1
EXHIBIT 10.4
ELIGIBLE LENDER TRUST AGREEMENT
This trust agreement (the "Agreement") is entered into as of March 1,
1999 (the "Effective Date"), between FIRSTAR BANK, NATIONAL ASSOCIATION, not in
its individual capacity, but solely as Co-owner Trustee (the "Co-owner Trustee")
under the Trust Agreement dated as of March 1, 1999 (the "Trust Agreement")
acting on behalf of Student Loan Funding 1998-A/B Trust (the "Trust") and
FIRSTAR BANK, NATIONAL ASSOCIATION, as eligible lender trustee (the "Eligible
Lender Trustee") on behalf of the Co-owner Trustee.
WITNESSETH:
WHEREAS, the Eligible Lender Trustee is an "eligible lender" under the
Higher Education Act; and
WHEREAS, the Co-owner Trustee desires the Eligible Lender Trustee to
hold all right, title and interest in and to certain Financed Student Loans in
trust for the benefit of the Co-owner Trustee; and
WHEREAS, in order to consummate the transactions contemplated by the
Trust Agreement, the parties hereto desire and intend to create the trusts set
forth herein and the Eligible Lender Trustee agrees to be charged with and
accept its trusts and duties set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein the parties hereto hereby agree as follows:
ARTICLE I
Creation of Trust for Benefit of Co-owner Trustee and the Trust
Authority to Enter Into and
Execute Documents; Acceptance of Trust
Section 1.1. Purpose. The trust created by Article I of this Agreement
is formed, entered into and intended by the Co-owner Trustee and the Eligible
Lender Trustee to create a trust for the purpose of (a) the Eligible Lender
Trustee holding all right, title and interest to Financed Student Loans for the
benefit of the Co-owner Trustee (b) the Eligible Lender Trustee entering into,
and complying with, the terms of any agreement, document or certificate required
under the Trust Agreement and this Agreement and (c) the Eligible Lender Trustee
complying with the requirements of the Higher Education Act, if applicable.
Section 1.2. Creation and Acceptance of Trust for the Benefit of the
Co-owner Trustee. The Co-owner Trustee may from time to time cause title to
Financed Student Loans to be conveyed to the Eligible Lender Trustee; which
Financed Student Loans shall be held, administered and pledged and the proceeds
thereof distributed by the Eligible Lender Trustee for the benefit of the
Co-owner Trustee as set forth in the Trust Agreement and herein. At the request
2
of the Co-owner Trustee hereunder, the Eligible Lender Trustee hereby agrees to
accept and hold title to such Financed Student Loans (without liability or
responsibility at acceptance for the condition or validity of such right, title
and interest) in trust, as hereinafter set forth for the use and benefit of the
Co-owner Trustee and the Trust.
Section 1.3. Authority to Enter Into and Execute Documents.
(a) The Co-owner Trustee hereby authorizes and directs the Eligible
Lender Trustee to enter into, execute and deliver any and all agreements,
documents and certificates which may be required in connection with performing
its duties and obligations with respect to Financed Student Loans under this
Agreement.
(b) The Co-owner Trustee hereby authorizes and directs the Eligible
Lender Trustee to enter into, execute and deliver, from time to time as the
Co-owner Trustee may request, any and all agreements, documents or certificates
which may be required in connection with the Trust Agreement, including without
limitation Transaction Documents, Servicing Agreements or Federal Loan Program
Documents, with respect to the Financed Student Loans held on behalf of the Co-
owner Trustee under this Agreement.
Section 1.4. Duties of the Eligible Lender Trustee. The Eligible Lender
Trustee, by the execution hereof, covenants, represents and agrees that:
(a) it shall accept and hold as herein set forth all such
right, title and interest to the Financed Student Loans that are
transferred and assigned to it at the request of the Co-owner Trustee;
(b) it is, and shall be, an "eligible lender" as defined in 20
U.S.C. Section 1085(d) under the Higher Education Act;
(c) it shall enter into and maintain a Contract of Guarantee
with each Guarantor where it acts on behalf of the Co-owner Trustee;
(d) if requested by the Co-owner Trustee (with respect to
Financed Student Loans held on behalf of the Co-owner Trustee under
this Agreement) in a reasonably detailed writing that sets forth
sufficient information and instructions, it shall execute, deliver and
perform Federal Loan Program Documents, Servicing Agreements,
Transaction Documents, and all other agreements, documents or
certificates required under the Trust Agreement and any other
agreements, instruments, or documents relating, directly or indirectly,
to the making, acquisition or consolidation of Financed Student Loans
or the servicing, administration, sale, exchange, assignment or
transfer of Financed Student Loans;
-2-
3
(e) it shall sell, exchange or otherwise deal with such
Financed Student Loans in accordance with the Trust Agreement;
(f) it shall enter into, and thereafter comply with the terms
thereof, any agreement or other document relating to the Trust
Agreement and take such actions as are necessary and reasonably
requested to convey, transfer, assign, pledge and xxxxx x xxxx on and a
security interest in all of its right, title and interest in and to the
Financed Student Loans in accordance with the Trust Agreement;
(g) it shall take such actions, at the request of the Co-owner
Trustee as are necessary or appropriate in order for the Co-owner
Trustee to obtain the full value and benefits of the Financed Student
Loans under this Agreement and the Trust Agreement;
(h) it shall hold all data, materials and information
pertaining to the Financed Student Loans confidential, and it agrees
not to use such data, materials or information for any purpose other
than for the limited purpose of performing its obligations under this
Agreement; and
(i) following the discharge or other termination of the
transactions contemplated by the Trust Agreement, it shall (i) continue
to hold all right, title and interest in and to the Financed Student
Loans for the benefit of the Co-owner Trustee pursuant to the terms and
conditions of this Agreement until otherwise directed by the Co-owner
Trustee and (ii) shall execute such agreements and documents as
requested by the Co-owner Trustee providing for the administration of
and receipt by the Co-owner Trustee of the cash flows and other
interests in such Financed Student Loans.
Section 1.5. Duties of the Co-owner Trustee. The Co-owner Trustee, by
the execution hereof, covenants, represents and agrees that:
(a) it shall accept, hold and maintain the beneficial interest in each
Financed Student Loan free of any claims, liens or encumbrances, except the
rights of the Eligible Lender Trustee and any trustee or other secured party
under the Indenture (as defined in Section 2.3);
(b) it shall promptly take all necessary actions to perform its
obligations hereunder and to support the Eligible Lender Trustee, in the prompt
and full performance of its obligations hereunder.
Section 1.6. Acceptance of Duties. The Eligible Lender Trustee accepts
the trusts hereby created and agrees to perform the duties and only the duties
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into the trust created hereby against the Eligible
Lender Trustee. The Eligible Lender Trustee shall not be answerable or
accountable under any circumstances except for its gross negligence or willful
misconduct.
-3-
4
Section 1.7. Reliance on Certain Documents, Other Persons. The Eligible
Lender Trustee shall not incur any liability in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. In the
administration of its duties hereunder, the Eligible Lender Trustee may execute
any of the trusts or powers hereof and perform its powers and duties hereunder
directly or through other agents or attorneys and may, at the expense of the
Co-owner Trustee seek advice of counsel, accountants and other skilled persons
to be selected and employed by it, and the Eligible Lender Trustee shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such counsel, accountants or other skilled
persons.
Section 1.8. Security for Action. No provision hereof shall require the
Eligible Lender Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
Section 1.9. Capacity. In accepting the trust hereby created, the
Eligible Lender Trustee acts solely as trustee hereunder and not in its
individual capacity.
Section 1.10. Compensation. The Co-owner Trustee shall pay to the
Eligible Lender Trustee from time to time reasonable compensation for all
services rendered by it hereunder with respect to Financed Student Loans held on
behalf of the Co-owner Trustee under this Agreement, and also all of its
reasonable expenses, charges, and other disbursements and those of its
attorneys, agents, and employees incurred in and about the administration and
execution of the trust hereby created with respect to Financed Student Loans
held on behalf of the Co-owner Trustee under this Agreement.
Section 1.11. Qualification. The Eligible Lender Trustee, including any
successor, shall at all times (a) be a trust company or bank having the powers
of a trust company within the state in which it is located, (b) be an "eligible
lender" as defined in 20 U.S.C. Section 1085(d) under the Higher Education Act
of 1965, as amended, and (c) have entered into, and maintain in force, a
Contract of Guarantee with each Guarantor.
Section 1.12. Successors. (a) The Eligible Lender Trustee or any
successor thereto may resign at any time without cause by giving at least 90
days prior written notice, such resignation to be effective upon the acceptance
of the trusts created by Article I hereunder by any successor Eligible Lender
Trustee meeting the requirements of Section 1.11 hereof and payment in full of
all amounts due the Eligible Lender Trustee. In addition, the Co-owner Trustee
may at any time remove the Eligible Lender Trustee with or without cause by an
instrument in writing delivered to the Eligible Lender Trustee, such removal to
be effective upon the acceptance of the trusts hereunder by a successor Eligible
Lender Trustee meeting the requirements of Section 1.11 hereof and payment in
full of all amounts due the Eligible Lender Trustee. If no successor Eligible
-4-
5
Lender Trustee has been appointed within 90 days after notice of resignation or
removal, as the case may be, the Eligible Lender Trustee may request a court of
competent jurisdiction to (i) require the Co-owner Trustee to appoint a
qualified successor Eligible Lender Trustee meeting the requirements of Section
1.11 hereof within 3 days of the receipt of citation or notice by the court, or
(ii) appoint a successor Eligible Lender Trustee meeting the requirements of
Section 1.11 hereof;
(b) Any successor Eligible Lender Trustee shall execute and deliver to
the predecessor Eligible Lender Trustee an instrument accepting such appointment
and, in cooperation with the Eligible Lender Trustee, shall take such further
actions to ensure (i) that title to the Financed Student Loans has been assigned
to such successor Eligible Lender Trustee and (ii) that the beneficial interest
of the Co-owner Trustee in the Financed Student Loans is maintained; thereupon
such successor Eligible Lender Trustee, without further act, shall become vested
with all the estates, properties, rights, powers, duties and trusts of the
predecessor Eligible Lender Trustee in the trusts hereunder with like effect as
if originally named as the Eligible Lender Trustee herein;
(c) Any bank, corporation or other entity into which the Eligible
Lender Trustee may be merged or converted or with which it may be consolidated,
or any bank, corporation or other entity resulting from any merger, conversion
or consolidation to which the Eligible Lender Trustee shall be a party, or any
bank, corporation or other entity to which substantially all the corporate trust
business of the Eligible Lender Trustee may be transferred, shall be the
Eligible Lender Trustee under this Agreement without any further act, provided
the resulting bank, corporation or other entity meets the qualification
requirements of Section 1.11 hereof.
Section 1.13. Servicing of Financed Student Loans. The Co-owner Trustee
acknowledges that pursuant to the Federal Loan Program, due diligence must be
used in the origination, servicing and collection of Financed Student Loans and
collection practices must be used no less extensive and forceful than those
generally in use among financial institutions with respect to other consumer
debt. The Co-owner Trustee acknowledges that the Eligible Lender Trustee is not
required to monitor the actions taken by the Servicers. The Co-owner Trustee
will cause an annual certification to be provided to the Eligible Lender Trustee
that servicing of the Financed Student Loans by the Servicers has been conducted
in accordance with the terms of the respective agreements that the Co-owner
Trustee has with each Servicer.
Section 1.14. Indemnification by the Co-owner Trustee of the Eligible
Lender Trustee. The Co-owner Trustee hereby agrees and does hereby indemnify and
hold harmless the Eligible Lender Trustee from and against any and all
liabilities, obligations, losses, damages, penalties, claims, actions, suits,
costs, expenses or disbursements (including legal fees and expenses) of any kind
and nature whatsoever which may be imposed on, incurred by or asserted against
the Eligible Lender Trustee in any way relating to or arising out of this
Agreement or any document, or the performance or enforcement of any of the terms
of any provision thereof, or in any way relating to or arising out of the
administration of the trust estate or the action or inaction of the Eligible
Lender Trustee hereunder, except only in the case of willful misconduct or gross
negligence on
-5-
6
the part of the Eligible Lender Trustee in the performance of its duties
hereunder; provided, however, that the Co-owner Trustee's indemnification with
respect to each Financed Student Loan shall be limited to the period of time
that the Eligible Lender Trustee holds such Financed Student Loans in trust on
behalf of the Co-owner Trustee.
Section 1.15. Termination. This Agreement and the trusts created hereby
shall terminate with respect to the Co-owner Trustee, upon the sale, transfer,
final disposition, maturity, final payment or assignment of all Financed Student
Loans held by the Eligible Lender Trustee on behalf of the Co-owner Trustee.
ARTICLE II
Miscellaneous
Section 2.1. Definitions. Capitalized terms used herein shall have the
same meaning given below:
"Consolidation Loans" shall mean Financed Student Loans
authorized under Section 428C of the Higher Education Act of 1965, as
amended, or any successor provision.
"Contract of Guarantee" shall mean a contract with a Guarantor
providing for, or a certificate or other evidence of, the guarantee of
Financed Student Loans.
"Federal Loan Program" shall mean a program that makes moneys
available for Federal Loans.
"Federal Loan Program Documents" shall mean any agreement,
document or certificate relating to the terms and conditions of the
Federal Loans under a particular Federal Loan Program, including but
not limited to any Contract of Guarantee, and any amendments or
supplements thereto.
"Federal Loans" shall mean Xxxxxxxx Loans, PLUS Loans or
Consolidation Loans.
"Financed Student Loans" shall mean Student Loans which become
subject to this Agreement.
"Guarantee" or "Guaranteed" shall mean, with respect to a
Federal Loan, the guarantee by the applicable Guarantor of the
principal of and accrued interest on such Federal Loan and the coverage
of such Federal Loan by a federal reinsurance agreement providing,
among other things, for reimbursement to the Guarantor for losses
incurred by it on defaulted Federal Loans guaranteed by the Guarantor
as provided by the Higher Education Act from time to time.
-6-
7
"Guarantor" shall mean any guarantee agency as is agreed to in
writing by the Co-owner Trustee and the Eligible Lender Trustee with
respect to Financed Student Loans held in trust by the Eligible Lender
Trustee.
"Higher Education Act" shall mean the Higher Education Act of
1965, as amended from time to time, and all regulations and directives
promulgated thereunder from time to time.
"PLUS Loans" shall mean Financed Student Loans authorized
under Section 428B of the Higher Education Act of 1965, as amended, or
any successor provision.
"Servicer" shall mean a servicing entity selected to provide
servicing of Financed Student Loans, including but not limited to
application review, disbursement, collection, due diligence and claims
services.
"Servicing Agreement" shall mean an agreement with a Servicer
for the servicing of Financed Student Loans.
"Xxxxxxxx Loans" shall mean Financed Student Loans authorized
under Section 427 and 428 of the Higher Education Act of 1965, as
amended, or any successor provision, including Unsubsidized Xxxxxxxx
Loans, but not including PLUS Loans.
"Student Loans" shall mean loans made to or for the benefit of
students for the purpose of financing part or all of the costs of
higher education.
"Transaction Documents" shall mean any agreement, document or
certificate relating to the terms and conditions of the Trust
Agreement, including but not limited to an indenture of trust, security
agreement, bailment agreement, UCC financing statements, and any
amendments or supplements thereto.
"Unsubsidized Xxxxxxxx Loans" shall mean student loans
authorized under Section 428H of the Higher Education Act of 1965, as
amended, or any successor provision.
Section 2.2. Notices. All notices shall be in writing, mailed by
regular mail, postage prepaid, (i) if to the Eligible Lender Trustee, addressed
to Firstar Bank, National Association, 000 Xxxxxx Xxxxxx, XX0000; X.X. Xxx 0000;
Xxxxxxxxxx, Xxxx 00000-0000, Attention: Corporate Trust Division, or to such
other address as may have been filed in writing with the Co-owner Trustee; and
(ii) if to Firstar, addressed to 000 Xxxxxx Xxxxxx, XX0000; X.X. Xxx 0000;
Xxxxxxxxxx, Xxxx 00000-0000, Attention: Corporate Trust Division, or to such
other address as may have been filed by the Co-owner Trustee in writing.
Section 2.3. Lender Identification Number. The parties acknowledge that
Lender Identification Number [829626] shall be used in connection with Student
Loans financed under the Indenture of Trust dated as of December 1, 1998 by and
among Student Loan Funding LLC,
-7-
8
Firstar Bank, National Association, as eligible lender trustee, and Firstar
Bank, National Association, as indenture trustee (the "Indenture") as the same
may be amended from time to time.
Section 2.4. Partial Invalidity. Any provisions of this Agreement which
are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 2.5. Amendment. No term or provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party or other person against whom enforcement of the
change, waiver, discharge or termination is sought; and any waiver of the terms
hereof shall be effective only in the specific instance and for the specific
purpose given.
Section 2.6. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 2.7. Trust Binding Upon Successors and Assigns. All covenants
and agreements contained herein shall be binding upon, and inure to the benefit
of, the Co-owner Trustee and its successors and assigns and the Eligible Lender
Trustee and its successors and assigns.
Section 2.8. Headings. The headings of the various articles and
sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 2.9. Governing Law and Place of Enforcement. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
Ohio and all suits and actions arising out of this Agreement shall be instituted
in a court of competent jurisdiction in the State of Ohio.
-8-
9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the date first above written.
Firstar Bank, National Association, Firstar Bank, National Association,
as Co-owner Trustee under the Not in its individual capacity, but solely
Trust Agreement dated as of as Eligible Lender Trustee
March 1, 1999 regarding Student
Loan Funding 1998-A/B Trust
By: /s/ XXXXXX X. XXXXX By: /s/ XXXXXX X. XXXXX
--------------------------- -------------------------------
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx
Senior Trust Officer Senior Trust Officer
-9-
