EXHIBIT 4.3
TRANSFER AND SERVICING AGREEMENT
among
CRESTAR STUDENT LOAN TRUST 1997-1
as Issuer,
CRESTAR BANK
as Transferor, Master Servicer and Administrator
and
STAR BANK, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of [_______,] 1997
TABLE OF CONTENTS
ARTICLE I
Definitions and Usage.................................................. 1
ARTICLE II
Conveyance of Financed Student Loans
------------------------------------
SECTION 2.1 Conveyance of Initial Financed
Student Loans........................................... 1
SECTION 2.2 Conveyance of Exchanged Student Loans...................... 2
SECTION 2.3 Conveyance of Certain Financed Student Loans by the Eligible
Lender Trustee to or upon Order of the Transferor....... 3
SECTION 2.4 Security Agreement......................................... 4
ARTICLE III
The Financed Student Loans
--------------------------
SECTION 3.1 Representations, Warranties and Agreements of Transferor
with Respect to the Financed Student Loans.............. 4
SECTION 3.2 Repurchase upon Breach; Reimbursement...................... 7
SECTION 3.3 Custody of Financed Student Loan Files..................... 8
SECTION 3.4 Duties of Master Servicer as Custodian..................... 8
SECTION 3.5 Instructions; Authority to Act............................. 9
SECTION 3.6 Custodian's Indemnification................................ 9
SECTION 3.7 Effective Period and Termination........................... 10
SECTION 3.8 Appointment of Subcustodian................................ 10
ARTICLE IV
Administration and Servicing of Financed Student Loans
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SECTION 4.1 Duties of Master Servicer................................... 11
SECTION 4.2 Collection of Financed Student Loan Payments................ 12
SECTION 4.3 Realization upon Financed Student Loans..................... 13
SECTION 4.4 No Impairment............................................... 13
SECTION 4.5 Notification of Breach; Indemnification of the Transferor... 13
SECTION 4.6 Servicing Fee............................................... 14
SECTION 4.7 Administrator's Certificate................................. 14
SECTION 4.8 Annual Statement as to Compliance; Notice of Default........ 14
SECTION 4.9 Annual Independent Certified Public Accountants' Report
or Reports............................................... 15
SECTION 4.10 Access to Certain Documentation and Information Regarding
Financed Student Loans................................... 15
SECTION 4.11 Master Servicer and Administrator Expenses.................. 16
SECTION 4.12 Appointment of Servicer..................................... 16
SECTION 4.13 Subservicing Agreements..................................... 16
SECTION 4.14 Incentive Programs.......................................... 16
ARTICLE V
Distributions; Reserve Account;
-------------------------------
Statements to Certificateholders and Noteholders
------------------------------------------------
SECTION 5.1 Establishment of Trust Accounts............................. 17
SECTION 5.2 Collections................................................. 18
SECTION 5.3 Application of Collections.................................. 19
SECTION 5.4 Additional Deposits......................................... 19
SECTION 5.5 Distributions............................................... 19
SECTION 5.6 Reserve Account............................................. 23
SECTION 5.7 Statements to Certificateholders and Noteholders 24
SECTION 5.8 Expense Account............................................. 25
SECTION 5.9 Note Distribution Account and Certificate Distribution
Account.................................................. 25
SECTION 5.10 Monthly Advances............................................ 25
SECTION 5.11 Certificate Interest........................................ 25
ARTICLE VI
The Transferor and the Master Servicer
--------------------------------------
SECTION 6.1 Representations of Transferor and Master Servicer........... 26
SECTION 6.2 Existence................................................... 27
SECTION 6.3 Liability and Indemnities................................... 27
SECTION 6.4 [Reserved].................................................. 30
SECTION 6.5 Merger or Consolidation of, or Assumption of the Obligations
of, the Transferor, the Administrator or the Master
Servicer................................................. 30
SECTION 6.6 Limitation on Liability of Transferor, Master Servicer
and Others............................................... 31
SECTION 6.7 Transferor May Own Certificates or Notes.................... 31
SECTION 6.8 Master Servicer Not to Resign............................... 31
ARTICLE VII
The Administrator
-----------------
SECTION 7.1 Representations of the Administrator........................ 32
SECTION 7.2 Liability and Indemnities................................... 33
SECTION 7.3 Administrator Not to Resign................................. 34
SECTION 7.4 Additional Services......................................... 35
ARTICLE VIII
Default
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SECTION 8.1 Master Servicer Default; Administrator Default.............. 35
SECTION 8.2 Appointment of Successor.................................... 37
SECTION 8.3 Notification to Noteholders and Certificateholders.......... 38
SECTION 8.4 Waiver of Past Defaults..................................... 38
ARTICLE IX
Termination
-----------
SECTION 9.1 Termination................................................. 38
ARTICLE X
[Reserved]
ARTICLE XI
Miscellaneous
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SECTION 11.1 Amendment.................................................. 41
SECTION 11.2 Protection of Interests in Trust........................... 41
SECTION 11.3 Notices.................................................... 43
SECTION 11.4 Assignment................................................. 43
SECTION 11.5 Limitations on Rights of Others............................ 44
SECTION 11.6 Severability............................................... 44
SECTION 11.7 Separate Counterparts...................................... 44
SECTION 11.8 Headings................................................... 44
SECTION 11.9 Governing ................................................. 44
SECTION 11.10 Assignment to Indenture Trustee............................ 44
SECTION 11.11 Nonpetition Covenants...................................... 44
SECTION 11.12 Limitation of Liability of Eligible Lender Trustee,
Indenture Trustee and Delaware Trustee.................. 44
APPENDIX A Definitions and Usage
SCHEDULE A-1 Schedule of Financed Student Loans
SCHEDULE B Location of Financed Student Loan Files
EXHIBIT A Form of Noteholders' Statement
EXHIBIT B Form of to Certificateholders' Statement
EXHIBIT C Form of Administrator's Certificate
EXHIBIT D Assignment for Financed Student Loans
EXHIBIT E Transfer Agreement
EXHIBIT F Officer's Certificate Required by Section 2.2(b)(viii)
of the Transfer and Servicing Agreement
TRANSFER AND SERVICING AGREEMENT (the "Agreement") dated as of
[_______,] 1997, among CRESTAR STUDENT LOAN TRUST 1997-1, a Delaware business
trust (the "Issuer"), CRESTAR BANK, a Virginia banking corporation (the
"Transferor," the "Master Servicer" or the "Administrator" in such respective
capacities), and STAR BANK, NATIONAL ASSOCIATION, a national banking
association, solely as eligible lender trustee and not in its individual
capacity (the "Eligible Lender Trustee").
WHEREAS the Issuer desires to acquire student loans originated or
acquired by the Transferor in the ordinary course of business;
WHEREAS the Eligible Lender Trustee is willing to hold legal title to,
and serve as eligible lender trustee with respect to, such student loans on
behalf of the Issuer; and
WHEREAS the Master Servicer and the Administrator are willing to
service such student loans and undertake certain administrative functions with
respect thereto; and
WHEREAS the Issuer has authorized the issuance of its Notes; and
WHEREAS the parties hereto are entering into this Transfer and
Servicing Agreement in connection with such Notes.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree, intending to be legally
bound hereby, as follows:
ARTICLE I
Definitions and Usage
---------------------
Capitalized terms used but not defined herein are defined in Appendix A
hereto, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
Conveyance of Financed Student Loans
------------------------------------
SECTION 2.1. Conveyance of Initial Financed Student Loans. (a) In
consideration of the Issuer's delivery to or upon the order of the Transferor on
the Closing Date of [$____________], the Transferor agrees to, and the
Transferor does hereby, as evidenced by a duly executed written assignment in
the form of Exhibit D, contribute, transfer, sell, assign, set over and
otherwise convey to the Eligible Lender Trustee on behalf of the Issuer, without
recourse (subject to the obligations herein):
(i) All right, title and interest in and to the
Financed Student Loans listed on Schedule A- 1 to this
Agreement (the "Initial Financed Student Loans") and all
obligations of the Obligors thereunder, including all moneys
paid thereunder (other than Interest Subsidy Payments and
Special Allowance Payments payable through the Cut-off Date),
and all written communications received by the Transferor with
respect thereto and still retained by Transferor in accordance
with its retention policies (including borrower
correspondence, notices of death, disability or bankruptcy and
requests for deferrals or forbearance), after the Cut-off
Date;
(ii) all right, title and interest in all funds on
deposit from time to time in the Trust Accounts and in all
investments and proceeds thereof (including all income
thereon); and
(iii) the proceeds of any and all of the foregoing.
(b) On the Closing Date, the Transferor shall have delivered
(A) to the Rating Agencies an Opinion of Counsel with respect to the
transfer of the Initial Financed Student Loans and (B) to the Eligible
Lender Trustee and the Indenture Trustee the Opinion of Counsel
required by Section 11.2(i)(1).
SECTION 2.2. Conveyance of Exchanged Student Loans.
(a) Subject to the conditions set forth in paragraph (b)
below, in consideration of the Eligible Lender Trustee's conveyance of
Financed Student Loans on the related Exchange Date to the Transferor
pursuant to Section 2.3(a), if the Transferor exercises its option
pursuant to Section 2.3 (d), the Transferor shall contribute, transfer,
sell, assign, set over and otherwise convey to the Eligible Lender
Trustee on behalf of the Issuer, without recourse (subject to the
obligations herein), all right, title and interest in and to each
Exchanged Student Loan, and all obligations of the Obligors thereunder,
including all moneys paid thereunder (other than Interest Subsidy
Payments and Special Allowance Payments payable through the related
Subsequent Cut-off Date), and all written communications received by
the Transferor with respect thereto and still retained by the
Transferor in accordance with its retention policies (including
borrower correspondence, notices of death, disability or bankruptcy and
requests for deferrals or forbearances), on and after the related
Subsequent Cut-off Date, and the proceeds of any and all of the
foregoing.
(b) The Transferor shall transfer to the Issuer the Exchanged
Student Loans for a given Exchange Date and the other property and
rights related thereto described in paragraph (a) above only upon the
satisfaction of each of the following conditions on or prior to such
Exchange Date:
(i) the Transferor shall have delivered to the
Eligible Lender Trustee and the Indenture Trustee a duly
executed written assignment (including an acceptance by the
Eligible Lender Trustee and the Indenture Trustee) in
substantially the form of Exhibit E (each, a "Transfer
Agreement"), which shall include supplements to Schedule A-1,
listing such Exchanged Student Loans;
(ii) the Transferor shall have delivered, at least
two days' prior to such Exchange Date, notice of such transfer
to the Eligible Lender Trustee and the Indenture Trustee, with
a copy to the Rating Agencies, including a listing of the
aggregate principal balance of such Exchanged Student Loans;
(iii) the Transferor shall, to the extent required by
Section 2.3 (d), have deposited in the Collection Account all
collections received in respect of the Exchanged Student Loans
after each applicable Subsequent Cut-off Date and all required
Adjustment Payments;
(iv) as of such Exchange Date, the Transferor was not
insolvent nor will it have been made insolvent by such
exchange nor is it aware of any pending insolvency;
(v) such exchange will not result in a material
adverse federal or State tax consequence to the Issuer
relating to its tax classification or the Noteholders,
considered as a whole, relating to a change in the
characterization of the Notes;
(vi) no Event of Default shall have occurred and be
continuing as of such Exchange Date and no Master Servicer
Default or Administrator Default shall have occurred and be
continuing as of such Exchange Date;
(vii) the Exchange Period shall not have terminated;
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(viii) the Transferor shall have delivered to the
Indenture Trustee and the Eligible Lender Trustee an Officers'
Certificate in substantially the form of Exhibit F, confirming
the satisfaction of each condition precedent specified in this
paragraph (b);
(ix) the Transferor shall have taken any action
required to maintain the first perfected ownership interest of
the Issuer in the Trust Estate and the first perfected
security interest of the Indenture Trustee in the Financed
Student Loans; and
(x) no selection procedures believed by the
Transferor to be adverse to the interests of the
Certificateholders or the Noteholders shall have been utilized
in selecting the Exchanged Student Loans; PROVIDED, HOWEVER,
that the Transferor shall not incur any liability as a result
of transferring Exchanged Student Loans on any Exchange Date
at a time when the condition set forth in clause (v) was not
satisfied, if at the time of such transfer the Transferor was
not aware of any fact that would reasonably suggest that such
condition would not be satisfied as of such date.
Upon the satisfaction of the conditions set forth in this Section 2.2
(b), the Eligible Lender Trustee shall execute and deliver to the
Transferor an Assignment, substantially in the form of Annex B to the
Transfer Agreement.
SECTION 2.3. Conveyance of Certain Financed Student Loans by the
Eligible Lender Trustee to or upon Order of the Transferor.
(a) Upon receipt of written notice (or telephonic or facsimile
notice promptly followed by written notice) from the Transferor (or
from the Master Servicer on behalf of the Transferor) by the Eligible
Lender Trustee and the Indenture Trustee, the Eligible Lender Trustee
will convey to the Transferor the Financed Student Loans identified in
such notice, which are to be repaid with proceeds of the Consolidation
Loans or HEAL Consolidation Loans to be made by or on behalf of the
Transferor. Simultaneously with each such conveyance by the Eligible
Lender Trustee and the making by the Transferor of each such
Consolidation Loan or HEAL Consolidation Loans, the Transferor shall
deposit into the Collection Account an amount equal to the aggregate
Purchase Amount of such Financed Student Loans, as payment for such
conveyance.
(b) [Reserved]
(c) Upon receipt of written notice (or telephonic or facsimile
notice promptly followed by written notice) from the Master Servicer by
the Eligible Lender Trustee and the Indenture Trustee, the Eligible
Lender Trustee will convey to the Master Servicer (or the Master
Servicer's designee) the Financed Student Loans identified in such
notice, which are to be transferred to a Guarantor or the Department of
HHS in consideration of a related Guarantee Payment or Insurance
Payment. Within [[one Business Day of its receipt]] of the related
Guarantee Payment or Insurance Payment, the Master Servicer shall
deposit, or cause to be deposited, into the Collection Account an
amount equal to such Guarantee Payment or Insurance Payment, as payment
of such conveyance.
(d) (i) Notwithstanding anything else contained in this
Section 2.3 to the contrary, during the Exchange Period, subject
to the conditions set forth in Section 2.2(b), in lieu of depositing
into the Collection Account the Purchase Amount of a Financed Student
Loan pursuant to Section 2.3 (a), the Transferor may, at its option,
transfer to the Eligible Lender Trustee on behalf of the Trust, as an
Exchanged Student Loan, the Consolidation Loan or the HEAL
Consolidation Loan being made by the Transferor relating to the
Financed Student Loan for which it is being exchanged.
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(ii) Additionally, during the Exchange Period,
subject to the conditions set forth in Section 2.2(b), the
Transferor may, at its option, transfer to the Eligible Lender
Trustee on behalf of the Trust, as an Exchanged Student Loan,
one or more FFELP Loans owned by the Transferor that are
serial to an existing Financed FFELP Loan owned by the Trust;
provided that each such Exchanged Student Loan satisfies the
following criteria: [[insert any criteria]]
(iii) Additionally, during the Exchange Period,
subject to the conditions set forth in Section 2.2(b), the
Transferor may, at its option, transfer to the Eligible Lender
Trustee on behalf of the Trust, as an Exchanged Student Loan,
one or more HEAL Loans owned by the Transferor that are serial
to an existing Financed HEAL Loan owned by the Trust; provided
that each such Exchanged Student Loan satisfies the following
criteria: [[insert any criteria]]
(e) If on any Exchange Date the aggregate outstanding
principal balance as of the related Subsequent Cut-off Date of all the
Exchanged Student Loans being exchanged on such Exchange Date is less
than that of all the Financed Student Loans for which they are being
exchanged plus any Issuer Consolidation Payments being made on such
Exchange Date, an amount equal to such difference (the "Adjustment
Payments") shall be deposited by the Transferor into the Collection
Account on the related Exchange Date.
(f) If on any Exchange Date the aggregate outstanding
principal balance as of the related Subsequent Cut-off Date of all the
Exchanged Student Loans [[that are Consolidation Loans or HEAL
Consolidation Loans]] being exchanged on such Exchange Date is greater
than that of all the Financed Student Loans for which they are being
exchanged, upon written request of the Transferor an amount up to the
amount of such excess (the "Issuer Consolidation Payments") shall be
remitted by the Indenture Trustee to the Transferor from Consolidation
Prepayments on deposit in the Collection Account.
SECTION 2.4. Security Agreement. Although it is the intent of the
parties to this Agreement that the conveyance of the Transferor's right, title
and interest in and to the Financed Student Loans pursuant to this Agreement or
any Transfer Agreement shall constitute a contribution and transfer and not a
loan, if such conveyance is deemed to be a loan, it is the intent of the parties
to this Agreement that the Transferor shall be deemed to have Granted to the
Eligible Lender Trustee, on behalf of the Issuer, a first priority perfected
security interest in all of the Transferor's right, title and interest in, to
and under the Financed Student Loans and the proceeds thereof, and that this
Agreement shall constitute a security agreement under applicable law. It is the
further intent of the parties to this Agreement that if the Trust is disregarded
for whatever reason or purpose, the Transferor's foregoing Grant of a first
priority perfected security interest shall be deemed to be directly to, and for
the direct benefit of, the Indenture Trustee.
ARTICLE III
The Financed Student Loans
--------------------------
SECTION 3.1. Representations, Warranties and Agreements of Transferor
with Respect to the Financed Student Loans. The Transferor hereby makes the
following representations and warranties as to the Financed Student Loans on
which the Issuer is deemed to have relied in acquiring (through the Eligible
Lender Trustee) such Financed Student Loans. Such representations and warranties
speak as of the Closing Date, in the case of the Initial Financed Student Loans,
and as of the applicable Exchange Dates in the case of the Exchanged Student
Loans, but shall survive the contribution, transfer and assignment of such
Financed Student Loans to the Eligible Lender Trustee on behalf of the Issuer
and the pledge thereof to the Indenture Trustee pursuant to the Indenture.
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(i) Characteristics of Financed Student Loans. Each
Financed Student Loan (A) was originated in the United States
of America, its territories, its possessions or other areas
subject to its jurisdiction to an eligible borrower under
applicable law and agreements and was fully and properly
executed by the parties thereto, (B) was originated or
acquired by the Transferor in the ordinary course of its
business, and (C) provides or, when the payment schedule with
respect thereto is determined, will provide for payments on a
periodic basis that fully amortize the principal amount of
such Financed Student Loan by its maturity and yields interest
at the rate applicable thereto (except as otherwise provided
in Section 4.14), as such maturity may be modified in
accordance with any applicable deferment or forbearance
periods granted in accordance with applicable laws and
restrictions, including those of the Higher Education Act, the
HEAL Act, the HEAL Insurance Contract or any Guarantee
Agreement. Each Financed Student Loan that is a Xxxxxxxx Loan
qualifies the holder thereof (assuming such holder is an
eligible lender under the Higher Education Act) to receive
Interest Subsidy Payments and Special Allowance Payments from
the Department of Education. Each Financed Student Loan that
is a Consolidation Loan, a PLUS Loan, a SLS Loan or an
Unsubsidized Xxxxxxxx Loan qualifies the holder thereof
(assuming such holder is an eligible lender under the Higher
Education Act) to receive Special Allowance Payments from the
Department of Education to the extent applicable. Each
Financed FFELP Loan qualifies the holder thereof (assuming
such holder is an eligible lender under the Higher Education
Act) to receive Guarantee Payments from the applicable
Guarantor in accordance with the applicable Guarantee
Agreement. Each Financed HEAL Loan qualifies the holder
thereof (assuming such holder is an eligible lender under the
HEAL Act) to receive Insurance Payments from the Department of
HHS in accordance with the HEAL Insurance Contract. From and
after the Closing Date, each (Y) Financed FFELP Loan shall
continue to qualify the holder thereof (assuming such holder
is an eligible lender under the Higher Education Act) to
receive Guarantee Payments from the applicable Guarantor in
accordance with the applicable Guarantee Agreement, and to
receive Special Allowance Payments and, in the case of
Xxxxxxxx Loans, Interest Subsidy Payments from the Department
of Education to the extent applicable, and (Z) Financed HEAL
Loan shall continue to qualify the holder thereof (assuming
such holder is an eligible lender under the HEAL Act) to
receive Insurance Payments from the Department of HHS in
accordance with the HEAL Insurance Contract.
(ii) Schedule of Financed Student Loans. The
information concerning the Financed Student Loans set forth in
Schedule A-1 to this Agreement and Schedule A of the related
Transfer Agreement is true and correct in all material
respects as of the close of business on the Cut-off Date (with
respect to Schedule A-1 to this Agreement) or each applicable
Subsequent Cut-off Date (with respect thereto), as applicable.
The computer tape or electronic data transmission regarding
the Initial Financed Student Loans is true and correct in all
material respects as of the Cut-off Date and each computer
tape or electronic data transmission regarding the Subsequent
Student Loans will be true and correct in all material
respects as of the related Subsequent Cut-off Date.
(iii) Compliance with Law. Except with respect to any
XXXX Service Errors that have been waived by the Department of
Education and the applicable Guarantor, at the time each
Financed Student Loan was originated or made and at the
execution of this Agreement or the applicable Transfer
Agreement, as the case may be, each Financed Student Loan
complied or complies, and the Transferor and its agents, with
respect to each such Financed Student Loan, have at all times
complied, in all material respects with all requirements of
applicable federal, State and local laws and regulations
thereunder, including the Higher Education Act with respect to
FFELP Loans, the HEAL Act with respect to HEAL Loans, the
Equal Credit Opportunity Act, the Federal Reserve Board's
Regulation B and other applicable consumer credit laws and
equal credit opportunity laws.
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(iv) Binding Obligation. Each Financed Student Loan
represents the genuine, legal, valid and binding payment
obligation in writing of the related borrower, enforceable by
or on behalf of the holder thereof against such borrower in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and similar
laws relating to creditors' rights generally and subject to
general principles of equity and no Financed Student Loan has
been satisfied, subordinated or rescinded.
(v) No Defenses. No right of rescission, setoff,
counterclaim or defense has been asserted or, to the
Transferor's knowledge, threatened with respect to any
Financed Student Loan.
(vi) No Default. No Initial Financed Student Loan has
a payment that is more than 90 days overdue as of the Cut-off
Date, and no Exchanged Student Loan will have a payment that
is more than 90 days overdue as of its related Subsequent
Cut-off Date, and, except as permitted in this paragraph, no
default, breach, violation or event permitting acceleration
under the terms of any Financed Student Loan has occurred;
and, except for payment defaults and other circumstances
creating a delinquency continuing for a period of not more
than 90 days, no continuing condition that with notice or the
lapse of time or both would constitute a default, breach,
violation or event permitting acceleration under the terms of
any Financed Student Loan has arisen; and the Transferor has
not waived and shall not waive any of the foregoing other than
as permitted by the Basic Documents.
(vii) Title. It is the intention of the Transferor
that the transfer and assignment herein contemplated
constitutes a contribution of the Financed Student Loans from
the Transferor to the Eligible Lender Trustee on behalf of the
Issuer and the beneficial interest in and title to such
Financed Student Loans shall not be part of the debtor's
estate in the event of the appointment of a receiver with
respect to the Transferor. No Financed Student Loan has been
transferred, assigned or pledged by the Transferor to any
Person other than the Eligible Lender Trustee on behalf of the
Issuer or any such assignment or pledge has been released.
Immediately prior to the transfer and assignment herein
contemplated, the Transferor had good title to each Financed
Student Loan, free and clear of all Liens and, immediately
upon the transfer thereof, the Eligible Lender Trustee on
behalf of the Issuer shall have good title to each such
Financed Student Loan, free and clear of all Liens, and the
transfer to the Indenture Trustee, shall have been perfected
under the UCC. No Financed Student Loan was subject to a third
party's right of first refusal to the transfers from the
Transferor provided for herein, and the transfer of the
Financed Student Loans as contemplated hereby will not violate
in any material respect the terms of any Subservicing
Agreement or any other material agreement or arrangement to
which the Master Servicer is a party.
(viii) Lawful Assignment. No Financed Student Loan
has been originated in, or is subject to the laws of, any
jurisdiction under which the contribution, transfer and
assignment of such Financed Student Loan under this Agreement
or any Transfer Agreement is unlawful, void or voidable.
(ix) All Filings Made. All filings (including UCC
filings) necessary in any jurisdiction to give the Issuer a
first perfected security interest in the Financed Student
Loans (if, despite the express intention of the parties
hereto, the transfer of the Financed Student Loans is deemed a
loan), and to give the Indenture Trustee a first perfected
security interest therein, shall have been made or have been
delivered for filing.
(x) One Original. To the best knowledge of the
Transferor, there is only one original executed copy of each
promissory note evidencing a Financed Student Loan.
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(xi) Principal Balance. The aggregate principal
balance of the Initial Financed Student Loans set forth on
Schedule A-1 as of the Cut-off Date is [$____________].
Additionally, as of the Cut-off Date, the accrued interest on
the Initial Financed Student Loans set forth on Schedule A-1
other than with respect to Interest Subsidy Payments and
Special Allowance Payments is [$____________].
(xii) Interest Rate. Except with respect to TP Loans
(as permitted by Section 4.14 hereof), each Financed FFELP
Loan included in the Initial Financed Student Loans bears
interest at the "applicable interest rate" permitted for such
loan under the Higher Education Act. Each Financed HEAL Loan
included in the Initial Financed Student Loans bears interest
at the rate of [______%].
(xiii) Interest Accruing. Each Financed Student Loan
is accruing interest (whether or not such interest is being
paid currently, by the Obligor or is being capitalized),
except as otherwise expressly permitted by the Basic
Documents.
SECTION 3.2. Repurchase upon Breach; Reimbursement. The Transferor, the
Master Servicer or the Eligible Lender Trustee, as the case may be, shall inform
the other parties to this Agreement and the Indenture Trustee promptly, in
writing, upon the discovery of any breach of the representations and warranties
of the Transferor made pursuant to Sections 3.1 and 6.1 hereof. Unless any such
breach shall have been cured within 120 days following the discovery thereof by
the Transferor or receipt by the Transferor of written notice from the Eligible
Lender Trustee or the Master Servicer of such breach, the Financed Student Loan
in which the interests of the Noteholders or the Certificateholders are
materially and adversely affected by any such breach shall be retransferred,
reassigned, resetover and otherwise reconveyed to the Transferor (a
"repurchase") as of the first day succeeding the end of such 120-day period that
is the last day of a Collection Period; provided that it is understood that any
such breach that does not adversely affect any Guarantor's obligation to
guarantee payment of such Financed FFELP Loan or the Department of HHS's
obligation to insure payment of any Financed HEAL Loan to the Eligible Lender
Trustee will not be considered to have a material adverse effect for this
purpose; and provided further, however, that in the case of any representation
or warranty the breach of which may be cured by reinstatement of the Guarantor's
obligation to guarantee payment or the Department of HHS's obligation to insure
payment, such cure period shall be 360 days (instead of 120 days), in each case
following the earlier of the date on which such breach is discovered by the
Transferor and the date of the Servicer's receipt of the Guarantor or Department
of HHS reject transmittal form with respect to such Financed Student Loan.
Notwithstanding the foregoing, if as of the last day of any Collection Period
the aggregate principal amount of Financed Student Loans with respect to which
claims have been filed with and rejected by a Guarantor or the Department of HHS
as a result of a breach of a representation or warranty of the Transferor in
Sections 3.1 or Section 6.1 hereof or with respect to which the Master Servicer
determines that claims cannot be filed pursuant to the Higher Education Act or
the HEAL Act, as the case may be, as a result of such a breach exceeds the
lesser of $250,000 or 1/4% of the Pool Balance as of such date, the Transferor
shall repurchase within 120 days of a written request by the Eligible Lender
Trustee or the Indenture Trustee, affected Financed Student Loans in an
aggregate principal amount such that after such repurchases the aggregate
principal amount of affected Financed Student Loans is equal to or less than the
lesser of $250,000 or 1/4% of the Pool Balance. The Financed Student Loans to be
repurchased by the Transferor pursuant to the preceding sentence will be based
on the date of claim rejection, with the Financed Student Loans with the
earliest such dates to be repurchased first. In consideration of and
simultaneously with the repurchase of the Financed Student Loan, the Transferor
shall remit the Purchase Amount, in the manner specified in Section 5.4, and the
Issuer shall execute such assignments and other documents reasonably requested
by the Transferor in order to effect such transfer. Upon any such transfer of a
Financed Student Loan, legal title to, and beneficial ownership and control of,
the related Financed Student Loan File and, if applicable, the related
Additional Financed HEAL Loan File will thereafter belong to the Transferor. The
Transferor shall have the right, at its option, to assign to the Master
Servicer, and the Master Servicer hereby agrees to assume, the obligation of the
Transferor to repurchase loans under this Section 3.2 to the extent such
repurchase obligation arose as a result of the breach of the last sentence of
Section 3.1(i).
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In addition, if any such breach does not trigger such a repurchase
obligation but does result in (i) the refusal by the Department of HHS to insure
the applicable portion of the accrued interest with respect to any Financed HEAL
Loan, or (ii) the refusal by a Guarantor to guarantee the applicable portion of
the accrued interest, or the loss of (including any obligation of the Issuer to
repay to the Department of Education) certain Interest Subsidy Payments and
Special Allowance Payments, with respect to a Financed FFELP Loan, then, unless
such breach, if curable, is cured within 120 days following the discovery
thereof by the Transferor or receipt by the Transferor of written notice from
the Eligible Lender Trustee, the Transferor shall, at its option, either
repurchase such Financed Student Loan at the applicable Purchase Amount or
reimburse the Issuer by remitting an amount equal to the sum of all amounts that
would have been payable if not for such breach in the manner specified in
Section 5.4 not later than the last day of the Collection Period in which such
120th day occurs (or, to the extent that all or a portion of such amount is not
otherwise due and payable as of such date, that portion shall be remitted to the
Collection Account on the last day of the Collection Period during which such
amount would otherwise be due and payable). The Transferor shall have the right,
at its option, to assign to the Master Servicer, and the Master Servicer hereby
agrees to assume, the obligation of the Transferor to reimburse amounts under
this paragraph to the extent such reimbursement obligation arose as a result of
the breach of the last sentence of Section 3.1(i).
The sole remedy of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders with respect to a
breach of the representations and warranties of the Transferor pursuant to
Sections 3.1 and 6.1 hereof and the agreement contained in this Section 3.2
shall be to require the Transferor to repurchase Financed Student Loans or to
reimburse the Issuer as provided above pursuant to this Section 3.2, subject to
the conditions contained herein. The Eligible Lender Trustee shall have no duty
to conduct any affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Financed Student Loan or the reimbursement for
any interest penalty pursuant to this Section 3.2.
SECTION 3.3. Custody of Financed Student Loan Files. To assure uniform
quality in servicing the Financed Student Loans and to reduce administrative
costs, the Issuer hereby revocably appoints the Master Servicer as custodian of
the following documents or instruments with respect to each Financed Student
Loan (such documents are referred to collectively as the "Financed Student Loan
File":
(a) the original fully executed copy of the note evidencing
the Financed FFELP Loan (which may be included in the application)
unless such note is in the custody of a Guarantor;
(b) the original loan application fully executed by the
related borrower (which may be included in the note evidencing a
Financed FFELP Loan); and
(c) any and all other documents and computerized records that
any of the Master Servicer, the Administrator or the Transferor shall
keep on file, in accordance with its customary procedures, relating to
such Financed Student Loan or any Obligor with respect thereto.
Notwithstanding the foregoing, each Subcustodian appointed pursuant to
Section 3.8 who enters into a Subservicing Agreement may act as a custodian of
the Related Financed Student Loan Files. The custodian for the original fully
executed copy of the note evidencing a Financed HEAL Loan (which may be included
in the application) and the original loan application for a Financed HEAL Loan
fully executed by the related borrower (if included in the note evidencing a
Financed HEAL Loan) (the "Additional Financed HEAL Loan File") shall be selected
by the Indenture Trustee, however, such custodian shall not be the Master
Servicer and such custodian shall not hold such documents pursuant to this
Transfer and Servicing Agreement.
SECTION 3.4. Duties of Master Servicer as Custodian.
(a) Safekeeping. The Master Servicer, as custodian, shall hold
or cause one or more Subcustodians appointed pursuant to Section 3.8,
to (i) hold the Financed Student Loan Files for the benefit of the
Issuer, and (ii) maintain such accurate and complete accounts, records
and computer systems
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pertaining to each Financed Student Loan File as shall enable the
Issuer to comply with this Agreement and the other Basic Documents. In
performing its duties as custodian, the Master Servicer shall act with
reasonable care and shall ensure that it complies in all material
respects with all applicable federal and State laws, including the
Higher Education Act and the HEAL Act, with respect thereto. The Master
Servicer shall promptly report to the Issuer and the Indenture Trustee
any failure on its part to hold the Financed Student Loan Files and
maintain its accounts, records and computer systems as herein provided
and promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or any
periodic review by the Issuer, the Eligible Lender Trustee or the
Indenture Trustee of the Financed Student Loan Files.
(b) Maintenance of and Access to Records. The Master Servicer
shall cause each Subcustodian to maintain the Related Financed Student
Loan Files at the office specified opposite such Subcustodian's name in
Schedule B or shall cause the Financed Student Loan Files to be
maintained at such other offices as shall be specified by written
notice to the Issuer and the Indenture Trustee not later than 60 days
after any change in location. Upon reasonable prior notice, the Master
Servicer shall make available, or cause each Subcustodian to make
available, to the Issuer and the Indenture Trustee or their respective
duly authorized representatives, attorneys or auditors (i) a list of
locations of the Financed Student Loan Files and (ii) the related
accounts, records and computer systems at the locations identified in
the list provided pursuant to clause (i) of this Section 3.4(b) and at
such times which are in accordance with the applicable Subservicing
Agreements.
SECTION 3.5. Instructions; Authority to Act. The Master Servicer shall
be deemed to have received proper instructions with respect to the Financed
Student Loan Files upon its receipt of written instructions signed by a
Responsible Officer of the Indenture Trustee.
SECTION 3.6. Custodian's Indemnification.
----------------------------
(a) The Master Servicer shall pay from its own funds for any
Indemnifiable Expense that may be imposed on, incurred by or asserted
against the Issuer, the Eligible Lender Trustee, the Delaware Trustee
or the Indenture Trustee or any of their officers, directors, employees
and agents to the extent such Indemnifiable Expense results from the
Master Servicer's failure to perform its duties as specified in this
Article III where the final determination that any such improper act or
omission by the Master Servicer or any Subcustodian resulted in such
Indemnifiable Expense is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Master Servicer;
PROVIDED, HOWEVER, that the Master Servicer shall not be liable to the
Eligible Lender Trustee for any portion of any such amount resulting
from the willful misfeasance, bad faith or negligence of the Eligible
Lender Trustee and the Master Servicer shall not be liable to the
Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.
This provision shall not be construed to limit the Master Servicer's or
any other party's rights, obligations, liabilities, claims or defenses
which arise as a matter of law or pursuant to any other provision of
this Agreement; provided, however, the Master Servicer shall not be
liable for any such Indemnifiable Expense imposed upon such Person to
the extent that they arise out of or result from such Person's
negligence, willful malfeasance or bad faith or a breach of the
representations and warranties of such Person in this Agreement.
Notwithstanding anything to the contrary contained in this Article III,
in no event shall the Master Servicer be liable under any theory of
tort, contract, strict liability or other legal or equitable theory for
any lost profits or exemplary, punitive, special, incidental, indirect
or consequential damages, each of which is hereby excluded by agreement
of the parties regardless of whether or not the Master Servicer has
been advised of the possibility of such damages.
(b) Promptly after receipt by an indemnified party under this
Section 3.6 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 3.6, notify the
indemnifying party of the commencement
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thereof, but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party otherwise than under Section 3.6, except to the extent the
indemnifying party is materially prejudiced by such failure. In case
any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified
party and the indemnifying party, and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be
legal defenses available to it and/or other indemnified parties which
are different from or additional to those available to the indemnifying
party, the indemnifying party or parties shall have the right to select
separate counsel to assert such legal defenses and to otherwise
participate in the defense of such action on behalf of the indemnified
party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under
this Section 3.6 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. In no event shall the
indemnifying party be liable for fees and expenses for more than one
counsel separate from their own counsel for all indemnified parties in
connection with any one action or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances. An indemnifying party will not, without the prior
written consent of the indemnified party, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out of
such claim, action, suit or proceeding.
The indemnified party will not, without the prior written
consent of the indemnifying party, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in which indemnification may be
sought hereunder.
SECTION 3.7. Effective Period and Termination. The Master Servicer's
appointment as custodian of the Financed Student Loan Files shall become
effective as of the Closing Date and shall continue in full force and effect for
so long as the Master Servicer shall remain the Master Servicer hereunder. If
the Master Servicer or any successor Master Servicer shall resign as Master
Servicer in accordance with the provisions of this Agreement or if all the
rights and obligations of the Master Servicer or any such successor Master
Servicer shall have been terminated under Section 8.1 of this Agreement, the
appointment of the Master Servicer or such successor Master Servicer as
custodian shall be terminated simultaneously with the effectiveness of such
termination. As soon as practicable on or after any termination of such
appointment (and in any event within (i) 10 Business Days, with respect to that
portion of the Financed Student Loan Files consisting of electronic records and
information that is reasonably available and deliverable within 10 Business
Days, and (ii) 30 Business Days, with respect to the remaining portion of the
Financed Student Loan Files), the Master Servicer shall deliver, to the extent
in its possession, the Financed Student Loan Files to the Indenture Trustee or
the Indenture Trustee's agent at such place or places as the Indenture Trustee
may reasonably designate.
SECTION 3.8. Appointment of Subcustodian.
(a) The Master Servicer may at any time appoint one or more
Servicers to act as a subcustodian (each a "Subcustodian") of the
Financed Student Loan Files of the Financed Student Loans being
serviced by such Servicer (the "Related Financed Student Loan Files")
to perform all or any portion of its obligations as custodian
hereunder; PROVIDED, HOWEVER, that the Master Servicer shall remain
obligated and be liable to the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders for the
custodial services with respect to the Financed Student Loan Files in
accordance with the provisions hereof without diminution of such
obligation and liability by virtue of the appointment of
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such Subcustodian and to the same extent and under the same terms and
conditions as if the Master Servicer alone were performing the
custodial services. The fees and expenses of the Subcustodian shall be
as agreed between the Master Servicer and its Subcustodian from time to
time and none of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Delaware Trustee, the Certificateholders or the
Noteholders shall have any responsibility therefor.
(b) The appointment of a Subcustodian by the Master Servicer
shall become effective as of the date specified in the related
Subservicing Agreement and shall continue in full force and effect with
respect to each such Subcustodian and its Related Financed Student Loan
Files for so long as such Subcustodian is a Servicer of the Financed
Student Loans relating to such Financed Student Loan Files. As soon as
practicable following the occurrence of an event of default as to which
the Master Servicer is aware or has received notice of that is
continuing under a Subservicing Agreement, the Master Servicer shall
cause each applicable Subcustodian to deliver the Financed Student Loan
Files held by it as directed by the Master Servicer.
ARTICLE IV
Administration and Servicing of Financed Student Loans
SECTION 4.1. Duties of Master Servicer. The Master Servicer, for the
benefit of the Issuer (to the extent provided herein), shall manage, service,
administer and make collections on the Financed Student Loans with reasonable
care. Without limiting the generality of the foregoing or of any other provision
set forth in this Agreement and notwithstanding any other provision to the
contrary set forth herein, the Master Servicer shall manage, service, administer
and make collections with respect to the Financed Student Loans (other than
collection of any Interest Subsidy Payments and Special Allowance Payments,
which the Eligible Lender Trustee will perform on behalf of the Trust) in
accordance in all material respects with all applicable federal and State laws,
including all applicable standards, guidelines and requirements of the Higher
Education Act and any Guarantee Agreement with respect to the Financed FFELP
Loans and of the HEAL Act and the HEAL Insurance Contract with respect to the
Financed HEAL Loans, the failure to comply with which would adversely affect the
eligibility of one or more of the Financed FFELP Loans for Interest Subsidy
Payments, Special Allowance Payments or Guarantee Payments or the eligibility of
one or more of the Financed HEAL Loans for Insurance Payments or would have a
material adverse effect on the Certificateholders or the Noteholders.
The Master Servicer's duties shall include collection and posting of
all payments, responding to inquiries of borrowers on such Financed Student
Loans, monitoring borrowers' status, making required disclosures to borrowers,
investigating delinquencies, sending bills or payment coupons to borrowers and
otherwise establishing repayment terms, reporting tax information to borrowers,
if applicable, accounting for collections and furnishing monthly and annual
statements with respect thereto to the Administrator. Subject to the provisions
of Section 4.2, the Master Servicer shall follow customary standards, policies
and procedures in performing its duties as Master Servicer. Without limiting the
generality of the foregoing, the Master Servicer is authorized and empowered to
execute and deliver, on behalf of itself, the Issuer, the Eligible Lender
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders or
any of them, instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to such
Financed Student Loans; PROVIDED, HOWEVER, that the Master Servicer agrees that
it will not (a) permit any rescission or cancellation of a Financed Student Loan
except as ordered by a court of competent jurisdiction or governmental authority
or as otherwise consented to in writing by the Eligible Lender Trustee and the
Indenture Trustee or (b) except as otherwise provided in Section 4.14,
reschedule, revise, defer or otherwise compromise with respect to payments due
on any Financed Student Loan except pursuant to any applicable deferment or
forbearance periods or otherwise in accordance with all applicable standards,
guidelines and requirements with respect to the servicing of the Financed
Student Loans; PROVIDED FURTHER, HOWEVER, that the Master Servicer shall not
agree to any decrease of the interest rate on, or the principal amount payable
with respect to, any Financed Student Loan except as otherwise permitted in
accordance
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with applicable standards, guidelines and requirements of the Higher Education
Act and any Guarantee Agreement with respect to the Financed FFELP Loans and by
the HEAL Act and the HEAL Insurance Contract with respect to the Financed HEAL
Loans. Notwithstanding the foregoing, the Master Servicer may, in its sole
discretion, without having to obtain the consent or approval of any other party,
(i) not collect late charges that may be due on Financed Student Loans, and (ii)
waive remaining amounts owing under a Financed Student Loan up to and including
$250.00. The Master Servicer also shall be responsible for advising the Eligible
Lender Trustee and the Indenture Trustee of any action required to be taken to
maintain each such Guarantee Agreement and the HEAL Insurance Contract. The
Eligible Lender Trustee on behalf of the Issuer hereby grants a power of
attorney and all necessary authorization to the Master Servicer to sign
endorsements of the notes relating to the Financed Student Loans on behalf of
the Eligible Lender Trustee in connection with conveyances pursuant to Section
2.3 hereof and to maintain any and all collection procedures with respect to the
Financed Student Loans, including filing, pursuing and recovering claims against
the Guarantors for Guarantee Payments and the Department of HHS for Insurance
Payments and taking any steps to enforce such Financed Student Loan such as
commencing a legal proceeding to enforce a Financed Student Loan in the name of
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders. The Eligible Lender Trustee or the
Indenture Trustee shall upon the written request of the Master Servicer or the
Administrator furnish the Master Servicer or the Administrator with any other
powers of attorney and other documents reasonably necessary or appropriate to
enable the Master Servicer or the Administrator to carry out its servicing and
administrative duties hereunder.
SECTION 4.2. Collection of Financed Student Loan Payments.
(a) The Master Servicer shall make reasonable efforts
(including all efforts that may be specified under the Higher Education
Act or any Guarantee Agreement with respect to Financed FFELP Loans and
under the HEAL Act and the HEAL Insurance Contract with respect to
Financed HEAL Loans) to collect all payments called for under the terms
and provisions of the Financed Student Loans as and when the same shall
become due. The Master Servicer may in its discretion waive any late
payment charge or any other fees in addition to any fee or waiver
permitted under Section 4.1 that may be collected in the ordinary
course of servicing a Financed Student Loan.
(b) The Master Servicer shall make reasonable efforts to
claim, pursue and collect all Guarantee Payments from the Guarantors
pursuant to the Guarantee Agreements and all Insurance Payments from
the Department of HHS pursuant to the HEAL Insurance Contract with
respect to any of the Financed Student Loans as and when the same shall
become due and payable, and shall comply in all material respects with
all applicable laws and agreements with respect to claiming, pursuing
and collecting such payments. In connection therewith, the Master
Servicer is hereby authorized and empowered to convey to any Guarantor
the note and the related Financed Student Loan File representing any
Financed FFELP Loan in connection with submitting a claim to such
Guarantor for a Guarantee Payment in accordance with the terms of the
applicable Guarantee Agreement and to the Department of HHS the note
and the related Financed Student Loan File representing any Financed
HEAL Loan in connection with submitting a claim to the Department of
HHS for an Insurance Payment in accordance with the terms of the HEAL
Insurance Contract whereupon the Lien of the Indenture Trustee relating
to such Financed Student Loan shall be released without any further
action of any kind.
(c) The Eligible Lender Trustee shall, with the assistance of
the Master Servicer and on behalf of the Issuer, make reasonable
efforts to claim, pursue and collect all Interest Subsidy Payments and
Special Allowance Payments from the Department of Education with
respect to any of the Financed FFELP Loans as and when the same shall
become due and payable, shall comply in all material respects with all
applicable laws and agreements with respect to claiming, pursuing and
collecting such payments. All amounts so collected by the Eligible
Lender Trustee shall constitute Available Funds for the applicable
Collection Period or Collection Periods and shall be deposited into the
Collection Account in accordance with Section 5.4. In connection
therewith, the Master Servicer shall prepare and file with the
Department of Education on a timely basis all claims, forms and other
documents and filings necessary or appropriate
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in connection with the claiming of Interest Subsidy Payments and
Special Allowance Payments on behalf of the Eligible Lender Trustee and
shall otherwise assist the Eligible Lender Trustee in pursuing and
collecting such Interest Subsidy Payments and Special Allowance
Payments from the Department of Education. The Eligible Lender Trustee
shall, upon the written request of the Master Servicer, furnish the
Master Servicer with any power of attorney and other documents
reasonably necessary or appropriate to enable the Master Servicer to
prepare and file such claims, forms and other documents and filings.
(d) The Eligible Lender Trustee may permit trusts, other than
the Trust, established by the Transferor to securitize student loans to
use the Department of Education and the Department of HHS lender
identification numbers applicable to the Trust. In such event, the
Eligible Lender Trustee may claim and collect Interest Subsidy Payments
and Special Allowance Payments with respect to Financed Student Loans
in the Trust and student loans in such other trusts using such common
lender identification number. Notwithstanding anything herein or in the
Basic Documents to the contrary, any amounts assessed against payments
(including, but not limited to, Interest Subsidy Payments and Special
Allowance Payments) due from the Department of Education, any Guarantor
or the Department of HHS to any such other trust using such common
lender identification number as a result of amounts (including, but not
limited to, consolidation fees) owing to the Department of Education,
any Guarantor or the Department of HHS from the Trust will be deemed
for all purposes hereof and of the Basic Documents (including for
purposes of determining amounts paid by the Department of Education,
any Guarantor or the Department of HHS with respect to the student
loans in the Trust and such other trust) to have been assessed against
the Trust and shall be deducted by the Eligible Lender Trustee or the
Master Servicer and paid to such other trust from any collections made
by them which would otherwise have been payable to the Collection
Account for the Trust. If so specified in the servicing agreement
applicable to any such other trust, any amounts assessed against
payments due from the Department of Education, any Guarantor or the
Department of HHS to the Trust as a result of amounts owing to the
Department of Education, any Guarantor or the Department of HHS to the
Trust from such other trust using such common lender identification
number will be deemed to have been assessed against such other trust
and will be deducted by the Eligible Lender Trustee or the Master
Servicer from any collections made by them which would otherwise be
payable to the collection account for such other trust and paid to the
Trust.
SECTION 4.3. Realization upon Financed Student Loans. For the benefit
of the Issuer, the Master Servicer shall use reasonable efforts consistent with
customary servicing practices and procedures and including all efforts that may
be specified under the Higher Education Act or any Guarantee Agreement with
respect to the Financed FFELP Loans and under the HEAL Act and the HEAL
Insurance Contract with respect to the Financed HEAL Loans in its servicing of
any delinquent Financed Student Loans.
SECTION 4.4. No Impairment. The Master Servicer shall not impair in any
material respect the rights of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders in the Financed
Student Loans, in any Guaranty Agreement or in the HEAL Insurance Contract.
SECTION 4.5. Notification of Breach; Indemnification of the Transferor.
The Master Servicer or the Eligible Lender Trustee, as the case may be, shall
inform the other parties to this Agreement and the Indenture Trustee promptly,
in writing, upon the discovery of any breach of an obligation under Section 4.1,
4.2, 4.3 or 4.4 hereof. The Eligible Lender Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any such breach.
The Master Servicer shall indemnify the Transferor for any payments made by the
Transferor in connection with a repurchase or reimbursement pursuant to Section
3.2 hereof resulting from any breach of an obligation under Section 4.1, 4.2,
4.3 or 4.4. hereof. The sole remedy of the Issuer, the Eligible Lender Trustee,
the Indenture Trustee, the Certificateholders (other than the Transferor
pursuant to the preceding sentence) or the Noteholders with respect to a breach
pursuant to Section 4.1, 4.2, 4.3 or 4.4 hereof shall be to require the
Transferor to purchase Financed Student Loans or to reimburse the Issuer to the
extent provided under Section 3.2 hereof, subject to the conditions contained
therein.
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SECTION 4.6. Servicing Fee. For its services hereunder, the Master
Servicer shall be entitled to receive the Servicing Fee in the manner set forth
in Section 5.5.
SECTION 4.7. Administrator's Certificate.
(a) On each Distribution Determination Date, the Administrator
shall deliver to the Indenture Trustee and the Eligible Lender Trustee
in writing the applicable Noteholders' Interest Distribution Amount,
the Noteholders Principal Distribution Amount and all amounts to be
paid to Certificateholders on the related Distribution Date. On each
Distribution Determination Date relating to a Quarterly Distribution
Date, the Administrator also shall deliver to the Indenture Trustee and
the Eligible Lender Trustee in writing the estimated Transaction Fees
(separately and in the aggregate) for the calendar quarter in which
such Quarterly Distribution Date occurs. Two Business Days prior to the
25th day of each month, the Administrator will advise the Indenture
Trustee and the Eligible Lender Trustee in writing of the Consolidation
Loan Fees for the preceding calendar month.
(b) On each Distribution Determination Date, the Administrator
also shall deliver to the Eligible Lender Trustee, the Indenture
Trustee and the Transferor (if the Transferor is not also the
Administrator), an Administrator's Certificate containing all
information necessary to make the distributions pursuant to Sections
5.5 and 5.6, if applicable, for the upcoming Distribution Date.
Financed Student Loans to be repurchased by the Transferor (or
purchased by the Master Servicer) (whether pursuant to Section 2.3 or
3.2), or acquired by any Guarantor or by the Department of HHS shall be
identified by the Administrator by borrower social security number with
respect to such Financed Student Loan (as specified in Schedule A-1).
(c) On or before each Distribution Determination Date [[15th
day of each month]], the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee and the Transferor (if the
Transferor is not also the Administrator), the Administrator's
Certificate substantially in the form of Exhibit C setting forth by
component the Available Funds for the immediately preceding Collection
Period.
SECTION 4.8. Annual Statement as to Compliance; Notice of Default.
(a) Each of the Master Servicer and the Administrator shall
deliver to the Transferor, the Eligible Lender Trustee and the
Indenture Trustee, on or before April 30 of each year beginning April
30, 1999, an Officer's Certificate of the Master Servicer or the
Administrator, as the case may be, dated as of December 31 of the
preceding year, stating that (i) a review of the activities of the
Master Servicer or the Administrator, as the case may be, during the
preceding 12-month period (or, in the case of the first such
certificate, during the period from the Closing Date to December 31,
1998) and of its performance under this Agreement has been made under
such officers' supervision and (ii) to the best of such officers'
knowledge, based on such review, the Master Servicer or the
Administrator, as the case may be, has fulfilled in all material
respects all its obligations under this Agreement and the
Administration Agreement, respectively, throughout such year or, if
there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and
status thereof. The Eligible Lender Trustee shall send a copy of each
such Officers' Certificate and each report referred to in Section 4.9
to the Rating Agencies. A copy of each such Officers' Certificate and
each report referred to in Section 4.9 may be obtained by any
Noteholder or Note Owner by a request in writing to the Eligible Lender
Trustee addressed to its Corporate Trust Office, together with evidence
satisfactory to the Eligible Lender Trustee that such Person is a
Noteholder or Note Owner. Pursuant to the Indenture, upon the telephone
request of the Eligible Lender Trustee, the Indenture Trustee will
promptly furnish the Eligible Lender Trustee a list of Noteholders as
of the date specified by the Eligible Lender Trustee.
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(b) The Master Servicer shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Transferor and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later
than five Business Days thereafter, written notice in an Officer's
Certificate of the Master Servicer of any event which with the giving
of notice or lapse of time, or both, would become a Master Servicer
Default under Section 8.1(a).
(c) The Administrator shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Master Servicer and the Rating
Agencies, promptly after having obtained knowledge thereof, but in no
event later than five Business Days thereafter, written notice in an
Officer's Certificate of the Administrator of any event which with the
giving of notice or lapse of time, or both, would become an
Administrator Default under Section 8.1(b) (l), (2) or (3).
SECTION 4.9. Annual Independent Certified Public Accountants' Report or
Reports. Each of the Master Servicer and the Administrator shall cause KPMG Peat
Marwick LLP, or any other nationally recognized firm of independent certified
public accountants, to deliver to the Transferor, which may also render its
services to the Master Servicer and the Administrator, the Eligible Lender
Trustee, the Indenture Trustee and any Servicer on or before April 30 of each
year beginning April 30, 1999 one or more reports addressed to the Master
Servicer and to the Transferor, the Eligible Lender Trustee and the Indenture
Trustee, to the effect that such accountants have relied upon the assertions by
the Master Servicer's and Administrator's management about the Master Servicer's
and Administrator's compliance with Sections 3.3, 3.4, 4.1, 4.2, 4.3, 4.4, 4.6,
4.7, 5.2, 5.5, 5.6, 5.7 and 5.8 of the Transfer and Servicing Agreement and
Sections [[1(B), 1(D), 1(G), 1(U), 2 and 3:]] of the Administration Agreement
during the preceding calendar year (or, in the case of the first such report(s),
during the period from the Closing Date to December 31, 1998) and in any such
accountant's opinion(s), such assertions are fairly stated in all material
respects, except for (i) such exceptions as any such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such
report(s). If any such firm requires the Indenture Trustee or the Eligible
Lender Trustee to agree to the procedures performed by such firm, the Master
Servicer shall direct the Indenture Trustee in writing to so agree; it being
understood and agreed that the Indenture Trustee or the Eligible Lender Trustee,
as applicable, will deliver such letter of agreement in conclusive reliance upon
the direction of the Master Servicer, and the Indenture Trustee and the Eligible
Lender Trustee make no independent inquiry or investigation as to and shall have
no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.
Such report(s) will also indicate that the firm is independent of the
Master Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 4.10. Access to Certain Documentation and Information Regarding
Financed Student Loans. Upon reasonable prior notice, the Master Servicer shall,
or shall cause each Servicer to, provide access to the Financed Student Loan
Files and the related accounts, records and computer systems maintained by the
Master Servicer or such Servicer, as the case may be, to (i) the Eligible Lender
Trustee and (ii) the Indenture Trustee and their respective duly authorized
representatives, attorneys or auditors; provided, however, that, except as
otherwise agreed to by the Master Servicer or required by law, (A) such Persons
shall maintain the confidentiality of the information in such Financed Student
Loan Files and the related accounts, records and computer systems and not use
any of such information for any purpose except in connection with performing
their obligations as Eligible Lender Trustee or Indenture Trustee, and (B)
access to the computer systems shall be limited to obtaining, and only to the
extent necessary to obtain, information relating to the Financed Student Loans
for purposes of performing their obligations as Eligible Lender Trustee or
Indenture Trustee. Access shall be afforded without charge (except that the
reasonable cost of photocopying shall be borne by the party requesting copies),
but only upon reasonable request and during the normal business hours at the
respective offices of the applicable Servicer. Nothing in this Section shall
affect the obligation of the Master Servicer (or a Servicer) to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Master Servicer to provide (or cause each Servicer to
provide) access to information as a result of such obligation shall not
constitute a breach of this Section.
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SECTION 4.11. Master Servicer and Administrator Expenses. The Master
Servicer and the Administrator shall be severally required to pay all expenses
incurred by them in connection with their respective activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Master Servicer or the Administrator, as the case may be, and expenses
incurred in connection with distributions and reports to the Administrator, the
Noteholders and the Eligible Lender Trustee, as the case may be.
SECTION 4.12. Appointment of Servicer.
(a) The Master Servicer may at any time appoint a Servicer to
perform all or any portion of its obligations as Master Servicer
hereunder; PROVIDED, HOWEVER, that the Rating Agency Condition shall
have been satisfied in connection therewith; PROVIDED FURTHER, that the
Master Servicer shall remain obligated and be liable to the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Certificateholders
and the Noteholders for the servicing and administering of the Financed
Student Loans in accordance with the provisions hereof without
diminution of such obligation and liability by virtue of the
appointment of such subservicer and to the same extent and under the
same terms and conditions as if the Master Servicer alone were
servicing and administering the Financed Student Loans. The fees and
expenses of each Servicer shall be as agreed between the Master
Servicer and such Servicer from time to time and none of the Issuer,
the Eligible Lender Trustee, the Delaware Trustee, the Indenture
Trustee, the Certificateholders and the Noteholders shall have any
responsibility therefor. Notwithstanding the foregoing, PHEAA shall be
deemed an approved Servicer for all purposes hereunder.
(b) The Master Servicer may at any time appoint one or more of
its Affiliates to perform all or any portion of its obligations
hereunder; provided, however, that the Master Servicer shall remain
obligated and liable to the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Financed Student Loans in accordance
with the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such Affiliate and to the
same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Financed Student
Loans. The fees and expenses of each such Affiliate shall be as agreed
between the Master Servicer and such Affiliate from time to time and
none of the Issuer, the Eligible Lender Trustee, the Delaware Trustee,
the Indenture Trustee, the Certificateholders and the Noteholders shall
have any responsibility therefor.
SECTION 4.13. Subservicing Agreements. The Master Servicer hereby
represents and warrants that: (i) as of the Closing Date it has entered into a
Subservicing Agreement with PHEAA (the "Subservicing Agreement"); (ii) the
Subservicing Agreement requires the Servicer thereunder to service the Financed
Student Loans subject thereto in accordance in all material respects with all
applicable federal and State laws, including all applicable standards,
guidelines and requirements of the Higher Education Act with respect to Financed
FFELP Loans and the HEAL Act with respect to Financed HEAL Loans.
SECTION 4.14. Incentive Programs. The Servicer shall be permitted to
reduce the applicable interest rate on a TP Loan by up to (i) 1.00% per anum for
Xxxxxxxx Loans and Unsubsidized Xxxxxxxx Loans and 0.5% per annum for PLUS
Loans, if the Obligor related to such TP Loan makes 36 consecutive monthly
payments of such TP Loan on or prior to the applicable due dates of such TP
Loan, or (ii) such greater percentage and upon such other conditions for which a
Rating Agency Condition is satisfied.
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ARTICLE V
Distributions; Reserve Account;
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Statements to Certificateholders and Noteholders
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SECTION 5.1. Establishment of Trust Accounts.
(a) The Indenture Trustee, for the benefit of the Noteholders,
shall establish and maintain in the name of the Indenture Trustee each
of the Collection Account, the Note Distribution Account, the Reserve
Account, the Expense Account and the Monthly Advance Account. The
Eligible Lender Trustee, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Eligible Lender Trustee
the Certificate Distribution Account and the Certificate Quarterly
Advance Account. The foregoing accounts are referred to collectively as
the "Trust Accounts." Each such Trust Account shall be an Eligible
Deposit Account and, except for the Certificate Distribution Account
and the Certificate Quarterly Advance Account, shall be entitled as
follows: "[Name of Account] for the benefit of Crestar Student Loan
Trust 1997-1 and Bankers Trust Company, as Indenture Trustee, as their
interests may appear." The Certificate Distribution Account and the
Certificate Quarterly Advance Account shall be entitled as follows:
"Crestar Student Loan Trust 1997-1 Certificate Distribution Account"
and Crestar Student Loan Trust 1997-1 Certificate Quarterly Advance
Account," respectively.
(b) Funds on deposit in the Trust Accounts shall be invested
by the Indenture Trustee and, in the case of the Certificate
Distribution Account and the Certificate Quarterly Advance Account, the
Eligible Lender Trustee in Eligible Investments pursuant to written
instructions from the Administrator, on behalf of the Issuer; PROVIDED,
HOWEVER, it is understood and agreed that the Indenture Trustee and the
Eligible Lender Trustee shall not be liable for any loss arising from
such investment in Eligible Investments. All such Eligible Investments
shall be held by the Indenture Trustee and the Eligible Lender Trustee
for the benefit of the Issuer; provided that on the Business Day
preceding each Distribution Date all interest and other investment
income (net of losses and investment expenses) on funds on deposit
therein shall be deposited into the Collection Account and shall be
deemed to constitute a portion of the Available Funds for the related
Distribution Date. Funds on deposit in the Trust Accounts shall be
invested in Eligible Investments that will mature or otherwise be
available so that such funds will be available at the close of business
on the Business Day preceding the day on which funds in the applicable
Trust Account may be required to be withdrawn; PROVIDED, HOWEVER, that
funds on deposit in such Trust Accounts may be invested in Eligible
Investments of the Indenture Trustee or of the Eligible Lender Trustee
in the case of the Certificate Distribution Account and Certificate
Quarterly Advance Account which may mature so that such funds will be
available on the following Business Day. Funds deposited in a Trust
Account on a Business Day which immediately precedes a Distribution
Date upon the maturity of any Eligible Investments are not required to
be invested overnight unless otherwise directed by telephone or
facsimile and confirmed within 24 hours in writing by the
Administrator.
(c) (i) The Indenture Trustee (or the Eligible Lender Trustee
with respect to the Certificate Distribution Account and the
Certificate Quarterly Advance Account) shall possess all right, title
and interest in all funds on deposit from time to time in the Trust
Accounts and in all proceeds thereof (including all income thereon) and
all such funds, investments, proceeds and income shall be part of the
Trust Estate. Subject to the Administrator's power to give instructions
pursuant to paragraph (b) above and paragraph (c) (iii) below, the
Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee (or the Eligible Lender Trustee with respect to the
Certificate Distribution Account and the Certificate Quarterly Advance
Account) for the benefit of the Noteholders and Certificateholders. If,
at any time, any of the Trust Accounts ceases to be an Eligible Deposit
Account, the Administrator, on behalf of the Issuer, agrees that it
shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which the Rating Agencies may consent) establish a
new Trust Account as an Eligible Deposit Account and shall transfer any
cash and/or any investments to such new Trust Account. In
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connection with the foregoing, the Administrator, on behalf of the
Issuer, agrees that, if any of the Trust Accounts are not accounts with
the Indenture Trustee (or the Eligible Lender Trustee with respect to
the Certificate Distribution Account and the Certificate Quarterly
Advance Account), the Administrator shall notify the Indenture Trustee
and the Eligible Lender Trustee in writing promptly upon any of such
Trust Accounts ceasing to be an Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees (or, with respect to the Certificate Distribution
Account and the Certificate Quarterly Advance Account, the Eligible
Lender Trustee agrees), by its acceptance thereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in Eligible Deposit
Accounts, subject to the last sentence of Section 5.1(c)(i);
and, subject to Section 5.1(b), each such Eligible Deposit
Account shall be subject to the exclusive custody and control
of the Indenture Trustee (or the Eligible Lender Trustee with
respect to the Certificate Distribution Account and the
Certificate Quarterly Advance Account), and the Indenture
Trustee (or the Eligible Lender Trustee with respect to the
Certificate Distribution Account and the Certificate Quarterly
Advance Account) shall have sole signature authority with
respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be Delivered to the Indenture Trustee
in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or disposition,
solely by the Indenture Trustee or a financial intermediary
(as such term is defined in Article 8 of the UCC) acting
solely for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
federal book-entry regulation shall be Delivered in accordance
with paragraph (b) of the definition of "Delivery" and shall
be maintained by the Indenture Trustee, pending maturity or
disposition, through continued book-entry registration of such
Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an
"uncertificated security" under Article VIII of the UCC and
that is not governed by clause (C) above shall be Delivered to
the Indenture Trustee in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through
continued registration of the Indenture Trustee's (or its
nominee's) ownership of such security.
(iii) The Administrator shall have the power, revocable for
cause or upon the occurrence and during the continuance of an
Administrator Default by the Indenture Trustee or by the Eligible
Lender Trustee with the consent of the Indenture Trustee, to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts (or the Eligible Lender Trustee with respect to the
Certificate Distribution Account and the Certificate Quarterly Advance
Account) for the purpose of permitting the Master Servicer, the
Administrator or the Eligible Lender Trustee to carry out its
respective duties hereunder or under the Trust Agreement or permitting
the Indenture Trustee to carry out its duties under the Indenture.
SECTION 5.2. Collections. The Master Servicer shall remit to the
Collection Account all payments by or on behalf of the Obligors with respect to
the Financed Student Loans for which it, rather than a Servicer, is acting as
Primary Servicer (other than Purchased Student Loans), (i) within [[__]]
Business Days after it has received an aggregate of [[$______]] during any
Collection Period and (ii) on the last Business Day of each Collection Period,
all other collections received during such Collection Period. The Master
Servicer shall cause each other Servicer to remit to the Collection Account, no
less frequently than [[_____,]] all payments by or on
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behalf of the Obligors with respect to the Financed Student Loans for which it
is acting as Primary Servicer. For purposes of this Article V, the phrase
"payments by or on behalf of Obligors" shall mean payments made with respect to
the Financed Student Loans by or on behalf of borrowers thereof, the Guarantors
and the Department of HHS. [[written notice to indenture trustee of wire
transfers; location of Collection Account]
SECTION 5.3. Application of Collections. With respect to each Financed
Student Loan, all collections (including all Guarantee Payments and all
Insurance Payments) with respect thereto shall be applied in accordance with
regulations of the Department of Education and the applicable Guarantor in the
case of Financed FFELP Loans and the Department of HHS in the case of Financed
HEAL Loans.
SECTION 5.4. Additional Deposits. Within two Business Days after
receipt thereof, the Eligible Lender Trustee (or the Master Servicer on its
behalf) shall deposit in the Collection Account the aggregate amount of Interest
Subsidy Payments and Special Allowance Payments received by it with respect to
the Financed Student Loans, and the Transferor shall deposit in the Collection
Account any amount owed pursuant to Section 3.2 no later than the last day of
the Collection Period during which any such amount is owed. The Transferor (or
the Master Servicer, if applicable) shall deposit or cause to be deposited in
the Collection Account the aggregate Purchase Amount with respect to Purchased
Student Loans and all other amounts to be paid by the Transferor (or the Master
Servicer, if applicable) under Sections 3.2 or 9.1 when such amounts are due.
The Transferor, the Master Servicer and the Administrator also shall deposit in
the Collection Account all amounts required to be deposited therein pursuant to,
and within the time periods provided by, Section 2.3. Notwithstanding the
foregoing, the Master Servicer shall deposit, or cause to be deposited, directly
into the Reserve Account any payments of or with respect to principal relating
to a Financed Student Loan for which any payment on account of a Realized Loss
was previously distributed (but only up to the amount of such Realized Loss),
and shall deposit, or cause to be deposited, directly into the Collection
Account any payments of or with respect to interest relating to a Financed
Student Loan for which any payment on account of a Realized Loss was previously
distributed.
The Master Servicer also shall, in its sole discretion, deposit into
the Monthly Advance Account the amount of any Monthly Advances determined to be
made by the Master Servicer pursuant to Section 5.10 no later than the
Distribution Determination Date relating to the Distribution Date when such
amounts are to be applied as a payment of interest. On each Distribution Date,
the Indenture Trustee will transfer from the Monthly Advance Account to the
Eligible Lender Trustee, by wire transfer no later than 11:00 a.m. New York
time, for deposit into the Certificate Quarterly Advance Account the portion of
the Monthly Advance, if any, for such Distribution Date allocable to the
Certificates. Pursuant to Section 5.10, if after making a Monthly Advance the
Master Servicer receives the Guarantee Payment, the Special Allowance Payment,
the Interest Subsidy Payment or the Insurance Payment for which such Monthly
Advance was made, the Master Servicer shall be reimbursed immediately from such
Guarantee Payment, Special Allowance Payment, Interest Subsidy Payment or
Insurance Payment, as the case may be, on deposit in the Collection Account up
to the amount of the related Monthly Advance or, if such Guarantee Payment,
Special Allowance Payment, Interest Subsidy Payment or Insurance Payment is not
received, the Master Servicer may reimburse itself from any funds on deposit in
the Collection Account up to the amount of the related Monthly Advance.
SECTION 5.5. Distributions.
(a) On each Distribution Date, pursuant to the Administrator's
written instructions, the Indenture Trustee will transfer from the
Collection Account, in the following priority and from Available Funds
for each Collection Period from and including the Collection Period
during which the preceding Quarterly Distribution Date occurred through
the Collection Period immediately preceding the month of such
Distribution Date (or with respect to each Distribution Date through
and including the first Quarterly Distribution Date, from the Closing
Date through the Collection Period immediately preceding such
Distribution Date), the required amounts from the Available Funds for
such Collection Periods:
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(i) first, to the Expense Account, (A) an amount
equal to the Consolidation Loan Fees with respect to the
calendar month most recently ended and all overdue
Consolidation Loan Fees from any prior months and (B) if such
Distribution Date is a Quarterly Distribution Date, an amount
up to the estimated Transaction Fees for the calendar quarter
commencing in the month of such Quarterly Distribution Date
and all overdue Transaction Fees from prior calendar quarters
(plus (or minus) the difference (or excess) of the actual
Transaction Fees for the immediately preceding calendar
quarter and the Transaction Fees deposited into the Expense
Account on the preceding Quarterly Distribution Date);
(ii) second, to the Note Distribution Account, an
amount up to the aggregate Noteholders' Interest Distribution
Amount for such Distribution Date;
(iii) third, to the Note Distribution Account, an
amount up to the Noteholders' Principal Distribution Amount
for such Distribution Date;
(iv) fourth, to the Eligible Lender Trustee, for
deposit into the Certificate Distribution Account, an amount
up to the Certificateholders' Interest Distribution Amount for
such Distribution Date; and
(v) fifth, if the Outstanding Amount of the Notes has
been paid in full, to the Eligible Lender Trustee, for deposit
into the Certificate Distribution Account, an amount up to the
Certificateholders' Principal Distribution Amount for such
Distribution Date.
(b) [Reserved]
(c) On each Quarterly Distribution Date (and in the case of
clause (i) below, on the 25th day of each month (or if such day is not
a Business Day, the next succeeding Business Day)), the Indenture
Trustee, pursuant to information contained in the Administrator's
Certificate delivered in accordance with Section 4.7, will distribute
from the Expense Account (in addition to any amounts transferred from
the Reserve Account pursuant to Section 5.6) the following amounts in
the following order of priority:
(i) to the Department of Education, the Consolidation
Loan Fees for the immediately preceding calendar month and all
overdue Consolidation Loan Fees for any prior months,
(ii) to the Master Servicer, the estimated Servicing
Fee for the calendar quarter in which such Quarterly
Distribution Date occurs and all overdue Servicing Fees,
(iii) to the Administrator, the estimated
Administration Fee for the calendar quarter in which such
Quarterly Distribution Date occurs and all overdue
Administration Fees,
(iv) to the Indenture Trustee, the estimated
Indenture Trustee Fee for the calendar quarter in which such
Quarterly Distribution Date occurs and all overdue Indenture
Trustee Fees, and
(v) to the Eligible Lender Trustee and the Delaware
Trustee, the estimated Eligible Lender Trustee Fee and
Delaware Trustee Fee, respectively, for the calendar quarter
in which such Quarterly Distribution Date occurs and all
overdue Eligible Lender Trustee Fees and Delaware Trustee
Fees.
(d) On each Distribution Date, the Indenture Trustee will
distribute to the Noteholders as of the related Record Date all amounts
transferred to the Note Distribution Account pursuant to Section
5.5(a)(ii) and (iii) (in addition to any amounts transferred from the
Reserve Account, any amounts deposited into the
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Monthly Advance Account pursuant to Section 5.4 and any Parity
Percentage Payments transferred from the Collection Account pursuant to
Section 5.5(e)) in the following order of priority:
(i) first, to each Class of Class A Noteholders, the
Class A Noteholders' Interest Distribution Amount (pro rata
based upon the portion thereof allocable to each such Class);
(ii) second, if such Distribution Date is a Quarterly
Distribution Date, to the Class B Noteholders, the Class B
Noteholders' Interest Distribution Amount;
(iii) third, to the Class A-1 Noteholders, the
Noteholders' Principal Distribution Amount until the
Outstanding Amount of the Class A-1 Notes has been reduced to
zero;
(iv) fourth, after the Outstanding Amount of the
Class A-1 Notes has been reduced to zero, to the Class A-2
Noteholders, the Noteholders' Principal Distribution Amount
until the Outstanding Amount of the Class A-2 Notes has been
reduced to zero, and
(v) fifth, after the Outstanding Amount of the Class
A Notes has been reduced to zero, if such Distribution Date is
a Quarterly Distribution Date, to the Class B Noteholders the
remaining Noteholders' Principal Distribution Amount until the
Outstanding Amount of the Class B Notes shall have been
reduced to zero.
On each Quarterly Distribution Date, the Eligible Lender
Trustee will distribute to the Certificateholders as of the related
Record Date all amounts transferred to the Certificate Distribution
Account pursuant to Section 5.5(a) (in addition to any amounts
transferred from the Reserve Account and any amount deposited into the
Certificate Quarterly Advance Account pursuant to Section 5.4) in the
following order of priority: (i) first, to the Certificateholders, the
Certificateholders' Interest Distribution Amount and (ii) second, to
the Certificateholders, the Certificateholders' Principal Distribution
Amount. The priority of distributions set forth in this Section 5.5(d)
shall be subject to the provisions of Section 5.5(f).
(e) On each Quarterly Distribution Date, after making any and
all required transfers to the Expense Account, the Note Distribution
Account and, if applicable, the Certificate Distribution Account
pursuant to Section 5.5(a), the Indenture Trustee will transfer any
amounts remaining in the Collection Account (other than amounts
representing payments received during the month in which such
Distribution Date occurs) in the following order of priority:
(i) to the Reserve Account, the amount, if any,
necessary to increase the balance thereof to the Specified
Reserve Account Balance,
(ii) to the Note Distribution Account, the Parity
Percentage Payment, if any, for such Distribution Date,
(iii) to the Note Distribution Account, the amount of
any outstanding Noteholders' Interest Carryover, and
(iv) to the Transferor, any amounts remaining on
deposit in the Collection Account other than amounts
representing payments received on or with respect to the
Financed Student Loans during the month of such Quarterly
Distribution Date (amounts transferred to the Transferor
pursuant to this clause (iv) shall be transferred by the
Indenture Trustee to the account specified by the Transferor).
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The Transferor shall have the right, at its option, to transfer and
assign, in whole or in part, its right to receive any amounts required
to be paid to it pursuant to clause (iv).
(f) Notwithstanding the foregoing, if (x) on any Distribution
Date following all distributions to be made on such Distribution Date,
the Outstanding Amount of the Class A Notes would exceed the sum of the
Pool Balance at the end of the immediately preceding Collection Period
plus the aggregate balance on deposit in the Trust Accounts on such
Distribution Date following such distributions, or (y) an Event of
Default has occurred with respect to payment of the Notes,
distributions pursuant to Section 5.5(d) shall be made in the following
priority:
(i) first, to each Class of Class A Noteholders, the
Noteholders' Interest Distribution Amount applicable to each
such Class pro rata based upon the portion thereof allocable
to each such Class;
(ii) second, in the case of
(A) clause (x) above, to the Class A-1
Noteholders, the Noteholders' Principal
Distribution Amount until the Outstanding
Amount of the Class A-1 Notes has been
reduced to zero, and then to the Class A-2
Noteholders, the Noteholders' Principal
Distribution Amount until the Outstanding
Amount of the Class A-2 Notes has been
reduced to zero, and
(B) clause (y) above, to each Class of Class
A Noteholders, the Noteholders' Principal
Distribution Amount applicable to such
Distribution Date, pro rata based upon the
Outstanding Amount of each Class of Class A
Notes until the Outstanding Amount of each
Class of Class A Notes has been paid in
full;
(iii) third, if such Distribution Date is a Quarterly
Distribution Date, to the Class B Noteholders, the
Noteholders' Interest Distribution Amount applicable to the
Class B Notes;
(iv) fourth, after the Outstanding Amount of each of
the Class A Notes has been reduced to zero, if such
Distribution Date is a Quarterly Distribution Date, to the
Class B Noteholders, the Noteholders' Principal Distribution
Amount until the Outstanding Amount of the Class B Notes has
been reduced to zero;
(v) fifth, if such Distribution Date is a Quarterly
Distribution Date, to the Class A Noteholders, the
Noteholders' Interest Carryover applicable to the respective
Class of Class A Notes, pro rata based upon the portion
thereof allocable to each such Class;
(vi) sixth, if such Distribution Date is a Quarterly
Distribution Date, to the Class B Noteholders, the
Noteholders' Interest Carryover applicable to the Class B
Notes;
(vii) seventh, if such Distribution Date is a
Quarterly Distribution Date, to the Certificateholders, the
Certificateholders' Interest Distribution Amount; and
(viii) eighth, if such Distribution Date is a
Quarterly Distribution Date, to the Certificateholders, the
Certificateholders' Principal Distribution Amount.
All distributions made to the Noteholders of a Class or the
Certificateholders on each Distribution Date shall be made on a pro rata basis
among the Noteholders of such Class and Certificateholders of record as of the
related Record Date based upon the Outstanding Amount of such Class (or, with
respect to payments of principal
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on such Class of Notes, the applicable Principal Factor with respect to such
Class) or percentage interest of Certificates so owned.
SECTION 5.6. Reserve Account.
(a) On the Closing Date, the Transferor shall deposit the
Reserve Account Initial Deposit into the Reserve Account.
(b) If the amount on deposit in the Reserve Account on any
Quarterly Distribution Date (after giving effect to all deposits or
withdrawals therefrom on such Quarterly Distribution Date) is greater
than the then applicable Specified Reserve Account Balance, the
Administrator shall instruct the Indenture Trustee in writing to
withdraw such excess from the Reserve Account and
(i) to deposit into the Note Distribution Account, an
amount equal to the lesser of such excess and the amount
described in Section 5.5(e)(iii) for such Distribution Date
(to the extent not otherwise paid to the Note Distribution
Account on such Distribution Date),
(ii) to deposit into the Note Distribution Account
the lesser of such excess (after giving effect to clause (i)
above) and any amounts required to be paid by the Transferor
pursuant to Section 3.2 as a result of breaches of
representations and warranties made in Section 3.1 to the
extent the Transferor (or the Master Servicer, if applicable)
has not made such payments within the required time period,
and
(iii) to distribute the remaining amount of such
excess (after giving effect to clauses (i) and (ii) above) to
the Transferor.
Amounts properly distributed pursuant to this paragraph (b) shall be
deemed released from the Trust Estate and the security interest therein
granted to the Indenture Trustee, and the Transferor shall in no event
thereafter be required to refund any such distributed amounts. The
Transferor shall have the right, at its option, to transfer and assign,
in whole or in part, its right to receive any amounts required to be
paid to it pursuant to clause (iii).
(c) Following the payment in full of the aggregate Outstanding
Amount of the Notes and of all other amounts owing or to be distributed
hereunder or under the Indenture or the Trust Agreement to Noteholders,
Certificateholders, the Master Servicer or the Administrator and the
termination of the Trust, any amount remaining on deposit in the
Reserve Account shall be distributed to the Transferor. The Transferor
shall in no event be required to refund any amounts properly
distributed pursuant to this Section 5.6(c).
(d) (i) If on any Quarterly Distribution Date (and with
respect to Section 5.5(c)(i), the 25th day of each month, or if such
day is not a Business Day the next succeeding Business Day), any
amounts to be distributed as calculated pursuant to Section
5.5(c)(i)-(v) exceed the amount on deposit in the Expense Account
available for such purposes, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account the lesser of
such excess and the amount on deposit in the Reserve Account (after
giving effect to each withdrawal in the order specified in Section
5.5(c) (i)-(v)) and deposit such withdrawn amount in the Expense
Account for distribution as provided in Section 5.5.
(ii) If the Noteholders' Distribution Amount for a
Distribution Date exceeds the amount in the Note Distribution Account
for such Distribution Date available for such purposes, the
Administrator shall instruct the Indenture Trustee to withdraw from the
Reserve Account an amount equal to the lesser of such excess, and the
amount on deposit in the Reserve Account (after giving effect to
paragraph (d)(i) above),
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and deposit such withdrawn amount into the Note Distribution Account
for distribution as provided in Section 5.5.
(iii) If the Certificateholders' Distribution Amount for a
Quarterly Distribution Date exceeds the amount for such Quarterly
Distribution Date available for such purposes, the Administrator shall
instruct the Indenture Trustee on such Quarterly Distribution Date to
withdraw from the Reserve Account an amount equal to the lesser of such
excess, and the amount on deposit in the Reserve Account (after giving
effect to paragraphs (d)(i) and (d) (ii) above), and to deposit such
withdrawn amount in the Certificate Distribution Account for
distribution as provided in Section 5.5.
SECTION 5.7. Statements to Certificateholders and Noteholders. On each
Distribution Determination Date immediately preceding a Distribution Date, the
Master Servicer or the Administrator shall provide to the Indenture Trustee with
a copy to the Rating Agencies (for the Indenture Trustee to forward on such
succeeding Distribution Date to each Noteholder of the applicable Class of
record and to the Eligible Lender Trustee for the Eligible Lender Trustee to
forward on such succeeding Distribution Date to each Certificateholder (if such
Certificateholder is not the Transferor) of record, a statement substantially in
the form of Exhibits A and B, respectively, setting forth at least the following
information with respect to such Distribution Date or the preceding Collection
Period or Collection Periods, to the extent applicable:
(i) the Principal Factor for each Class of Notes;
(ii) the amount of the distribution allocable to
principal on each Class of Notes;
(iii) the amount of the distribution allocable to
interest on each Class of Notes and on the Certificates,
together with the interest rates applicable with respect
thereto (indicating, whether such interest rates are based on
the Formula Interest Rate or on the Net Loan Rate with respect
to each Class of the Class A Notes and on the Formula Interest
Rate or on the Net Loan Rate with respect to the Class B
Notes, and specifying what each such interest rate would have
been if it had been calculated using the alternate basis);
(iv) the amount of the distribution, if any,
allocable to any Noteholders' Interest Carryover together with
the outstanding amount, if any, thereof after giving effect to
any such distribution;
(v) the Pool Balance as of the close of business on
the last day of the preceding Collection Period;
(vi) the aggregate outstanding principal amount of
each Class of Notes as of such Distribution Date, after giving
effect to payments allocated to principal reported under
clause (ii) above;
(vii) the amount of the Servicing Fee, the
Administration Fee, the Indenture Trustee Fee, the Delaware
Trustee Fee and the Eligible Lender Trustee Fee to be
allocated on the upcoming Distribution Date;
(viii) the amount of the aggregate Realized Losses,
if any, for the preceding Collection Period and the aggregate
amount, if any, received (stated separately for interest and
principal) during such Collection Period relating to Financed
Student Loans for which a Realized Loss was previously
allocated;
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(ix) the amount of the distribution attributable to
amounts in the Reserve Account, the amount of any other
withdrawals from the Reserve Account for such Distribution
Date, the balance of the Reserve Account on such Distribution
Date, after giving effect to changes therein on such
Distribution Date, the then applicable Parity Percentage and
the amount of the distribution, if any, attributable to Parity
Percentage Payments;
(x) the aggregate amount, if any, paid for Financed
Student Loans purchased from the Trust during the preceding
Collection Period;
(xi) during the Exchange Period only, the aggregate
Issuer Consolidation Payments and Adjustment Payments, stated
separately, for the preceding Collection Period; and
(xii) the number and principal amount of Financed
Student Loans, as of the end of the preceding Collection
Period, that are (A) 30 to 60 days delinquent, (B) 61 to 90
days delinquent, (C) 91 to 120 days delinquent, (D) more than
120 days delinquent and (E) for which claims have been filed
with the appropriate Guarantor or the Department of HHS and
which are awaiting payment.
5.8. Expense Account. The Administrator shall instruct the Indenture
Trustee to deposit funds into, and withdraw funds from, the Expense Account as
set forth in Sections 5.5 and 5.6. Any funds remaining in the Expense Account
upon termination of the Trust shall be distributed to the Master Servicer as
additional servicing compensation.
5.9. Note Distribution Account and Certificate Distribution Account.
The Administrator shall instruct the Indenture Trustee and the Eligible Lender
Trustee to deposit funds into, and withdraw funds from, the Note Distribution
Account and the Certificate Distribution Account, as applicable, as set forth in
Sections 5.5, 5.6 and 5.10.
5.10. Monthly Advances. If the Master Servicer has applied for a
Guarantee Payment from a Guarantor, an Interest Subsidy Payment or a Special
Allowance Payment from the Department of Education or an Insurance Payment from
the Department of HHS, and the Master Servicer has not received the related
payment prior to the end of the Collection Period immediately preceding the
Distribution Date on which such amount would be required to be distributed as a
payment of interest, the Master Servicer may, no later than the Distribution
Determination Date relating to such Distribution Date, in its sole discretion,
deposit into the Monthly Advance Account an amount up to the amount of such
payments applied for but not received (such deposits by the Master Servicer are
referred to herein as "Monthly Advances"). Such Monthly Advances are recoverable
by the Master Servicer (i) first, from the Guarantee Payment, Interest Subsidy
Payment, Special Allowance Payment or Insurance Payment, as the case may be, for
which such Monthly Advance was made and (ii) second, if such amounts have not
been received, from collections received generally on or with respect to the
Financed Student Loans. The Master Servicer shall have no obligation, legal or
otherwise, to make any Monthly Advance, and the making of or decision to make a
particular Monthly Advance shall not create any obligation on the Master
Servicer, legal or otherwise, to make any future Monthly Advances.
5.11. Certificate Interest. During the initial Interest Period, the
Certificates shall bear interest at the Certificate Initial Rate. Thereafter,
the Certificates shall bear interest during each applicable Interest Period at
the Certificate Rate.
During each Interest Period, interest at the Certificate Rate shall
accrue daily and shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days.
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The Master Servicer shall calculate One-Month LIBOR on each Rate
Determination Date and shall notify the Eligible Lender Trustee and the
Indenture Trustee of One-Month LIBOR. The determination by the Master Servicer
of One-Month LIBOR shall (in the absence of manifest error) be final and binding
upon all parties.
ARTICLE VI
The Transferor and the Master Servicer
--------------------------------------
SECTION 6.1. Representations of Transferor and Master Servicer. The
Transferor and Master Servicer make the following representations with respect
to the Transferor and the Master Servicer, respectively, on which the Issuer is
deemed to have relied in acquiring (through the Eligible Lender Trustee) the
Financed Student Loans being conveyed pursuant to this Agreement. The
representations speak as of the Closing Date, in the case of the Initial
Financed Student Loans, and as of the applicable Exchange Date, in the case of
the Exchanged Student Loans transferred on such Exchange Date, but shall survive
the contribution, transfer and assignment of the Financed Student Loans to the
Eligible Lender Trustee on behalf of the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Each of the Transferor and
the Master Servicer is duly organized and validly existing as a
Virginia banking corporation with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, except for such power
and authority the absence of which would not have a material adverse
effect on the Master Servicer or Transferor, as the case may be, or
their respective ability to consummate the transactions contemplated by
the Basic Documents, and the Transferor had at all relevant times, and
has, the power, authority and legal right to originate, acquire and own
the Financed Student Loans and the Master Servicer had at all relevant
times, and has the power, authority and legal right to service the
Financed Student Loans.
(b) Due Qualification. The Master Servicer is duly qualified
to do business and has obtained all necessary licenses and approvals in
all jurisdictions in which the ownership and lease of property or the
conduct of its business (including the servicing of the Financed
Student Loans for which it acts as Primary Servicer as required by this
Agreement) shall require such qualifications except for such licenses
and approvals the absence of which would not have a material adverse
effect on the Master Servicer or its ability to consummate the
transactions contemplated by the Basic Documents.
(c) Power and Authority. Each of the Transferor and the Master
Servicer has the requisite corporate power and authority to execute and
deliver this Agreement and to carry out its terms; the Transferor has
requisite corporate power and authority to transfer and assign the
property to be contributed and assigned to and deposited with the
Issuer (or with the Eligible Lender Trustee on behalf of the Issuer)
and the Transferor has duly authorized such transfer and assignment to
the Issuer (or to the Eligible Lender Trustee on behalf of the Issuer)
by all necessary corporate action on Transferor's part; and the
execution, delivery and performance of this Agreement have been duly
authorized by the Transferor and the Master Servicer by all necessary
corporate action on their respective parts.
(d) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Transferor and the Master Servicer,
enforceable against the Transferor and the Master Servicer in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance and similar laws
relating to creditors' rights generally or the rights of creditors of
banks the deposit accounts of which are insured by the FDIC and subject
to general principles of equity.
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(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not violate, 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 charter or by-laws of the Transferor or the Master
Servicer, or any material indenture, material agreement or other
material instrument to which the Transferor or the Master Servicer is a
party or by which it shall be bound; or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any such material indenture, material agreement or other material
instrument (other than pursuant to the Basic Documents); nor violate
any material law or, to the knowledge of either the Transferor or the
Master Servicer, any material order, rule or regulation applicable to
it of any court or of any federal or State regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Transferor or the Master Servicer or its
properties.
(f) No Proceedings. To its best knowledge, there are no
proceedings or investigations pending or threatened against the
Transferor or the Master Servicer, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over it or its properties: (i) asserting the invalidity of
this Agreement, the Indenture or any of the other Basic Documents, the
Notes or the Certificates, (ii) seeking to prevent the issuance of the
Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of
the other Basic Documents, (iii) seeking any determination or ruling
that could reasonably be expected to have a material and adverse effect
on the performance by either the Transferor or the Master Servicer of
its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes
or the Certificates or (iv) seeking to affect adversely the federal or
State income tax attributes of the Issuer, the Notes or the
Certificates.
(g) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government
instrumentality required to be obtained, effected or given by either
the Transferor or the Master Servicer in connection with the execution
and delivery by either the Transferor or the Master Servicer of this
Agreement and the performance by either the Transferor or the Master
Servicer of the transactions expressly contemplated by this Agreement,
have been duly obtained, effected or given and are in full force and
effect, except such as may be required by the blue sky laws of any
jurisdiction in connection with the sale and distribution of the Notes
and the Certificates for which no representation or warranty is being
given.
(h) No Amendment or Waiver. Except as provided in Section
4.14, no provision of a Financed Student Loan has been waived, altered
or modified in any respect, except pursuant to a document, instrument
or writing included in the Financed Student Loan File, and no such
amendment, waiver, alteration or modification causes such Financed
Student Loan not to conform in any material respect to the other
warranties contained in this Section or those of the Transferor
contained in Section 3.1.
(i) Location of Financed Student Loan Files. The Financed
Student Loan Files are kept in accordance with Section 3.4(b).
SECTION 6.2. Existence. Except as permitted by Section 6.5, during the
term of this Agreement, each of the Transferor and the Master Servicer will keep
in full force and effect its existence, rights and franchises as a Virginia
banking corporation under the laws of the jurisdiction of its organization.
SECTION 6.3. Liability and Indemnities.
(a) Each of the Transferor and the Master Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor and the Master Servicer, as
the case may be, under this Agreement.
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(b) The Transferor shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee and the Indenture Trustee and
their officers, directors, employees and agents from and against any
taxes that may at any time be asserted against any such Person with
respect to the transactions contemplated herein (except (i) taxes
arising out of fees paid to the Eligible Lender Trustee or the
Indenture Trustee, (ii) taxes arising out of the transfer of the
Financed Student Loans to the Eligible Lender Trustee, (iii) taxes
arising out of the issuance and sale of the Certificates and the Notes,
(iv) taxes arising out of the ownership of the Financed Student Loans
(including, without limitation, income taxes), and (v) taxes arising
out of distributions on the Certificates and the Notes) and costs and
expenses in defending against the same).
(c) The Transferor shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, and the
Noteholders and the officers, directors, employees and agents of the
Issuer, the Eligible Lender Trustee and the Indenture Trustee from and
against any and all Indemnifiable Expenses arising out of, or imposed
upon such Person through, (i) the Transferor's willful misfeasance, bad
faith or negligence in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and
duties under this Agreement and (ii) the Transferor's or the Issuer's
violation of federal or State securities laws in connection with the
offering and sale of the Notes and the Certificates; provided, however,
the Transferor shall not be liable for any such Indemnifiable Expenses
imposed upon such Person to the extent that they arise out of or result
from such Person's negligence, willful malfeasance or bad faith or a
breach of the representations and warranties of such Person in this
Agreement. Notwithstanding anything to the contrary contained in this
Agreement, in no event shall the Transferor be liable under any theory
of tort, contract, strict liability or other legal or equitable theory
for any lost profits or exemplary, punitive, special, incidental,
indirect or consequential damages, each of which is hereby excluded by
agreement of the parties regardless of whether or not the Transferor
has been advised of the possibility of such damages.
(d) The Transferor shall indemnify, defend and hold harmless
the Eligible Lender Trustee, the Delaware Trustee and the officers,
directors, employees and agents of the Eligible Lender Trustee and the
Delaware Trustee from and against, Indemnifiable Expenses arising out
of, incurred in connection with or relating to the Trust Agreement, the
other Basic Documents, the Trust Estate, the acceptance or performance
of the trusts and duties set forth herein and in the Trust Agreement or
the action or the inaction of such Person hereunder and under the Trust
Agreement, except to the extent that such Indemnifiable Expenses: (i)
shall be due to the willful misfeasance, bad faith or negligence of
such Person, (ii) shall arise from any breach by such Person of its
covenants under any of the Basic Documents; or (iii) shall arise from
the breach by such Person of any of its representations or warranties
set forth in Section [[7.3]] of the Trust Agreement. Notwithstanding
anything to the contrary contained in this Agreement, in no event shall
the Transferor be liable under any theory of tort, contract, strict
liability or other legal or equitable theory for any lost profits or
exemplary, punitive, special, incidental, indirect or consequential
damages, each of which is hereby excluded by agreement of the parties
regardless of whether or not the Transferor has been advised of the
possibility of such damages.
(e) The Transferor shall pay any and all taxes levied or
assessed upon all or any part of the Trust Estate (other than those
taxes expressly excluded from the Transferor's responsibilities
pursuant to the parenthetical in paragraph (b) above).
(f) Pursuant to Section 6.7 of the Indenture, and subject to
the limitations therein, the Transferor shall pay reasonable
compensation to the Indenture Trustee and shall reimburse the Indenture
Trustee for all reasonable expenses, disbursements and advances, and
indemnify, defend and hold harmless the Indenture Trustee and its
officers, directors, employees and agents from and against all
Indemnifiable Expenses, to the extent and in the manner provided in the
Indenture. Notwithstanding anything to the contrary contained in this
Agreement, in no event shall the Transferor be liable under any theory
of tort, contract, strict liability or other legal or equitable theory
for any lost profits or exemplary, punitive,
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special, incidental, indirect or consequential damages, each of which
is hereby excluded by agreement of the parties regardless of whether or
not the Transferor has been advised of the possibility of such damages.
(g) The Master Servicer shall indemnify, defend and hold
harmless the Issuer, the Eligible Lender Trustee, the Delaware Trustee,
the Indenture Trustee, the Certificateholders, and the Noteholders and
the officers, directors, employees and agents of the Issuer, the
Eligible Lender Trustee, the Delaware Trustee and the Indenture Trustee
from and against any and all Indemnifiable Expenses arising out of, or
imposed upon such Person through, the Master Servicer's willful
misfeasance, bad faith or negligence in the performance of its duties
under this Agreement, where the final determination that any such loss,
liability or expense arose out of, or was imposed upon any such Person
through, any such negligence, willful misfeasance or bad faith on the
part of the Master Servicer is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Master Servicer;
provided, however, the Master Servicer shall not be liable for any such
Indemnifiable Expenses imposed upon such Person to the extent that they
arise out of or result from such Person's negligence, willful
malfeasance or bad faith or a breach of the representations and
warranties of such Person in this Agreement. Notwithstanding the
foregoing, if the Master Servicer is rendered unable, in whole or in
part, by a force outside the control of the Master Servicer (including
acts of God, acts of war, severe weather, communications failures or
failures to receive electronic data or labor disputes or strikes,
fires, earthquakes and other disasters) to satisfy its obligations
under this Agreement, the Master Servicer shall not be deemed to have
breached any such obligation upon delivery of written notice of such
event to the other parties hereto, for so long as the Master Servicer
remains unable to perform such obligation as a result of such event.
Notwithstanding anything to the contrary contained in this Agreement,
in no event shall the Master Servicer be liable under any theory of
tort, contract, strict liability or other legal or equitable theory for
any lost profits or exemplary, punitive, special, incidental, indirect
or consequential damages, each of which is hereby excluded by agreement
of the parties regardless of whether or not the Master Servicer has
been advised of the possibility of such damages.
(h) Indemnification under this Section shall survive the
resignation or removal of the Eligible Lender Trustee, the Delaware
Trustee or the Indenture Trustee and the termination of this Agreement
or the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and expenses of
litigation. If the Transferor or the Master Servicer, as the case may
be, shall have made any indemnity payments pursuant to this Section and
the Person to or on behalf of whom such payments are made thereafter
shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Transferor or the Master Servicer,
as the case may be without interest.
(i) Promptly after receipt by an indemnified party under this
Section 6.3 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 6.3, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under Section
6.3., except to the extent the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on
behalf of the indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 6.3 for any legal or other
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expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
In no event shall the indemnifying party be liable for fees and
expenses for more than one counsel separate from their own counsel for
all indemnified parties in connection with any one action or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances. An indemnifying party will not, without
the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
The indemnified party will not, without the prior written
consent of the indemnifying party, settle, compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in which indemnification may be sought
hereunder.
SECTION 6.4. [Reserved]
SECTION 6.5. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor, the Administrator or the Master Servicer. Any
Person (a) into which the Transferor, the Administrator or the Master Servicer,
as the case may be, may be merged or consolidated, (b) which may result from any
merger or consolidation to which the Transferor, the Administrator or the Master
Servicer, as the case may be, shall be a party or (c) which may succeed to the
properties and assets of the Transferor, the Administrator or the Master
Servicer, as the case may be, substantially as a whole, shall be the successor
to the Transferor, the Administrator or the Master Servicer, as the case may be,
without the execution or filing of any document or any further act by any of the
parties to this Agreement or the Administration Agreement; PROVIDED, HOWEVER,
that each of the Transferor, the Administrator and the Master Servicer hereby
covenants that it will not consummate any of the foregoing transactions except
upon satisfaction of the following: (i) the surviving Transferor, Administrator
or Master Servicer, as the case may be, if other than Crestar Bank or a Crestar
Subsidiary or Crestar Financial Corporation, executes an agreement of assumption
to perform every obligation of the Transferor, the Administrator or the Master
Servicer, as the case may be, under this Agreement and the Administration
Agreement, (ii) immediately after giving effect to such transaction, no Master
Servicer Default (in the case of the Master Servicer) or no Administrator
Default (in the case of the Administrator) shall have occurred and be
continuing, (iii) the Transferor, the Administrator or the Master Servicer, as
the case may be, if other than Crestar Bank or a Crestar Subsidiary or Crestar
Financial Corporation shall have delivered to the Eligible Lender Trustee and
the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, (iv) such transaction will not result in a material adverse federal or
State tax consequence to the Issuer relating to its tax classification, or to
the Noteholders, considered as a whole, relating to a change in the
characterization of the Notes and (v) unless "Crestar Bank" is the name of the
surviving entity, the Transferor, the Administrator or the Master Servicer, as
the case may be, shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and Indenture
Trustee, respectively, in the Financed Student Loans, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
protect such interests. Nothing in this Agreement or any other Basic Document
shall be deemed to restrict or prohibit, and no consent of Noteholders or
Certificateholders, supplemental agreement, Officer's Certificate (except to the
extent provided in clause [[(12)]] below of this Section 6.5) or Opinion of
Counsel (except to the extent provided in clause (v) above of this Section 6.5)
shall be required in the case of, the merger of a Crestar Subsidiary with a
Crestar Subsidiary or Crestar Financial Corporation, the consolidation of a
Crestar Subsidiary and a Crestar Subsidiary or Crestar Financial Corporation, or
the sale or other disposition of all or substantially all of the assets of a
Crestar Subsidiary to another Crestar Subsidiary or Crestar Financial
Corporation, if, in any such case in which the surviving, resulting or
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acquiring entity is not Crestar Financial Corporation, Crestar Financial
Corporation would own, directly or indirectly, at least eighty percent (80%) of
the voting securities of the Crestar Subsidiary surviving such merger, resulting
from such consolidation or acquiring such assets. For the purpose of this
Section 6.5, "Crestar Subsidiary" means each of (l) Crestar Bank, (2) [_______]
[[(__)]] any other banking subsidiaries of Crestar Financial Corporation the
consolidated assets of which constitute twenty percent (20%) or more of the
consolidated assets of Crestar Financial Corporation and its consolidated
subsidiaries, [[(__)]] any other banking subsidiary of Crestar Financial
Corporation designated as a Crestar Subsidiary pursuant to a Board Resolution
and set forth in an Officer's Certificate delivered to the Eligible Lender
Trustee and the Indenture Trustee, and [[(13)]] any subsidiary of Crestar
Financial Corporation that owns, directly or indirectly any voting securities,
or options, warrants or rights to subscribe for or purchase voting securities of
any Crestar Subsidiary under clauses (l) through [[(__)]], and in the case of
each of clauses (1) through [[(__)]] their respected successors (whether by
consolidation, merger, conversion, transfer of substantially all their assets
and business or otherwise) so long as any successor is a banking subsidiary (in
the case of clauses 1 through [[__]])) or a subsidiary (in the case of clause
[[(13)]]) of Crestar Financial Corporation. References to Crestar Financial
Corporation include any name change. "Board Resolution" means a copy of a
resolution certified by the Secretary or any Assistant Secretary of Crestar
Financial Corporation to have been duly adopted by the Board of Directors of
Crestar Financial Corporation, or such committee of the Board of Directors or
officers of Crestar Financial Corporation to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the Eligible Lender Trustee and
the Indenture Trustee.
SECTION 6.6. Limitation on Liability of Transferor, Master Servicer
and Others.
(a) The Transferor, the Master Servicer and any director or
officer or employee or agent of either may rely in good faith on the
advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising
hereunder.
(b) Neither the Transferor, the Master Servicer nor any of its
directors, officers, employees or agents shall be under any liability
to the Issuer, the Noteholders, the Certificateholders, the Indenture
Trustee or the Eligible Lender Trustee except as provided under this
Agreement or the Administration Agreement for any action taken or for
refraining from the taking of any action pursuant to this Agreement or
for errors in judgment; PROVIDED, HOWEVER, that this provision shall
not protect the Transferor or Master Servicer or any such person
against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith or negligence in the performance of
their respective duties under this Agreement or the Administration
Agreement.
Except as provided in this Agreement, the Transferor and the
Master Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that shall not be incidental to
its duties in accordance with this Agreement, and that in its opinion
may involve it in any expense or liability; PROVIDED, HOWEVER, that the
Transferor or the Master Servicer may undertake any reasonable action
that it may deem necessary or desirable in respect of this Agreement
and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of
the Certificateholders under this Agreement or the Administration
Agreement and the Noteholders under the Indenture.
SECTION 6.7. Transferor May Own Certificate or Notes. The Transferor
and any Affiliate thereof may in its individual or any other capacity become the
owner or pledgee of Certificates or Notes with the same rights as it would have
if it were not the Transferor or an Affiliate thereof, except as expressly
provided herein or in any other Basic Document.
SECTION 6.8. Master Servicer Not to Resign. Subject to the provisions
of Section 6.5, Crestar Bank shall not resign from the obligations and duties
imposed on it as Master Servicer under this Agreement except upon (i)
determination that the performance of its duties under this Agreement shall no
longer be permissible under
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applicable law or shall violate any final order of a court or administrative
agency with jurisdiction over it or its properties, or (ii) satisfaction of a
Rating Agency Condition with respect to such resignation. Notice of any such
determination permitting resignation shall be communicated to the Eligible
Lender Trustee and the Indenture Trustee at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Eligible Lender Trustee and
the Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Master Servicer shall have assumed the responsibilities and obligations of
Crestar Bank in accordance with Section 8.2.
ARTICLE VII
The Administrator
-----------------
SECTION 7.1. Representations of the Administrator. The Administrator
makes the following representations on which the Issuer is deemed to have relied
in acquiring (through the Eligible Lender Trustee) the Financed Student Loans
being conveyed pursuant to this Agreement. The representations speak as of the
Closing Date, in the case of the Initial Financed Student Loans, and as of the
applicable Exchange Date, in the case of the Exchanged Student Loans being
transferred on such Exchange Date, but shall survive the contribution, transfer
and assignment of the Financed Student Loans to the Eligible Lender Trustee on
behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to
the Indenture.
(a) Organization and Good Standing. The Administrator is duly
organized and validly existing as a Virginia banking corporation with
the power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted except for such power and authority the absence of
which would not have a material adverse effect on the Administrator or
its ability to consummate the transactions contemplated by the Basic
Documents, and had at all relevant times, and has, the power, authority
and legal right, to administer the Financed Student Loans.
(b) Power and Authority of the Administrator. The
Administrator has the requisite corporate power and authority to
execute and deliver this Agreement and the Administration Agreement and
to carry out their respective terms; and the execution, delivery and
performance of this Agreement and the Administration Agreement have
been duly authorized by the Administrator by all necessary corporate
action on its part.
(c) Binding Obligation. This Agreement and the Administration
Agreement each constitutes a legal, valid and binding obligation of the
Administrator, enforceable against the Administrator in accordance with
its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance and similar laws relating to
creditors' rights generally or the rights of creditors of banks the
deposit accounts of which are insured by the FDIC or and subject to
general principles of equity.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the Administration Agreement and the
fulfillment of the terms hereof or thereof do not violate, result in
any breach of any of the terms and provisions of, nor constitute (with
or without notice of lapse of time or both) a default under, the
charter or by-laws of the Administrator, or any material indenture,
material agreement or other material instrument to which the
Administrator is a party or by which it shall be bound; nor result in
the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such material indenture, material
agreement or other material instrument (other than pursuant to the
Basic Documents); nor violate any material law or, to the knowledge of
the Administrator, any material order, rule or regulation applicable to
it of any court or of any federal or State regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Administrator or its properties.
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(e) No Proceedings. To its best knowledge, there are no
proceedings or investigations pending or threatened against the
Administrator, before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over it or
its properties: (i) asserting the invalidity of this Agreement or the
Administration Agreement, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or the
Administration Agreement or (iii) seeking any determination or ruling
that could reasonably be expected to have a material and adverse effect
on the performance by the Administrator, of its obligations under, or
the validity or enforceability of, this Agreement or the Administration
Agreement.
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government
instrumentality required to be obtained, effected or given by the
Administrator in its capacity as the Administrator in connection with
the execution and delivery by the Administrator of this Agreement or
the Administration Agreement and the performance by the Administrator
in its capacity as the Administrator of the transactions contemplated
by this Agreement or the Administration Agreement, have been duly
obtained, effected or given and are in full force and effect.
SECTION 7.2. Liability and Indemnities.
(a) The Administrator shall be liable in accordance herewith
only to the extent of the obligations specifically undertaken by the
Administrator under this Agreement or the Administration Agreement. The
Administrator and any of its directors, officers, employees or agents
may rely in good faith on the advice of counsel or on any document of
any kind, prima facie properly executed and submitted by any Person.
Except as provided in this Agreement or the Administration
Agreement, the Administrator shall not be under any obligation to
appear in, prosecute or defend any legal action that shall not be
incidental to its duties to administer the Financed Student Loans and
the Trust in accordance with this Agreement and the Administration
Agreement, and that in its opinion may involve it in any expense or
liability; PROVIDED, HOWEVER, that the Administrator may undertake any
reasonable action that it may deem necessary or desirable in respect of
this Agreement and the other Basic Documents and the rights and duties
of the parties to this Agreement and the other Basic Documents and the
interests of the Certificateholders under this Agreement and the
Noteholders under the Indenture.
(b) The Administrator shall indemnify, defend and hold
harmless from its funds, the Issuer, the Eligible Lender Trustee, the
Delaware Trustee, the Indenture Trustee, the Master Servicer, the
Noteholders and the Certificateholders and the officers, directors,
employees and agents of the Issuer, the Eligible Lender Trustee, the
Delaware Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any and all Indemnifiable Expenses
arising out of, or imposed upon such Person through, the
Administrator's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement or the Administration
Agreement, or by reason of reckless disregard of its obligations and
duties under this Agreement or the Administration Agreement, where the
final determination that any such loss, liability or expense arose out
of, or was imposed upon any such Person through, any such negligence,
willful misfeasance or bad faith on the part of the Administrator is
established by a court of law, by an arbitrator or by way of settlement
agreed to by the Administrator. Notwithstanding the foregoing, if the
Administrator is rendered unable, in whole or in part, by a force
outside the control of the Administrator (including acts of God, acts
of war, severe weather, communications failures or failures to receive
electronic data or labor disputes or strikes, fires, earthquakes and
other disasters) to satisfy its obligations under this Agreement, the
Administrator shall not be deemed to have breached any such obligation
upon delivery of written notice of such event to the other parties
hereto, for so long as the Administrator remains unable to perform such
obligation as a result of such event; provided, however, the
Administrator shall not be liable for any such Indemnifiable Expenses
imposed upon such Person to the extent that they arise out of or result
from such Person' s negligence, willful malfeasance or bad faith or a
breach of the
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representations and warranties of such Person in this Agreement or the
Administration Agreement. Notwithstanding anything to the contrary
contained in this Agreement or the Administration Agreement, in no
event shall the Administrator be liable under any theory of tort,
contract, strict liability or other legal or equitable theory for any
lost profits or exemplary, punitive, special, incidental, indirect or
consequential damages, each of which is hereby excluded by agreement of
the parties regardless of whether or not the Administrator has been
advised of the possibility of such damages.
(c) Indemnification under this Section shall survive the
resignation or removal of the Eligible Lender Trustee, the Delaware
Trustee or the Indenture Trustee and the termination of this Agreement
or the Indenture or the Trust Agreement, as applicable, and shall
include reasonable fees and expenses of counsel and expenses of
litigation. If the Administrator shall have made any indemnity payments
pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the
Administrator without interest.
(d) Promptly after receipt by an indemnified party under this
Section 7.2 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7.2, notify the
indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise than under Section
7.2., except to the extent the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified
party; provided, however, that if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, the indemnifying party or parties
shall have the right to select separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on
behalf of the indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable
to such indemnified party under this Section 7.2 for any legal or other
expenses subsequently incurred by such indemnified party in connection
with the defense thereof other than reasonable costs of investigation.
In no event shall the indemnifying party be liable for fees and
expenses for more than one counsel separate from their own counsel for
all indemnified parties in connection with any one action or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances. An indemnifying party will not, without
the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
The indemnified party may not, without the prior written
consent of the indemnifying party, settle, compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in which indemnification may be sought
hereunder.
SECTION 7.3. Administrator Not to Resign. Subject to the provisions of
Section 6.5, Crestar Bank shall not resign from the obligations and duties
imposed on it as Administrator under this Agreement except upon (i)
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law or shall violate any final order of a
court or administrative agency with jurisdiction over it or its properties, or
(ii) satisfaction of a Rating Agency Condition with respect to such resignation.
Notice of any such
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determination permitting resignation shall be communicated to the Eligible
Lender Trustee and the Indenture Trustee at the earliest practicable time (and,
if such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Eligible Lender Trustee and
the Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Administrator shall have assumed the responsibilities and obligations of Crestar
Bank in accordance with Section 8.2.
SECTION 7.4. Additional Services. Notwithstanding anything in the
Administration Agreement to the contrary, the Administrator is authorized and
directed to prepare, execute on behalf of the Trust in its capacity as
Administrator, and file any and all reports required to be filed under the
Exchange Act by the Trust as a result of the registration of the Notes under the
Securities Act. The Trust hereby ratifies and confirms as actions of the Trust
the execution by the Administrator on behalf of the Trust of the Registration
Statement on Form S-3, Registration No. 333-35825-__, and each amendment
thereto, and any related correspondence with Securities and Exchange Commission,
the Current Report on Form 8-K dated as of [________], 1997, and the Letter of
Representations to The Depository Trust Company with respect to the Notes.
ARTICLE VIII
Default
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SECTION 8.1. Master Servicer Default; Administrator Default.
-----------------------------------------------
(a) If any one of the following events (a "Master Servicer Default")
shall occur and be continuing:
(1) any failure by the Master Servicer to deliver to
the Indenture Trustee for deposit in any of the Trust Accounts
at the time required for such deposit any collections,
Guarantee Payments, Insurance Payments or other amounts
received by the Master Servicer with respect to the Financed
Student Loans, which failure continues unremedied for three
Business Days after written notice of such failure is received
by the Master Servicer from the Eligible Lender Trustee, the
Indenture Trustee or the Administrator or after discovery of
such failure by an officer of the Master Servicer; or
(2) any failure by the Master Servicer duly to
observe or to perform in any material respect any other
covenants or agreements of the Master Servicer set forth in
this Agreement or any other Basic Document, which failure
shall (i) materially and adversely affect the rights of
Noteholders and Certificateholders and (ii) continue
unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Master Servicer by
the Indenture Trustee, the Eligible Lender Trustee, or the
Administrator or (B) to the Master Servicer and to the
Indenture Trustee and the Eligible Lender Trustee by the
holders of Directing Notes, representing not less than 25% of
the Outstanding Amount of the Directing Notes or
(3) an Insolvency Event occurs with respect to the
Master Servicer; or
(4) any limitation, suspension or termination by the
Department of Education or the Department of HHS of the Master
Servicer's eligibility to service Student Loans which
materially and adversely affects the Master Servicer's ability
to service the Financed Student Loans;
then, and in each and every case, so long as the Master Servicer
Default shall not have been remedied, the Indenture Trustee or the
holders of Directing Notes evidencing not less than 25% of the
Outstanding Amount of the Directing Notes, by notice then given in
writing to the Master Servicer (and to the Indenture
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Trustee and the Eligible Lender Trustee if given by the Noteholders)
may terminate all the rights and obligations (other than the
obligations set forth in Section 6.3 hereof) of the Master Servicer
under this Agreement. On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Notes, the
Certificates or the Financed Student Loans or otherwise, shall, without
further action, pass to and be vested in the Indenture Trustee or such
successor Master Servicer as may be appointed under Section 8.2, and,
without limitation, the Indenture Trustee and the Eligible Lender
Trustee are hereby authorized and empowered to execute and deliver, for
the benefit of the predecessor Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Financed Student Loans and related
documents, or otherwise. The predecessor Master Servicer shall
cooperate with the successor Master Servicer, the Indenture Trustee and
the Eligible Lender Trustee in effecting the termination of the
responsibilities and rights of the predecessor Master Servicer under
this Agreement, including the transfer to the successor Master Servicer
for administration by it of all cash amounts that shall at the time be
held by the predecessor Master Servicer for deposit, or shall
thereafter be received by it with respect to a Financed Student Loan.
All reasonable costs and expenses (including attorneys' fees) incurred
in connection with transferring the Financed Student Loan Files from a
current Master Servicer to the successor Master Servicer and amending
this Agreement and any other Basic Documents to reflect such succession
as Master Servicer pursuant to this Section shall be paid by the
predecessor Master Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Master Servicer Default, the Eligible Lender Trustee
shall give notice thereof to the Rating Agencies.
Notwithstanding the termination of the Master Servicer and the
engagement of a successor Master Servicer, each Servicer shall continue
to serve in its capacity as Servicer or subservicer, unless it is in
breach of the related Servicing or Subservicing Agreement.
(b) Administrator Default. If any one of the following events
(an "Administrator Default") shall occur and be continuing:
(1) any failure by the Administrator to direct the
Indenture Trustee or the Eligible Lender Trustee, as
applicable, to make any required distributions from any of the
Trust Accounts, which failure continues unremedied for three
Business Days after written notice of such failure is received
by the Administrator from the Indenture Trustee or the
Eligible Lender Trustee or after discovery of such failure by
an officer of the Administrator; or
(2) any failure by the Administrator duly to observe
or to perform in any material respect any other covenants or
agreements of the Administrator set forth in this Agreement,
the Administration Agreement or any other Basic Document,
which failure shall (i) materially and adversely affect the
rights of Noteholders and (ii) continue unremedied for a
period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have
been given (A) to the Administrator by the Indenture Trustee
or the Eligible Lender Trustee or (B) to the Administrator and
to the Indenture Trustee and the Eligible Lender Trustee by
the holders of Directing Notes representing not less than 25%
of the Outstanding Amount of the Directing Notes;
(3) an Insolvency Event occurs with respect to the
Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, the Indenture Trustee or the holders of Directing Notes
evidencing not less than 25% of the Outstanding Amount of the Directing Notes,
by notice then given in writing to the Administrator (and to the Indenture
Trustee and the Eligible Lender Trustee if given by the Noteholders) may
terminate all the rights and obligations (other than the obligations set forth
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in Sections 6.3 and 7.2 hereof) of the Administrator under this Agreement and
the Administration Agreement. On or after the receipt by the Administrator of
such written notice, all authority and power of the Administrator under this
Agreement and the Administration Agreement, whether with respect to the Notes,
the Certificates or the Financed Student Loans or otherwise, shall, without
further action, pass to and be vested in the Indenture Trustee or such successor
Administrator as may be appointed under Section 8.2; and, without limitation,
the Indenture Trustee and the Eligible Lender Trustee are hereby authorized and
empowered to execute and deliver, for the benefit of the predecessor
Administrator, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination. The
predecessor Administrator shall cooperate with the successor Administrator, the
Indenture Trustee and the Eligible Lender Trustee in effecting the termination
of the responsibilities and rights of the predecessor Administrator under this
Agreement and the Administration Agreement. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with amending this Agreement
and the Administration Agreement to reflect such succession as Administrator
pursuant to this Section shall be paid by the predecessor Administrator upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of an Administrator Default, the Eligible
Lender Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.2. Appointment of Successor.
(a) Upon receipt by the Master Servicer or the Administrator,
as the case may be, of notice of termination pursuant to Section 8.1,
or the resignation by the Master Servicer or the Administrator, as the
case may be, in accordance with the terms of this Agreement, the
predecessor Master Servicer or the Administrator, as the case may be,
shall continue to perform its functions as Master Servicer or
Administrator, as the case may be, under this Agreement and the
Administration Agreement, as the case may be, in the case of
termination, only until the date specified in such termination notice
or, if no such date is specified in a notice of termination, until
receipt of such notice and, in the case of resignation, until the later
of (x) the date 120 days from the delivery to the Eligible Lender
Trustee and the Indenture Trustee of written notice of such resignation
(or written confirmation of such notice) in accordance with the terms
of this Agreement and (y) the date upon which the predecessor Master
Servicer or Administrator, as the case may be, shall become unable to
act as Master Servicer or Administrator, as the case may be, as
specified in the notice of resignation and accompanying Opinion of
Counsel. In the event of the termination hereunder of the Master
Servicer or the Administrator, as the case may be, the Issuer shall
appoint a successor Master Servicer or Administrator, as the case may
be, acceptable to the Indenture Trustee, and the successor Master
Servicer or Administrator, as the case may be, shall accept its
appointment by a written assumption in form acceptable to the Indenture
Trustee. If a successor Master Servicer or Administrator, as the case
may be, has not been appointed at the time when the predecessor Master
Servicer or Administrator, as the case may be, has ceased to act as
Master Servicer or Administrator, as the case may be, in accordance
with this Section, the Indenture Trustee without further action shall
automatically be appointed the successor Master Servicer or
Administrator, as the case may be, and the Indenture Trustee shall be
entitled to the Master Servicing Fee or the Administration Fee, as the
case may be in accordance with the provisions of the Basic Documents.
Notwithstanding the above, the Indenture Trustee shall, if it shall be
unwilling or legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established institution whose
regular business shall include the servicing of student loans, as the
successor to the Master Servicer or Administrator, as the case may be,
under this Agreement; PROVIDED, HOWEVER, that such right to appoint or
to petition for the appointment of any such successor servicer shall in
no event relieve the Indenture Trustee from any obligations otherwise
imposed on it under the Basic Documents until such successor has in
fact assumed such appointment.
(b) Upon appointment, the successor Master Servicer or
Administrator, as the case may be (including the Indenture Trustee
acting as successor Master Servicer or Administrator as the case may
be), shall be the successor in all respects to the predecessor Master
Servicer or Administrator, as the case may be, and shall be subject to
all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Master Servicer or
Administrator, as the case may be, and shall be entitled to
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an amount agreed to by such successor Master Servicer or Administrator
as the case may be, in accordance with the provisions of the Basic
Documents (which shall not exceed the Master Servicing Fee or
Administration Fee, as the case may be, unless such compensation
arrangements will not result in a downgrading of the Notes by any
Rating Agency) and all the rights granted to the predecessor Master
Servicer or Administrator, as the case may be, by the terms and
provisions of this Agreement.
(c) Neither the Master Servicer nor the Administrator may
resign unless it is prohibited from serving as such by law as evidenced
by an Opinion of Counsel to such effect delivered to the Indenture
Trustee and the Eligible Lender Trustee. Notwithstanding the foregoing
or anything to the contrary herein or in the other Basic Documents, the
Indenture Trustee, to the extent it is acting as successor Master
Servicer or Administrator, as the case may be, pursuant hereto shall be
entitled to resign to the extent a qualified successor Master Servicer
or Administrator, as the case may be, has been appointed and has
assumed all the obligations of the Master Servicer or Administrator, as
the case may be, in accordance with the terms of this Agreement and the
other Basic Documents.
(d) Any successor Master Servicer shall assume all the
obligations and responsibilities of the Master Servicer under each
Subservicing Agreement with a Servicer and shall only be able to modify
or terminate such Subservicing Agreements pursuant to the provisions
thereof.
SECTION 8.3. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Master Servicer or
Administrator, as the case may be, pursuant to this Article VIII, the Eligible
Lender Trustee shall give prompt written notice thereof to Certificateholders
and the Indenture Trustee shall give prompt written notice thereof to
Noteholders and the Rating Agencies (which, in the case of any such appointment
of a successor, shall consist of prior written notice thereof to the Rating
Agencies).
SECTION 8.4. Waiver of Past Defaults. The holders of Directing Notes
evidencing not less than a majority of the Outstanding Amount of the Directing
Notes may, on behalf of all Noteholders and Certificateholders, waive in writing
any default by the Master Servicer or Administrator, as the case may be, in the
performance of its obligations hereunder and any consequences thereof, except a
default in making any required payments from any of the Trust Accounts (or
giving instructions regarding the same) in accordance with this Agreement. Upon
any such waiver of a past default, such default shall cease to exist, and any
Master Servicer Default or Administrator Default, as the case may be, arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE IX
Termination
-----------
SECTION 9.1. Termination.
(a) Optional Purchase of All Financed Student Loans. As of the
last day of any Collection Period immediately preceding a Quarterly
Distribution Date as of which the then outstanding Pool Balance is 10%
or less of the Initial Pool Balance, the Transferor shall have the
option to purchase the Indenture Trust Estate, other than the Trust
Accounts. To exercise such option, the Transferor shall deposit
pursuant to Section 5.4 in the Collection Account an amount equal to
the aggregate Purchase Amount for the Financed Student Loans and the
related rights with respect thereto, plus the appraised value of any
such other property held by the Trust, such value to be determined by
an appraiser mutually agreed upon by the Transferor, the Eligible
Lender Trustee and the Indenture Trustee, and shall succeed to all
interests in and to the Trust; PROVIDED, HOWEVER, that the Transferor
may not effect such purchase if the aggregate Purchase Amount to be so
deposited in the Collection Account does not equal or exceed an amount
equal to the sum of (x) the unpaid principal balance of the Notes plus
accrued and unpaid interest thereon at the related Class
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Interest Rate to the last day of the Collection Period during which
such purchase occurs and (y) the unpaid Transaction Fees, if any.
(b) Auction of Financed Student Loans. Any Financed Student
Loans remaining in the Trust as of the end of [________], 2006 will be
offered for sale by the Indenture Trustee on or prior to the [October
2006] Distribution Date if the then outstanding Pool Balance is 10% or
less of the Initial Pool Balance. The Transferor, its Affiliates and
unrelated third parties may offer bids to purchase such Financed
Student Loans on or prior to such Distribution Date. If at least two
bids are received, the Indenture Trustee will accept the highest bid
equal to or in excess of the greater of (x) the aggregate Purchase
Amounts of such Financed Student Loans as of the end of the Collection
Period immediately preceding such Distribution Date or (y) an amount
that would be sufficient to (i) reduce the outstanding principal amount
of the Notes on such Distribution Date to zero and (ii) pay to the
Noteholders the Noteholders' Interest Distribution Amount payable on
such Distribution Date (the "Minimum Purchase Price"). If at least two
bids are not received or the highest bid is not equal to or in excess
of the Minimum Purchase Price, the Indenture Trustee will not
consummate such sale. The proceeds of any such sale will be used to
redeem any outstanding Notes on such Distribution Date. The proceeds of
any sale will be applied in the order and priority set forth in 5.4(b)
of the Indenture. If the sale is not consummated in accordance with the
foregoing, the Indenture Trustee may, but shall not be under any
obligation to, solicit bids to purchase the Financed Student Loans on
future Distribution Dates upon terms similar to those described above.
(c) Insolvency of Transferor . Upon any sale of the assets of
the Trust pursuant to Section [[9.2]] of the Trust Agreement, the
Master Servicer shall instruct the Indenture Trustee to deposit the net
proceeds from such sale after all payments and reserves therefrom
(including the expenses of such sale) have been made (the "Insolvency
Proceeds") in the Collection Account. On the applicable Distribution
Date, or, if such proceeds are not so deposited on a Distribution Date,
on the first Distribution Date following the date on which the
Insolvency Proceeds are deposited in the Collection Account, the Master
Servicer shall instruct the Indenture Trustee to make the following
distributions (after the application on such Distribution Date of the
amount of Available Funds and amounts on deposit in the Reserve Account
pursuant to Sections 5.5 (other than pursuant to Section 5.5(a) (ii))
and 5.6) from the Insolvency Proceeds and any funds remaining on
deposit in the Reserve Account (including the proceeds of any sale of
investments therein as described in the following sentence):
(i) to the Department of Education, the Indenture
Trustee, the Delaware Trustee and the Eligible Lender Trustee,
any unpaid Consolidation Loan Fees, Indenture Trustee Fees,
Delaware Trustee Fees and Eligible Lender Trustee Fees,
respectively, and other amounts owed the Indenture Trustee,
the Delaware Trustee or the Eligible Lender Trustee hereunder
or under any other Basic Document and not otherwise paid on
such Distribution Date;
(ii) to each Class of Class A Noteholders, pro rata
based upon the portion thereof allocable to each such Class,
any portion of the Noteholders' Interest Distribution Amount
applicable to the Class A Noteholders not otherwise
distributed to such Class A Noteholders on such Distribution
Date;
(iii) to each Class of Class A Noteholders, pro rata
based upon the Outstanding Amount of such Class (after giving
effect to the reduction in the Outstanding Amount of such
Class resulting from the distributions to such Class on such
Distribution Date and on prior Distribution Dates) until the
Outstanding Amount of each Class of Class A Notes has been
reduced to zero;
(iv) to the Class B Noteholders, any portion of the
Noteholders' Interest Distribution Amount applicable to the
Class B Noteholders not otherwise distributed to the Class B
Noteholders on such Distribution Date;
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(v) after the Outstanding Amount of the Class A Notes
has been reduced to zero, to the Class B Noteholders, the
Outstanding Amount of the Class B Notes (after giving effect
to the reduction in the Outstanding Amount of the Notes
resulting from the distributions to Noteholders on such
Distribution Date and on prior Distribution Dates);
(vi) to the Master Servicer, any unpaid Servicing Fee
and other amounts owed to the Master Servicer hereunder or
under any other Basic Document and not otherwise paid on such
Distribution Date;
(vii) to the Class A-1 Noteholders and the Class A-2
Noteholders, any portion of the Noteholders' Interest
Carryover applicable to any such Class, pro rata based upon
the portion thereof allocable to each such Class not otherwise
distributed to the Class A Noteholders on such Distribution
Date;
(viii) to the Class B Noteholders, any portion of the
Noteholders' Interest Carryover applicable to the Class B
Noteholders not otherwise distributed to the Class B
Noteholders on such Distribution Date;
(ix) to the Certificateholders, any portion of the
Certificateholders' Interest Distribution amount not otherwise
distributed to the Certificateholders on such Distribution
Date; and
(x) to the Certificateholders, the Certificate
Balance (after giving effect to the reduction in the
Certificate Balance to result from the distributions to
Certificateholders on such Distribution Date).
Any investments on deposit in the Reserve Account which will not mature
on or before the Distribution Date when needed shall be sold by the
Indenture Trustee at such time as will result in the Indenture Trustee
receiving the proceeds from such sale not later than the Business Day
preceding such Distribution Date. Any Insolvency Proceeds remaining
after the deposits described above shall be paid to the Transferor.
(d) Notice. Notice of any termination of the Trust shall be
given by the Administrator to the Master Servicer, the Eligible Lender
Trustee, the Indenture Trustee and the Rating Agencies as soon as
practicable after the Administrator has received notice thereof.
(e) Succession. Following the satisfaction and discharge of
the Indenture and the payment in full of the principal of and interest
on the Notes, the Certificateholders will succeed to the rights of the
Noteholders hereunder other than Section 5.6(b) and the Eligible Lender
Trustee will succeed to the rights of, and assume the obligations of,
the Indenture Trustee pursuant to this Agreement and any other Basic
Documents.
ARTICLE X
[Reserved]
----------
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ARTICLE XI
Miscellaneous
-------------
SECTION 11.1. Amendment.
(a) This Agreement may be amended by the Transferor, the
Master Servicer and the Eligible Lender Trustee, with the prior consent
of the Indenture Trustee (which consent shall not be unreasonably
withheld) 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 delivered
to the Eligible Lender Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder.
(b) This Agreement may also be amended from time to time by
the Transferor, the Master Servicer and the Eligible Lender Trustee,
with the prior consent of the Indenture Trustee and the consent of the
holders of Directing Notes evidencing not less than a majority of the
Outstanding Amount of the Directing Notes, 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 (i) increase or reduce in any manner the amount
of, or accelerate or delay the timing of, collections of payments with
respect to Financed Student Loans or distributions that shall be
required to be made for the benefit of the Noteholders or the
Certificateholders or (ii) reduce the aforesaid percentage of the
Outstanding Amount of the Notes and the Certificate Balance, the
Noteholders and the Certificateholders of which are required to consent
to any such amendment, without the consent of all outstanding
Noteholders and Certificateholders affected thereby.
(c) Promptly after the execution of any amendment pursuant to
clause (ii) above, the Eligible Lender Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee.
(d) It shall not be necessary for the consent of
Certificateholders or Noteholders 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.
(e) Prior to the execution of any amendment to this Agreement,
the Eligible Lender Trustee and the Indenture Trustee shall be entitled
to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this
Agreement and the Opinion of Counsel referred to in Section 11.2(i)(l).
The Eligible Lender Trustee and the Indenture Trustee may, but shall
not be obligated to, enter into any such amendment which affects the
Eligible Lender Trustee's or the Indenture Trustee's, as applicable,
own rights, duties or immunities under this Agreement or otherwise.
Notwithstanding anything to the contrary contained in this Section
11.1, neither this Agreement nor the Indenture may be amended unless such
amendment satisfies the Rating Agency Condition.
SECTION 11.2. Protection of Interests in Trust.
(a) The Transferor shall execute and file such financing
statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by
law fully to preserve, maintain, and protect the interest of the
Issuer, the Eligible Lender Trustee and the Indenture Trustee in the
Financed Student Loans and in the proceeds thereof. The Transferor
shall deliver (or cause to be delivered) to the Eligible Lender Trustee
and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available
following such filing.
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(b) Neither the Transferor nor the Master Servicer shall
change its name, identity or corporate structure in any manner that
would, could or might make any financing statement or continuation
statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of ss. 9-402(7) of the UCC, unless it
shall have given the Eligible Lender Trustee and the Indenture Trustee
at least five days' prior written notice thereof and shall have
promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Transferor and the Master Servicer shall have
an obligation to give the Eligible Lender Trustee and the Indenture
Trustee at least 30 days' prior written notice of any relocation of its
principal executive office if, as a result of such relocation, the
applicable provisions of the UCC would require the filing of any
amendment of any previously filed financing or continuation statement
or of any new financing statement and shall promptly file any such
amendment. The Master Servicer shall at all times maintain each office
from which it shall service Financed Student Loans, and its principal
executive office, within the United States of America.
(d) The Master Servicer shall maintain, or cause the Servicers
to maintain, accounts and records as to each Financed Student Loan for
which it is the Primary Servicer (or provide access to such accounts
and records being serviced by a Servicer) accurately and in sufficient
detail to permit (i) the reader thereof to know at any time the status
of such Financed Student Loan, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation
between payments or recoveries on (or with respect to) each Financed
Student Loan and the amounts from time to time deposited in the
Collection Account in respect of such Financed Student Loan.
(e) The Master Servicer shall cause each Subcustodian to
maintain its computer systems so that, from and after the time of
transfer under this Agreement of the Financed Student Loans, each
Subcustodian's master computer records (including any backup archives)
that refer to a Financed Student Loan shall indicate clearly the
interest of the Issuer and the Indenture Trustee in such Financed
Student Loan and that such Financed Student Loan has been assigned by
the Transferor to the Issuer and has been pledged to the Indenture
Trustee. Indication of the Issuer's and the Indenture Trustee's
interest in a Financed Student Loan shall be deleted from or modified
on the applicable Subcustodian's computer systems when, and only when,
the related Financed Student Loan shall have been paid in full or
repurchased.
(f) If at any time the Transferor shall propose to contribute,
grant a security interest in, or otherwise transfer any interest in
Financed Student Loans to any prospective purchaser, lender or other
transferee, the Master Servicer shall give notice to such prospective
purchaser, lender or other transferee that such Financed Student Loan
has been assigned to the Issuer and has been pledged to the Indenture
Trustee.
(g) Upon reasonable notice, the Master Servicer shall permit
the Indenture Trustee and its agents once each calendar year (unless
there is a Servicer Default, in which case at any time) during normal
business hours to inspect, audit and make copies of and abstracts from
the Master Servicer's records regarding any Financed Student Loan.
(h) Upon request at any time the Eligible Lender Trustee or
the Indenture Trustee shall have reasonable grounds to believe that
such request would be necessary in connection with its performance of
its duties under the Basic Documents, the Master Servicer shall furnish
to the Eligible Lender Trustee or to the Indenture Trustee, within
[[twenty Business Days]], a list of all Financed Student Loans (by
borrower social security number and date of issuance) then held as part
of the Trust, and a comparison of such list to the list of the Initial
Financed Student Loans set forth in Schedule A as of the Closing Date,
and, for each Financed Student Loan that has been added to or removed
from the pool of loans held by
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the Eligible Lender Trustee on behalf of the Issuer, information as to
the date as of which and circumstances under which each such Financed
Student Loan was so added or removed.
(i) The Transferor shall deliver to the Eligible Lender
Trustee and the Indenture Trustee:
(l) promptly after the execution and delivery of this
Agreement and of each amendment thereto an Opinion of Counsel
either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been
executed and filed that are necessary to preserve and perfect
the interest of the Eligible Lender Trustee and the Indenture
Trustee in the Financed Student Loans, and reciting the
details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that,
in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest; and
(2) within 120 days after the beginning of each
calendar year beginning with the first calendar year beginning
more than three months after the Closing Date, an Opinion of
Counsel, dated as of a date during such 120-day period, either
(A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been
executed and filed that are necessary to preserve and perfect
the interest of the Eligible Lender Trustee and the Indenture
Trustee in the Financed Student Loans, and reciting the
details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that,
in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest; provided that
a single Opinion of Counsel may be delivered in satisfaction
of the foregoing requirement and that of Section 3.6 of the
Indenture.
Each Opinion of Counsel referred to in clause (l) or (2) above
shall specify (as of the date of such opinion and given all applicable
laws as in effect on such date) any action necessary to be taken in the
following year to preserve and protect such interest.
(j) The Administrator shall file all reports with respect to
the Notes and the Certificates as may be required by the Commission or
state securities authorities.
SECTION 11.3. Notices. All demands, notices and communications upon or
to the Transferor, the Master Servicer, the Administrator, the Eligible Lender
Trustee or the Indenture Trustee under this Agreement shall be in writing,
personally delivered or mailed by certified mail or overnight courier, return
receipt requested or overnight courier (or in the form of telex or facsimile
notice, followed by written notice delivered as aforesaid) and shall be deemed
to have been duly given upon receipt (a) in the case of the Transferor, the
Master Servicer or Administrator, two copies, one to Crestar Bank,
[____________], Richmond, Virginia [____________], Attention: [____________];
facsimile: [____________], with a copy to Crestar Bank, [____________],
Richmond, Virginia [____________], Attention: [____________]; facsimile
[____________] (b) in the case of the Issuer or the Eligible Lender Trustee, at
the Corporate Trust Office of the Eligible Lender Trustee, (c) in the case of
the Indenture Trustee, at its Corporate Trust Office; (d) in the case of
Moody's, to Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Structured Finance Department / Student Loans (telephone:
(000) 000 0000; facsimile: (000) 000 0000), (e) in the case of Standard &
Poor's, to Standard & Poor's Ratings Service, 00 Xxxxxxxx (00xx Xxxxx), Xxx
Xxxx, Xxx Xxxx 00000, Attention: Asset Backed Surveillance Department
(telephone: (000) 000 0000; facsimile: (000) 000 0000), or, as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 11.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 4.12 and in Section 6.5 and as
provided in the provisions of this Agreement concerning the resignation of the
Master Servicer, this Agreement may not be assigned by the Transferor or the
Master Servicer. This Agreement may only be assigned by the Eligible Lender
Trustee to its permitted successor pursuant to the Trust Agreement.
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SECTION 11.5. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Transferor, the Master Servicer, the
Issuer and the Eligible Lender Trustee and for the benefit of the
Certificateholders, the Indenture Trustee, the Delaware Trustee and the
Noteholders as third party beneficiaries, and nothing in this Agreement, 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 11.6. 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 11.7. 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 11.8. 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 11.9. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, 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.
SECTION 11.10. Assignment to Indenture Trustee. The Transferor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
Noteholders of a security interest in all right, title and interest of the
Issuer in, to and under the Financed Student Loans and/or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 11.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Master Servicer, the Administrator and the
Transferor shall not, prior to the date that is one year after the termination
of this Agreement, with respect to the Issuer acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
under any federal or State bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
SECTION 11.12. Limitation of Liability of Eligible Lender Trustee,
Indenture Trustee and Delaware Trustee.
(a) Notwithstanding anything contained herein to the contrary,
this Agreement has been signed by Star Bank, National Association not
in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and in no event shall Star Bank, National
Association in its individual capacity or as beneficial owner of the
Issuer have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or
in any of the certificates, notices or agreements delivered pursuant
hereto as to all of which recourse shall be had solely to the assets of
the Issuer.
Notwithstanding any provision in this Agreement or the Basic
Documents, nothing in such Agreement and Basic Documents shall be
construed to limit the Eligible Lender Trustee's responsibility to (i)
the U.S. Secretary of Education or a Guarantor in its capacity as
Eligible Lender Trustee for any violations of statutory or regulatory
requirements that may occur with respect to loans held in the Trust,
pursuant to 34 CFR 682.203(b) or any successor provision thereto, or
(ii) the Department of HHS in its
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capacity as Eligible Lender Trustee for any violations of statutory or
regulatory requirements that may occur with respect to loans held in
the Trust, pursuant to the HEAL Act.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Bankers Trust Company not in its
individual capacity but solely as Indenture Trustee and in no event
shall Bankers Trust Company have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer
hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.
(c) In no event shall the Delaware Trustee have any liability
for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which
recourse shall be had solely to the assets of the Issuer.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
CRESTAR STUDENT LOAN TRUST 1997-1
By: STAR BANK, NATIONAL ASSOCIATION, not in
its individual capacity but solely as Eligible
Lender Trustee on behalf of the Trust
By: __________________________________
Name:
Title:
CRESTAR BANK
Transferor, Master Servicer and Administrator
By: ______________________________________________
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
BANKERS TRUST COMPANY, not
in its individual capacity
but solely as Indenture Trustee
By: ____________________________________
Name: [________]
Title: Vice President
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APPENDIX A
TO THE
TRANSFER AND SERVICING AGREEMENT
DEFINITIONS AND USAGE
Usage
-----
The following rules of construction and usage shall be applicable to
any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant thereto unless otherwise defined therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in an instrument refer to such instrument as a whole and not to
any particular provision or subdivision thereof; references in an instrument to
"Article", "Section" or another subdivision or to an attachment are, unless the
context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument; and the term "including" means "including without
limitation".
(d) The definitions contained in this Appendix are equally applicable
to both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below
or in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
Definitions
-----------
"Act" has the meaning specified in Section 11.3(a) of the Indenture.
"Additional Financed HEAL Loan File" has the meaning set forth in
section 3.3 of the Transfer and Servicing Agreement.
"Adjustment Payments" has the meaning set forth in Section 2.3(e) of
the Transfer and Servicing Agreement.
"Administration Agreement" means the Administration Agreement dated as
of [_______] 1997, among the Issuer, the Indenture Trustee and the
Administrator, as amended from time to time.
"Administration Fee" has the meaning specified in Section 3 of the
Administration Agreement.
"Administrator" means Crestar Bank, in its capacity as administrator of
the Issuer and the Financed Student Loans, or any successor as Administrator
under the Transfer and Servicing Agreement.
"Administrator Default" has the meaning specified in Section 8.1(b) of
the Transfer and Servicing Agreement.
"Administrator's Certificate" means an Officer's Certificate of the
Administrator delivered pursuant to Section 4.7 of the Transfer and Servicing
Agreement, substantially in the form of Exhibit C thereto and as the
Administrator and the Indenture Trustee may agree.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authenticating Agent" means the Person appointed by the Indenture
Trustee at the request of the Issuer as Authenticating Agent for the Notes
pursuant to Section [[2.3(8)]] of the Indenture, and any successor
Authenticating Agent for the Notes.
"Authorized Officer" means (i) with respect to the Issuer, any officer
of the Eligible Lender Trustee who is authorized to act for the Eligible Lender
Trustee in matters relating to the Issuer pursuant to the Basic Documents and
who is identified on the list of Authorized Officers delivered by the Eligible
Lender Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (ii) with respect to the
Administrator, any officer of the Administrator who is authorized to act for the
Administrator in matters relating to itself or to the Issuer and to be acted
upon by the Administrator pursuant to the Basic Documents and who is identified
on the list of Authorized Officers delivered by the Administrator to the
Indenture Trustee on the Closing Date (as such list may be modified or
supplemented from time to time thereafter), (iii) with respect to the
Transferor, any officer of the Transferor who is authorized to act for the
Transferor in matters relating to or to be acted upon by the Transferor pursuant
to the Basic Documents and who is identified on the list of Authorized Officers
delivered by the Transferor to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and (iv)
with respect to a Servicer, any officer of such Servicer who is authorized to
act for such Servicer in matters relating to or to be acted upon by such
Servicer pursuant to the Basic Documents and who is identified on the list of
Authorized officers delivered by such Servicer to the Indenture Trustee, or the
Closing Date (as such list may be modified or supplemented from time to time
thereafter).
"Available Funds" means, with respect to any Collection Period, the
excess of (A) the sum, without duplication, of the following amounts with
respect to such Collection Period: (i) all collections received by the Master
Servicer or any Servicer on the Financed Student Loans (including any Guarantee
Payments and Insurance Payments received with respect to the Financed Student
Loans) during such Collection Period; (ii) any payments, including without
limitation Interest Subsidy Payments and Special Allowance Payments, received by
the Eligible Lender Trustee during such Collection Period with respect to
Financed Student Loans; (iii) all proceeds from any sales of Financed Student
Loans by the Trust during such Collection Period; (iv) any payments of or with
respect to interest received by the Master Servicer or a Servicer during such
Collection Period with respect to a Financed Student Loan for which a Realized
Loss was previously allocated; (v) the aggregate Purchase Amounts received for
those Financed Students Loans purchased by the Transferor (or the Master
Servicer, if applicable) during the related Collection Period; (vi) the
aggregate amounts, if any, received from the Transferor (or the Master Servicer,
if applicable) as reimbursement of non-guaranteed or uninsured interest amounts
(which shall not include, with respect to Financed FFELP Loans, the portion of
such interest amounts (i.e., 2%) for which the Guarantor did not have an
obligation to make a Guarantee Payment), or lost Interest Subsidy Payments and
Special Allowance Payments,
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with respect to the Financed Student Loans pursuant to Section 3.2 of the
Transfer and Servicing Agreement (vii) all Adjustment Payments, if any, received
from the Transferor during such Collection Period and (viii) Investments
Earnings for such Collection Period over (B) the Issuer Consolidation Payments
for such Collection Period; provided, however, that Available Funds will exclude
all payments and proceeds of any Financed Student Loans the Purchase Amount of
which has been included in Available Funds for a prior Collection Period, which
payments and proceeds shall be paid to the Transferor, and amounts used to
reimburse the Master Servicer for Monthly Advances pursuant to Section 5.4 of
the Transfer and Servicing Agreement.
"Basic Documents" means the Trust Agreement, the Master Indenture, the
Terms Supplement, the Transfer and Servicing Agreement, the Administration
Agreement, the Note Depository Agreement, the Guarantee Agreements, the HEAL
Insurance Contract, the Underwriting Agreement and other documents and
certificates delivered in connection with any thereof and all amendments and
supplements thereto.
"Benefit Plan" means any employee benefit plan, retirement arrangement,
individual retirement account or Xxxxx Plan subject to either Title I of ERISA
or Section 4975 of the Code, or any entity (including an insurance company
general account) whose underlying assets include plan assets by reason of a
plan's investment in the entity.
"Book-Entry Note" means a beneficial interest in the Notes, ownership
and transfers of which shall be through book entries by a Securities Depository
as described in Section 2.14 of the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which national banking associations or banking institutions or trust
companies in New York, Ohio, Pennsylvania or Virginia are authorized or
obligated by law, regulation or executive order to remain closed.
"Certificate" means a certificate evidencing the beneficial interest of
a Certificateholder in the Trust, substantially in the form of Exhibit A to the
Trust Agreement.
"Certificate Balance" equals, initially, the Initial Certificate
Balance and, thereafter, equals the Initial Certificate Balance reduced by all
amounts previously distributed to Certificateholders as principal. In
determining whether the Certificateholders which hold Certificates representing
the requisite Certificate Balance have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, the Certificate Balance shall not include the principal balance of
Certificates owned by the Transferor or any Affiliate of the Transferor.
"Certificate Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.1 of the Transfer and
Servicing Agreement.
"Certificate Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 3.10 of the Trust Agreement, which shall initially
be the Eligible Lender Trustee.
"Certificate Initial Rate" means [_______]% per annum.
"Certificate Quarterly Advance Account" means the account designated as
such, established and maintained pursuant to Section 5.1 of the Transfer and
Servicing Agreement.
"Certificate Rate" means One-Month LIBOR plus 1.50% per annum.
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means a Person in whose name a Certificate is
registered in the Certificate Register.
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"Certificateholders' Distribution Amount" means, as to any Class of
Certificates, with respect to any Quarterly Distribution Date, the
Certificateholders' Interest Distribution Amount for such Quarterly Distribution
Date plus, for each Quarterly Distribution Date on and after which the Notes
have been paid in full, the Certificateholders' Principal Distribution Amount
for such Quarterly Distribution Date.
"Certificateholders' Interest Shortfall" means, as to any Class of
Certificates, with respect to any Quarterly Distribution Date, the excess, if
any, of (i) the sum of the related Certificateholders' Interest Distribution
Amount on the preceding Quarterly Distribution Date and any outstanding
Certificateholders' Interest Shortfall on such preceding Quarterly Distribution
Date over (ii) the amount of interest actually distributed to the
Certificateholders of such Class on such preceding Quarterly Distribution Date,
plus interest on the amount of such excess interest due to the
Certificateholders of such Class, to the extent permitted by law, at the related
Certificate Rate from such preceding Quarterly Distribution Date to the current
Quarterly Distribution Date.
"Certificateholders' Interest Distribution Amount" means, as to any
Class of Certificates, with respect to any Quarterly Distribution Date relating
to such Certificates, the sum of (i) the amount of interest accrued at One Month
LIBOR plus 1.50% per annum for each related Interest Period since the last
Quarterly Distribution Date (or, in the case of the first Quarterly Distribution
Date, the Closing Date) on the outstanding principal amount of such Certificates
on the immediately preceding Quarterly Distribution Date, after giving effect to
all distributions of principal to Certificateholders of such Class on such
Quarterly Distribution Date (or, in the case of the first Quarterly Distribution
Date, on the Closing Date) and (ii) the Certificateholders' Interest Carryover
Shortfall relating to such Certificates for such Quarterly Distribution Date.
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Quarterly Distribution Date relating to a Class of Certificates on
or after which the Notes have been paid in full, the excess, if any, of (i) the
sum of the Certificateholders' Principal Distribution Amount on such Quarterly
Distribution Date and any outstanding Certificateholders' Principal Carryover
Shortfall for the preceding Quarterly Distribution Date over (ii) the amount of
principal actually distributed to the Certificateholders on such Quarterly
Distribution Date.
"Certificateholders' Principal Distribution Amount" means, on each
Quarterly Distribution Date occurring after the principal balance of each Class
of Notes has been paid in full, the sum of (i) the Principal Distribution Amount
for the three Collection Periods preceding such Quarterly Distribution Date, and
(ii) the Certificateholders' Principal Carryover Shortfall as of the close of
the preceding Quarterly Distribution Date; provided, however, that the
Certificateholders' Principal Distribution Amount will in no event exceed the
outstanding principal balance of the applicable class of Certificates. Further,
on the first Quarterly Distribution Date occurring on or after the Distribution
Date on which the principal balance of the last outstanding Class of Notes is
paid in full, the Certificateholders' Principal Distribution Amount also will
include the excess, if any, of the amount of principal available to be
distributed on such Distribution Date over the amount of principal paid on the
Notes on such date.
"Class" means any class of Notes.
"Class A Notes" means the Class A-1 Notes and the Class A-2 Notes.
"Class A-1 Notes" means Notes of the Issuer designated as "Crestar
Student Loan Trust 1997-1, Senior LIBOR Rate Class A-1 Student Loan Asset Backed
Notes."
"Class A-1 Noteholder" means any Noteholder of the Class A-1 Notes.
"Class A-2 Notes" means Notes of the Issuer designated as "Crestar
Student Loan Trust 1997-1, Senior LIBOR Rate Class A-2 Student Loan Asset Backed
Notes."
"Class A-2 Noteholder" means any Noteholder of the Class A-2 Notes.
-4-
"Class B Notes" means Notes of the Issuer designated as "Crestar
Student Loan Trust 1997-1, Subordinate LIBOR Rate Class B Student Loan Asset
Backed Notes."
"Class B Noteholder" means any Noteholder of the Class B Notes.
"Class Initial Rate" means, with respect to any Class of Notes, the
rate identified as such in the Terms Supplement.
"Class Interest Rate" means, with respect to any Class of Notes, the
interest rate determined as set forth in the Terms Supplement.
"Closing Date" means [_______,] 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Transfer and Servicing Agreement.
"Collection Period" means, initially, with respect to each of the
Initial Financed Student Loans, the period beginning on the day immediately
succeeding the Cut-off Date and ending on December 31, 1997, inclusive, and
thereafter, the Collection Period means the calendar month immediately following
the end of the previous Collection Period.
"Commission" means the Securities and Exchange Commission.
"Consolidation Loan" means a FFELP Loan designated as such, made by the
Transferor to an eligible borrower that represents the refinancing of student
loans to such borrower and his or her spouse in accordance with the applicable
terms and provisions of the Higher Education Act.
"Consolidation Loan Fees" means, as to any Collection Period, an amount
accrued during such Collection Period equal to 1.05% per annum of the average
outstanding principal balance of the Consolidation Loans owned by the Trust
during such Collection Period.
"Consolidation Prepayments" means, on any Exchange Date, the amount of
principal then on deposit in the Collection Account representing payments
received as a result of Financed Student Loans being repaid with the proceeds of
Consolidation Loans or HEAL Consolidation Loans (provided, however, if an
Exchange Date occurs during the month of a Distribution Date, Consolidation
Prepayments shall not include amounts received during the month of such
Distribution Date).
"Corporate Trust Office" means (i) with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
on the Closing Date is located at Four Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust and Agency Group, Structured Finance Group
(telephone: (212) 000- 0000; facsimile: (000) 000-0000) or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders, the Certificateholder and the Transferor, or the principal
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Noteholders and the Transferor)
and (ii) with respect to the Eligible Lender Trustee, the principal corporate
trust office of the Eligible Lender Trustee located at 000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxx 00000, Attention: [____________] telephone: [____________];
facsimile [____________]; or at such other address as the Eligible Lender
Trustee may designate by notice to the Certificateholders and the Transferor, or
the principal corporate trust office of any successor Eligible Lender Trustee
(the address of which the successor Eligible Lender Trustee will notify the
Certificateholders and the Transferor).
-5-
"Crestar Subsidiary" has the meaning specified in Section 6.5 of the
Transfer and Servicing Agreement.
"Cut-off Date" means for the Financed Student Loans set forth on
Schedule A-1 to the Transfer and Servicing Agreement, the close of business on
[_______], 1997.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Deferment Period" means certain deferment periods authorized by the
Higher Education Act and the HEAL Act during which the related borrower's
scheduled payments are deferred.
"Deferral Phase" means the period during which the related borrower is
in school and for certain authorized periods as described in the Higher
Education Act.
"Delaware Trustee" means Delaware Trust Capital Management, Inc., not
in its individual capacity but solely as the Delaware Trustee under the Trust
Agreement, and its successors and assigns in such capacity.
"Delaware Trustee Fee" has the meaning specified in Section [__] of the
Trust Agreement.
"Definitive Notes" has the meaning specified in Section 2.14 of the
Indenture.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(l) (i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Indenture Trustee or its nominee or custodian by physical delivery
to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer thereof (i)
by delivery of such certificated security endorsed to, or registered in
the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section
8-313) of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated
securities as belonging to the Indenture Trustee or its nominee or
custodian and the sending by such financial intermediary of a
confirmation of the purchase of such certificated security by the
Indenture Trustee or its nominee or custodian, or (ii) by delivery
thereof to a "clearing corporation" (as defined in Section 8-102(3) of
the UCC) and the making by such clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of a
financial intermediary by the amount of such certificated security, the
identification by the clearing corporation of the certificated
securities for the sole and exclusive account of the financial
intermediary, the maintenance of such certificated securities by such
clearing corporation or a "custodian bank" (as defined in Section
8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the sending of a confirmation by the
financial intermediary of the purchase by the Indenture Trustee or its
nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying
such certificated securities as belonging to the Indenture Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"),
and, in any event, any such Physical Property in registered form shall
be in the name of the Indenture Trustee or its nominee or custodian;
and such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
-6-
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles 8
and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a Federal
Reserve Bank by a financial intermediary which is also a "depository"
pursuant to applicable federal regulations and issuance by such
financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Indenture Trustee
or its nominee or custodian of the purchase by the Indenture Trustee or
its nominee or custodian of such book-entry securities; the making by
such financial intermediary of entries in its books and records
identifying such book-entry security held through the Federal Reserve
System pursuant to federal book-entry regulations as belonging to the
Indenture Trustee or its nominee or custodian and indicating that such
custodian holds such Trust Account Property solely as agent for the
Indenture Trustee or its nominee or custodian; and such additional or
alternative procedures as may hereafter become appropriate to effect
complete transfer of ownership of any such Trust Account Property to
the Indenture Trustee or its nominee or custodian, consistent with
changes in applicable law or regulations or the interpretation thereof;
and
(c) with respect to any item of Trust Account Property that is
an uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security, the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Department of Education" means the United States Department of
Education.
"Department of HHS" means the United States Department of Health and
Human Services.
"Depositor" means Crestar Bank in its capacity as Depositor under the
Trust Agreement.
"Directing Notes" means the Class A Notes while any such Notes are
Outstanding, and, when no Class A Notes remain Outstanding, the Class B Notes.
"Distribution" means, with respect to any Financed Student Loan, the
amount of the monthly remittance payable to the holder of such Financed Student
Loan in accordance with its terms.
"Distribution Date" means, the 25th day of each month or if such day is
not a Business Day, the next succeeding Business Day, commencing January 26,
1998.
"Distribution Determination Date" means, with respect to any
Distribution Date, the [[_____]] Business Day immediately preceding such
Distribution Date.
"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the States (or any domestic branch of a
foreign bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such depository
institution have a credit rating from each Rating Agency in one of its generic
rating categories which signifies investment grade. An Eligible Deposit Account
may not be evidenced by a certificate of deposit, passbook or other instrument.
-7-
"Eligible Institution" means an entity which is an institution whose
deposits are insured by the FDIC and the unsecured and uncollateralized
long-term debt obligations of which shall be rated "AA-" or better by Standard &
Poor's and A2 or better by Moody's, or the highest short-term rating by Standard
& Poor's and the highest short term rating by Moody's, and which is either (i) a
federal savings association duly organized, validly existing and in good
standing under the federal banking laws, (ii) an institution duly organized,
validly existing and in good standing under the applicable banking laws of any
state, (iii) a national banking association duly organized, validly existing and
in good standing under the federal banking laws, or (iv) a principal subsidiary
of a bank holding company.
"Eligible Investments" As used herein, Eligible Investments shall
include the following:
(1) Cash (insured at all times by the Federal Deposit Insurance
Corporation);
(2) Direct obligations of (including obligations issued or held in
book entry form on the books of) the Department of the
Treasury of the United States of America;
(3) obligations of any of the following federal agencies which
obligations represent the full faith and credit of the United
States of America, including:
- Export-Import Bank
- Farm Credit System Financial Assistance Corporation
- Farmers Home Administration
- General Services Administration
- U.S. Maritime Administration
- Small Business Administration
- Government National Mortgage Association (GNMA)
- U.S. Department of Housing & Urban Development (PHA's)
- Federal Housing Administration;
(4) senior debt obligations rated "AAA" by Standard & Poor's and
"Aaa" by Moody's issued by the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation
(5) U.S. dollar denominated deposit accounts, federal funds and
banker's acceptances with domestic commercial banks which have
a rating on their short term certificates of deposit on the
date of purchase of "A-1+" by Standard & Poor's and "P-1" by
Moody's and maturing no more than 360 days after the date of
purchase (ratings on holding companies not being considered
the rating of the bank);
(6) commercial paper which is rated at the time of purchase in the
single highest classification, "A- 1+" by Standard & Poor's
and "P-1" by Moody's and which matures not more than 270 days
after the date of purchase;
(7) Investments in money market funds (including, but not limited
to, money market mutual funds) rated "AAAm" or "AAAm-G" or
better by Standard & Poor's;
(8) investment agreements acceptable to the Rating Agencies,
written confirmation of which shall be furnished to the
Indenture Trustee prior to any such investment; and
(9) other forms of investments acceptable to the Rating Agencies,
written confirmation of which shall be furnished to the
Indenture Trustee prior to any such investment.
-8-
Notwithstanding anything in this Agreement or the Basic Documents to
the contrary, for so long as the Transferor is a Certificateholder, all
investments of the Trust shall be made in investments permissible for a national
bank.
The value of the above investments shall be determined as follows:
a) as to investments the bid and asked prices of which are
published on a regular basis in The Wall Street Journal (or,
if not there, then in The New York Times): the average of the
bid and asked prices for such investments so published on or
most recently prior to such time of determination;
b) as to investments the bid and asked prices of which are not
published on a regular basis in The Wall Street Journal or The
New York Times: the average bid price at such time of
determination for such investments by any two nationally
recognized government securities dealers (selected by the
Indenture Trustee in its absolute discretion) at the time
making a market in such investments or the bid price published
by a nationally recognized pricing service;
c) as to certificates of deposit and bankers acceptances: the
face amount thereof, plus accrued interest; and
d) as to any investment not specified above: the value thereof
established by prior agreement between the Issuer, the
Administrator and the Indenture Trustee.
"Eligible Lender Trustee" means Star Bank, National Association not in
its individual capacity but solely as Eligible Lender Trustee under the Trust
Agreement, and its successors and assigns in such capacity.
"Eligible Lender Trustee Fee" has the meaning specified in Section 8.1
of the Trust Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning specified in Section 5.1 of the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Date" means, with respect to any Exchanged Student Loans, the
date specified as such in the related Transfer Agreement.
"Exchange Period" means the period commencing on the Closing Date and
ending on December 31, 2002.
"Exchanged Student Loan" means any FFELP Loan or HEAL Loan transferred
to the Eligible Lender Trustee on behalf of the Issuer during the Exchange
Period pursuant to Section 2.2 of the Transfer and Servicing Agreement.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Executive Vice President, any Senior Vice President, any Vice President, the
Secretary, the Controller or the Treasurer of such corporation; and with respect
to any partnership, any general partner thereof.
"Expense Account" means the account designated as such pursuant to
Section 5.1 of the Transfer and Servicing Agreement.
-9-
"Expenses" means any and all liabilities, obligations, losses, damages,
taxes, claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Eligible Lender Trustee or any of its officers, directors or agents
in any way relating to or arising out of the Trust Agreement, the other Basic
Documents, the Trust Estate, the administration of the Trust Estate or the
action or inaction of the Eligible Lender Trustee under the Trust Agreement or
the other Basic Documents.
"FDIC" means the Federal Deposit Insurance Corporation.
"FFELP Loan" means a student loan which is a PLUS Loan, SLS Loan,
Consolidation Loan, Xxxxxxxx Loan or Unsubsidized Xxxxxxxx Loan.
"FHLMC" means Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
"Final Maturity Date" means, with respect to any Note, the date on
which the entire unpaid principal amount of such Note becomes due and payable as
provided in the Terms Supplement.
"Financed FFELP Loan" means a Financed Student Loan that also is a
FFELP Loan.
"Financed HEAL Loan" means a Financed Student Loan that also is a HEAL
Loan.
"Financed Student Loan" means the FFELP Loans and HEAL Loans set forth
in Schedule A-1 to the Transfer and Servicing Agreement and Schedule A to each
Transfer Agreement, as amended or supplemented from time to time by the Master
Servicer to accurately reflect the Financed Student Loans then subject to the
Lien of the Indenture. The Schedule of Financed Student Loans may be in the form
of microfiche or other form of electronic media.
"Financed Student Loan Files" means the documents specified in Section
3.3 of the Transfer and Servicing Agreement.
"FNMA" means Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
"Formula Interest Rate" means, with respect to any Class of Notes, the
interest rate determined as set forth in the Terms Supplement.
"Grace Period" means certain grace periods authorized by the Higher
Education Act and the HEAL Act during which the related borrower's scheduled
payments are deferred.
"Grant" means mortgage, pledge, hypothecate, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and xxxxx x xxxx
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to the Indenture. A Grant of the Trust Estate or of any
other agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the Granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Trust Estate and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
-10-
"Guarantee Agreements" means each agreement entered into between the
Eligible Lender Trustee and a Guarantor pursuant to which such Guarantor
guarantees payments on Financed FFELP Loans.
"Guarantee Payment" means any payment made by a Guaranty Agency
pursuant to a Guarantee Agreement in respect of a Financed FFELP Loan.
"Guarantor" means the Department of Education, Educational Credit
Management Corporation, a Minnesota non-profit corporation (formerly known as
Transitional Guaranty Agency, Inc.), PHEAA, United Student Aid Funds, Inc., a
Delaware non-profit corporation, the Florida Department of Education, an agency
of the State of Florida, New York Higher Education Services Corporation, an
agency of the State of New York, and Texas Guaranteed Student Loan Program, a
Texas nonprofit corporation, and their respective successors and assigns.
"Guaranty Agency" means any agency which has an agreement with the
Department of Education of Education to be a guarantor of FFELP Loans.
"HEAL Act" means Title VII, ss.ss.701-720 of the Public Health Services
Act, as amended, 42 U.S.C. xx.xx. 292-292p, together with any rules and
regulations promulgated thereunder by the Department of HHS.
"HEAL Consolidation Loan" means a HEAL Loan that is designated as such
that is made under the HEAL Act.
"HEAL Insurance Contract" means the HEAL Insurance Contract entered
into between the Eligible Lender Trustee and the Department of HHS pursuant to
which the Department of HHS insures payments on Financed HEAL Loans.
"Higher Education Act" means Title IV, Part B of the Higher Education
Act of 1965, as amended, together with any rules and regulations promulgated
thereunder by the Department of Education or the Guarantors.
"Indemnifiable Expenses" means any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever which may at any time be imposed on, incurred
by, or asserted against a Person (or any of its officers, directors, employees
or agents) who is entitled to be indemnified.
"Indenture" means the Master Indenture and the Terms Supplement, each
as amended or supplemented from' time to time.
"Indenture Trust Estate" means all money, instruments, rights and other
property that are, from time to time, subject or intended to be subject to the
Lien and security interest of the Indenture for the benefit of the Noteholders
(including all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Indenture Trustee" means Bankers Trust Company, not in its individual
capacity but solely as Indenture Trustee under the Indenture and its successors
and assigns in such capacity.
"Indenture Trustee Fee" has the meaning specified in Section 6.7 of the
Master Indenture, as may be amended pursuant to any amendment to the Terms
Supplement.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Transferor and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Transferor or any Affiliate
of any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Transferor or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
-11-
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section [[11.1]] of the
Master Indenture, made by an Independent appraiser or other expert appointed by
an Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read the definition of "Independent" and that the signer is Independent within
the meaning thereof.
"Individual Note" means a Note of an initial principal amount equal to
$50,000. A Note of an original principal amount in excess thereof shall be
deemed to be a number of Individual Notes equal to the quotient obtained by
dividing such initial principal amount by $50,000, without regard to fractions.
"Initial Financed Student Loans" has the meaning specified in Section
2.1 of the Transfer and Servicing Agreement.
"Initial Certificate Balance" means $1,000, representing the
Certificate Balance as of the Closing Date.
"Initial Pool Balance" means [$_______] representing the sum of Pool
Balance for the Initial Financed Student Loans set forth on Schedule A-1 as of
the Cut-off Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable federal or State bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable federal
or State bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Insurance Payment" means any payment made by the Department of HHS
pursuant to the HEAL Insurance Contract in respect of a Financed HEAL Loan.
"Interest Payment Period" has the meaning set forth in the Terms
Supplement.
"Interest Period" has the meaning set forth in the Terms Supplement.
"Interest Subsidy Payments" means payments, designated as such,
consisting of interest subsidies by the Department of Education in respect of
the Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust
in accordance with the Higher Education Act.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on or
prior to such Distribution Date pursuant to Section 5.1(b) of the Transfer and
Servicing Agreement.
"Issuer" means Crestar Student Loan Trust 1997-1.
"Issuer Consolidation Payments" has the meaning set forth in Section
2.3(f) of the Transfer and Servicing Agreement.
-12-
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"LIBOR Determination Date" means, with respect to any Class of Notes or
the Certificates for which One- Month LIBOR is being determined other than for
the Initial Period, the applicable Rate Determination Date, which must be a
Business Day (in New York and Virginia) and London Banking Day.
"LIBOR Rate" means, with respect to the Notes or the Certificates, the
related Class Interest Rate or Certificate Rate, as the case may be, that
results from a determination based on One-Month LIBOR and is determined as
described in the Terms Supplement, the Transfer and Servicing Agreement or the
Trust Agreement, as the case may be.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any, which
attach to the respective Financed Student Loan by operation of law as a result
of any act or omission by the related Obligor or obligations under Subservicing
Agreements in effect as of the Closing Date.
"London Banking Day" means any Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
"Majority Certificateholder" means the holders of more than 50% of the
Certificate Balance of the Certificates without regard to the Certificates held
by the Depositor.
"Margin" has the meaning set forth in the Terms Supplement.
"Master Indenture" means the Indenture dated as of [_______], 1997
between the Issuer and the Indenture Trustee, as amended or supplemented from
time to time.
"Master Servicer" means Crestar Bank, and its permitted successors and
assigns, as Master Servicer of the Financed Student Loans and the Transfer and
Servicing Agreement.
"Master Servicer Default" means an event specified in Section 8.1(a) of
the related Transfer and Servicing Agreement or Supplemental Transfer and
Servicing Agreement.
"Minimum Purchase Price" has the meaning set forth in Section 9.1(b) of
the Transfer and Servicing Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Monthly Advance" means the amount, if any, advanced by the Master
Servicer pursuant to Section 5.10 of the Transfer and Servicing Agreement with
respect to Guarantee Payments or Interest Subsidy Payments applied for but not
received as of the end of the Collection Period immediately preceding the date
such Monthly Advance is made.
"Monthly Advance Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Transfer and Servicing
Agreement.
"Net Loan Rate" shall have the meaning set forth in the Terms
Supplement.
-13-
"Notes" means the notes designated as the Issuer's Student Loan
Asset-Backed Notes, issued pursuant to the terms of the Master Indenture and the
Terms Supplement and having an original principal amount equal to
[$_______________].
"Note Depository Agreement" means the agreement dated as of the Closing
Date relating to the Notes among the Issuer, the Indenture Trustee, the
Administrator and the Depository Trust Company, as the initial Securities
Depository.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Transfer and Servicing
Agreement.
"Note Owner" means, with respect to a Book Entry Note, the Person who
is the owner of such Book Entry Note, as reflected on the books of the
Securities Depository, or on the books of a Person maintaining an account with
such Securities Depository (directly as Securities Depository Participant or as
an indirect participant, in each case in accordance with the rules of such
Securities Depository).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section [[2.6]] of the Indenture.
"Noteholder" means the Person in whose name a Note is registered in the
Note Register.
"Noteholders' Distribution Amount" means, as to any Class of Notes,
with respect to any Distribution Date, the sum of the related Noteholders'
Interest Distribution Amount and the Noteholders' Principal Distribution Amount
for such Distribution Date.
"Noteholders' Interest Carryover" has the meaning set forth in the
Terms Supplement.
"Noteholders' Interest Shortfall" means, as to any Class of Notes, with
respect to any Distribution Date (which, for the Class B Notes, shall be a
Quarterly Distribution Date), the excess of (i) the sum of the related
Noteholders' Interest Distribution Amount on the preceding Distribution Date for
such Class of Notes and any Noteholders' Interest Shortfall on such preceding
Distribution Date for such Class of Notes over (ii) the amount of interest
actually allocated to such Noteholders on such preceding Distribution Date for
such Class of Notes, plus interest on the amount of such excess interest due to
the Noteholders, to the extent permitted by law, at the related Class Interest
Rate from such preceding Distribution Date for such Class of Notes to the
current Distribution Date for such Class of Notes.
"Noteholders' Interest Distribution Amount" means, as to any Class of
Notes, with respect to any Distribution Date (which, for the Class B Notes,
shall be a Quarterly Distribution Date), the sum of (i) the amount of interest
accrued at the respective Class Interest Rate for each Interest Period since the
last Distribution Date for such Class of Notes (or, in the case of the first
Distribution Date for such Class of Notes, the Closing Date) on the outstanding
principal balance of such Class of Notes on the immediately preceding
Distribution Date for such Class of Notes after giving effect to all principal
distributions to holders of Notes of such Class on such date (or, in the case of
the first Distribution Date for such Class of Notes, on the Closing Date) and
(ii) the Noteholders' Interest Shortfall for such Class of Notes for such
Distribution Date; provided, however, that the Noteholders' Interest
Distribution Amount will not include any Noteholders' Interest Carryover.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of (i) the sum of the Noteholders' Principal
Distribution Amount on such Distribution Date and any outstanding Noteholders'
Principal Carryover Shortfall for the preceding Distribution Date over (ii) the
amount of principal actually allocated to the Noteholders on such Distribution
Date.
-14-
"Noteholders' Principal Distribution Amount" means, (A) as to any
Distribution Date on or after April 27, 1998 and on or before the Distribution
Date on which the Class A Notes are paid in full, the sum of (i) the Principal
Distribution Amount for the Collection Period immediately preceding the month of
such Distribution Date (and, in the case of the April 27, 1998 Distribution
Date, all preceding Collection Periods), (ii) any Parity Percentage Payments to
be made on such Distribution Date, (iii) the Noteholders' Principal Carryover
Shortfall as of the close of the preceding Distribution Date and (iv) the
amount, if any, remaining on deposit in the Note Distribution Account following
the preceding Distribution Date, and (B) as to any Quarterly Distribution Date
after the Distribution Date on which the Class A Notes are paid in full, the sum
of (i) the Principal Distribution Amount for the three Collection Periods
immediately preceding the month of such Quarterly Distribution Date, (ii) any
Parity Percentage Payments to be made on such Quarterly Distribution Date, (iii)
the Noteholders' Principal Carryover Shortfall as of the close of the preceding
Quarterly Distribution Date and (iv) the amount, if any, remaining on deposit in
the Note Distribution Account following the preceding Quarterly Distribution
Date; provided, however, that the Noteholders' Principal Distribution Amount
allocable to a Class of Notes will not exceed the outstanding principal balance
of such Class of Notes. In addition, with respect to each Class of Notes, on the
related Final Maturity Date the Noteholders' Principal Distribution Amount will
include the amount required to reduce the outstanding principal balance of such
Notes to zero.
"Obligor" on a Financed Student Loan means the borrower or co-borrowers
of such Financed Student Loan and any other Person who owes payments in respect
of such Financed Student Loan, including (i) the Guaranty Agency thereof with
respect to a Financed FFELP Loan and the Department of HHS with respect to a
Financed HEAL Loan, and (ii) with respect to any Interest Subsidy Payment or
Special Allowance Payment, if any, thereon, the Department of Education.
"Officer's Certificate" means (i) in the case of the Issuer, a
certificate signed by an Authorized Officer of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, and delivered to the Indenture
Trustee, (ii) in the case of the Transferor, the Master Servicer or the
Administrator, a certificate signed by an Authorized Officer of the Transferor,
the Master Servicer or the Administrator, as appropriate and (iii) in the case
of the Servicer, a certificate signed by an Authorized Officer of the Servicer.
"One-Month LIBOR" means the rate of interest per annum equal to the
London interbank offered rate for deposits in U.S. dollars having a maturity of
one month commencing on the related LIBOR Determination Date (the "Index
Maturity") which appears on Telerate Page 3750 as of 11:00 a.m., London time, on
such LIBOR Determination Date. If such rate does not appear on Telerate Page
3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the Index Maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the Reference Banks. The Master Servicer will request the
principal London office of each of such Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, One-Month LIBOR for
that day will be the arithmetic mean (rounded upwards, if necessary, to the
nearest .01%) of the quotations. If fewer than two quotations are provided,
One-Month LIBOR for that day will be the arithmetic mean (rounded upwards, if
necessary, to the nearest .01%) of the rates quoted by three major banks in New
York City, selected by the Master Servicer, or by the Trustee, as applicable, at
approximately 11:00 a.m., New York City time, on such LIBOR Determination Date
for loans in U.S. dollars to leading European banks having the Index Maturity
and in a principal amount equal to an amount of not less than U.S. $1,000,000;
provided, however, that if the banks selected as aforesaid are not quoting as
mentioned in this sentence, One-Month LIBOR in effect for the applicable
Interest Period will be One-Month LIBOR in effect for the previous Interest
Period.
"Opinion of Counsel" means (i) with respect to the Issuer, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Master Indenture, be employees of or counsel to the Issuer or Administrator
or any of their Affiliates and who shall be reasonably satisfactory to the
Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee as Indenture Trustee, shall comply with any
-15-
applicable requirements of Section 11.1 of the Master Indenture, and shall be in
form and substance reasonably satisfactory to the Indenture Trustee and (ii)
with respect to the Transferor, the Administrator or the Master Servicer, one or
more written opinions of counsel who may be an employee of or counsel to the
Transferor, the Administrator or the Master Servicer, which counsel shall be
reasonably acceptable to the Indenture Trustee and the Eligible Lender Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Noteholders thereof
(PROVIDED, HOWEVER, that if such Notes are to be redeemed, notice of
such redemption has been duly given or irrevocably provided for
pursuant to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to the Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
PROVIDED that in determining whether the Noteholders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Transferor or any Affiliate of any of the foregoing Persons shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be do disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Transferor or any Affiliate of any
of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or Class of Notes or Certificates as applicable, Outstanding at the date of
determination.
"Parity Percentage" means, as of any date of determination, the
fraction expressed as a percentage, the numerator of which is the sum of (i) the
then Pool Balance plus accrued interest thereon due from borrowers, and accrued
Interest Subsidy Payments and Special Allowance Payments, if any, as of the end
of the preceding Collection Period, and (ii) all amounts on deposit (including
any accrued interest thereon) in the Collection Account and the Reserve Account
and the denominator of which is the sum of the aggregate Outstanding Amount of
the Notes and the Certificates, accrued and unpaid interest thereon plus accrued
and unpaid Transaction Fees and Consolidation Loan Fees.
"Parity Percentage Payment" means, with respect to any Distribution
Date, the amount, if any, to be transferred from the Collection Account to the
Note Distribution Account pursuant to Section 5.5(e) of the Transfer and
Servicing Agreement, up to the amount necessary for the Parity Percentage to
equal [_______]% after giving effect to all distributions to be made on such
Distribution Date.
"Participant" means a Securities Depository Participant.
-16-
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of the Master Indenture and is authorized by the Issuer to make the
payments to and distributions from the Collection Account and payments of
principal of and interest and any other amounts owing on the Notes on behalf of
the Issuer.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PHEAA" means Pennsylvania Higher Education Assistance Agency.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pledged Account or Fund" means the Collection Account, the Reserve
Account, the Note Distribution Account and the Certificate Distribution Account.
"PLUS Loan" means a FFELP Loan made pursuant to the provisions of the
PLUS program established under Section 428B of the Higher Education Act (or
predecessor provisions).
"Pool Balance" means, at any time, the aggregate principal balance of
the Financed Student Loans at the end of the preceding Collection Period
(including accrued interest thereon for such Collection Period to the extent
such interest will be capitalized as of the end of such Collection Period),
after giving effect to the following, without duplication: (i) all payments in
respect of principal received by the Trust during such Collection Period from or
on behalf of borrowers and Guarantors and, with respect to certain payments on
certain Financed Student Loans, the Department of Education and the Department
of HHS, (ii) the principal portion of all Purchase Amounts received by the Trust
for such Collection Period and (iii) any Exchanged Student Loans acquired
conveyed to the Trust and any Financed Student Loans conveyed by the Trust in
exchange for such Exchanged Financed Student Loan during such Collection Period,
in each case pursuant to Sections 2.2 and 2.3(e) of the Transfer and Servicing
Agreement.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section [[2.7]] of the Master Indenture and in
lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence
the same debt as the mutilated, lost, destroyed or stolen Note.
"Primary Servicer" means, with respect to any Financed Student Loan,
the entity responsible for the primary servicing of such Financed Student Loan
on a day to day basis, it being understood that where a subservicer appointed in
accordance with the terms of the Transfer and Servicing Agreement has
responsibility for servicing a Financed Student Loan, such subservicer and not
the Master Servicer shall be the Primary Servicer with respect such Financed
Student Loan.
"Principal Distribution Amount" means, with respect to any Collection
Period, the excess of (A) the sum, without duplication, of the following
amounts: (i) that portion of all collections received by the Master Servicer or
any Servicer on the Financed Student Loans that is allocable to principal
(including the portion of any Guarantee Payments or Insurance Payments received
that is allocable to principal of the Financed Student Loans); (ii) the portion
of the proceeds allocable to principal from the sale of Financed Student Loans
by the Trust during such Collection Period; (iii) all Realized Losses incurred
during such Collection Period; (iv) to the extent attributable to principal, the
Purchase Amount received with respect to each Financed Student Loan repurchased
by the Transferor or purchased by the Master Servicer during the related
Collection Period; and (v) the Adjustment Payments, if any, received from the
Transferor during such Collection Period over (B) the Issuer Consolidation
Payments for such Collection Period; PROVIDED, HOWEVER, that the Principal
Distribution Amount will exclude all payments and proceeds of any Financed
Student Loans the Purchase Amount of which has been included in Available Funds
for a prior Collection Period.
-17-
"Principal Factor" means, as of any Distribution Date for each Class of
Notes, a seven-digit decimal figure equal to the Outstanding Amount of such
Class of Notes (after giving effect to any payments of principal made on such
Distribution Date) divided by the original Outstanding Amount of such Class. The
Principal Factor will be 1.0000000 for each Class of Notes as of the Closing
Date; thereafter, the Principal Factor for each Class of Notes will decline to
reflect reductions in the outstanding principal balance of such Class.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Amount" means, as to any Financed Student Loan on any date of
determination, the amount required to prepay in full the outstanding principal
balance of such Financed Student Loan as of the last day of the most recently
completed Collection Period, including all accrued but unpaid interest thereon
(including interest to be capitalized) through the last day of the Collection
Period in which such Financed Student Loan is being purchased.
"Purchased Student Loan" means a Financed Student Loan purchased or
repurchased pursuant to Section 3.2 of the Transfer and Servicing Agreement.
"Qualified Letter of Credit" means a letter of credit delivered or to
be delivered to the Indenture Trustee in lieu of a deposit of cash or Eligible
Investments in the Reserve Account for such Class, which letter of credit shall
(a) be irrevocable and name the Indenture Trustee, in its capacity as
such, as the sole beneficiary thereof;
(b) be issued by a bank whose credit standing is acceptable to each of
the rating agencies which are rating or have rated the Notes of such
Class;
(c) provide that if at any time the then current credit standing of the
issuing bank is such that the continued reliance on such letter of
credit for the purpose or purposes for which it was originally
delivered to the Indenture Trustee would result in a downgrading of any
rating of the Notes of such Class, the Indenture Trustee may either
draw under such letter of credit any amount up to and including the
entire amount then remaining available for drawing thereunder or
terminate such letter of credit;
(d) be transferable to any successor trustee hereunder with respect to
such Class; and
(e) meet such other standards as may be specified in the Terms
Supplement.
"Qualified Institutional Buyer" has the meaning ascribed to such term
in Rule 144A under the Securities Act.
"Quarterly Distribution Date" means the Distribution Date in each
January, April, July and October, commencing April 27, 1998.
"Rate Adjustment Date" has the meaning set forth in the Terms
Supplement.
"Rate Determination Date" means for the Notes and the Certificates, the
date which is both two Business Days (in New York and Virginia) and two London
Business Days preceding the related Rate Adjustment Date.
"Rating Agency" means Xxxxx'x and Standard & Poor's. If no such
organization or successor is any longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable Person
designated by the Transferor, notice of which designation shall be given to the
Indenture Trustee, the Eligible Lender Trustee and the Servicer.
-18-
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof and that each
of the Rating Agencies shall have notified the Transferor, the Master Servicer,
the Eligible Lender Trustee and the Indenture Trustee in writing that such
action will not result in and of itself in a reduction or withdrawal of the then
current ratings of each Class of Notes.
"Realized Loss" means, for each Financed Student Loan submitted to a
Guarantor for a Guarantee Payment or the Department of HHS for an Insurance
Payment, the excess, if any, of (i) the unpaid principal balance of such
Financed Student Loan on the date it was first submitted to a Guarantor for a
Guarantee Payment or the Department of HHS for an Insurance Payment over (ii)
all amounts received on or with respect to principal on such Financed Student
Loan (including amounts received pursuant to Section 3.2 of the Transfer and
Servicing Agreement) up through the earlier to occur of (A) the date a related
Guarantee Payment or Insurance Payment is made or (B) the last day of the
Collection Period occurring 12 months after the date the claim for such
Guarantee Payment or Insurance Payment is first denied.
"Record Date" means, with respect to a Distribution Date, the close of
business on the second Business Day (in New York) preceding such Distribution
Date.
"Reference Banks" means four leading banks, selected by the Master
Servicer, or by the Trustee, as applicable, (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not an
Affiliate of the Master Servicer, the Administrator or the Transferor and (iii)
and having an established place of business in London.
"Related Financed Student Loan File" has the meaning specified in
Section 3.8(a) of the Transfer and Servicing Agreement.
"Repayment Phase" means the period during which the related borrower is
required to make payments of principal and interest on the related Financed
Student Loan.
"Requisite Amount" has the meaning set forth in the Terms Supplement.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.1 of the related Transfer and Servicing
Agreement.
"Reserve Account Initial Deposit" means, [$_______].
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee with direct
responsibility for the administration of the Indenture and the other Basic
Documents on behalf of the Indenture Trustee, including any Managing Director,
Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular matter, any other officer to whom such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"Schedule of Financed Student Loans" means the master listing of the
Financed Student Loans set forth in Schedule A-1 to the Transfer and Servicing
Agreement and Schedule A to each Transfer Agreement, in each case as from time
to time amended or supplemented to reflect the Financed Student Loans then
subject to the Lien of the Indenture. The Schedule of Financed Student Loans may
be in the form of microfiche or in the form of electronic media.
"Securities Act" means the Securities Act of 1933, as amended.
-19-
"Securities Depository" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Securities Depository Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Securities
Depository effects book-entry transfers and pledges of securities deposited with
the Securities Depository.
"Senior Notes" means the Class A Notes.
"Senior Noteholder" means the holder of a Senior Note.
"Serial Loan" means a Student Loan that is owned by a third party that
is serial to a Financed Student Loan.
"Servicer" means PHEAA or, subject to satisfying the Rating Agency
Condition, another entity appointed by the Master Servicer to service the
Financed Student Loans, in its capacity as servicer of the Financed Student
Loans.
"Servicer's Report" means any report of the Master Servicer delivered
pursuant to Section 4.8(a) of the Transfer and Servicing Agreement,
substantially in the form acceptable to the Administrator.
"Servicing Fee" means a quarterly fee in an amount equal to (i)
[_______]% of the average Pool Balance as of the last day of the Collection
Period and the last day of the immediately preceding Collection Period (or the
Cut-off Date with respect to the initial Collection Period), or (ii) such
greater amount for which a Rating Agency Condition is satisfied.
"SLS Loan" means a FFELP Loan designated as such that is made under the
Supplemental Loans for Students Program pursuant to the Higher Education Act.
"Special Allowance Payments" means payments, designated as such, by the
Department of Education in respect of the Financed FFELP Loans to the Eligible
Lender Trustee on behalf of the Trust in accordance with the Higher Education
Act.
"Specified Reserve Account Balance" means, with respect to any
Distribution Date, an amount equal to the greater of (i) [_______]% of the sum
of the Outstanding Amount of the Notes and the Certificate Balance on such
Distribution Date, after giving effect to all payments to be made on such date;
or (ii) [$_______]; provided, however, that such balance shall not exceed the
sum of the aggregate Outstanding Amount of the Notes and the Certificate
Balance.
"Xxxxxxxx Loan" means a student loan designated as such that is made
under ss. 428 of the Higher Education Act (excluding Unsubsidized Xxxxxxxx
Loans).
"Standard & Poor's" means Standard & Poor's Rating Services, a division
of The XxXxxx-Xxxx Companies, Inc., and its successors and assigns.
"State" means any one of the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx Xxxxxxx
or the District of Columbia.
"Subcustodian" has the meaning specified in Section 3.8 of the Transfer
and Servicing Agreement.
"Subordinated Notes" means the Class B Notes.
"Subordinated Noteholder" means any Noteholder of a Subordinated Note.
-20-
"Subsequent Cut-off Date" means the day as to which principal and
interest accruing with respect to an Exchanged Student Loan are transferred to
the Eligible Lender Trustee on behalf of the Issuer pursuant to Section 2.2 of
the Transfer and Servicing Agreement.
"Subservicing Agreement" has the meaning specified in Section 4.13 of
the Transfer and Servicing Agreement.
"Successor Administrator" has the meaning specified in Section 3.7(e)
of the Indenture.
"Successor Master Servicer" has the meaning specified in Section 3.7(e)
of the Indenture.
"Telerate Page 3750" means the display page so designated on the Dow
Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices). [[Provide
backup services]]
"Terms Supplement" means, the Terms Supplement to the Indenture dated
as of [_______,] 1997 between the Issuer and the Indenture Trustee.
"TP Loans" means all Xxxxxxxx Loans, Unsubsidized Xxxxxxxx Loans and
PLUS Loans with a first disbursement made by the Transferor on or after November
1, 1996.
"TP Program" means the Crestar Bank Top Performer Program and any
similar program with respect to which a Rating Agency Condition is satisfied.
"Transaction Fees" means, collectively, the Servicing Fee, the
Administration Fee, the Indenture Trustee Fee, the Delaware Trustee Fee and the
Eligible Lender Trustee Fee.
"Transfer Agreement" has the meaning set forth in Section 2.2(b) of the
Transfer and Servicing Agreement.
"Transfer and Servicing Agreement" means the Transfer and Servicing
Agreement dated as of [_______,] 1997, among the Issuer, the Transferor, the
Administrator, the Eligible Lender Trustee and the Master Servicer, as amended
from time to time.
"Transferor" means Crestar Bank.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" means the Issuer, established pursuant to the Trust Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, if any,
and all proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section 5.1 of the
Transfer and Servicing Agreement.
"Trust Agreement" means the Trust Agreement dated as of [_______],
1997, among the Depositor, the Eligible Lender Trustee and the Delaware Trustee,
as amended and supplemented from time to time.
"Trust Certificate" means a Certificate.
-21-
"Trust Certificateholder" means a person in whose name a Trust
Certificate is registered in the Certificate Register.
"Trust Estate" means all right, title and interest of the Trust (or the
Eligible Lender Trustee on behalf of the Trust) in and to (i) the property and
rights assigned to the Trust pursuant to Article II of the Transfer and
Servicing Agreement and each Transfer Agreement, (ii) all funds on deposit from
time to time in the Trust Accounts and (iii) all other property of the Trust
from time to time, including any rights of the Eligible Lender Trustee and the
Trust pursuant to the Transfer and Servicing Agreement, the Administration
Agreement and the other Basic Documents.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"Unsubsidized Xxxxxxxx Loan" means a FFELP Loan designated as such that
is made under ss. 428H of the Higher Education Act.
"XXXX Service Errors" has the meaning assigned to such term in the
letter to the Transferor, dated March 7, 1996, from the Department of Education.
-22-
SCHEDULE A-1
TO THE
TRANSFER AND SERVICING AGREEMENT
Schedule of Financed Student Loans
----------------------------------
Schedule of Financed Student Loans was delivered to Trustee and is not
included herein.
A-1
SCHEDULE B
TO THE
TRANSFER AND SERVICING AGREEMENT
Location of Financed Student Loan Files
---------------------------------------
Name of subcustodian Location of Related Financed Student Loan Files
-------------------- -----------------------------------------------
Pennsylvania Higher 0000 X. 0xx Xxxxxx
Education Assistance Xxxxxxxxxx, XX 00000
Agency
B-1
EXHIBIT A
TO THE
TRANSFER AND SERVICING AGREEMENT
Form of Noteholders' Statement
pursuant to Section 5.7(a) of
Transfer and Servicing
Agreement (capitalized terms used
herein are defined in Appendix A thereto)
-----------------------------------------
Distribution Date:____________________
(i) Principal Factor
(a) Class A-1 Notes: _________________
(b) Class A-2 Notes: _________________
(c) Class B Notes: _________________
(ii) Amount of principal being paid or distributed:
(a) Class A-1 Notes: _________________
(b) Class A-2 Notes: _________________
(c) Class B Notes: _________________
(d) Certificates: _________________
(iii) (a) Amount of interest being paid or distributed:
(1) Class A-1 Notes: $__ (based on [Formula Interest Rate] [Net Loan Rate])
(2) Class A-2 Notes: $___(based on [Formula Interest Rate] [Net Loan Rate])
(3) Class B Notes: $___(based on [Formula Interest Rate] [Net Loan Rate])
(4) Certificates: $____ (based on [One-Month LIBOR] [Net Loan Rate])
(b) Applicable Interest Rate:
(1) Class A-1 Notes: ______%
(2) Class A-2 Notes: ______%
(3) Class B Notes: ______%
(4) Certificates: ______%
(iv) Amount of distribution allocable to any Noteholders' Interest Carryover:
(a) Class A-1 Notes: $____________
(b) Class A-2 Notes: $____________
(c) Class B Notes: $____________
(v) Pool Balance at end of preceding Collection Period: __________
(vii) After giving effect to distributions on this Distribution Date:
(a) outstanding principal amount of Class A-1 Notes: $____________
(b) outstanding principal amount of Class A-2 Notes: $____________
A-1
(c) outstanding principal amount of Class B Notes: $____________
(d) Certificate Balance: $____________
(vii) Amount of Servicing Fee, Administration Fee, Indenture Trustee Fee, Delaware Trustee Fee and
Eligible Lender Trustee Fee to be allocated for the upcoming Distribution Date: ($____________)
(viii) (a) Aggregated amount of Realized Losses (if any) for the Collection Period immediately preceding
the Distribution Date: ____________
(ix) (a) Amount of distribution attributable to amounts in the Reserve Account: $____________
(b) Amount of other withdrawals from the Reserve Account $____________
(c) Reserve Account Balance $____________
(d) Parity percentage _____%
(e) Amount of Parity Percentage Payments $____________
(x) The aggregate Purchase Amount paid for Financed Student Loans
purchased from the trust during the immediately preceding
Collection Period: ____________
(xi) During the Exchange Period only, the aggregate Issuer
Consolidation Payments and Adjustment Payments, stated
separately, for the immediately preceding Collection Period:
$____________
(xii) Amount of Financed Student Loans:
(1) that are 30 to 60 days delinquent: $____________
(2) that are 61 to 90 days delinquent: $____________
(3) that are 91 to 120 days delinquent: $____________
(4) that are 120 days delinquent: $____________
(5) for which claims have been filed with
the appropriate Guarantor or the Department of HHS
and which are awaiting payment $____________
A-2
EXHIBIT B
TO THE
TRANSFER AND SERVICING AGREEMENT
Form of Certificateholders' Statement
pursuant to Section 5.7(a) of
Transfer and Servicing
Agreement (capitalized terms used
herein are defined in Appendix A thereto)
-----------------------------------------
Distribution Date:____________________
(i) Principal Factor
(a) Class A-1 Notes: _________________
(b) Class A-2 Notes: _________________
(c) Class B Notes: _________________
(ii) Amount of principal being paid or distributed:
(a) Class A-1 Notes: _________________
(b) Class A-2 Notes: _________________
(c) Class B Notes: _________________
(d) Certificates: _________________
(iii) (a) Amount of interest being paid or distributed:
(1) Class A-1 Notes: $__ (based on [Formula Interest Rate] [Net Loan Rate])
(2) Class A-2 Notes: $__ (based on [Formula Interest Rate] [Net Loan Rate])
(3) Class B Notes: $__ (based on [Formula Interest Rate] [Net Loan Rate])
(4) Certificates: $____ (based on [One-Month LIBOR] [Net Loan Rate])
(b) Applicable Interest Rate:
(1) Class A-1 Notes: ______%
(2) Class A-2 Notes: ______%
(3) Class B Notes: ______%
(4) Certificates: ______%
(iv) Amount of distribution allocable to any Noteholders' Interest Carryover:
(a) Class A-1 Notes: $____________
(b) Class A-2 Notes: $____________
(c) Class B Notes: $____________
(v) Pool Balance at end of preceding Collection Period: __________
(vii) After giving effect to distributions on this Distribution Date:
(a) outstanding principal amount of Class A-1 Notes: $____________
(b) outstanding principal amount of Class A-2 Notes: $____________
B-1
(c) outstanding principal amount of Class B Notes: $____________
(d) Certificate Balance: $____________
(vii) Amount of Servicing Fee, Administration Fee, Indenture Trustee Fee, Delaware Trustee Fee and
Eligible Lender Trustee Fee to be allocated for the upcoming Distribution Date: ($____________)
(viii) (a) Aggregated amount of Realized Losses (if any) for the immediately preceding Collection Period:
$____________
(ix) (a) Amount of distribution attributable to amounts in the Reserve Account: $____________
(b) Amount of other withdrawals from the Reserve Account $____________
(c) Reserve Account Balance $____________
(d) Parity percentage _____%
(e) Amount of Parity Percentage Payments $____________
(x) The aggregate Purchase Amount paid for Financed Student Loans purchased from the Trust during the
immediately preceding Collection Period: ____________
(xi) During the Exchange Period only, the aggregate Issuer Consolidation Payments and Adjustment
Payments, stated separately, for the immediately preceding Collection Period: $____________
(xii) Amount of Financed Student Loans:
(1) that are 30 to 60 days delinquent: $____________
(2) that are 61 to 90 days delinquent: $____________
(3) that are 91 to 120 days delinquent: $____________
(4) that are 120 days delinquent: $____________
(5) for which claims have been filed with
the appropriate Guarantor or the Department of HHS
and which are awaiting payment $____________
B-2
EXHIBIT C
TO THE
TRANSFER AND SERVICING AGREEMENT
Form of Administrator's Certificate
-----------------------------------
[To be provided by the Administrator pursuant to
Section 4.7 of the Transfer and
Servicing Agreement]
C-1
EXHIBIT D
TO THE
TRANSFER AND SERVICING AGREEMENT
ASSIGNMENT FOR
FINANCED STUDENT LOANS
For value received, in accordance with the Transfer and Servicing
Agreement (the "Transfer and Servicing Agreement") dated as of [_______,] 1997,
among the undersigned, as transferor (the "Transferor"), as master servicer (the
"Master Servicer") and as administrator (the "Administrator"), Crestar Student
Loan Trust 1997-1 (the "Trust"), and Star Bank, National Association, not in its
individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender
Trustee"), the undersigned does hereby contribute, assign, transfer and
otherwise convey unto the Eligible Lender Trustee on behalf of the Trust,
without recourse (subject to the obligations set forth in the Transfer and
Servicing Agreement), all right, title and interest of the undersigned in and to
(i) the FFELP Loans and the HEAL Loans set forth on Schedule A-1 to the Transfer
and Servicing Agreement and all obligations of the Obligors thereunder,
including all monies paid or payable thereunder (other than Interest Subsidy
Payments and Special Allowance Payments through the Cut-off Date) after the
Cut-off Date, including the right to enforce such FFELP Loans and HEAL Loans in
the same manner and to the same extent as the Transferor would have the power to
do but for the execution and delivery of the Transfer and Servicing Agreement,
(ii) all funds on deposit from time to time in the Trust Accounts and in all
investments and proceeds thereof (including all income thereon) and (iii) the
proceeds of any and all of the foregoing. The foregoing contribution,
assignment, transfer and conveyance does not constitute and is not intended to
result in any assumption by the Eligible Lender Trustee or the Trust of any
obligation of the Transferor to the borrowers of Initial Financed Student Loans
or any other person in connection with the Financed Student Loans or any
agreement or instrument relating to any of them, except to the extent required
by the Higher Education Act or the HEAL Act, as the case may be.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Transfer and Servicing Agreement and is to be governed by the Transfer and
Servicing Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in Appendix A to the Transfer and Servicing Agreement, which
also contains rules as to usage that shall be applicable herein.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of [_______,] 1997.
CRESTAR BANK,
as Transferor
By:_________________________________________
Name:
Title:
D-1
EXHIBIT E
TO THE
TRANSFER AND SERVICING AGREEMENT
TRANSFER AGREEMENT
TRANSFER AGREEMENT No. ___dated as of ________, _____, among CRESTAR
STUDENT LOAN TRUST 1997-1, a Delaware business trust (the "Issuer"), CRESTAR
BANK, a Virginia banking corporation, as transferor (the "Transferor"), and
STAR BANK, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity but solely as Eligible Lender Trustee of the Issuer (the
"Eligible Lender Trustee").
WITNESSETH:
WHEREAS the Issuer, the Transferor, the Eligible Lender Trustee, the
Administrator and the Master Servicer (as defined in the Appendix A to the
Transfer and Servicing Agreement) are parties to the Transfer and Servicing
Agreement dated as of [_______,] 1997 (as amended or supplemented, the "Transfer
and Servicing Agreement");
WHEREAS pursuant to the Transfer and Servicing Agreement, the
Transferor wishes to convey the FFELP Loans [and HEAL Loans] referred to in
Section 2 hereof (the "Exchanged Student Loans") to the Eligible Lender Trustee
on behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are willing to
accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree, intending to be
legally bound hereby, as follows:
1. Definitions and Usage. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in Appendix A to the
Transfer and Servicing Agreement, which also contains rules of construction and
usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"Exchange Date" means, with respect to the Exchanged Student Loans,
[_______].
"Subsequent Cut-Off Date" means, with respect to each Exchanged Student
Loan, the date specified as such on Schedule A hereto.
2. Schedule of Exchanged Student Loans. Attached hereto as Schedule A
is a supplement to the Schedule of Financed Student Loans listing the Exchanged
Student Loans to be conveyed on the Exchange Date to the Eligible Lender Trustee
on behalf of the Issuer pursuant to this Agreement. Attached hereto as Schedule
B is a list of Financed Student Loans to be repaid on the Exchange Date from the
proceeds of a Consolidation Loan or a HEAL Consolidation Loan, as the case may
be, and conveyed to the Transferor by the Eligible Lender Trustee on behalf of
the Issuer in exchange for the Exchanged Student Loans, which Schedule B shall
be deemed to modify the Schedule of Financed Student Loans to delete therefrom
such Financed Student Loans being so conveyed to the Transferor.
E-1
3. Conveyance of Exchanged Student Loans. In consideration of the
Issuer's delivery to or upon the order of the Transferor of the Financed Student
Loans listed on Schedule B attached hereto, the Transferor does hereby
contribute, transfer, assign. set over and otherwise convey, without recourse
(subject to the obligations set forth in the Transfer and Servicing Agreement),
to the Eligible Lender Trustee on behalf of the Issuer:
(a) all right, title and interest in and to each Exchanged
Student Loan, and all obligations of the Obligors thereunder, including
all moneys paid thereunder (other than Interest Subsidy Payments and
Special Allowance Payments payable through the Subsequent Cut-Off
Date), and all written communications received by the Transferor with
respect thereto and still retained by the Transferor in accordance with
its retention policies (including borrower correspondence, notices of
death. disability or bankruptcy and requests for deferments or
forbearances), on and after the Subsequent Cut-Off Date; and
(b) the proceeds of any and all of the foregoing.
4. Representations and Warranties of the Transferor. The Transferor
hereby represents and warrants to the Issuer as of the date of this Agreement
and as of the Exchange Date that:
(a) Organization and Good Standing. The Transferor is duly
organized and validly existing as a Virginia banking corporation with
the power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted, except for such power and authority the absence of
which would not have a material adverse effect on the Transferor or its
ability to consummate the transactions contemplated by this Agreement
and the Transferor had at all relevant times, and has, the power,
authority and legal right to originate, acquire and own the Exchanged
Student Loans.
(b) Power and Authority. The Transferor has the requisite
corporate power and authority to execute and deliver this Agreement and
to carry out its terms; the Transferor has requisite corporate power
and authority to transfer and assign the property to be contributed and
assigned to and deposited with the Issuer (or with the Eligible Lender
Trustee on behalf of the Issuer) and the Transferor has duly authorized
such transfer and assignment to the Issuer (or to the Eligible Lender
Trustee on behalf of the Issuer) by all necessary corporate action on
the Transferor's part; and the execution, delivery and performance of
this Agreement have been duly authorized by the Transferor by all
necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Transferor enforceable against the
Transferor in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and
similar laws relating to creditors' rights generally or the rights of
creditors of banks the deposit accounts of which are insured by the
FDIC and subject to general principles of equity.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not violate, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time or both) a
default under, the charter or by-laws of the Transferor, or any
material indenture, material agreement or other material instrument to
which the Transferor is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such material indenture,
material agreement or other material instrument (other than pursuant to
the Basic Documents); nor violate any material law or, to the knowledge
of the Transferor, any material order, rule or regulation applicable to
it of any court or of any federal or State regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Transferor or its properties.
E-2
(e) No Proceedings. To its best knowledge, there are no
proceedings or investigations pending or threatened against the
Transferor, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over it or its
properties: (i) asserting the invalidity of this Agreement, (ii)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, (iii) seeking any determination or
ruling that could reasonably be expected to have a material and adverse
effect on the performance by the Transferor of its obligations under,
or the validity or enforceability of, this Agreement or (iv) seeking to
affect adversely the federal or State income tax attributes of the
Issuer, the Notes or the Certificates.
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government
instrumentality required to be obtained, effected or given by the
Transferor in connection with the execution and delivery by the
Transferor of this Agreement and the performance by the Transferor of
the transactions contemplated by this Agreement have been duly
obtained, effected or given and are in full force and effect.
(g) Principal Balances. (i) The aggregate principal balance of
the Consolidation Loans, the HEAL Consolidation Loans and the Serial
Loans that are Exchanged Student Loans listed on Schedule A attached
hereto and conveyed to the Eligible Lender Trustee on behalf of the
Issuer pursuant to this Agreement as of their respective Subsequent
Cut-Off Dates is $________, $_______ and $________, respectively;
[[(ii) the aggregate principal balance of the Financed Student Loans
listed on Schedule B attached hereto and to be conveyed to the
Transferor pursuant to Section 2.3(d) of the Transfer and Servicing
Agreement is $_______ ;]] (iii) the Consolidation Prepayments on
deposit in the Collection Account is $________; (iv) the Issuer
Consolidation Payments for the Exchange Date is $__________; and (v)
the Exchange Adjustment for the Exchange Date is $________.
5. Conditions Precedent. The obligation of the Issuer to acquire the
Exchanged Student Loans hereunder is subject to the satisfaction, on or prior to
the Exchange Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Transferor in Section 4 of
this Agreement and the representations and warranties made with respect
to the Exchanged Student Loans in Section 3.1 of the Transfer and
Servicing Agreement shall be true and correct in all material respects
as of the date of this Agreement and as of the Exchange Date.
(b) Transfer and Servicing Agreement Conditions. Each of the
conditions set forth in Section 2.2(b) of the Transfer and Servicing
Agreement shall have been satisfied.
(c) Delivery of Assignment. The Transferor shall have
delivered an Assignment substantially in the form of Annex A hereto.
Upon the satisfaction of the conditions set forth in this Section 5,
the Eligible Lender Trustee shall have executed and delivered to the Transferor
an Assignment, substantially in the form of Annex B hereto.
6. Ratification of Agreement. As supplemented by this Agreement, the
Transfer and Servicing Agreement is in all respects ratified and confirmed and
the Transfer and Servicing Agreement as so supplemented by this Agreement shall
be read, taken and construed as one and the same instrument.
7. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
E-3
8. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York, 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.
9. Headings. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and the year first above written.
CRESTAR STUDENT LOAN TRUST 1997-1
By: STAR BANK, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Eligible Lender
Trustee
By:_________________________________________
Name:
Title:
STAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Eligible Lender Trustee
By: ________________________________________
Name:
Title:
CRESTAR BANK, as
Transferor
By: ________________________________________
Name:
Title:
E-4
Acknowledged and accepted as
of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By ______________________________________
Name:
Title:
E-5
ANNEX A
TO THE TRANSFER AGREEMENT
ASSIGNMENT
For value received, in accordance with the Transfer and Servicing
Agreement (the "Transfer and Servicing Agreement") dated as of [_______,] 1997,
among the undersigned, as transferor (the "Transferor"), as master servicer and
as administrator, Crestar Student Loan Trust 1997-1 (the "Trust"), Star Bank,
National Association, not in its individual capacity but solely as Eligible
Lender Trustee (the "Eligible Lender Trustee"), and the Transfer Agreement No.
__ dated as of____, (the "Transfer Agreement") among the Transferor, the Trust
and the Eligible Lender Trustee, the undersigned does hereby contribute, assign,
transfer and otherwise convey unto the Eligible Lender Trustee on behalf of the
Trust, without recourse (subject to the obligations set forth in the Transfer
and Servicing Agreement), all right, title and interest of the undersigned in
and to (i) the Exchanged Student Loans and all obligations of the Obligors
thereunder, including all moneys paid or payable thereunder (other than Interest
Subsidy Payments and Special Allowance Payments through the related Subsequent
Cut-Off Date) after the related Subsequent Cut-Off Date and (ii) the proceeds of
any and all of the foregoing. The foregoing contribution, assignment, transfer
and conveyance does not constitute and is not intended to result in any
assumption by the Eligible Lender Trustee or the Trust of any obligation of the
Transferor to the borrowers of such Exchanged Student Loans or any other person
in connection with the Exchanged Student Loans or any agreement or instrument
relating to any of them, except to the extent required by the Higher Education
Act or the HEAL Act, as the case may be.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Exchanged Student Loan described
in Schedule A to the Transfer Agreement in favor of the Eligible Lender Trustee
on behalf of the Trust, without recourse (subject to the obligations set forth
in the Transfer and Servicing Agreement) against the undersigned. This
endorsement may be effected by attaching a facsimile hereof to each or any of
such promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Transfer and Servicing Agreement and the Transfer Agreement and is to be
governed by the Transfer and Servicing Agreement and the Transfer Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in the Transfer Agreement or in Appendix A to the Transfer and
Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of______
CRESTAR BANK,
as Transferor
By: ________________________________________
Name:
Title:
A-1
ANNEX B
TO THE TRANSFER AGREEMENT
ASSIGNMENT
For value received, in accordance with the Transfer and Servicing
Agreement (the "Transfer and Servicing Agreement") dated as of [_______], 1997,
among the undersigned, (the "Trust"), as Master Servicer and as Administrator
(the "Transferor"), and Star Bank, National Association, not in its individual
capacity but solely as Eligible Lender Trustee (the "Eligible Lender Trustee"),
and the Transfer Agreement No. __ dated as of ____________, ____ (the "Transfer
Agreement") among the Transferor, the Trust and the Eligible Lender Trustee, the
undersigned does hereby contribute, assign, transfer and otherwise convey unto
the Transferor, without recourse (subject to the obligations set forth in the
Transfer and Servicing Agreement), all right, title and interest of the
undersigned in and to (i) the Financed Student Loans set forth on Schedule B to
the Transfer Agreement and all obligations of the Obligors thereunder, including
all moneys paid or payable thereunder (other than Interest Subsidy Payments and
Special Allowance Payments through the related Subsequent Cut-off Date) after
the related Subsequent Cut-off Date and (ii) the proceeds of any and all of the
foregoing. The foregoing contribution, assignment. transfer and conveyance does
not constitute and is not intended to result in any assumption by the Transferor
of any obligation of the Eligible Lender Trustee or the Trust to the borrowers
of such Financed Student Loans or any other person in connection with such
Financed Student Loans or any agreement or instrument relating to any of them,
except to the extent required by the Higher Education Act or the HEAL Act, as
the case may be.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Financed Student Loan described in
Schedule B to the Transfer Agreement in favor of the Transferor, without
recourse, against the undersigned. This endorsement may be effected by attaching
a facsimile hereof to each or any of such promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Transfer and Servicing Agreement and the Transfer Agreement and is to be
governed by the Transfer and Servicing Agreement and the Transfer Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in the Transfer Agreement or in Appendix A to the Transfer and
Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of______
CRESTAR STUDENT LOAN TRUST 1997-1
By: STAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely as Eligible
Lender Trustee on behalf of the Trust
By: ________________________________________
Name:
Title:
B-1
SCHEDULE A
TO THE TRANSFER AGREEMENT NO.____
[List of Exchanged Student Loans and
their related Subsequent Cut-Off Dates]
B-1
SCHEDULE B
TO THE TRANSFER AGREEMENT NO.___
[List of Financed Student Loans
to be Conveyed to the Transferor]
B-2
EXHIBIT F
TO THE
TRANSFER AND SERVICING AGREEMENT
OFFICER'S CERTIFICATE
REQUIRED BY SECTION 2.2(b)(viii) OF THE TRANSFER AND SERVICING AGREEMENT
B-3
