certificateholder to surrender its Certificate for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice the Certificate shall not have been surrendered for
cancellation, the Co-Owner Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact such Certificateholder concerning
surrender of its Certificate, and the cost thereof shall be paid out of the
funds and other assets that remain subject to this Agreement. Any funds that are
payable to the Certificateholder remaining in the Trust after exhaustion of such
remedies shall, to the fullest extent permitted by law, be distributed by the
Co-Owner Trustee to the Certificateholder
32 of 41
(but only upon termination of this Agreement), and such Certificateholder, by
acceptance of its Certificate, hereby waives any rights with respect to such
funds.
33 of 41
ARTICLE X
SUCCESSOR OWNER TRUSTEES,
CO-OWNER TRUSTEES AND TRUST ELIGIBLE LENDER TRUSTEES
Section 10.1. Eligibility Requirements for Owner Trustee, Co-Owner Trustee
and Trust Eligible Lender Trustee.
(a) The Owner Trustee shall at all times be a banking or trust corporation
(i) meeting the requirements of Section 3807(a) of the Delaware Statutory Trust
Act, (ii) authorized to exercise corporate trust powers in the State of
Delaware; (iii) having a combined capital and surplus of at least $50,000,000
and subject to supervision or examination by Federal or State authorities; and
(iv) having (or having a parent which has) a rating of at least investment grade
by the Rating Agencies. If such corporation shall publish reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 10.2.
(b) Each of the Co-Owner Trustee and the Trust Eligible Lender Trustee
shall at all times be a trust company or bank having the powers of a trust
company within the state in which the principal office of the Administrator is
located, organized and doing business under the laws of the United States of
America, any state thereof or the District of Columbia and have a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authorities. In addition, the Trust Eligible
Lender Trustee shall at all times be an Eligible Lender.
Section 10.2. Resignation or Removal of Owner Trustee, Co-Owner Trustee and
Trust Eligible Lender Trustee.
(a) The Owner Trustee or the Co-Owner Trustee may at any time resign and
be discharged from the trusts hereby created by giving written notice thereof to
the other two Trustees hereunder, the Certificateholder, the Depositor (if
different from the Certificateholder) and the Indenture Trustee at least 30 days
before the date specified in such instrument. If the Trust Eligible Lender
Trustee resigns or is discharged from the trusts created by the Co-Owner
Eligible Lender Trust Agreement, the Trust Eligible Lender Trustee (i) shall
give written notice thereof to the other two Trustees hereunder, the
Certificateholder, the Depositor (if different from the Certificateholder) and
the Indenture Trustee at least 30 days before the effective date of such
registration and (ii) shall be deemed to have resigned from its obligations
hereunder and shall be replaced by a Successor Trustee appointed pursuant to
this Section 10.2; provided, however, that the Successor Trustee to be appointed
shall have executed and delivered an eligible lender trust agreement with the
Co-Owner Trustee if any of the Trust Property consists of Financed Student Loans
originated under the Act. Upon receiving such notice of resignation, the
Certificateholder, with the consent of the non-resigning Trustee of the Trust
shall promptly appoint a successor
34 of 41
Owner Trustee, Co-Owner Trustee or Trust Eligible Lender Trustee, as applicable
(any successor appointed under any provision of this Section 10.2, solely for
purposes of this Section 10.2 and Section 10.3, a "Successor Trustee"), meeting
the qualifications set forth in Section 10.1(a) or (b), as applicable, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the Successor Trustee,
provided that the Depositor shall have received Rating Agency Confirmation
regarding the proposed appointment. If no Successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee, either of the non-resigning
Trustees or the Indenture Trustee may petition any court of competent
jurisdiction for the appointment of a Successor Trustee.
(b) If (i) at any time the Owner Trustee, the Co-Owner Trustee and/or the
Trust Eligible Lender Trustee shall cease to be eligible in accordance with the
provisions of Section 10.1(a) or (b), as applicable, and shall fail to resign
after written request therefor by either of the other Trustees, the
Certificateholder or the Indenture Trustee, (ii) at any time the Owner Trustee,
the Co-Owner Trustee and/or the Trust Eligible Lender Trustee shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the
Owner Trustee, the Co-Owner Trustee and/or the Trust Eligible Lender Trustee, or
of the respective property of any of them, shall be appointed, or any public
officer shall take charge or control of the Owner Trustee, the Co-Owner Trustee
and/or the Trust Eligible Lender Trustee, or of the respective property or
affairs of any one or all of them, for the purpose of rehabilitation,
conservation or liquidation, or (iii) the Certificateholder elects in its sole
discretion to remove the Owner Trustee, the Co-Owner Trustee or the Trust
Eligible Lender Trustee for any reason (in each case such Trustee for the
purposes of this paragraph is hereafter referred to as a "Disqualified Trustee"
and a Trustee not meeting the description of a Disqualified Trustee, a
"Qualified Trustee"), then either of the Qualified Trustees, if any, or the
Certificateholder may remove such Disqualified Trustee. If either of the
Qualified Trustees or the Certificateholder shall remove the Disqualified
Trustee under the authority of the immediately preceding sentence, the
Certificateholder shall promptly appoint a Successor Trustee meeting the
qualification requirements of Section 10.1 by written instrument, in triplicate,
one copy of which instrument shall be delivered to the Disqualified Trustee so
removed and one copy to the Successor Trustee and Qualified Trustees, if any,
and shall make payment of all fees owed to the outgoing Disqualified Trustee.
(c) Any resignation or removal of the Owner Trustee, the Co-Owner Trustee
and/or the Trust Eligible Lender Trustee and appointment of a Successor Trustee
pursuant to any of the provisions of this Section shall not become effective
until all fees and expenses, including any indemnity payments, due to the
outgoing Trustee have been paid and until acceptance of appointment by the
Successor Trustee pursuant to Section 10.3.
Section 10.3. Successor Trustee.
(a) Any Successor Trustee appointed pursuant to Section 10.2 shall
execute, acknowledge and deliver to the remaining Trustees, if any, to the
Certificateholder and to its predecessor (solely for purposes of this Section
10.3, the "Predecessor Trustee") an instrument accepting such appointment under
this Agreement and, if the Successor Trustee is the Trust Eligible Lender
Trustee, an eligible lender trust agreement between itself and the Co-Owner
35 of 41
Trustee, and thereupon the resignation or removal of the Predecessor Trustee
shall become effective and such Successor Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties,
and obligations of its Predecessor Trustee under this Agreement, with like
effect as if originally named as Owner Trustee, Co-Owner Trustee or Trust
Eligible Lender Trustee, as applicable. The Predecessor Trustee shall deliver to
the Successor Trustee all documents and statements and moneys, if any, held by
it under this Agreement; and the Certificateholder, the remaining Trustee and
the Predecessor Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the Successor Trustee all such rights, powers, duties and
obligations.
(b) No Successor Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such Successor Trustee shall be
eligible to become the Owner Trustee, the Co-Owner Trustee or the Trust Eligible
Lender Trustee, as applicable, pursuant to Section 10.1.
(c) Upon acceptance of appointment by a Successor Trustee pursuant to this
Section, the Certificateholder shall give notice by first class mail of the name
and address and telecopy number of the Successor Trustee to the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Certificateholder shall
fail to mail such notice within 10 days after acceptance of appointment by the
Successor Trustee, the Successor Trustee shall cause such notice to be mailed at
the expense of the Certificateholder.
Section 10.4. Merger or Consolidation of Owner Trustee, Co-Owner Trustee or
Trust Eligible Lender Trustee. Any corporation into which the Owner Trustee, the
Co-Owner Trustee or the Trust Eligible Lender Trustee, as the case may be, may
be merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Owner
Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Owner Trustee, the Co-Owner Trustee
or the Trust Eligible Lender Trustee, as the case may be, shall be the successor
of the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee,
as the case may be, hereunder, provided such corporation shall be eligible
pursuant to the applicable provisions of Section 10.1, without the execution or
filing of any instrument or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding, and provided further
that the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender
Trustee, as the case may be, shall mail notice of such merger or consolidation
to the Rating Agencies.
Section 10.5. Appointment of Additional Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Property, including, without limitation, any Financed
Student Loan, may at the time be located, the Administrator and the Co-Owner
Trustee acting jointly shall have the power and shall execute and deliver all
instruments to appoint one or more Persons to act as co-trustee, jointly with
the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee, as
the case may be, or separate trustee or separate trustees, of all or any part of
the Trust Property, and to vest in such
36 of 41
Person, in such capacity, such title to the Trust Property, or any part thereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Co-Owner Trustee may
consider necessary or desirable. If the Administrator shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
the Co-Owner Trustee shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 10.1 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.1; provided, however, that such co-trustee with
or separate trustee from the Trust Eligible Lender Trustee shall be an Eligible
Lender.
(b) Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee, the Co-Owner Trustee or the Trust Eligible
Lender Trustee, as applicable, shall be conferred upon and exercised or
performed by the Owner Trustee, the Co-Owner Trustee or the Trust Eligible
Lender Trustee, as applicable, and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee, the Co-Owner
Trustee or the Trust Eligible Lender Trustee, as applicable, joining in
such act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed, the Owner Trustee,
the Co-Owner Trustee or the Trust Eligible Lender Trustee, as applicable,
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties, and obligations (including the holding
of title to the Trust Property or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the Owner Trustee,
the Co-Owner Trustee or the Trust Eligible Lender Trustee, as applicable;
(ii) no Trustee under this Agreement shall be personally liable by
reason of any act or omission of any other Trustee under this Agreement;
and
(iii) the Administrator and the Owner Trustee, the Co-Owner Trustee
or the Trust Eligible Lender Trustee, as applicable, acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the Owner Trustee, the
Co-Owner Trustee or the Trust Eligible Lender Trustee, as applicable, shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee, the
Co-Owner Trustee or the Trust Eligible Lender Trustee, as applicable, or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee, the Co-Owner Trustee or
37 of 41
the Trust Eligible Lender Trustee, as applicable. Each such instrument shall be
filed with the Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender
Trustee, as applicable, and a copy thereof given to the Administrator and the
Certificateholder.
(d) Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee, as
applicable, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, the Co-Owner Trustee or the Trust Eligible Lender Trustee, as
applicable, to the extent permitted by law, without the appointment of a new or
successor trustee.
38 of 41
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1. Amendment.
(a) This Agreement may be amended by the Certificateholder, the Owner
Trustee, the Co-Owner Trustee and the Trust Eligible Lender Trustee, without the
consent of the Depositor (if other than the Certificateholder) or Noteholders,
(i) to cure any ambiguity or (ii) to correct, supplement or modify any
provisions in this Agreement; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of the Certificateholder or any Noteholder.
(b) This Agreement may also be amended from time to time by the
Certificateholder (without the consent of the Depositor if other than the
Certificateholder), the Owner Trustee, the Co-Owner Trustee and the Trust
Eligible Lender Trustee and, if such amendment materially and adversely affects
the interests of Noteholders, the consent of a majority of the Directing Notes
(which consent of any Noteholder given pursuant to this Section or pursuant to
any other provision of this Agreement shall be conclusive and binding on such
holders and on any holder of any Certificate or Note issued upon the transfer
thereof or in exchange therefor or in lieu thereof whether or not notation of
such consent is made upon the Certificate or Note) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the
Certificateholder or holder of a Note; provided, however, that no such amendment
shall (i) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on the Financed Student Loans or
distributions that shall be required to be made on any Note or (ii) reduce the
aforesaid percentage required to consent to any such amendment or any waiver
hereunder, without the consent of the holders of all the Notes then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Certificateholder shall furnish written notification of the substance of such
amendment or consent to each Rating Agency. Any such amendment or consent shall
be subject to the Rating Agency Condition.
(d) Promptly after the execution of any such amendment or consent, the
Co-Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Indenture Trustee unless such party has previously
received such notification.
(e) It shall not be necessary for the consent of the Noteholders pursuant
to Section 11.1(b) to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of the
Noteholders provided for in this Agreement) and of evidencing the authorization
of the execution thereof by the Certificateholder shall be subject to such
reasonable requirements as the Co-Owner Trustee may prescribe, including the
establishment of record dates.
39 of 41
(f) Prior to the execution of any amendment to this Agreement, the Owner
Trustee, the Co-Owner Trustee and the Trust Eligible Lender Trustee shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement and
that all conditions precedent to the execution and delivery of such amendment
have been satisfied. The Owner Trustee, the Co-Owner Trustee and the Trust
Eligible Lender Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Owner Trustee's, the Co-Owner Trustee's or the Trust
Eligible Lender Trustee's own rights, duties or immunities under this Agreement
or otherwise.
Section 11.2. No Recourse. The Certificateholder by accepting a Certificate
acknowledges that such Certificateholder's Certificate represents such
Certificateholder's beneficial interest in the Trust only and does not represent
interests in or obligations of the Depositor, the Administrator, the Servicer,
the Owner Trustee, the Co-Owner Trustee, the Trust Eligible Lender Trustee, the
Indenture Trustee or any affiliate of any of the foregoing and no recourse may
be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, in each Certificate or in the Basic
Documents.
Section 11.3. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to the principles of conflicts of
laws thereof and the obligations, rights and remedies of the parties under this
Agreement shall be determined in accordance with such laws; provided, however,
that the parties hereto intend that the provisions hereof shall control over any
contrary or limiting statutory or common law of the State of Delaware and that,
to the maximum extent permitted by applicable law, there shall not be applicable
to the Trust, the Trustees or this Agreement any provisions of the laws
(statutory or common) of the State of Delaware pertaining to trusts that relate
to or regulate in a manner inconsistent with the terms hereof: (i) the filing
with any court or governmental body or agency of trustee accounts or schedules
of trustee fees and charges, (ii) affirmative requirements to post bonds for
trustees, officers, agents or employees of a trust, (iii) the necessity for
obtaining court or other governmental approval concerning the acquisition,
holding or disposition of real or personal property, (iv) fees or other sums
payable to trustees, officers, agents or employees of a trust, (v) the
allocation of receipts and expenditures between income and principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards or responsibilities or limitations on the acts or powers of
trustees that are inconsistent with the limitations on liability or authorities
and powers of the Trustees set forth or referenced in this Agreement. Sections
3540 and 3561 of Title 12 of the Delaware Code shall not apply to the Trust.
Section 11.4. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Certificate
or the rights of the Holder thereof.
40 of 41
Section 11.5. Certificate Nonassessable and Fully Paid. The
Certificateholder shall not be personally liable for obligations of the Trust,
the undivided beneficial interest in the assets of the Trust, whether fractional
or whole, represented by a Certificate shall be nonassessable for any losses or
expenses of the Trust or for any reason whatsoever, and each Certificate upon
execution thereof by the Owner Trustee and authentication thereof by the
Authentication Agent, in each case pursuant to Section 3.3, are and shall be
deemed fully paid and nonassessable.
Section 11.6. Third-Party Beneficiaries. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder.
Section 11.7. Counterparts. For the purpose of facilitating its execution
and for other purposes, this Agreement may be executed simultaneously in any
number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.
Section 11.8. Notices. All demands, notices and communications under this
Agreement shall be in writing, personally delivered or mailed by certified
mail-return receipt requested, and shall be deemed to have been duly given upon
receipt (a) in the case of the Depositor, at the following address:
__________________, (b) in the case of the Owner Trustee, the Co-Owner Trustee
and the Trust Eligible Lender Trustee, at their respective Corporate Trust
Office and (c) in the case of the Administrator, at the following address:
______________________, or at such other address as shall be designated by any
such party in a written notice to the other parties. Notwithstanding the
foregoing, any notice required or permitted to be mailed to the
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register.
[Remainder of page intentionally left blank - signatures begin on next page]
41 of 41
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers as of
the day and year first above written.
EDUCATION FUNDING CAPITAL I, LLC, ("Depositor
and sole initial "Certificateholder")
By:
------------------------------------------
Name:
Title:
______________________, not in its individual
capacity, but solely as trustee under this
Trust Agreement ("Owner Trustee")
By:
------------------------------------------
Name:
Title:
________________________, not in its
individual capacity, but solely as trustee
under this Trust Agreement
("Co-Owner Trustee")
By:
------------------------------------------
Name:
Title:
Acknowledged and Agreed to: ________________________, not in its
individual capacity, but solely as
eligible lender trustee under the Co-Owner
Eligible Lender Trust Agreement for the
benefit of the Trust ("Trust Eligible Lender
Trustee")
By:
------------------------------------------
Name:
Title:
EXHIBIT A
FORM OF CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES THAT THIS CERTIFICATE MAY BE RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS AND (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(l)-(3) UNDER THE ACT THAT
PURCHASES FOR ITS OWN ACCOUNT, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT.
THIS CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (I) AN
EMPLOYEE BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA")) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, (II) A PLAN DESCRIBED IN SECTION 4975(E)(1) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (III) ANY ENTITY
WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN
THE ENTITY. FURTHER, THIS CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES
PERSON WITHIN THE MEANING OF SECTION 7701(A)(30) OF THE CODE.
THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
Percentage Interest: 100%
[EDUCATION FUNDING CAPITAL TRUST-__]
EDUCATION LOAN ASSET-BACKED TRUST CERTIFICATE
evidencing the undivided beneficial Percentage Interest set forth
above in the Trust, as defined below, the property of which includes a pool of
student loans transferred to and deposited in the Trust by Education Funding
Capital I, LLC and ________________________, as eligible lender trustee on
behalf of Education Funding Capital I, LLC
THIS CERTIFIES THAT ____________________________ is the registered owner of
the Percentage Interest set forth above in the [Education Funding Capital
Trust-__] (the "Trust"), a statutory trust formed under the laws of the State of
Delaware by Education Funding Capital I, LLC (the "Depositor"). The Trust was
created pursuant to a Trust Agreement dated as of _____________, 20__ among the
Depositor, _____________________, a __________, as owner
A-1
trustee under the Trust Agreement, and ________________________, a __________,
as co-owner trustee under the Trust Agreement.
The Original Trust Agreement was amended and restated in its entirety by
the Amended and Restated Trust Agreement dated as of ____________, 20__ (the
"Trust Agreement") among the Depositor, _______________________, a __________,
as owner trustee under the Trust Agreement (the "Owner Trustee"), and
________________________, an __________, as co-owner trustee under the Trust
Agreement (the "Co-Owner Trustee"), and acknowledged and agreed to by
________________________, a __________, not in its individual capacity, but
solely in its capacity as trust eligible lender trustee under the Trust
Agreement (the "Trust Eligible Lender Trustee" and collectively with the Owner
Trustee and the Co-Owner Trustee, the "Trustees").
A summary of certain of the pertinent provisions of the Trust Agreement is
set forth below. To the extent not otherwise defined herein, the capitalized
terms used herein shall have the meanings assigned to them in the Trust
Agreement. The rules as to usage set forth in the Trust Agreement shall also be
applicable to this Certificate.
This Certificate is the sole, initial duly authorized Certificate,
designated "[Education Funding Capital Trust-__] - Education Loan Asset-Backed
Trust Certificate" (herein called "this Certificate" or, collectively, with
other Certificates that may be issued upon transfer or exchange of this
Certificate for such other Certificates, whose aggregate Percentage Interest
shall be 100%, the "Certificates") issued under the Trust Agreement, to which
Trust Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound. The Trust Property includes an
initial deposit by the Depositor to the Certificate Contribution Account, and
all property and proceeds thereof of every description conveyed pursuant to the
Depositor Transfer and Sale Agreement and simultaneously with the issuance of
this Certificate, including, without limitation, a pool of student loans (the
"Financed Student Loans") and any all amounts deposited from time to time in the
Certificate Distribution Account. The rights of the Holder of this Certificate
to the assets of the Trust are subject to the rights of the Holders of certain
notes (the "Notes") issued under the Indenture of Trust dated as of __________,
20__ (the "Indenture") among the Co-Owner Trustee, the Trust Eligible Lender
Trustee and ________________________, not in its individual capacity but solely
in its capacity as Indenture Trustee (the "Indenture Trustee").
Under the Trust Agreement, distributions will be made on the Certificate on
each Certificateholder's Distribution Date in the manner set forth in the Trust
Agreement.
The Holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate from amounts transferred by
the Indenture Trustee to the Certificate Distribution Account are subject to the
rights of the Noteholders as described in the Indenture.
The Certificateholder, by its acceptance of this Certificate, covenants and
agrees that such Certificateholder will not at any time institute against the
Depositor or the Trustees, or join in any institution against the Depositor or
the Trustees, any bankruptcy, reorganization, arrangement,
A-2
insolvency, receivership or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to this Certificate, the Notes, the Trust Agreement or
any of the other Basic Documents.
The Holder of this Certificate, by its acceptance of this Certificate, (i)
agrees, for federal, state and local income and franchise tax purposes, to treat
the Trust as a "disregarded entity" (i.e. the Trust will be disregarded as an
entity separate from the Certificateholder (or, if the Certificateholder is also
a "disregarded entity," both the Trust and the Certificateholder will be
disregarded as entities separate from the sole owner of the Certificateholder)),
with the assets of the Trust being the Financed Student Loans and other assets
held by the Co-Owner Trustee, the Notes for such purposes being debt of the
Certificateholder (or, if the Certificateholder is also a "disregarded entity,"
of the sole owner of the Certificateholder) which has elected to disregard the
Trust as an entity separate from itself for tax purposes, and (ii) acknowledges
that the Trust will file or cause to be filed annual or other necessary returns,
reports and other forms consistent with the characterization of the Trust as a
"disregarded entity" for federal, state and local and franchise tax purposes and
that the Depositor will not make, or cause to be made, an election under the
provisions of Treasury Regulation Section 301.7701-3 to classify the Trust as an
association taxable as a corporation.
Distributions on this Certificate will be made from the Certificate
Distribution Account as provided in the Trust Agreement by the Co-Owner Trustee
by wire transfer or by check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon.
This Certificate does not represent an obligation of, or an interest in,
the Depositor, the Servicer, the Administrator, the Trustees or the Indenture
Trustee or any affiliates of any of them, and no recourse may be had against
such parties or their assets, except as may be expressly set forth herein, in
the Trust Agreement or in the other Basic Documents. In addition, this
Certificate is not guaranteed by any governmental agency or instrumentality and
is limited in right of payment to certain excess collections respecting the
Financed Student Loans, all as more specifically set forth in the Indenture. A
copy of each of the Indenture and the Trust Agreement may be examined during
normal business hours at the principal office of the Depositor, and at such
other places, if any, designated by the Depositor upon request.
The Trust Agreement permits the amendment thereof without the consent of
the Certificateholder or any Noteholders, (i) to cure any ambiguity or (ii) to
correct, supplement or modify any provisions in the Trust Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of the Certificateholder
or any Noteholder. The Trust Agreement permits, with certain exceptions therein
provided, but only with the consent of the Certificateholder and, if such
amendment materially and adversely affects the interests of Noteholders, with
the consent of a majority of the Directing Notes (as defined in the Indenture)
(which consent of the Certificateholder and Noteholders, if any, given pursuant
to the Trust Agreement shall be conclusive and binding on such holders and on
all future holders of the Certificate or Notes and of any Certificate or Notes
issued upon the transfer thereof or in exchange therefor or in lieu thereof
whether or not notation of such consent is made upon the Certificate or Notes)
for the purpose of adding any provisions to or
A-3
changing in any manner or eliminating any of the provisions of the Trust
Agreement, or of modifying in any manner the rights of the Certificateholder or
any Noteholder.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer, to the extent permitted herein, of this
Certificate is registrable in the Certificate Register upon surrender of this
Certificate for registration of transfer at the office or agency maintained by
________________________, in its capacity as Certificate Registrar, or by any
successor Certificate Registrar, accompanied by a written instrument of transfer
in form satisfactory to the Co-Owner Trustee and the Certificate Registrar duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee.
This Certificate is issuable only as a Certificate registered in the name
of the Depositor as the initial Certificateholder and in the Percentage Interest
of 100%. As provided in the Trust Agreement and subject to the provisions of the
next succeeding paragraph and provided that there are no Notes Outstanding (as
defined in the Indenture), the Depositor, as the initial registered Holder, may
transfer, or exchange for other Certificates aggregating in Percentage Interests
100%, this Certificate upon the surrender of this Certificate. No service charge
will be made for any such registration of transfer or exchange, but the Co-Owner
Trustee or the Certificate Registrar (if different from the Co-Owner Trustee)
may require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
This Certificate may not be transferred directly or indirectly to (i) an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)( 1) of
the Internal Revenue Code of 1986, as amended (the "Code"), or (iii) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan"). By accepting and holding this Certificate,
the Certificateholder thereof shall he deemed to have represented and warranted
that it is not a Benefit Plan.
The Certificate Registrar and any agent of the Certificate Registrar may
treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Owner Trustee, the Co-Owner Trustee or
the Certificate Registrar or any such agent shall be affected by any notice to
the contrary.
This Certificate may not be transferred to any person who is not a U.S.
Person, as such term is defined in Section 7701(a)(30) of the Code.
Each transferee of this Certificate, or any portion thereof, shall be
required, prior to purchasing a Certificate, to execute the Purchaser's
Representation and Warranty Letter in the form attached to the Trust Agreement
as Exhibit B.
The obligations and responsibilities created by the Trust Agreement and the
Trust formed thereby shall terminate upon the earlier to occur of (i) the
maturity or other liquidation of the last Financed Student Loan (including the
auction sale by the Indenture Trustee of the remaining
A-4
Financed Student Loans in the Trust as described in the Indenture and the
subsequent distribution of amounts in respect of such auction sale as provided
in the Indenture and the other Basic Documents) and (ii) the payment to the
Noteholders of all amounts payable pursuant to the Indenture.
This Certificate shall be construed in accordance with the laws of the
State of Delaware, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws.
Unless the certificate of authentication hereon shall have been executed by
an authorized representative of the Authentication Agent, by manual signature,
this Certificate shall not entitle the Holder hereof to any benefit under the
Trust Agreement or be valid for any purpose.
IN WITNESS WHEREOF, [Education Funding Capital Trust-__] has caused this
Certificate to be duly executed as of the date set forth below.
[Education Funding Capital Trust-__]
By: ________________________, not in
its individual capacity but
solely as Co-Owner Trustee of
[Education Funding Capital
Trust-__]
By:
Authorized Signatory
Date:______________________________, 20__
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
By: ________________________, not in its
individual capacity but solely as
Authentication Agent of [Education
Funding Capital Trust-__]
A-5
By:
Name:_________________________________
Authorized Representative
Date:______________________________, 20__
