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EXHIBIT 4.1
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TRUST AGREEMENT
between
SLM FUNDING CORPORATION,
as Depositor
and
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of November 1, 1997
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TABLE OF CONTENTS
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ARTICLE I
Section 1.1 Definitions and Usage............................................................................. 1
ARTICLE II
SECTION 2.1 Creation of Trust; Name........................................................................... 1
SECTION 2.2 Office............................................................................................ 1
SECTION 2.3 Purposes and Powers............................................................................... 1
SECTION 2.4 Appointment of Eligible Lender Trustee............................................................ 2
SECTION 2.5 Initial Capital Contribution of Trust Estate...................................................... 2
SECTION 2.6 Declaration of Trust.............................................................................. 2
SECTION 2.7 Liability of the Certificateholders............................................................... 3
SECTION 2.8 Title to Trust Property........................................................................... 3
SECTION 2.9 Representations and Warranties of the Depositor................................................... 4
SECTION 2.10 Application of Trust Funds........................................................................ 5
ARTICLE III
SECTION 3.1 Initial Beneficial Ownership...................................................................... 7
SECTION 3.2 The Trust Certificates............................................................................ 7
SECTION 3.3 Authentication of Trust Certificates.............................................................. 7
SECTION 3.4 Registration of Transfer and Exchange of Trust Certificates....................................... 8
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Trust Certificates........................................... 9
SECTION 3.6 Persons Deemed Owners............................................................................. 9
SECTION 3.7 Access to List of Certificate holders' Names and Addresses........................................ 10
SECTION 3.8 Maintenance of Office or Agency................................................................... 10
SECTION 3.9 Appointment of Certificate Paying Agent........................................................... 11
SECTION 3.10 Book-Entry Certificates........................................................................... 11
SECTION 3.11 Notices to Clearing Agency........................................................................ 13
SECTION 3.12 Definitive Certificates........................................................................... 13
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ARTICLE IV
SECTION 4.1 Prior Notice to Certificateholders With Respect to Certain Matters................................ 14
SECTION 4.2 Action by Certificateholders with Respect to Certain Matters...................................... 15
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy........................................... 15
SECTION 4.4 Restrictions on Certificateholders' Power......................................................... 15
SECTION 4.5 Majority Control.................................................................................. 15
ARTICLE V
SECTION 5.1 Application of Trust Funds........................................................................ 15
SECTION 5.2 Method of Payment................................................................................. 16
SECTION 5.3 No Segregation of Moneys; No Interest............................................................. 17
SECTION 5.4 Accounting and Reports to the Noteholders, Certificateholders, the
Internal Revenue Service and Others............................................................... 17
SECTION 5.5 Signature on Returns; Tax Matters Partner......................................................... 18
SECTION 5.6 Capital Accounts.................................................................................. 18
ARTICLE VI
SECTION 6.1 General Authority................................................................................. 19
SECTION 6.2 General Duties.................................................................................... 19
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
ARTICLE VII
SECTION 7.1 Acceptance of Trusts and Duties................................................................... 22
SECTION 7.2 Furnishing of Documents........................................................................... 24
SECTION 7.3 Representations and Warranties.................................................................... 24
SECTION 7.4 Reliance; Advice of Counsel....................................................................... 25
SECTION 7.5 Not Acting in Individual Capacity................................................................. 26
SECTION 7.6 Eligible Lender Trustee Not Liable for Trust Certificates or Trust Student Loans.................. 26
SECTION 7.7 Eligible Lender Trustee May Own Trust Certificates and Notes...................................... 27
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ARTICLE VIII
SECTION 8.1 Eligible Lender Trustee's Fees and Expenses....................................................... 27
SECTION 8.2 Payments to the Eligible Lender Trustee........................................................... 27
SECTION 8.3 Indemnity......................................................................................... 27
ARTICLE IX
SECTION 9.1 Termination of Trust Agreement.................................................................... 27
SECTION 9.2 Dissolution upon Insolvency of the Depositor...................................................... 29
ARTICLE X
SECTION 10.1 Eligibility Requirements for Eligible Lender Trustee.............................................. 29
SECTION 10.2 Resignation or Removal of Eligible Lender Trustee................................................. 30
SECTION 10.3 Successor Eligible Lender Trustee................................................................. 31
SECTION 10.4 Merger or Consolidation of Eligible Lender Trustee................................................ 32
SECTION 10.5 Appointment of Co-Eligible Lender Trustee or Separate Eligible Lender
Trustee........................................................................................... 32
ARTICLE XI
SECTION 11.1 Supplements and Amendments........................................................................ 34
SECTION 11.2 No Legal Title to Trust Estate in Certificateholders.............................................. 35
SECTION 11.3 Limitations on Rights of Others................................................................... 35
SECTION 11.4 Notices........................................................................................... 35
SECTION 11.5 Severability...................................................................................... 36
SECTION 11.6 Separate Counterparts............................................................................. 36
SECTION 11.7 Successors and Assigns............................................................................ 36
SECTION 11.8 No Petition....................................................................................... 36
SECTION 11.9 No Recourse....................................................................................... 37
SECTION 11.10 Headings.......................................................................................... 37
SECTION 11.11 Governing Law..................................................................................... 37
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate Depository Agreement
Annex 1 to Trust Agreement
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TRUST AGREEMENT dated as of November 1, 1997, between SLM FUNDING
CORPORATION, a Delaware corporation, as Depositor, and CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity but solely as Eligible Lender Trustee.
The Depositor and the Eligible Lender Trustee hereby agree as
follows:
ARTICLE I
SECTION 1.1 Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
ARTICLE II
Organization
SECTION II.1 Creation of Trust; Name. There is hereby created a
Trust which shall be known as "SLM Student Loan Trust 1997-4", in which name the
Eligible Lender Trustee may conduct the business of the Trust, make and execute
contracts and other instruments on behalf of the Trust and xxx and be sued. The
Trust shall constitute a business trust within the meaning of Section 3801(a) of
the Delaware Business Trust Act for which the Trustee has filed a certificate of
trust with the Secretary of State of the State of Delaware pursuant to Section
3810(a) of the Delaware Business Trust Act.
SECTION II.2 Office. The office of the Trust shall be in care of the
Eligible Lender Trustee at its Corporate Trust Office or at such other address
as the Eligible Lender Trustee may designate by written notice to the
Certificateholders and the Depositor.
SECTION II.3 Purposes and Powers. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Trust Certificates pursuant to this Agreement and to sell the Notes
and the Trust Certificates in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the
Trust Certificates, to fund the Reserve Account pursuant to Section
2.8 of the Administration Agreement and to purchase the Trust
Student Loans pursuant to the Sale Agreement;
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(iii) to Grant the Trust Estate to the Indenture Trustee
pursuant to the Indenture, and to hold, manage and distribute to the
Certificateholders pursuant to the terms of this Agreement any
portion of the Trust Estate released from the Lien of, and remitted
to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the
Basic Documents to which it is to be a party;
(v) 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
(vi) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection
with conservation of the Trust Estate and the making of
distributions to the Certificateholders, the Noteholders and the
others specified in Section 2.7 of the Administration Agreement.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Basic Documents.
SECTION II.4 Appointment of Eligible Lender Trustee. The Depositor
hereby appoints the Eligible Lender Trustee as trustee of the Trust effective as
of the date hereof, to have all the rights, powers and duties set forth herein.
SECTION II.5 Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the
Eligible Lender Trustee, as of the date hereof, the sum of $1.00. The Eligible
Lender Trustee hereby acknowledges receipt in trust from the Depositor, as of
the date hereof, of the foregoing contribution, which shall constitute the
Initial Trust Estate and shall be deposited in the Collection Account. The
Depositor shall pay the organizational expenses of the Trust as they may arise
or shall, upon the request of the Eligible Lender Trustee, promptly reimburse
the Eligible Lender Trustee for any such expenses paid by the Eligible Lender
Trustee.
SECTION II.6 Declaration of Trust. The Eligible Lender Trustee
hereby declares that it will hold the Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the other
Basic Documents. It is the intention of the parties hereto that the Trust
constitute a business trust under Delaware law and that this Agreement
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constitute the governing instrument of such trust. It is the intention of the
parties hereto that, solely for income tax purposes, the Trust shall be treated
as a partnership, with the assets of the partnership being the Trust Student
Loans and other assets held by the Trust, the partners of the partnership being
the Certificateholders (including the Depositor as recipient of distributions
from the Reserve Account), and the Notes being debt of the partnership. The
parties agree that, unless otherwise required by appropriate tax authorities,
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
partnership for such tax purposes. Effective as of the date hereof, the Eligible
Lender Trustee shall have all rights, powers and duties set forth herein with
respect to accomplishing the purposes of the Trust.
SECTION II.7 Liability of the Certificateholders.
(a) Notwithstanding the provisions of Section 3803 of the
Delaware Business Trust Act, the Depositor shall be
liable directly to and shall indemnify the injured party
for all losses, claims, damages, liabilities and
expenses of the Trust (including Expenses, to the extent
that the assets of the Trust that would remain if all of
the Notes were paid in full would not be sufficient to
pay any such liabilities, or if such liabilities in fact
are not paid out of the Trust Estate) to the extent that
the Depositor would be liable if the Trust were a
partnership under the Delaware Revised Uniform Limited
Partnership Act in which the Depositor were a general
partner; provided, however, that the Depositor shall not
be liable for any losses incurred by a beneficial owner
of a Note in its capacity as a holder of limited
recourse debt or to any Certificateholder. In addition,
any third party creditors of the Trust (other than in
connection with the obligations to Noteholders excepted
above) shall be third party beneficiaries of this
paragraph.
(b) No Certificateholder shall have any personal liability
for any liability or obligation of the Trust.
SECTION II.8 Title to Trust Property. Legal title to all of the
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Eligible Lender Trustee, a co-trustee
and/or a separate trustee, as the case may be; provided that legal title to the
Trust Student Loans shall be vested at all times in the Eligible Lender Trustee
on behalf of the Trust.
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SECTION II.9 Representations, Warranties, and Covenants of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Eligible Lender Trustee as follows:
(a) The Depositor is duly organized and validly existing as
a Delaware corporation 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 such business is
presently conducted.
(b) The Depositor has the corporate power and authority to
execute and deliver this Agreement and to carry out its
terms; the Depositor has full corporate power and
authority to sell and assign the property to be sold and
assigned to and deposited with the Trust (or with the
Eligible Lender Trustee on behalf of the Trust) and the
Depositor has duly authorized such sale and assignment
and deposit to the Trust (or to the Eligible Lender
Trustee on behalf of the Trust) by all necessary
corporate action; and the execution, delivery and
performance of this Agreement has been duly authorized
by the Depositor by all necessary corporate action.
(c) This Agreement constitutes a legal, valid and binding
obligation of the Depositor enforceable in accordance
with its terms, subject to applicable bankruptcy,
insolvency, reorganization and similar laws relating to
creditors' rights generally and subject to general
principles of equity.
(d) The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, the
certificates of incorporation or by-laws of the
Depositor, or any indenture, agreement or other
instrument to which the Depositor is a party or by which
it is bound; nor result in the creation or imposition of
any Lien upon any of its properties pursuant to the
terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents);
nor violate any law or, to the Depositor's knowledge,
any order, rule or regulation applicable to the
Depositor of any court or of any Federal or state
regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over
the Depositor or its properties.
(e) The Depositor agrees for the benefit of the Noteholders
and of the Certificate Holders that it will comply with
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each of the requirements set forth in Article IX, X, and
XII of its Certificate of Incorporation and with each of
the undertakings set forth in Annex I hereto.
SECTION II.10 Application of Trust Funds.
(a) Income and Loss Allocations. After giving effect to the
special allocations set forth in subparagraph (b) of
this Section 2.10 and for purposes of maintaining
Capital Accounts under Section 5.6, gross income items
of the Trust for any Accrual Period as determined for
Federal income tax purposes shall be allocated as
follows:
(1) first, among the Certificateholders as
of the close of business on the last day of
such Accrual Period, in proportion to the
Certificate Balance of the Certificates
owned by them on such date, an amount of
gross income up to the sum of (i) the
portion of the Certificateholders' Return
Distribution Amount and the Certificate
Return Carryover, if any, for the related
Distribution Date allocable to such Accrual
Period, (ii) return on the excess, if any,
of the Certificateholders' Return
Distribution Amount for the preceding
Distribution Date over the amount in respect
of return on the Certificates that is
actually distributed to Certificateholders
on such preceding Distribution Date, to the
extent permitted by law, at the Certificate
Rate for such Accrual Period and (iii) the
portion of the market discount on the Trust
Student Loans accrued during such Accrual
Period that is allocable to the excess, if
any, of the initial aggregate principal
amount of the Certificates over their
initial aggregate issue price; and
(2) the balance of Profits, if any, to the
Depositor.
If the items of gross income of the Trust for any month
are insufficient for the allocations described in clause
(1) above, subsequent items of gross income shall first
be allocated to make up such shortfall before Profits
are allocated as provided in clause (b). Loss of the
Trust for any Accrual Period shall be allocated to the
Depositor to the extent the Depositor is reasonably
expected to bear the economic burden of such Loss, and
any remaining Loss shall be allocated among the
Certificateholders as of the close of business on the
last day of such Accrual Period in proportion to the
Certificate Balance of Trust
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Certificates owned by them
on such date. If any items of loss or deduction are
allocated to Certificateholders and the Depositor
subsequently determines that the economic loss to
Certificateholders will be less than was expected at the
time such allocations were made, additional items of
gross income will be allocated to Certificateholders in
subsequent periods to offset the excess allocations of
losses and deductions to Certificateholders before any
Profits are allocated to the Depositor as provided in
clause (2) above.
(b) Special Allocations.
(1) In the event any Certificateholder
unexpectedly receives any adjustments,
allocations or distributions described in
Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items
of Trust income and gain shall be specially
allocated to such Certificateholder in an
amount and manner sufficient to eliminate,
to the extent required by the Treasury
Regulations, the deficit, if any, in the
balance of the Capital Account of such
Certificateholder as quickly as possible.
This Section 2.10(b) is intended to comply
with the qualified income offset provision
in Section 1.704-1(b)(2)(ii)(d) of the
Treasury Regulations.
(2) In the event the initial issue price of
Certificates differs from their initial
Certificate Balance, there shall be
specially allocated to the
Certificateholders the portion, if any, of
the offset for premium (in the case the
issue price of the Certificates exceeds the
Certificate Balance) on the Trust Student
Loans accruing for a calendar month that is
attributable to such difference.
(c) Liquidating Profit or Loss. Liquidating Profit or Loss
shall be allocated, after all other adjustments are made
to the Capital Accounts (including adjustments to
reflect the Liquidating Distribution), as follows:
(1) First, among the Certificateholders in
proportion to their ownership of the
principal amount of Certificates, in an
amount that would cause their Capital
Account balances to equal zero (in the case
of the Depositor, taking into account the
Capital Account balance of the Depositor
only to the extent it relates to
Certificates owned by the Depositor); and
(2) Any balance, to the Depositor.
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(d) Tax Allocations. For Federal income tax purposes, each
item of income, gain, loss and deduction of the Trust
shall be allocated among the Certificateholders and the
Depositor in a manner consistent with the allocations
set forth in this Section 2.10, subject to the
provisions of Section 704(c) of the Code.
Notwithstanding anything to the contrary set forth in
this Agreement, the Depositor is authorized to modify
the allocations of this Section 2.10(d) and Sections
2.10(a), (b) and (c) if necessary or appropriate, in the
Depositor's sole discretion, for the allocations to
fairly reflect the economic gain, income or loss to the
Depositor or the Certificateholders, or as otherwise
required by the Code or the Treasury Regulations.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION III.1 Initial Beneficial Ownership. Upon the formation of
the Trust by the contribution by the Depositor pursuant to Section 2.5 and until
the issuance of the Trust Certificates, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION III.2 The Trust Certificates. The Trust Certificates shall
be issued in denominations of $100,000 or in integral multiples of $1,000 in
excess thereof. The Trust Certificates shall be executed on behalf of the Trust
by manual or facsimile signature of an authorized officer of the Eligible Lender
Trustee. Trust Certificates 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 Trust, shall be valid and binding obligations of the
Trust, notwithstanding that such individuals or any of them shall have ceased to
be so authorized prior to the authentication and delivery of such Trust
Certificates or did not hold such offices at the date of authentication and
delivery of such Trust Certificates.
SECTION III.3 Authentication of Trust Certificates. Concurrently
with the sale of the Trust Student Loans to the Trust pursuant to the Purchase
Agreement, the Eligible Lender Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the Initial Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by its chairman of the board, its
president or any vice president, without further action by the Depositor, in
authorized denominations. No Trust Certificate shall entitle its holder to
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any benefit under this Agreement, or shall be valid for any purpose, unless
there shall appear on such Trust Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Eligible
Lender Trustee or The Chase Manhattan Bank, as the Eligible Lender Trustee's
authenticating agent, by manual signature; such authentication shall constitute
conclusive evidence that such Trust Certificate shall have been duly
authenticated and delivered hereunder. All Trust Certificates shall be dated the
date of their authentication. No further Trust Certificates shall be issued
except pursuant to Section 3.4, 3.5 or 3.12 hereunder.
SECTION III.4 Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Eligible
Lender Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided.
The Chase Manhattan Bank shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.8, the Eligible Lender
Trustee shall execute, authenticate and deliver (or shall cause The Chase
Manhattan Bank as its authenticating agent to authenticate and deliver), in the
name of the designated transferee or transferees, one or more new Trust
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Eligible Lender Trustee or any authenticating
agent. At the option of a Certificateholder, Trust Certificates may be exchanged
for other Trust Certificates of authorized denominations of a like aggregate
amount upon surrender of the Trust Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.8.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Eligible Lender Trustee and the Certificate Registrar
duly executed by the Certificateholder or his attorney duly authorized in
writing, with such signature guaranteed by a member firm of the New York Stock
Exchange or a commercial bank or trust company. Each Trust Certificate
surrendered for registration of transfer or exchange shall be cancelled and
subsequently disposed of by the Eligible Lender Trustee in accordance with its
customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Eligible Lender Trustee or the
Certificate Registrar may require payment
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of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the
Eligible Lender Trustee shall not be required to make and the Certificate
Registrar need not register transfers or exchanges of Trust Certificates for a
period of 15 days preceding any Distribution Date with respect to the Trust
Certificates.
The Trust Certificates and any beneficial interest in such Trust
Certificates may not be acquired by (a) employee benefit plans (as defined in
section 3(3) of ERISA) that are subject to the provisions of Title I of ERISA,
(b) plans described in section 4975(e)(1) of the Code, including individual
retirement accounts described in Section 408(a) of the Code or Xxxxx plans, or
(c) entities whose underlying assets include plan assets by reason of a plan's
investment in such entities (each, a "Benefit Plan"). By accepting and holding a
Trust Certificate or an interest therein, the Certificateholder thereof or
Certificate Owner thereof shall be deemed to have represented and warranted that
it is not a Benefit Plan, is not purchasing Trust Certificates on behalf of a
Benefit Plan and is not using assets of a Plan to purchase any Certificates and
to have agreed that if the Trust Certificate is deemed to be a plan asset, the
Certificateholder will promptly dispose of the Trust Certificate.
SECTION III.5 Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Certificate, and
(b) there shall be delivered to the Certificate Registrar and the Eligible
Lender Trustee such security or indemnity as may be required by them to save
each of them and the Trust harmless, then in the absence of notice that such
Trust Certificate shall have been acquired by a bona fide purchaser, the
Eligible Lender Trustee on behalf of the Trust shall execute and the Eligible
Lender Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust
Certificate of like tenor and denomination. In connection with the issuance of
any new Trust Certificate under this Section, the Eligible Lender Trustee and
the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Certificate issued pursuant to this Section shall
constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Certificate shall be
found at any time.
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SECTION III.6 Persons Deemed Owners. Prior to due presentation of a
Trust Certificate for registration of transfer, the Eligible Lender Trustee and
the Certificate Registrar and any agent of either of them may treat the Person
in whose name any Trust Certificate shall be registered in the Certificate
Register as the owner of such Trust Certificate for the purpose of receiving
distributions pursuant to Section 5.1 and for all other purposes whatsoever, and
neither the Eligible Lender Trustee, the Certificate Registrar nor any agent
thereof shall be bound by any notice to the contrary.
SECTION III.7 Access to List of Certificateholders' Names and
Addresses. The Eligible Lender Trustee shall furnish or cause to be furnished to
the Depositor, within 15 days after receipt by the Eligible Lender Trustee of a
request therefor from the Depositor in writing, a list, in such form as the
Depositor may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more
Certificateholders or one or more Certificateholders evidencing not less than
25% of the Certificate Balance apply in writing to the Eligible Lender Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Eligible Lender
Trustee shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Upon receipt of any such application, the Eligible Lender
Trustee shall promptly notify the Depositor by providing a copy of such
application and a copy of the list of Certificateholders produced in response
thereto. Each Certificateholder, by receiving and holding a Trust Certificate,
shall be deemed to have agreed not to hold any of the Depositor, the Certificate
Registrar or the Eligible Lender Trustee accountable by reason of the disclosure
of its name and address, regardless of the source from which such information
was derived.
SECTION III.8 Maintenance of Office or Agency. The Eligible Lender
Trustee shall maintain in the Borough of Brooklyn, The City of New York, an
office or offices or agency or agencies where Trust Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Eligible Lender Trustee in respect of the Trust
Certificates and the other Basic Documents may be served. The Eligible Lender
Trustee initially designates 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, as its
principal Corporate Trust Office. The Eligible Lender Trustee's New York office
and its authenticating agent's office are located at 000 Xxxx 00xx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Services. The
Eligible Lender Trustee shall
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give prompt written notice to the Depositor and to the Certificateholders of any
change in the location of the Certificate Register or any such office or agency.
SECTION III.9 Appointment of Certificate Paying Agent. The
Certificate Paying Agent shall make distributions to Certificateholders from the
amounts received from the Indenture Trustee out of the Trust Accounts pursuant
to Section 5.1 and shall report the amounts of such distributions to the
Eligible Lender Trustee. Any Certificate Paying Agent shall have the revocable
power to receive such funds from the Indenture Trustee for the purpose of making
the distributions referred to above. The Eligible Lender Trustee may revoke such
power and remove the Certificate Paying Agent if the Eligible Lender Trustee
determines in its sole discretion that the Certificate Paying Agent shall have
failed to perform its obligations under this Agreement in any material respect.
The Certificate Paying Agent shall initially be the Eligible Lender Trustee, and
any co-paying agent chosen by the Eligible Lender Trustee and consented to by
the Administrator (which consent shall not be unreasonably withheld). The
copaying agent shall initially be the Indenture Trustee. The Eligible Lender
Trustee shall be permitted to resign as Certificate Paying Agent upon 30 days'
written notice to the Eligible Lender Trustee. In the event that the Eligible
Lender Trustee shall no longer be the Certificate Paying Agent, the Eligible
Lender Trustee shall appoint a successor to act as Certificate Paying Agent
(which shall be a bank or trust company). The Eligible Lender Trustee shall give
notice to the Rating Agencies of the appointment of a successor Paying Agent.
The Eligible Lender Trustee shall cause such successor Certificate Paying Agent
or any additional Certificate Paying Agent appointed by the Eligible Lender
Trustee to execute and deliver to the Eligible Lender Trustee an instrument in
which such successor Certificate Paying Agent or additional Certificate Paying
Agent shall agree with the Eligible Lender Trustee that as Certificate Paying
Agent, such successor Certificate Paying Agent or additional Certificate Paying
Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholder entitled
thereto until such sums shall be paid to such Certificateholder. The Certificate
Paying Agent shall return all unclaimed funds to the Eligible Lender Trustee and
upon removal of a Certificate Paying Agent such Certificate Paying Agent shall
also return all funds in its possession to the Eligible Lender Trustee. The
provisions of Sections 7.1, 7.3, 7.4, 7.5 and 8.1 shall apply to the Eligible
Lender Trustee also in its role as Certificate Paying Agent, for so long as the
Eligible Lender Trustee shall act as Certificate Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in this
Agreement to the Certificate Paying Agent shall include any copaying agent
unless the context requires otherwise.
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SECTION III.10 Book-Entry Certificates. The Trust Certificates, upon
original issuance, will be issued in the form of a typewritten Trust Certificate
or Trust Certificates representing Book-Entry Certificates, to be delivered to
The Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Trust. Such Book-Entry Certificate or Book-Entry Certificates shall
initially be registered on the Certificate Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency, and no Certificate owner will
receive a Definitive Certificate representing such Certificate Owner's interest
in such Trust Certificate, except as provided in Section 3.12. Unless and until
definitive, fully registered Trust Certificates (the "Definitive Certificates")
have been issued to Certificate owners pursuant to Section 3.12:
(i) the provisions of this Section shall be in full
force and effect;
(ii) the Certificate Registrar and the Eligible Lender
Trustee shall be entitled to deal with the Clearing Agency for all
purposes of this Agreement (including the payment of principal of
and interest on the Trust Certificates and the giving of
instructions or directions hereunder) as the sole Certificateholder
and shall have no obligation to the Certificate owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions
of this Section shall control;
(iv) the rights of Certificate Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Certificate Owners
and the Clearing Agency and/or the Clearing Agency Participants.
Pursuant to the Certificate Depository Agreement, unless and until
Definitive Certificates are issued pursuant to Section 3.12, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit distribution
in respect of the Certificate Balance and return on the Trust
Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions
to be taken based upon instructions or directions of
Certificateholders of Trust Certificates evidencing a specified
percentage of the Certificate Balance, the Clearing Agency shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively,
such required percentage of the beneficial interest in the Trust
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Certificates and has delivered such instructions to the Eligible
Lender Trustee.
SECTION III.11 Notices to Clearing Agency. Whenever a notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 3.12, the Eligible Lender Trustee shall give all such
notices and communications specified herein to be given to Certificateholders to
the Clearing Agency, and shall have no obligations to the Certificate Owners.
SECTION III.12 Definitive Certificates. If (i) the Administrator
advises the Eligible Lender Trustee in writing that the Clearing Agency is no
longer willing or able to discharge properly its responsibilities with respect
to the Trust Certificates, and the Administrator is unable to locate a qualified
successor, (ii) the Administrator at its option advises the Eligible Lender
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default, a Servicer
Default or an Administrator Default, Certificate Owners representing beneficial
interests aggregating at least a majority of the Certificate Balance advise the
Clearing Agency (which shall then notify the Eligible Lender Trustee) in writing
that the continuation of a book-entry system through the Clearing Agency is no
longer in the best interest of the Certificate Owners, then the Eligible Lender
Trustee shall cause the Clearing Agency to notify all Certificate Owners of the
occurrence of any such event and of the availability of the Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Eligible Lender Trustee of the typewritten Trust Certificate or Trust
Certificates representing the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions, the Eligible Lender Trustee shall
execute and authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. Neither the Certificate Registrar nor the
Eligible Lender Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Certificates, the Eligible
Lender Trustee shall recognize the registered holders of the Definitive
Certificates as Certificateholders. The Definitive Certificates shall, at the
expense of the Depositor, be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Eligible Lender
Trustee, as evidenced by its execution thereof.
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ARTICLE IV
Actions by Eligible Lender Trustee
SECTION IV.1 Prior Notice to Certificateholders With Respect to
Certain Matters. With respect to the following matters, the Eligible Lender
Trustee shall not take action unless at least 30 days before the taking of such
action, the Eligible Lender Trustee shall have notified the Certificateholders
and each of the Rating Agencies in writing of the proposed action and the
Certificateholders shall not have notified the Eligible Lender Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the
Trust (except claims or lawsuits brought in connection
with the collection of the Trust Student Loans) and the
compromise of any material action, claim or lawsuit
brought by or against the Trust (except with respect to
the aforementioned claims or lawsuits for collection of
Trust Student Loans);
(b) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is required;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is not required and such amendment materially
adversely affects the interest of the
Certificateholders;
(d) the amendment, change or modification of the
Administration Agreement, except to cure any ambiguity
or to amend or supplement any provision in a manner or
add any provision that would not materially adversely
affect the interests of the Certificateholders; or
(e) the appointment pursuant to the Administration Agreement
of a successor Administrator, the appointment pursuant
to the Indenture of a successor Note Registrar, Paying
Agent or Indenture Trustee, or the appointment pursuant
to this Agreement of a successor Certificate Registrar
or successor Certificate Paying Agent, or the consent to
the assignment by the Administrator, the Note Registrar,
the Paying Agent, the Indenture Trustee, the Certificate
Registrar or the Certificate Paying Agent of its
obligations under the
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Administration Agreement, the Indenture or this
Agreement, as applicable.
SECTION IV.2 Action by Certificateholders with Respect to Certain
Matters. The Eligible Lender Trustee shall not have the power, except upon the
written direction of the Certificateholders and except as expressly provided in
the Basic Documents, to sell the Trust Student Loans after the termination of
the Indenture.
SECTION IV.3 Action by Certificateholders with Respect to
Bankruptcy. The Eligible Lender Trustee shall not have the power to commence a
voluntary proceeding in bankruptcy relating to the Trust without the unanimous
prior approval of all Certificateholders (other than the Depositor) and the
delivery to the Eligible Lender Trustee by each such Certificateholder of a
certificate certifying that such Certificateholder reasonably believes that the
Trust is insolvent.
SECTION IV.4 Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Eligible Lender Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Eligible Lender Trustee under this Agreement
or any of the other Basic Documents or would be contrary to Section 2.3 nor
shall the Eligible Lender Trustee be permitted to follow any such direction, if
given.
SECTION IV.5 Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Agreement may
be taken by the Certificateholders of Trust Certificates evidencing a majority
of the Certificate Balance. Except as expressly provided herein, any written
notice of the Certificateholders delivered pursuant to this Agreement shall be
effective if signed by Certificateholders of Trust Certificates evidencing not
less than a majority of the Certificate Balance at the time of the delivery of
such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION V.1 Application of Trust Funds.
(a) On each Distribution Date, the Eligible Lender Trustee
shall distribute to Certificateholders (i) the
Certificateholders' Return Distribution Amount for such
Distribution Date on a pro rata basis according to
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amounts payable in respect of Certificateholders' Return
Distribution Amount, (ii) the Certificate Balance
Distribution Amount for such Distribution Date, if any,
on a pro rata basis according to amounts payable in
respect of the Certificate Balance, and (iii) the
Certificate Return Carryover for such Distribution Date,
if any, on a pro rata basis according to amounts payable
in respect of Certificate Return Carryover, as received
from the Indenture Trustee pursuant to Sections 2.7 and
2.8 of the Administration Agreement on such Distribution
Date.
(b) On each Distribution Date, the Eligible Lender Trustee
shall send to each Certificateholder the statement
provided to the Eligible Lender Trustee by the
Administrator pursuant to Section 2.9 of the
Administration Agreement on such Distribution Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a
Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in
accordance with this Section. The Eligible Lender
Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of
any tax that is legally owed by the Trust (but such
authorization shall not prevent the Eligible Lender
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 a Certificateholder shall be treated as
cash distributed to such Certificateholder at the time
it is withheld by the Trust to be remitted to the
appropriate taxing authority. The Eligible Lender
Trustee shall withhold or cause to be withheld at the
maximum applicable rate provided in section 1441, 1442
or 1446 of the Code with respect to all distributions
made to persons that are not known to be U.S. Persons,
within the meaning of the Code, unless it is otherwise
determined in the opinion of counsel. In the event that
a Certificateholder wishes to apply for a refund of any
such withholding tax, the Eligible Lender Trustee shall
reasonably cooperate with such Certificateholder in
making such claim so long as such Certificateholder
agrees to reimburse the Eligible Lender Trustee for any
out-of-pocket expenses incurred.
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SECTION V.2 Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions signed by two authorized officers, if
any, at least five Business Days prior to such Distribution Date and such
Certificateholder's Trust Certificates in the aggregate evidence a denomination
of not less than $1,000,000, or, if not, by check mailed to such
Certificateholder at the address of such Certificateholder appearing in the
Certificate Register; provided, however, that, unless Definitive Certificates
have been issued pursuant to Section 3.12, with respect to Trust Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), distributions will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Notwithstanding the foregoing, the final distribution in respect of any
Trust Certificate (whether on the Certificate Final Maturity Date or otherwise)
shall be payable only upon presentation and surrender of such Trust Certificate
at the Corporate Trust Office of the Eligible Lender Trustee or such other
location specified in writing to the Certificateholder thereof.
SECTION V.3 No Segregation of Moneys; No Interest. Subject to
Section 5.1, moneys received by the Eligible Lender Trustee hereunder need not
be segregated in any manner except to the extent required by law or the
Administration Agreement and may be deposited under such general conditions as
may be prescribed by law, and the Eligible Lender Trustee shall not be liable
for any interest thereon.
SECTION V.4 Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. The Eligible Lender
Trustee shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual method of accounting, (b) deliver (or cause
to be delivered) to each Certificateholder (and to each Person who was a
Certificateholder at any time during the applicable calendar year), as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each such Certificateholder
to prepare its Federal and state income tax returns, (c) file (or cause to be
filed) such tax returns relating to the Trust (including a partnership
information return, Internal Revenue Service Form 1065), and make such elections
as may from time to time be
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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
partnership for Federal income tax purposes, (d) cause such tax returns to be
signed in the manner required by law and (e) collect (or cause to be collected)
any withholding tax as described in and in accordance with Section 5.1(c) with
respect to income or distributions to Certificateholders. The Eligible Lender
Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Trust Student
Loans. The Eligible Lender Trustee shall not make the election provided under
Section 754 of the Code. The Eligible Lender Trustee shall be entitled to hire
an independent accounting firm to perform the functions described in this
Section 5.4 the reasonable fees and expenses of which shall be paid by the
Depositor.
SECTION V.5 Signature on Returns; Tax Matters Partner.
(a) The Eligible Lender Trustee shall sign on behalf of the
Trust the tax returns of the Trust, unless applicable
law requires a Certificateholder to sign such documents,
in which case such documents shall be signed by the
Depositor.
(b) The Depositor shall be designated the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A)
of the Code and applicable Treasury Regulations.
SECTION V.6 Capital Accounts. The Trust shall maintain accounts
("Capital Accounts") with respect to each Certificateholder (including the
Depositor) in accordance with the following provisions:
(a) Each Certificateholder's Capital Account shall be
increased by the Capital Contributions (as defined
below) of such Certificateholder, such
Certificateholder's distributive share of gross income
(and any Liquidating Profits) and any items in the
nature of income or gain which are specially allocated
to such Certificateholder pursuant to Section 2.10(b) of
this Agreement.
(b) Each Certificateholder's Capital Account shall be
reduced by any amount distributed to such
Certificateholder (including, in the case of the
Depositor, any amount released or otherwise distributed
to the Depositor from the Reserve Account under Sections
2.8C(G) and 2.8D of the Administration Agreement) and
such Certificateholder's distributive
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share of Losses and deductions (and any Liquidating
Loss), including any special allocation pursuant to
Section 2.10(b).
(c) In the event all or a portion of a Certificate is
transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it related to
such Certificate or a portion thereof.
(d) Notwithstanding the above, the Capital Accounts shall be
adjusted in accordance with the provisions governing the
economic rights of the Certificateholders, as set forth
herein and in the Basic Documents.
"Capital Contribution" means the amount of any cash and the fair
market value of any property contributed to the Trust by a Certificateholder
(including any amounts deemed to be contributed in connection with the original
issuance of the Certificates), including, in the case of the Depositor, the fair
market value of the Trust Student Loans deemed to be contributed by the
Depositor to the Trust, taking into account the provisions of Section
707(a)(2)(B) of the Code and the Regulations thereunder. The foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with section 1.704-1(b)
of the Treasury Regulations and shall be interpreted in a manner consistent
therewith.
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION VI.1 General Authority. The Eligible Lender Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust 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, in each case, in such form as the Depositor shall approve as evidenced
conclusively by the Eligible Lender Trustee's execution thereof, and, on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver Notes
in the aggregate principal amount of $2,477,000,000. The Eligible Lender Trustee
is also authorized and directed on behalf of the Trust (i) to acquire and hold
legal title to the Trust Student Loans from the Depositor and (ii) to take all
actions required pursuant to Section 3.2C of the Administration Agreement and
otherwise follow the direction of and cooperate with the Servicer in submitting,
pursuing and collecting any claims to and with the
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Department with respect to any Interest Subsidy Payments and Special Allowance
Payments relating to the Trust Student Loans.
In addition to the foregoing, the Eligible Lender Trustee is
authorized to take all actions required of the Trust pursuant to the Basic
Documents. The Eligible Lender Trustee is further authorized from time to time
to take such action as the Administrator directs or instructs with respect to
the Basic Documents and is directed to take such action to the extent that the
Administrator is expressly required pursuant to the Basic Documents to cause the
Eligible Lender Trustee to act.
SECTION VI.2 General Duties. It shall be the duty of the Eligible
Lender Trustee to discharge (or cause to be discharged) all its responsibilities
pursuant to the terms of this Agreement and the other Basic Documents to which
the Trust is a party and to administer the Trust in the interest of the
Certificateholders, subject to and in accordance with the provisions of this
Agreement and the other Basic Documents. Without limiting the foregoing, the
Eligible Lender Trustee shall on behalf of the Trust file and prove any claim or
claims that may exist on behalf of the Trust against the Depositor in connection
with any claims paying procedure as part of an insolvency or a receivership
proceeding involving the Depositor. Notwithstanding the foregoing, the Eligible
Lender Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the other Basic Documents to the extent the
Administrator has agreed in the Administration Agreement to perform and act or
to discharge any duty of the Eligible Lender Trustee hereunder or under any
other Basic Document, and the Eligible Lender Trustee shall not be held liable
for the default or failure of the Administrator to carry out its obligations
under the Administration Agreement. Except as expressly provided in the Basic
Documents, the Eligible Lender Trustee shall have no obligation to administer,
service or collect the Trust Student Loans or to maintain, monitor or otherwise
supervise the administration, servicing or collection of the Trust Student
Loans.
SECTION VI.3 Action upon Instruction.
(a) [Reserved]
(b) The Eligible Lender Trustee shall not be required to
take any action hereunder or under any other Basic
Document if the Eligible Lender Trustee shall have
reasonably determined, or shall have been advised by
counsel, that such action is likely to result in
liability on the part of the Eligible Lender Trustee or
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is contrary to the terms hereof or of any other Basic
Document or is otherwise contrary to law.
(c) Whenever the Eligible Lender Trustee is unable to
determine the appropriate course of action between
alternative courses and actions permitted or required by
the terms of this Agreement or under any other Basic
Document, the Eligible Lender Trustee shall promptly
give notice (in such form as shall be appropriate under
the circumstances) to the Certificateholders requiring
instruction as to the course of action to be adopted,
and to the extent the Eligible Lender Trustee acts in
good faith in accordance with any written instruction of
the Certificateholders received, the Eligible Lender
Trustee shall not be liable on account of such action to
any Person. If the 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
other Basic Documents, as it shall deem to be in the
best interests of the Certificateholders, and shall have
no liability to any Person for such action or inaction.
(d) In the event that the Eligible Lender Trustee is unsure
as to the application of any provision of this Agreement
or any other 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 Eligible Lender Trustee or is
silent or is incomplete as to the course of action that
the Eligible Lender Trustee is required to take with
respect to a particular set of facts, the Eligible
Lender Trustee may give notice (in such form as shall be
appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the
extent that the Eligible Lender Trustee acts or refrains
from acting in good faith in accordance with any such
instruction received, the Eligible Lender Trustee shall
not be liable, on account of such action or inaction, to
any Person. If the 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
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Agreement or the other Basic Documents, as it shall deem
to be in the best interest of the Certificateholders,
and shall have no liability to any Person for such
action or inaction.
SECTION VI.4 No Duties Except as Specified in this Agreement or in
Instructions. The Eligible Lender Trustee shall not have any duty or obligation
to manage, make any payment with respect to, register, record, sell, service,
dispose of or otherwise deal with the Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Eligible Lender Trustee is a party, except as
expressly provided by the terms of this Agreement or in any document or written
instruction received by the Eligible Lender Trustee pursuant to Section 6.3; and
no implied duties or obligations shall be read into this Agreement or any other
Basic Document against the Eligible Lender Trustee. The Eligible Lender Trustee
shall have no responsibility for filing any financing or continuation statement
in any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
prepare or file any Commission filing for the Trust or to record this Agreement
or any other Basic Document. The Eligible Lender Trustee nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any Liens on any part of the Trust Estate that result
from actions by, or claims against, Chase Manhattan Bank USA, National
Association in its individual capacity or as the Eligible Lender Trustee that
are not related to the ownership or the administration of the Trust Estate.
SECTION VI.5 No Action Except Under Specified Documents or
Instructions. The Eligible Lender Trustee shall not otherwise deal with any part
of the Trust Estate except (i) in accordance with the powers granted to and the
authority conferred upon the Eligible Lender Trustee pursuant to this Agreement,
(ii) in accordance with the other Basic Documents to which it is a party and
(iii) in accordance with any document or instruction delivered to the Eligible
Lender Trustee pursuant to Section 6.3.
SECTION VI.6 Restrictions. The Eligible Lender Trustee shall not
take any action (a) that is inconsistent with the purposes of the Trust set
forth in Section 2.3 or (b) that, to the actual knowledge of the Eligible Lender
Trustee, would result in the Trust's becoming taxable as a corporation for
Federal income tax purposes. The Certificateholders shall not direct the
Eligible Lender Trustee to take action that would violate the provisions of this
Section.
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ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION VII.1 Acceptance of Trusts and Duties. The Eligible Lender
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Eligible Lender Trustee also agrees to disburse all moneys actually received
by it constituting part of the Trust Estate upon the terms of this Agreement and
the other Basic Documents. The Eligible Lender Trustee shall not be answerable
or accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful misconduct or negligence or (ii)
in the case of the inaccuracy of any representation or warranty contained in
Section 7.3 expressly made by the Eligible Lender Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Eligible Lender Trustee shall not be liable for any
error of judgment made by a responsible officer of the
Eligible Lender Trustee;
(b) the Eligible Lender Trustee shall not be liable with
respect to any action taken or omitted to be taken by it
in accordance with the direction or instructions of the
Administrator or any Certificateholder;
(c) no provision of this Agreement or any other Basic
Document shall require the Eligible Lender Trustee to
expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or
powers hereunder or under any other Basic Document, if
the Eligible Lender Trustee 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 it;
(d) under no circumstances shall the Eligible Lender Trustee
be liable for indebtedness evidenced by or arising under
any of the Basic Documents, including the principal of
and interest on the Notes;
(e) the Eligible Lender Trustee shall not be responsible for
or in respect of the validity or sufficiency of this
Agreement or for the due execution hereof by the
Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Trust
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Estate or for or in respect of the validity or
sufficiency of the Basic Documents, other than the
certificate of authentication on the Trust Certificates,
and the Eligible Lender Trustee shall in no event assume
or incur any liability, duty, or obligation to any
Noteholder or to any Certificateholder, other than as
expressly provided for herein and in the other Basic
Documents;
(f) the Eligible Lender Trustee shall not be liable for the
action or inaction, default or misconduct of the
Administrator, the Depositor, the Indenture Trustee or
the Servicer under any of the other Basic Documents or
otherwise and the Eligible Lender Trustee shall have no
obligation or liability to perform the obligations of
the Trust under this Agreement or the other Basic
Documents that are required to be performed by the
Administrator under the Administration Agreement, the
Indenture Trustee under the Indenture or the Servicer
under the Servicing Agreement; and
(g) the Eligible Lender Trustee shall be under no 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 other Basic Document,
at the request, order or direction of any of the
Certificateholders, unless such Certificateholders have
offered to the Eligible Lender Trustee security or
indemnity satisfactory to it against the costs, expenses
and liabilities that may be incurred by the Eligible
Lender Trustee therein or thereby. The right of the
Eligible Lender Trustee to perform any discretionary act
enumerated in this Agreement or in any other Basic
Document shall not be construed as a duty, and the
Eligible Lender Trustee shall not be answerable for
other than its negligence or willful misconduct in the
performance of any such act.
SECTION VII.2 Furnishing of Documents. The Eligible Lender Trustee
shall furnish to the Certificateholders 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 the Eligible Lender Trustee under the Basic Documents. On each Distribution
Date the Eligible Lender Trustee shall provide to each Certificateholder of
record as of the related Record Date the information provided by the
Administrator to the Eligible Lender
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Trustee on the related Determination Date pursuant to Section 2.9 of the
Administration Agreement.
SECTION VII.3 Representations and Warranties. The Eligible Lender
Trustee hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is duly organized and validly existing in good
standing under the laws of its governing jurisdiction
and has an office located within the State of Delaware.
It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this
Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and
this Agreement will be executed and delivered by one of
its officers who is duly authorized to execute and
deliver this Agreement on its behalf.
(c) 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 Delaware state law,
governmental rule or regulation governing the banking or
trust powers of the 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.
(d) It is and will maintain its status as an "eligible
lender" (as such term is defined in Section 435(d) of
the Higher Education Act) for purposes of holding legal
title to the Trust Student Loans as contemplated by this
Agreement and the other Basic Documents, it has a lender
identification number with respect to the Trust Student
Loans from the Department and has and will maintain in
effect a Guarantee Agreement with each of the Guarantors
with respect to the Trust Student Loans.
SECTION VII.4 Reliance; Advice of Counsel.
(a) The Eligible Lender Trustee shall incur no liability to
anyone in acting upon any signature, instrument,
direction, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or
paper believed by it to be genuine and believed by it
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to be signed by the proper party or parties. The
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 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 Eligible Lender Trustee 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 in the performance of its duties and
obligations under this Agreement or the other Basic
Documents, the Eligible Lender Trustee (i) may act
directly or through its agents or attorneys pursuant to
agreements entered into with any of them and the
Eligible Lender Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if
such agents or attorneys shall have been selected by the
Eligible Lender Trustee with reasonable care, and (ii)
may consult with counsel and accountants to be selected
with reasonable care and employed by it. The Eligible
Lender Trustee shall not 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
or accountants and not contrary to this Agreement or any
other Basic Document.
SECTION VII.5 Not Acting in Individual Capacity. Except as provided
in this Article VII, in accepting the trusts hereby created Chase Manhattan Bank
USA, National Association acts solely as Eligible Lender Trustee hereunder and
not in its individual capacity and all Persons having any claim against the
Eligible Lender Trustee by reason of the transactions contemplated by this
Agreement or any other Basic Document shall look only to the Trust Estate for
payment or satisfaction thereof.
SECTION VII.6 Eligible Lender Trustee Not Liable for Trust
Certificates or Trust Student Loans. The recitals contained herein and in the
Trust Certificates (other than the signature of and authentication by the
Eligible Lender Trustee on the Trust Certificates) shall be taken as the
statements of the Depositor
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and the Eligible Lender Trustee assumes no responsibility for the correctness
thereof. The Eligible Lender Trustee makes no representations as to the validity
or sufficiency of this Agreement, the Trust Certificates or any other Basic
Document (other than the signature of and authentication by the Eligible Lender
Trustee on the Trust Certificates) or the Notes, or of any Trust Student Loan or
related documents. The Eligible Lender Trustee shall at no time have any
responsibility (or liability except for willfully or negligently terminating or
allowing to be terminated any of the Guarantee Agreements, in a case where the
Eligible Lender Trustee knows of any facts or circumstances which will or could
reasonably be expected to result in any such termination) for or with respect to
the legality, validity, enforceability and eligibility for Guarantee Payments,
federal reinsurance, Interest Subsidy Payments or Special Allowance Payments, as
applicable, in respect of any Trust Student Loan, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Agreement or the Noteholders under
the Indenture, including the existence and contents of any computer or other
record of any Trust Student Loan; the validity of the assignment of any Trust
Student Loan to the Eligible Lender Trustee on behalf of the Trust; the
completeness of any Trust Student Loan; the performance or enforcement (except
as expressly set forth in any Basic Document) of any Trust Student Loan; the
compliance by the Depositor or the Servicer with any warranty or representation
made under any Basic Document or in any related document or the accuracy of any
such warranty or representation or any action or inaction of the Administrator,
the Indenture Trustee or the Servicer or any subservicer taken in the name of
the Eligible Lender Trustee.
SECTION VII.7 Eligible Lender Trustee May Own Trust Certificates and
Notes. The Eligible Lender Trustee in its individual or any other capacity may
become the owner or pledgee of Trust Certificates or Notes and may deal with the
Depositor, the Administrator, the Indenture Trustee and the Servicer in banking
transactions with the same rights as it would have if it were not Eligible
Lender Trustee.
ARTICLE VIII
Compensation and Indemnity of Eligible Lender Trustee
SECTION VIII.1 Eligible Lender Trustee's Fees and Expenses. The
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 Eligible Lender Trustee, and the Eligible Lender Trustee shall
be
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entitled to be reimbursed by the Depositor, to the extent provided in such
separate agreement, for its other reasonable expenses (including the reasonable
fees and expenses of counsel and independent accountants) hereunder.
SECTION VIII.2 Payments to the Eligible Lender Trustee. Any amounts
paid to the Eligible Lender Trustee pursuant to Section 8.1 hereof or pursuant
to Section 9 of the Sale Agreement, Section 4.2 of the Administration Agreement
or Section 4.2 of the Servicing Agreement shall be deemed not to be a part of
the Trust Estate immediately after such payment.
SECTION VIII.3 Indemnity. The Depositor shall cause the
Administrator to indemnify the Eligible Lender Trustee in its individual
capacity and any of its officer, directors, employees and agents as and to the
extent provided for in Section 4.2 of the Administration Agreement.
ARTICLE IX
Termination of Trust Agreement
SECTION IX.1 Termination of Trust Agreement.
(a) This Agreement (other than Article VIII) and the Trust
shall terminate and be of no further force or effect
upon the earlier of (i) the final distribution by the
Eligible Lender Trustee of all moneys or other property
or proceeds of the Trust Estate in accordance with the
terms of the Indenture, the Administration Agreement and
Article V, and (ii) the time provided in Section 9.2.
The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder, other than the
Depositor as described in Section 9.2, shall not (x)
operate to terminate this Agreement or the Trust, nor
(y) entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust
or Trust Estate nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.1(a), neither the
Depositor nor any Certificateholder shall be entitled to
revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders
shall surrender their Trust Certificates to the
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Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given promptly
by the Eligible Lender Trustee by letter to
Certificateholders mailed within five Business Days of
receipt of notice of such termination from the
Administrator given pursuant to Section 6.1C of the
Administration Agreement, stating (i) the Distribution
Date upon which final payment of the Trust Certificates
shall be made upon presentation and surrender of the
Trust Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any
such final payment and (iii) that the Record Date
otherwise applicable to such Distribution Date is not
applicable, payments being made only upon presentation
and surrender of the Trust Certificates at the office of
the Certificate Paying Agent therein specified. The
Eligible Lender Trustee shall give such notice to the
Certificate Registrar (if other than the Eligible Lender
Trustee) and the Certificate Paying Agent at the time
such notice is given to Certificateholders. Upon
presentation and surrender of the Trust Certificates,
the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable
on such Distribution Date pursuant to Section 5.1.
In the event that all the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Eligible Lender Trustee
shall give a second written notice to the remaining Certificateholders to
surrender their Trust Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Trust Certificates shall not have been surrendered for cancellation, the
Eligible Lender Trustee may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out of
the funds and other assets that shall remain subject to this Agreement. Any
funds remaining in the Trust after exhaustion of such remedies and no later than
five years after the first such notice shall be distributed by the Eligible
Lender Trustee to the Depositor.
Upon final distribution of any funds remaining in the Trust, the
Eligible Lender Trustee shall file a certificate of cancellation of the Trust's
certificate of trust pursuant to Section 3810(c) of the Delaware Business Trust
Act.
SECTION IX.2 Dissolution upon Insolvency of the Depositor.
Notwithstanding the provisions of Section 3808 of the Delaware
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Business Trust Act, in the event that an Insolvency Event shall occur with
respect to the Depositor, (x) the Trust created hereunder shall dissolve and (y)
this Agreement shall be terminated in accordance with Section 9.1 90 days after
the date of such Insolvency Event. Promptly after the occurrence of any
Insolvency Event with respect to the Depositor, (i) the Depositor shall give the
Indenture Trustee, the Eligible Lender Trustee and each Rating Agency written
notice of such Insolvency Event, and (ii) the Eligible Lender Trustee shall,
upon the receipt of such written notice from the Depositor, give prompt written
notice to the Certificateholders and the Indenture Trustee, of the occurrence of
such event and of the effect of such event under this Section 9.2; provided,
however, that any failure to give a notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Trust pursuant to the
first sentence of this Section 9.2. Upon a termination of the Trust pursuant to
this Section, the Eligible Lender Trustee shall direct the Indenture Trustee
promptly to sell the assets of the Trust (other than the Trust Accounts) in a
commercially reasonable manner and on commercially reasonable terms. The
proceeds of such a sale of the assets of the Trust shall be treated as
collections under the Administration Agreement.
ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION X.1 Eligibility Requirements for Eligible Lender Trustee.
The Eligible Lender Trustee shall at all times be a corporation or association
(i) qualifying as an "eligible lender" as such term is defined in Section 435(d)
of the Higher Education Act for purposes of holding legal title to the Trust
Student Loans on behalf of the Trust, with a valid lender identification number
with respect to the Trust Student Loans from the Department; (ii) being
authorized to exercise corporate trust powers and hold legal title to the Trust
Student Loans; (iii) having in effect Guarantee Agreements with each of the
Guarantors; (iv) having a combined capital and surplus of at least $50,000,000
and being subject to supervision or examination by Federal or state authorities;
(v) having its principal place of business in the State of Delaware and
otherwise complying with Section 3807 of the Delaware Business Trust Act; and
(vi) having (or having a parent which has) a rating in respect of its longterm
senior unsecured debt of at least BBB- (or the equivalent) by each of the Rating
Agencies (or which, if the long-term senior unsecured debt of such corporation
or association is not rated by any Rating Agency, shall have provided to the
Indenture Trustee written confirmation from such
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Rating Agency that the appointment of such corporation or association to serve
as Eligible Lender Trustee will not result in and of itself in a reduction or
withdrawal of the then current rating of any of the Notes or the Certificates).
If the Eligible Lender Trustee 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 the Eligible Lender Trustee 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 Eligible Lender Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Eligible Lender
Trustee shall resign immediately in the manner and with the effect specified in
Section 10.2.
SECTION X.2 Resignation or Removal of Eligible Lender Trustee. The
Eligible Lender Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Administrator. Upon
receiving such notice of resignation, the Administrator shall promptly appoint a
successor Eligible Lender Trustee meeting the eligibility requirements of
Section 10.1 by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Eligible Lender Trustee and one copy to the
successor Eligible Lender Trustee. If no successor Eligible Lender Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Eligible Lender Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Eligible Lender Trustee; provided, however, that such right to appoint or to
petition for the appointment of any such successor shall in no event relieve the
resigning Eligible Lender Trustee from any obligations otherwise imposed on it
under the Basic Documents until such successor has in fact assumed such
appointment.
If at any time the Eligible Lender Trustee shall cease to be or
shall be likely to cease to be eligible in accordance with the provisions of
Section 10.1 and shall fail to resign after written request therefor by the
Administrator, or if at any time an Insolvency Event with respect to the
Eligible Lender Trustee shall have occurred and be continuing, then the
Administrator may remove the Eligible Lender Trustee. If the Administrator shall
remove the Eligible Lender Trustee under the authority of the immediately
preceding sentence, the Administrator shall promptly appoint a successor
Eligible Lender Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Eligible Lender Trustee so removed
and one copy to the successor Eligible Lender Trustee and payment of all fees
owed to the outgoing Eligible Lender Trustee.
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Any resignation or removal of the Eligible Lender Trustee and
appointment of a successor Eligible Lender Trustee pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee pursuant to Section 10.3,
payment of all fees and expenses owed to the outgoing Eligible Lender Trustee
and the filing of a certificate of amendment to the Trust's certificate of trust
pursuant to Section 3810(b) of the Delaware Business Trust Act. The
Administrator shall provide notice of such resignation or removal of the
Eligible Lender Trustee and to each of the Rating Agencies.
SECTION X.3 Successor Eligible Lender Trustee. Any successor
Eligible Lender Trustee appointed pursuant to Section 10.2 shall execute,
acknowledge and deliver to the Administrator and to its predecessor Eligible
Lender Trustee an instrument accepting such appointment under this Agreement,
and thereupon the resignation or removal of the predecessor Eligible Lender
Trustee shall become effective and such successor Eligible Lender Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as Eligible Lender Trustee.
The predecessor Eligible Lender Trustee shall upon payment of its fees and
expenses deliver to the successor Eligible Lender Trustee all documents,
statements, moneys and properties held by it under this Agreement and shall
assign, if permissible, to the successor Eligible Lender Trustee the lender
identification number obtained from the Department on behalf of the Trust; and
the Administrator and the predecessor Eligible Lender 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 Eligible Lender
Trustee all such rights, powers, duties and obligations.
No successor Eligible Lender Trustee shall accept such appointment
as provided in this Section unless at the time of such acceptance such successor
Eligible Lender Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Eligible Lender
Trustee pursuant to this Section, the Administrator shall mail notice of the
successor of such Eligible Lender Trustee to all Certificateholders, the
Indenture Trustee, the Noteholders and the Rating Agencies. If the Administrator
shall fail to mail such notice within 10 days after acceptance of appointment by
the successor Eligible Lender Trustee, the successor Eligible Lender Trustee
shall cause such notice to be mailed at the expense of the Administrator.
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SECTION X.4 Merger or Consolidation of Eligible Lender Trustee. Any
corporation into which the Eligible Lender Trustee 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 Eligible Lender Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Eligible Lender Trustee, shall, 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, be the successor of the
Eligible Lender Trustee hereunder; provided that such corporation shall be
eligible pursuant to Section 10.1; and provided further that the Eligible Lender
Trustee shall mail notice of such merger or consolidation to the Rating Agencies
not less than 15 days prior to the effective date thereof.
SECTION X.5 Appointment of Co-Eligible Lender Trustee or Separate
Eligible Lender Trustee. 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 may at the time be located, the
Administrator and the Eligible Lender Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Eligible Lender Trustee, meeting the eligibility
requirements of clauses (i) through (iii) of Section 10.1, to act as co-trustee,
jointly with the Eligible Lender Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person, in
such capacity, such title to the Trust Estate, 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 Eligible Lender 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 Eligible Lender Trustee alone 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 clauses (iv), (v)
and (vi) of Section 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.3.
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 Eligible Lender Trustee shall be
conferred upon and exercised or performed by the Eligible
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Lender Trustee 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 Eligible Lender Trustee
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 Eligible Lender Trustee 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 or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, solely at the direction of the Eligible Lender Trustee;
(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 Eligible Lender Trustee
acting jointly may at any time accept the resignation of or remove
any separate trustee or cotrustee.
Any notice, request or other writing given to the Eligible Lender
Trustee 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 Eligible
Lender Trustee 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 Eligible Lender Trustee. Each such instrument shall be filed
with the Eligible Lender Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Eligible Lender Trustee as 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
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Eligible Lender Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
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ARTICLE XI
Miscellaneous
SECTION XI.1 Supplements and Amendments. This Agreement may be
amended by the Depositor and the Eligible Lender Trustee, with prior written
notice to the Rating Agencies, without the consent of any of the Noteholders or
the Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the
Depositor and the Eligible Lender Trustee, with prior written notice to the
Rating Agencies, with the consent of (i) the Noteholders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes and (ii) the
Certificateholders of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Trust Student Loans or distributions that shall be required to be
made for the benefit of the Noteholders or the Certificateholders or (b) reduce
the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance required to consent to any such amendment, without the
consent of all the outstanding Noteholders and Certificateholders.
Promptly after the execution of any such amendment or consent, the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to each Certificateholder, the Indenture Trustee and
each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the
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execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Eligible Lender Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the
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. The Eligible Lender Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Eligible Lender Trustee's
own rights, duties or immunities under this Agreement or otherwise.
SECTION XI.2 No Legal Title to Trust Estate in Certificateholders.
The Certificateholders shall not have legal title to any part of the Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided beneficial ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title, or interest of the Certificateholders to and in
their beneficial ownership interest in the Trust Estate 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
Estate.
SECTION XI.3 Limitations on Rights of Others. Except for Section
2.7, the provisions of this Agreement are solely for the benefit of the Eligible
Lender Trustee, the Depositor, the Certificateholders, the Administrator and, to
the extent expressly provided herein, the Indenture Trustee and the Noteholders,
and nothing in this Agreement (other than Section 2.7), whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION XI.4 Notices.
(a) Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and shall
be deemed given upon receipt by the intended recipient
or three Business Days after mailing if mailed by
certified mail, postage prepaid (except that notice to
the Eligible Lender Trustee shall be deemed given only
upon actual receipt by the Eligible Lender Trustee), if
to the Eligible Lender Trustee, addressed to its
Corporate Trust Office; if to the Depositor, addressed
to SLM Funding Corporation, 000 Xxxx Xxxxx Xxxxx,
Xxxxxxx, Xxxxx 00000, or, as to each party, at
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such other address as shall be designated by such party
in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail,
postage prepaid, at the address of such
certificateholder as shown in the Certificate Register.
Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder
receives such notice.
SECTION XI.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION XI.6 Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION XI.7 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon to the benefit of, the Depositor and its
successors, the Eligible Lender Trustee and its successors, each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION XI.8 No Petition.
(a) The Depositor will not at any time institute against the
Trust any bankruptcy proceedings under any United States
Federal or state bankruptcy or similar law in connection
with any obligations relating to the Trust Certificates,
the Notes, this Agreement or any of the other Basic
Documents.
(b) The Eligible Lender Trustee (not in its individual
capacity but solely as Eligible Lender Trustee), by
entering into this Agreement, each Certificateholder, by
accepting a Trust Certificate, and the Indenture Trustee
and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they
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will not at any time institute against the Depositor or
the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy,
reorganization, arrangement, 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 the Trust
Certificates, the Notes, this Agreement or any of the
other Basic Documents.
SECTION XI.9 No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Depositor, the Servicer, the Administrator, the
Eligible Lender Trustee, the Indenture Trustee or any Affiliate thereof or any
officer, director or employee of any thereof and no recourse may be had against
such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Trust Certificates or the other Basic
Documents.
SECTION XI.10 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION XI.11 Governing Law. This Agreement shall be governed by and
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Eligible Lender Trustee,
By /s/ X.X. XXXXXX
------------------------------
Name:
Title:
SLM FUNDING CORPORATION,
Depositor,
By /s/ XXXXXXX M.E. XXXXXX, JR.
------------------------------
Name:
Title:
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EXHIBIT A
TO THE TRUST AGREEMENT
[FORM OF TRUST CERTIFICATE]
[SEE REVERSE FOR CERTAIN DEFINITIONS]
Unless this Trust Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to the Issuer (as defined below) or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as
the registered owner hereof, Cede & Co., has an interest herein.
THIS TRUST CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF
A BENEFIT PLAN (AS DEFINED BELOW). THIS CERTIFICATE IS NOT GUARANTEED OR INSURED
BY ANY GOVERNMENTAL AGENCY.
NUMBER $89,900,000
R-1 CUSIP NO. 78442 XXX 6
SLM STUDENT LOAN TRUST 1997-4
FLOATING RATE STUDENT LOAN-BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of student loans sold
to the Trust by SLM Funding Corporation.
(This Trust Certificate does not represent an interest in or
obligation of SLM Funding Corporation, the Servicer (as defined
below), the Eligible Lender Trustee (as defined below) or any of
their respective affiliates, except to the extent described below.)
THIS CERTIFIES THAT Cede & Co. is the registered owner of
$89,900,000 dollars non-assessable, fully-paid, fractional undivided interest in
the SLM Student Loan Trust 1997-4 (the "Trust"), a trust formed under the laws
of the State of Delaware by SLM Funding Corporation, a Delaware corporation (the
"Depositor"). The Trust was created pursuant to a Trust Agreement dated as of
November 1, 1997 (the "Trust Agreement"), between the Depositor and Chase
Manhattan Bank USA, National
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Association, a national banking association, not in its individual capacity but
solely as eligible lender trustee on behalf of the Trust (the "Eligible Lender
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in Appendix A to the Trust
Agreement.
This Certificate is one of the duly authorized Certificates
designated as "Floating Rate Student Loan-Backed Certificates" (herein called
the "Trust Certificates"). This Trust Certificate is issued under and is subject
to the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Trust Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of the Trust
includes a pool of student loans (the "Trust Student Loans"), all moneys paid
thereunder on or after October 27, 1997, certain bank accounts and the proceeds
thereof and certain other rights under the Trust Agreement, the Sale Agreement,
the Purchase Agreement, the Administration Agreement and the Servicing Agreement
and all proceeds of the foregoing. The rights of the holders of the Trust
Certificates to the assets of the Trust are subordinated to the rights of the
holders of the Notes issued under the Indenture dated as of November 1, 1997,
between the Trust and Bankers Trust Company, as Indenture Trustee, and
designated as "Floating Rate Student Loan-Backed Notes" (the "Notes"), as set
forth in the Trust Agreement, the Indenture and the Administration Agreement.
Under the Trust Agreement, to the extent of funds available
therefor, return on the Certificate Balance of this Trust Certificate at the
Certificate Rate (as defined below) will be distributed on the 25th day of each
January, April, July and October (or, if such 25th day is not a Business Day,
the next succeeding Business Day) (each a "Distribution Date"), commencing on
April 27, 1998, to the person in whose name this Trust Certificate is registered
as of the close of business on the day immediately preceding the Distribution
Date (such day the "Record Date"), in each case to the extent of such
certificateholder's pro rata interest in the amount or amounts to be distributed
to Certificateholders on
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such Distribution Date pursuant to the Administration Agreement.
The Certificate Rate for each Accrual Period shall be equal to the
lesser of (a) the daily weighted average of the T-Xxxx Rates within such Accrual
Period plus 1.05% per annum and (b) the Student Loan Rate for such Accrual
Period. The "Student Loan Rate" for any Accrual Period shall equal the product
of (a) the quotient obtained by dividing (i) 365 (or 366 in the case of a leap
year) by (ii) the actual number of days elapsed in such Accrual Period and (b)
the percentage equivalent of a fraction, (i) the numerator of which is equal to
Expected Interest Collections for the related Collection Period less the Primary
Servicing Fee, the Administration Fee and any prior unpaid Administration Fees
with respect to such Collection Period and (ii) the denominator of which is the
Pool Balance as of the first day of such Collection Period.
Each holder of this Trust Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Trust Certificate from
Available Funds and amounts on deposit in the Reserve Account are subordinated
to the rights of the Noteholders as described in the Trust Agreement, the
Indenture and the Administration Agreement.
It is the intent of the Depositor, the Certificateholders and the
Certificate Owners that, for purposes of Federal, state and local income and
franchise and any other income taxes, the Trust will be treated as a partnership
and the Certificateholders (including the Depositor in its capacity as
Certificateholder and as recipient of distributions from the Reserve Account)
will be treated as partners in that partnership. The Depositor and the other
Certificateholders by acceptance of a Trust Certificate (and the Certificate
Owners by acceptance of a beneficial interest in a Trust Certificate), agree to
treat, and to take no action inconsistent with the treatment of, the Trust
Certificates for such tax purposes as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of a
Trust Certificate or, in the case of a
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Certificate Owner, a beneficial interest in a Trust Certificate, covenants and
agrees that such Certificateholder or Certificate Owner, as the case may be,
will not at any time institute against the Depositor or the Trust, or join in
any institution against the Depositor or the Trust of, any bankruptcy,
reorganization, arrangement, 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 the
Trust Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Eligible Lender Trustee by wire transfer or by check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency, unless
Definitive Certificates have been issued (initially, such nominee to be Cede &
Co.), payments will be made by wire transfer in immediately available funds to
the account designated by such nominee. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Trust Certificate will be made after due notice by the Eligible Lender Trustee
of the pendency of such distribution and only upon presentation and surrender of
this Trust Certificate at the office or agency maintained for the purpose by the
Eligible Lender Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Eligible Lender Trustee or its
authenticating agent, by manual signature, this Trust Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or the
Administration Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Eligible Lender Trustee on behalf of the
Trust and not in its individual capacity has caused this Trust Certificate to be
duly executed as of the date set forth below.
SLM STUDENT LOAN TRUST 1997-4
by CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Eligible Lender Trustee.
By:
------------------------------
Authorized Signatory
Date: November 12, 1997
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as Eligible
Lender Trustee,
By:
-----------------------------------
Authorized Signatory
OR
THE CHASE MANHATTAN BANK, solely in
its capacity as Authenticating Agent
for the Eligible Lender Trustee,
By:
-----------------------------------
Authenticating Agent
Date: November 12, 1997
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[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, Xxxxxx Xxx Servicing Corporation, as servicer (the
"Servicer"), Student Loan Marketing Association, as administrator (the
"Administrator"), the Eligible Lender 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 or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Trust Certificate is not guaranteed by
any governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Trust Student Loans, all as more
specifically set forth in the Trust Agreement. A copy of each of the Trust
Agreement, the Sale Agreement, the Purchase Agreement, the Administration
Agreement, Servicing Agreement and the Indenture may be examined during normal
business hours at the principal office of the Administrator, and at such other
places, if any, designated by the Administrator, by any Certificateholder upon
request.
The Trust Agreement permits, with certain options therein provided,
the amendment thereof and the certification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Eligible Lender Trustee with the consent of
the holders of the Notes and the Trust Certificates each voting as a class
evidencing not less than a majority of the outstanding principal balance of the
Notes and the Certificate Balance. Any such consent by the holder of this Trust
Certificate shall be conclusive and binding on such holder and on all future
holders of this Certificate and of any Trust Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Trust Certificate. The Trust Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the holders of any of the Trust Certificates.
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As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of the Trust Certificates is
registerable in the Certificate Register upon surrender of this Certificate for
registration of transfer at the offices or agencies maintained by Chase
Manhattan Bank USA, National Association in its capacity as Certificate
Registrar, or by any successor Certificate Registrar, in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of transfer
in form satisfactory to the Eligible Lender 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 Trust Certificates of
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee.
The Trust Certificates are issuable only as registered Trust
Certificates without coupons in denominations of $100,000 or in integral
multiples of $1,000 in excess thereof. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Trust Certificates are
exchangeable for new Trust Certificates of authorized denominations evidencing
the same aggregate denomination, as requested by the holder surrendering the
same. No service charge will be made for any such registration of transfer or
exchange, but the Eligible Lender Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Eligible Lender Trustee, the Certificate Registrar and any agent
of the Eligible Lender Trustee or the Certificate Registrar may treat the person
in whose name this Trust Certificate is registered as the owner hereof for all
purposes, and none of the Eligible Lender Trustee or the Certificate Registrar
or any such agent shall be affected by any notice to the contrary.
The Trust Certificates (including any beneficial interests therein)
may not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of 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"), including an individual retirement
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account described in Section 408(a) of the Code or a Xxxxx plan 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
Trust Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan, it is not purchasing this Trust
Certificate on behalf of a Benefit Plan, is not using assets of a Benefit Plan
to purchase this Trust Certificate and to have agreed that if this Trust
Certificate is deemed to be a plan asset, the Holder will promptly dispose of
this Trust Certificate.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement, the Administration Agreement and the Indenture and the
disposition of all property held as part of the Trust. The Depositor may at its
option purchase the corpus of the Trust at a price specified in the
Administration Agreement, and such purchase of the Trust Student Loans and other
property of the Trust will effect early retirement of the Trust Certificates;
however, such right of purchase is exercisable only on any Distribution Date on
or after the date on which the Pool Balance is less than or equal to 10% of the
Initial Pool Balance. Any Trust Student Loans remaining in the Trust as of the
end of the Collection Period immediately preceding the Trust Auction Date will
be offered for sale by the Indenture Trustee by auction in accordance with the
procedure described in the Indenture.
This Trust 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.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney
------------------------------------------------------------------------
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*
------------------------------
Signature Guaranteed:
*
------------------------------
* NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Trust Certificate in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member firm of the
New York Stock Exchange or a commercial bank or trust company.
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EXHIBIT B
TO THE TRUST AGREEMENT
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
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ANNEX 1
TO THE TRUST AGREEMENT
DATED AS OF NOVEMBER 1, 1997
BETWEEN SLM FUNDING CORPORATION,
AS DEPOSITOR, AND
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
AS ELIGIBLE LENDER TRUSTEE
All defined terms are used herein as defined in the Trust Agreement
referred to above.
Existence. The Depositor will maintain its corporate existence and
its good standing under the laws of the State of Delaware.
Procedures Observed. The Depositor will observe all corporate
procedures required by its Certificate of Incorporation, its by-laws and the
corporation law of the State of Delaware.
Management. The business and affairs of the Depositor will be
managed by or under the direction of the Depositor's Board of Directors. The
Depositor will at all times ensure that its Board of Directors duly authorizes
all corporate actions requiring Board authorization. When necessary, the
Depositor will obtain proper authorization from its stockholder for corporate
action. Its stockholder will not be actively involved in the day-to-day
management of the Depositor except as contemplated by an arm's length management
services contract.
Records. The Depositor will maintain separate corporate records and
books of account from those of its stockholder or any other affiliate of its
stockholder. The Depositor will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its stockholder and
Board of Directors. The resolutions, agreements and other instruments underlying
the transactions contemplated by the Trust Agreement will be continuously
maintained as official records by the Depositor.
Offices. The Depositor will have an address and telephone number
distinguishable from those of its stockholder. To the extent the Depositor's
office is located in the office of its stockholder or any affiliate of its
stockholder, the Depositor will pay fair market rent for any such office space
and a fair share of any material overhead costs.
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Identifiable Assets. Except in connection with the customary
operation of such cash management system as its stockholder may from time to
time in the ordinary course of business implement for itself and its
consolidated subsidiaries (which cash management system will be operated such
that all transfers of funds are properly documented and the respective assets
and liabilities of the Depositor and its stockholder are ascertainable at all
times), the Depositor's funds and other assets will be identifiable and will not
be commingled with those of its stockholder or any other entity. The Depositor
will maintain separate banking records and books of account from those of its
stockholder or any other affiliate of its stockholder.
Capitalization. The Depositor will not engage in any business for
which its capitalization would not be adequate.
Expenses. The Depositor will pay from its own funds and assets all
obligations and indebtedness incurred by it and will provide for its own
material operating expenses and liabilities from its own funds. General overhead
and administrative expenses of its stockholder will not be charged or otherwise
allocated to the Depositor (unless directly attributable to services provided to
or for the account of the Depositor) and such expenses of the Depositor which
are material will not be charged or otherwise allocated to its stockholder. Any
organizational expenses of the Depositor and expenses relating to the
preparation, negotiation, execution and delivery of the Transaction Documents
paid by its stockholder will be charged back to the Depositor. Such expenses
will be paid by the Depositor from amounts available to it as a result of the
capital contributions made by its stockholder, from the yield earned by it on
its Certificates, or from the retained portion of Deferred Payments made to it
under the Sale Agreement.
Conduct. The Depositor will conduct its business solely in its own
name so as not to mislead others as to the identity of the Depositor. Without
limiting the generality of the foregoing, all oral and written communications
related to the Depositor, including without limitation letters, invoices,
purchase orders, contracts, statements and applications, will be made solely in
the name of the Depositor except for items pursuant to the Facilities and
Services Agreement between the Depositor and its stockholder. The Depositor will
utilize its own separate stationery.
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Intercompany Claims. The Depositor will not enter into any
guarantees made by its stockholder with respect to obligations of the Depositor
and the Depositor will make no guarantees with respect to obligations of its
stockholder. There will be no intercompany debt or claims between the Depositor
and its stockholder other than (i) the obligation of the Depositor to pay to its
stockholder the Deferred Payment under the Purchase Agreement, (ii) the demand
note of its stockholder contributed to the Depositor as part of the Depositor's
capitalization, (iii) such intercompany claims as may arise in connection with
the management services contract referred to above, including a cash management
system for its stockholder and its consolidated subsidiaries as described above,
and (iv) such amounts as may temporarily be carried in intercompany accounts
relating to expenses incurred by its stockholder or its affiliates, to the
extent the Depositor is properly obligated to reimburse its stockholder or any
such affiliate for amounts allocable to the Depositor. The demand note referred
to above will be properly documented on the books and records of the Depositor.
Reliance by Others. The Depositor will act solely in its name and
through its duly authorized officers or agents in the conduct of its businesses.
The Depositor will not: (a) hold itself out as having agreed to pay or become
liable for the debts of its stockholder; (b) fail to correct any known
misrepresentation with respect to the foregoing; (c) operate or purport to
operate as an integrated, single economic unit with respect to its stockholder
or in its dealings with any other affiliated or unaffiliated entity; (d) seek or
obtain credit or incur any obligation to any third party based upon the assets
of its stockholder or any other affiliated or unaffiliated entity; or (e) induce
any such third party to reasonably rely on the creditworthiness of its
stockholder or any other affiliated or unaffiliated entity for the payment or
performance of the Depositor.
Arm's Length. The Depositor will maintain an arm's length
relationship between the Depositor and its stockholder and between the Depositor
and any affiliates of its stockholder.
Disclosure of the Transactions. The annual financial statements of
the Depositor will disclose the effects of the Transactions in accordance with
generally accepted accounting principles. The transfer of the Loans by its
stockholder to the Depositor pursuant to the
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Purchase Agreement will be treated as a purchase by the Depositor under
generally accepted accounting principles. In particular, the financial
statements of the Depositor will clearly indicate its existence separate from
its stockholder and will reflect its separate assets and liabilities. None of
such financial statements, nor any consolidated financial statements for its
stockholder, will suggest in any way that the assets of the Depositor are
available to pay the claims of creditors of its stockholder or any other entity.
Any consolidated financial statements of its stockholder and its subsidiaries
prepared for the benefit of third parties will disclose, through appropriate
footnotes or otherwise, the separate corporate existence of the Depositor.
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