EXHIBIT NO. 4.2
AMENDED AND RESTATED
TRUST AGREEMENT
between
KEY CONSUMER RECEIVABLES LLC
as Depositor
and
[ ],
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of [ ], [ ]
Table of Contents
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ARTICLE I
Definitions and Usage
ARTICLE II
Organization
SECTION 2.01. Name.................................................................. 1
SECTION 2.02. Office................................................................ 1
SECTION 2.03. Purposes and Powers................................................... 1
SECTION 2.04. Appointment of Eligible Lender Trustee................................ 2
SECTION 2.05. Initial Capital Contribution of Trust Estate.......................... 2
SECTION 2.06. Declaration of Trust.................................................. 3
SECTION 2.07. [Reserved]............................................................ 3
SECTION 2.08. Title to Trust Property; Situs of Trust............................... 3
SECTION 2.09. Representations and Warranties of the Depositor....................... 3
SECTION 2.10. Federal Income Tax Allocations........................................ 4
SECTION 2.11. Covenants and Restrictions on Conduct of Business..................... 4
ARTICLE III
Trust Certificate and Transfer of Interests
SECTION 3.01. Initial Beneficial Ownership.......................................... 6
SECTION 3.02. The Trust Certificate................................................. 6
SECTION 3.03. Authentication of Trust Certificate................................... 6
SECTION 3.04. Registration of Transfer and Exchange of Trust Certificate............ 7
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificate................ 7
SECTION 3.06. Persons Deemed Owners................................................. 8
SECTION 3.07. [Reserved]............................................................ 8
SECTION 3.08. Maintenance of Office or Agency....................................... 8
SECTION 3.09. Appointment of Certificate Paying Agent............................... 8
SECTION 3.10. Restrictions on Transfers of the Trust Certificate.................... 9
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ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.01. Prior Notice with Respect to Certain Matters.......................... 11
SECTION 4.02. Action by Certificateholder with Respect to Certain Matters........... 13
SECTION 4.03. Action by Certificateholder with Respect to Bankruptcy................ 14
SECTION 4.04. Restrictions on Certificateholder's Power............................. 14
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Application of Trust Funds............................................ 14
SECTION 5.02. Method of Payment..................................................... 15
SECTION 5.03. No Segregation of Moneys; No Interest................................. 15
SECTION 5.04. Accounting and Reports to the Noteholders, Certificateholder,
the Internal Revenue Service and Others............................... 15
SECTION 5.05. Signature on Returns; Tax Matters Partner............................. 16
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.01. General Authority..................................................... 16
SECTION 6.02. General Duties........................................................ 16
SECTION 6.03. Action Upon Instruction............................................... 17
SECTION 6.04. No Duties Except as Specified in this Trust
Agreement, the Sale and Servicing Agreement, or in Instructions....... 18
SECTION 6.05. No Action Except Under Specified Documents or Instructions............ 18
SECTION 6.06. Restrictions.......................................................... 18
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.01. Acceptance of Trusts and Duties....................................... 19
SECTION 7.02. Furnishing of Documents............................................... 20
SECTION 7.03. Representations and Warranties........................................ 20
SECTION 7.04. Reliance; Advice of Counsel........................................... 21
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SECTION 7.05. Not Acting in Individual Capacity..................................... 21
SECTION 7.06. Eligible Lender Trustee Not Liable for Trust
Certificate or Financed Student Loans................................. 21
SECTION 7.07. Eligible Lender Trustee May Not Own Trust Certificate
and May Own Notes..................................................... 22
ARTICLE VIII
Compensation of Eligible Lender Trustee
SECTION 8.01. Eligible Lender Trustee's Fees and Expenses........................... 22
SECTION 8.02. Payments to the Eligible Lender Trustee............................... 22
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement........................................ 23
ARTICLE X
Successor Eligible Lender Trustees and Additional Eligible Lender Trustees
SECTION 10.01. Eligibility Requirements for Eligible Lender Trustee.................. 24
SECTION 10.02. Resignation or Removal of Eligible Lender Trustee..................... 24
SECTION 10.03. Successor Eligible Lender Trustee..................................... 25
SECTION 10.04. Merger or Consolidation of Eligible Lender Trustee.................... 26
SECTION 10.05. Appointment of Co-Eligible Lender Trustee or Separate
Eligible Lender Trustee............................................... 26
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments............................................ 28
SECTION 11.02. No Legal Title to Trust Estate in Certificateholder................... 29
SECTION 11.03. Limitations on Rights of Others....................................... 29
SECTION 11.04. Notices............................................................... 30
SECTION 11.05. Severability.......................................................... 30
SECTION 11.06. Separate Counterparts................................................. 30
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SECTION 11.07. Successors and Assigns................................................ 30
SECTION 11.08. No Petition........................................................... 30
SECTION 11.09. No Recourse........................................................... 31
SECTION 11.10. Headings.............................................................. 31
SECTION 11.11. Governing Law......................................................... 31
SECTION 11.12. Third Party Beneficiaries............................................. 31
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EXHIBIT A Form of Trust Certificate
EXHIBIT B Form of Transferor Letter
EXHIBIT C-1 Form of Non-Rule 144A Transferee Letter
EXHIBIT C-2 Form of Rule 144A Transferee Letter
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AMENDED AND RESTATED TRUST AGREEMENT (the "Trust Agreement") dated as of [
], [ ], between KEY CONSUMER RECEIVABLES LLC, a Delaware limited liability
company, as Depositor (the "Depositor"), and [ ], a [ ], not in its individual
capacity but solely as Eligible Lender Trustee (the "Eligible Lender Trustee"),
amending and restating that certain trust agreement (the "Original Trust
Agreement") dated as of [ ], [ ] between the parties hereto.
WHEREAS the Original Trust Agreement was entered into as of [ ], [ ];
WHEREAS the Original Trust Agreement is hereby amended and restated in its
entirety as of [ ], [ ] in order to make such changes and modifications as are
set forth herein; and
WHEREAS, in connection therewith, the Depositor and the Eligible Lender
Trustee agree that the terms and provisions of the Original Trust Agreement
shall no longer have any force and effect with respect to any date on or after
the date as of which this Amended and Restated Trust Agreement is being entered
into (other than Section 4 thereof to the extent applicable to the allocation of
collections, Interest Subsidy Payments and Special Allowance Payments accruing
during any period prior to the Cutoff Date).
NOW, THEREFORE, the Depositor and the Eligible Lender Trustee hereby agree
as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in Appendix A to
the Sale and Servicing Agreement, which also contains rules as to construction
and usage that shall be applicable herein.
ARTICLE II
Organization
SECTION 2.01. Name. The Trust created under the Original Trust Agreement
shall be known as "KeyCorp Student Loan Trust [ ]" 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 ▇▇▇ and be sued. The Trust
shall constitute a statutory trust under Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Sections. 3801 et seq. (the "Statutory Trust Act")
SECTION 2.02. 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 Securities
Insurer, the Swap Counterparty, the Administrator, the Depositor, and, if
different, the holder of the Trust Certificate.
SECTION 2.03.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
Certificate pursuant to this Trust Agreement and to sell the Notes in one
or more transactions;
(ii) with the proceeds of the sale of the Notes, to purchase the
Financed Student Loans and to fund the Pre-Funding Account in order to
purchase Additional Student Loan pursuant to the Sale and Servicing
Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the holder of the Trust Certificate pursuant to the terms of the Sale
and Servicing 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 holder of the
Trust Certificate, the holders of the Notes and the others specified in
Section 5.05 of the Sale and Servicing 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 Trust
Agreement or the other Basic Documents.
SECTION 2.04.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.
[ ] is appointed the initial Delaware Trustee. The Delaware Trustee shall
not have any of the powers or duties of the Eligible Lender Trustee or of a
trustee generally set forth herein, except as required under the Delaware
Statutory Trust Act. The Delaware Trustee shall be a trustee hereunder for the
sole and limited purpose of fulfilling the requirements of Section 3807(a) of
the Delaware Statutory Trust Act.
SECTION 2.05. Initial Capital Contribution of Trust Estate. Pursuant to
the Original Trust Agreement, the Depositor has sold, assigned, transferred,
conveyed and set over to the Eligible Lender Trustee, as of the date thereof,
the sum of $10.00. The Eligible Lender Trustee hereby acknowledges receipt in
trust from the Depositor, as of the date thereof, 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.
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SECTION 2.06. Declaration of Trust. The Eligible Lender Trustee hereby
declares that it will hold the Trust Estate upon and subject to the conditions
set forth herein for the use and benefit of the holder of the Trust Certificate,
subject to the obligations of the Trust under the other Basic Documents. It is
the intention of the parties hereto that the Trust constitute a statutory trust
under the Statutory Trust Act and that this Trust Agreement constitute the
governing instrument of such trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall be treated
as a disregarded entity, with the Trust being owned by the Certificateholder.
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, if any, consistent with the characterization
of the Trust as provided in the preceding sentence for such tax purposes.
Effective as of the date hereof, the Eligible Lender Trustee shall have all
rights, powers and duties set forth herein and in the Statutory Trust Act with
respect to accomplishing the purposes of the Trust. The Eligible Lender Trustee
has filed the Certificate of Trust with the Secretary of State of the State of
Delaware on [ ], [ ].
SECTION 2.07. [Reserved]
SECTION 2.08. Title to Trust Property; Situs of Trust. (a) Legal title to
all 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 Financed Student Loans shall be vested at all times in the Eligible
Lender Trustee on behalf of the Trust.
(b) Neither the Depositor nor any subsequent holder of the Trust
Certificate shall have legal title to any part of the Trust Estate. No transfer
by operation of law or otherwise of any interest of the Depositor nor any
subsequent holder of the Trust Certificate shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of any part of the Trust Estate.
(c) The Trust will be located in the State of Delaware. All bank accounts
maintained by the Administrator in the name of the Eligible Lender Trustee or
the Indenture Trustee, as applicable, on behalf of the Trust, shall be located
only in the States of Delaware, Ohio, Illinois or New York. The Trust shall not
have any employees; provided, however, that nothing herein shall restrict or
prohibit the Eligible Lender Trustee from having employees within or without the
State of Delaware. Payments will be received by the Trust only in Delaware,
Ohio, Illinois or New York, and payments will be made by the Trust only from
Delaware, Ohio, Illinois or New York. The principal place of business of the
Trust will be at the Corporate Trust Office of the Eligible Lender Trustee.
SECTION 2.09. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Eligible Lender Trustee, the
Swap Counterparty and the Securities Insurer that:
(a) The Depositor is duly organized and validly existing as a Delaware
limited liability company in good standing under the laws of the State of
Delaware, with power and
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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 power and authority to execute and deliver this
Trust Agreement and to carry out its terms; the Depositor has full 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 limited liability company action; and the execution, delivery
and performance of this Trust Agreement has been duly authorized by the
Depositor by all necessary limited liability company action.
(c) This Trust 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 or the rights of creditors of banks the deposit accounts of
which are insured by the FDIC and subject to general principles of equity.
(d) The consummation of the transactions contemplated by this Trust
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 limited liability
company agreement and the other organizational documents of the Depositor, or
any indenture, agreement or other instrument to which the Depositor is a party
or by which it is bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any Federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
SECTION 2.10.Federal Income Tax Allocations. Net income of the Trust for
any Collection Period as determined for Federal income tax purposes (and each
item of income, gain, loss and deduction entering into the computation thereof)
shall be allocated to the Certificateholder.
SECTION 2.11. Covenants and Restrictions on Conduct of Business.
(a) The Trust shall abide by the following restrictions:
(i) other than as contemplated by the Basic Documents and related
documentation, the Trust shall not incur any indebtedness;
(ii) other than as contemplated by the Basic Documents and related
documentation, the Trust shall not engage in any dissolution, liquidation,
consolidation, merger or sale of assets;
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(iii) the Trust shall not engage in any business activity in which
it is not currently engaged other than as contemplated by the Basic
Documents and related documentation; and
(iv) the Trust shall not form, or cause to be formed, any
subsidiaries and shall not own or acquire any asset other than as
contemplated by the Basic Documents and related documentation.
(b) The Trust shall:
(i) maintain books and records separate from any other person or
entity;
(ii) maintain its office and bank accounts separate from any other
person or entity;
(iii) not commingle its assets with those of any other person or
entity;
(iv) conduct its own business in its own name and use stationery or
other business forms under its own name and not that of any Noteholder or
any Affiliate;
(v) other than as contemplated by Section 8.01, the Basic Documents
and related documentation, pay its own liabilities and expenses only out
of its own funds;
(vi) observe all formalities required under the Delaware Statutory
Trust Act;
(vii) not guarantee or become obligated for the debts of any other
person or entity;
(viii) not hold out its credit as being available to satisfy the
obligation of any other person or entity;
(ix) not acquire the obligations or securities of its Noteholders or
its Affiliates;
(x) other than as contemplated by the Basic Documents and related
documentation, not make loans to any other person or entity or buy or hold
evidence of indebtedness issued by any other person or entity;
(xi) other than as contemplated by the Basic Documents and related
documentation, not pledge its assets for the benefit of any other person
or entity;
(xii) hold itself out as a separate entity from each Noteholder and
not conduct any business in the name of any Noteholder;
(xiii) correct any known misunderstanding regarding its separate
identity;
(xiv) not identify itself as a division of any other person or
entity; and
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(xv) except as required or specifically provided in the Trust
Agreement, the Trust will conduct business with the Noteholders or any
Affiliate thereof on an arm's-length basis.
(c) So long as the Notes or any other amounts owed under the Indenture
remain outstanding, the Trust shall not amend this Section 2.11 without the
prior written consent of each Rating Agency, in addition to the requirements
under Section 11.01.
ARTICLE III
Trust Certificate and Transfer of Interests
SECTION 3.01. Initial Beneficial Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.05 and until
the issuance of the Trust Certificate, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION 3.02. The Trust Certificate. The Trust Certificate shall be issued
as a single, physical, full registered certificate, substantially in the form of
Exhibit A hereto and shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Eligible Lender Trustee,
upon the order of the Depositor to the Eligible Lender Trustee concurrently with
the initial sale and assignment to the Trust of the Financed Student Loans. The
Trust Certificate shall represent the entire beneficial ownership interest in
the assets of the Trust, subject to the debt represented by the Notes. The
initial Trust Certificate and each Trust Certificate issued in exchange or upon
transfer therefor shall be manually executed by an Authorized Officer of the
Eligible Lender Trustee. Any Trust Certificate bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been 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 Certificate or did not hold such offices at the date of
authentication and delivery of such Trust Certificate. The initial holder of the
Trust Certificate shall be the Depositor or its designated Affiliate.
A transferee of the Trust Certificate shall be the "holder of the Trust
Certificate" for all purposes hereunder, and shall be entitled to the rights and
be subject to the obligations of the holder of the Trust Certificate hereunder,
upon such transferee's acceptance of the Trust Certificate duly registered in
such transferee's name pursuant to Section 3.04 below.
SECTION 3.03. Authentication of Trust Certificate. Concurrently with the
initial sale of the Financed Student Loans to the Trust pursuant to the Sale and
Servicing Agreement, the Eligible Lender Trustee shall cause the Trust
Certificate 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. No Trust Certificate shall entitle its holder to any benefit under
this Trust 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
First Chicago Trust Company of New York, as the Eligible Lender Trustee's
authenticating agent, by manual signature; such authentication shall constitute
conclusive
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evidence that such Trust Certificate shall have been duly authenticated and
delivered hereunder. Each Trust Certificate shall be dated the date of its
authentication. No further Trust Certificate shall be issued except pursuant to
Section 3.04, 3.05 or 3.10 hereunder.
SECTION 3.04. Registration of Transfer and Exchange of Trust Certificate.
The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.08, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Eligible Lender
Trustee shall provide for the registration of the Trust Certificate and of
transfers and exchanges of the Trust Certificate as herein provided. The
Eligible Lender Trustee 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 3.08, the Eligible Lender
Trustee shall execute, authenticate and deliver (or shall cause First Chicago
Trust Company of New York as its authenticating agent to authenticate and
deliver), in the name of the designated transferee or transferees, a new Trust
Certificate dated the date of authentication by the Eligible Lender Trustee or
any authenticating agent. At any one time, only one Trust Certificate,
representing 100% of all the Trust Certificates, shall be issued and
outstanding, and there shall be only a single beneficial owner of such Trust
Certificate, who also shall be the holder of such Trust Certificate.
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 holder of the Trust Certificate or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in Security Transfer Agent's
Medallion Program ("STAMP") or such other "signature guarantee program" as may
be determined by the Certificate Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Exchange Act. 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 a Trust Certificate, 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 a Trust Certificate.
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 a Trust Certificate for a period of five
Business Days preceding any Distribution Date with respect to such Trust
Certificate.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificate. 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 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. 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 3.06. Persons Deemed Owners. Prior to due presentation of a Trust
Certificate for registration of transfer, the Eligible Lender Trustee or the
Certificate Registrar and any agent of any thereof 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 5.01 and for all other purposes whatsoever, and neither the
Eligible Lender Trustee, the Certificate Registrar nor any agent of any thereof
shall be bound by any notice to the contrary. Initially, the Certificate
Registrar shall register the Depositor as the sole holder of the Trust
Certificate in the Certificate Register.
SECTION 3.07. [Reserved].
SECTION 3.08. Maintenance of Office or Agency. The Eligible Lender Trustee
shall maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Trust Certificate 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 Certificate and the other
Basic Documents may be served. The Eligible Lender Trustee initially designates
[ ], as its principal Corporate Trust Office. The Eligible Lender Trustee's New
York office and the Authenticating Agent's office is located at [ ]. The
Eligible Lender Trustee shall give prompt written notice to the Securities
Insurer, the Swap Counterparty, the Administrator, the Depositor and to the
holder of the Trust Certificate (if different) of any change in the location of
the Certificate Register or any such office or agency.
SECTION 3.09. Appointment of Certificate Paying Agent. The Certificate
Paying Agent shall make distributions to the holder of the Trust Certificate
from the amounts received from the Indenture Trustee out of the Trust Accounts
pursuant to Section 5.01 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 Trust 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 acceptable to each of the Administrator and the Securities Insurer
(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 Administrator. In the event that the Eligible Lender Trustee shall
no longer be the Certificate Paying Agent, the Eligible Lender Trustee, shall
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appoint a successor to act as Certificate Paying Agent (which shall be a bank or
trust company). The Eligible Lender Trustee shall cause such successor
Certificate Paying Agent or any additional Certificate Paying Agent appointed by
the Eligible Lender Trustee to execute and deliver to the Eligible Lender
Trustee an instrument in which such successor Certificate Paying Agent or
additional Certificate Paying Agent shall agree with the Eligible Lender Trustee
that as Certificate Paying Agent, such successor Certificate Paying Agent or
additional Certificate Paying Agent will hold all sums, if any, held by it for
payment to the holder of the Trust Certificate in trust for the benefit of the
holder of the Trust Certificate entitled thereto until such sums shall be paid
to such holder of the Trust Certificate. 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 7.01, 7.03, 7.04, 7.05 and 8.01 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
Trust Agreement to the Certificate Paying Agent shall include any co-paying
agent unless the context requires otherwise.
SECTION 3.10. Restrictions on Transfers of the Trust Certificate. (a) The
Trust Certificate may be transferred by the Depositor or its designated
Affiliate to any other Affiliate thereof, without any requirement to provide any
officer's certificates or legal opinions that would otherwise be required if
such proposed transfer was being made to a Person who is not an Affiliate of the
Depositor or its designated Affiliate.
(b) Except as provided above, the Trust Certificate shall not be sold,
pledged, transferred or assigned except as provided below.
(i) The Trust Certificate has not been registered or qualified under
the Securities Act of 1933, as amended (the "Securities Act") or any state
securities law. No transfer, sale, pledge or other disposition of the
Trust Certificate or any interest therein shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and effective registration or qualification under
applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. In the event that a
transfer is to be made without registration or qualification, the Eligible
Lender Trustee shall require, in order to assure compliance with such
laws, that the prospective transferor and transferee each certify to the
Eligible Lender Trustee, the Certificate Registrar, the Administrator,
and, if it not the proposed transferor, the Depositor, in writing the
facts surrounding the transfer. Such certifications shall be substantially
in the forms of Exhibits B and C-1 or C-2 hereto, respectively. In the
event that such a transfer is to be made within two years from the date of
the initial issuance of the Trust Certificate pursuant hereto (other than
a transfer as to which the proposed transferee has provided a certificate
in the form of Exhibit C-2), the Eligible Lender Trustee in its sole
discretion, may require that there shall also be delivered to the Eligible
Lender Trustee, the Certificate Registrar, the Administrator, and, if it
not the proposed transferor, the Depositor, at the expense of the
transferor, an opinion of counsel that such transfer may be made pursuant
to an exemption from the Securities Act and such state securities laws.
Any such opinion of counsel shall not be an expense of the Eligible Lender
Trustee, the Certificate Registrar, the Administrator, and, if it not the
9
proposed transferor, the Depositor. None of the Depositor, the
Administrator nor the Eligible Lender Trustee is obligated to register or
qualify the Trust Certificate under the Securities Act or any other
securities law or to take any action not otherwise required under this
Agreement to permit the transfer of the Trust Certificate without
registration or qualification. Any such holder of the Trust Certificate
desiring to effect such transfer shall, and does hereby agree to,
indemnify the Eligible Lender Trustee, the Certificate Registrar, the
Administrator, and, if it not the proposed transferor, the Depositor,
against any liability that may result if the transfer is not so exempt or
is not made in accordance with such applicable federal and state laws.
(ii) No transfer of the Trust Certificate will be registered by the
Eligible Lender Trustee or the Certificate Registrar unless the Eligible
Lender Trustee, the Certificate Registrar, the Administrator, and, if it
not the proposed transferor, the Depositor receives a representation from
the proposed transferee of the Trust Certificate, substantially in the
form of Exhibit C-1 or C-2, as the case may be, that such transferee is
not acquiring the Trust Certificate directly or indirectly for, on behalf
of or with the assets of, an employee benefit plan or other retirement
arrangement subject to Title I of ERISA and/or Section 4975 of the Code (a
"Plan"). If any proposed transferee shall become a holder of the Trust
Certificate in violation of these provisions, then the last preceding
permitted transferee shall be restored, to the extent permitted by law, to
all rights as holder of the Trust Certificate, retroactive to the date of
registration of such transfer of the Trust Certificate. Neither the
Eligible Lender Trustee nor the Certificate Registrar shall not have any
liability to any person for any registration or transfer of the Trust
Certificate that is not permitted or for making any payments due on the
Trust Certificate to the holder or taking any other action with respect to
such holder under this Agreement. Any proposed transferee who becomes a
holder of the Trust Certificate shall agree to indemnify the Eligible
Lender Trustee, the Certificate Registrar, the Securities Insurer, the
Swap Counterparty, the Administrator, and, if it not the proposed
transferor, the Depositor against any loss, damage or penalty incurred as
a result of the transfer of the Trust Certificate to such purposed
transferee in violation of such restrictions.
(iii) The prospective transferee shall be aware that the Trust
Certificate shall bear legends referring to the restrictions contained in
sub-clauses (i) and (ii) above and by its acceptance of the Trust
Certificate agrees to abide by such restrictions.
(iv) The prospective transferee shall deliver an opinion of counsel
addressed to the Eligible Lender Trustee, the Securities Insurer, the Swap
Counterparty, the Administrator, and, if it not the proposed transferor,
the Depositor, to the effect that, (A) as a matter of Federal income tax
law, such prospective transferee is permitted to accept the transfer of
the Trust Certificate, (B) such transfer or pledge would not jeopardize
the tax treatment of the Trust, (C) such transfer or pledge would not
subject the Trust to an entity-level tax, (D) such transfer or pledge
would not jeopardize the status of the Notes as debt for all purposes, and
(D) such pledge or transfer would not cause the Trust to be treated, for
federal income tax purposes, as an association or a publicly traded
partnership taxable as a corporation.
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(v) No pledge or transfer of the Trust Certificate shall be
effective unless such purchase or transfer is to a single beneficial owner
who shall be the registered holder of the Trust Certificate.
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.01. Prior Notice with Respect to Certain Matters. With respect
to the following matters, the Eligible Lender Trustee shall not take action and
neither the holder of the Trust Certificate nor the Securities Insurer shall
direct the Eligible Lender Trustee to take any action, unless (i) (with respect
to any action affecting the Group II Insured Notes and so long as no Securities
Insurer Default has occurred and is continuing) the Securities Insurer (except
with respect to those actions set forth in paragraph (e) below) has provided its
written consent, and (ii) at least 30 days before the taking of such action, the
Eligible Lender Trustee shall have notified the holder of the Trust Certificate
and the Securities Insurer in writing of the proposed action and neither the
holder of the Trust Certificate nor (except with respect to those actions set
forth in paragraph (e) below) the Securities Insurer (with respect to any action
affecting the Group II Insured Notes) shall have notified the Eligible Lender
Trustee in writing prior to the 30th day after such notice is given that the
Securities Insurer (with respect to any action affecting the Group II Notes) or
the holder of the Trust Certificate has 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 Financed
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 Financed Student Loans);
(b) the election by the Trust to file an amendment to the Certificate of
Trust;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any holder of the Group I or Group II Notes
or the Securities Insurer is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any holder of the Notes or the Securities
Insurer is not required and such amendment materially adversely affects the
interest of the holder of the Trust Certificate;
(e) 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 holder of the Trust Certificate;
(f) the appointment pursuant to this Trust Agreement of a successor
Certificate Registrar, or the consent to the assignment by the Certificate
Paying Agent or Certificate Registrar of its obligations under this Trust
Agreement;
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(g) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee, or the consent to the assignment
by the Note Registrar, Paying Agent or Indenture Trustee of its obligations
under the Indenture;
(h) the consent to the calling or waiver of any default of any Basic
Document;
(i) the consent to the assignment by the Indenture Trustee, the Master
Servicer, the Administrator or the Seller of their respective obligations under
any Basic Document;
(j) except as provided in Article IX hereof, the dissolution, termination
or liquidation of the Trust, in whole or in part;
(k) the merger or consolidation of the Trust with or into any other
entity, or, except as contemplated by the Sale and Servicing Agreement and the
Indenture, the conveyance or transfer of all or substantially all of the Trust's
assets to any other entity;
(l) the causing of the Trust to incur, assume or guaranty any indebtedness
other than the Notes, as set forth in this Agreement;
(m) doing any act that conflicts with any other Basic Document;
(n) doing any act which would make it impossible to carry on the ordinary
business of the Trust;
(o) confessing a judgment against the Trust;
(p) possessing Trust assets, or assigning the Trust's right to property,
for other than a Trust purpose;
(q) changing the Trust's purpose and powers from those set forth in this
Agreement; or
(r) cause the Trust to lend any funds to any entity, unless permitted in
this Trust Agreement or the Basic Documents.
In addition, the Trust shall not commingle its assets with those of the
Depositor and shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses from its own funds, and
the Trust shall not pay the indebtedness, operating expenses and liabilities of
any other Person. The Trust shall maintain appropriate minutes or other records
of all appropriate actions and shall maintain its office separate from the
offices of the Depositor and any of its Affiliates. This Agreement and the Basic
Documents shall be the only agreements among the parties hereto with respect to
the creation, operation and termination of the Trust. For accounting purposes,
the Trust shall be treated as an entity separate and distinct from the
Depositor. The pricing and other material terms of all transactions and
agreements to which the Trust is a party shall be intrinsically fair to all
parties thereto.
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The Eligible Lender Trustee shall not have the power, except upon the
direction of the holder of the Trust Certificate and, to the extent permitted by
applicable law (with respect to any action affecting the Group II Insured Notes
and so long as no Securities Insurer Default has occurred and is continuing)
with the consent of the Securities Insurer (which consent shall not be
unreasonably withheld), and to the extent otherwise consistent with the Basic
Documents, to (i) remove or replace the Master Servicer, the Administrator or
the Indenture Trustee, (ii) institute proceedings to have the Trust declared or
adjudicated a bankrupt or insolvent, (iii) consent to the institution of
bankruptcy or insolvency proceedings against the Trust, (iv) file a petition or
consent to a petition seeking reorganization or relief on behalf of the Trust
under any applicable federal or state law relating to bankruptcy, (v) consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
any similar official) of the Trust or a substantial portion of the property of
the Trust, (vi) make any assignment for the benefit of the Trust's creditors,
(vii) cause the Trust to admit in writing its inability to pay its debts
generally as they become due, or (viii) take any action, or cause the Trust to
take any action, in furtherance of any of the foregoing (any (ii) through (viii)
above, a "Bankruptcy Action"). So long as the Indenture remains in effect,
neither the Depositor, nor, if different, holder of the Trust Certificate shall
have the power to take, and shall not take, any Bankruptcy Action with respect
to the Trust or direct the Eligible Lender Trustee to take any Bankruptcy Action
with respect to the Trust.
In considering whether to take any Bankruptcy Action relating to the
Trust, the Eligible Lender Trustee shall consider the interests of the
Noteholders, the Swap Counterparty and the Securities Insurer in addition to the
interests of the Trust and whether the Trust is insolvent. The Eligible Lender
Trustee shall have no duty to take any Bankruptcy Action relating to the Trust
if the Eligible Lender Trustee shall not have been furnished (at the expense of
the Person that requested that such letter be furnished to the Eligible Lender
Trustee) a letter from an independent accounting firm of national reputation
stating that in the opinion of such firm the Trust is then insolvent. The
Eligible Lender Trustee shall not be personally liable to any holder of the
Trust Certificate on account of the Eligible Lender Trustee's good faith
reliance on the provisions of this Section and no holder of the Trust
Certificate shall have claim for breach of fiduciary duty or otherwise against
the Eligible Lender Trustee for determining not to take any such Bankruptcy
Action.
The provisions of this Section do not constitute an acknowledgment or
admission by the Trust, the Eligible Lender Trustee, any holder of the Trust
Certificate or any creditor of the Trust that the Trust is eligible to be a
debtor under the United States Bankruptcy Code, 11 U.S.C. Sections 101 et seq.,
as amended.
SECTION 4.02. Action by Certificateholder with Respect to Certain Matters.
The Eligible Lender Trustee shall not have the power, except upon the direction
of the holder of the Trust Certificate, and (with respect to any action
affecting the Group II Insured Notes and provided that no Securities Insurer
Default has occurred and is continuing) with the consent of the Securities
Insurer, to (a) remove the Master Servicer or the Administrator under the Sale
and Servicing Agreement pursuant to Section 8.01 thereof or (b) except as
expressly provided in the Basic Documents, sell the Financed Student Loans after
the termination of the Indenture. The Eligible Lender Trustee shall take the
actions referred to in the preceding sentence only upon written instructions
signed by the holder of the Trust Certificate, and (with respect to any action
13
affecting the Group II Insured Notes and provided that no Securities Insurer
Default has occurred and is continuing) with the written consent of the
Securities Insurer.
SECTION 4.03. Action by Certificateholder with Respect to Bankruptcy. The
Eligible Lender Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the prior consent and
approval of the holder of the Trust Certificate, the Indenture Trustee and (with
respect to any action affecting the Group II Insured Notes and provided that no
Securities Insurer Default has occurred and is continuing) the Securities
Insurer, and the delivery to the Eligible Lender Trustee by the holder of the
Trust Certificate of a certificate certifying that such holder of the Trust
Certificate reasonably believes that the Trust is insolvent.
SECTION 4.04. Restrictions on Certificateholder's Power. The holder of the
Trust Certificate or (with respect to any action affecting the Group II Insured
Notes and provided that no Securities Insurer Default has occurred and is
continuing) the Securities Insurer 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 obligations of the Trust or the Eligible Lender Trustee under
the Higher Education Act or this Trust Agreement or any of the other Basic
Documents or would be contrary to Section 2.03 nor shall the Eligible Lender
Trustee be permitted to follow any such direction, if given.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Application of Trust Funds. (a) On each Distribution Date,
the Eligible Lender Trustee will distribute to the holder of the Trust
Certificate, amounts received from the Indenture Trustee pursuant to Sections
5.05 of the Sale and Servicing Agreement, or Sections 5.04(b) or 5.04(c) of the
Indenture, as applicable, on such Distribution Date.
(b) On each Distribution Date, the Eligible Lender Trustee shall send to
the holder of the Trust Certificate a copy of the statement sent to the
Noteholders and provided to the Eligible Lender Trustee by the Administrator
pursuant to Section 5.07 of the Sale and Servicing 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 holder of the Trust Certificate, such
tax shall reduce the amount otherwise distributable to such holder in accordance
with this Section. The Eligible Lender Trustee is hereby authorized and directed
to retain from amounts otherwise distributable to the holder of the Trust
Certificate sufficient funds for the payment of any tax that is legally owed by
the Trust (but such authorization shall not prevent the Eligible Lender Trustee
from contesting any such tax in appropriate proceedings, and withholding payment
of such tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to a holder of the Trust
Certificate shall be treated as cash distributed to such holder of the Trust
Certificate at the time it is withheld by the Trust to be remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
holder of the Trust Certificate), the Eligible
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Lender Trustee in its sole discretion may (but unless otherwise required by law
shall be obligated to) withhold such amounts in accordance with this paragraph
(c). In the event that a holder of the Trust Certificate wishes to apply for a
refund of any such withholding tax, the Eligible Lender Trustee shall reasonably
cooperate with such holder in making such claim so long as such holder of the
Trust Certificate agrees to reimburse the Eligible Lender Trustee for any
out-of-pocket expenses incurred.
SECTION 5.02. Method of Payment. Subject to Section 9.01(c), distributions
required to be made to the holder of the Trust Certificate on any Distribution
Date shall be made to each such holder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of such
holder at a bank or other entity having appropriate facilities therefor, if such
holder 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 or, if not, by check mailed to such holder
at the address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, the final distribution in respect of any Trust
Certificate will 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 holder thereof.
SECTION 5.03. No Segregation of Moneys; No Interest. Subject to Section
5.01, moneys received by the Eligible Lender Trustee hereunder need not be
segregated in any manner, except to the extent required by law or the Sale and
Servicing 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 5.04. Accounting and Reports to the Noteholders,
Certificateholder, the Internal Revenue Service and Others. The Eligible Lender
Trustee shall deliver to the holder of the Trust Certificate such information,
reports or statements as may be required by the Code and applicable Treasury
Regulations and as may be required to enable the holder of the Trust Certificate
to prepare its Federal and state income tax returns. Consistent with the Trust's
characterization for tax purposes as a disregarded entity, no Federal income tax
return shall be filed on behalf of the Trust unless either (a) the Trust, the
Administrator, the Swap Counterparty, the Securities Insurer, the Eligible
Lender Trustee, KBUSA, the Depositor and, if different, the holder of the Trust
Certificate receives an opinion of counsel based on a change in applicable law
occurring after the date hereof that the Code requires such a filing, or (b) the
Internal Revenue Service shall determine that the Trust is required to file such
a return. In the event that the Trust is required to file tax returns, 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 Financed
Student Loans. The Eligible Lender Trustee shall prepare or shall cause to be
prepared any tax returns required to be filed by the Trust and shall remit such
returns to holder of the Trust Certificate at least five days before such
returns are due to be filed. The holder of the Trust Certificate, or any other
such party required by law, shall promptly sign such returns and deliver such
returns after signature to the Eligible Lender Trustee and such returns shall be
filed by, or at the direction of, the Eligible Lender Trustee with the
appropriate tax authorities. In no event shall the holder of the Trust
Certificate, the Depositor or KBUSA be liable for any liabilities, costs or
expenses of the Trust arising out of the application of any tax law, including
federal, state, foreign or local income or excise taxes or any other tax imposed
on or measured by income
15
(or any interest, penalty or addition with respect thereto or arising from a
failure to comply therewith), except for any such liability, cost or expense
attributable to the holder of the Trust Certificate's, the Depositor's or
KBUSA's breach of its obligations under this Agreement.
SECTION 5.05. Signature on Returns; Tax Matters Partner. The Eligible
Lender Trustee shall sign on behalf of the Trust the tax returns of the Trust,
unless applicable law requires the holder of the Trust Certificate, the
Depositor or KBUSA to sign such documents, in which case such documents shall be
signed by the holder of the Trust Certificate, the Depositor or KBUSA.
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.01. General Authority. The Eligible Lender Trustee is authorized
and directed to execute and deliver the Basic Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party, in each
case, in such form as the Depositor shall approve as evidenced conclusively by
the Eligible Lender Trustee's execution thereof, and, on behalf of the Trust, to
direct the Indenture Trustee to authenticate and deliver the Notes, other than
the Class II-[ ] Notes, in the aggregate principal amount of $[ ], and the Class
II-[ ] Notes in the aggregate notional principal amount of $[ ]. The Eligible
Lender Trustee is also authorized and directed on behalf of the Trust (i) to
acquire and hold legal title to the Financed Student Loans from the Depositor
and (ii) to take all actions required pursuant to Section 4.02(c) of the Sale
and Servicing Agreement, and otherwise follow the direction of and cooperate
with the Administrator 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 Financed Federal Loans.
In addition to the foregoing, the Eligible Lender Trustee is authorized,
but shall not be obligated, 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 6.02. 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 Trust Agreement and the other Basic Documents to
which the Trust is a party and to administer the Trust in the interest of the
holder of the Trust Certificate, subject to and in accordance with the
provisions of this Trust 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 any act or to discharge
16
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 Financed Student Loans or to maintain, monitor or otherwise
supervise the administration, servicing or collection of the Financed Student
Loans.
SECTION 6.03. Action Upon Instruction. (a) Subject to Article IV, Section
7.01 and in accordance with the terms of the Basic Documents, the holder of the
Trust Certificate may by written instruction direct the Eligible Lender Trustee
in the management of the Trust (and with respect to any action affecting the
Group II Insured Notes and provided that for so long as no Securities Insurer
Default has occurred and is continuing, the consent of the Securities Insurer
will be required in connection with each such instruction). Such direction may
be exercised at any time by written instruction of the holder of the Trust
Certificate pursuant to Article IV.
(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 of action permitted or
required by the terms of this Trust 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 holder of the Trust Certificate and
(with respect to any action affecting the Group II Insured Notes and so long as
no Securities Insurer Default has occurred and is continuing) to the Securities
Insurer requesting 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 received from the holder of the Trust Certificate and (with
respect to any action affecting the Group II Insured Notes and so long as no
Securities Insurer Default has occurred and is continuing) as consented to by
the Securities Insurer, 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 Trust
Agreement or the other Basic Documents, as it shall deem to be in the best
interests of the holder of the Trust Certificate, 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 Trust 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
Trust 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 holder of the Trust Certificate and (with
respect to any action affecting the Group II Insured Notes and so
17
long as no Securities Insurer Default has occurred and is continuing) the
Securities Insurer requesting instruction and, to the extent that the Eligible
Lender Trustee acts or refrains from acting in good faith in accordance with any
such instruction received from the holder of the Trust Certificate, and (with
respect to any action affecting the Group II Insured Notes and so long as no
Securities Insurer Default has occurred and is continuing) as consented to by
the Securities Insurer, 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 Trust Agreement or the other Basic Documents, as it shall deem to be in the
best interests of the holder of the Trust Certificate, and shall have no
liability to any Person for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Trust Agreement, the
Sale and Servicing 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 Trust
Agreement, the Sale and Servicing Agreement, or in any document or written
instruction received by the Eligible Lender Trustee pursuant to Section 6.03;
and no implied duties or obligations shall be read into this Trust 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 Trust Agreement or any other Basic Document. The Eligible Lender Trustee
and the Delaware Trustee each severally and not jointly, 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, [ ], in its individual capacity or as the
Eligible Lender Trustee or against [ ], in its individual capacity or as
Delaware Trustee, as applicable, that are not related to the ownership or the
administration of the Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or Instructions.
The Eligible Lender Trustee shall not manage, control, use, sell, service,
dispose of or 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 Trust 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 6.03.
SECTION 6.06. Restrictions. The Eligible Lender Trustee and the Delaware
Trustee shall not take any action (a) that is inconsistent with the purposes of
the Trust set forth in Section 2.03 or (b) that, to the actual knowledge of the
Eligible Lender Trustee or the Delaware Trustee, would result in the Trust's
becoming taxable as a corporation for Federal income tax purposes. The holder of
the Trust Certificate shall not direct the Eligible Lender Trustee or the
Delaware Trustee to take action that would violate the provisions of this
Section.
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ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.01. 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 Trust 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 Trust 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 7.03 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 from any holder of the Trust Certificate
and (with respect to any action affecting the Group II Insured Notes and so long
as no Securities Insurer Default has occurred and is continuing) as consented to
by the Securities Insurer;
(c) subject to Section 7.07 hereof, no provision of this Trust Agreement
or any other Basic Document shall require the Eligible Lender Trustee to expend
or risk funds or otherwise incur any financial liability in the performance of
any of its rights or powers hereunder or under any other Basic Document, if the
Eligible Lender Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) under no circumstances shall the Eligible Lender Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(e) the Eligible Lender Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Trust 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 Certificate, and the Eligible Lender Trustee shall
in no event assume or incur any liability, duty, or obligation to any holder of
the Notes or to any holder of the Trust Certificate, other than as expressly
provided for herein and in the other Basic Documents;
(f) subject to Section 7.07 hereof, the Eligible Lender Trustee shall not
be liable for the action or inaction, default or misconduct of the
Administrator, the Seller, the Swap Counterparty, the Securities Insurer, the
Cap Provider, the Cap Counterparty, the Indenture
19
Trustee or the Master 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 Trust Agreement, or the other
Basic Documents that are required to be performed by the Administrator under the
Sale and Servicing Agreement, or the Administration Agreement, the Indenture
Trustee under the Indenture, the Swap Counterparty under the Group I Interest
Rate Swap, the Securities Insurer under the Group II Insured Notes Guaranty
Insurance Policy, the Master Servicer under the Sale and Servicing Agreement,
the Cap Provider under the Basis Risk Cap Agreements or the Cap Counterparty
under the Group II Cap 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 Trust Agreement, or to
institute, conduct or defend any litigation under this Trust Agreement or
otherwise or in relation to this Trust Agreement or any other Basic Document, at
the request, order or direction of any of the holder of the Trust Certificate,
unless such holder 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
Trust 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 7.02. Furnishing of Documents. The Eligible Lender Trustee shall
furnish to the holder of the Trust Certificate, the Swap Counterparty or the
Securities Insurer 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.
SECTION 7.03. Representations and Warranties. The Eligible Lender Trustee
hereby represents and warrants to the Depositor, for the benefit of the holder
of the Trust Certificate, the Securities Insurer and the Swap Counterparty,
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 New York. It has all requisite corporate
power and authority to execute, deliver and perform its obligations under this
Trust Agreement.
(b) It has taken all corporate action necessary to authorize the execution
and delivery by it of this Trust Agreement, and this Trust Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Trust Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Trust 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.
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(d) It is 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 Financed
Student Loans as contemplated by this Trust Agreement and the other Basic
Documents, has obtained a lender identification number with respect to the Trust
from the Department and has in effect a Guarantee Agreement with each of the
Guarantors with respect to the Financed Student Loans.
SECTION 7.04. 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 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.
(a) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Trust 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, accountants and other skilled persons 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, accountants or other
such persons and not contrary to this Trust Agreement or any other Basic
Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created [ ], 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 Trust Agreement or any other Basic Document
shall look only to the Trust Estate for payment or satisfaction thereof.
Notwithstanding any other provision in this Trust Agreement or the other
Basic Documents, nothing in this Trust Agreement or the other Basic Documents
shall be construed to limit the legal responsibility of the Eligible Lender
Trustee or the Indenture Trustee to the U.S. Secretary of Education or a
Guarantor for any violations of statutory or regulatory requirements that may
occur with respect to loans held by the Eligible Lender Trustee or the Indenture
Trustee, pursuant to or to otherwise comply with their obligations under the
Higher Education Act or implementing regulations.
SECTION 7.06. Eligible Lender Trustee Not Liable for Trust Certificate or
Financed Student Loans. The recitals contained herein and in the Trust
Certificate (other than the signature and countersignature of the Eligible
Lender Trustee on the Trust Certificate) shall
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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 representations as to the validity or sufficiency of this Trust
Agreement, the Trust Certificate or any other Basic Document (other than the
signature and countersignature of the Eligible Lender Trustee on the Trust
Certificate) or the Notes, or of any Financed Student Loan or related documents.
Subject to Section 7.07 hereof, 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, of any Financed 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 the holder of the Trust Certificate under this
Trust Agreement or the holders of the Notes under the Indenture, including: the
existence and contents of any computer or other record of any Financed Student
Loan; the validity of the assignment of any Financed Student Loan to the
Eligible Lender Trustee on behalf of the Trust; the completeness of any Financed
Student Loan; the performance or enforcement (except as expressly set forth in
any Basic Document) of any Financed Student Loan; the compliance by the
Depositor or the Master 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, the Swap Counterparty, the Securities Insurer, the Cap
Provider, the Cap Counterparty or the Master Servicer or any Sub-Servicer taken
in the name of the Eligible Lender Trustee.
SECTION 7.07. Eligible Lender Trustee May Not Own Trust Certificate and
May Own Notes. The Eligible Lender Trustee in its individual or any other
capacity may become the owner or pledgee of the Notes and may deal with the
Depositor, the Administrator, the Indenture Trustee, the Swap Counterparty, the
Securities Insurer, the Cap Provider, the Cap Counterparty and the Master
Servicer in banking transactions with the same rights as it would have if it
were not Eligible Lender Trustee. The Eligible Lender Trustee may not become the
holder of the Trust Certificate.
ARTICLE VIII
Compensation of Eligible Lender Trustee
SECTION 8.01. Eligible Lender Trustee's Fees and Expenses. The Eligible
Lender Trustee shall receive from the Administrator (on behalf of the Depositor)
as compensation for its services hereunder, such fees as have been separately
agreed upon before the date hereof among the Depositor, the Administrator and
the Eligible Lender Trustee, and the Eligible Lender Trustee shall be entitled
to be reimbursed by the Administrator (on behalf of the Depositor), to the
extent provided in such separate agreement, for its other reasonable expenses
hereunder.
SECTION 8.02. Payments to the Eligible Lender Trustee. Any amounts paid to
the Eligible Lender Trustee pursuant to Section 8.01 hereof or pursuant to
Section 6.03 or 6.04 of the Sale and Servicing Agreement shall be deemed not to
be a part of the Trust Estate immediately after such payment.
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ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This Trust Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect upon 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 Sale and Servicing Agreement and Article V. The
bankruptcy, liquidation, dissolution, death or incapacity of the holder of the
Trust Certificate shall not (x) operate to terminate this Trust Agreement or the
Trust, nor (y) entitle such holder'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.
(a) Except as provided in Section 9.01(a), neither the Depositor nor any
holder of the Trust Certificate shall be entitled to revoke or terminate the
Trust.
(b) Notice of any termination of the Trust, specifying the Distribution
Date upon which the holder of the Trust Certificate shall surrender its Trust
Certificate 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 the holder of the Trust Certificate mailed within five
Business Days of receipt of notice of such termination from the Administrator
given pursuant to Section 9.01(d) of the Sale and Servicing Agreement, stating
(i) the Distribution Date upon which final payment of the Trust Certificate
shall be made upon presentation and surrender of the Trust Certificate 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 Certificate 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
the holder of the Trust Certificate. Upon presentation and surrender of the
Trust Certificate, the Certificate Paying Agent shall cause to be distributed to
the holder of the Trust Certificate amounts distributable to such holder on such
Distribution Date pursuant to Section 5.01.
In the event that the holder of the Trust Certificate shall not surrender
its Trust Certificate 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 holder of the Trust Certificate to
surrender its Trust Certificate for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
the Trust Certificate shall not have been surrendered for cancellation, the
Eligible Lender Trustee may take appropriate steps, or may appoint an agent to
take other reasonable and appropriate steps, to contact the holder of the Trust
Certificate concerning surrender of its Trust Certificate, and the cost thereof
shall be paid out of the funds and other assets that shall remain subject to
this Trust 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.
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ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION 10.01. 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 Financed
Student Loans on behalf of the Trust, with a valid lender identification number
with respect to the Trust from the Department; (ii) being authorized to exercise
corporate trust powers and hold legal title to the Financed 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) incorporated or
authorized to do business in the State of New York or which is a national bank
having an office located within the State of New York; and (vi) having (or
having a parent which has) a rating of at least Baa3 by ▇▇▇▇▇'▇ and at least BBB
by S&P and (vii) (so long as no Securities Insurer Default has occurred and is
continuing) is acceptable to the Securities Insurer. 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 or the Delaware Trustee, as the case may be,
shall cease to be eligible in accordance with the provisions of this Section, in
the case of the Eligible Lender Trustee, or Section 3807(a) of the Delaware
Statutory Trust Act, in the case of the Delaware Trustee, the Eligible Lender
Trustee or the Delaware Trustee, as the case may be, shall resign immediately in
the manner and with the effect specified in Section 10.02.
SECTION 10.02. Resignation or Removal of Eligible Lender Trustee. The
Eligible Lender Trustee and the Delaware Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Administrator and the Securities Insurer. Upon receiving such notice of
resignation, the Administrator shall promptly appoint a successor Eligible
Lender Trustee or Delaware Trustee, as the case may be, and (so long as no
Securities Insurer Default has occurred and is continuing) with the consent of
the Securities Insurer (such consent not to be unreasonably withheld), meeting
the eligibility requirements of Section 10.01 (or in the case of the Delaware
Trustee, meeting the requirements of Section 3807(a) of the Delaware Statutory
Trust Act) by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Eligible Lender Trustee or the Delaware
Trustee, as the case may be, and one copy to the successor Eligible Lender
Trustee or the Delaware Trustee, as the case may be. If no successor Eligible
Lender Trustee or Delaware Trustee, as the case may be, 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 or Delaware
Trustee, as the case may be, may petition any court of competent jurisdiction
for the appointment of a successor Eligible Lender Trustee or Delaware Trustee,
as the case may be; 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 or Delaware Trustee, as
24
the case may be, 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 or the Delaware Trustee, as the
case may be, shall cease to be eligible in accordance with the provisions of
Section 10.01 (or the Delaware Trustee shall cease to satisfy the requirements
of Section 3807(a) of the Delaware Statutory Trust Act) 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 or the Delaware
Trustee, as the case may be, shall have occurred and be continuing, then the
Administrator may, with the consent of the Securities Insurer (so long as no
Securities Insurer Default has occurred and is continuing), or shall (so long as
no Securities Insurer Default has occurred and is continuing) at the direction
of the Securities Insurer, remove the Eligible Lender Trustee or the Delaware
Trustee, as the case may be. If the Administrator shall remove the Eligible
Lender Trustee or the Delaware Trustee, as the case may be, under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint
a successor Eligible Lender Trustee or Delaware Trustee, as the case may be, and
(so long as no Securities Insurer Default has occurred and is continuing)
acceptable to the Securities Insurer, by written instrument, in duplicate, one
copy of which instrument shall be delivered to the outgoing Eligible Lender
Trustee or Delaware Trustee, as the case may be, so removed and one copy to the
successor Eligible Lender Trustee or Delaware Trustee, as the case may be, and
payment of all fees owed to the outgoing Eligible Lender Trustee or Delaware
Trustee, as the case may be.
Any resignation or removal of the Eligible Lender Trustee or the Delaware
Trustee, as the case may be, and appointment of a successor Eligible Lender
Trustee or Delaware Trustee, as the case may be, pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee or Delaware Trustee, as the
case may be, pursuant to Section 10.03 and payment of all fees and expenses owed
to the outgoing Eligible Lender Trustee or Delaware Trustee, as the case may be.
The Administrator shall provide notice of such resignation or removal of the
Eligible Lender Trustee or Delaware Trustee, as the case may be, to each of the
Rating Agencies, the Swap Counterparty and the Securities Insurer.
SECTION 10.03. Successor Eligible Lender Trustee. Any successor Eligible
Lender Trustee or Delaware Trustee, appointed pursuant to Section 10.02 shall
execute, acknowledge and deliver to the Administrator, the Securities Insurer
and to its predecessor Eligible Lender Trustee or Delaware Trustee, as the case
may be, an instrument accepting such appointment under this Trust Agreement, and
thereupon the resignation or removal of the predecessor Eligible Lender Trustee
or Delaware Trustee, as the case may be, shall become effective and such
successor Eligible Lender Trustee or Delaware Trustee, as the case may be,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under this Trust
Agreement, with like effect as if originally named as Eligible Lender Trustee or
Delaware Trustee, as the case may be. The predecessor Eligible Lender Trustee or
Delaware Trustee, as the case may be, shall upon payment of its fees and
expenses deliver to the successor Eligible Lender Trustee or Delaware Trustee,
as the case may be, all documents, statements, moneys and properties held by it
under this Trust Agreement and shall assign, if permissible, to the successor
Eligible Lender Trustee or Delaware Trustee, as the case may be, the lender
identification number obtained from the Department on behalf of the
25
Trust; and the Administrator and the predecessor Eligible Lender Trustee or
Delaware Trustee, as the case may be, 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 or Delaware
Trustee, as the case may be, all such rights, powers, duties and obligations.
No successor Eligible Lender Trustee or Delaware Trustee, as the case may
be, shall accept appointment as provided in this Section unless at the time of
such acceptance such successor Eligible Lender Trustee or Delaware Trustee, as
the case may be, shall be eligible pursuant to Section 10.01 (or in the case of
the Delaware Trustee, satisfy the requirements of Section 3807(a) of the
Delaware Statutory Trust Act).
Upon acceptance of appointment by a successor Eligible Lender Trustee or
Delaware Trustee, as the case may be, pursuant to this Section, the
Administrator shall mail notice of the successor of such Eligible Lender Trustee
or Delaware Trustee, as the case may be, to the holder of the Trust Certificate,
the Securities Insurer, the Swap Counterparty, the Indenture Trustee, all
holders of the Notes 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 or Delaware Trustee, as the case may be, the successor
Eligible Lender Trustee or Delaware Trustee, as the case may be, shall cause
such notice to be mailed at the expense of the Administrator.
SECTION 10.04. Merger or Consolidation of Eligible Lender Trustee. Any
corporation into which the Eligible Lender Trustee or Delaware Trustee, as the
case may be, may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Eligible Lender Trustee or Delaware Trustee, as the case may be, shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Eligible Lender Trustee or Delaware Trustee, as the case
may be, 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 or Delaware
Trustee, as the case may be, hereunder; provided that such corporation shall be
eligible pursuant to Section 10.01 (or in the case of the Delaware Trustee,
satisfy the requirements of Section 3807(a) of the Delaware Statutory Trust
Act); provided further that the Eligible Lender Trustee or Delaware Trustee, as
the case may be, shall mail notice of such merger or consolidation to the Rating
Agencies, the Administrator, the Swap Counterparty and the Securities Insurer.
SECTION 10.05. Appointment of Co-Eligible Lender Trustee or Separate
Eligible Lender Trustee. Notwithstanding any other provisions of this Trust
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, (and if no
Securities Insurer Default has occurred and is continuing) with the consent of
the Securities Insurer, 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 10.01, 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
26
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Administrator and the Eligible Lender Trustee, and (if no
Securities Insurer Default has occurred and is continuing) with the consent of
the Securities Insurer), 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, and (if no Securities Insurer Default
has occurred and is continuing) with the consent of the Securities Insurer. No
co-trustee or separate trustee under this Trust Agreement shall be required to
meet the terms of eligibility as a successor trustee pursuant to clauses (iv)
and (v) of Section 10.01 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.03.
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;
(ii) no trustee under this Trust Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Trust Agreement; and
(iii) the Administrator and the Eligible Lender Trustee acting
jointly, and (if no Securities Insurer Default has occurred and is
continuing) with the consent of the Securities Insurer, may at any time
accept the resignation of or remove any separate trustee or co-trustee.
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 Trust
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 Trust Agreement, specifically
including every provision of this Trust 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 and the Securities Insurer.
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
27
do any lawful act under or in respect of this Trust 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 11.01. Supplements and Amendments. This Trust 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 holder of the Trust Certificate, but with the consent of the Securities
Insurer (which consent will not be unreasonably withheld) (unless any such
proposed amendment does not affect the Group II Insured Notes or the Securities
Insurer (as evidenced in an Opinion of Counsel of the Depositor who shall not be
an employee of KBUSA or any of its Affiliates) regarding the lack of changes to
any legal rights and remedies of the Group II Insured Noteholders or the
Securities Insurer, and a confirmation from each Rating Agency that such
amendment will not result in a downgrading of the then current ratings of any of
the Group II Insured Notes (without regard to the Group II Insured Notes
Guaranty Insurance Policy) and so long as no Securities Insurer Payment Default
has occurred and is continuing), to cure any ambiguity, to correct or supplement
any provisions in this Trust Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Trust Agreement or of modifying in any manner the rights of the holders of
the Notes or the holder of the Trust Certificate; provided, however, that such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any holder of any Class of Notes or holder of
the Trust Certificate, the Securities Insurer or the Swap Counterparty.
This Trust 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, (i) with the consent of the holder of the Trust Certificate,
(ii) with the consent of a majority in interest of the Group I Controlling
Parties (unless any such amendment does not affect the Group I Notes or Group I
Student Loans (as evidenced in an Opinion of Counsel) of the Depositor (who
shall not be an employee of KBUSA or any of its Affiliates) regarding the lack
of changes to any legal rights and remedies of the Group I Noteholders, and a
confirmation from each Rating Agency that such amendment will not result in a
downgrading of the then current ratings of the Group I Notes) and (iii) so long
as no Securities Insurer Payment Default has occurred and is continuing, with
the consent of the Securities Insurer, or if a Securities Insurer Payment
Default has occurred and is continuing, with the consent of a majority in
interest of the Group II Controlling Noteholders (unless any such amendment does
not affect the Group II Notes or Group II Student Loans or the Securities
Insurer (as evidenced in an Opinion of Counsel of the Depositor (who shall not
be an employee of KBUSA or any of its Affiliates) regarding the lack of changes
to any legal rights and remedies of the Group II Insured Noteholders or the
Securities Insurer, and a confirmation from each Rating Agency that such
amendment will not result in a downgrading of the Group II Insured Notes
(without regard to the Group II Insured Notes Guaranty Insurance Policy), for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the
28
provisions of this Trust Agreement or of modifying in any manner the rights of
the holders of any Class of Notes or the holder of the Trust Certificate;
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 with respect to Group I or Group II Student Loans or distributions that
shall be required to be made for the benefit of the holders of the Group I or
Group II Notes or (b) amend aforesaid percentage of the Outstanding Amount of
the related Class or Classes of Notes, which are required to consent to any such
amendment, without the consent of all outstanding holders of all Classes of
Notes affected by such amendment and holder of the Trust Certificate.
Notwithstanding anything to the contrary contained in the Indenture, such rights
of consent granted to the holders of the Notes contained in clauses (a) and (b)
of this proviso shall not be exercisable by the Group I Controlling Parties on
behalf of all of the Group I Noteholders or by the Securities Insurer on behalf
of all of the Group II Noteholders or if a Securities Insurer Payment Default
has occurred and is continuing, by the Group II Controlling Parties on behalf of
all Group II Noteholders.
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 the holder of the Trust Certificate, the Indenture
Trustee, the Securities Insurer, the Swap Counterparty and each of the Rating
Agencies.
It shall not be necessary for the consent of the holder of the Trust
Certificate, the holder of any class of Notes, the Securities Insurer 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 the holder of the Trust Certificate and the Securities Insurer
provided for in this Trust Agreement or in any other Basic Document) and of
evidencing the authorization of the execution thereof by holder of the Trust
Certificate shall be subject to such reasonable requirements as the Eligible
Lender Trustee may prescribe.
Prior to the execution of any amendment to this Trust 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 Trust 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 Trust Agreement or
otherwise.
SECTION 11.02. No Legal Title to Trust Estate in Certificateholder. The
holder of the Trust Certificate shall not have legal title to any part of the
Trust Estate. The holder of the Trust Certificate shall be entitled to receive
distributions with respect to its beneficial ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title, or interest of the holder of the Trust
Certificate to and in their beneficial ownership interest in the Trust Estate
shall operate to terminate this Trust 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 11.03. Limitations on Rights of Others. The provisions of this
Trust Agreement are solely for the benefit of the Eligible Lender Trustee, the
Depositor, the holder of
29
the Trust Certificate, the Administrator, the Securities Insurer, the Swap
Counterparty and, to the extent expressly provided herein, the Indenture Trustee
and the holder of the Notes, and nothing in this Trust Agreement, whether
express or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the Trust Estate or under or in respect of
this Trust Agreement or any covenants, conditions or provisions contained
herein.
SECTION 11.04. 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 Key Consumer
Receivables LLC, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention:
[ ]; if to the Securities Insurer, addressed to [ ], Attention: [ ]; 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 holder of the Trust
Certificate shall be given by first-class mail, postage prepaid, at the address
of such holder as shown in the Certificate Register. Any notice so mailed within
the time prescribed in this Trust Agreement shall be conclusively presumed to
have been duly given, whether or not such holder receives such notice.
SECTION 11.05. Severability. Any provision of this Trust Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Trust 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 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor and its successors, the Eligible Lender Trustee and its successors,
each holder of the Trust Certificate and its successors and permitted assigns,
all as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a holder of the Trust Certificate shall bind the
successors and assigns of such holder.
SECTION 11.08. No Petition. (a) The Depositor (nor any Affiliate of the
Depositor if such Affiliate is the holder of the Trust Certificate) 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 Certificate, the Notes, this Trust Agreement
or any of the other Basic Documents.
30
(a) The Eligible Lender Trustee (not in its individual capacity but solely
as Eligible Lender Trustee), by entering into this Trust Agreement, each holder
of the Trust Certificate, by accepting a Trust Certificate, and the Indenture
Trustee and each holder of the Notes by accepting the benefits of this Trust
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 Certificate, the Notes, this Trust
Agreement or any of the other Basic Documents, until such time as thirteen
months after payment in full of the Notes and the repayment in full of amounts
owed the Securities Insurer and the Swap Counterparty has passed.
SECTION 11.09. No Recourse. Each holder of the Trust Certificate by
accepting a Trust Certificate acknowledges that such holder's Trust Certificate
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Seller, the Master Servicer, the Administrator, the
Eligible Lender Trustee, the Cap Provider, the Cap Counterparty, the Indenture
Trustee, the Swap Counterparty, the Securities Insurer 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 Trust Agreement, the Trust Certificate or the other Basic
Documents.
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 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.
SECTION 11.12. Third Party Beneficiaries. The parties hereto acknowledge
that the Securities Insurer and the Swap Counterparty are express third party
beneficiaries hereof entitled to enforce the provisions hereof as if each were
actually a party hereto. Notwithstanding the foregoing, nothing in this Section
11.12 shall be construed to mitigate, in any way, the fiduciary responsibilities
of the Eligible Lender Trustee to the Depositor and, if different, to the holder
of the Trust Certificate.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
[ ], not in its individual capacity
but solely as Eligible Lender Trustee,
By:____________________________________
Name:
Title:
KEY CONSUMER RECEIVABLES LLC,
Depositor,
By:____________________________________
Name:
Title:
Acknowledged, accepted,
and with respect to
Sections 8.01, agreed to,
as of the day and year
first above written:
KEY BANK USA, NATIONAL
ASSOCIATION, as Administrator
By:______________________________
Name:
Title:
32
Acknowledged and accepted as of the
day and year first above written:
[ ],
as Delaware Trustee
By:______________________________
Name:
Title:
33
EXHIBIT A
TO THE TRUST AGREEMENT
[FORM OF TRUST CERTIFICATE]
A-1
EXHIBIT B
[FORM OF TRANSFEROR LETTER]
B-1
EXHIBIT C-1
[FORM OF TRANSFEREE LETTER (NON-RULE 144A)]
C-1-1
EXHIBIT C-2
[FORM OF TRANSFEREE LETTER (RULE 144A)]
C-1-1