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EXHIBIT 4.1
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TRUST AGREEMENT
between
SLM FUNDING CORPORATION,
as Depositor
and
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of October 1, 1996
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TABLE OF CONTENTS
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ARTICLE I
Section 1.1 Definitions and Usage . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
SECTION 2.1 Creation of Trust; Name . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.3 Purposes and Powers . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.4 Appointment of Eligible Lender Trustee . . . . . . . . . . . . . 2
SECTION 2.5 Initial Capital Contribution of Trust Estate . . . . . . . . . . 2
SECTION 2.6 Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.7 Liability of the Certificateholders . . . . . . . . . . . . . . . 3
SECTION 2.8 Title to Trust Property . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.9 Representations and Warranties of the Depositor . . . . . . . . . 4
SECTION 2.10 Application of Trust Funds . . . . . . . . . . . . . . . . . . . 5
SECTION 2.11 Required Net Worth . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
SECTION 3.1 Initial Beneficial Ownership . . . . . . . . . . . . . . . . . . 7
SECTION 3.2 The Trust Certificates . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.3 Authentication of Trust Certificates . . . . . . . . . . . . . . 8
SECTION 3.4 Registration of Transfer and Exchange
of Trust Certificates . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen
Trust Certificates . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.6 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.7 Access to List of Certificate holders'
Names and Addresses . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.8 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . 11
SECTION 3.9 Appointment of Certificate Paying
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.10 Disposition by Depositor . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.11 Book-Entry Certificates . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.12 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . 13
SECTION 3.13 Definitive Certificates . . . . . . . . . . . . . . . . . . . . . 13
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ARTICLE IV
SECTION 4.1 Prior Notice to Certificateholders
With Respect to Certain Matters . . . . . . . . . . . . . . . . . 14
SECTION 4.2 Action by Certificateholders with
Respect to Certain Matters . . . . . . . . . . . . . . . . . . . 15
SECTION 4.3 Action by Certificateholders with
Respect to Bankruptcy . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.4 Restrictions on Certificateholders'
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.5 Majority Control . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V
SECTION 5.1 Application of Trust Funds . . . . . . . . . . . . . . . . . . . 16
SECTION 5.2 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.3 No Segregation of Moneys; No Interest . . . . . . . . . . . . . . 17
SECTION 5.4 Accounting and Reports to the Note-
holders, Certificateholders, the
Internal Revenue Service and Others . . . . . . . . . . . . . . . 18
SECTION 5.5 Signature on Returns; Tax Matters
Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.6 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VI
SECTION 6.1 General Authority . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 6.2 General Duties . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6.3 Action upon Instruction . . . . . . . . . . . . . . . . . . . . . 21
SECTION 6.4 No Duties Except as Specified in
this Agreement or in Instructions . . . . . . . . . . . . . . . . 22
SECTION 6.5 No Action Except Under Specified
Documents or Instructions . . . . . . . . . . . . . . . . . . . . 22
SECTION 6.6 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VII
SECTION 7.1 Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . 23
SECTION 7.2 Furnishing of Documents . . . . . . . . . . . . . . . . . . . . . 24
SECTION 7.3 Representations and Warranties . . . . . . . . . . . . . . . . . 25
SECTION 7.4 Reliance; Advice of Counsel . . . . . . . . . . . . . . . . . . . 25
SECTION 7.5 Not Acting in Individual Capacity . . . . . . . . . . . . . . . . 26
SECTION 7.6 Eligible Lender Trustee Not Liable
for Trust Certificates or Trust
Student Loans . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 7.7 Eligible Lender Trustee May Own
Trust Certificates and Notes . . . . . . . . . . . . . . . . . . 27
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ARTICLE VIII
SECTION 8.1 Eligible Lender Trustee's Fees and Expenses . . . . . . . . . . . 27
SECTION 8.2 Payments to the Eligible Lender
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE IX
SECTION 9.1 Termination of Trust Agreement . . . . . . . . . . . . . . . . . 28
SECTION 9.2 Dissolution upon Insolvency of
the Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE X
SECTION 10.1 Eligibility Requirements for Eligible Lender Trustee . . . . . . 30
SECTION 10.2 Resignation or Removal of Eligible
Lender Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 10.3 Successor Eligible Lender Trustee . . . . . . . . . . . . . . . . 32
SECTION 10.4 Merger or Consolidation of Eligible
Lender Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 10.5 Appointment of Co-Eligible Lender
Trustee or Separate Eligible Lender
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XI
SECTION 11.1 Supplements and Amendments . . . . . . . . . . . . . . . . . . . 34
SECTION 11.2 No Legal Title to Trust Estate in
Certificateholders . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 11.3 Limitations on Rights of Others . . . . . . . . . . . . . . . . . 36
SECTION 11.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 11.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 11.6 Separate Counterparts . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 11.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 37
SECTION 11.8 No Petition. . . . . . . . . . . . . . 37
SECTION 11.9 No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 11.10 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 11.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate Depository Agreement
Annex 1 to Trust Agreement
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TRUST AGREEMENT dated as of October 1, 1996, between SLM FUNDING
CORPORATION, a Delaware corporation, as Depositor, and CHASE MANHATTAN BANK
USA, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity but solely as Eligible Lender Trustee.
The Depositor and the Eligible Lender Trustee hereby agree as follows:
ARTICLE I
Definitions and Usage
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
ARTICLE II
Organization
SECTION 2.1 Creation of Trust; Name. There is hereby created a
Trust which shall be known as "SLM Student Loan Trust 1996-4", in which name
the Eligible Lender Trustee may conduct the business of the Trust, make and
execute contracts and other instruments on behalf of the Trust and xxx and be
sued. The Trust shall constitute a business trust within the meaning of
Section 3801(a) of the Delaware Business Trust Act for which the Trustee has
filed a certificate of trust with the Secretary of State of the State of
Delaware pursuant to Section 3810(a) of the Delaware Business Trust Act.
SECTION 2.2 Office. The office of the Trust shall be in care of
the Eligible Lender Trustee at its Corporate Trust Office or at such other
address as the Eligible Lender Trustee may designate by written notice to the
Certificateholders and the Depositor.
SECTION 2.3 Purposes and Powers. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Trust Certificates pursuant to this Agreement and to sell the Notes
and the Trust Certificates in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to fund the Reserve Account pursuant to
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Section 2.8 of the Administration Agreement and to purchase the Trust
Student Loans pursuant to the Sale Agreement;
(iii) to Grant the Trust Estate to the Indenture Trustee
pursuant to the Indenture, and to hold, manage and distribute to the
Certificateholders pursuant to the terms of this Agreement any portion
of the Trust Estate released from the Lien of, and remitted to the
Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the
Basic Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Trust Estate and the making of distributions to
the Certificateholders, the Noteholders and the others specified in
Section 2.7 of the Administration Agreement.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the other Basic Documents.
SECTION 2.4 Appointment of Eligible Lender Trustee. The Depositor
hereby appoints the Eligible Lender Trustee as trustee of the Trust effective as
of the date hereof, to have all the rights, powers and duties set forth
herein.
SECTION 2.5 Initial Capital Contribution of Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the
Eligible Lender Trustee, as of the date hereof, the sum of $1.00. The Eligible
Lender Trustee hereby acknowledges receipt in trust from the Depositor, as of
the date hereof, of the foregoing contribution, which shall constitute the
Initial Trust Estate and shall be deposited in the Collection Account. The
Depositor shall pay the organizational expenses of the Trust as they may arise
or shall, upon the request of the Eligible Lender Trustee, promptly reimburse
the Eligible Lender Trustee for any such expenses paid by the Eligible Lender
Trustee.
SECTION 2.6 Declaration of Trust. The Eligible Lender Trustee
hereby declares that it will hold the Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the other
Basic Documents. It is
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the intention of the parties hereto that the Trust constitute a business trust
under Delaware law and that this Agreement constitute the governing instrument
of such trust. It is the intention of the parties hereto that, solely for
income tax purposes, the Trust shall be treated as a partnership, with the
assets of the partnership being the Trust Student Loans and other assets held
by the Trust, the partners of the partnership being the Certificateholders
(including the Depositor in its capacity as Certificateholder and as recipient
of distributions from the Reserve Account), and the Notes being debt of the
partnership. The parties agree that, unless otherwise required by appropriate
tax authorities, the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with the characterization
of the Trust as a partnership for such tax purposes. Effective as of the date
hereof, the Eligible Lender Trustee shall have all rights, powers and duties
set forth herein with respect to accomplishing the purposes of the Trust.
SECTION 2.7 Liability of the Certificateholders.
(a) Notwithstanding the provisions of Section 3803 of the Delaware
Business Trust Act, the Depositor shall be liable directly to
and shall indemnify the injured party for all losses, claims,
damages, liabilities and expenses of the Trust (including
Expenses, to the extent that the assets of the Trust that
would remain if all of the Notes were paid in full would not
be sufficient to pay any such liabilities, or if such
liabilities in fact are not paid out of the Trust Estate) to
the extent that the Depositor would be liable if the Trust
were a partnership under the Delaware Revised Uniform Limited
Partnership Act in which the Depositor were a general partner;
provided, however, that the Depositor shall not be liable for
any losses incurred by a beneficial owner of a Note in its
capacity as a holder of limited recourse debt or to any
Certificateholder. In addition, any third party creditors of
the Trust (other than in connection with the obligations to
Noteholders excepted above) shall be third party beneficiaries
of this paragraph. The obligations of the Depositor under
this paragraph shall be evidenced by the Trust Certificates
described in Section 3.10, which shall be deemed to be a
separate class of Trust Certificates from all other Trust
Certificates issued by the Trust; provided that the rights and
obligations evidenced by all Trust Certificates, regardless of
class, except as provided in Section 3.10 and this Section,
shall be identical.
(b) No Certificateholder, other than to the extent set forth in
paragraph (a), shall have any personal liability for any
liability or obligation of the Trust.
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SECTION 2.8 Title to Trust Property. Legal title to all of the
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Eligible Lender Trustee, a co-trustee
and/or a separate trustee, as the case may be; provided that legal title to the
Trust Student Loans shall be vested at all times in the Eligible Lender Trustee
on behalf of the Trust.
SECTION 2.9 Representations, Warranties, and Covenants of the
Depositor. The Depositor hereby represents, warrants and covenants to the
Eligible Lender Trustee as follows:
(a) The Depositor is duly organized and validly existing as a
Delaware corporation in good standing under the laws of the
State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are
currently owned and such business is presently conducted.
(b) The Depositor has the corporate power and authority to execute
and deliver this Agreement and to carry out its terms; the
Depositor has full corporate power and authority to sell and
assign the property to be sold and assigned to and deposited
with the Trust (or with the Eligible Lender Trustee on behalf
of the Trust) and the Depositor has duly authorized such sale
and assignment and deposit to the Trust (or to the Eligible
Lender Trustee on behalf of the Trust) by all necessary
corporate action; and the execution, delivery and performance
of this Agreement has been duly authorized by the Depositor by
all necessary corporate action.
(c) This Agreement constitutes a legal, valid and binding
obligation of the Depositor enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency,
reorganization and similar laws relating to creditors' rights
generally and subject to general principles of equity.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse
of time or both) a default under, the certificates of
incorporation or by-laws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a
party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement
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or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the Depositor's
knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any Federal or state regulatory
body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties.
(e) The Depositor agrees for the benefit of the Noteholders and of
the Certificate Holders that it will comply with each of the
requirements set forth in Article IX, X, and XII of its
Certificate of Incorporation and with each of the undertakings
set forth in Annex I hereto.
SECTION 2.10 Application of Trust Funds.
(a) Income and Loss Allocations. After giving effect to the
special allocations set forth in subparagraph (b) of this
Section 2.10 and for purposes of maintaining Capital Accounts
under Section 5.6, gross income items of the Trust for any
Accrual Period as determined for Federal income tax purposes
shall be allocated as follows:
(1) first, among the Certificateholders as of the
close of business on the last day of such Accrual
Period, in proportion to the Certificate Balance of
the Certificates owned by them on such date, an
amount of gross income up to the sum of (i) the
portion of the Certificateholders' Return
Distribution Amount and the Certificate Return
Carryover, if any, for the related Distribution Date
allocable to such Accrual Period, (ii) return on the
excess, if any, of the Certificateholders' Return
Distribution Amount for the preceding Distribution
Date over the amount in respect of return on the
Certificates that is actually distributed to
Certificateholders on such preceding Distribution
Date, to the extent permitted by law, at the
Certificate Rate for such Accrual Period and (iii)
the portion of the market discount on the Trust
Student Loans accrued during such Accrual Period that
is allocable to the excess, if any, of the initial
aggregate principal amount of the Certificates over
their initial aggregate issue price; and
(2) the balance of Profits, if any, to the
Depositor.
If the items of gross income of the Trust for any month are
insufficient for the allocations described in
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clause (1) above, subsequent items of gross income shall first
be allocated to make up such shortfall before Profits are
allocated as provided in clause (b). Loss of the Trust for any
Accrual Period shall be allocated to the Depositor to the
extent the Depositor is reasonably expected to bear the
economic burden of such Loss, and any remaining Loss shall be
allocated among the Certificateholders as of the close of
business on the last day of such Accrual Period in proportion
to the Certificate Balance of Trust Certificates owned by them
on such date. If any items of loss or deduction are allocated
to Certificateholders and the Depositor subsequently
determines that the economic loss to Certificateholders will
be less than was expected at the time such allocations were
made, additional items of gross income will be allocated to
Certificateholders in subsequent periods to offset the excess
allocations of losses and deductions to Certificateholders
before any Profits are allocated to the Depositor as provided
in clause (2) above.
(b) Special Allocations.
(1) In the event any Certificateholder unexpectedly
receives any adjustments, allocations or
distributions described in Treasury Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of
Trust income and gain shall be specially allocated to
such Certificateholder in an amount and manner
sufficient to eliminate, to the extent required by
the Treasury Regulations, the deficit, if any, in the
balance of the Capital Account of such
Certificateholder as quickly as possible. This
Section 2.10(b) is intended to comply with the
qualified income offset provision in Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
(2) In the event the initial issue price of
Certificates differs from their initial Certificate
Balance, there shall be specially allocated to the
Certificateholders the portion, if any, of the offset
for premium (in the case the issue price of the
Certificates exceeds the Certificate Balance) on the
Trust Student Loans accruing for a calendar month
that is attributable to such difference.
(c) Liquidating Profit or Loss. Liquidating Profit or Loss shall
be allocated, after all other adjustments are made to the
Capital Accounts (including adjustments to reflect the
Liquidating Distribution), as follows:
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(1) First, among the Certificateholders in
proportion to their ownership of the principal amount
of Certificates, in an amount that would cause their
Capital Account balances to equal zero (in the case
of the Depositor, taking into account the Capital
Account balance of the Depositor only to the extent
it relates to Certificates owned by the Depositor);
and
(2) Any balance, to the Depositor.
(d) Tax Allocations. For Federal income tax purposes, each item
of income, gain, loss and deduction of the Trust shall be
allocated among the Certificateholders and the Depositor in a
manner consistent with the allocations set forth in this
Section 2.10, subject to the provisions of Section 704(c) of
the Code. Notwithstanding anything to the contrary set forth
in this Agreement, the Depositor is authorized to modify the
allocations of this Section 2.10(d) and Sections 2.10(a), (b)
and (c) if necessary or appropriate, in the Depositor's sole
discretion, for the allocations to fairly reflect the economic
gain, income or loss to the Depositor or the
Certificateholders, or as otherwise required by the Code or
the Treasury Regulations.
SECTION 2.11 Required Net Worth. For so long as any Notes or
Certificates shall remain outstanding, the Depositor shall take all actions
necessary to maintain its net worth (exclusive of its interest in the Trust)
equal to $2,635,000 or such other amount as satisfies the then existing
Internal Revenue Service guidelines concerning the net worth requirements for
general partners of partnerships, as set forth in Revenue Procedure 92-88 or
successor pronouncements.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1 Initial Beneficial Ownership. Upon the formation of
the Trust by the contribution by the Depositor pursuant to Section 2.5 and
until the issuance of the Trust Certificates, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION 3.2 The Trust Certificates. The Trust Certificates shall
be issued in denominations of $100,000 or in integral multiples of $1,000 in
excess thereof. The Trust Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of an authorized officer of the Eligible
Lender Trustee. Trust Certificates bearing the manual or facsimile
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signatures of individuals who were, at the time when such signatures were
affixed, authorized to sign on behalf of the Trust, shall be valid and binding
obligations of the Trust, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Trust Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Certificates.
SECTION 3.3 Authentication of Trust Certificates. Concurrently
with the sale of the Trust Student Loans to the Trust pursuant to the Purchase
Agreement, the Eligible Lender Trustee shall cause the Trust Certificates in an
aggregate principal amount equal to the Initial Certificate Balance to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by its chairman of the board, its
president or any vice president, without further action by the Depositor, in
authorized denominations. No Trust Certificate shall entitle its holder to any
benefit under this Agreement, or shall be valid for any purpose, unless there
shall appear on such Trust Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Eligible
Lender Trustee or The Chase Manhattan Bank, as the Eligible Lender Trustee's
authenticating agent, by manual signature; such authentication shall constitute
conclusive evidence that such Trust Certificate shall have been duly
authenticated and delivered hereunder. All Trust Certificates shall be dated
the date of their authentication. No further Trust Certificates shall be
issued except pursuant to Section 3.4, 3.5 or 3.13 hereunder.
SECTION 3.4 Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Eligible
Lender Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. The Chase
Manhattan Bank shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.8, the Eligible Lender
Trustee shall execute, authenticate and deliver (or shall cause The Chase
Manhattan Bank as its authenticating agent to authenticate and deliver), in the
name of the designated transferee or transferees, one or more new Trust
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Eligible Lender Trustee or any authenticating
agent. At the option of a Certificateholder, Trust Certificates may be
exchanged for other Trust Certificates of authorized denominations of a like
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xxxxxxxxx xxxxxx xxxx xxxxxxxxx of the Trust Certificates to be exchanged at
the office or agency maintained pursuant to Section 3.8.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Eligible Lender Trustee and the Certificate
Registrar duly executed by the Certificateholder or his attorney duly
authorized in writing, with such signature guaranteed by a member firm of the
New York Stock Exchange or a commercial bank or trust company. Each Trust
Certificate surrendered for registration of transfer or exchange shall be
cancelled and subsequently disposed of by the Eligible Lender Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Eligible Lender Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the Eligible
Lender Trustee shall not be required to make and the Certificate Registrar need
not register transfers or exchanges of Trust Certificates for a period of 15
days preceding any Distribution Date with respect to the Trust Certificates.
The Trust Certificates and any beneficial interest in such Trust
Certificates may not be acquired by (a) employee benefit plans (as defined in
section 3(3) of ERISA) that are subject to the provisions of Title I of ERISA,
(b) plans described in section 4975(e)(1) of the Code, including individual
retirement accounts described in Section 408(a) of the Code or Xxxxx plans, or
(c) entities whose underlying assets include plan assets by reason of a plan's
investment in such entities (each, a "Benefit Plan"). By accepting and holding
a Trust Certificate or an interest therein, the Certificateholder thereof or
Certificate Owner thereof shall be deemed to have represented and warranted
that it is not a Benefit Plan, is not purchasing Trust Certificates on behalf
of a Benefit Plan and is not using assets of a Plan to purchase any
Certificates.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to
the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate, and (b) there shall be delivered to the Certificate Registrar and
the Eligible Lender Trustee such security or indemnity as may be required by
them to save each of them and the Trust harmless,
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then in the absence of notice that such Trust Certificate shall have been
acquired by a bona fide purchaser, the Eligible Lender Trustee on behalf of the
Trust shall execute and the Eligible Lender Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Certificate, a new Trust Certificate of like tenor and
denomination. In connection with the issuance of any new Trust Certificate
under this Section, the Eligible Lender Trustee and the Certificate Registrar
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Certificate issued pursuant to this Section shall constitute conclusive
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Trust Certificate shall be found at any time.
SECTION 3.6 Persons Deemed Owners. Prior to due presentation of
a Trust Certificate for registration of transfer, the Eligible Lender Trustee
and the Certificate Registrar and any agent of either of them may treat the
Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the owner of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.1 and for all other purposes
whatsoever, and neither the Eligible Lender Trustee, the Certificate Registrar
nor any agent thereof shall be bound by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
Addresses. The Eligible Lender Trustee shall furnish or cause to be furnished
to the Depositor, within 15 days after receipt by the Eligible Lender Trustee
of a request therefor from the Depositor in writing, a list, in such form as
the Depositor may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more
Certificateholders or one or more Certificateholders evidencing not less than
25% of the Certificate Balance apply in writing to the Eligible Lender Trustee,
and such application states that the applicants desire to communicate with
other Certificateholders with respect to their rights under this Agreement or
under the Trust Certificates and such application is accompanied by a copy of
the communication that such applicants propose to transmit, then the Eligible
Lender Trustee shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Upon receipt of any such application, the
Eligible Lender Trustee shall promptly notify the Depositor by providing a copy
of such application and a copy of the list of Certificateholders produced in
response thereto. Each Certificateholder, by receiving and holding a Trust
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Certificate Registrar or the Eligible Lender Trustee accountable by reason
of the disclosure of its name and
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address, regardless of the source from which such information was derived.
SECTION 3.8 Maintenance of Office or Agency. The Eligible Lender
Trustee shall maintain in the Borough of Brooklyn, The City of New York, an
office or offices or agency or agencies where Trust Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Eligible Lender Trustee in respect of the Trust
Certificates and the other Basic Documents may be served. The Eligible Lender
Trustee initially designates 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, as its
principal Corporate Trust Office. The Eligible Lender Trustee's New York
office and its authenticating agent's office are located at 000 Xxxx 00xx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance
Services. The Eligible Lender Trustee shall give prompt written notice to the
Depositor and to the Certificateholders of any change in the location of the
Certificate Register or any such office or agency.
SECTION 3.9 Appointment of Certificate Paying Agent. The
Certificate Paying Agent shall make distributions to Certificateholders from
the amounts received from the Indenture Trustee out of the Trust Accounts
pursuant to Section 5.1 and shall report the amounts of such distributions to
the Eligible Lender Trustee. Any Certificate Paying Agent shall have the
revocable power to receive such funds from the Indenture Trustee for the
purpose of making the distributions referred to above. The Eligible Lender
Trustee may revoke such power and remove the Certificate Paying Agent if the
Eligible Lender Trustee determines in its sole discretion that the Certificate
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. The Certificate Paying Agent shall initially be the
Eligible Lender Trustee, and any co-paying agent chosen by the Eligible Lender
Trustee and consented to by the Administrator (which consent shall not be
unreasonably withheld). The Eligible Lender Trustee shall be permitted to
resign as Certificate Paying Agent upon 30 days' written notice to the Eligible
Lender Trustee. In the event that the Eligible Lender Trustee shall no longer
be the Certificate Paying Agent, the Eligible Lender Trustee shall appoint a
successor to act as Certificate Paying Agent (which shall be a bank or trust
company). The Eligible Lender Trustee shall give notice to the Rating Agencies
of the appointment of a successor Paying Agent. The Eligible Lender Trustee
shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent appointed by the Eligible Lender Trustee to execute
and deliver to the Eligible Lender Trustee an instrument in which such
successor Certificate Paying Agent or additional Certificate Paying Agent shall
agree with the Eligible Lender Trustee that as Certificate Paying Agent, such
successor Certificate Paying Agent or additional Certificate Paying Agent will
hold all sums, if
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any, held by it for payment to the Certificateholders in trust for the benefit
of the Certificateholder entitled thereto until such sums shall be paid to such
Certificateholder. The Certificate Paying Agent shall return all unclaimed
funds to the Eligible Lender Trustee and upon removal of a Certificate Paying
Agent such Certificate Paying Agent shall also return all funds in its
possession to the Eligible Lender Trustee. The provisions of Sections 7.1,
7.3, 7.4, 7.5 and 8.1 shall apply to the Eligible Lender Trustee also in its
role as Certificate Paying Agent, for so long as the Eligible Lender Trustee
shall act as Certificate Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Certificate Paying Agent shall include any copaying agent unless the context
requires otherwise.
SECTION 3.10 Disposition by Depositor. On and after the Closing
Date, the Depositor shall retain beneficial and record ownership of Trust
Certificates representing at least 1% of the Certificate Balance. Any
attempted transfer of any Trust Certificate that would reduce such interest of
the Depositor below 1% of the Certificate Balance shall be void. The Eligible
Lender Trustee shall cause any Trust Certificate issued to the Depositor on the
Closing Date (and any Trust Certificate issued in exchange therefor) to contain
a legend stating "THIS CERTIFICATE IS NONTRANSFERABLE". The right of the
Depositor to receive the amounts payable to it in accordance with Sections
2.8D(D) and 2.8E of the Administration Agreement shall not be transferable or
assignable by the Depositor.
SECTION 3.11 Book-Entry Certificates. The Trust Certificates,
upon original issuance, will be issued in the form of a typewritten Trust
Certificate or Trust Certificates representing Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust; provided, however, that one Definitive Certificate (as
defined below) may be issued to the Depositor pursuant to Section 3.10. Such
Book-Entry Certificate or BookEntry Certificates shall initially be registered
on the Certificate Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Certificate owner (other than the Depositor)
will receive a Definitive Certificate representing such Certificate Owner's
interest in such Trust Certificate, except as provided in Section 3.13. Unless
and until definitive, fully registered Trust Certificates (the "Definitive
Certificates") have been issued to Certificate owners pursuant to Section 3.13:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Certificate Registrar and the Eligible Lender
Trustee shall be entitled to deal with the Clearing Agency
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for all purposes of this Agreement (including the payment of principal
of and interest on the Trust Certificates and the giving of
instructions or directions hereunder) as the sole Certificateholder
and shall have no obligation to the Certificate owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Agreement, the provisions
of this Section shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency and shall be limited to those established
by law and agreements between such Certificate Owners and the Clearing
Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive
Certificates are issued pursuant to Section 3.13, the initial Clearing
Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distribution in respect of the
Certificate Balance and return on the Trust Certificates to such
Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to be
taken based upon instructions or directions of Certificateholders of
Trust Certificates evidencing a specified percentage of the
Certificate Balance, the Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received instructions
to such effect from Certificate Owners and/or Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Trust Certificates and
has delivered such instructions to the Eligible Lender Trustee.
SECTION 3.12 Notices to Clearing Agency. Whenever a notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to Certificate
Owners pursuant to Section 3.13, the Eligible Lender Trustee shall give all
such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency, and shall have no obligations to the
Certificate Owners.
SECTION 3.13 Definitive Certificates. If (i) the Administrator
advises the Eligible Lender Trustee in writing that the Clearing Agency is no
longer willing or able to discharge properly its responsibilities with respect
to the Trust Certificates, and the Administrator is unable to locate a
qualified successor, (ii) the Administrator at its option advises the Eligible
Lender Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or
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(iii) after the occurrence of an Event of Default, a Servicer Default or an
Administrator Default, Certificate Owners representing beneficial interests
aggregating at least a majority of the Certificate Balance advise the Clearing
Agency (which shall then notify the Eligible Lender Trustee) in writing that
the continuation of a book-entry system through the Clearing Agency is no
longer in the best interest of the Certificate Owners, then the Eligible Lender
Trustee shall cause the Clearing Agency to notify all Certificate Owners of the
occurrence of any such event and of the availability of the Definitive
Certificates to Certificate Owners requesting the same. Upon surrender to the
Eligible Lender Trustee of the typewritten Trust Certificate or Trust
Certificates representing the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions, the Eligible Lender Trustee shall
execute and authenticate the Definitive Certificates in accordance with the
instructions of the Clearing Agency. Neither the Certificate Registrar nor the
Eligible Lender Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Certificates, the
Eligible Lender Trustee shall recognize the registered holders of the
Definitive Certificates as Certificateholders. The Definitive Certificates
shall, at the expense of the Depositor, be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Eligible Lender Trustee, as evidenced by its execution thereof.
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.1 Prior Notice to Certificateholders With Respect to
Certain Matters. With respect to the following matters, the Eligible Lender
Trustee shall not take action unless at least 30 days before the taking of such
action, the Eligible Lender Trustee shall have notified the Certificateholders
and each of the Rating Agencies in writing of the proposed action and the
Certificateholders shall not have notified the Eligible Lender Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the
collection of the Trust Student Loans) and the compromise of
any material action, claim or lawsuit brought by or against
the Trust (except with respect to the aforementioned claims or
lawsuits for collection of Trust Student Loans);
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(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the
interest of the Certificateholders;
(d) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or
supplement any provision in a manner or add any provision that
would not materially adversely affect the interests of the
Certificateholders; or
(e) the appointment pursuant to the Administration Agreement of a
successor Administrator, the appointment pursuant to the
Indenture of a successor Note Registrar, Paying Agent or
Indenture Trustee, or the appointment pursuant to this
Agreement of a successor Certificate Registrar or successor
Certificate Paying Agent, or the consent to the assignment by
the Administrator, the Note Registrar, the Paying Agent, the
Indenture Trustee, the Certificate Registrar or the
Certificate Paying Agent of its obligations under the
Administration Agreement, the Indenture or this Agreement, as
applicable.
SECTION 4.2 Action by Certificateholders with Respect to Certain
Matters. The Eligible Lender Trustee shall not have the power, except upon the
written direction of the Certificateholders and except as expressly provided in
the Basic Documents, to sell the Trust Student Loans after the termination of
the Indenture.
SECTION 4.3 Respect to Bankruptcy. The Eligible Lender Trustee
shall not have the power to commence a voluntary proceeding in bankruptcy
relating to the Trust without the unanimous prior approval of all
Certificateholders (other than the Depositor) and the delivery to the Eligible
Lender Trustee by each such Certificateholder of a certificate certifying that
such Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Eligible Lender Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Eligible Lender Trustee under this Agreement
or any of the other Basic Documents or would be contrary to Section 2.3 nor
shall the
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Eligible Lender Trustee be permitted to follow any such direction, if given.
SECTION 4.5 Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Certificateholders of Trust Certificates
evidencing a majority of the Certificate Balance. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Certificateholders of Trust
Certificates evidencing not less than a majority of the Certificate Balance at
the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.1 Application of Trust Funds.
(a) On each Distribution Date, the Eligible Lender Trustee shall
distribute to Certificateholders (i) the Certificateholders'
Return Distribution Amount for such Distribution Date on a pro
rata basis according to amounts payable in respect of
Certificateholders' Return Distribution Amount, (ii) the
Certificate Balance Distribution Amount for such Distribution
Date, if any, on a pro rata basis according to amounts payable
in respect of the Certificate Balance, and (iii) the
Certificate Return Carryover for such Distribution Date, if
any, on a pro rata basis according to amounts payable in
respect of Certificate Return Carryover, as received from the
Indenture Trustee pursuant to Sections 2.7 and 2.8 of the
Administration Agreement on such Distribution Date.
(b) On each Distribution Date, the Eligible Lender Trustee shall
send to each Certificateholder the statement provided to the
Eligible Lender Trustee by the Administrator pursuant to
Section 2.9 of the Administration Agreement on such
Distribution Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a
Certificateholder, such tax shall reduce the amount otherwise
distributable to the Certificateholder in accordance with this
Section. The Eligible Lender Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax
that is legally owed by the Trust (but such authorization
shall not prevent the Eligible Lender
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Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings). The amount
of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust to
be remitted to the appropriate taxing authority. The Eligible
Lender Trustee shall withhold or cause to be withheld at the
maximum applicable rate provided in section 1441, 1442 or 1446
of the Code with respect to all distributions made to persons
that are not known to be U.S. Persons, within the meaning of
the Code, unless it is otherwise determined in the opinion of
counsel. In the event that a Certificateholder wishes to
apply for a refund of any such withholding tax, the Eligible
Lender Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Eligible Lender
Trustee for any out-of-pocket expenses incurred.
SECTION 5.2 Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions signed by two authorized officers,
if any, at least five Business Days prior to such Distribution Date and such
Certificateholder's Trust Certificates in the aggregate evidence a denomination
of not less than $1,000,000, or, if not, by check mailed to such
Certificateholder at the address of such Certificateholder appearing in the
Certificate Register; provided, however, that, unless Definitive Certificates
have been issued pursuant to Section 3.13, with respect to Trust Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), distributions will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Notwithstanding the foregoing, the final distribution in respect of
any Trust Certificate (whether on the Certificate Final Maturity Date or
otherwise) shall be payable only upon presentation and surrender of such Trust
Certificate at the Corporate Trust Office of the Eligible Lender Trustee or
such other location specified in writing to the Certificateholder thereof.
SECTION 5.3 No Segregation of Moneys; No Interest. Subject to
Section 5.1, moneys received by the Eligible Lender Trustee hereunder need not
be segregated in any manner except to the
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extent required by law or the Administration Agreement and may be deposited
under such general conditions as may be prescribed by law, and the Eligible
Lender Trustee shall not be liable for any interest thereon.
SECTION 5.4 Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. The Eligible
Lender Trustee shall (a) maintain (or cause to be maintained) the books of the
Trust on a calendar year basis on the accrual method of accounting, (b) deliver
(or cause to be delivered) to each Certificateholder (and to each Person who
was a Certificateholder at any time during the applicable calendar year), as
may be required by the Code and applicable Treasury Regulations, such
information as may be required (including Schedule K-1) to enable each such
Certificateholder to prepare its Federal and state income tax returns, (c) file
(or cause to be filed) such tax returns relating to the Trust (including a
partnership information return, Internal Revenue Service Form 1065), and make
such elections as may from time to time be required or appropriate under any
applicable state or Federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a partnership for Federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect (or cause to be collected) any withholding tax as described in
and in accordance with Section 5.1(c) with respect to income or distributions
to Certificateholders. The Eligible Lender Trustee shall elect under Section
1278 of the Code to include in income currently any market discount that
accrues with respect to the Trust Student Loans. The Eligible Lender Trustee
shall not make the election provided under Section 754 of the Code. The
Eligible Lender Trustee shall be entitled to hire an independent accounting
firm to perform the functions described in this Section 5.4 the reasonable fees
and expenses of which shall be paid by the Depositor.
SECTION 5.5 Signature on Returns; Tax Matters Partner.
(a) The Eligible Lender Trustee shall sign on behalf of the Trust
the tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such
documents shall be signed by the Depositor.
(b) The Depositor shall be designated the "tax matters partner" of
the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
SECTION 5.6 Capital Accounts. The Trust shall maintain accounts
("Capital Accounts") with respect to each Certificateholder (including the
Depositor) in accordance with the following provisions:
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(a) Each Certificateholder's Capital Account shall be increased by
the Capital Contributions (as defined below) of such
Certificateholder, such Certificateholder's distributive share
of gross income (and any Liquidating Profits) and any items in
the nature of income or gain which are specially allocated to
such Certificateholder pursuant to Section 2.10(b) of this
Agreement.
(b) Each Certificateholder's Capital Account shall be reduced by
any amount distributed to such Certificateholder (including,
in the case of the Depositor, any amount released or otherwise
distributed to the Depositor from the Reserve Account under
Sections 2.8D(D) and 2.8E of the Administration Agreement) and
such Certificateholder's distributive share of Losses and
deductions (and any Liquidating Loss), including any special
allocation pursuant to Section 2.10(b).
(c) In the event all or a portion of a Certificate is transferred
in accordance with the terms of this Agreement, the transferee
shall succeed to the Capital Account of the transferor to the
extent it related to such Certificate or a portion thereof.
(d) Notwithstanding the above, the Capital Accounts shall be
adjusted in accordance with the provisions governing the
economic rights of the Certificateholders, as set forth herein
and in the Basic Documents.
"Capital Contribution" means the amount of any cash and the fair
market value of any property contributed to the Trust by a Certificateholder
(including any amounts deemed to be contributed in connection with the original
issuance of the Certificates), including, in the case of the Depositor, the
fair market value of the Trust Student Loans deemed to be contributed by the
Depositor to the Trust, taking into account the provisions of Section
707(a)(2)(B) of the Code and the Regulations thereunder. The foregoing
provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with section 1.704-1(b)
of the Treasury Regulations and shall be interpreted in a manner consistent
therewith.
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.1 General Authority. The Eligible Lender Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is to be a party and each
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certificate or other document attached as an exhibit to or contemplated by the
Basic Documents to which the Trust is to be a party, in each case, in such form
as the Depositor shall approve as evidenced conclusively by the Eligible Lender
Trustee's execution thereof, and, on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver Notes in the aggregate principal
amount of $1,452,300,000. The Eligible Lender Trustee is also authorized and
directed on behalf of the Trust (i) to acquire and hold legal title to the
Trust Student Loans from the Depositor and (ii) to take all actions required
pursuant to Section 3.2C of the Administration Agreement and otherwise follow
the direction of and cooperate with the Servicer in submitting, pursuing and
collecting any claims to and with the Department with respect to any Interest
Subsidy Payments and Special Allowance Payments relating to the Trust Student
Loans.
In addition to the foregoing, the Eligible Lender Trustee is
authorized to take all actions required of the Trust pursuant to the Basic
Documents. The Eligible Lender Trustee is further authorized from time to time
to take such action as the Administrator directs or instructs with respect to
the Basic Documents and is directed to take such action to the extent that the
Administrator is expressly required pursuant to the Basic Documents to cause
the Eligible Lender Trustee to act.
SECTION 6.2 General Duties. It shall be the duty of the Eligible
Lender Trustee to discharge (or cause to be discharged) all its
responsibilities pursuant to the terms of this Agreement and the other Basic
Documents to which the Trust is a party and to administer the Trust in the
interest of the Certificateholders, subject to and in accordance with the
provisions of this Agreement and the other Basic Documents. Without limiting
the foregoing, the Eligible Lender Trustee shall on behalf of the Trust file
and prove any claim or claims that may exist on behalf of the Trust against the
Depositor in connection with any claims paying procedure as part of an
insolvency or a receivership proceeding involving the Depositor.
Notwithstanding the foregoing, the Eligible Lender Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the other
Basic Documents to the extent the Administrator has agreed in the
Administration Agreement to perform and act or to discharge any duty of the
Eligible Lender Trustee hereunder or under any other Basic Document, and the
Eligible Lender Trustee shall not be held liable for the default or failure of
the Administrator to carry out its obligations under the Administration
Agreement. Except as expressly provided in the Basic Documents, the Eligible
Lender Trustee shall have no obligation to administer, service or collect the
Trust Student Loans or to maintain, monitor or otherwise supervise the
administration, servicing or collection of the Trust Student Loans.
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SECTION 6.3 Action upon Instruction.
(a) [Reserved]
(b) The Eligible Lender Trustee shall not be required to take any
action hereunder or under any other Basic Document if the
Eligible Lender Trustee shall have reasonably determined, or
shall have been advised by counsel, that such action is likely
to result in liability on the part of the Eligible Lender
Trustee or is contrary to the terms hereof or of any other
Basic Document or is otherwise contrary to law.
(c) Whenever the Eligible Lender Trustee is unable to determine
the appropriate course of action between alternative courses
and actions permitted or required by the terms of this
Agreement or under any other Basic Document, the Eligible
Lender Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the
Certificateholders requiring instruction as to the course of
action to be adopted, and to the extent the Eligible Lender
Trustee acts in good faith in accordance with any written
instruction of the Certificateholders received, the Eligible
Lender Trustee shall not be liable on account of such action
to any Person. If the Eligible Lender Trustee shall not have
received appropriate instruction within 10 days of such notice
(or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this
Agreement or the other Basic Documents, as it shall deem to be
in the best interests of the Certificateholders, and shall
have no liability to any Person for such action or inaction.
(d) In the event that the Eligible Lender Trustee is unsure as to
the application of any provision of this Agreement or any
other Basic Document or any such provision is ambiguous as to
its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this
Agreement permits any determination by the Eligible Lender
Trustee or is silent or is incomplete as to the course of
action that the Eligible Lender Trustee is required to take
with respect to a particular set of facts, the Eligible Lender
Trustee may give notice (in such form as shall be appropriate
under the circumstances) to the Certificateholders requesting
instruction and, to the extent that the Eligible Lender
Trustee acts or
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refrains from acting in good faith in accordance with any such
instruction received, the Eligible Lender Trustee shall not be
liable, on account of such action or inaction, to any Person.
If the Eligible Lender Trustee shall not have received
appropriate instruction within 10 days of such notice (or
within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this
Agreement or the other Basic Documents, as it shall deem to be
in the best interest of the Certificateholders, and shall have
no liability to any Person for such action or inaction.
SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions. The Eligible Lender Trustee shall not have any duty or obligation
to manage, make any payment with respect to, register, record, sell, service,
dispose of or otherwise deal with the Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Eligible Lender Trustee is a party, except as
expressly provided by the terms of this Agreement or in any document or written
instruction received by the Eligible Lender Trustee pursuant to Section 6.3;
and no implied duties or obligations shall be read into this Agreement or any
other Basic Document against the Eligible Lender Trustee. The Eligible Lender
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
prepare or file any Commission filing for the Trust or to record this Agreement
or any other Basic Document. The Eligible Lender Trustee nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any Liens on any part of the Trust Estate that result
from actions by, or claims against, Chase Manhattan Bank USA, National
Association in its individual capacity or as the Eligible Lender Trustee that
are not related to the ownership or the administration of the Trust Estate.
SECTION 6.5 No Action Except Under Specified Documents or
Instructions. The Eligible Lender Trustee shall not otherwise deal with any
part of the Trust Estate except (i) in accordance with the powers granted to
and the authority conferred upon the Eligible Lender Trustee pursuant to this
Agreement, (ii) in accordance with the other Basic Documents to which it is a
party and (iii) in accordance with any document or instruction delivered to the
Eligible Lender Trustee pursuant to Section 6.3.
SECTION 6.6 Restrictions. The Eligible Lender Trustee shall not
take any action (a) that is inconsistent with the
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purposes of the Trust set forth in Section 2.3 or (b) that, to the actual
knowledge of the Eligible Lender Trustee, would result in the Trust's becoming
taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Eligible Lender Trustee to take action
that would violate the provisions of this Section.
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.1 Acceptance of Trusts and Duties. The Eligible Lender
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this
Agreement. The Eligible Lender Trustee also agrees to disburse all moneys
actually received by it constituting part of the Trust Estate upon the terms of
this Agreement and the other Basic Documents. The Eligible Lender Trustee
shall not be answerable or accountable hereunder or under any other Basic
Document under any circumstances, except (i) for its own willful misconduct or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Eligible Lender
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Eligible Lender Trustee shall not be liable for any error
of judgment made by a responsible officer of the Eligible
Lender Trustee;
(b) the Eligible Lender Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in accordance
with the direction or instructions of the Administrator or any
Certificateholder;
(c) no provision of this Agreement or any other Basic Document
shall require the Eligible Lender Trustee to expend or risk
funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder or under
any other Basic Document, if the Eligible Lender Trustee shall
have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) under no circumstances shall the Eligible Lender Trustee be
liable for indebtedness evidenced by or arising under any of
the Basic Documents, including the principal of and interest
on the Notes;
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(e) the Eligible Lender Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or
for the due execution hereof by the Depositor or for the form,
character, genuineness, sufficiency, value or validity of any
of the Trust Estate or for or in respect of the validity or
sufficiency of the Basic Documents, other than the certificate
of authentication on the Trust Certificates, and the Eligible
Lender Trustee shall in no event assume or incur any
liability, duty, or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein
and in the other Basic Documents;
(f) the Eligible Lender Trustee shall not be liable for the action
or inaction, default or misconduct of the Administrator, the
Depositor, the Indenture Trustee or the Servicer under any of
the other Basic Documents or otherwise and the Eligible Lender
Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other
Basic Documents that are required to be performed by the
Administrator under the Administration Agreement, the
Indenture Trustee under the Indenture or the Servicer under
the Servicing Agreement; and
(g) the Eligible Lender Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation
under this Agreement or otherwise or in relation to this
Agreement or any other Basic Document, at the request, order
or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Eligible Lender Trustee
security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Eligible
Lender Trustee therein or thereby. The right of the Eligible
Lender Trustee to perform any discretionary act enumerated in
this Agreement or in any other Basic Document shall not be
construed as a duty, and the Eligible Lender Trustee shall not
be answerable for other than its negligence or willful
misconduct in the performance of any such act.
SECTION 7.2 Furnishing of Documents. The Eligible Lender Trustee
shall furnish to the Certificateholders promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Eligible Lender Trustee under the Basic Documents. On each Distribution
Date the Eligible Lender Trustee shall provide to each
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Certificateholder of record as of the related Record Date the information
provided by the Administrator to the Eligible Lender Trustee on the related
Determination Date pursuant to Section 2.9 of the Administration Agreement.
SECTION 7.3 Representations and Warranties. The Eligible Lender
Trustee hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a national banking association duly organized and
validly existing in good standing under the laws of the United
States and having an office located within the State of
Delaware. It has all requisite corporate power and authority
to execute, deliver and perform its obligations under this
Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this
Agreement will be executed and delivered by one of its
officers who is duly authorized to execute and deliver this
Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions
contemplated hereby nor compliance by it with any of the terms
or provisions hereof will contravene any Federal or Delaware
state law, governmental rule or regulation governing the
banking or trust powers of the Eligible Lender Trustee or any
judgment or order binding on it, or constitute any default
under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a
party or by which any of its properties may be bound.
(d) It is and will maintain its status as an "eligible lender" (as
such term is defined in Section 435(d) of the Higher Education
Act) for purposes of holding legal title to the Trust Student
Loans as contemplated by this Agreement and the other Basic
Documents, it has a lender identification number with respect
to the Trust Student Loans from the Department and has and
will maintain in effect a Guarantee Agreement with each of the
Guarantors with respect to the Trust Student Loans.
SECTION 7.4 Reliance; Advice of Counsel.
(a) The Eligible Lender Trustee shall incur no liability to anyone
in acting upon any signature, instrument, direction, notice,
resolution, request, consent, order, certificate, report,
opinion, bond or other document or paper believed by it to be
genuine and believed by it
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to be signed by the proper party or parties. The Eligible
Lender Trustee may accept a certified copy of a resolution of
the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution
has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of
the determination of which is not specifically prescribed
herein, the Eligible Lender Trustee may for all purposes
hereof rely on a certificate, signed by the president or any
vice president or by the treasurer or other authorized
officers of the relevant party, as to such fact or matter and
such certificate shall constitute full protection to the
Eligible Lender Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and
in the performance of its duties and obligations under this
Agreement or the other Basic Documents, the Eligible Lender
Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them
and the Eligible Lender Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if such
agents or attorneys shall have been selected by the Eligible
Lender Trustee with reasonable care, and (ii) may consult with
counsel and accountants to be selected with reasonable care
and employed by it. The Eligible Lender Trustee shall not be
liable for anything done, suffered or omitted in good faith by
it in accordance with the written opinion or advice of any
such counsel or accountants and not contrary to this Agreement
or any other Basic Document.
SECTION 7.5 Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created Chase
Manhattan Bank USA, National Association acts solely as Eligible Lender Trustee
hereunder and not in its individual capacity and all Persons having any claim
against the Eligible Lender Trustee by reason of the transactions contemplated
by this Agreement or any other Basic Document shall look only to the Trust
Estate for payment or satisfaction thereof.
SECTION 7.6 Eligible Lender Trustee Not Liable for Trust
Certificates or Trust Student Loans. The recitals contained herein and in the
Trust Certificates (other than the signature of and authentication by the
Eligible Lender Trustee on the Trust Certificates) shall be taken as the
statements of the Depositor and the Eligible Lender Trustee assumes no
responsibility for the correctness thereof. The Eligible Lender Trustee makes
no
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representations as to the validity or sufficiency of this Agreement, the Trust
Certificates or any other Basic Document (other than the signature of and
authentication by the Eligible Lender Trustee on the Trust Certificates) or the
Notes, or of any Trust Student Loan or related documents. The Eligible Lender
Trustee shall at no time have any responsibility (or liability except for
willfully or negligently terminating or allowing to be terminated any of the
Guarantee Agreements, in a case where the Eligible Lender Trustee knows of any
facts or circumstances which will or could reasonably be expected to result in
any such termination) for or with respect to the legality, validity,
enforceability and eligibility for Guarantee Payments, federal reinsurance,
Interest Subsidy Payments or Special Allowance Payments, as applicable, in
respect of any Trust Student Loan, or for or with respect to the sufficiency of
the Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the Indenture,
including the existence and contents of any computer or other record of any
Trust Student Loan; the validity of the assignment of any Trust Student Loan to
the Eligible Lender Trustee on behalf of the Trust; the completeness of any
Trust Student Loan; the performance or enforcement (except as expressly set
forth in any Basic Document) of any Trust Student Loan; the compliance by the
Depositor or the Servicer with any warranty or representation made under any
Basic Document or in any related document or the accuracy of any such warranty
or representation or any action or inaction of the Administrator, the Indenture
Trustee or the Servicer or any subservicer taken in the name of the Eligible
Lender Trustee.
SECTION 7.7 Eligible Lender Trustee May Own Trust Certificates
and Notes. The Eligible Lender Trustee in its individual or any other capacity
may become the owner or pledgee of Trust Certificates or Notes and may deal
with the Depositor, the Administrator, the Indenture Trustee and the Servicer
in banking transactions with the same rights as it would have if it were not
Eligible Lender Trustee.
ARTICLE VIII
Compensation and Indemnity of Eligible Lender Trustee
SECTION 8.1 Eligible Lender Trustee's Fees and Expenses. The
Eligible Lender Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Depositor and the Eligible Lender Trustee, and the Eligible Lender
Trustee shall be entitled to be reimbursed by the Depositor, to the extent
provided in such separate agreement, for its other reasonable expenses
(including the reasonable fees and expenses of counsel and independent
accountants) hereunder.
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SECTION 8.2 Payments to the Eligible Lender Trustee. Any amounts
paid to the Eligible Lender Trustee pursuant to Section 8.1 hereof or pursuant
to Section 9 of the Sale Agreement, Section 4.2 of the Administration Agreement
or Section 4.2 of the Servicing Agreement shall be deemed not to be a part of
the Trust Estate immediately after such payment.
SECTION 8.3 Indemnity. The Depositor shall cause the
Administrator to indemnify the Eligible Lender Trustee in its individual
capacity and any of its officer, directors, employees and agents as and to the
extent provided for in Section 4.2 of the Administration Agreement.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1 Termination of Trust Agreement.
(a) This Agreement (other than Article VIII) and the Trust shall
terminate and be of no further force or effect upon the
earlier of (i) the final distribution by the Eligible Lender
Trustee of all moneys or other property or proceeds of the
Trust Estate in accordance with the terms of the Indenture,
the Administration Agreement and Article V, and (ii) the time
provided in Section 9.2. The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder,
other than the Depositor as described in Section 9.2, shall
not (x) operate to terminate this Agreement or the Trust, nor
(y) entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all
or any part of the Trust or Trust Estate nor (z) otherwise
affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in Section 9.1(a), neither the Depositor
nor any Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders shall
surrender their Trust Certificates to the Certificate Paying
Agent for payment of the final distribution and cancellation,
shall be given promptly by the Eligible Lender Trustee by
letter to Certificateholders mailed within five Business Days
of receipt of notice of such termination from the
Administrator given pursuant to Section 6.1C of the
Administration Agreement, stating (i) the Distribution
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Date upon which final payment of the Trust Certificates shall
be made upon presentation and surrender of the Trust
Certificates at the office of the Certificate Paying Agent
therein designated, (ii) the amount of any such final payment
and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only
upon presentation and surrender of the Trust Certificates at
the office of the Certificate Paying Agent therein specified.
The Eligible Lender Trustee shall give such notice to the
Certificate Registrar (if other than the Eligible Lender
Trustee) and the Certificate Paying Agent at the time such
notice is given to Certificateholders. Upon presentation and
surrender of the Trust Certificates, the Certificate Paying
Agent shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to
Section 5.1.
In the event that all the Certificateholders shall not surrender their
Trust Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Eligible Lender Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Trust Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the Trust
Certificates shall not have been surrendered for cancellation, the Eligible
Lender Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement. Any
funds remaining in the Trust after exhaustion of such remedies and no later
than five years after the first such notice shall be distributed by the
Eligible Lender Trustee to the Depositor.
Upon final distribution of any funds remaining in the Trust, the
Eligible Lender Trustee shall file a certificate of cancellation of the Trust's
certificate of trust pursuant to Section 3810(c) of the Delaware Business Trust
Act.
SECTION 9.2 Dissolution upon Insolvency of the Depositor.
Notwithstanding the provisions of Section 3808 of the Delaware Business Trust
Act, in the event that an Insolvency Event shall occur with respect to the
Depositor, (x) the Trust created hereunder shall dissolve and (y) this
Agreement shall be terminated in accordance with Section 9.1 90 days after the
date of such Insolvency Event. Promptly after the occurrence of any Insolvency
Event with respect to the Depositor, (i) the Depositor shall give the Indenture
Trustee, the Eligible Lender Trustee and each Rating Agency written notice of
such Insolvency Event, and (ii) the Eligible Lender Trustee shall, upon the
receipt of such
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written notice from the Depositor, give prompt written notice to the
Certificateholders and the Indenture Trustee, of the occurrence of such event
and of the effect of such event under this Section 9.2; provided, however, that
any failure to give a notice required by this sentence shall not prevent or
delay, in any manner, a termination of the Trust pursuant to the first sentence
of this Section 9.2. Upon a termination of the Trust pursuant to this Section,
the Eligible Lender Trustee shall direct the Indenture Trustee promptly to sell
the assets of the Trust (other than the Trust Accounts) in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of such a
sale of the assets of the Trust shall be treated as collections under the
Administration Agreement.
ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION 10.1 Eligibility Requirements for Eligible Lender Trustee.
The Eligible Lender Trustee shall at all times be a corporation or association
(i) qualifying as an "eligible lender" as such term is defined in Section
435(d) of the Higher Education Act for purposes of holding legal title to the
Trust Student Loans on behalf of the Trust, with a valid lender identification
number with respect to the Trust Student Loans from the Department; (ii) being
authorized to exercise corporate trust powers and hold legal title to the Trust
Student Loans; (iii) having in effect Guarantee Agreements with each of the
Guarantors; (iv) having a combined capital and surplus of at least $50,000,000
and being subject to supervision or examination by Federal or state
authorities; (v) having its principal place of business in the State of
Delaware and otherwise complying with Section 3807 of the Delaware Business
Trust Act; and (vi) having (or having a parent which has) a rating in respect
of its longterm senior unsecured debt of at least BBB-(or the equivalent) by
each of the Rating Agencies (or which, if the long-term senior unsecured debt
of such corporation or association is not rated by any Rating Agency, shall
have provided to the Indenture Trustee written confirmation from such Rating
Agency that the appointment of such corporation or association to serve as
Eligible Lender Trustee will not result in and of itself in a reduction or
withdrawal of the then current rating of any of the Notes or the Certificates).
If the Eligible Lender Trustee shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purpose of this Section, the combined
capital and surplus of the Eligible Lender Trustee shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Eligible Lender Trustee shall
cease to be
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eligible in accordance with the provisions of this Section, the Eligible Lender
Trustee shall resign immediately in the manner and with the effect specified in
Section 10.2.
SECTION 10.2 Resignation or Removal of Eligible Lender Trustee.
The Eligible Lender Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Administrator.
Upon receiving such notice of resignation, the Administrator shall promptly
appoint a successor Eligible Lender Trustee meeting the eligibility
requirements of Section 10.1 by written instrument, in duplicate, one copy of
which instrument shall be delivered to the resigning Eligible Lender Trustee
and one copy to the successor Eligible Lender Trustee. If no successor
Eligible Lender Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Eligible Lender Trustee may petition any court of competent
jurisdiction for the appointment of a successor Eligible Lender Trustee;
provided, however, that such right to appoint or to petition for the
appointment of any such successor shall in no event relieve the resigning
Eligible Lender Trustee from any obligations otherwise imposed on it under the
Basic Documents until such successor has in fact assumed such appointment.
If at any time the Eligible Lender Trustee shall cease to be or shall
be likely to cease to be eligible in accordance with the provisions of Section
10.1 and shall fail to resign after written request therefor by the
Administrator, or if at any time an Insolvency Event with respect to the
Eligible Lender Trustee shall have occurred and be continuing, then the
Administrator may remove the Eligible Lender Trustee. If the Administrator
shall remove the Eligible Lender Trustee under the authority of the immediately
preceding sentence, the Administrator shall promptly appoint a successor
Eligible Lender Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Eligible Lender Trustee so
removed and one copy to the successor Eligible Lender Trustee and payment of
all fees owed to the outgoing Eligible Lender Trustee.
Any resignation or removal of the Eligible Lender Trustee and
appointment of a successor Eligible Lender Trustee pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee pursuant to Section 10.3,
payment of all fees and expenses owed to the outgoing Eligible Lender Trustee
and the filing of a certificate of amendment to the Trust's certificate of
trust pursuant to Section 3810(b) of the Delaware Business Trust Act. The
Administrator shall provide notice of such resignation or removal of the
Eligible Lender Trustee and to each of the Rating Agencies.
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SECTION 10.3 Successor Eligible Lender Trustee. Any successor
Eligible Lender Trustee appointed pursuant to Section 10.2 shall execute,
acknowledge and deliver to the Administrator and to its predecessor Eligible
Lender Trustee an instrument accepting such appointment under this Agreement,
and thereupon the resignation or removal of the predecessor Eligible Lender
Trustee shall become effective and such successor Eligible Lender Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under this
Agreement, with like effect as if originally named as Eligible Lender Trustee.
The predecessor Eligible Lender Trustee shall upon payment of its fees and
expenses deliver to the successor Eligible Lender Trustee all documents,
statements, moneys and properties held by it under this Agreement and shall
assign, if permissible, to the successor Eligible Lender Trustee the lender
identification number obtained from the Department on behalf of the Trust; and
the Administrator and the predecessor Eligible Lender Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Eligible Lender
Trustee all such rights, powers, duties and obligations.
No successor Eligible Lender Trustee shall accept such appointment as
provided in this Section unless at the time of such acceptance such successor
Eligible Lender Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Eligible Lender Trustee
pursuant to this Section, the Administrator shall mail notice of the successor
of such Eligible Lender Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Administrator shall
fail to mail such notice within 10 days after acceptance of appointment by the
successor Eligible Lender Trustee, the successor Eligible Lender Trustee shall
cause such notice to be mailed at the expense of the Administrator.
SECTION 10.4 Merger or Consolidation of Eligible Lender Trustee.
Any corporation into which the Eligible Lender Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Eligible Lender
Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Eligible Lender Trustee, shall, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding, be the
successor of the Eligible Lender Trustee hereunder; provided that such
corporation shall be eligible pursuant to Section 10.1; and provided further
that the Eligible Lender Trustee shall mail notice of such merger
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or consolidation to the Rating Agencies not less than 15 days prior to the
effective date thereof.
SECTION 10.5 Appointment of Co-Eligible Lender Trustee or
Separate Eligible Lender Trustee. Notwithstanding any other provisions of this
Agreement, at any time, for the purpose of meeting any legal requirements of
any jurisdiction in which any part of the Trust may at the time be located, the
Administrator and the Eligible Lender Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Eligible Lender Trustee, meeting the eligibility
requirements of clauses (i) through (iii) of Section 10.1, to act as
co-trustee, jointly with the Eligible Lender Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust Estate, or any part thereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Eligible Lender
Trustee may consider necessary or desirable. If the Administrator shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Eligible Lender Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee under this Agreement
shall be required to meet the terms of eligibility as a successor trustee
pursuant to clauses (iv), (v) and (vi) of Section 10.1 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Eligible Lender Trustee shall be conferred upon and
exercised or performed by the Eligible Lender Trustee and such
separate trustee or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately
without the Eligible Lender Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Eligible Lender
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties, and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, solely at the direction of the
Eligible Lender Trustee;
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(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Administrator and the Eligible Lender Trustee
acting jointly may at any time accept the resignation of or remove any
separate trustee or cotrustee.
Any notice, request or other writing given to the Eligible Lender
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Eligible Lender Trustee or separately, as may be provided
therein, subject to all the provisions of this Agreement, specifically
including every provision of this Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Eligible Lender
Trustee. Each such instrument shall be filed with the Eligible Lender Trustee
and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Eligible Lender Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all its estates, properties, rights, remedies and trusts shall vest in
and be exercised by the Eligible Lender Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
ARTICLE XI
Miscellaneous
SECTION 11.1 Supplements and Amendments. This Agreement may be
amended by the Depositor and the Eligible Lender Trustee, with prior written
notice to the Rating Agencies, without the consent of any of the Noteholders or
the Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder or Certificateholder.
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This Agreement may also be amended from time to time by the Depositor
and the Eligible Lender Trustee, with prior written notice to the Rating
Agencies, with the consent of (i) the Noteholders of Notes evidencing not less
than a majority of the Outstanding Amount of the Notes and (ii) the
Certificateholders of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Trust Student Loans or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any such
amendment, without the consent of all the outstanding Noteholders and
Certificateholders.
Promptly after the execution of any such amendment or consent, the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to each Certificateholder, the Indenture Trustee and
each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholders provided
for in this Agreement or in any other Basic Document) and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject
to such reasonable requirements as the Eligible Lender Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Eligible Lender Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Eligible Lender
Trustee's own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2 No Legal Title to Trust Estate in Certificateholders.
The Certificateholders shall not have legal title to any part of the Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided beneficial ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of
35
40
law or otherwise, of any right, title, or interest of the Certificateholders to
and in their beneficial ownership interest in the Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to
an accounting or to the transfer to it of legal title to any part of the Trust
Estate.
SECTION 11.3 Limitations on Rights of Others. Except for Section
2.7, the provisions of this Agreement are solely for the benefit of the
Eligible Lender Trustee, the Depositor, the Certificateholders, the
Administrator and, to the extent expressly provided herein, the Indenture
Trustee and the Noteholders, and nothing in this Agreement (other than Section
2.7), whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Estate or
under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.4 Notices.
(a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed
given upon receipt by the intended recipient or three Business
Days after mailing if mailed by certified mail, postage
prepaid (except that notice to the Eligible Lender Trustee
shall be deemed given only upon actual receipt by the Eligible
Lender Trustee), if to the Eligible Lender Trustee, addressed
to its Corporate Trust Office; if to the Depositor, addressed
to SLM Funding Corporation, 000 Xxxx Xxxxx Xxxxx, Xxxxxxx,
Xxxxx 00000, or, as to each party, at such other address as
shall be designated by such party in a written notice to each
other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such certificateholder as shown in
the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5 Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
36
41
SECTION 11.6 Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.7 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon to the benefit of, the Depositor and its
successors, the Eligible Lender Trustee and its successors, each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument
or action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.8 No Petition.
(a) The Depositor will not at any time institute against the Trust
any bankruptcy proceedings under any United States Federal or
state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes,
this Agreement or any of the other Basic Documents.
(b) The Eligible Lender Trustee (not in its individual capacity
but solely as Eligible Lender Trustee), by entering into this
Agreement, each Certificateholder, by accepting a Trust
Certificate, and the Indenture Trustee and each Noteholder by
accepting the benefits of this Agreement, hereby covenant and
agree that they will not at any time institute against the
Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States
Federal or state bankruptcy or similar law in connection with
any obligations relating to the Trust Certificates, the Notes,
this Agreement or any of the other Basic Documents.
SECTION 11.9 No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Depositor, the Servicer, the Administrator, the
Eligible Lender Trustee, the Indenture Trustee or any Affiliate thereof or any
officer, director or employee of any thereof and no recourse may be had against
such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Trust Certificates or the other Basic
Documents.
37
42
SECTION 11.10 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.11 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
38
43
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Eligible Lender Trustee,
By /s/ Xxxx X. Xxxx
---------------------------------
Name: Xxxx X. Xxxx
Title: Second Vice President
SLM FUNDING CORPORATION,
Depositor,
By /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer and Controller
39
44
EXHIBIT A
TO THE TRUST AGREEMENT
[FORM OF TRUST CERTIFICATE]
Unless this Trust Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to the Issuer (as defined below) or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THIS TRUST CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW). THIS CERTIFICATE IS NOT GUARANTEED OR INSURED
BY ANY GOVERNMENTAL AGENCY.
NUMBER $52,173,000
R-1 CUSIP XX. 00000XXX0
XXX XXXXXXX LOAN TRUST 1996-4
FLOATING RATE STUDENT LOAN-BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as
defined below, the property of which includes a pool of
student loans sold to the Trust by SLM Funding Corporation.
(This Trust Certificate does not represent an interest in or
obligation of SLM Funding Corporation, the Servicer (as
defined below), the Eligible Lender Trustee (as defined below)
or any of their respective affiliates, except to the extent
described below.)
THIS CERTIFIES THAT Cede & Co. is the registered owner of $52,173,000
dollars non-assessable, fully-paid, fractional undivided interest in the SLM
Student Loan Trust 1996-4 (the "Trust"), a trust formed under the laws of the
State of Delaware by SLM Funding Corporation, a Delaware corporation (the
"Depositor"). The Trust was created pursuant to a Trust Agreement dated as of
October 1, 1996 (the "Trust Agreement"), between the Depositor and Chase
Manhattan Bank USA, National
45
Association, a national banking association, not in its individual capacity but
solely as eligible lender trustee on behalf of the Trust (the "Eligible Lender
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in Appendix A to the Trust
Agreement.
This Certificate is one of the duly authorized Certificates designated
as "Floating Rate Student Loan- Backed Certificates" (herein called the "Trust
Certificates"). This Trust Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Trust Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of the Trust
includes a pool of student loans (the "Trust Student Loans"), all moneys paid
thereunder on or after September 2, 1996, certain bank accounts and the
proceeds thereof and certain other rights under the Trust Agreement, the Sale
Agreement, the Purchase Agreement, the Administration Agreement and the
Servicing Agreement and all proceeds of the foregoing. The rights of the
holders of the Trust Certificates to the assets of the Trust are subordinated
to the rights of the holders of the Notes issued under the Indenture dated as
of October 1, 1996, between the Trust and Bankers Trust Company, as Indenture
Trustee, and designated as "Floating Rate Student Loan-Backed Notes" (the
"Notes"), as set forth in the Trust Agreement, the Indenture and the
Administration Agreement.
Under the Trust Agreement, to the extent of funds available therefor,
return on the Certificate Balance of this Trust Certificate at the Certificate
Rate (as defined below) will be distributed on the 25th day of each January,
April, July and October (or, if such 25th day is not a Business Day, the next
succeeding Business Day) (each a "Distribution Date"), commencing on January
27, 1997, to the person in whose name this Trust Certificate is registered as
of the close of business on the day immediately preceding the Distribution Date
(such day the "Record Date"), in each case to the extent of such
certificateholder's pro rata interest in the amount or amounts to be
distributed to Certificateholders on
2
46
such Distribution Date pursuant to the Administration Agreement.
The Certificate Rate for each Accrual Period shall be equal to the
lesser of (a) the weighted average of the T-Xxxx Rates within such Accrual
Period plus 0.93% per annum and (b) the Student Loan Rate for such Accrual
Period. The "Student Loan Rate" for any Accrual Period shall equal the product
of (a) the quotient obtained by dividing (i) 365 (or 366 in the case of a leap
year) by (ii) the actual number of days elapsed in such Accrual Period and (b)
the percentage equivalent of a fraction, (i) the numerator of which is equal to
Expected Interest Collections for the related Collection Period less the
Primary Servicing Fee and the Administration Fee with respect to such
Collection Period and (ii) the denominator of which is the Pool Balance as of
the first day of such Collection Period.
Each holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate from
Available Funds and amounts on deposit in the Reserve Account are subordinated
to the rights of the Noteholders as described in the Trust Agreement, the
Indenture and the Administration Agreement.
It is the intent of the Depositor, the Certificateholders and the
Certificate Owners that, for purposes of Federal, state and local income and
franchise and any other income taxes, the Trust will be treated as a
partnership and the Certificateholders (including the Depositor in its capacity
as Certificateholder and as recipient of distributions from the Reserve
Account) will be treated as partners in that partnership. The Depositor and
the other Certificateholders by acceptance of a Trust Certificate (and the
Certificate Owners by acceptance of a beneficial interest in a Trust
Certificate), agree to treat, and to take no action inconsistent with the
treatment of, the Trust Certificates for such tax purposes as partnership
interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of a
Trust Certificate or, in the case of a Certificate Owner, a beneficial interest
in a Trust Certificate, covenants and agrees that such Certificateholder or
Certificate Owner, as the case may
3
47
be, will not at any time institute against the Depositor or the Trust, or join
in any institution against the Depositor or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Eligible Lender Trustee by wire transfer or by check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency, unless
Definitive Certificates have been issued (initially, such nominee to be Cede &
Co.), payments will be made by wire transfer in immediately available funds to
the account designated by such nominee. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Trust Certificate will be made after due notice by the Eligible Lender Trustee
of the pendency of such distribution and only upon presentation and surrender
of this Trust Certificate at the office or agency maintained for the purpose by
the Eligible Lender Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Eligible Lender Trustee or its
authenticating agent, by manual signature, this Trust Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or the
Administration Agreement or be valid for any purpose.
4
48
IN WITNESS WHEREOF, the Eligible Lender Trustee on behalf of
the Trust and not in its individual capacity has caused this Trust Certificate
to be duly executed as of the date set forth below.
SLM STUDENT LOAN TRUST 1996-4
by CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Eligible Lender Trustee.
by
---------------------------------
Authorized Signatory
Date: October 3, 1996
5
49
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Eligible
Lender Trustee,
by
--------------------------------
Authorized Signatory
OR
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Eligible Lender
Trustee,
by
--------------------------------
as Authenticating Agent,
Date: October 3, 1996
6
50
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, Xxxxxx Xxx Servicing Corporation, as servicer (the
"Servicer"), Student Loan Marketing Association, as administrator (the
"Administrator"), the Eligible Lender Trustee or any affiliates of any of them,
and no recourse may be had against such parties or their assets, except as may
be expressly set forth or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Trust Certificate is not guaranteed
by any governmental agency or instrumentality and is limited in right of
payment to certain collections with respect to the Trust Student Loans, all as
more specifically set forth in the Trust Agreement. A copy of each of the
Trust Agreement, the Sale Agreement, the Purchase Agreement, the Administration
Agreement, Servicing Agreement and the Indenture may be examined during normal
business hours at the principal office of the Administrator, and at such other
places, if any, designated by the Administrator, by any Certificateholder upon
request.
The Trust Agreement permits, with certain options therein provided,
the amendment thereof and the certification of the rights and obligations of
the Depositor and the rights of the Certificateholders under the Trust
Agreement at any time by the Depositor and the Eligible Lender Trustee with the
consent of the holders of the Notes and the Trust Certificates each voting as a
class evidencing not less than a majority of the outstanding principal balance
of the Notes and the Certificate Balance. Any such consent by the holder of
this Trust Certificate shall be conclusive and binding on such holder and on
all future holders of this Certificate and of any Trust Certificate issued upon
the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of
7
51
the Trust Certificates are registerable in the Certificate Register upon
surrender of this Certificate for registration of transfer at the offices or
agencies maintained by Chase Manhattan Bank USA, National Association in its
capacity as Certificate Registrar, or by any successor Certificate Registrar,
in the Borough of Manhattan, The City of New York, accompanied by a written
instrument of transfer in form satisfactory to the Eligible Lender Trustee and
the Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Trust
Certificates of authorized denominations evidencing the same aggregate interest
in the Trust will be issued to the designated transferee.
The Trust Certificates are issuable only as registered Trust
Certificates without coupons in denominations of $100,000 or in integral
multiples of $1,000 in excess thereof. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Trust Certificates are
exchangeable for new Trust Certificates of authorized denominations evidencing
the same aggregate denomination, as requested by the holder surrendering the
same. No service charge will be made for any such registration of transfer or
exchange, but the Eligible Lender Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Eligible Lender Trustee, the Certificate Registrar and any agent
of the Eligible Lender Trustee or the Certificate Registrar may treat the
person in whose name this Trust Certificate is registered as the owner hereof
for all purposes, and none of the Eligible Lender Trustee or the Certificate
Registrar or any such agent shall be affected by any notice to the contrary.
The Trust Certificates (including any beneficial interests therein)
may not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a plan described in section 4975(e)(1) of the Internal Revenue
Code of 1986, as amended (the "Code"), including an individual retirement
account described in Section 408(a) of the Code or a Xxxxx plan or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in
8
52
the entity (each, a "Benefit Plan"). By accepting and holding this Trust
Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement, the Administration Agreement and the Indenture and the
disposition of all property held as part of the Trust. The Depositor may at
its option purchase the corpus of the Trust at a price specified in the
Administration Agreement, and such purchase of the Trust Student Loans and
other property of the Trust will effect early retirement of the Trust
Certificates; however, such right of purchase is exercisable only on any
Distribution Date on or after the date on which the Pool Balance is less than
or equal to 10% of the Initial Pool Balance. Any Trust Student Loans remaining
in the Trust as of the end of the Collection Period immediately preceding the
Trust Auction Date will be offered for sale by the Indenture Trustee by auction
in accordance with the procedure described in the Indenture.
This Trust Certificate shall be construed in accordance with the laws
of the State of Delaware, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
9
53
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney
------------------------------------------------------------------------
to transfer said Trust certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
*
------------------------------
Signature Guaranteed:
*
------------------------------
* NOTICE: The signature to this assignment must correspond with the
name as it appears upon the face of the within Trust Certificate in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member firm of the
New York Stock Exchange or a commercial bank or trust company.
10
54
EXHIBIT B
TO THE TRUST AGREEMENT
FORM OF CERTIFICATE DEPOSITORY AGREEMENT
55
ANNEX 1
TO THE TRUST AGREEMENT
DATED AS OF OCTOBER 1, 1996
BETWEEN SLM FUNDING CORPORATION,
AS DEPOSITOR, AND
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
AS ELIGIBLE LENDER TRUSTEE
All defined terms are used herein as defined in the Trust Agreement
referred to above.
Existence. The Depositor will maintain its corporate existence and
its good standing under the laws of the United States.
Procedures Observed. The Depositor will observe all corporate
procedures required by its Certificate of Incorporation, its by-laws and the
corporation law of the State of Delaware.
Management. The business and affairs of the Depositor will be managed
by or under the direction of the Depositor's Board of Directors. The Depositor
will at all times ensure that its Board of Directors duly authorizes all
corporate actions requiring Board authorization. When necessary, the Depositor
will obtain proper authorization from its stockholder for corporate action.
Its stockholder will not be actively involved in the day-to-day management of
the Depositor except as contemplated by an arm's length management services
contract.
Records. The Depositor will maintain separate corporate records and
books of account from those of its stockholder or any other affiliate of its
stockholder. The Depositor will keep correct and complete books and records of
account and minutes of the meetings and other proceedings of its stockholder
and Board of Directors. The resolutions, agreements and other instruments
underlying the transactions contemplated by the Trust Agreement will be
continuously maintained as official records by the Depositor.
Offices. The Depositor will have an address and telephone number
distinguishable from those of its stockholder. To the extent the Depositor's
office is located in the office of its stockholder or any affiliate of its
stockholder, the Depositor will pay fair market rent for any such office space
and a fair share of any material overhead costs.
Identifiable Assets. Except in connection with the customary
operation of such cash management system as its
56
stockholder may from time to time in the ordinary course of business implement
for itself and its consolidated subsidiaries (which cash management system will
be operated such that all transfers of funds are properly documented and the
respective assets and liabilities of the Depositor and its stockholder are
ascertainable at all times), the Depositor's funds and other assets will be
identifiable and will not be commingled with those of its stockholder or any
other entity. The Depositor will maintain separate banking records and books
of account from those of its stockholder or any other affiliate of its
stockholder.
Capitalization. The Depositor will not engage in any business for
which its capitalization would not be adequate.
Expenses. The Depositor will pay from its own funds and assets all
obligations and indebtedness incurred by it and will provide for its own
material operating expenses and liabilities from its own funds. General
overhead and administrative expenses of its stockholder will not be charged or
otherwise allocated to the Depositor (unless directly attributable to services
provided to or for the account of the Depositor) and such expenses of the
Depositor which are material will not be charged or otherwise allocated to its
stockholder. Any organizational expenses of the Depositor and expenses
relating to the preparation, negotiation, execution and delivery of the
Transaction Documents paid by its stockholder will be charged back to the
Depositor. Such expenses will be paid by the Depositor from amounts available
to it as a result of the capital contributions made by its stockholder, from
the yield earned by it on its Certificates, or from the retained portion of
Deferred Payments made to it under the Sale Agreement.
Conduct. The Depositor will conduct its business solely in its own
name so as not to mislead others as to the identity of the Depositor. Without
limiting the generality of the foregoing, all oral and written communications
related to the Depositor, including without limitation letters, invoices,
purchase orders, contracts, statements and applications, will be made solely in
the name of the Depositor except for items pursuant to the Facilities and
Services Agreement between the Depositor and its stockholder. The Depositor
will utilize its own separate stationery.
Intercompany Claims. The Depositor will not enter into any guarantees
made by its stockholder with respect to obligations of the Depositor and the
Depositor will
2
57
make no guarantees with respect to obligations of its stockholder. There will
be no intercompany debt or claims between the Depositor and its stockholder
other than (i) the obligation of the Depositor to pay to its stockholder the
Deferred Payment under the Purchase Agreement, (ii) the demand note of its
stockholder contributed to the Depositor as part of the Depositor's
capitalization, (iii) such intercompany claims as may arise in connection with
the management services contract referred to above, including a cash management
system for its stockholder and its consolidated subsidiaries as described
above, and (iv) such amounts as may temporarily be carried in intercompany
accounts relating to expenses incurred by its stockholder or its affiliates, to
the extent the Depositor is properly obligated to reimburse its stockholder or
any such affiliate for amounts allocable to the Depositor. The demand note
referred to above will be properly documented on the books and records of the
Depositor.
Reliance by Others. The Depositor will act solely in its name and
through its duly authorized officers or agents in the conduct of its
businesses. The Depositor will not: (a) hold itself out as having agreed to
pay or become liable for the debts of its stockholder; (b) fail to correct any
known misrepresentation with respect to the foregoing; (c) operate or purport
to operate as an integrated, single economic unit with respect to its
stockholder or in its dealings with any other affiliated or unaffiliated
entity; (d) seek or obtain credit or incur any obligation to any third party
based upon the assets of its stockholder or any other affiliated or
unaffiliated entity; or (e) induce any such third party to reasonably rely on
the creditworthiness of its stockholder or any other affiliated or unaffiliated
entity for the payment or performance of the Depositor.
Arm's Length. The Depositor will maintain an arm's length
relationship between the Depositor and its stockholder and between the
Depositor and any affiliates of its stockholder.
Disclosure of the Transactions. The annual financial statements of
the Depositor will disclose the effects of the Transactions in accordance with
generally accepted accounting principles. The transfer of the Loans by its
stockholder to the Depositor pursuant to the Purchase Agreement will be treated
as a purchase by the Depositor under generally accepted accounting principles.
In particular, the financial statements of the Depositor will clearly indicate
its existence separate from its stockholder and will reflect its separate
assets and
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58
liabilities. None of such financial statements, nor any consolidated financial
statements for its stockholder, will suggest in any way that the assets of the
Depositor are available to pay the claims of creditors of its stockholder or
any other entity. Any consolidated financial statements of its stockholder and
its subsidiaries prepared for the benefit of third parties will disclose,
through appropriate footnotes or otherwise, the separate corporate existence of
the Depositor.
4
59
INTERIM TRUST AGREEMENT
between
SLM FUNDING CORPORATION,
as Seller
and
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Interim Eligible Lender Trustee
Dated as of October 1, 1996
60
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions and Usage . . . . . . . . . . . . . . . . . . . 1
---------------------
ARTICLE II
Appointment of Interim Eligible Lender Trustee . . . . . . . . . . . . . 1
----------------------------------------------
SECTION 2.1 Appointment of Interim Eligible
-------------------------------
Lender Trustee . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
--------------
SECTION 2.2 Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------------------
SECTION 2.3 Title to Interim Trust Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----------------------------
ARTICLE III
Representations and Warranties of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--------------------------------------------
ARTICLE IV
Authority and Duties of Interim Eligible Lender Trustee
-------------------------------------------------------
SECTION 4.1 General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-----------------
SECTION 4.2 General Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
--------------
SECTION 4.3 No Duties Except as Specified in this
-------------------------------------
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
---------
SECTION 4.4 No Action Except Under Specified
--------------------------------
Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
---------
SECTION 4.5 Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
------------
ARTICLE V
Concerning the Interim Eligible Lender Trustee
----------------------------------------------
SECTION 5.1 Acceptance of Trust and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . 4
------------------------------
SECTION 5.2 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 5
------------------------------
SECTION 5.3 Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . 6
---------------------------------
SECTION 5.4 Interim Eligible Lender Trustee
-------------------------------
Not Liable for the Interim Trust Loans . . . . . . . . . . . . . . . . . . . . . . 6
--------------------------------------
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ARTICLE VI
Compensation of Interim Eligible Lender Trustee . . . . . . . . . . . . . 6
-----------------------------------------------
ARTICLE VII
Termination of Interim Trust Agreement . . . . . . . . . . . . . . . 6
--------------------------------------
ARTICLE VIII
Successor Interim Eligible Lender Trustees . . . . . . . . . . . . . . 7
------------------------------------------
SECTION 8.1 Eligibility Requirements for Interim
------------------------------------
Eligible Lender Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------------
SECTION 8.2 Resignation or Removal of Interim
---------------------------------
Eligible Lender Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-----------------------
SECTION 8.3 Successor Interim Eligible Lender
---------------------------------
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-------
SECTION 8.4 Merger or Consolidation of Interim
----------------------------------
Eligible Lender Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
-----------------------
ARTICLE IX
Miscellaneous
-------------
SECTION 9.1 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
--------------------------
SECTION 9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
-------
SECTION 9.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
------------
SECTION 9.4 Separate Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
---------------------
SECTION 9.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------
SECTION 9.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
--------
SECTION 9.7 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
-------------
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INTERIM TRUST AGREEMENT dated as of October 1, 1996, between SLM
FUNDING CORPORATION, a Delaware corporation (the "Seller") and CHASE MANHATTAN
BANK USA, NATIONAL ASSOCIATION, a national banking association, not in its
individual capacity but solely as Interim Eligible Lender Trustee (the "Interim
Eligible Lender Trustee").
WHEREAS, the Seller is a special purpose corporation established for
the purpose of purchasing Loans from the Student Loan Marketing Association for
immediate resale to special purpose trusts established for the purpose of
financing the purchase of such Loans; and
WHEREAS, the Seller has entered into the Purchase Agreement with the
Student Loan Marketing Association and the Sale Agreement with SLM Student Loan
Trust 1996-4 for the purpose of effecting such a purchase and resale; and
WHEREAS, the Seller is not an "eligible lender" within the meaning of
Section 435(d) of the Higher Education Act for the purpose of holding legal
title to the Loans to be purchased under the Purchase Agreement and any Trust
Student Loans required to be repurchased from the Trust pursuant to the Sale
Agreement;
WHEREAS, the Interim Eligible Lender Trustee is an "eligible lender"
within the meaning of Section 435(d) of the Higher Education Act and is willing
to hold legal title to such Loans and any such Trust Student Loans
(collectively, the "Interim Trust Loans") on behalf and for the benefit of the
Seller;
NOW, THEREFORE, the Seller and the Interim Eligible Lender Trustee
hereby agree as follows:
ARTICLE I
Definitions and Usage
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
ARTICLE II
Appointment of Interim Eligible Lender Trustee
SECTION 2.1 Appointment of Interim Eligible Lender Trustee. The
Seller hereby appoints the Interim Eligible Lender Trustee, effective as of the
date hereof, as trustee, to have all the
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rights, powers and duties set forth herein, cluding, without limitation:
a. to hold legal title to the Interim Trust Loans on behalf and
for the benefit of the Seller;
b. to enter into and perform its obligations as the Interim
Eligible Lender Trustee under the Purchase Agreement, the Sale
Agreement and this Agreement; and
c. to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or
connected therewith.
SECTION 2.2 Declaration of Trust. The Interim Eligible Lender
Trustee hereby declares that it will hold the Interim Trust Loans in trust upon
and subject to the conditions set forth herein for the use and benefit of the
Seller, subject to the obligations of the Interim Eligible Lender Trustee under
the Purchase Agreement and the Sale Agreement. Effective as of the date
hereof, the Interim Eligible Lender Trustee shall have all rights, powers and
duties set forth herein with respect to accomplishing the purposes of this
Agreement.
SECTION 2.3 Title to Interim Trust Loans. Legal title to all of the
Interim Trust Loans shall be vested at all times in the Interim Eligible Lender
Trustee on behalf and for the benefit of the Seller.
ARTICLE III
Representations and Warranties of the Seller
The Seller hereby represents and warrants to the Interim Eligible
Lender Trustee that:
1. The Seller is duly organized and validly existing as a
Delaware corporation in good standing under the laws of the
State of Delaware, with power and authority to own its
properties and to conduct its business as such properties are
currently owned and such business is presently conducted.
2. The Seller has the corporate power and authority to execute
and deliver this Agreement and to carry out its terms; and the
execution, delivery and performance of this Agreement has been
duly authorized by the Seller by all necessary corporate
action.
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3. This Agreement constitutes a legal, valid and binding
obligation of the Seller enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency,
reorganization and similar laws relating to creditors' rights
generally and subject to general principles of equity.
4. The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse
of time or both) a default under, the certificate of
incorporation or by-laws of the Seller, or any indenture,
agreement or other instrument to which the Seller is a party
or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument
(other than other than as contemplated by the Basic
Documents); nor violate any law or any order, rule or
regulation applicable to the Seller of any court or of any
Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
the Seller or its properties.
ARTICLE IV
Authority and Duties of Interim Eligible Lender Trustee
SECTION 4.1 General Authority. The Interim Eligible Lender Trustee is
authorized and directed to execute and deliver the Purchase Agreement, the Sale
Agreement and this Agreement and each certificate or other document attached as
an exhibit to or contemplated by such agreements, in each case, in such form as
the Seller shall approve as evidenced conclusively by the Interim Eligible
Lender Trustee's execution thereof. The Interim Eligible Lender Trustee is also
authorized and directed on behalf and for the benefit of the Seller to acquire
and hold legal title to the Interim Trust Loans and to take all actions required
of the Interim Eligible Lender Trustee pursuant to the Purchase Agreement, the
Sale Agreement and this Agreement.
SECTION 4.2 General Duties. It shall be the duty of the Interim
Eligible Lender Trustee to discharge (or cause to be discharged) all its
responsibilities as the Interim Eligible Lender Trustee pursuant to the terms
of the Purchase Agreement, the Sale Agreement and this Agreement.
SECTION 4.3 No Duties Except as Specified in this Agreement. The
Interim Eligible Lender Trustee shall not have
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any duty or obligation to manage, make any payment with respect to, register,
record, sell, service, dispose of or otherwise deal with the Interim Trust
Loans, or to otherwise take or refrain from taking any action under, or in
connection with, any document contemplated hereby to which the Interim Eligible
Lender Trustee is a party, except as expressly provided by the terms of the
Purchase Agreement, the Sale Agreement or this Agreement; and no implied duties
or obligations shall be read into this Agreement, the Purchase Agreement or the
Sale Agreement against the Interim Eligible Lender Trustee.
SECTION 4.4 No Action Except Under Specified Documents. The Interim
Eligible Lender Trustee shall not otherwise deal with the Interim Trust Loans
except in accordance with the powers granted to and the authority conferred
upon the Interim Eligible Lender Trustee pursuant to this Agreement, the
Purchase Agreement and the Sale Agreement.
SECTION 4.5 Restrictions. The Interim Eligible Lender Trustee shall
not take any action that is inconsistent with the purposes of the Trust set
forth in the Basic Documents.
ARTICLE V
Concerning the Interim Eligible Lender Trustee
SECTION 5.1 Acceptance of Trust and Duties. The Interim Eligible
Lender Trustee accepts the trust hereby created and agrees to perform its
duties hereunder with respect to such trust but only upon the terms of this
Agreement. The Interim Eligible Lender Trustee shall not be answerable or
accountable hereunder or under the Purchase Agreement or the Sale Agreement
under any circumstances, except (i) for its own willful misconduct or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 5.2 expressly made by the Interim Eligible Lender
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
1. the Interim Eligible Lender Trustee shall not be liable for
any error of judgment made by a responsible officer of the
Interim Eligible Lender Trustee;
2. no provision of this Agreement, the Purchase Agreement or the
Sale Agreement shall require the Interim Eligible Lender
Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or
powers hereunder or under the Purchase Agreement or the Sale
Agreement, if the Interim Eligible Lender Trustee shall have
reasonable grounds for believing that repayment of such
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66
funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it; and
3. the Interim Eligible Lender Trustee shall not be responsible
for or in respect of the validity or sufficiency of this
Agreement or for the due execution hereof by the Seller or for
the form, character, genuineness, sufficiency, value or
validity of any of the Interim Trust Loans or for or in
respect of the validity or sufficiency of the Purchase
Agreement or the Sale Agreement.
SECTION 5.2 Representations and Warranties. The Interim Eligible
Lender Trustee hereby represents and warrants to the Seller that:
1. It is a national banking association duly organized and
validly existing in good standing under the laws of the United
States and having an office located within the State of
Delaware. It has all requisite corporate power and authority
to execute, deliver and perform its obligations under the
Purchase Agreement, the Sale Agreement and this Agreement.
2. It has taken all corporate action necessary to authorize the
execution and delivery by it of the Purchase Agreement, the
Sale Agreement and this Agreement, and the Purchase Agreement,
the Sale Agreement and this Agreement have been executed and
delivered by one of its officers who is duly authorized to
execute and deliver the same on its behalf.
3. Neither the execution nor the delivery by it of the Purchase
Agreement, the Sale Agreement or this Agreement, nor the
consummation by it of the transactions contemplated thereby or
hereby nor compliance by it with any of the terms or
provisions thereof or hereof will contravene any Federal or
Delaware state law, governmental rule or regulation governing
the banking or trust powers of the Interim Eligible Lender
Trustee or any judgment or order binding on it, or constitute
any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be
bound.
4. It is and will maintain its status as an "eligible lender" (as
such term is defined in Section 435(d) of the Higher Education
Act) for purposes of holding legal title to the Interim Trust
Loans as contemplated by
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this Agreement, the Purchase Agreement and the Sale Agreement.
SECTION 5.3 Not Acting in Individual Capacity. Except as provided in
this Article V, in accepting the trust hereby created, Chase Manhattan Bank
USA, National Association, acts solely as Interim Eligible Lender Trustee
hereunder and not in its individual capacity.
SECTION 5.4 Interim Eligible Lender Trustee Not Liable for the Interim
Trust Loans. The Interim Eligible Lender Trustee makes no representations as to
the validity or sufficiency of this Agreement, the Purchase Agreement or the
Sale Agreement, or of any Interim Trust Loan or related documents. The Interim
Eligible Lender Trustee shall at no time have any responsibility for or with
respect to the sufficiency of the Interim Trust Loans; the validity or
completeness of the assignment to the Interim Eligible Lender Trustee of legal
title to any Interim Trust Loan on behalf and for the benefit of the Seller; the
performance or enforcement (except as expressly set forth in the Purchase
Agreement or the Sale Agreement) of any Interim Trust Loan; the compliance by
the Seller or the Servicer with any warranty or representation made under any
Basic Document or in any related document or the accuracy of any such warranty
or representation or any action or inaction of the Administrator, the Indenture
Trustee or the Servicer or any subservicer taken in the name of the Interim
Eligible Lender Trustee.
ARTICLE VI
Compensation of Interim Eligible Lender Trustee
The Interim Eligible Lender Trustee shall receive as compensation for
its services hereunder such fees as have been separately agreed upon before the
date hereof between the Seller and the Interim Eligible Lender Trustee, and the
Interim Eligible Lender Trustee shall be entitled to be reimbursed by the
Seller, to the extent provided in such separate agreement, for its other
reasonable expenses hereunder.
ARTICLE VII
Termination of Interim Trust Agreement
This Agreement (other than Article VI) and the trust created hereby
shall terminate and be of no further force or effect upon the earlier of (i)
the termination of the Trust puruant to Section 9.1 of the Trust Agreement and
(ii) the expiration of 21 years from the death of the last survivor of the
descendants of
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Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
Xxxxx, living on the date hereof.
ARTICLE VIII
Successor Interim Eligible Lender Trustees
SECTION 8.1 Eligibility Requirements for Interim Eligible Lender
Trustee. The Interim Eligible Lender Trustee shall at all times be a
corporation or association (i) qualifying as an "eligible lender" as such term
is defined in Section 435(d) of the Higher Education Act for purposes of
holding legal title to the Interim Trust Loans on behalf and for the benefit of
the Seller, with a valid lender identification number with respect to the
Interim Trust Loans from the Department; and (ii) being authorized to exercise
corporate trust powers and hold legal title to the Interim Trust Loans. In
case at any time the Interim Eligible Lender Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Interim Eligible Lender
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.2.
SECTION 8.2 Resignation or Removal of Interim Eligible Lender Trustee.
The Interim Eligible Lender Trustee may at any time resign and be discharged
from the trust hereby created by giving written notice thereof to the Seller.
Upon receiving such notice of resignation, the Seller shall promptly appoint a
successor Interim Eligible Lender Trustee meeting the eligibility requirements
of Section 8.1 by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Interim Eligible Lender Trustee and one copy
to the successor Interim Eligible Lender Trustee. If no successor Interim
Eligible Lender Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Interim Eligible Lender Trustee may petition any court of competent
jurisdiction for the appointment of a successor Interim Eligible Lender Trustee;
provided, however, that such right to appoint or to petition for the appointment
of any such successor shall in no event relieve the resigning Interim Eligible
Lender Trustee from any obligations otherwise imposed on it under this
Agreement, the Purchase Agreement or the Sale Agreement until such successor has
in fact assumed such appointment.
If at any time the Interim Eligible Lender Trustee shall cease to be or
shall be likely to cease to be eligible in accordance with the provisions of
Section 8.1 and shall fail toresign after written request therefor by the
Seller, then the Seller may remove the Interim Eligible Lender Trustee. If the
Seller shall remove the Interim Eligible Lender Trustee under the authority of
the immediately preceding sentence, the Seller shall
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promptly appoint a successor Interim Eligible Lender Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the outgoing Interim Eligible Lender Trustee so removed and one copy to the
successor Interim Eligible Lender Trustee together with payment of all fees
owed to the outgoing Interim Eligible Lender Trustee.
Any resignation or removal of the Interim Eligible Lender Trustee and
appointment of a successor Interim Eligible Lender Trustee pursuant to any of
the provisions of this Section shall not become effective until acceptance of
appointment by the successor Interim Eligible Lender Trustee pursuant to
Section 8.3 and payment of all fees and expenses owed to the outgoing Interim
Eligible Lender Trustee.
SECTION 8.3 Successor Interim Eligible Lender Trustee. Any successor
Interim Eligible Lender Trustee appointed pursuant to Section 8.2 shall
execute, acknowledge and deliver to the Seller and to its predecessor Interim
Eligible Lender Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Interim
Eligible Lender Trustee shall become effective and such successor Interim
Eligible Lender Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Interim Eligible Lender Trustee. The predecessor Interim Eligible Lender
Trustee shall upon payment of its fees and expenses deliver to the successor
Interim Eligible Lender Trustee all documents, statements, moneys and
properties held by it under this Agreement and shall assign, if permissible, to
the successor Interim Eligible Lender Trustee any lender identification number
obtained from the Department with respect to the Interim Trust Loans; and the
Seller and the predecessor Interim Eligible Lender Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Interim
Eligible Lender Trustee all such rights, powers, duties and obligations.
No successor Interim Eligible Lender Trustee shall accept such
appointment as provided in this Section unless at the time of such acceptance
such successor Eligible Lender Trustee shall be eligible pursuant to Section
8.1.
SECTION 8.4 Merger or Consolidation of Interim Eligible Lender
Trustee. Any corporation into which the Interim Eligible Lender Trustee may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Interim
Eligible Lender Trustee shall be a party, or any corporation succeeding to all
or substantially all the corporate trust business of the Interim Eligible
Lender Trustee, shall, without the execution or filing
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of any instrument or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, be the successor of the
Interim Eligible Lender Trustee hereunder; provided that such corporation shall
be eligible pursuant to Section 8.1.
ARTICLE IX
Miscellaneous
SECTION 9.1 Supplements and Amendments. This Agreement may be amended
by the Seller and the Interim Eligible Lender Trustee, with prior written notice
to the Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Seller and
the Interim Eligible Lender Trustee, with prior written notice to the Rating
Agencies, with the consent of (i) the Noteholders of Notes evidencing not less
than a majority of the Outstanding Amount of the Notes and (ii) the
Certificateholders of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Trust Student Loans or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance required to consent to any such
amendment, without the consent of all the outstanding Noteholders and
Certificateholders.
Promptly after the execution of any such amendment or consent, the
Interim Eligible Lender Trustee shall furnish written notification of the
substance of such amendment or consent to each Certificateholder, the Indenture
Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee
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pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Certificateholders provided for in this Agreement or in any other
Basic Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the
Interim Eligible Lender Trustee may prescribe.
Prior to the execution of any amendment to this Agreement, the Interim
Eligible Lender Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement. The Interim Eligible Lender Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Interim Eligible Lender Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 9.2 Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that notice
to the Interim Eligible Lender Trustee shall be deemed given only upon actual
receipt by the Interim Eligible Lender Trustee), if to the Interim Eligible
Lender Trustee, addressed to its Corporate Trust Office; if to the Seller,
addressed to SLM Funding Corporation, 000 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxx
00000, or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party.
SECTION 9.3 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 9.4 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 9.5 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon and to the benefit of, the Seller and
its successors and the Interim Eligible Lender Trustee and its successors, all
as herein provided.
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SECTION 9.6 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 9.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Interim Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Interim Eligible Lender Trustee,
By /s/ Xxxx X. Xxxx
-----------------------------------
Name: Xxxx X. Xxxx
Title: Second Vice President
SLM FUNDING CORPORATION,
Seller,
By /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Treasurer and Controller
12