EX-99.15
12
p06-1554ex99_15.htm
TRUST AGREEMENT
Exhibit
99.15
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THE
NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-3
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TRUST
AGREEMENT
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Among
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WILMINGTON
TRUST COMPANY
as
OWNER TRUSTEE
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and
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THE
NATIONAL COLLEGIATE FUNDING LLC
and
THE EDUCATION RESOURCES INSTITUTE, INC.
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as
OWNERS
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Dated
as of
September
28, 2006
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ARTICLE
I
DEFINITIONS
Section
1.01 Capitalized
Terms
ARTICLE
II
ORGANIZATION
Section
2.01 Name
Section
2.02 Office
Section
2.03 Purposes
and Powers.
Section
2.04 Appointment
of the Owner Trustee
Section
2.05 Declaration
of Trust
Section
2.06 No
Liability of Owners for Expenses or Obligations of Trust
Section
2.07 Situs
of
Trust
ARTICLE
III
TRUST
CERTIFICATES AND TRANSFER OF INTEREST
Section
3.01 Issuance
of Trust Certificate.
Section
3.02 Registration
and Transfer of Certificates.
Section
3.03 Lost,
Stolen, Mutilated or Destroyed Certificates
Section
3.04 Limitation
on
Transfer of Ownership Rights.
Section
3.05 Assignment
of Right to Distributions
ARTICLE
IV
CONCERNING
THE OWNERS
Section
4.01 Action
by
Owners with Respect to Certain Matters.
Section
4.02 Action
Upon
Instructions.
Section
4.03 Super-majority
Control
Section
4.04 Representations
and Warranties of the Depositor
Section
4.05 Power
of
Attorney.
ARTICLE
V
INVESTMENT
AND APPLICATION OF TRUST FUNDS
Section
5.01 Investment
of Trust Funds
Section
5.02 Application
of Funds
ARTICLE
VI
CAPITAL
Section
6.01 Tax
Characterization
Section
6.02 Initial
Capital Contributions of Owners
Section
6.03 Capital
Accounts
Section
6.04 Interest
Section
6.05 No
Additional Capital Contributions
Section
6.06 Investment
of
Capital Contributions
Section
6.07 Repayment
and Return of Capital Contributions
ARTICLE
VII
ALLOCATION
OF PROFIT AND LOSS; DISTRIBUTIONS
Section
7.01 Profit
Section
7.02 Loss
Section
7.03 Special
Allocations.
Section
7.04 Curative
Allocations
Section
7.05 Other
Allocation Rules.
Section
7.06 Distribution
of Net Cash Flow
Section
7.07 Distribution
Date Statement
Section
7.08 Allocation
of Tax Liability
Section
7.09 Method
of
Payment
Section
7.10 No
Segregation of Funds; No Interest
Section
7.11 Interpretation
and
Application of Provisions by the Administrator
ARTICLE
VIII
AUTHORITY
AND DUTIES OF THE OWNER TRUSTEE
Section
8.01 General
Authority
Section
8.02 Specific
Authority
Section
8.03 General
Duties
Section
8.04 Accounting
and Reports to the Owners, the Internal Revenue Service and Others
Section
8.05 Signature
of
Returns
Section
8.06 Right
to
Receive and Rely Upon Instructions
Section
8.07 No
Duties
Except as Specified in this Agreement or in Instructions
Section
8.08 No
Action
Except Under Specified Documents or Instructions
Section
8.09 Restriction
ARTICLE
IX
CONCERNING
THE OWNER TRUSTEE
Section
9.01 Acceptance
of Trusts and Duties
Section
9.02 Furnishing
of
Documents
Section
9.03 Reliance;
Advice of Counsel.
Section
9.04 Not
Acting in Individual Capacity
Section
9.05 Representations
and Warranties of Owner Trustee
ARTICLE
X
COMPENSATION
OF OWNER TRUSTEE
Section
10.01 Owner
Trustee’s Fees and Expenses
Section
10.02 Indemnification
Section
10.03 Lien
on Trust
Property
Section
10.04 Payments
to the Owner Trustee
ARTICLE
XI
TERMINATION
OF TRUST
Section
11.01 Termination
of Trust.
Section
11.02 Distribution
of Assets
Section
11.03 No
Termination by Depositor or Owners
ARTICLE
XII
SUCCESSOR
OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section
12.01 Resignation
of Owner Trustee; Appointment of Successor.
Section
12.02 Appointment
of Additional Owner Trustees
ARTICLE
XIII
TAX
MATTERS PARTNER
Section
13.01 Tax
Matters
Partner
Section
13.02 Notice
of Tax
Audit
Section
13.03 Authority
to
Extend Period for Assessing Tax
Section
13.04 Choice
of
Forum for Filing Petition for Readjustment
Section
13.05 Authority
to
Bind Owners by Settlement Agreement
Section
13.06 Notices
Sent
to the Internal Revenue Service
Section
13.07 Indemnification
of Tax Matters Partner
Section
13.08 Approval
of
Tax Matters Partner’s Decisions
Section
13.09 Participation
by Owners in Internal Revenue Service Administrative Proceedings
ARTICLE
XIV
MISCELLANEOUS
Section
14.01 Supplements
and Amendments.
Section
14.02 No
Legal
Title to Trust Property in Owner
Section
14.03 Pledge
of
Collateral by Owner Trustee is Binding
Section
14.04 Limitations
on Rights of Others
Section
14.05 Notices
Section
14.06 Severability
Section
14.07 Separate
Counterparts
Section
14.08 Successors
and Assigns
Section
14.09 Headings
Section
14.10 Governing
Law
Section
14.11 General
Interpretive Principles
| SCHEDULE
A |
CAPITAL
CONTRIBUTIONS, INITIAL SHARING RATIOS AND PERCENTAGE
INTERESTS
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| SCHEDULE
B |
LOAN
ORIGINATORS
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| SCHEDULE
C |
LOAN
PURCHASE AGREEMENTS
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| SCHEDULE
D |
GUARANTY
AGREEMENTS
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| EXHIBIT
1 |
FORM
OF TRUST CERTIFICATE
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| EXHIBIT
2 |
FORM
OF ACCESSION AGREEMENT
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TRUST
AGREEMENT, dated as of September 28, 2006, among The National Collegiate Funding
LLC, a Delaware limited liability company (the “Depositor”), The Education
Resources Institute, Inc., a private non-profit corporation organized under
Chapter 180 of the Massachusetts General Laws, and Wilmington Trust Company,
a
Delaware banking corporation (the “Owner Trustee”).
WHEREAS,
the parties hereto intend to amend and restate that certain Interim
Trust
Agreement, dated as of August 28, 2006 (the “Interim
Trust Agreement”), by and
between the Depositor and the Owner Trustee, on the terms and conditions
hereinafter set forth.
NOW
THEREFORE, in consideration of the premises and of the mutual agreements herein
contained and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto amend and
restate the Interim
Trust Agreement in its entirety and further agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Capitalized
Terms.
For all
purposes of this Agreement, the following terms shall have the meanings set
forth below:
“Administration
Agreement” means the Administration Agreement, dated as of September 28, 2006,
among the Trust, the Indenture Trustee, the Owner Trustee, the Depositor and
First Marblehead Data Services, Inc., as Administrator, as it may be amended
from time to time.
“Administrator”
means First Marblehead Data Services, Inc., a Massachusetts corporation, as
Administrator under the Administration Agreement, or any successor Administrator
as appointed pursuant to the terms of the Administration Agreement.
“Affiliate”
means, with respect to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, “control” when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.
“Agreement”
means this
Trust Agreement, as it may be amended or restated from time to
time.
“Assignments
of Servicing Agreements” means each of the Servicer Consent Letters, dated as of
September 28, 2006, among the Trust, The First Marblehead Corporation and the
Pennsylvania Higher Education Assistance Agency, Great Lakes Educational Loan
Services, Inc., Edfinancial Services, LLC Nelnet, Inc. and ACS Education
Services, Inc., respectively, relating to the assignment of each of the
respective Servicing Agreements to the Trust.
“Authorized
Officer” means any officer of the Owner Trustee who is authorized to act for the
Owner Trustee in matters relating to, and binding upon, the Trust and whose
name
appears on a list of such authorized officers furnished by the Owner Trustee
as
such list may be amended or supplemented from time to time.
“Back-up
Agreement” means the Back-up Administration Agreement, dated as of September 28,
2006, among the Trust, the Depositor, the Owner Trustee, the Administrator
and
U.S. Bank National Association.
“Bankruptcy
Action” has the meaning set forth in Section 4.01(b)(iv)(G).
“Beneficial
Interest” as to any Owner, means all or any part of the interest of that Owner
in the Trust, including without limitation its (a) right to a distributive
share
of the Profit and Loss of the Trust, (b) right to a distributive share of the
assets of the Trust, and (c) right to direct or consent to actions of the Owner
Trustee and otherwise participate in the management of and control the affairs
of the Trust.
“Business
Day” means any day that is not a Saturday, Sunday or any other day on which
commercial banking institutions in Delaware are authorized or obligated by
law
or executive order to be closed.
“Capital
Account” means the Capital Account maintained for each Owner pursuant to Article
VI of this Agreement.
“Capital
Contribution” means the amount of money contributed or deemed to have been
contributed by an Owner to the capital of the Trust, which shall be as set
forth
on Schedule A to this Agreement.
“Certificate
of Trust” means the Certificate of Trust filed with the Secretary of State by
the Owner Trustee on behalf of the Trust.
“Custodial
Agreements” means each of the Custodial Agreements, dated as of September 28,
2006, among the Trust, the Indenture Trustee and the Pennsylvania Higher
Education Assistance Agency, Great Lakes Educational Loan Services, Inc.,
Edfinancial Services, LLC, Nelnet, Inc. and ACS Education Services, Inc.,
respectively.
“Deposit
and Sale Agreement” means the Deposit and Sale Agreement, dated as of September
28, 2006, between the Depositor and the Trust.
“Deposit
and Security Agreement” means the Deposit and Security Agreement, dated as of
September 28, 2006, among the Administrator, ▇▇▇▇ and the Trust.
“Depositor”
means The National Collegiate Funding LLC, a Delaware limited liability
company.
“Distribution
Date” means the first Business Day following a day on which the Owner Trustee
obtains receipt of funds or, if instructed by the Owners, such other Business
Day as they shall specify in writing.
“Distribution
Date Statement” means the statement described as such in Section
7.07.
“Distribution”
means any money or other property distributed to an Owner with respect to its
Beneficial Interest.
“Eligible
Investments” means one or more of the following (it being acknowledged by the
parties hereto that Eligible Investments will have the meaning set forth in
the
Indenture until such time as the Notes are no longer outstanding):
(a) Obligations
of or guaranteed as to principal and interest by the United States or any agency
or instrumentality thereof when such obligations are backed by the full faith
and credit of the United States;
(b) Repurchase
agreements on obligations specified in clause (a) maturing not more than one
month from the date of acquisition thereof, provided that the unsecured
obligations of the party agreeing to repurchase such obligations are at the
time
rated by each of the Rating Agencies in its highest short-term rating
available;
(c) Federal
funds, certificates of deposit, demand deposits, time deposits and bankers’
acceptances (which shall each have an original maturity of not more than 90
days
and, in the case of bankers’ acceptances, shall in no event have an original
maturity of more than 365 days or a remaining maturity of more than 30 days)
denominated in United States dollars of any U.S. depository institution or
trust
company incorporated under the laws of the United States or any state thereof
or
of any domestic branch of a foreign depository institution or trust company;
provided that the debt obligations of such depository institution or trust
company at the date of acquisition thereof have been rated by each of the Rating
Agencies in its highest short-term rating available; and, provided further
that,
if the original maturity of such short-term obligations of a domestic branch
of
a foreign depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall have a credit rating in one of
the
two highest applicable categories from each of the Rating Agencies;
(d) Commercial
paper (having original maturities of not more than 365 days) of any corporation
incorporated under the laws of the United States or any state thereof, which,
on
the date of acquisition has been rated by each of the Rating Agencies in its
highest short-term rating available; provided that such commercial paper shall
have a remaining maturity of not more than 30 days;
(e) A
money
market fund rated by each of the Rating Agencies in its highest rating available
which may be a money market fund of the Owner Trustee; and
(f) Other
obligations or securities that are acceptable to each of the Rating Agencies
as
an Eligible Investment hereunder; provided, however, that no instrument shall
be
an Eligible Investment if it provides for either (i) the right to receive only
interest payments with respect to the underlying debt instrument or (ii) the
right to receive both principal and interest payments derived from the
obligations underlying such instrument and the principal and interest payments
with respect to such instrument provide a yield to maturity greater than 120%
of
the yield to maturity at par of such underlying obligations; and provided
further that so long as the Notes are outstanding, no instrument that is not
a
permitted investment under the Indenture shall be an Eligible Investment for
purposes of this Agreement.
“ERISA”
means the Employee Retirement Income Security Act of 1974, as
amended.
“Fiscal
Year” means the twelve-month period ending on June 30 each year or such portion
thereof as the Trust may be in existence.
“Indemnification
Agreements” means each of the Indemnification Agreements, dated as of September
28, 2006, between the Trust, the Depositor and The First Marblehead Corporation
and Bank of America, N.A. and JPMorgan Chase Bank, N.A.,
respectively.
“Indenture”
means the Indenture between the Trust and U.S. Bank National Association, as
Indenture Trustee, dated as of September 1, 2006, as amended or supplemented
from time to time pursuant to which the Notes are to be issued.
“Indenture
Trustee” means the bank or trust company acting as Indenture Trustee under the
Indenture.
“Interested
Noteholders” shall have the meaning set forth in the Indenture.
“Issuer
Order” means the Issuer Order to the Indenture Trustee from the Trust dated
September 28, 2006.
“Issuer
Orders to Authenticate” means the Issuer Orders to Authenticate to the Indenture
Trustee from the Trust dated September 28, 2006.
“Liquidity
Note Agreement” means the Liquidity Note Agreement, dated as of September 28,
2006, between the Trust and UBS AG, Stamford branch.
“Liquidity
Note” means a liquidity note executed and delivered to the liquidity provider
pursuant to the Liquidity Note Agreement in an aggregate maximum amount
outstanding at any time not to exceed $118,000,000.
“Loan
Originators” means each of the originators of the Student Loans, as set forth on
Schedule B attached hereto, as amended or supplemented from time to
time.
“Loan
Purchase Agreements” means each of the loan purchase agreements entered into
between each of the Loan Originators and The First Marblehead Corporation,
as
set forth on Schedule C attached hereto, as amended or supplemented from time
to
time.
“Net
Cash
Flow” means, with respect to any fiscal period of the Trust, all revenues of the
Trust decreased by (a) cash expenditures for operating expenses (including
interest on indebtedness of the Trust but not including expense items which
do
not require current cash outlay), (b) reserves for contingencies and working
capital established in such amounts as the Owner Trustee, with the consent
of
the Owners, may determine, (c) repayments of principal on any Trust
indebtedness, and (d) taxes.
“1933
Act” has the meaning set forth in Section 3.02(a).
“Notes”
mean the collateralized student loan asset backed notes to be issued by the
Trust pursuant to the Indenture.
“Noteholder”
means any holder of the Notes.
“Owner”
means each of the Depositor, ▇▇▇▇ and any other Person who becomes an owner
of a
Beneficial Interest.
“Owner
Trustee” means Wilmington Trust Company, a Delaware banking corporation with its
principal place of business in the State of Delaware, not in its individual
capacity but solely as trustee, or any successor thereto, duly appointed in
accordance with Section 12.01 hereof.
“Percentage
Interest” means the initial undivided beneficial interest in the Trust Property
of an Owner expressed as a percentage of the total initial undivided beneficial
interests in the Trust Property. References to Percentage Interests herein
shall
be solely for the purpose of certificating Owners’ interests hereunder and for
any other purpose specified in this Agreement.
“Periodic
Filings” means any filings or submissions that the Trust is required to make
with any state or Federal regulatory agency or under the Code.
“Person”
means any individual, corporation, partnership, joint venture, limited liability
company, association, trust (including any beneficiary thereof), estate,
custodian, nominee, unincorporated organization or government or any agency
or
political subdivision thereof.
“Plan”
has the meaning set forth in Section 3.04(d).
“Plan
Assets” has the meaning set forth in Section 3.04(d).
“Rating
Agencies” means ▇▇▇▇▇’▇ Investors Service, Inc., Fitch, Inc. and Standard &
Poors Rating Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc.
“Secretary
of State” means the office of the Secretary of State of the State of
Delaware.
“Servicers”
means the Pennsylvania Higher Education Assistance Agency, Great Lakes
Educational Loan Services, Inc., Edfinancial Services, LLC, Nelnet, Inc., ACS
Education Services, Inc. and any other loan servicer satisfying the Rating
Agency Condition.
“Servicing
Agreements” means (a) the Servicing
Agreement,
dated
as of September 28, 2006, between the Pennsylvania Higher Education Assistance
Agency and The First Marblehead Corporation, (b) the Non-FFELP Loan Servicing
Agreement, dated as of May 1, 2003, as amended, by and between Great Lakes
Educational Loan Services, Inc. and The First Marblehead Corporation, (c) the
Alternative Servicing Agreement dated as of February 1, 2004, as supplemented,
between Edfinancial Services, LLC (as successor in interest to Educational
Services of America, Inc.) and The First Marblehead Corporation, (d) the Loan
Servicing Agreement, dated as of August 1, 2001, as amended, between Nelnet,
Inc. (as successor in interest to UNIPAC Service Corporation) and The First
Marblehead Corporation and (e) the
Alternative Servicing Agreement, dated as of March 1, 2005, as amended, between
ACS Education Services, Inc. and The First Marblehead Corporation, all
of
which agreements will be assigned to the Trust concurrent with the initial
purchase of Financed Student Loans, or any other servicing agreement between
the
Issuer and a servicer under which such servicer agrees to service Financed
Student Loans included in the Indenture Trust Estate, which servicing agreement
shall satisfy the Rating Agency Condition.
“Servicer
Consent Letters” means each of the Servicer Consent Letters, dated as of
September 28, 2006, among The
First
Marblehead Corporation,
the
Trust and Pennsylvania Higher Education Assistance Agency, Great Lakes
Educational Loan Services, Inc., Edfinancial Services, LLC, Nelnet, Inc. and
ACS
Education Services, Inc.,
respectively
“Sharing
Ratio” means, with respect to any Owner, the ratio (expressed as a percentage)
specified on Schedule A attached hereto.
“Statutory
Trust Statute” means the Delaware Statutory Trust Act, 12 Del. Code §3801 et
seq.
“Structuring
Advisor” means The First Marblehead Corporation.
“Structuring
Advisory Agreement” means the Structuring Advisory Agreement between the
Structuring Advisor and the Trust, dated as September 28, 2006.
“Student
Loans” means the education loans, to or for the benefit of students, originated
under one of the Student Loan Programs.
“Student
Loan Notes” means the promissory notes to be sold to the Trust by the Loan
Originators pursuant to the Loan Purchase Agreements representing education
loans, to or for the benefit of students, originated under the Student Loan
Programs.
“Student
Loan Programs” means each of the programs for the origination of the Student
Loans by each of the Loan Originators pursuant to the Loan Purchase
Agreements.
“Super-majority
Owners” shall have the meaning set forth in Section 4.03.
“▇▇▇▇”
means The Education Resources Institute, Inc., a private non-profit corporation
organized under Chapter 180 of the Massachusetts General Laws.
“▇▇▇▇
Deposit Account” means the special deposit account established by ▇▇▇▇ pursuant
to the Deposit and Security Agreement.
“▇▇▇▇
Guaranty Agreements” means each of the Guaranty Agreements entered into between
each of the Loan Originators and ▇▇▇▇ as set forth on Schedule D attached
hereto, as amended or supplemented from time to time.
“▇▇▇▇
Guaranteed Loans” means Student Loans originated under the Student Loan Programs
owned by the Trust and guaranteed by ▇▇▇▇ pursuant to the Guaranty
Agreements.
“Transfer”
means the sale, transfer or other assignment of all of an Owner’s right, title
and interest in all or a portion of such Owner’s Beneficial
Interest.
“Trust”
means The National Collegiate Student Loan Trust 2006-3 established by this
Agreement.
“Trust
Certificate” means a certificate evidencing the Beneficial Interest of an Owner
in substantially the form attached hereto as Exhibit 1.
“Trust
Property” means all right, title and interest of the Trust or the Owner Trustee
on behalf of the Trust in and to any property contributed to the Trust by the
Owners or otherwise acquired by the Trust, including without limitation all
distributions, payments or proceeds thereon.
“Trust
Related Agreements” means any instruments or agreements signed by the Owner
Trustee on behalf of the Trust, including without limitation, the Indenture,
the
Loan Purchase Agreements, the Administration Agreement, the Deposit and Sale
Agreement, the Deposit and Security Agreement, the Servicer Consent Letters,
the
Structuring Advisory Agreement, the Assignments of Servicing Agreements, the
Back-up Agreement, the Custodial Agreements, the Notes, the Indemnification
Agreements, the Liquidity Note Agreement, the Liquidity Note, the Issuer Order
and the Issuer Orders to Authenticate.
Tax
Terms:
“Adjusted
Capital Account Deficit” means, with respect to any Partner, the deficit
balance, if any, in such Partner’s Capital Account as of the end of the relevant
Fiscal Year, after giving effect to the following adjustments:
(a) Credit
to
such Capital Account the minimum gain chargeback that such Partner is deemed
to
be obligated to restore pursuant to the penultimate sentences of sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations and the amount of such
Partner’s share of Partner Nonrecourse Debt Minimum Gain; and
(b) Debit
to
such Capital Account the items described in sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6) of the
Regulations.
The
foregoing definition of Adjusted Capital Account Deficit is intended to comply
with the provisions of section 1.704-1(b)(2)(ii)(d) of the Regulations and
shall
be interpreted consistently therewith.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Nonrecourse
Deductions” has the meaning set forth in section 1.704-2(b)(1) of the
Regulations.
“Nonrecourse
Liability” has the meaning set forth in section 1.704-2(b)(3) of the
Regulations.
“Partner
Nonrecourse Debt” has the meaning set forth in section 1.704-2(b)(4) of the
Regulations.
“Partner
Nonrecourse Debt Minimum Gain” means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with section 1.704-2(i)(3) of the
Regulations.
“Partner
Nonrecourse Deductions” has the meaning set forth in sections 1.704-2(i)(1) and
1.704-2(i)(2) of the Regulations.
“Partners”
means the Owners.
“Partnership”
means the Trust.
“Partnership
Minimum Gain” has the meaning set forth in sections 1.704-2(b)(2) and 1.704-2(d)
of the Regulations.
“Profit
and Loss” means, for each Fiscal Year, an amount equal to the Partnership’s
taxable income or loss for such Fiscal Year, determined in accordance with
section 703(a) of the Code (for this purpose, all items of income, gain, loss,
or deduction required to be stated separately pursuant to section 703(a)(1)
of
the Code shall be included in taxable income or loss), with the following
adjustments:
(a) Any
income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Profit or Loss pursuant to this
definition shall be added to such taxable income or loss;
(b) Any
expenditures of the Partnership described in section 705(a)(2)(B) of the Code
or
treated as expenditures under section 705(a)(2)(B) of the Code pursuant to
section 1.704-1(b)(2)(iv)(i) of the Regulations (other than expenses in respect
of which an election is properly made under section 709 of the Code), and not
otherwise taken into account in computing Profit or Loss pursuant to this
definition, shall be subtracted from such taxable income or loss;
(c) Notwithstanding
any other provisions of this definition, any items which are specially allocated
pursuant to Section 7.03 or 7.04 shall not be taken into account in computing
Profit or Loss.
The
amounts of the items of Partnership income, gain, loss, or deduction available
to be specially allocated pursuant to Sections 7.03 and 7.04 shall be determined
by applying rules analogous to those set forth in clauses (a) and (b)
above.
“Regulations”
means the federal income tax regulations promulgated by the United States
Treasury Department under the Code as such Regulations may be amended from
time
to time.
All
references herein to a specific section of the regulations shall be deemed
also
to refer to any corresponding provision of succeeding Regulations.
“Regulatory
Allocations” has the meaning set forth in Section 7.04.
ARTICLE
II
ORGANIZATION
Section
2.01 Name.
The
Trust continued hereby shall be known as The National Collegiate Student Loan
Trust 2006-3, in which name the Owner Trustee may take any action as provided
herein.
Section
2.02 Office.
The
principal place of business and principal office of the Trust shall be in care
of the Owner Trustee, at the address set forth in Section 14.05. The Trust
shall
also have an office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
Section
2.03 Purposes
and Powers.
(a) The
purpose of the Trust is to engage in the following activities and only these
activities:
(i) To
acquire a pool of Student Loans, to execute the Indenture and to issue the
Notes;
(ii) To
enter
into the Trust Related Agreements and to provide for the administration of
the
Trust and the servicing of the Student Loans;
(iii) To
engage
in those activities and to enter into such agreements that are necessary,
suitable or convenient to accomplish the foregoing or are incidental thereto
or
connected therewith; and
(iv) To
engage
in such other activities as may be required in connection with conservation
of
the Trust Property and Distributions to Owners. Until the Indenture is
discharged, the Trust shall not engage in any business or activities other
than
in connection with, or relating to, the foregoing and other than as required
or
authorized by the terms of this Agreement and the Indenture, except as are
incidental to and necessary to accomplish such activities, unless the Interested
Noteholders consent to the Trust engaging in other activities.
(b) Until
the
Indenture is discharged, the operations of the Trust shall be conducted in
accordance with the following standards:
(i) The
Trust
will act solely in its own name and the Owner Trustee or other agents selected
in accordance with this Agreement will act on behalf of the Trust subject to
direction by the Owners as provided herein, but such action shall not be in
violation of the terms of this Agreement;
(ii) The
Trust’s funds and assets shall at all times be maintained separately from those
of the Owners and any of their respective Affiliates;
(iii) The
Trust
shall maintain complete and correct books, minutes of the meetings and
proceedings of the Owners, and records of accounts;
(iv) The
Trust
shall conduct its business at the office of the Owner Trustee and will use
stationery and other business forms of the Trust under its own name and not
that
of the Owners or any of their respective Affiliates, and will avoid the
appearance (A) of conducting business on behalf of any Owner or any Affiliate
of
an Owner or (B) that the assets of the Trust are available to pay the creditors
of the Owner Trustee or any Owner;
(v) The
Trust’s operating expenses shall be paid out of its own funds;
(vi) The
Trust
shall not incur, guarantee or assume any debt (other than the Notes or pursuant
to the Liquidity Note Agreement) nor hold itself out as being liable for the
debts of any entity, including any Owner or any Affiliates of any
Owner;
(vii) For
so
long as any of the Notes are outstanding, the Trust shall not (A) merge or
consolidate with or into any other entity, (B) convey or transfer all or
substantially all of its assets to any other entity (other than to the Indenture
Trustee pursuant to the Indenture), or (C) dissolve, liquidate or terminate
in
whole or in part; and
(viii) For
so
long as any of the Notes are outstanding, the Trust shall not own or acquire
any
financial asset that requires the Trust, the Owners or the Administrator to
make
any decisions regarding such asset other than the servicing of the
asset.
Section
2.04 Appointment
of the Owner Trustee.
The
Depositor hereby appoints the Owner Trustee as trustee of the Trust, to have
all
the rights, powers and duties set forth herein and in the Statutory Trust
Statute. The Owner Trustee acknowledges receipt in trust from the Depositor,
of
the sum of one dollar ($1), constituting the initial Trust
Property.
Section
2.05 Declaration
of Trust.
The
Owner Trustee hereby declares that it will hold the Trust Property in trust
upon
and subject to the conditions set forth herein for the use and benefit of the
Owners, subject to the obligations of the Owner Trustee under the Trust Related
Agreements. It is the intention of the parties hereto that the Trust constitute
a statutory trust under the Statutory Trust Statute and that this Agreement
constitute the governing instrument of the Trust.
Section
2.06 No
Liability of Owners for Expenses or Obligations of Trust.
No
Owner shall be liable for any liability, expense or other obligation of the
Trust.
Section
2.07 Situs
of Trust.
The
Trust will be located and administered in the State of Delaware. The Trust
shall
not have any employees in any state other than in the State of Delaware and
payments will be received by the Owner Trustee on behalf of the Trust only
in
the State of Delaware and payments will be made by the Owner Trustee on behalf
of the Trust only from the State of Delaware.
ARTICLE
III
TRUST
CERTIFICATES AND TRANSFER OF INTEREST
Section
3.01 Issuance
of Trust Certificate.
(a) As
of the
date hereof, as set forth on Schedule A attached hereto, the Depositor has
been
issued a Trust Certificate evidencing a percentage of the Beneficial Interest
in
the Trust and ▇▇▇▇ has been issued a Trust Certificate evidencing a percentage
of the Beneficial Interest in the Trust.
(b) Each
Trust Certificate shall be executed by manual signature on behalf of the Owner
Trustee by one of its Authorized Officers. Trust Certificates bearing the manual
signature of an individual who was, at the time when such signature was affixed,
authorized to sign on behalf of the Owner Trustee shall bind the Trust,
notwithstanding that such individual has ceased to be so authorized prior to
the
delivery of such Trust Certificate or does not hold such office at the date
of
such Trust Certificate. Each Trust Certificate shall be dated the date of its
issuance.
Section
3.02 Registration
and Transfer of Certificates.
(a) The
Owner
Trustee shall maintain at its office referred to in Section 2.02, or at the
office of any agent appointed by it and approved in writing by the Owners at
the
time of such appointment, a register for the registration and Transfer of Trust
Certificates. No Transfer of a Beneficial Interest shall be made unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act of 1933, as amended (the “1933 Act”), and state securities laws,
or is exempt from the registration requirements under the 1933 Act and state
securities laws.
(b) The
registered Owner of any Trust Certificate may Transfer all or any portion of
the
Beneficial Interest evidenced by such Trust Certificate upon surrender thereof
to the Owner Trustee accompanied by the documents required by Section 3.04.
Such
Transfer may be made by the registered Owner in person or by its attorney duly
authorized in writing upon surrender of the Trust Certificate to the Owner
Trustee accompanied by a written instrument of Transfer and with such signature
guarantees and evidence of authority of the Persons signing the instrument
of
Transfer as the Owner Trustee may reasonably require. Promptly upon the receipt
of such documents and receipt by the Owner Trustee of the transferor’s Trust
Certificate, the Owner Trustee shall (i) record the name of such transferee
as
an Owner and its Percentage Interest in the Trust Certificate register and
(ii)
issue, execute and deliver to such Owner a Trust Certificate evidencing such
Percentage Interest. In the event a transferor Transfers only a portion of
its
Beneficial Interest, the Owner Trustee shall register and issue to such
transferor a new Trust Certificate evidencing such transferor’s new Percentage
Interest. Subsequent to a Transfer and upon the issuance of the new Trust
Certificate or Trust Certificates, the Owner Trustee shall cancel and destroy
the Trust Certificate surrendered to it in connection with such Transfer. The
Owner Trustee may treat the Person in whose name any Trust Certificate is
registered as the sole Owner of the Beneficial Interest in the Trust evidenced
by such Trust Certificate.
(c) As
a
condition precedent to any registration of Transfer, the Owner Trustee may
require the payment of a sum sufficient to cover the payment of any tax or
taxes
or other governmental charges required to be paid in connection with such
Transfer and any other reasonable expenses connected therewith.
(d) The
Trust
Certificates may not be acquired or held by or for the account of a Plan (as
defined herein).
Section
3.03 Lost,
Stolen, Mutilated or Destroyed Certificates.
If (i)
any mutilated Trust Certificate is surrendered to the Owner Trustee, or (ii)
the
Owner Trustee receives evidence to its satisfaction that any Trust Certificate
has been destroyed, lost or stolen, and upon proof of ownership satisfactory
to
the Owner Trustee together with such security or indemnity as may be requested
by the Owner Trustee to save it harmless, the Owner Trustee shall execute and
deliver a new Trust Certificate for the same Percentage Interest as the Trust
Certificate so mutilated, destroyed, lost or stolen, of like tenor and bearing
a
different issue number, with such notations, if any, as the Owner Trustee shall
determine. In connection with the issuance of any new Trust Certificate under
this Section 3.03, the Owner Trustee may require the payment by the registered
Owner thereof of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
reasonable fees and expenses of the Owner Trustee) connected therewith. Any
replacement Trust Certificate issued pursuant to this Section 3.03 shall
constitute complete and indefeasible evidence of ownership of a Beneficial
Interest, as if originally issued, whether or not the lost, stolen or destroyed
Trust Certificate shall be found at any time.
Section
3.04 Limitation
on Transfer of Ownership Rights.
(a) No
Transfer of all or any part of a Beneficial Interest shall be made to any Person
unless (i) such Person delivers to the Owner Trustee an accession agreement
substantially in the form of Exhibit 2 hereof, (ii) except for the initial
transfer of the Beneficial Interest of the Depositor, the Owner Trustee shall
have received a written opinion of counsel in form and substance satisfactory
to
the Owner Trustee stating that such Transfer is exempt from the 1933 Act and
any
applicable state securities laws.
(b) At
any
time that there is more than one Owner, no Transfer of a Beneficial Interest
shall be valid unless the Owner making such Transfer shall have received the
prior written consent to such Transfer of the Owners holding at least 85% of
both the Percentage Interests and the Sharing Ratios in the Trust at such time,
which consent may not be unreasonably withheld; provided,
however,
that in
calculating the total Beneficial Interests in the Trust the Beneficial Interest
owned by the transferor or (unless the transferor and its Affiliates are the
only Owners) any Affiliate thereof shall be excluded.
(c) Except
for the initial issuance of the Trust Certificates to the Depositor, no Transfer
shall be valid if, as a result of such Transfer, (i) any Person would have
a
Percentage Interest or a Sharing Ratio of 100%, considering for such purpose
all
interests owned by any Affiliate of such Person as owned by such Person, or
(ii)
such Transfer would result in a termination of the Trust for Federal income
tax
purposes.
(d) No
Transfer of all or any part of a Beneficial Interest shall be made to any
employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject
to
ERISA or Section 4975 of the Code (collectively, “Plan”), nor to any Person
acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring the Beneficial Interest with “plan assets” of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R. §
2510.3-101 (“Plan Assets”) unless the Owner Trustee is provided with an opinion
of counsel which establishes to the satisfaction of the Owner Trustee that
the
purchase of the Beneficial Interest is permissible under applicable law, will
not constitute or result in any prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Owners, the Owner Trustee or the
Trust
to any obligation or liability (including obligations or liabilities under
ERISA
or Section 4975 of the Code) in addition to that undertaken in this Agreement,
which opinion of counsel shall not be an expense of the Owners, the Owner
Trustee or the Trust.
(e) No
Transfer of all or any part of a Beneficial Interest shall be permitted, and
no
such transfer shall be effective hereunder, if such transfer would cause the
Trust to be classified as a publicly traded partnership, taxable as a
corporation for federal income tax purposes, by causing the Trust to have more
than 100 Owners at any time during any taxable year of the Trust.
Section
3.05 Assignment
of Right to Distributions.
An
Owner may assign all or any part of its right to receive distributions
hereunder, but such assignment (in the absence of a permitted Transfer) shall
effect no change in the ownership of the Trust.
ARTICLE
IV
CONCERNING
THE OWNERS
Section
4.01 Action
by Owners with Respect to Certain Matters.
(a) The
Owner
Trustee will take such action or refrain from taking such action under this
Agreement or any Trust Related Agreement as it shall be directed pursuant to
an
express provision of this Agreement or such Trust Related Agreement or, with
respect to nonministerial matters, as it shall be directed by all the Owners
for
so long as any of the Notes are outstanding.
(b) Without
limiting the generality of the foregoing, in connection with the following
nonministerial matters, the Owner Trustee will take no action, and will not
have
authority to take any such action, unless it receives prior written approval
from all the Owners for so long as any of the Notes are
outstanding:
(i) Initiate
any claim or lawsuit by the Trust and compromise any claim or lawsuit brought
by
or against the Trust, except for claims or lawsuits initiated in the ordinary
course of business by the Trust or its agents or nominees for collection on
the
Student Loans owned by the Trust;
(ii) Amend,
change or modify this Agreement or any Trust Related Agreement;
(iii) To
the
fullest extent permitted by applicable law, file a voluntary petition in
bankruptcy for the Trust, which in no event shall the Owner Trustee be permitted
to do or be instructed to do until at least 367 days after the payment in full
of the Outstanding Notes (as defined in the Indenture) issued by the Trust;
and
(iv) To
the
fullest extent permitted by applicable law, (A) Institute proceedings to have
the Trust declared or adjudicated bankrupt or insolvent, (B) consent to the
institution of bankruptcy or insolvency proceedings against the Trust, (C)
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,
(D) 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, (E) make any assignment for the benefit of the
Trust’s creditors, (F) cause the Trust to admit in writing its inability to pay
its debts generally as they become due, or (G) take any action, or cause the
Trust to take any action, in furtherance of any of the foregoing (any of the
above, a “Bankruptcy Action”). No Owner shall have the power to take, and no
Owner shall take, any Bankruptcy Action with respect to the Trust or direct
the
Owner Trustee to take any Bankruptcy Action with respect to the
Trust.
(c) No
Owner
shall take any action to cause the filing of an involuntary petition in
bankruptcy against the Trust.
Section
4.02 Action
Upon Instructions.
(a) The
Owner
Trustee shall take such action or actions as may be specified in this Agreement
or in any instructions delivered in accordance with this Article IV or Article
VIII; provided,
however,
that
the Owner Trustee shall not be required to take any such action if it shall
have
reasonably determined, or shall have been advised by counsel, that such action
(i) is contrary to the terms hereof or of any document contemplated hereby
to
which the Trust or the Owner Trustee is a party or is otherwise contrary to
law,
(ii) is likely to result in personal liability on the part of the Owner Trustee,
unless the Owners shall have provided to the Owner Trustee indemnification
or
security reasonably satisfactory to the Owner Trustee against all costs,
expenses and liabilities arising from the Owner Trustee’s taking of such action,
or (iii) would adversely affect the status of the Trust as a partnership for
Federal income tax purposes.
(b) No
Owner
shall direct the Owner Trustee to take or refrain from taking any action
contrary to this Agreement or any Trust Related Agreement, nor shall the Owner
Trustee be obligated to follow any such direction, if given.
(c) Notwithstanding
anything contained herein or in any Trust Related Agreement to the contrary,
the
Owner Trustee shall not be required to take any action in any jurisdiction
other
than in the State of Delaware if the taking of such action will (i) require
the
consent or approval or authorization or order for the giving of notice to,
or
the registration with or taking of any action in respect of, any state or other
governmental authority or agency of any jurisdiction other than the State of
Delaware; (ii) result in any fee, tax or other governmental charge under the
laws of any jurisdiction or any political subdivision thereof in existence
on
the date hereof other than the State of Delaware becoming payable by the Owner
Trustee; or (iii) subject the Owner Trustee to personal jurisdiction in any
jurisdiction other than the State of Delaware for causes of action arising
from
acts unrelated to the consummation of the transactions by the Owner Trustee
contemplated hereby.
(d) The
Owner
Trustee shall not have the power to remove the Administrator under the
Administration Agreement or appoint a successor Administrator pursuant to the
Administration Agreement without written instruction by the Owners.
Section
4.03 Super-majority
Control.
Except
as otherwise expressly provided in this Agreement, any action which may be
taken
or consent or instructions which may be given by the Owners under this Agreement
may be taken by the Owners holding in the aggregate at least 85% of both the
Percentage Interests and the Sharing Ratios in the Trust at the time of such
action (the “Super-majority Owners”). Any written notice of the Owners delivered
pursuant to this Agreement shall be effective only if signed by the
Super-majority Owners at the time of the delivery of such notice.
Section
4.04 Representations
and Warranties of the Depositor.
The
Depositor hereby represents and warrants to the Owner Trustee as
follows:
(a) Upon
the
receipt of the Trust Property by the Owner Trustee under this Agreement, the
Owner Trustee on behalf of the Trust will have good title to the Trust Property
free and clear of any lien.
(b) The
Trust
is not and will not be, upon conveyance of the Trust Property to the Owner
Trustee, an “Investment Company” or under the “control” of an “Investment
Company,” as such terms are defined in the Investment Company Act of 1940, as
amended.
(c) Except
for the filing of the Certificate of Trust with the Secretary of State, no
consent, approval, authorization or order of, or filing with, any court or
regulatory, supervisory or governmental agency or body is required under current
law in connection with the execution, delivery or performance by the Depositor
of this Agreement or the consummation of the transactions contemplated hereby;
provided,
however,
that no
representation or warranty is made herein as to compliance with Federal
securities laws or the securities or “blue sky” laws of any state.
(d) This
Agreement has been duly and validly authorized, executed and delivered by,
and
constitutes a valid and binding agreement of, the Depositor, enforceable in
accordance with its terms.
Section
4.05 Power
of Attorney.
(a) General.
Each
Owner hereby irrevocably constitutes and appoints the Administrator, with full
power of substitution, such Owner’s true and lawful attorney-in-fact, in such
Owner’s name, place and stead, with full power to act jointly and severally, to
make, execute, sign, acknowledge, swear to, verify, deliver, file, record and
publish the following documents:
(i) Any
certificate, instrument or document to be filed by the Owners under the laws
of
any state, or with any governmental agency in connection with this
Agreement;
(ii) Any
certificate, instrument or document which may be required to effect the
continuation or the termination of the Trust, including any amendments to this
Agreement; provided such continuation or termination is in accordance with
the
terms of this Agreement; and
(iii) Any
written notice, instruction, instrument or document under Article XII of this
Agreement.
(b) Duration
of Power of Attorney.
It is
expressly intended by each of the Owners that the Power of Attorney granted
under this Section 4.05 is coupled with an interest, and it is agreed that
such
Power of Attorney shall survive (i) the dissolution, death or incompetency
of
any Owner and (ii) the assignment by any Owner of the whole or any portion
of
such Owner’s Beneficial Interest.
ARTICLE
V
INVESTMENT
AND APPLICATION OF TRUST FUNDS
Section
5.01 Investment
of Trust Funds.
Unless
otherwise directed in writing by the Owners, income with respect to and proceeds
of the Trust Property which are received by the Owner Trustee more than one
day
prior to a Distribution Date shall be invested and reinvested by the Owner
Trustee in Eligible Investments. Interest earned from such investment and
reinvestment shall be credited to the Trust Property.
Section
5.02 Application
of Funds.
Income
with respect to and proceeds of Trust Property held by the Owner Trustee on
a
Distribution Date shall be remitted directly to the Indenture Trustee for
application in accordance with the Indenture for so long as any of the Notes
is
outstanding, and thereafter shall be applied by the Owner Trustee on such
Distribution Date in the following order:
(i) First,
to pay
any amounts due to the Owner Trustee under this Agreement;
(ii) Second,
to pay
any amounts due to the Administrator under the Administration Agreement and
to
the Structuring Advisor under the Structuring Advisory Agreement;
(iii) Third,
to pay
any amounts then due to any Person under the Trust Related
Agreements;
(iv) Fourth,
to pay
any other expenses of the Trust; and
(v) Fifth,
to the
Owners in accordance with Section 7.06.
All
payments to be made under this Agreement by the Owner Trustee shall be made
only
from the income and proceeds of the Trust Property and only to the extent that
the Owner Trustee has received such income or proceeds.
ARTICLE
VI
CAPITAL
Section
6.01 Tax
Characterization.
It is
intended that the Trust be characterized and treated as a partnership for
federal income tax purposes. To the extent the Trust is characterized and
treated as anything other than a partnership for federal, state or local income
tax purposes, the Owners shall jointly and severally be liable for, and hereby
agree to indemnify the Trust for, any tax liability arising out of such
characterization. All references to a “Partner,” the “Partners” and to the
“Partnership” in this Agreement and in the provisions of the Code and
Regulations cited in this Agreement shall be deemed to refer to an Owner, the
Owners and the Trust, respectively. The Tax Matters Partner of the Trust shall
be as set forth in Article XIII.
Section
6.02 Initial
Capital Contributions of Owners.
The
Depositor shall make an initial Capital Contribution in the amount of one dollar
($1) upon execution of this Agreement. Upon their accession to this Agreement
as
Owners and the issuance of Trust Certificates to them in accordance with Section
3.01(a), the Owners will be deemed to have made initial Capital Contributions
in
the amounts set forth on Schedule A attached hereto.
Section
6.03 Capital
Accounts.
A
capital account shall be maintained for each Owner throughout the term of the
Trust in accordance with the rules of section 1.704-1(b)(2)(iv) of the
Regulations as in effect from time to time, and, to the extent not inconsistent
therewith, to which the following provisions apply:
(a) To
each
Owner’s Capital Account there shall be credited (i) the amount of money
contributed by such Owner to the Trust (including each Owner’s share of any
liabilities of the Trust assumed by such Owner as provided in section
1.704-1(b)(2)(iv)(c) of the Regulations), (ii) the fair market value of any
property contributed to the Trust by such Owner (net of liabilities secured
by
such contributed property that the Trust is considered to assume or take subject
to under section 752 of the Code), and (iii) such Owner’s share of Profit and
items of income and gain that are specially allocated pursuant to Sections
7.03
and 7.04 (other than any income or gain allocated to such Owner pursuant to
Section 7.03(f) in accordance with section 704(c) of the Code). The initial
Capital Contributions of each Owner are set forth on Schedule A attached
hereto.
(b) To
each
Owner’s Capital Account there shall be debited (i) the amount of money
distributed to such Owner by the Trust (including any liabilities of such Owner
assumed by the Trust as provided in section 1.704-1(b)(2)(iv)(c) of the
Regulations) other than amounts that are in repayment of debt obligations of
the
Trust to such Owner, (ii) the fair market value of property distributed to
such
Owner (net of liabilities secured by such distributed property that such Owner
is considered to assume or take subject to), and (iii) such Owner’s share of
Loss and items of loss or deduction that are specially allocated pursuant to
Sections 7.03 and 7.04 (other than any deduction or loss allocated to such
Owner
pursuant to Section 7.03(f) in accordance with section 704(c) of the
Code).
(c) The
Capital Account of a transferee Owner shall include the appropriate portion
of
the Capital Account of the Owner from whom the transferee Owner’s interest was
obtained.
(d) In
determining the amount of any liability, there shall be taken into account
section 752(c) of the Code and any other applicable provisions of the Code
and
Regulations.
The
foregoing provisions and the other provisions of this Agreement relating to
the
maintenance of Capital Accounts are intended to comply with section 1.704-1(b)
of the Regulations, and shall be interpreted and applied in a manner consistent
with such Regulations.
Section
6.04 Interest.
No
Owner shall be entitled to interest on its Capital Contribution or on any Profit
retained by the Trust.
Section
6.05 No
Additional Capital Contributions.
No
Owner shall make an additional Capital Contribution to the Trust, or receive
a
distribution from the Trust, of property unless this Agreement shall have first
been amended to the extent necessary to comply with the requirements of sections
704(b) and (c) of the Code regarding the distributive shares of, and the
allocation of income, gain, loss, deduction and credit among, partners of a
partnership.
Section
6.06 Investment
of Capital Contributions.
The
cash Capital Contributions of the Owners shall be invested by the Owner Trustee
in accordance with Section 5.01.
Section
6.07 Repayment
and Return of Capital Contributions.
The
Owner Trustee shall have no personal liability for the repayment of any Capital
Contributions of the Owners.
ARTICLE
VII
ALLOCATION
OF PROFIT AND LOSS; DISTRIBUTIONS
Section
7.01 Profit.
After
giving effect to special allocations set forth in Section 7.03 and Section
7.04,
Profit for any Fiscal Year shall be allocated to the Owners in proportion to
their respective Sharing Ratios.
Section
7.02 Loss.
After
giving effect to the special allocations set forth in Sections 7.03 and 7.04,
Loss for any Fiscal Year shall be allocated as follows:
(a) Special
Allocation of Loss Attributable to Note Defaults on ▇▇▇▇ Guaranteed
Loans.
To the
extent of any positive balance in TERI’s Capital Account as an Owner, ▇▇▇▇ shall
be specially allocated all Losses for such Fiscal Year resulting from defaults,
as determined pursuant to the ▇▇▇▇ Guaranty Agreements, on the ▇▇▇▇ Guaranteed
Loans owned by the Trust to the extent that the Trust is not reimbursed for
such
Losses by ▇▇▇▇ as a guaranty payment pursuant to the ▇▇▇▇ Guaranty
Agreements.
(b) Other
Loss.
All
Loss not allocated pursuant to Section 7.02(a) shall be allocated to the Owners
in proportion to their Sharing Ratios.
(c) Effect
of Adjusted Capital Account Deficit.
The
Loss allocated pursuant to Section 7.02(a) and (b) shall not exceed the maximum
amount of Loss that can be so allocated without causing any Owner to have an
Adjusted Capital Account Deficit at the end of any Fiscal Year. In the event
some but not all of the Owners would have Adjusted Capital Account Deficits
as a
consequence of an allocation of Loss pursuant to Section 7.02(a) and (b), the
limitation set forth in this Section 7.02(c) shall be applied on an Owner by
Owner basis so as to allocate the maximum permissible Loss to each Owner under
section 1.704-1(b)(2)(ii)(d) of the Regulations.
(d) Remaining
Loss.
In the
event that there is any remaining Loss in excess of the limitation set forth
in
Section 7.02(c), such remaining Loss shall be allocated among the Owners in
proportion to their respective Sharing Ratios.
Section
7.03 Special
Allocations.
(a) Minimum
Gain Chargeback.
Except
as otherwise provided in section 1.704-2(f) of the Regulations, notwithstanding
any other provision of this Section 7.03, if there is a net decrease in
Partnership Minimum Gain during any Fiscal Year, each Owner shall be specially
allocated items of Trust income and gain for such Fiscal Year (and, if
necessary, subsequent Fiscal Years) in an amount equal to such Owner’s share of
the net decrease in Partnership Minimum Gain, determined in accordance with
section 1.704-2(g) of the Regulations. Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to
be
allocated to each Owner pursuant thereto. The items to be so allocated shall
be
determined in accordance with sections 1.704-2(f)(6) and 1.704-2(j)(2) of the
Regulations. This Section 7.03(a) is intended to comply with the minimum gain
chargeback requirement in section 1.704-2(f) of the Regulations and shall be
interpreted consistently therewith.
(b) Owner
Minimum Gain Chargeback.
Except
as otherwise provided in section 1.704-2(i)(4) of the Regulations,
notwithstanding any other provision of this Section 7.03, if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Year, each Owner who has a share of the
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with section 1.704-2(i)(5) of the Regulations,
shall be specially allocated items of Partnership income and gain for such
Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal
to
such Partner’s share of the net decrease in Partner Nonrecourse Debt Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with section 1.704-2(i)(4) of the Regulations. Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Partner pursuant thereto. The items to be so allocated
shall be determined in accordance with sections 1.704- 2(i)(4) and 1.704-2(j)(2)
of the Regulations. This Section 7.03(b) is intended to comply with the minimum
gain chargeback requirement in section 1.704-2(i)(4) of the Regulations and
shall be interpreted consistently therewith.
(c) Qualified
Income Offset.
In the
event any Owner unexpectedly receives any adjustments, allocations, or
distributions described in section 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) of the Regulations, items
of
Trust income and gain shall be specially allocated to the Owner in an amount
and
manner sufficient to eliminate, to the extent required by the Regulations,
the
Adjusted Capital Account Deficit of the Owner as quickly as possible, provided
that an allocation pursuant to this Section 7.03(c) shall be made only if and
to
the extent that the Owner would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Article VII have been tentatively
made as if this Section 7.03(c) were not in this Agreement.
(d) Nonrecourse
Deductions.
Nonrecourse Deductions for any Fiscal Year shall be specially allocated among
the Owners in proportion to their Sharing Ratios.
(e) Partner
Nonrecourse Deductions.
Any
Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated
to the Owner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with section 1.704-2(i)(1) of the Regulations.
(f) Mandatory
Allocations Under Section 704(c) of the Code.
Notwithstanding the foregoing provisions of this Section 7.03, in the event
section 704(c) of the Code or section 704(c) of the Code principles applicable
under section 1.704-1(b)(2)(iv) of the Regulations require allocations of
income, gain, deduction or loss in a manner different than that set forth above,
the provisions of section 704(c) of the Code and the Regulations thereunder
shall control such allocations. Any item of Trust income, gain, loss and
deduction with respect to any property (other than cash) that has been
contributed by a Partner to the capital of the Trust or which has been revalued
for Capital Account purposes pursuant to section 1.744-1(b)(2)(iv) of the
Regulations and which is required to be allocated to such Partner for income
tax
purposes under section 704(c) of the Code so as to take into account the
variation between the tax basis of such property and its fair market value
at
the time of its contribution shall be allocated solely for income tax purposes
in the manner required or permitted under section 704(c) of the Code using
the
“traditional method” described in section 1.704-3(b) of the Regulations,
provided,
however,
that
curative allocations consisting of the special allocation of gain or loss upon
the sale or other disposition of the contributed property shall be made in
accordance with section 1.704-3(c) of the Regulations to the extent necessary
to
eliminate any disparity, to the extent possible, between the Partners’ book and
tax Capital Accounts attributable to such property; further provided,
however,
that
any other method allowable under applicable Regulations may be used for any
contribution of property as to which there is agreement between the contributing
Partner and the Administrator.
(g) Gross
Income Allocation.
In the
event any Owner has an Adjusted Capital Account Deficit, such Owner shall be
specially allocated items of Trust income and gain in the amount of such excess
as quickly as possible, provided that an allocation pursuant to this Section
7.03(g) shall be made only if and to the extent that such Owner would have
an
Adjusted Capital Account Deficit after all other allocations provided for in
this Section 7.03 have been made as if Sections 7.03(c) and 7.03(g) were not
in
this Agreement.
Section
7.04 Curative
Allocations.
The
allocations set forth in Sections 7.02 and 7.03(a) through (e) (the “Regulatory
Allocations”) are intended to comply with certain requirements of the
Regulations. It is the intent of the Owners that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations of other items of Trust income, gain, loss, or
deduction. Therefore, notwithstanding any other provision of this Article VII
(other than the Regulatory Allocations), offsetting special allocations of
Trust
income, gain, loss, or deduction shall be made so that, after such offsetting
allocations are made, each Owner’s Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Owner would have had if
the
Regulatory Allocations were not part of this Agreement and all Trust items
were
allocated pursuant to Sections 7.01 and 7.02. In making such offsetting
allocations, there shall be taken into account future Regulatory Allocations
under Section 7.03(a) and (b) that, although not yet made, are likely to offset
other Regulatory Allocations previously made under Section 7.03(d) and
(e).
Section
7.05 Other
Allocation Rules.
(a) For
purposes of determining the Profit, Loss, or any other items allocable to any
period, Profit, Loss, and any such other items shall be determined on a daily,
monthly, or other basis, as determined by the Owner Trustee, under the direction
of the Super-majority Owners, using any method permissible under section 706
of
the Code and the Regulations thereunder.
(b) The
Owners are aware of the income tax consequences of the allocations made by
this
Article VII and hereby agree to be bound by the provisions of this Article
VII
in reporting their shares of Trust income and loss for income tax
purposes.
(c) Solely
for purposes of determining an Owner’s proportionate share of the “excess
nonrecourse liabilities” of the Trust within the meaning of section
1.752-3(a)(3) of the Regulations, the Owners’ interests in Trust profits are in
proportion to their Sharing Ratios.
(d) To
the
extent permitted by section 1.704-2(h)(3) of the Regulations, the Owner Trustee
shall endeavor to treat distributions of Net Cash Flow as having been made
from
the proceeds of a Nonrecourse Liability or a Partner Nonrecourse Debt only
to
the extent that such distributions would cause or increase an Adjusted Capital
Account Deficit for any Owner.
Section
7.06 Distribution
of Net Cash Flow.
Except
to the extent prohibited by any other agreement to which the Trust is a party
or
is otherwise bound, Net Cash Flow on each Distribution Date shall be distributed
on such Distribution Date to each Owner in an amount equal to (i) the Profit
allocated to such Owner under this Article VII and not previously distributed
to
such Owner less (ii) the amount of Losses allocated to such Owner to the extent
such Losses were not applied in reduction of the amount of any previous
distribution of Net Cash Flow to such Owner. All payments to be made under
this
Agreement by the Owner Trustee shall be made only from the income and proceeds
of the Trust Property and only to the extent the Owner Trustee has received
such
income or proceeds.
Section
7.07 Distribution
Date Statement.
With
each distribution to an Owner pursuant to Section 7.06, the Owner Trustee shall
deliver a Distribution Date Statement setting forth, for the period since the
preceding Distribution Date:
(a) Income
and proceeds received by the Owner Trustee with respect to the Trust
Property;
(b) Amounts
paid to the Owner Trustee;
(c) Amounts
paid to any Person pursuant to a Trust Related Agreement; and
(d) Amounts
paid for other expenses of the Trust.
Section
7.08 Allocation
of Tax Liability.
In the
event that any tax is imposed on the Trust, such tax shall be charged against
amounts otherwise distributable to the Owners in proportion to their respective
Sharing Ratios. The Owner Trustee is hereby authorized to retain from amounts
otherwise distributable to the Owners sufficient funds to pay or provide for
the
payment of, and then to pay, such tax as is legally owed by the Trust (but
such
authorization shall not prevent the Owner 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).
Section
7.09 Method
of Payment.
All
amounts payable to an Owner pursuant to this Agreement shall be paid by the
Owner Trustee to such Owner or a nominee therefor by check payable to such
Owner, mailed first class to the address of such Owner appearing on the register
maintained pursuant to Section 3.02, or by crediting the amount to be
distributed to such Owner to an account maintained by such Owner with the Owner
Trustee or by transferring such amount by wire transfer in immediately available
funds to a banking institution with bank wire transfer facilities for the
account of such Owner, as instructed in writing from time to time by such Owner.
The Owner Trustee may require an Owner to pay any wire transfer fees incurred
in
connection with any wire transfer made to such Owner.
Section
7.10 No
Segregation of Funds; No Interest.
Subject
to Sections 2.03(b)(ii) and 5.01, funds received by the Owner Trustee hereunder
need not be segregated in any manner except to the extent required by law and
may be deposited under such general conditions as may be prescribed by law,
and
the Owner Trustee shall not be liable for any interest thereon.
Section
7.11 Interpretation
and Application of Provisions by the Administrator.
The
Owner Trustee shall appoint and authorize the Administrator to interpret and
apply the provisions set forth in Articles V, VI, VII and XI regarding
application of funds, allocations of Profit and Loss and Distributions of Net
Cash Flow, to resolve any ambiguities that may result from such application
and
to provide the Owner Trustee and the Owners with clarification of any provision
as may be necessary or appropriate. The determinations of the Administrator
shall be binding upon the Owners.
ARTICLE
VIII
AUTHORITY
AND DUTIES OF THE OWNER TRUSTEE
Section
8.01 General
Authority.
The
Owner Trustee is authorized to take all actions required or permitted to be
taken by it pursuant to the terms of this Agreement, the Trust Related
Agreements and the Statutory Trust Statute. The Owner Trustee is further
authorized from time to time to take such action as the Administrator directs
with respect to the Trust Related Agreements.
Section
8.02 Specific
Authority.
The
Owner Trustee is hereby authorized and directed to take the following
actions:
(a) Execute
the Certificate of Trust;
(b) Execute
and deliver the Administration Agreement and the Back-up Agreement and on behalf
of the Trust, as well as the Trust Related Agreements, including without
limitation, the Trust Certificates and any other document contemplated by the
foregoing, in each case in such form as the Administrator shall approve, as
evidenced conclusively by the Owner Trustee’s execution thereof;
and
(c) Execute
and deliver on behalf of the Trust any documents necessary or appropriate,
in
such form as the Administrator shall approve, as evidenced conclusively by
the
Owner Trustee’s execution thereof, to cause the repurchase by ▇▇▇▇ or the Trust,
as the case may be, of any Student Loan Note required to be repurchased in
accordance with the ▇▇▇▇ Guaranty Agreements.
Section
8.03 General
Duties.
It
shall be the duty of the Owner Trustee to discharge (or cause to be discharged)
all of its responsibilities pursuant to the terms of this Agreement and to
administer the Trust in the interest of the Owners. Notwithstanding the
foregoing, the Owner Trustee shall be deemed to have discharged its duties
and
responsibilities hereunder and under the Trust Related Agreements to the extent
the Administrator has agreed in the Administration Agreement to perform such
acts or to discharge such duties of the Owner Trustee hereunder or under any
Trust Related Agreement, and the Owner Trustee shall not be held liable for
the
default or failure of the Administrator to carry out its obligations under
the
Administration Agreement.
Section
8.04 Accounting
and Reports to the Owners, the Internal Revenue Service and
Others.
The
Administrator shall (a) maintain or cause to be maintained the books of the
Trust on a fiscal year basis using the accrual method of accounting, (b) deliver
to each Owner, within 60 days of the end of each Fiscal Year, or more often,
as
may be required by the Code and the Regulations thereunder, a copy of the annual
financial statement of the Trust for such Fiscal Year and a statement in such
form and containing such information as may be required by such Regulations,
and
as is necessary and appropriate to enable each Owner to prepare its federal
and
state income tax returns, (c) file such tax returns and reports relating to
the
Trust, and make such elections, including an election for the first taxable
year
of the Trust, as may be necessary for the Trust to qualify as a partnership,
or
as may from time to time be required under any applicable state or federal
statute or rule or regulation thereunder, (d) cause such tax returns to be
signed in the manner required by law, (e) collect or cause to be collected
any
withholding tax required by the Code to be withheld by the Owner Trustee with
respect to distributions to Owners who are nonresident aliens or foreign
corporations, and (f) cause to be mailed to each Owner copies of all such
reports and tax returns of the Trust.
Section
8.05 Signature
of Returns.
The
Owner Trustee shall sign on behalf of the Trust the tax returns and other
Periodic Filings of the Trust, unless applicable law requires an Owner to sign
such documents, in which case, so long as the Depositor is an Owner and
applicable law allows the Depositor to sign any such document, the Depositor
shall sign such document. At any time that the Depositor is not an Owner, or
is
otherwise not allowed by law to sign any such document, then the Owner required
by law to sign such document shall sign.
Section
8.06 Right
to Receive and Rely Upon Instructions.
In the
event that the Owner Trustee is unable to decide between alternative courses
of
action, or is unsure as to the application of any provision of this Agreement
or
any Trust Related Agreement, or such provision is ambiguous as to its
application, or is or appears to be in conflict with any other applicable
provision, or in the event that this Agreement or any Trust Related Agreement
permits any determination by the Owner Trustee or is silent or is incomplete
as
to the course of action which the Owner Trustee is required to take with respect
to a particular set of facts, the Owner Trustee may give notice (in such form
as
shall be appropriate under the circumstances) to the Owners requesting
instructions and, to the extent that the Owner Trustee shall have acted or
refrained from acting in good faith in accordance with any instructions received
from the Owners, the Owner Trustee shall not be liable to any Person on account
of such action or inaction. If the Owner Trustee shall not have received
appropriate instructions within ten days of such notice (or within such shorter
period of time as may be specified in such notice) the Owner Trustee may, but
shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Trust Related Agreements, as the Owner
Trustee shall deem to be in the best interests of the Owners, and the Owner
Trustee shall have no liability to any Person for such action or
inaction.
Section
8.07 No
Duties Except as Specified in this Agreement or in Instructions.
The
Owner Trustee shall not have any duty or obligation to manage, make any payment
in respect of, register, record, sell, dispose of or otherwise deal with the
Trust Property, or to otherwise take or refrain from taking any action under,
or
in connection with, any document contemplated hereby to which the Owner Trustee
or the Trust is a party, except as expressly provided by the terms of this
Agreement, and no implied duties or obligations shall be read into this
Agreement against the Owner Trustee. The Owner Trustee nevertheless agrees
that
it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Trust Property which result
from claims against the Owner Trustee personally that are not related to the
ownership or the administration of the Trust Property or the transactions
contemplated by the Trust Related Agreements.
Section
8.08 No
Action Except Under Specified Documents or Instructions.
The
Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal
with any part of the Trust Property except (a) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, and (b) in accordance with instructions delivered to the Owner
Trustee pursuant to Section 8.06 and Article IV hereof.
Section
8.09 Restriction.
Notwithstanding anything herein to the contrary, the Owner Trustee shall not
take any action (a) that is inconsistent with the purposes of the Trust or
(b)
that would result in the Trust being treated as an association taxable as a
corporation for Federal income tax purposes.
ARTICLE
IX
CONCERNING
THE OWNER TRUSTEE
Section
9.01 Acceptance
of Trusts and Duties.
The
Owner Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to the same but only upon the terms of this Agreement.
The Owner Trustee shall not be personally liable under any circumstances, except
(a) for its own willful misconduct or gross negligence, (b) for liabilities
arising from the failure by the Owner Trustee to perform obligations expressly
undertaken by it in the last sentence of Section 8.07, or (c) for taxes, fees
or
other charges on, based on or measured by any fees, commissions or compensation
received by the Owner Trustee in connection with any of the transactions
contemplated by this Agreement or the Trust Related Agreements. In particular,
but not by way of limitation:
(i) The
Owner
Trustee shall not be personally liable for any error of judgment made in good
faith by an Authorized Officer of the Owner Trustee;
(ii) The
Owner
Trustee shall not be personally liable with respect to any action taken or
omitted to be taken by the Owner Trustee in good faith in accordance with the
instructions of the Administrator or the Owners;
(iii) No
provision of this Agreement shall require the Owner Trustee to expend or risk
its personal funds or otherwise incur any financial liability in the performance
of any of its rights or powers hereunder if the Owner 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;
(iv) Under
no
circumstance shall the Owner Trustee be personally liable for any indebtedness
of the Trust under any Trust Related Agreement;
(v) The
Owner
Trustee shall not be personally responsible for or in respect of the validity
or
sufficiency of this Agreement or for the due execution hereof by the Depositor,
or for the form, character, genuineness, sufficiency, value or validity of
any
Student Loan or Trust Certificate (other than with respect to the due execution
thereby by an Authorized Officer), or for or in respect of the validity or
sufficiency of the Administration Agreement or the Trust Related Agreements;
and
(vi) The
Owner
Trustee shall not be liable for the default or misconduct of the Administrator
under any of the Trust Related Agreements or otherwise and the Owner Trustee
shall have no obligation or liability to perform the obligations of the Trust
hereunder or under any Trust Related Agreement that are required to be performed
by the Administrator under the Administration Agreement.
Section
9.02 Furnishing
of Documents.
The
Owner Trustee shall furnish to the Owners, promptly upon receipt thereof,
duplicates or copies of all material reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee hereunder (other than documents originated by or otherwise
furnished to such Owners).
Section
9.03 Reliance;
Advice of Counsel.
(a) The
Owner
Trustee shall incur no liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report,
opinion, note 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 Owner 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 manner of ascertainment of which is
not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by
the
treasurer or any assistant treasurer or the secretary of the relevant party,
as
to such fact or matter, and such certificate shall constitute full protection
to
the Owner Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon.
(b) In
the
exercise or administration of the trusts hereunder and in the performance of
its
duties and obligations under any of the Trust Related Agreements, the Owner
Trustee (i) may act directly or, at the expense of the Trust, through agents
or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the default or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care; and (ii) may, at the expense of the Trust, consult
with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it, and the Owner Trustee shall not be liable
for anything done, suffered or omitted in good faith by it in accordance with
the advice or opinion of any such counsel, accountants or other skilled
persons.
Section
9.04 Not
Acting in Individual Capacity.
Except
as expressly provided in this Article IX, in accepting the trusts hereby
created, the Owner Trustee acts solely as trustee hereunder and not in its
individual capacity, and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or the Trust
Related Agreements shall look only to the Trust Property for payment or
satisfaction thereof.
Section
9.05 Representations
and Warranties of Owner Trustee.
The
Owner Trustee represents and warrants to the Depositor that (a) the Owner
Trustee meets the requirements of (i) Rule 3(a)(7) promulgated under the
Investment Company Act of 1940, as amended, and (ii) section 3807 of the
Statutory Trust Statute and (b) the Owner Trustee or the Owner Trustee’s parent
entity has a combined capital and surplus of at least $50,000,000.
ARTICLE
X
COMPENSATION
OF OWNER TRUSTEE
Section
10.01 Owner
Trustee’s Fees and Expenses.
The
Owner Trustee shall receive compensation from the Administrator and, to the
extent not paid by the Administrator, from the Trust Property for its services
hereunder as set forth in a separate fee agreement between The First Marblehead
Corporation, the Depositor and the Owner Trustee. The Owner Trustee shall be
entitled to be reimbursed by the Administrator and, to the extent not paid
by
the Administrator, from the Trust Property for its reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements
of
such agents, representatives, experts and counsel as the Owner Trustee may
employ in connection with the exercise and performance of its rights and duties
under this Agreement and the Trust Related Agreements.
Section
10.02 Indemnification.
The
National Collegiate Funding LLC and The Education Resources Institute, Inc.
shall be jointly and severally liable for, and hereby agree to, indemnify
Wilmington Trust Company, individually and as Owner Trustee, and its successors,
assigns, agents and servants, from and against any and all liabilities,
obligations, losses, damages, taxes (other than taxes incurred as the result
of
the payment of fees and expenses pursuant to Section 10.01), claims, actions,
suits, costs, expenses and disbursements (including legal fees and expenses)
of
any kind and nature whatsoever which may be imposed on, incurred by or asserted
at any time against the Owner Trustee (whether or not indemnified against by
other parties) in any way relating to or arising out of this Agreement, any
Trust Related Agreement, the administration of the Trust Property or the action
or inaction of the Owner Trustee hereunder, except only that the Owners shall
not be required to indemnify the Owner Trustee for expenses arising or resulting
from any of the matters described in the second sentence of Section 9.01. The
indemnities contained in this Section 10.02 shall survive the termination of
this Agreement. The obligations of The National Collegiate Funding LLC and
The
Education Resources Institute, Inc. pursuant to this Section 10.02 shall be
borne in proportion to their respective Percentage Interests. The indemnities
contained in this Section 10.02 extend only to the Owner Trustee in its
individual capacity.
Section
10.03 Lien
on Trust Property.
Following the retirement of the Notes, the Owner Trustee shall have a lien
on
the Trust Property for any compensation or expenses and indemnity due hereunder
which lien shall be prior to all other liens.
Section
10.04 Payments
to the Owner Trustee.
Any
amounts paid to the Owner Trustee from the Trust Property pursuant to this
Article X shall be deemed not to be part of the Trust Property immediately
after
such payment.
ARTICLE
XI
TERMINATION
OF TRUST
Section
11.01 Termination
of Trust.
(a) The
trust
created hereby shall dissolve and terminate and, except as otherwise provided
in
this Article XI, this Agreement shall be of no further force or effect, upon
the
earlier of (i) if the Notes are no longer outstanding, the unanimous consent
of
the Owners, (ii) if the Notes are no longer outstanding, the sale or other
final
disposition by the Owner Trustee of the Trust Property and the final
distribution by the Owner Trustee of all funds or other property or proceeds
of
the Trust Property in accordance with the terms of this Agreement and the Trust
Related Agreements, and (iii) 21 years less one day after the death of the
survivor of the descendants living on the date of this Agreement of ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇, the late Ambassador of the United States to the Court of St.
▇▇▇▇▇.
(b) The
bankruptcy, death, incapacity, dissolution or termination of any Owner shall
not
operate to dissolve or terminate this Agreement, nor entitle such Owner’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 the Trust Property,
nor
otherwise affect the rights, obligations and liabilities of the parties
hereto.
(c) Upon
the
termination of the Trust pursuant to this Article XI, the Owner Trustee shall
cause a Certificate of Termination to be filed with the Secretary of
State.
Section
11.02 Distribution
of Assets.
Upon
dissolution and termination of the Trust, the Owner Trustee shall take full
account of the Trust assets and liabilities, shall liquidate the assets as
promptly as is consistent with obtaining the fair value thereof, and shall
apply
and distribute the proceeds therefrom in the following order:
(a) To
the
payment of the expenses of liquidation and the debts and liabilities of the
Trust;
(b) To
the
setting up of reserves which the Owner Trustee may deem necessary or appropriate
for anticipated obligations or contingencies of the Trust arising out of or
in
connection with the operation of the Trust. Such reserves may be paid over
by
the Owner Trustee to an escrow agent or trustee selected by the Owner Trustee
to
be disbursed by such escrow agent or trustee in payment of any of such
obligations or contingencies and, if any balance remains at the expiration
of
such period as the Owner Trustee shall deem advisable, to be distributed by
such
escrow agent or trustee in the manner hereinafter provided;
(c) To
each
of the Owners, other than ▇▇▇▇, in accordance with the positive balances in
each
such Owner’s Capital Account to the extent of the aggregate unreturned Capital
Contributions of such Owner credited therein; and
(d) To
the
Owners, the balance of any proceeds in accordance with the positive balances
in
their respective Capital Accounts; provided that with respect to any
distribution to ▇▇▇▇, such distribution shall be reduced by the amount of money
paid to ▇▇▇▇ by the Trust in accordance with paragraph 4 of the Section 2.05
Supplement to Master Loan Guaranty Agreement between ▇▇▇▇ and The First
Marblehead Corporation dated April 30, 2001 less the amount by which aggregate
Distributions to ▇▇▇▇ of Net Cash Flow pursuant to Section 7.06 hereof have
been
reduced by the application of subsection (iii) thereof, and any such reduction
shall be distributed to the Owners other than ▇▇▇▇ in accordance with the
positive balances in their respective Capital Accounts.
If,
at
the time of liquidation, the Owner Trustee shall determine that an immediate
sale of some or all of the assets would cause undue loss to the Owners, the
Owner Trustee may, in order to avoid such loss and with the consent of the
Owners, defer liquidation.
Section
11.03 No
Termination by Depositor or Owners.
Except
as provided in Section 11.01, neither the Depositor nor the Owners shall be
entitled to terminate or revoke the Trust established hereunder.
ARTICLE
XII
SUCCESSOR
OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section
12.01 Resignation
of Owner Trustee; Appointment of Successor.
(a) The
Owner
Trustee may resign at any time without cause by giving at least 60 days’ prior
written notice to the Administrator, the Owners and the Administrative Agent,
such resignation to be effective upon the acceptance of appointment by a
successor Owner Trustee under Section 12.01(b). In addition, the Super-majority
Owners may at any time remove the Owner Trustee without cause by an instrument
in writing delivered to the Owner Trustee and the Administrator, such removal
to
be effective upon the acceptance of appointment by a successor Owner Trustee
under Section 12.01(b). In case of the resignation or removal of the Owner
Trustee, the Owners may appoint a successor Owner Trustee by an instrument
signed by the Owners. If a successor Owner Trustee shall not have been appointed
within 30 days after the giving of written notice of such resignation or the
delivery of the written instrument with respect to such removal, the Owner
Trustee or the Owners may apply to any court of competent jurisdiction to
appoint a successor Owner Trustee to act until such time, if any, as a successor
Owner Trustee shall have been appointed as provided above. Any successor Owner
Trustee so appointed by such court shall immediately and without further act
be
superseded by any successor Owner Trustee appointed as above provided within
one
year from the date of the appointment by such court.
(b) Any
successor Owner Trustee, however appointed, shall execute and deliver to the
predecessor Owner Trustee an instrument accepting such appointment, and
thereupon such successor Owner Trustee, without further act (except for the
filing required under clause (e) below), shall become vested with all the
estates, properties, rights, powers, duties and trust of the predecessor Owner
Trustee in the trusts hereunder with like effect as if originally named the
Owner Trustee herein; but nevertheless, upon the written request of such
successor Owner Trustee and the payment of all fees and indemnities due the
predecessor Owner Trustee, such predecessor Owner Trustee shall execute and
deliver an instrument transferring to such successor Owner Trustee, upon the
trusts herein expressed, all the estates, properties, rights, powers, duties
and
trusts of such predecessor Owner Trustee, and such predecessor Owner Trustee
shall duly assign, transfer, deliver and pay over to such successor Owner
Trustee all funds or other property then held or subsequently received by such
predecessor Owner Trustee upon the trusts herein expressed.
(c) Any
successor Owner Trustee, however appointed, shall be a bank or trust company
(i)
that meets the requirements of (A) Rule 3(a)(7) promulgated under the Investment
Company Act of 1940, as amended, and (B) section 3807 of the Statutory Trust
Statute and (ii) whose parent entity has a combined capital and surplus of
at
least $50,000,000, if there be such an institution willing, able and legally
qualified to perform the duties of the Owner Trustee hereunder upon reasonable
or customary terms.
(d) Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any
corporation to which substantially all the corporate trust business of the
Owner
Trustee may be transferred, shall, subject to the terms of Section 12.01(c),
be
the Owner Trustee under this Agreement without further act.
(e) Any
successor Owner Trustee appointed pursuant to this Article XII shall file an
amendment to the Certificate of Trust with the Secretary of State reflecting
the
name and principal place of business of such successor Owner
Trustee.
Section
12.02 Appointment
of Additional Owner Trustees.
At any
time or times for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Property may at the time be located,
the Owner Trustee and the Administrator, acting jointly, by an instrument in
writing, may appoint one or more individuals or corporations approved by the
Administrator and the Owner Trustee to act as separate trustee or separate
trustees of all or any part of the Trust Property to the full extent that local
law makes it necessary or appropriate for such separate trustee or separate
trustees to act alone. If the Administrator shall not have joined in such
appointment within fifteen days after the receipt of such request, the Owner
Trustee, acting alone, shall have the power to make such
appointment.
ARTICLE
XIII
TAX
MATTERS PARTNER
Section
13.01 Tax
Matters Partner.
The tax
matters partner (within the meaning of section 6231(a)(7) of the Code and
applicable Regulations) of the Trust for all federal income tax purposes set
forth in the Code shall be The National Collegiate Funding LLC. Subject to
Section 13.08, the tax matters partner shall have the authority to
represent the Trust and perform the duties imposed on the tax matters partner
under the Code, and as set forth in this Article XIII.
Section
13.02 Notice
of Tax Audit.
The tax
matters partner shall give prompt notice to the Owners upon receipt of advice
that the Internal Revenue Service intends to examine Trust income tax returns
for any year.
Section
13.03 Authority
to Extend Period for Assessing Tax.
Subject
to Section 13.08, the tax matters partner shall have the authority to extend
the
period for assessing any tax imposed on any Owner under the Code by any
agreement as provided for under section 6229(b)(1)(B) of the Code.
Section
13.04 Choice
of Forum for Filing Petition for Readjustment.
Any
petition for readjustment may, but is not required to, be filed by the tax
matters partner in accordance with section 6226(a) of the Code in the United
States District Court for the district in which the Trust’s principal place of
business is located, or the United States Claims Court.
Section
13.05 Authority
to Bind Owners by Settlement Agreement.
Subject
to Section 13.08, the tax matters partner shall enter into a settlement
agreement in accordance with section 6224(c)(3) of the Code as directed by
the
Owners.
Section
13.06 Notices
Sent to the Internal Revenue Service.
The tax
matters partner shall use its best efforts to furnish to the Internal Revenue
Service the name, address, profits interest and taxpayer identification number
of each Owner and any additional information it receives from each Owner
regarding any change in that Owner’s name, address, profits interest and
taxpayer identification number. In no event shall the tax matters partner be
liable, responsible or accountable in damages or otherwise to the Owner for
any
loss in connection with furnishing such information to the Internal Revenue
Service if the tax matters partner acts in good faith and is not guilty of
fraud
or gross negligence.
Section
13.07 Indemnification
of Tax Matters Partner.
The
Trust shall indemnify and save harmless the tax matters partner against any
loss, damage, cost or expense (including attorneys’ fees) incurred by it as a
result of any act performed or omitted on behalf of the Trust or any Owner
or in
furtherance of the Trust’s interests or the interests of the Owner, in its
capacity as tax matters partner, without, however, relieving the tax matters
partner of liability for bad faith, fraud or gross negligence.
Section
13.08 Approval
of Tax Matters Partner’s Decisions.
The tax
matters partner shall call a meeting of the Owners at any time in order to
discuss any decisions the tax matters partner may propose to make, notice of
which shall be included in the notice of such meeting. The tax matters partner
shall make no decision and take no action with respect to the determination,
assessment or collection of any tax imposed by the Code on the Owners unless
and
until such decision has been approved by the Owners.
Section
13.09 Participation
by Owners in Internal Revenue Service Administrative Proceedings.
Nothing
contained in this Article XIII shall be construed to take away from any Owner
any right granted to such person by the Code to participate in any manner in
administrative proceedings of the Internal Revenue Service.
ARTICLE
XIV
MISCELLANEOUS
Section
14.01 Supplements
and Amendments.
(a) This
Agreement may be amended only by a written instrument signed by the Owner
Trustee and all of the Owners at the time of such amendment and upon
satisfaction of the Rating Agency Condition (as defined in the Indenture);
provided, however, that if, in the opinion of the Owner Trustee, any instrument
required to be so executed adversely affects any right, duty or liability of,
or
immunity or indemnity in favor of, the Owner Trustee under this Agreement or
any
of the documents contemplated hereby to which the Owner Trustee or the Trust
is
a party, or would cause or result in any conflict with or breach of any terms,
conditions or provisions of, or default under, the charter documents or by-laws
of the Owner Trustee or any document contemplated hereby to which the Owner
Trustee is a party, the Owner Trustee may in its sole discretion decline to
execute such instrument. The Certificate of Trust shall be amended (except
as
required by the Statutory Trust Statute) only upon satisfaction of the Rating
Agency Condition (as defined in the Indenture). The Owner Trustee shall be
fully
protected in relying upon a certificate of the Administrator in determining
if
the Rating Agency Condition (as defined in the Indenture) has been
satisfied.
(b) The
Trust
shall not change its jurisdiction of formation without first satisfying the
Rating Agency Condition (as defined in the Indenture).
Section
14.02 No
Legal Title to Trust Property in Owner.
Legal
title to all Trust Property shall be vested at all times in the Trust as a
separate legal entity, except where the laws of any jurisdiction require title
to be vested in a trustee in which case legal title shall be vested in the
Owner
Trustee on behalf of the Trust. The Owners shall not have legal title to any
part of the Trust Property and shall only have an undivided beneficial interest
therein. No transfer, by operation of law or otherwise, of any right, title
and
interest of the Owners in and to their undivided Beneficial Interests in the
Trust Property hereunder shall operate to terminate this Agreement or the trusts
hereunder or entitle any successor transferee to an accounting or to the
transfer to it of legal title to any part of the Trust Property.
Section
14.03 Pledge
of Collateral by Owner Trustee is Binding.
The
pledge of any Trust Property to any Person by the Owner Trustee made under
any
Trust Related Agreement and pursuant to the terms of this Agreement shall bind
the Owners and shall be effective to transfer or convey the rights of the Owner
Trustee and the Owners in and to such Trust Property to the extent set forth
in
such Trust Related Agreement. No purchaser or other grantee shall be required
to
inquire as to the authorization, necessity, expediency or regularity of such
pledge or as to the application of any proceeds with respect thereto by the
Owner Trustee.
Section
14.04 Limitations
on Rights of Others.
Nothing
in this Agreement, whether express or implied, shall be construed to give to
any
Person other than the Owner Trustee, the Administrator and the Owners any legal
or equitable right, remedy or claim in the Trust Property or under or in respect
of this Agreement or any covenants, conditions or provisions contained herein
provided,
however,
that
for so long as any of the Notes are outstanding or any amounts are owed to
the
Indenture Trustee, the Noteholders are third party beneficiaries
hereof.
Section
14.05 Notices.
Unless
otherwise expressly specified or permitted by the terms hereof, all notices
shall be in writing and delivered by hand or mailed by certified mail, postage
prepaid, if to the Owner Trustee, addressed to: Wilmington Trust Company, ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention: Corporate Trust
Administration, or to such other address as the Owner Trustee may have set
forth
in a written notice to the Owners; and if to an Owner, addressed to it at the
address set forth for such Owner in the register maintained by the Owner
Trustee. Whenever any notice in writing is required to be given by the Owner
Trustee hereunder, such notice shall be deemed given and such requirement
satisfied 72 hours after such notice is mailed by certified mail, postage
prepaid, addressed as provided above; any notice given by an Owner to the Owner
Trustee shall be effective upon receipt by an Authorized Officer of the Owner
Trustee. A copy of any notice delivered to the Owner Trustee shall also be
delivered to the Administrator, addressed to: First Marblehead Data Services,
Inc., The Prudential Tower, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, with a copy to First Marblehead
Corporation, The Prudential Tower, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇
▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration, or to such other
addresses as the Administrator may have set forth in a written notice to the
Owner Trustee.
Section
14.06 Severability.
Any
provision of this Agreement which 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
14.07 Separate
Counterparts.
This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same
instrument.
Section
14.08 Successors
and Assigns.
All
covenants and agreements contained herein shall be binding upon, and inure
to
the benefit of, the Owner Trustee and its successors and assigns and each Owner
and its successors and permitted assigns, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by an Owner
shall bind the successors and assigns of such Owner.
Section
14.09 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
14.10 Governing
Law.
This
Agreement shall in all respects be governed by, and construed in accordance
with, the laws of the State of Delaware (excluding conflict of law rules),
including all matters of construction, validity and performance.
Section
14.11 General
Interpretive Principles.
For
purposes of this Agreement, except as otherwise expressly provided or unless
the
context otherwise requires:
(a) The
defined terms in this Agreement include the plural as well as the singular,
and
the use of any gender herein shall be deemed to include any other
gender;
(b) Accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with generally accepted accounting principles as in effect on the
date hereof;
(c) References
herein to “Articles,” “Sections,” “paragraphs” and other subdivisions without
reference to a document are to designated Articles, Sections, paragraphs and
other subdivisions of this Agreement;
(d) A
reference to a paragraph without further reference to a Section is a reference
to such paragraph as contained in the same Section in which the reference
appears, and this rule shall also apply to subparagraphs and other
subdivisions;
(e) The
words
“herein,” “hereof,” “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and
(f) The
term
“include” or “including” shall mean without limitation by reason of
enumeration.
IN
WITNESS WHEREOF, the parties hereto have caused this
Trust Agreement to the
duly
executed by their respective officers hereunto duly authorized, as of the day
and year first above written.
| | | |
| |
WILMINGTON
TRUST COMPANY, not in its
individual
capacity except as expressly provided
herein,
but solely as Owner Trustee
|
|
|
|
|
| | By: | /s/ J.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
| |
|
| |
Name:
J.
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title:
Financial
Services Officer
|
| | | |
| |
THE
NATIONAL COLLEGIATE FUNDING,
LLC,
as Depositor and Owner
By: GATE
Holdings, Inc., Member
|
|
|
|
|
| | By: | /s/ ▇▇▇▇
▇.
▇▇▇▇▇▇ |
| |
|
| |
Name:
▇▇▇▇
▇. ▇▇▇▇▇▇
Title:
Vice
President
|
| | | |
| |
THE
EDUCATION RESOURCES INSTITUTE,
INC.,
as Owner
|
|
|
|
|
| | By: | /s/ ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇ III |
| |
|
| |
Name:
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ III
Title:
President
and CEO
|
ACKNOWLEDGED
WITH RESPECT
TO
THE
POWER ATTORNEY
GRANTED
IN SECTION 4.05
FIRST
MARBLEHEAD DATA SERVICES, INC.
| | | | |
|
By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
| | | |
|
| | |
|
|
Name:
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
Title:
President
| | | |
SCHEDULE
A
|
Owners
| |
Capital
Contributions
($)
| |
Sharing
Ratio
(%)
| |
Percentage
Interest
(%)
|
| | | | | | | |
|
The
National Collegiate
Funding
LLC
| |
$1.00
| |
64%*
| |
64%*
|
| | | | |
| |
|
|
The
Education Resources
Institute,
Inc.
| |
None
| |
36%*
| |
36%*
|
*
Subject
to final reconciliation.
SCHEDULE
B
Loan
Originators
| · |
Citizens
Bank of Rhode Island
|
| · |
First
National Bank Northeast
|
| · |
HSBC
Bank USA, National Association
|
| · |
The
Huntington National Bank
|
| · |
JPMorgan
Chase Bank, N.A. (as successor to Bank One,
N.A.)
|
| · |
Manufacturers
and Traders Trust Company
|
SCHEDULE
C
Loan
Purchase Agreements
Each
of
the Note Purchase Agreements, as amended or supplemented, was entered into
by
and between The First Marblehead Corporation and:
|
| · |
Bank
of America, N.A., dated April 30, 2001, for loans that were originated
under Bank of America’s BAGEL Loan Program, ▇▇▇▇ Alternative Loan Program
and ISLP Loan Program.
|
|
| · |
Bank
of America, N.A., dated June 30, 2006, for loans that were originated
under Bank of America’s BAGEL Loan Program, ▇▇▇▇ Alternative Loan Program
and ISLP Loan Program.
|
|
| · |
Bank
of America, N.A., dated June 30, 2003, for loans that were originated
under Bank of America’s Direct to Consumer Loan
Program.
|
|
| · |
Bank
of America, N.A., dated April 1, 2006, for loans that were originated
under Bank of America’s Direct to Consumer Loan
Program.
|
|
| · |
Bank
One, N.A., dated May 1, 2002, for loans that were originated under
Bank
One’s CORPORATE ADVANTAGE Loan Program, EDUCATION ONE Loan Program, and
Campus One Loan Program.
|
|
| · |
Charter
One Bank, N.A., dated as of December 29, 2003 for loans that were
originated under Charter One’s AAA Southern New England Bank Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated October 31, 2003, for loans that were originated
under Charter One’s AES EducationGAIN Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated May 15, 2002, for loans that were originated
under
Charter One’s CFS Direct to Consumer Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated June 30, 2003, for loans that were originated
under
Charter One’s Citibank Education Assistance Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated July 1, 2002, for loans that were originated
under
Charter One’s College Loan Corporation Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated December 1, 2003, for loans that were originated
under Charter One’s Custom Educredit Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated May 10, 2004, for loans that were originated
under
Charter One’s EdFinancial Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated September 15, 2003, for loans that were originated
under Charter One’s Extra Credit II Loan Program (North Texas Higher
Education).
|
|
| · |
Charter
One Bank, N.A., dated September 20, 2003, for loans that were originated
under Charter One’s M&I Alternative Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated November 17, 2003, for loans that were originated
under Charter One’s National Education Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated May 15, 2002, for loans that were originated
under
Charter One’s NextStudent Alternative Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated March 26, 2004, for loans that were originated
under
Charter One’s NextStudent Private Consolidation Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated March 25, 2004, for loans that were originated
under
Charter One’s Astrive and AstriveAlliance Education Loan
Programs.
|
|
| · |
Charter
One Bank, N.A., dated May 15, 2003, for loans that were originated
under
Charter One’s WAMU Alternative Student Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated February 15, 2005, for loans that were originated
under Charter One’s Referral Loan Program (including loans in the UPromise
Alternative Loan Program, Collegiate Solutions Alternative Loan Program,
College Board Alternative Loan Program, and Axiom Alternative Loan
Programs).
|
|
| · |
Citizens
Bank of Rhode Island, dated April 30, 2004, for loans that were originated
under Citizens Bank of Rhode Island’s Alternative Loan Program, Compass
Bank Alternative Loan Program, FinanSure Alternative Loan Program,
Navy
Federal Alternative Loan Program, and Xanthus Alternative Loan
Program.
|
|
| · |
Citizens
Bank of Rhode Island, dated October 1, 2002, for loans that were
originated under Citizens Bank of Rhode Island’s Penn State Undergraduate
Loan Program.
|
|
| · |
First
National Bank Northeast, dated August 1, 2001, for loans that were
originated under First National Bank Northeast’s CASL Undergraduate
Alternative Loan Program.
|
|
| · |
HSBC
Bank USA, National Association, dated April 17, 2002, as amended
on June
2, 2003 and August 1, 2003, for loans that were originated under
the HSBC
Loan Program.
|
|
| · |
The
Huntington National Bank, dated May 20, 2003, for loans that were
originated under The Huntington National Bank’s Huntington Bank Education
Loan Program.
|
|
| · |
KeyBank,
dated May 12, 2006, for loans that were originated under KeyBank’s Private
Education Loan Program.
|
|
| · |
Manufacturers
and Traders Trust Company, dated April 29, 2004, for loans that were
originated under Manufacturers and Traders Trust Company’s Alternative
Loan Program.
|
|
| · |
National
City Bank, dated November 13, 2002, for loans that were originated
under
National City Bank’s National City Loan
Program.
|
|
| · |
PNC
Bank, N.A., dated April 22, 2004, for loans that were originated
under PNC
Bank’s Alternative Conforming Loan Program, Brazos Alternative Loan
Program, Edvisors Alternative Loan Program, GE Money Bank Alternative
Loan
Prorgam, Old National Bank Alternative Loan Program, and Regions
Bank
Alternative Loan Program.
|
|
| · |
Sovereign
Bank, dated April 30, 2004, for loans that were originated under
Sovereign
Bank’s Alternative Loan Program.
|
|
| · |
SunTrust
Bank, dated March 1, 2002, for loans that were originated under SunTrust
Bank’s SunTrust Alternative Loan
Program.
|
|
| · |
TCF
National Bank, dated July 22, 2005, for loans that were originated
under
TCF National Bank’s Alternative Loan
Program.
|
|
| · |
U.S.
Bank, N.A., dated May 1, 2005, for loans that were originated under
U.S
Bank’s Alternative Loan Program.
|
SCHEDULE
D
Guaranty
Agreements
Each
of
the following Guaranty Agreements, as amended or supplemented, was entered
into
by and between The Education Resources Institute, Inc. and:
|
| · |
Bank
of America, N.A., dated April 30, 2001, for loans that were originated
under Bank of America’s BAGEL Loan Program, ▇▇▇▇ Loan Program and ISLP
Loan Program.
|
|
| · |
Bank
of America, N.A., dated June 30, 2006, for loans that were originated
under Bank of America’s BAGEL Loan Program, ▇▇▇▇ Loan Program and ISLP
Loan Program.
|
|
| · |
Bank
of America, N.A., dated June 30, 2003, for loans that were originated
under Bank of America’s Direct to Consumer Loan
Program.
|
|
| · |
Bank
One, N.A., dated May 13, 2002, for loans that were originated under
Bank
One’s CORPORATE ADVANTAGE Loan Program, EDUCATION ONE Loan Program, and
Campus One Loan Program.
|
|
| · |
Charter
One Bank, N.A., dated as of December 29, 2003 for loans that were
originated under Charter One’s AAA Southern New England Bank Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated October 31, 2003, for loans that were originated
under Charter One’s AES EducationGAIN Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated March 25, 2004, for loans that were originated
under
Charter One’s Astrive and AstriveAlliance Education Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated May 15, 2002, for loans that were originated
under
Charter One’s CFS Direct to Consumer Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated June 30, 2003, for loans that were originated
under
Charter One’s Citibank Education Assistance Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated July 1, 2002, for loans that were originated
under
Charter One’s College Loan Corporation Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated December 1, 2003, for loans that were originated
under Charter One’s Custom Educredit Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated May 10, 2004, for loans that were originated
under
Charter One’s Edfinancial Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated September 15, 2003, for loans that were originated
under Charter One’s Extra Credit II Loan Program (North Texas Higher
Education).
|
|
| · |
Charter
One Bank, N.A., dated September 20, 2003, for loans that were originated
under Charter One’s M&I Alternative Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated November 17, 2003, for loans that were originated
under Charter One’s National Education Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated May 15, 2002, for loans that were originated
under
Charter One’s NextStudent Alternative Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated March 26, 2004, for loans that were originated
under
Charter One’s NextStudent Private Consolidation Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated May 15, 2003, for loans that were originated
under
Charter One’s WAMU Alternative Student Loan
Program.
|
|
| · |
Charter
One Bank, N.A., dated February 15, 2005, for loans that were originated
under Charter One’s Referral Loan Program, including the UPromise
Alternative Loan Program, Collegiate Solutions Alternative Loan Program,
College Board Alternative Loan Program, and Axiom Alternative Loan
Program.
|
|
| · |
Citizens
Bank of Rhode Island, dated April 30, 2004, for loans that were originated
under Citizens Bank of Rhode Island’s Alternative Loan Program, Compass
Bank Alternative Loan Program, FinanSure Alternative Loan Program,
Navy
Federal Alternative Loan Program, and Xanthus Alternative Loan
Program.
|
|
| · |
Citizens
Bank of Rhode Island, dated October 1, 2002, for loans that were
originated under Citizens Bank of Rhode Island’s Penn State Undergraduate
Loan Program.
|
|
| · |
First
National Bank Northeast, dated August 1, 2001, for loans that were
originated under First National Bank Northeast’s CASL Undergraduate
Alternative Loan Program.
|
|
| · |
HSBC
Bank USA, National Association, dated April 17, 2002, for loans that
were
originated under the HSBC Loan
Program.
|
|
| · |
The
Huntington National Bank, dated May 20, 2003, for loans that were
originated under The Huntington National Bank’s Huntington Bank Education
Loan Program.
|
|
| · |
KeyBank,
dated May 12, 2006, for loans that were originated under KeyBank’s Private
Education Loan Program.
|
|
| · |
Manufacturers
and Traders Trust Company, dated April 29, 2004, for loans that were
originated under Manufacturers and Traders Trust Company’s Alternative
Loan Program.
|
|
| · |
National
City Bank, dated July 26, 2002, for loans that were originated under
National City Bank’s National City Loan
Program.
|
|
| · |
PNC
Bank, N.A., dated April 22, 2004, for loans that were originated
under PNC
Bank’s Alternative Conforming Loan Program, Brazos Alternative Loan
Program, Edvisors Alternative Loan Program, GE Money Bank Alternative
Loan
Prorgam, Old National Bank Alternative Loan Program, and Regions
Bank
Alternative Loan Program..
|
|
| · |
Sovereign
Bank, dated April 30, 2004, for loans that were originated under
Sovereign
Bank’s Alternative Loan Program.
|
|
| · |
SunTrust
Bank, dated March 1, 2002, for loans that were originated under SunTrust
Bank’s SunTrust Alternative Loan
Program.
|
|
| · |
TCF
National Bank, dated July 22, 2005, for loans that were originated
under
TCF National Bank’s Alternative Loan
Program.
|
|
| · |
U.S.
Bank, N.A., dated May 1, 2005, for loans that were originated under
U.S
Bank’s Alternative Loan Program.
|
EXHIBIT
1
FORM
OF TRUST CERTIFICATE
THE
NATIONAL COLLEGIATE STUDENT LOAN TRUST 2006-3
TRUST
CERTIFICATE
THE
BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST CERTIFICATE HAS
NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD
OR
OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF UNLESS IN THE
OPINION OF COUNSEL SATISFACTORY TO THE OWNER TRUSTEE, SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION UNDER THE ACT AND STATE SECURITIES LAWS. THE TRANSFER OF
THIS
TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE HAS DELIVERED
TO
THE OWNER TRUSTEE A LETTER IN THE FORM REQUIRED BY SECTION 3.04(A) OF THE
TRUST
AGREEMENT AND THE TRANSFEREE PROVIDES THE OWNER TRUSTEE WITH EVIDENCE
SATISFACTORY TO THE OWNER TRUSTEE DEMONSTRATING THE TRANSFEROR’S COMPLIANCE WITH
SECTION 3.04(B) OF THE
TRUST AGREEMENT.
TRUST
CERTIFICATE
UNDER
THE TRUST AGREEMENT, DATED
as
of September 28, 2006
Certificate
No. ______
Wilmington
Trust Company, not in its individual capacity, but solely as owner trustee
(the
“Owner Trustee”) under the Trust Agreement, dated as of September 28, 2006, with
The National Collegiate Funding LLC and The Education Resources Institute,
Inc.,
on behalf of the holders from time to time (each an “Owner”) of beneficial
interests in the trust created thereby (the “Trust Agreement”), hereby certifies
that ______________ is the owner of an undivided beneficial interest equal
to
the percentage listed on Schedule A to the Trust Agreement in the Trust Property
provided for and created by the Trust Agreement. This Trust Certificate is
issued pursuant to and is entitled to the benefits of the Trust Agreement,
and
each Owner by acceptance hereof shall be bound by the terms of the Trust
Agreement. Reference is hereby made to the Trust Agreement for a statement
of
the rights and obligations of the Owner hereof. The Owner Trustee may treat
the
person shown on the register maintained by the Owner Trustee pursuant to Section
3.02 of the Trust Agreement as the absolute Owner hereof for all
purposes.
Capitalized
terms used herein without definition have the meanings ascribed to them in
or by
reference in the Trust Agreement.
Transfer
of this Trust Certificate is subject to certain restrictions and limitations
set
forth in the Trust Agreement, including the requirement that any transfer
requires the prior consent of owners of at least 85% of the Percentage Interests
in the Trust. In the manner more fully set forth in, and as limited by, the
Trust Agreement, this Trust Certificate may be transferred upon the books of
the
Owner Trustee by the registered Owner in person or by his attorney duly
authorized in writing upon surrender of this Trust Certificate to the Owner
Trustee accompanied by a written instrument of transfer and with such signature
guarantees and evidence of authority of the Persons signing the instrument
of
transfer as the Owner Trustee may reasonably require, whereupon the Owner
Trustee shall issue in the name of the transferee a Trust Certificate or Trust
Certificates evidencing the amount and extent of interest of the
transferee.
The
Owner
hereof, by its acceptance of this Trust Certificate, warrants and represents
to
the Owner Trustee and to the Owners of the other Trust Certificates issued
under
the Trust Agreement and agrees not to transfer this Trust Certificate except
in
accordance with the Trust Agreement.
This
Trust Certificate may not be acquired or held by a Plan. By accepting and
holding this Trust Certificate, the Owner hereof shall be deemed to have
represented and warranted that it is not a Plan.
This
Trust Certificate and the Trust Agreement shall in all respects be governed
by,
and construed in accordance with, the laws of the State of Delaware (excluding
conflict of law rules), including all matters of construction, validity and
performance.
IN
WITNESS WHEREOF, the Owner Trustee, pursuant to the Trust Agreement, has caused
this Trust Certificate to be issued as of the date hereof.
| | | |
| |
WILMINGTON
TRUST COMPANY, not in its
individual
capacity , but solely as Owner Trustee
|
|
|
|
|
| | By: | /s/ |
| |
|
| |
Name:
Title:
|
Dated:
_______________
EXHIBIT
2
FORM
OF ACCESSION AGREEMENT
___________________,
___________
Wilmington
Trust Company
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Dear
Sirs:
We
refer
to the Trust Agreement, dated as of September 28, 2006 (the “Trust Agreement”),
among The National Collegiate Funding LLC (the “Company”), The Education
Resources Institute, Inc. and Wilmington Trust Company, a Delaware banking
corporation (in its capacity as trustee thereunder, the “Owner Trustee”). We
propose to purchase a beneficial interest in The National Collegiate Student
Loan Trust 2006-3, a Delaware statutory trust (the “Trust”) formed pursuant to
the Trust Agreement. Capitalized terms used herein without definition have
the
meanings given them in the Trust Agreement.
| 1. |
We
understand that our Trust Certificate is not being registered under
the
Securities Act of 1933, as amended (the “1933 Act”), or any state
securities or “Blue Sky” law and is being sold to us in a transaction that
is exempt from the registration requirements of the 1933 Act and
any
applicable state laws.
|
| 2. |
We
have knowledge and experience in financial and business matters as
to be
capable of evaluating the merits and risks of an investment in the
Trust,
we are able to bear the economic risk of investment in the Trust
and we
are an “accredited investor” as defined in Regulation D under the 1933
Act.
|
| 3. |
We
acknowledge that none of the Trust, the Company or the Owner Trustee
has
advised us concerning the federal or state income tax consequences
of
owning a beneficial interest in the Trust, including the tax status
of the
Trust or the likelihood that distributions from the Trust would be
characterized as “unrelated business income” for federal tax purposes, and
we have consulted with our own tax advisor with respect to such
matters.
|
| 4. |
We
are acquiring our Trust Certificate for our own account and not for
the
benefit of any other person and not with a view to any distribution
of our
beneficial interest in the Trust subject, nevertheless, to the
understanding that disposition of our property shall at all times
be and
remain within our control.
|
| 5. |
We
agree that our beneficial interest in the Trust must be held indefinitely
by us unless subsequently registered under the 1933 Act and any applicable
state securities or “Blue Sky” law or unless exemptions from the
registration requirements of the 1933 Act and applicable state laws
are
available.
|
| 6. |
We
agree that in the event that at some future time we wish to dispose
of or
exchange any of our beneficial interest in the Trust, we will not
transfer
or exchange any of our beneficial interest in the Trust unless we
have
obtained the prior written consent to such transfer or exchange pursuant
to Section 3.04 of the Trust Agreement, and
either:
|
|
| (A) |
(1)
the transfer or exchange is made to an Eligible Purchaser (as defined
below), (2) a letter to substantially the same effect as this letter
is
executed promptly by such Eligible Purchaser, and (3) all offers
or
solicitations in connection with the sale (if a sale), whether made
directly or through any agent acting on our behalf, are limited only
to
Eligible Purchasers and are not made by means of any form of general
solicitation or general advertising whatsoever;
or
|
|
| (B) |
our
beneficial interest in the Trust is sold in a transaction that does
not
require registration under the 1933 Act and any applicable State
“Blue
Sky” law.
|
“Eligible
Purchaser” means a corporation, partnership or other entity which we have
reasonable grounds to believe and do believe can make representations with
respect to itself to substantially the same effect as the representations set
forth herein.
| 7. |
We
understand that our Trust Certificate bears a legend to substantially
the
following effect:
|
THE
BENEFICIAL INTEREST IN THE TRUST REPRESENTED BY THIS TRUST CERTIFICATE HAS
NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY
STATE SECURITIES LAW, AND MAY NOT BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD
OR
OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF UNLESS IN THE
OPINION OF COUNSEL SATISFACTORY TO THE OWNER TRUSTEE SUCH TRANSACTION IS EXEMPT
FROM REGISTRATION UNDER THE ACT AND STATE SECURITIES LAWS. THE TRANSFER OF
THIS
TRUST CERTIFICATE WILL NOT BE EFFECTIVE UNLESS THE TRANSFEREE HAS DELIVERED
TO
THE OWNER TRUSTEE A LETTER IN THE FORM REQUIRED BY SECTION 3.04(A) OF THE TRUST
AGREEMENT AND THE TRANSFEREE PROVIDES THE OWNER TRUSTEE WITH EVIDENCE
SATISFACTORY TO THE OWNER TRUSTEE DEMONSTRATING THE TRANSFEROR’S COMPLIANCE WITH
SECTION 3.04(B) OF THE TRUST AGREEMENT.
| 8. |
We
agree to be bound by all terms and conditions of our Trust Certificate
and
the Trust Agreement.
|
| | | |
| |
Very
truly yours,
____________________________________________________________
Name
of Purchaser
|
|
|
|
|
| | By: | |
| |
|
| |
Name:
Title:
|
Accepted
and Acknowledged this _____th
day of
____________________,
_____.
WILMINGTON
TRUST COMPANY, not in its
individual
capacity, but solely as Owner Trustee