Exhibit 4.2
TRUST AGREEMENT
among
CRESTAR BANK,
as Depositor
STAR BANK, NATIONAL ASSOCIATION,
as Eligible Lender Trustee
and
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
as Delaware Trustee
Dated as of December 1, 1997
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Usage..................................................................................1
ARTICLE II Organization..........................................................................................1
SECTION 2.1. Name....................................................................................1
SECTION 2.2. Office and Situs of the Trust...........................................................1
SECTION 2.3. Purposes and Powers.....................................................................1
SECTION 2.4. Appointment of Eligible Lender Trustee and Delaware Trustee.............................2
SECTION 2.5. Initial Capital Contribution of Trust Estate............................................4
SECTION 2.6. Declaration of Trust....................................................................4
SECTION 2.7. No Liability of the Certificateholders..................................................4
SECTION 2.8. Title to Trust Property.................................................................5
SECTION 2.9. Representations and Warranties of the Depositor.........................................5
SECTION 2.10. Federal Income Tax Provisions...........................................................6
ARTICLE III Trust Certificates and Transfer of Interests.........................................................8
SECTION 3.1. Initial Beneficial Ownership............................................................8
SECTION 3.2. The Trust Certificates..................................................................8
SECTION 3.3. Authentication of Trust Certificates....................................................8
SECTION 3.4. Registration of Transfer and Exchange of Trust Certificates.............................9
SECTION 3.5. Restrictions on Transfer...............................................................10
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Trust Certificates................................11
SECTION 3.7. Persons Deemed Owners..................................................................12
SECTION 3.8. Access to List of Certificateholders' Names and Addresses..............................12
SECTION 3.9. Maintenance of Office or Agency........................................................12
SECTION 3.10. Appointment of Certificate Paying Agent................................................12
ARTICLE IV Actions by Eligible Lender Trustee...................................................................13
SECTION 4.1. Prior Notice to Certificateholders with Respect to Certain Matters.....................13
SECTION 4.2. Action by Certificateholders with Respect to Certain Matters...........................14
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy................................14
SECTION 4.4. Restrictions on Certificateholders' Power..............................................14
SECTION 4.5. Majority Control.......................................................................14
ARTICLE V Application of Trust Funds; Certain Duties............................................................15
SECTION 5.1. Application of Trust Funds.............................................................15
SECTION 5.2. Method of Payment......................................................................16
SECTION 5.3. Segregation of Moneys; No Interest.....................................................16
SECTION 5.4. Accounting and Reports to the Certificateholders, the Internal Revenue Service
and Others.......................................................................16
SECTION 5.5. Signature on Returns; Tax Matters Partner..............................................16
ARTICLE VI Authority and Duties of Eligible Lender Trustee......................................................17
SECTION 6.1. General Authority......................................................................17
SECTION 6.2. General Duties.........................................................................17
SECTION 6.3. Action upon Instruction................................................................18
SECTION 6.4. No Duties Except as Specified in this Agreement, the Transfer and Servicing
Agreement, any Supplemental Transfer and Servicing Agreement or in
Instructions.....................................................................18
SECTION 6.5. No Action Except Under Specified Documents or Instructions.............................19
SECTION 6.6. Restrictions...........................................................................19
ARTICLE VII Concerning the Eligible Lender Trustee..............................................................19
SECTION 7.1. Acceptance of Trusts and Duties........................................................19
SECTION 7.2. Furnishing of Documents................................................................21
SECTION 7.3. Representations and Warranties.........................................................21
SECTION 7.4. Reliance; Advice of Counsel............................................................22
SECTION 7.5. Not Acting in Individual Capacity......................................................22
SECTION 7.6. Eligible Lender Trustee Not Liable for Trust Certificates or Financed Student
Loans............................................................................22
SECTION 7.7. Eligible Lender Trustee May Own Trust Certificates and Notes...........................23
SECTION 7.8. Representations and Warrantees of Delaware Trustee.....................................23
ARTICLE VIII Compensation of Trustees...........................................................................24
SECTION 8.1. Eligible Lender Trustee's Fees and Expenses............................................24
SECTION 8.2. Payments to the Eligible Lender Trustee................................................24
SECTION 8.3. Delaware Trustee's Fees and Expenses...................................................24
ARTICLE IX Termination of Trust Agreement.......................................................................24
SECTION 9.1. Termination of Trust Agreement.........................................................24
SECTION 9.2. Dissolution upon Insolvency of Depositor...............................................26
ARTICLE X Successor Eligible Lender Trustees and Additional Eligible Lender Trustees............................26
SECTION 10.1. Eligibility Requirements for Eligible Lender Trustee...................................26
SECTION 10.2. Resignation or Removal of Eligible Lender Trustee......................................27
SECTION 10.3. Successor Eligible Lender Trustee......................................................28
SECTION 10.4. Merger or Consolidation of Eligible Lender Trustee.....................................28
SECTION 10.5. Appointment of Co-Eligible Lender Trustee or Separate Eligible Lender Trustee..........29
ARTICLE XI Miscellaneous........................................................................................30
SECTION 11.1. Supplements and Amendments.............................................................30
SECTION 11.2. No Legal Title to Trust Estate in Certificateholders...................................31
SECTION 11.3. Limitations on Rights of Others........................................................31
SECTION 11.4. Notices................................................................................32
SECTION 11.5. Severability...........................................................................32
SECTION 11.6. Separate Counterparts..................................................................32
SECTION 11.7. Successors and Assigns.................................................................32
SECTION 11.8. No Petition............................................................................33
SECTION 11.9. No Recourse............................................................................33
SECTION 11.10. Headings...............................................................................33
SECTION 11.11. Governing Law..........................................................................33
EXHIBIT A -- Form of Trust Certificate
EXHIBIT B -- Form of Purchaser's Representation and Warranty Letter
APPENDIX A -- Definitions
TRUST AGREEMENT dated as of December 1, 1997, between CRESTAR BANK, as
Depositor (the "Depositor"), and STAR BANK, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender
Trustee") and DELAWARE TRUST CAPITAL MANAGEMENT, INC., not in its individual
capacity but solely as Delaware Trustee (the "Delaware Trustee").
The Depositor, the Eligible Lender Trustee and the Delaware Trustee
hereby agree as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in Appendix A
to the Transfer and Servicing Agreement, which Appendix is attached hereto. The
Appendix also contains rules as to construction and usage that are applicable
herein.
ARTICLE II
Organization
SECTION 2.1. Name.
The Trust created hereby shall be known as "Crestar Student Loan Trust
1997-1," in which name the Eligible Lender Trustee may conduct the business of
the Trust, make and execute contracts and other instruments on behalf of the
Trust and ▇▇▇ and be sued.
SECTION 2.2. Office and Situs of the Trust.
The registered office of the Issuer in Delaware shall be the office of
the Delaware Trustee at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and the situs of the Trust shall be at the corporate trust office of the
Eligible Lender Trustee located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
SECTION 2.3. Purposes and Powers.
The purpose of the Trust is to engage in the following activities:
(a) to issue one or more Classes of the Trust Certificates pursuant
to this Agreement and to sell the Trust Certificates in one or more
transactions;
(b) to issue one or more Classes of Notes pursuant to the Master
Indenture and the applicable Terms Supplement and to sell the Notes in one or
more transactions in accordance with instructions received from the
Administrator;
(c) with the proceeds of the sale of the Notes and the Trust
Certificates, to acquire, from time to time, the Financed Student Loans;
(d) to assign, grant, transfer, pledge, hypothecate, mortgage and
convey the Trust Estate pursuant to the Indenture and the applicable Terms
Supplement and to hold, manage and distribute to the Certificateholders pursuant
to the terms of the Transfer and Servicing Agreement any portion of the Trust
Estate released from the Lien of, and remitted to the Trust pursuant to, the
Indenture and the applicable Terms Supplement;
(e) from time to time to sell and dispose of the Financed Student
Loans in accordance with the terms of the Basic Documents;
(f) to enter into and perform its obligations under the Basic Documents
to which it is to be a party;
(g) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or are
incidental thereto or connected therewith; and
(h) to engage in such other activities as may be required in connection
with conservation of the Trust Estate and the making of distributions to the
Certificateholders, the Noteholders and the others specified in Article V of the
Transfer and Servicing Agreement and or contemplated by the Basic Documents.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Basic Documents. Notwithstanding anything in this Agreement or the
Basic Documents to the contrary, for so long as the Depositor is a
Certificateholder, the Trust's activities shall be limited to activities that
are part of, or incidental to, the business of banking.
This Section 2.3 shall not be amended without the prior written
unanimous consent of the Certificateholders, including the Depositor.
SECTION 2.4. Appointment of Eligible Lender Trustee and Delaware
Trustee.
(a) The Depositor hereby (i) appoints the Eligible Lender Trustee as
trustee of the Trust effective as of the date hereof, to have all the rights,
powers and duties set forth herein, and (ii) ratifies all actions of the
Eligible Lender Trustee taken on behalf of the Trust prior to the execution
hereof.
(b) The Delaware Trustee is hereby appointed to serve as the trustee of
the Trust in the State of Delaware for the sole purpose of satisfying the
requirement of Section 3807 of the Delaware Business Trust Statute that the
Trust have at least one trustee with a principal place of business in Delaware.
It is understood and agreed by the parties hereto and the Certificateholders
that the Delaware Trustee shall have none of the duties or liabilities of the
Eligible Lender Trustee. The duties of the Delaware Trustee shall be limited to
(a) accepting legal process served on the Trust in the State of Delaware and (b)
the execution of any certificates required to be filed with the Delaware
Secretary of State, which the Delaware Trustee is required to execute under
Section 3811 of the Delaware Business Trust Statute. To the extent that, at law
or in equity, the Delaware Trustee has duties (including fiduciary duties) and
liabilities relating to the Trust, the Certificateholders or any other Person,
it is hereby understood and agreed by the other parties hereto and the
Certificateholders that such duties and liabilities are replaced by the duties
and liabilities of the Delaware Trustee expressly set forth in this Agreement in
Section 2.4. Except as otherwise expressly required by this Section 2.4, the
Delaware Trustee shall have no duty, obligation or liability with respect to the
Trust and shall incur no liability for any actions taken, or omitted to be
taken, in good faith pursuant to its rights, obligations or responsibilities
hereunder. By the execution hereof, the Delaware Trustee accepts the trust
created hereby. Except for the representations and warranties set forth in
Section 7.8, in accepting the trust hereby created, the Delaware Trustee acts
solely as Delaware trustee hereunder and not in its individual capacity, and all
Persons having any claim against the Delaware Trustee by reason of the creation
or existence of the Trust, the terms of this Agreement, or the transactions
contemplated by this Agreement or any other Basic Document shall look only to
the Trust Estate for payment or satisfaction thereof. Without limitation to the
foregoing, (A) in no event and under no circumstances shall the Delaware
Trustee, in its individual capacity or as Delaware Trustee, have any liability
for any of the representations, warranties, covenants, agreements or other
obligations of the Trust, (B) the Delaware Trustee shall incur no liability to
anyone in acting upon any signature, instrument, notice, resolution, request,
consent, order, instruction, certificate, report, opinion, bond or other
document or paper reasonably believed by it to be genuine and reasonably
believed by it to be signed or provided by the proper party or parties, and (C)
in the exercise of its rights or responsibilities under this Agreement, the
Delaware Trustee may consult with counsel, accountants and other skilled persons
to be selected with reasonable care and employed by it and it shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the opinion or advice of any such counsel, accountants or other skilled
persons.
(c) The Depositor shall indemnify, defend and hold harmless the
Delaware Trustee and any of its affiliates, officers, directors, employees and
agents (the "Indemnified Parties") from and against any and all losses, claims,
taxes, damages, reasonable expenses, and liabilities (including liabilities
under state or federal securities laws) of any kind and nature whatsoever
(collectively, "Expenses"), as incurred, to the extent that such Expenses arise
out of or are imposed upon or asserted against such Indemnified Person with
respect to the creation, operation or termination of the Trust, the execution,
delivery or performance of this Agreement or the transactions contemplated
hereby; provided however that the Depositor shall not be required to indemnify
any Indemnified Party for any Expenses which are a result of the willful
misconduct, bad faith or gross negligence of such Indemnified Person. The
obligations of the Depositor to indemnify the Indemnified Persons as provided
herein shall survive the termination of this Agreement.
(d) The Delaware Trustee may resign upon thirty days' prior notice to
the Eligible Lender Trustee; provided, however, that such resignation shall not
be effective until a successor Delaware Trustee shall have been appointed and
agreed to serve that meets the requirements of Section 3807 of the Delaware
Business Trust Statute and is satisfactory to the Eligible Lender Trustee and
the Administrator. If a successor Delaware Trustee shall not have been appointed
within such thirty day period, the Delaware Trustee may apply to the Court of
Chancery of the State of Delaware for the appointment of a successor Delaware
Trustee. The Eligible Lender Trustee may remove and replace the Delaware Trustee
from time to time in its sole discretion, provided that the removal shall not be
effective until a successor Delaware Trustee shall have been appointed and
agreed to serve.
SECTION 2.5. Initial Capital Contribution of Trust Estate.
The Depositor hereby sells, assigns, transfers, conveys and sets over
to the Eligible Lender Trustee, as of the date hereof, the sum of $10.00. The
Eligible Lender Trustee hereby acknowledges receipt in trust from the Depositor
of the foregoing contribution, which shall constitute the initial Trust Estate
and shall be deposited in the Collection Account.
SECTION 2.6. Declaration of Trust.
The Eligible Lender Trustee hereby declares that it will hold the Trust
Estate in trust upon and subject to the conditions set forth herein for the use
and benefit of the Certificateholders, subject to the obligations of the Trust
under the other Basic Documents. It is the intention of the parties hereto that
the Trust constitute a business trust under Delaware law and that this Agreement
constitute the governing instrument of such trust. If for any reason it is
determined that the Trust does not qualify as a business trust under Delaware
law, it shall be a trust, nonetheless, under the common law of Delaware. It is
the intention of the parties hereto that, solely for federal, state and local
income, franchise and similar tax purposes, the Trust shall be treated as a
partnership, with the assets of the partnership being the Financed Student Loans
and other assets held by the Trust, the partners of the partnership being the
Depositor and the Certificateholders and the Notes being nonrecourse debt of the
partnership (or, alternatively, that the Trust shall be disregarded as an entity
separate from the Depositor, with the assets held by the Trust being treated as
assets of the Depositor and the Notes and the Certificates being treated as
nonrecourse debt of the Depositor). The parties agree that, unless otherwise
required by appropriate federal, state or local tax authorities or unless the
Trust is disregarded as an entity separate from the Depositor for income and
franchise tax purposes, they shall treat the Trust as a partnership for income
and franchise tax purposes, and the Administrator will file or cause to be filed
annual or other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes.
Furthermore, the Depositor will not make, or cause to be made, an election under
the provisions of Treasury Regulation Section 301.7701-3 to classify the Trust
as an association and shall take, or cause to be taken, necessary and
appropriate actions consistent with carrying out the intent of this Section 2.6.
Effective as of the date hereof, the Eligible Lender Trustee shall have all
rights, powers and duties set forth herein with respect to accomplishing the
purposes of the Trust.
SECTION 2.7. No Liability of the Certificateholders.
No Certificateholder shall have any personal liability for any
liability or obligation of the Trust.
SECTION 2.8. Title to Trust Property.
Legal title to all the Trust Estate shall be vested at all times in the
Trust as a separate legal entity except where applicable law in any jurisdiction
requires title to any part of the Trust Estate to be vested in a trustee or
trustees, in which case title shall be deemed to be vested in the Eligible
Lender Trustee, a co-trustee and/or a separate trustee, as the case may be;
provided that legal title to the Financed Student Loans shall be vested at all
times in the Eligible Lender Trustee on behalf of the Trust.
SECTION 2.9. Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Eligible Lender
Trustee that:
(a) The Depositor is duly organized and validly existing as a banking
corporation under the laws of the Commonwealth of Virginia, with corporate power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted except
for such power and authority the absence of which would not have a material
adverse effect on the Depositor.
(b) The Depositor has the requisite corporate power and authority to
execute and deliver this Agreement and to carry out its terms; the Depositor has
the requisite corporate power and authority to sell and assign the property to
be sold and assigned to and deposited with the Trust (or with the Eligible
Lender Trustee on behalf of the Trust) and the Depositor has duly authorized
such sale and assignment and deposit to the Trust (or to the Eligible Lender
Trustee on behalf of the Trust) by all necessary corporate action on the
Depositor's part; and the execution, delivery and performance of this Agreement
has been duly authorized by the Depositor by all necessary corporate action.
(c) This Agreement has been duly executed and delivered by the
Depositor, and constitutes a legal, valid and binding obligation of the
Depositor enforceable against the Depositor in accordance with its terms,
subject to the effect of applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and court decisions with respect thereto and subject
to the application of equitable principles in any proceeding, whether at law or
in equity.
(d) The consummation of the transactions contemplated by this Agreement
and the fulfillment of the terms hereof do not violate, result in any breach of
any of the terms and provisions of, or constitute (with or without notice or
lapse of time or both) a default under, the articles of incorporation or by-laws
of the Depositor, or any material indenture, material agreement or other
material instrument to which the Depositor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such material indenture, material agreement or
other material instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the Depositor's knowledge, any, order, rule or regulation
applicable to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties except for such violations
which would not have a material adverse effect on the Depositor.
(e) No consent of any federal or state governmental or administrative
authority is required to be obtained by the Depositor prior to its entering into
this Agreement or in connection with its consummation of the transactions
expressly contemplated by the Basic Documents, other than those that have been
obtained, except such as may be required by the blue sky laws of any
jurisdiction in connection with the sale of and distribution of the Notes and
Certificates for which no representation is being made.
SECTION 2.10. Federal Income Tax Provisions.
If the Trust is treated as a partnership (rather than disregarded as a
separate entity) for income and franchise tax purposes pursuant to Section 2.6,
all references in this Section to Certificateholder shall include the Depositor
in its capacity as a partner of the partnership, and the following provisions
shall apply:
(a) A separate capital account (a "Capital Account") shall be
established and maintained for each Certificateholder in accordance with
Treasury Regulations Section 1.704-1(b)(2)(iv). No Certificateholder shall be
entitled to interest on its Capital Account or any capital contribution made by
such Certificateholder to the Trust.
(b) Upon termination of the Trust pursuant to Article IX, any amounts
available for distribution to Certificateholders shall be distributed to the
Certificateholders with positive Capital Account balances in accordance with
such balances. For purposes of this Section 2.10(b), the Capital Account of each
Certificateholder shall be determined after all adjustments made in accordance
with this Section 2.10 resulting from the Trust's operations and from all sales
and dispositions of all or any part of the assets of the Trust. Any
distributions pursuant to this Section 2.10(b) shall be made by the end of the
taxable year in which the termination occurs (or, if later, within 90 days after
the date of the termination).
(c) No Certificateholder shall be required to restore any deficit
balance in its Capital Account. Furthermore, no Certificateholder shall be
liable for the return of the Capital Account of, or of any capital contribution
made to the Trust by, another Certificateholder.
(d) Interest payments on the Certificates at the Certificate rate
(including interest on amounts previously due on the Certificates but not yet
distributed) shall be treated as "guaranteed payments" under Section 707(c) of
the Code.
(e) Except as provided in Section 2.10(h), profit and loss of the Trust
for each taxable year shall be allocated to the Depositor.
(f) Notwithstanding any provision to the contrary, (i) any expense of
the Trust that is a "nonrecourse deduction" within the meaning of Treasury
Regulations Section 1.704-2(b)(1) shall be allocated to the Depositor, (ii) any
expense of the Trust that is a "partner nonrecourse deduction" within the
meaning of Treasury Regulations Section 1.704-2(i)(2) shall be allocated in
accordance with Treasury Regulations Section 1.704-2(i)(1), (iii) if there is a
net decrease in Trust Minimum Gain within the meaning of Treasury Regulations
Section 1.704-2(f)(1) for any taxable year, items of gain and income shall be
allocated among the Certificateholders in accordance with Treasury Regulations
Section 1.704-2(f) and the ordering rules contained in Treasury Regulations
Section 1.704-2(j), and (iv) if there is a net decrease in Certificateholder
Nonrecourse Debt Minimum Gain within the meaning of Treasury Regulations Section
1.704-2(i)(4) for any taxable year, items of gain and income shall be allocated
among the Certificateholders in accordance with Treasury Regulations Section
1.704-2(i)(4) and the ordering rules contained in Treasury Regulations Section
1.704-2(j). The Depositor's "interest in partnership profits" for purposes of
determining its share of the nonrecourse liabilities of the Trust within the
meaning of Treasury Regulations Section 1.752-3(a)(3) shall be 100%.
(g) If a Certificateholder receives in any taxable year an adjustment,
allocation, or distribution described in subparagraphs (4), (5), or (6) of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a
negative balance in such Certificateholder's Capital Account that exceeds the
sum of such Certificateholder's shares of Trust Minimum Gain and
Certificateholder Nonrecourse Debt Minimum Gain, as determined in accordance
with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i), such
Certificateholder shall be allocated specially for such taxable year (and, if
necessary, later taxable years) items of income and gain in an amount and manner
sufficient to eliminate such negative Capital Account balance as quickly as
possible as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After
the occurrence of an allocation of income or gain to a Certificateholder in
accordance with this Section 2.10(g), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such
Certificateholder in an amount necessary to offset the income or gain previously
allocated to such Certificateholder under this Section 2.10(g).
(h) Loss shall be allocated first to the Depositor, but only to the
extent that such allocation would not cause a deficit in the Depositor's Capital
Account (after reduction to reflect the items described in Treasury Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) in excess of the sum of the
Depositor's share of Trust Minimum Gain and Certificateholder Nonrecourse Debt
Minimum Gain. Any loss in excess of that limitation shall be allocated to all
the Certificateholders in proportion to the outstanding principal amount of the
Notes and/or Certificates as of the end of the taxable year in which such loss
is allocated. After the occurrence of an allocation of loss to a
Certificateholder in accordance with this Section 2.10(h), to the extent
permitted by Treasury Regulations Section 1.704-1(b), profit shall be allocated
to such Certificateholder in an amount necessary to offset the loss previously
allocated to such Certificateholder under this Section 2.10(h).
(i) If a Certificateholder transfers any part or all of its Interest in
the Trust and the transferee is admitted as provided herein (a "Transferee
Certificateholder"), the distributive shares of the various items of profit and
loss allocable among the Certificateholders during such taxable year shall be
allocated between the transferor and the Transferee Certificateholder (at the
election of the Depositor) either (i) as if the taxable year had ended on the
date of the transfer or (ii) based on the number of days of such taxable year
that each was a Certificateholder without regard to the results of Trust
activities in the respective portions of such taxable year in which the
transferor and Transferee Certificateholder were Certificateholders.
(j) "Profit" and "loss" and any items of income, gain, expense or loss
referred to in this Section 2.10 shall be determined in accordance with federal
income tax accounting principles as modified by Treasury Regulations Section
1.704-1(b)(2)(iv), except that profits and losses shall not include items of
income, gain, and expense that are specially allocated pursuant to Sections
2.10(f), 2.10(g) or 2.10(h) hereof. All allocations of income, profits, gains,
expenses, and losses (and all items contained therein) for federal income tax
purposes shall be identical to all allocations of such items set forth in this
Section 2.10, except as otherwise required by Section 704(c) of the Code and
Section 1.704-1(b)(4) of the Treasury Regulations.
(k) In the event that a Note is treated for federal income tax purposes
as an equity interest in the Trust rather than as a debt obligation (a
"Recharacterized Note"), the holder of such Recharacterized Note will be treated
as a Certificateholder for purposes of this Section, Section 5.1 and Section
5.4. In addition, the holder of any such Recharacterized Note shall be allocated
items of income, profits, gain, expenses, and losses so as to achieve, to the
extent possible, the same economic and tax effect as if such Recharacterized
Note had been treated for federal income tax purposes as a debt instrument.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1. Initial Beneficial Ownership.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.5 and until the initial issuance of the Trust
Certificates, the Depositor shall be the sole beneficial owner of the Trust.
SECTION 3.2. The Trust Certificates.
The Trust Certificates shall be substantially in the form of Exhibit A.
The Trust Certificates shall be issued in minimum denominations of $10.00 and
integral multiples of $1.00 in excess thereof. The Trust Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Eligible Lender Trustee. Trust Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be valid and binding obligations of the Trust, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to
the authentication and delivery of such Trust Certificates or did not hold such
offices at the date of authentication and delivery of such Trust Certificates.
SECTION 3.3. Authentication of Trust Certificates.
(a) On the Closing Date, the Eligible Lender Trustee shall cause the
Trust Certificates in an aggregate principal amount equal to $1,000 to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by its chairman of the board, its
president or any vice president, without further action by the Depositor, in
authorized denominations in exchange for the amount contributed to the Trust
pursuant to Section 2.5 and $990 in cash payable by the initial
Certificateholders on the Closing Date. Such Trust Certificates shall be
designated as the Crestar Student Loan Trust 1997-1 Student Loan Asset-Backed
Certificates. No Trust Certificate shall entitle its holder to any benefit under
this Agreement, or shall be valid for any purpose, unless there shall appear on
such Trust Certificate a certificate of authentication substantially in the form
set forth in Exhibit A, executed by the Eligible Lender Trustee by manual
signature; such authentication shall constitute conclusive evidence that such
Trust Certificate shall have been duly authenticated and delivered hereunder.
All Trust Certificates shall be dated the date of their authentication. No
further Trust Certificates shall be issued except pursuant to Section 3.4 or 3.5
hereunder.
(b) In connection with the initial issuance of the Trust Certificates
the Depositor hereby makes the following representations and warranties:
(i) It is not (1) an employee benefit plan, retirement
arrangement, individual retirement account or ▇▇▇▇▇ plan subject to
either Title I of the Employee Retirement Income Security Act of 1974,
as amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended, or (2) an entity (including an insurance company general
account) whose underlying assets include plan assets by reason of any
such plan's or account's investment in any such entity.
(ii) It is a U.S. Person as defined in Section 7701(a)(30) of the
Code.
(iii) It understands that the Trust Certificates will be offered in
a transaction not involving any public offering within the meaning of
the Securities Act, and that, if in the future it decides to resell,
pledge or otherwise transfer any Trust Certificates, such Trust
Certificates may be resold, pledged or transferred only (a) to a person
who the seller reasonably believes is an institutional "accredited
investor" as defined in Rule 501(a)(1) - (3) under the Securities Act
that purchases for its own account or for the account of another
institutional accredited investor or (b) pursuant to an effective
registration statement under the Securities Act.
SECTION 3.4. Registration of Transfer and Exchange of Trust
Certificates.
The Certificate Registrar shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 3.9, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Eligible Lender
Trustee shall provide for the registration of Trust Certificates and of transfer
and exchanges of Trust Certificates as provided herein. The Eligible Lender
Trustee shall be the Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate at
the office or agency maintained pursuant to Section 3.9, and compliance with the
provisions set forth in Section 3.5, the Eligible Lender Trustee shall execute,
authenticate and deliver in the name of the designated transferee or
transferees, one or more new Trust Certificates in authorized denominations of a
like aggregate amount dated the date of authentication by the Eligible Lender
Trustee or any authenticating agent. At the option of a Certificateholder, Trust
Certificates may be exchanged for other Trust Certificates of authorized
denominations of a like aggregate amount upon surrender of the Trust
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.9.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Eligible Lender Trustee and the Certificate Registrar
duly executed by the Certificateholder or his attorney duly authorized in
writing, with such signature guaranteed by an entity acceptable to the Eligible
Lender Trustee. Each Trust Certificate surrendered for registration of transfer
or exchange shall be canceled and subsequently disposed of by the Eligible
Lender Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Eligible Lender Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
The preceding provisions of this Section 3.4 notwithstanding, the
Eligible Lender Trustee shall not be required to make and the Certificate
Registrar need not register transfers or exchanges of Trust Certificates for a
period of 15 days preceding any Distribution Date.
SECTION 3.5. Restrictions on Transfer.
(a) Except for the initial sale of the Trust Certificates, the Trust
Certificates may not be offered or sold except to institutional "accredited
investors" (as defined in Rule 501(a)(1) - (3) under the Securities Act) who are
U.S. Persons (as defined in Section 7701(a)(30) of the Code) in reliance on an
exemption from the registration requirements of the Securities Act.
The Trust Certificates have not been registered or qualified under the
Securities Act, or any state securities law. No transfer, sale, pledge or other
disposition of any Trust Certificate shall be made unless such disposition is
made pursuant to an effective registration statement under the Securities Act
and effective registration or qualification under applicable state securities
laws, or is made in a transaction which does not require such registration or
qualification. In the event that a transfer is to be made in reliance upon an
exemption from the Securities Act, the Eligible Lender Trustee may require, in
order to assure compliance with the Securities Act, that the Certificateholder's
prospective transferee certify to the Eligible Lender Trustee in writing the
facts surrounding such disposition. Unless the Eligible Lender Trustee requests
otherwise, such certification shall be substantially in the form of Exhibit B
hereto. In the event that such certification of facts does not on its face
establish the availability of an exemption under the Securities Act, the
Eligible Lender Trustee may require an opinion of counsel satisfactory to it
that such transfer may be made pursuant to an exemption from the Securities Act,
which opinion of counsel shall not be an expense of the Eligible Lender Trustee
or of the Trust.
(b) Each Trust Certificate will bear a legend substantially to the
following effect:
"THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS AND (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1) - (3)
UNDER THE ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN
INSTITUTIONAL ACCREDITED INVESTOR, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR ▇▇▇▇▇ PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(a)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR ANY
INTEREST IN CRESTAR BANK, STAR BANK, NATIONAL ASSOCIATION OR DELAWARE TRUST
CAPITAL MANAGEMENT, INC.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Trust
Certificates.
If (a) any mutilated Trust Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Certificate and
(b) there shall be delivered to the Certificate Registrar and the Eligible
Lender Trustee such security or indemnity as may be required by them to save
each of them harmless, then in the absence of notice that such Trust Certificate
shall have been acquired by a bona fide purchaser, the Eligible Lender Trustee
on behalf of the Trust shall execute and the Eligible Lender Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
tenor and denomination. In connection with the issuance of any new Trust
Certificate under this Section, the Eligible Lender Trustee and the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Trust Certificate issued pursuant to this Section shall constitute conclusive
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Trust Certificate shall be found at any time.
SECTION 3.7. Persons Deemed Owners.
Prior to due presentation of a Trust Certificate for registration of
transfer, the Eligible Lender Trustee or the Certificate Registrar and any agent
of any thereof may treat the Person in whose name any Trust Certificate shall be
registered in the Certificate Register as the owner of such Trust Certificate
for the purpose of receiving distributions pursuant to Section 5.1 and for all
other purposes whatsoever, and neither the Eligible Lender Trustee or the
Certificate Registrar nor any agent of any thereof shall be bound by any notice
to the contrary.
SECTION 3.8. Access to List of Certificateholders' Names and
Addresses.
The Eligible Lender Trustee shall furnish or cause to be furnished to
the Depositor within 15 days after receipt by the Eligible Lender Trustee of a
request therefor from the Depositor in writing, a list, in such form as the
Depositor may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more
Certificateholders or one or more Certificateholders evidencing not less than
25% of the Certificate Balance apply in writing to the Eligible Lender Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Eligible Lender
Trustee shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Upon receipt of any such application, the Eligible Lender
Trustee will promptly notify the Depositor by providing a copy of such
application and a copy of the list of Certificateholders produced in response
thereto. Each Certificateholder, by receiving and holding a Trust Certificate
shall be deemed to have agreed not to hold any of the Depositor, the Certificate
Registrar or the Eligible Lender Trustee accountable by reason of the disclosure
of its name and address, regardless of the source from which such information
was derived.
SECTION 3.9. Maintenance of Office or Agency.
The Eligible Lender Trustee shall maintain in the City of Cincinnati,
Ohio an office or offices or agency or agencies where Trust Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Eligible Lender Trustee in respect of the Trust
Certificates and the other Basic Documents may be served. The Eligible Lender
Trustee initially designates its corporate trust office at Star Bank, National
Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, as such office. The
Eligible Lender Trustee shall give prompt written notice to the Depositor and to
the Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
SECTION 3.10. Appointment of Certificate Paying Agent.
The Certificate Paying Agent shall make distributions to
Certificateholders from the amounts received from the Indenture Trustee out of
the Trust Accounts pursuant to Section 5.1 and shall report the amounts of such
distributions to the Eligible Lender Trustee. Any Certificate Paying Agent shall
have the revocable power to receive such funds from the Indenture Trustee for
the purpose of making the distributions referred to above. The Eligible Lender
Trustee may revoke such power and remove the Certificate Paying Agent if the
Majority Certificateholder determines in its sole discretion that the
Certificate Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Certificate Paying Agent shall initially
be the Eligible Lender Trustee, and any co-paying agent chosen by the Eligible
Lender Trustee acceptable to the Majority Certificateholder, which consent shall
not be unreasonably withheld. The Eligible Lender Trustee shall furnish the
Indenture Trustee and the Majority Certificateholder with a notice identifying
each co-paying agent within two days of any such appointment. The Eligible
Lender Trustee shall be permitted to resign as Certificate Paying Agent upon 30
days written notice to the Eligible Lender Trustee and the Majority
Certificateholder. If the Eligible Lender Trustee shall no longer be the
Certificate Paying Agent, the Eligible Lender Trustee, subject to the prior
written consent of the Majority Certificateholder (which consent shall not be
unreasonably withheld), shall appoint a successor to act as Certificate Paying
Agent (which shall be a bank or trust company). The Eligible Lender Trustee
shall cause such successor Certificate Paying Agent or any additional
Certificate Paying Agent appointed by the Eligible Lender Trustee to execute and
deliver to the Eligible Lender Trustee an instrument in which such successor
Certificate Paying Agent or additional Certificate Paying Agent shall agree with
the Eligible Lender Trustee that, as Certificate Paying Agent, such successor
Certificate Paying Agent or additional Certificate Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders. The Certificate Paying Agent shall return all
unclaimed funds to the Eligible Lender Trustee and upon removal of a Certificate
Paying Agent such Certificate Paying Agent shall also return all funds in its
possession to the Eligible Lender Trustee. The provisions of Sections 7.1, 7.3,
7.4, 7.5 and 8.1 shall apply to the Eligible Lender Trustee also in its role as
Certificate Paying Agent, for so long as the Eligible Lender Trustee shall act
as Certificate Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Certificate
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.1. Prior Notice to Certificateholders with Respect to
Certain Matters.
With respect to the following matters, the Eligible Lender Trustee
shall not take action unless at least 30 days before the taking of such action
the Eligible Lender Trustee shall have notified the Certificateholders in
writing of the proposed action and the Majority Certificateholder shall not have
notified the Eligible Lender Trustee in writing prior to the 30th day after such
notice is given that the Majority Certificateholder has withheld consent:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection of the
Financed Student Loans) and the compromise of any material action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of Financed Student Loans);
(b) the amendment of the Indenture or the Terms Supplement by a
supplemental indenture;
(c) the amendment, change or modification of the Administration
Agreement; or
(d) the appointment pursuant to the Indenture or the Terms Supplement
of a successor Note Registrar or Indenture Trustee or pursuant to this Agreement
of a successor Certificate Registrar or Certificate Paying Agent, or the consent
to the assignment by the Note Registrar, Certificate Paying Agent or Indenture
Trustee or Certificate Registrar of its obligations under the Indenture or this
Agreement, as applicable.
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters.
The Eligible Lender Trustee shall not have the power, except upon the
direction of the Majority Certificateholders or, with the Majority
Certificateholder's consent, to (a) remove the Master Servicer or the
Administrator under the Transfer and Servicing Agreement pursuant to Section 8.1
thereof or (b) except as expressly provided in the Basic Documents, sell the
Financed Student Loans after the termination of the Indenture. The Eligible
Lender Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Majority Certificateholder.
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy.
The Eligible Lender Trustee shall not have the power to commence a
voluntary proceeding in bankruptcy relating to the Trust without the unanimous
prior approval of all Certificateholders and the delivery to the Eligible Lender
Trustee by each such Certificateholder of a certificate certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power.
The Certificateholders shall not direct the Eligible Lender Trustee to
take or refrain from taking any action if such action or inaction would be
contrary to any obligation of the Trust or the Eligible Lender Trustee under
this Agreement or any of the other Basic Documents or would be contrary to
Section 2.3 nor shall the Eligible Lender Trustee be permitted to follow any
such direction, if given.
SECTION 4.5. Majority Control.
Except as expressly provided herein, any action that may be taken by
the Certificateholders under this Agreement may be taken by the Majority
Certificateholders evidencing not less than 50.1% of the Certificate Balance
without regard to Certificates held by the Depositor. Except as expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this Agreement shall be effective if signed by the Majority
Certificateholders evidencing not less than 50.1% of the Certificate Balance at
the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.1. Application of Trust Funds.
(a) No later than the close of business on the day it receives funds
distributed by the Indenture Trustee pursuant to Sections 5.5, 5.6 and 5.10 of
the Transfer and Servicing Agreement, the Certificate Paying Agent will
distribute such amounts to Trust Certificateholders on a pro rata basis, based
upon the portion of the Certificate Balance held by such Certificateholder;
provided, however, that if the Eligible Lender Trustee receives funds for
distribution to Certificateholders after 11:00 a.m. on any day it shall use all
reasonable efforts to distribute such funds to the applicable Certificateholders
on such day but shall not be liable for any damages if such funds are
distributed on the following Business Day. Notwithstanding the foregoing, all
amounts received by the Eligible Lender Trustee from the Indenture Trustee
representing amounts in the Reserve Account in excess of the Specified Reserve
Account Balance shall be distributed to the Depositor (but such distributions
shall not reduce the principal amount of the Trust Certificates held by the
Depositor) and no other Certificateholder shall be entitled to have a claim for
such amounts.
(b) No later than the Business Day following its receipt thereof, the
Eligible Lender Trustee shall send to each Trust Certificateholder (but so long
as the Depositor is a Certificateholder, no such statement need be sent to the
Depositor) the statement provided to the Eligible Lender Trustee by the
Administrator pursuant to Section 5.7 of the Transfer and Servicing Agreement
relating to such Certificate Distribution Date.
(c) If any withholding tax is imposed on the Trust's payments (or
allocations of income) to a Certificateholder, such tax shall reduce the amount
otherwise distributable to the Certificateholder in accordance with this
Section. The Eligible Lender Trustee is hereby authorized to and shall, upon
receipt of written instructions of the Administrator identifying the appropriate
amount, to retain from amounts otherwise distributable to the Certificateholders
sufficient funds for the payment of any tax that is legally owed by the Trust
(but such authorization shall not prevent the Eligible Lender Trustee from
contesting any such tax in appropriate proceedings, and withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to a Certificateholder shall
be treated as cash distributed to such Certificateholder at the time it is
withheld by the Trust to be remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-U.S. Certificateholder), the
Eligible Lender Trustee in its sole discretion may (but unless otherwise
required by law shall not be obligated to) withhold such amounts in accordance
with this paragraph (c). In the event that a Certificateholder wishes to apply
for a refund of any such withholding tax, the Eligible Lender Trustee and the
Administrator shall reasonably cooperate with such Certificateholder in making
such claim so long as such Certificateholder agrees to reimburse the Eligible
Lender Trustee and the Administrator for any reasonable out-of-pocket expenses
incurred.
SECTION 5.2. Method of Payment.
Subject to Section 9.1(c), distributions required to be made to
Certificateholders on any Distribution Date shall be made to each
Certificateholder of record on the applicable Record Date either by wire
transfer, in immediately available funds, to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefore, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions (which may be standing instructions)
at least five Business Days prior to such Distribution Date or, if not, by check
mailed to such Certificateholder at the address of such Certificateholder
appearing in the Certificate Register.
SECTION 5.3. Segregation of Moneys; No Interest.
Subject to Section 5.1, moneys received by the Eligible Lender Trustee
hereunder shall be deposited in the Certificate Distribution Account and
invested in Eligible Investments in accordance with instructions received from
the Administrator. The Eligible Lender Trustee shall not be liable for any
interest thereon.
SECTION 5.4. Accounting and Reports to the Certificateholders,
the Internal Revenue Service and Others.
The Administrator, on behalf of the Eligible Lender Trustee, shall (a)
maintain (or cause to be maintained) the books of the Trust on a calendar year
basis on the accrual method of accounting, (b) deliver to each Certificateholder
(and to each Person who was a Certificateholder at any time during the
applicable calendar year), as may be required by the Code and applicable
Treasury Regulations, such information as may be required (including Schedule
K-1) to enable each such Certificateholder to prepare its federal and State
income tax returns, (c) file such tax returns relating to the Trust (including a
partnership information return, Internal Revenue Service Form 1065), and make
such elections as may from time to time be required or appropriate under any
applicable State or federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a partnership for federal, State and
local income tax purposes, (d) cause such tax returns to be signed in the manner
required by law and (e) collect or cause to be collected any withholding tax as
described in and in accordance with Section 5.1(c) with respect to income or
distributions to Certificateholders. The Depositor shall instruct the
Administrator and the Eligible Lender Trustee as to whether to make any
available election under the Code or any applicable state or local tax law
(including the election under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Financed Student
Loans). If the Depositor instructs the Administrator and the Trustee to make an
election under Section 754 of the Code, the Depositor shall bear the cost of
preparing such election and any additional accounting expenses of the Trust
incurred as a result of such election.
SECTION 5.5. Signature on Returns; Tax Matters Partner.
(a) The Depositor shall sign on behalf of the Trust the tax returns of
the Trust unless otherwise required by applicable law.
(b) The Depositor shall be designated the "tax matters partner" of the
Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.1. General Authority.
The Eligible Lender Trustee is authorized and directed by the Depositor
to execute and deliver the Basic Documents to which the Trust is to be a party
and each certificate or other document attached as an exhibit to or contemplated
by the Basic Documents to which the Trust is to be a party, in each case, in
such form as the Depositor shall approve as evidenced conclusively by the
Eligible Lender Trustee's execution thereof, and, on behalf of the Trust, to
direct the Indenture Trustee to authenticate and deliver such Notes as may from
time to time be authorized by the Indenture and any related Terms Supplement.
The Eligible Lender Trustee is also authorized and directed on behalf of the
Trust (i) to acquire and hold legal title to the Financed Student Loans and (ii)
to take all actions required pursuant to Section 4.2(c) of the Transfer and
Servicing Agreement, and otherwise follow the direction of and cooperate with
the Administrator in submitting, pursuing and collecting any claims to and with
the Department of HHS and Department of Education and any Guarantor with respect
to any Interest Subsidy Payments, Special Allowance Payments, and any other
payments relating to the Financed Student Loans.
In addition to the foregoing, the Eligible Lender Trustee is authorized
to take all actions required of the Trust pursuant to the Basic Documents. The
Eligible Lender Trustee is further authorized from time to time to take such
action as the Administrator directs or instructs with respect to the Basic
Documents or with respect to the administration of the Trust and is directed to
take such action to the extent that the Administrator is expressly required
pursuant to the Basic Documents to cause the Eligible Lender Trustee to act.
SECTION 6.2. General Duties.
It shall be the duty of the Eligible Lender Trustee to discharge (or
cause to be discharged) all its responsibilities pursuant to the terms of this
Agreement and the other Basic Documents to which the Trust is a party and to
administer the Trust in the best interests of the Certificateholders, subject to
and in accordance with the provisions of this Agreement and the other Basic
Documents. Notwithstanding the foregoing, the Eligible Lender Trustee shall be
deemed to have discharged its duties and responsibilities hereunder and under
the other Basic Documents to the extent the Administrator has agreed in the
Administration Agreement to perform any act or to discharge any duty of the
Eligible Lender Trustee hereunder or under any other Basic Document, and the
Eligible Lender Trustee shall not be held liable for the default or failure of
the Administrator to carry out its obligations under the Administration
Agreement. Except as expressly provided in the Basic Documents, the Eligible
Lender Trustee shall have no obligation to administer, service or collect the
Financed Student Loans or to maintain, monitor or otherwise supervise the
administration, servicing or collection of the Financed Student Loans.
SECTION 6.3. Action upon Instruction.
(a) The Eligible Lender Trustee shall not be required to take any
action hereunder or under any other Basic Document if the Eligible Lender
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability (except as such action is
specifically required hereunder) on the part of the Eligible Lender Trustee or
is contrary to the terms hereof or of any other Basic Document or is otherwise
contrary to law.
(b) Whenever the Eligible Lender Trustee is unable to determine the
appropriate course of action between alternative courses of action permitted or
required by the terms of this Agreement or under any other Basic Document, the
Eligible Lender Trustee shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Certificateholders and the
Administrator requesting instruction as to the course of action to be adopted,
and to the extent the Eligible Lender Trustee acts in good faith in accordance
with any written instruction received from the Administrator, the Eligible
Lender Trustee shall not be liable on account of such action to any Person. If
the Eligible Lender Trustee shall not have received appropriate instruction
within 30 days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the other Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
(c) If the Eligible Lender Trustee is unsure as to the application of
any provision of this Agreement or any other Basic Document or any agreement
entered into by the Eligible Lender Trustee on behalf of the Trust or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or if this Agreement permits any
determination by the Eligible Lender Trustee or is silent or is incomplete as to
the course of action that the Eligible Lender Trustee is required to take with
respect to a particular set of facts, the Eligible Lender Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Eligible
Lender Trustee acts or refrains from acting in good faith in accordance with any
such instruction received from the Certificateholders, the Eligible Lender
Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Eligible Lender Trustee shall not have received appropriate
instruction within 30 days of such notice (or within such shorter period of time
as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Agreement or the other Basic
Documents or such other agreements, as it shall deem to be in the best interests
of the Certificateholders, and shall have no liability to any Person for such
action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement, the
Transfer and Servicing Agreement, any Supplemental Transfer and Servicing
Agreement or in Instructions.
The Eligible Lender Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, service,
dispose of or otherwise deal with the Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Eligible Lender Trustee is a party, except as
expressly provided by the terms of this Agreement, the Transfer and Servicing
Agreement, or in any document or written instruction received by the Eligible
Lender Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any other Basic Document against the
Eligible Lender Trustee. The Eligible Lender Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Commission filing for the Trust or to record this Agreement or any other Basic
Document. The Eligible Lender Trustee nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to discharge
any liens on any part of the Trust Estate that result from actions by, or claims
against, Star Bank, National Association in its individual capacity or as the
Eligible Lender Trustee that are not related to the ownership or the
administration of the Trust Estate.
SECTION 6.5. No Action Except Under Specified Documents or
Instructions.
The Eligible Lender Trustee shall not manage, control, use, sell,
service, dispose of or otherwise deal with any part of the Trust Estate except
(i) in accordance with the powers granted to and the authority conferred upon
the Eligible Lender Trustee pursuant to this Agreement, (ii) in accordance with
the other Basic Documents to which it or the Trust is a party and (iii) in
accordance with any document or instruction delivered to the Eligible Lender
Trustee pursuant to Section 6.3.
SECTION 6.6. Restrictions.
The Eligible Lender Trustee shall not take any action (a) that is
inconsistent with the purposes of the Trust set forth in Section 2.3 or (b)
that, to the actual knowledge of the Eligible Lender Trustee, would result in
the Trust's becoming taxable as a corporation for federal income tax purposes.
The Certificateholders shall not direct the Eligible Lender Trustee to take any
action that would violate the provisions of this Section.
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.1. Acceptance of Trusts and Duties.
The Eligible Lender Trustee accepts the trusts hereby created and
agrees to perform its duties hereunder with respect to such trusts but only upon
the terms of this Agreement for the benefit of the Certificateholders. The
Eligible Lender Trustee also agrees to disburse all moneys actually received by
it constituting part of the Trust Estate under the terms of this Agreement and
the other Basic Documents. The Eligible Lender Trustee shall not be answerable
or accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful misconduct, bad faith or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Eligible Lender Trustee;
provided, however, that in no event shall the Eligible Lender Trustee be liable
under any theory of tort, contract, strict liability or other legal or equitable
theory for any lost profits or exemplary, punitive, special, incidental,
indirect or consequential damages, each of which is hereby excluded by agreement
of the parties regardless of whether or not the Eligible Lender Trustee has been
advised of the possibility of such damages. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the Eligible Lender Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer of the Eligible Lender
Trustee unless it is proved that the Eligible Lender Trustee was negligent in
ascertaining the pertinent facts;
(b) the Eligible Lender Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the direction or
instructions of the Administrator, the Depositor or the Certificateholders of
Certificates evidencing the requisite percentage of the Certificate Balance;
(c) no provision of this Agreement or any other Basic Document shall
require the Eligible Lender Trustee to expend or risk funds or otherwise incur
any financial liability in the performance of any of its rights or powers
hereunder or under any other Basic Document, if the Eligible Lender Trustee
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) under no circumstances shall the Eligible Lender Trustee be liable
for indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes or for any amounts owing
under the Trust Certificates;
(e) the Eligible Lender Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or for the form, character genuineness,
sufficiency, value or validity of any of the Trust Estate or for or in respect
of the validity or sufficiency of the Basic Documents, other than the
certificate of authentication on the Trust Certificates and the Eligible Lender
Trustee shall in no event assume or incur any liability, duty or obligation to
any Noteholder or to any Certificateholder, other than as expressly provided for
herein and in the other Basic Documents;
(f) the Eligible Lender Trustee shall not be liable for the action or
inaction, default or misconduct of the Depositor, Administrator, the Indenture
Trustee or the Master Servicer under this Agreement or any of the other Basic
Documents or otherwise and the Eligible Lender Trustee shall have no obligation
or liability to perform the obligations of the Trust under this Agreement or the
other Basic Documents that are required to be performed by the Administrator
under the Transfer and Servicing Agreement, the Indenture Trustee under the
Indenture or any Terms Supplement or the Master Servicer under the Transfer and
Servicing Agreement; and
(g) the Eligible Lender Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or otherwise or
in relation to this Agreement or any other Basic Document, at the request, order
or direction of any of the Certificateholders, unless such Certificateholders
have offered to the Eligible Lender Trustee security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Eligible Lender Trustee therein or thereby. The right of the
Eligible Lender Trustee to perform any discretionary act enumerated in this
Agreement or in any other Basic Document shall not be construed as a duty, and
the Eligible Lender Trustee shall not be answerable for other than its
negligence, bad faith or willful misconduct in the performance of any such act.
SECTION 7.2. Furnishing of Documents.
The Eligible Lender Trustee shall furnish to the Certificateholders
promptly upon receipt of a written request therefor duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other instruments furnished to the Eligible Lender Trustee under the Basic
Documents.
SECTION 7.3. Representations and Warranties.
The Eligible Lender Trustee hereby represents and warrants to the
Depositor, for the benefit of the Certificateholders that:
(a) It is a national banking association duly organized and validly
existing in good standing under the laws of the United States. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the other Basic Documents to which it is a
party.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and the other Basic Documents to
which it is a party, and this Agreement and the other Basic Documents to which
it is a party, have been executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement and the other Basic
Documents to which it is a party on its behalf, and when so executed shall be
legal, valid and binding obligations of the Eligible Lender Trustee, enforceable
against the Eligible Lender Trustee in accordance with their respective terms.
(c) Neither the execution nor the delivery by it of this Agreement or
the other Basic Documents to which it is a party, nor the consummation by it of
the transactions contemplated hereby or thereby nor compliance by it with any of
the terms or provisions hereof or thereof, will contravene any federal or State
law, governmental rule or regulation governing the banking or trust powers of
the Eligible Lender Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
(d) It is an "eligible lender," as such term is defined in Section
435(d) of the Higher Education Act (and is otherwise eligible to be a lender
under the FFEL Program under the regulations for the FFEL Program) and Section
292o(2) of the HEAL Act (and is otherwise eligible to be a HEAL lender or holder
under the regulations for the HEAL Program), for purposes of holding legal title
to the Financed Student Loans as contemplated by this Agreement and the other
Basic Documents, and has obtained a lender identification number with respect to
the Trust from the (i) Department of Education and has in effect a Guarantee
Agreement with each of the Guarantors with respect to the Financed FFELP Loans
and (ii) the Department of HHS and has in effect the HEAL Insurance Contract
with respect to the Financed HEAL Loans.
SECTION 7.4. Reliance; Advice of Counsel.
(a) The Eligible Lender Trustee shall incur no liability to anyone in
acting upon any signature, instrument, direction, notice, resolution, request,
consent, order, certificate, report, opinion, bond, or other document or paper
believed by it to be genuine and believed by it to be signed by the proper party
or parties. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Eligible Lender Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Eligible Lender Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Basic Documents, the Eligible Lender Trustee (i) may act directly or through its
agents, including the Administrator, or attorneys pursuant to agreements entered
into with any of them, and the Eligible Lender Trustee shall not be liable for
the conduct or misconduct of such agents or attorneys if such agents or
attorneys shall have been selected by the Eligible Lender Trustee with
reasonable care or by the Administrator or Depositor, and (ii) may consult with
counsel, accountants and other skilled persons to be selected with reasonable
care and employed by it or selected and employed by the Administrator or
Depositor. The Eligible Lender Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the opinion or advice
of any such counsel, accountants or other such persons and not contrary to this
Agreement or any other Basic Document.
SECTION 7.5. Not Acting in Individual Capacity.
Except for the representations and warranties set forth in Section 7.3,
in accepting the trusts hereby created Star Bank, National Association acts
solely as Eligible Lender Trustee hereunder and not in its individual capacity
and all Persons having any claim against the Eligible Lender Trustee by reason
of the transactions contemplated by this Agreement or any other Basic Document
shall look only to the Trust Estate for payment or satisfaction thereof.
SECTION 7.6. Eligible Lender Trustee Not Liable for Trust
Certificates or Financed Student Loans.
The recitals contained in any Trust Supplement and in the Trust
Certificates (other than the signature and countersignature of the Eligible
Lender Trustee on the Trust Certificates) shall be taken as the statements of
the Depositor, and the Eligible Lender Trustee assumes no responsibility for the
correctness thereof. The Eligible Lender Trustee makes no representations as to
the validity or sufficiency of this Agreement, the Trust Certificates or any
other Basic Document (other than the signature and countersignature of the
Eligible Lender Trustee on the Trust Certificates) or the Notes, or of any
Financed Student Loan or related documents. Except as to a Guarantor, the U.S.
Secretary of Education or the U.S. Secretary of the Department of HHS, the
Eligible Lender Trustee shall at no time have any responsibility or liability
(except for willfully or negligently terminating or allowing to be terminated
any of the Guarantee Agreements or the HEAL Insurance Contract) for or with
respect to the legality, validity, enforceability and eligibility for Guarantee
Payments or Insurance Payments of any Financed Student Loan, or for or with
respect to the sufficiency of the Trust Estate or its ability to generate the
payments to be distributed to Certificateholders under this Agreement or the
Noteholders under the Indenture, including without limitation: the existence and
contents of any computer or other record of any Financed Student Loan; the
validity of the assignment of any Financed Student Loan to the Trust; the
completeness of any Financed Student Loan; the performance or enforcement
(except as expressly set forth in any Basic Document) of any Financed Student
Loan; the compliance by the Depositor, Administrator, Seller or the Master
Servicer with any warranty or representation made under any Basic Document or in
any related document or the accuracy of any such warranty or representation or
any action or inaction of the Depositor, Administrator, the Indenture Trustee or
the Master Servicer or any subservicer taken in the name of the Eligible Lender
Trustee; and the failure of the Financed Student Loans to be serviced in
conformity with applicable regulations.
Notwithstanding any provision in this Agreement or the Basic Documents,
nothing in this Agreement or the Basic Documents shall be construed to limit the
Eligible Lender Trustee's responsibility to the (i) Secretary of Education or a
Guarantor in its capacity as Eligible Lender Trustee for any violations of
statutory or regulatory requirements that may occur with respect to loans held
in the Trust, pursuant to 34 CFR 682.203(b) or any successor provision thereto;
or (ii) the Department of HHS in its capacity as Eligible Lender Trustee for any
violations of statutory or regulatory requirements that may occur with respect
to loans held in the Trust, pursuant to the HEAL Act.
SECTION 7.7. Eligible Lender Trustee May Own Trust Certificates and
Notes.
The Eligible Lender Trustee in its individual or any other capacity may
become the owner or pledgee of the Trust Certificates or Notes and may deal with
the Depositor, the Administrator, the Indenture Trustee, the Master Servicer and
the Guarantors in banking or trust transactions with the same rights as it would
have if it were not Eligible Lender Trustee, including serving as a trustee of
other trusts dealing in any student loans, including trusts which purchase
student loans from the Trust.
SECTION 7.8. Representations and Warrantees of Delaware Trustee.
The Delaware Trustee hereby represents and warrants to the Depositor,
for the benefit of the Certificateholders that:
(a) It is a Delaware banking corporation duly organized and validly
existing in good standing under the laws of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement has been
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf, and when so executed shall be a legal,
valid and binding obligation of the Delaware Trustee, enforceable against the
Delaware Trustee in accordance with its terms.
(c) Neither the execution nor the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby nor compliance by
it with any of the terms or provisions hereof will, contravene any federal or
State law, governmental rule or regulation governing the banking or trust powers
of the Delaware Trustee or any judgment or order binding on it, or constitute
any default under its charter documents or by-laws or any indenture, mortgage,
contract, agreement or instrument to which it is a party or by which any of its
properties may be bound.
ARTICLE VIII
Compensation of Trustees
SECTION 8.1. Eligible Lender Trustee's Fees and Expenses.
The Eligible Lender Trustee shall receive as compensation for its
services hereunder such fees as have been separately agreed upon before the date
hereof between the Depositor and the Eligible Lender Trustee. Such fee shall be
payable as provided in Section 5.5 of the Transfer and Servicing Agreement.
SECTION 8.2. Payments to the Eligible Lender Trustee.
Any amounts paid to the Eligible Lender Trustee pursuant to this
Agreement or the Transfer and Servicing Agreement shall be deemed not to be a
part of the Trust Estate immediately after such payment.
SECTION 8.3. Delaware Trustee's Fees and Expenses.
The Delaware Trustee shall receive as compensation for its services
hereunder such fees and expenses as have been separately agreed upon before the
date hereof between the Depositor and the Delaware Trustee. Such fees shall be
payable as provided in Section 5.5 of the Transfer and Servicing Agreement.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement.
(a) This Trust shall terminate upon the earlier of (i) the final
distribution by the Eligible Lender Trustee of all moneys or other property or
proceeds of the Trust Estate in accordance with the terms of the Indenture, any
related Terms Supplement, the Transfer and Servicing Agreement and Article V
hereof, (ii) the expiration of 21 years from the death of the last survivor of
the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador of the United States
to the Court of St. ▇▇▇▇▇, living on the date hereof, and (iii) the time
provided in Section 9.2. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder other than the Depositor as described in
Section 9.2, shall not (x) operate to terminate this Agreement or the Trust, nor
(y) entitle such Certificateholder's or Depositor's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in Section 9.1(a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust without the
prior written consent of the Indenture Trustee.
(c) Upon the termination of the Trust under Section 9.1(a), the Trust
shall be wound up by the Eligible Lender Trustee pursuant to Section 3808 of the
Delaware Business Trust Statute. Notice of any termination of the Trust,
specifying the Distribution Date upon which the Certificateholders shall
surrender their Trust Certificates to the Certificate Paying Agent for payment
of the final distribution and cancellation, shall be given promptly by the
Eligible Lender Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Administrator
given pursuant to Section 9.1(c) of the Transfer and Servicing Agreement,
stating (i) the Distribution Date upon which final payment of the Trust
Certificates shall be made upon presentation and surrender of the Trust
Certificates at the office of the Certificate Paying Agent therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments being
made only upon presentation and surrender of the Trust Certificates at the
office of the Certificate Paying Agent therein specified. The Eligible Lender
Trustee shall give such notice to the Certificate Registrar (if other than the
Eligible Lender Trustee) and the Certificate Paying Agent at the time such
notice is given to Certificateholders. Upon presentation and surrender of the
Trust Certificates the Certificate Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.1. Certificates shall cease to earn interest as of the termination
date of the Trust. Any funds remaining in the Trust after required distributions
to Certificateholders shall be distributed by the Eligible Lender Trustee to the
Depositor.
(d) If all the Certificateholders shall not surrender their Trust
Certificates for cancellation within six months after the date specified in the
above-mentioned written notice, the Eligible Lender Trustee shall give a second
written notice to the remaining Certificateholders to surrender their Trust
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Trust Certificates
shall not have been surrendered for cancellation, the Eligible Lender Trustee
may take appropriate steps, or may appoint an agent to take appropriate steps,
to contact the remaining Certificateholders concerning surrender of their Trust
Certificates and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies and no later than five years after the
first such notice shall be distributed by the Eligible Lender Trustee to the
Depositor.
(e) Upon termination of the Trust in accordance with Article IX, the
Eligible Lender Trustee or Delaware Trustee (upon instruction from the Eligible
Lender Trustee) shall cause the Certificate of Trust to be canceled by filing a
Certificate of Cancellation with the Delaware Secretary of State under
applicable law.
SECTION 9.2. Dissolution upon Insolvency of Depositor.
If an Insolvency Event shall occur with respect to the Depositor, the
Trust shall be terminated in accordance with Section 9.1 90 days after the date
of such Insolvency Event, unless, before the end of such 90-day period, the
Eligible Lender Trustee shall have received written instructions from the
Majority Certificateholders to the effect that they disapprove of the
liquidation of the Financed Student Loans and termination of the Trust, in which
event the Trust shall continue in accordance with the Basic Documents. Promptly
after the occurrence of any Insolvency Event with respect to the Depositor (i)
the Depositor shall give the Indenture Trustee and the Eligible Lender Trustee
written notice of such Insolvency Event, (ii) the Eligible Lender Trustee shall,
upon the receipt of such written notice from the Depositor give prompt written
notice to the Certificateholders and the Indenture Trustee, of the occurrence of
such event and (iii) the Indenture Trustee shall, upon receipt of written notice
of such Insolvency Event from the Eligible Lender Trustee or the Depositor, give
prompt written notice to the Noteholders of the occurrence of such event;
provided, however, that any failure to give a notice required by this sentence
shall not prevent or delay, in any manner, a termination of the Trust pursuant
to the first sentence of this Section 9.2. Upon a termination pursuant to this
Section 9.2, the Eligible Lender Trustee shall direct the Indenture Trustee
promptly to sell the assets of the Trust (other than the Trust Accounts) in a
commercially reasonable manner and on commercially reasonable terms. The
proceeds of such a sale of the assets of the Trust shall be treated as
collections under the Transfer and Servicing Agreement.
ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION 10.1. Eligibility Requirements for Eligible Lender Trustee.
The Eligible Lender Trustee shall at all times be a corporation or
association (i) qualifying as an "eligible lender" as such term is defined in
Section 435(d) of the Higher Education Act (and otherwise eligible to be a
lender under the FFEL Program under the regulations for the FFEL Program) for
purposes of holding legal title to the Federal Loans on behalf of the Trust,
with a valid lender identification number with respect to the Trust from the
Department of Education; (ii) qualifying as an "eligible lender" as such term is
defined in Section 292o(2) of the HEAL Act (and otherwise eligible to be a HEAL
lender or holder under the regulations for the HEAL Program), for purposes of
holding legal title to the HEAL Loans on behalf of the Trust, with a valid
lender identification number with respect to the Trust from the Department of
HHS, (iii) being authorized to exercise corporate trust powers and hold legal
title to the Financed Student Loans; (iv) having in effect Guarantee Agreements
with each of the Guaranty Agencies then guaranteeing FFELP Loans and an
insurance contract with the Department of HHS insuring the HEAL Loans; (v)
having a combined capital and surplus of at least $50,000,000 and being subject
to supervision or examination by federal or State authorities; and (vi), with
respect to any successor Eligible Lender Trustees, having (or having a parent
which has) a rating of at least Baa3 by ▇▇▇▇▇'▇ and at least BBB by Standard &
Poor's and Fitch IBCA, Inc. If the Eligible Lender Trustee shall publish reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.1, the combined capital and surplus of the Eligible Lender Trustee
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Eligible Lender
Trustee shall cease to be eligible in accordance with the provisions of this
Section 10.1, the Eligible Lender Trustee shall resign immediately in the manner
and with the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Eligible Lender Trustee.
The Eligible Lender Trustee may at any time resign and be discharged
from the trusts hereby created by giving written notice thereof to the
Administrator and the Administrator may dismiss the Eligible Lender Trustee or
any co-paying agent at any time for its failure to act in accordance with the
terms of this Agreement; provided, however, that prior to any such dismissal,
the Administrator shall have given the Eligible Lender Trustee or the co-paying
agent, as the case may be, notice identifying such failure, and shall have given
the Eligible Lender Trustee or the co-paying agent, as the case may be, two
Business Days to cure such failure, if such failure relates to the distribution
of funds to Certificateholders, and 30 days to cure all other failures. Upon
receiving such notice of resignation or dismissal, the Administrator, with the
approval of the Majority Certificateholders shall promptly appoint a successor
Eligible Lender Trustee meeting the eligibility requirements of Section 10.1 by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Eligible Lender Trustee and one copy to the successor
Eligible Lender Trustee. If no successor Eligible Lender Trustee shall have been
so appointed and have accepted appointment within 30 days after the giving of
such notice of resignation or dismissal, the resigning or dismissed Eligible
Lender Trustee, as the case may be, may petition any court of competent
jurisdiction for the appointment of a successor Eligible Lender Trustee;
provided, however, that such right to appoint or to petition for the appointment
of any such successor shall in no event relieve the resigning or dismissed
Eligible Lender Trustee, as the case may be, from any obligations otherwise
imposed on it under the Basic Documents until such successor has in fact assumed
such appointment.
If at any time the Eligible Lender Trustee shall cease to be eligible
in accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Administrator, or if at any time an Insolvency
Event with respect to the Eligible Lender Trustee shall have occurred and be
continuing, then the Administrator may remove the Eligible Lender Trustee. If
the Administrator shall remove the Eligible Lender Trustee under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint,
with the prior approval of the Majority Certificateholder, a successor Eligible
Lender Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the outgoing Eligible Lender Trustee so removed and one
copy to the successor Eligible Lender Trustee and payment of all fees owed to
the outgoing Eligible Lender Trustee.
Any resignation or removal of the Eligible Lender Trustee and
appointment of a successor Eligible Lender Trustee pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee pursuant to Section 10.3
and payment of all fees and expenses owed to the outgoing Eligible Lender
Trustee. The Administrator shall provide notice of such resignation or removal
of the Eligible Lender Trustee to the Certificateholders and, if any Notes or
Certificates are then rated by any of the Rating Agencies, the Rating Agencies.
SECTION 10.3. Successor Eligible Lender Trustee.
Any successor Eligible Lender Trustee appointed pursuant to Section
10.2 shall execute, acknowledge and deliver to the Administrator and to its
predecessor Eligible Lender Trustee an instrument accepting such appointment
under this Agreement, and thereupon the resignation or removal of the
predecessor Eligible Lender Trustee shall become effective and such successor
Eligible Lender Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Eligible Lender Trustee. The predecessor Eligible Lender Trustee shall upon
payment of its fees and expenses deliver to the successor Eligible Lender
Trustee all documents, statements, moneys and properties held by it under this
Agreement and shall assign, if permissible, to the successor Eligible Lender
Trustee the lender identification number obtained from the Department of
Education and the Department of HHS on behalf of the Trust; and the
Administrator and the predecessor Eligible Lender Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the successor Eligible Lender
Trustee all such rights, powers, duties and obligations.
No successor Eligible Lender Trustee shall accept appointment as
provided in this Section 10.3 unless at the time of such acceptance such
successor Eligible Lender Trustee shall be eligible pursuant to Section 10.1 and
shall have made the representations and warranties set forth in Section 7.3 to
the Depositor, for the benefit of the Certificateholders.
Upon acceptance of appointment by a successor Eligible Lender Trustee
pursuant to this Section, the Administrator shall mail notice of the successor
of such Eligible Lender Trustee to all Certificateholders, the Indenture Trustee
and the Noteholders. If the Administrator shall fail to mail such notice within
10 days after acceptance of appointment by the successor Eligible Lender
Trustee, the successor Eligible Lender Trustee shall cause such notice to be
mailed at the expense of the Administrator.
SECTION 10.4. Merger or Consolidation of Eligible Lender Trustee.
Any corporation into which the Eligible Lender Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Eligible Lender
Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Eligible Lender Trustee, shall, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding, be the
successor of the Eligible Lender Trustee hereunder; provided that such
corporation shall be eligible pursuant to Section 10.1; provided further that
the Eligible Lender Trustee shall mail notice of such merger or consolidation to
the Depositor.
SECTION 10.5. Appointment of Co-Eligible Lender Trustee or Separate
Eligible Lender Trustee.
Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust may at the time be located, the Administrator and the
Eligible Lender Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Eligible Lender Trustee, the Majority Certificateholder, and if the Notes or the
Certificates are then rated by any of the Rating Agencies, the Rating Agencies,
meeting the eligibility requirements of clauses (i) through (iii) of Section
10.1, to act as co-trustee, jointly with the Eligible Lender Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Estate,
and to vest in such Person, in such capacity, such title to the Trust Estate, or
any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Administrator and the
Eligible Lender Trustee may consider necessary or desirable. If the
Administrator shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Eligible Lender Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee under
this Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to clauses (iv) , (v) and (vi) of Section 10.1 and no notice of
the appointment of any co-trustee or separate trustee shall be required pursuant
to Section 10.3. The expenses incurred in connection with the retention of any
co-trustee shall be deemed an Expense of the Issuer to be borne by the
Depositor.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or imposed
upon the Eligible Lender Trustee shall be conferred upon and exercised or
performed by the Eligible Lender Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is not
authorized to act separately without the Eligible Lender Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Eligible Lender Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of title to the
Trust or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, solely at the direction
of the Eligible Lender Trustee;
(b) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) the Administrator and the Eligible Lender Trustee acting jointly
may at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Eligible Lender
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Eligible
Lender Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Eligible Lender Trustee. Each such instrument shall be filed
with the Eligible Lender Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Eligible
Lender Trustee as its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustees shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Eligible Lender Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments.
(a) This Agreement, including the Attachments and Annexes hereto, may
be amended by the Depositor and the Eligible Lender Trustee, but without the
consent of any of the Noteholders or the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions in this Agreement or of modifying in any manner the rights of
the Noteholders, or the Certificateholders; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder or Certificateholder.
(b) Subject to the last sentence of Section 2.3, this Agreement may
also be amended from time to time by the Depositor and the Eligible Lender
Trustee, with the consent of (i) the Noteholders of Directing Notes evidencing
not less than 50.1% of the Outstanding Amount of the Directing Notes, and (ii)
the Majority Certificateholders for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Financed Student Loans or distributions that shall be
required to be made for the benefit of the Noteholders or the
Certificateholders, (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance of Trust Certificates required
to consent to any such amendment, without the consent of all the outstanding
Noteholders and Certificateholders or (c) modify Section 2.7 (or any other
Sections without an Opinion of Counsel that such amendment will not cause the
Trust to be taxed as a corporation).
Promptly after the execution of any such amendment or consent, the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to each Certificateholder and, if the Notes or
Certificates are then rated by any Rating Agency, the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Eligible Lender Trustee may prescribe.
(c) Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Agreement. The Eligible Lender Trustee may, but shall not be obligated
to, enter into any such amendment which affects the Eligible Lender Trustee's
own rights, duties or immunities under this Agreement or otherwise.
(d) Notwithstanding anything to the contrary contained in this Section
11.1, or elsewhere in this Agreement, the Depositor and the Eligible Lender
Trustee (upon written direction from the Depositor), at any time and from time
to time, may enter into one or more Trust Supplements to set forth the terms of
any Class of Trust Certificates that have not theretofore been authorized by a
Trust Supplement.
(e) Notwithstanding anything to the contrary contained in this Section
11.1 or elsewhere in this Agreement, no amendment, supplement or modification
shall be made or become effective with respect to Section 2.4(b), (c) or (d)
without sixty (60) days prior written notice to the Delaware Trustee (or the
prior written consent of the Delaware Trustee).
SECTION 11.2. No Legal Title to Trust Estate in Certificateholders.
The Certificateholders shall not have legal title to any part of the
Trust Estate. The Certificateholders shall be entitled to receive distributions
with respect to their undivided beneficial ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title, or interest of the Certificateholders to and in
their beneficial ownership interest in the Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Estate.
SECTION 11.3. Limitations on Rights of Others.
The provisions of this Agreement are solely for the benefit of the
Eligible Lender Trustee, the Delaware Trustee, the Depositor, the
Certificateholders, the Administrator and, to the extent expressly provided
herein, the Indenture Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Estate or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 11.4. Notices.
(a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon receipt
by the intended recipient or three Business Days after mailing if mailed by
certified mail, postage prepaid (except that notice to the Eligible Lender
Trustee shall be deemed given only upon actual receipt by the Eligible Lender
Trustee), if to the Eligible Lender Trustee, to Star Bank, National Association,
addressed to its Corporate Trust Office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇; if to the Depositor, to Crestar Bank, addressed to ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President - Securitizations Manager,
▇▇▇-▇▇▇-▇▇▇▇ (Tel); ▇▇▇-▇▇▇-▇▇▇▇ (Fax); with a copy to Crestar Bank, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇ ▇▇▇▇▇▇; Senior Vice
President and General Counsel, or, as to each party, at such other address or
facsimile number as shall be designated by such party in a written notice to
each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given (i) by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register, or (ii) by facsimile if
the Certificate Register contains a facsimile number for such Certificateholder.
Any notice so mailed or sent by facsimile within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Certificateholder receives such notice.
SECTION 11.5. Severability.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.6. Separate Counterparts.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.7. Successors and Assigns.
All covenants and agreements contained herein shall be binding upon,
and inure to the benefit of, the Depositor and its successors, the Eligible
Lender Trustee and its successors, the Delaware Trustee and its successors, each
Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.8. No Petition.
(a) Prior to the date which is one year and a day after the termination
of the Trust pursuant to Section 9.1, the Depositor will not institute against
the Trust any bankruptcy proceedings under any United States federal or State
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, this Agreement or any of the other Basic
Documents.
(b) The Eligible Lender Trustee (not in its individual capacity but
solely as Eligible Lender Trustee), by entering into this Agreement, and each
Certificateholder, by accepting a Trust Certificate hereby covenant and agree
that they will not at any time institute against the Depositor or the Trust, or
join in any institution against the Depositor or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States federal or State
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, this Agreement or any of the other Basic
Documents.
SECTION 11.9. No Recourse.
Each Certificateholder by accepting a Trust Certificate acknowledges
that such Certificateholder's Trust Certificates represent beneficial interests
in the Trust only and do not represent interests in or obligations of the
Depositor, the Seller, the Master Servicer, the Administrator, the Eligible
Lender Trustee, the Delaware Trustee, the Indenture Trustee or any Affiliate
thereof or any officer, director or employee of any thereof and no recourse may
be had against such parties or their assets, except as may be expressly set
forth in this Agreement, the Trust Certificates or the other Basic Documents.
SECTION 11.10. Headings.
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 11.11. Governing Law.
This Agreement shall be construed in accordance with the laws of the
State of Delaware, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws. The Trust created by this Agreement shall be a
business trust subject to Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
STAR BANK, NATIONAL ASSOCIATION,
as Eligible Lender Trustee
By:________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Trust Officer
DELAWARE TRUST CAPITAL
MANAGEMENT, INC., as Delaware Trustee
By:________________________________
Name:
Title:
CRESTAR BANK, Depositor
By:________________________________
Name:
Title:
COMMONWEALTH OF VIRGINIA, )
) SS:
CITY OF RICHMOND, )
On this, the _____ day of December, 1997, before me, the undersigned
officer, personally appeared ______________, who acknowledged himself to be a
__________________________ of Star Bank, National Association, and that he as
such, being authorized to do so, executed the foregoing for the purpose of
creating Crestar Student Loan Trust 1997-1 with Star Bank, National Association,
as Eligible Lender Trustee, in accordance with the terms of the foregoing
instrument, by signing the name of the corporation by himself as
-------------------------.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
----------------------------------
Notary Public in and for the
Commonwealth of Virginia
[SEAL]
My commission expires:
------------------------------
COMMONWEALTH OF VIRGINIA, )
) ss.:
CITY OF RICHMOND, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ______________________, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
_____________ of DELEWARE TRUST CAPITAL MANAGEMENT, not in its individual
capacity but solely as Delaware Trustee of CRESTAR STUDENT LOAN TRUST 1997-1, a
Delaware trust, and that he executed the same as the act of said trust for the
purpose and consideration therein expressed, and in the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of
___________, 1997.
-----------------------------
Notary Public in and for
the Commonwealth of Virginia
[SEAL]
My commission expires:
----------------------
COMMONWEALTH OF VIRGINIA, )
) ss.:
CITY OF RICHMOND, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared _____________________ known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said CRESTAR
BANK, a Virginia banking corporation, and that he executed the same as the act
of said trust for the purpose and consideration therein expressed, and in the
capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 16th day of December,
1997.
-----------------------------
Notary Public in and for
the Commonwealth of Virginia
[SEAL]
My commission expires:
----------------------
EXHIBIT A
FORM OF TRUST CERTIFICATE
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF,
BY PURCHASING THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS AND (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1)-(3)
UNDER THE ACT THAT PURCHASES FOR ITS OWN ACCOUNT, OR (2) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO
(1) EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT
ACCOUNTS OR ▇▇▇▇▇ PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(a)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THIS TRUST CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR
AN INTEREST IN CRESTAR BANK, STAR BANK, NATIONAL ASSOCIATION OR DELAWARE TRUST
CAPITAL MANAGEMENT, INC.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.
Original Denomination of this Certificate:
Aggregate Original Principal Balance of all Certificates:
CRESTAR STUDENT LOAN TRUST 1997-1
STUDENT LOAN ASSET BACKED CERTIFICATES
Exhibit A - Page 1
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of student loans sold to
the Trust by Crestar Bank.
THIS CERTIFIES THAT ________________ is the registered owner of a
_________________________ dollars non-assessable, fully-paid, fractional
undivided interest in the Crestar Student Loan Trust 1997-1 (the "Trust"), a
business trust formed under the laws of Delaware by Crestar Bank, (the
"Depositor"). The Trust was created pursuant to a Trust Agreement dated as of
December 1, 1997 (the "Trust Agreement") among the Depositor, Star Bank,
National Association, as eligible lender trustee (the "Eligible Lender
Trustee"), and Delaware Trust Capital Management, Inc., as Delaware trustee, a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in Annex A to the Trust Agreement; such Annex A
also contains rules as to usage that shall be applicable herein.
This Certificate is one of the duly authorized Certificates designated
as "Crestar Student Loan Trust 1997-1 Student Loan Asset Backed Certificates"
(herein called the "Trust Certificates") issued under the Trust Agreement, to
which Trust Agreement the holder of this Trust Certificate by virtue of the
acceptance hereof assents and by which such holder is bound. The property of the
Trust includes a pool of student loans (the "Financed Student Loans"), all
moneys paid thereunder on or after the Cut-off Date, certain bank accounts and
the proceeds thereof and certain other rights under the Trust Agreement and the
Transfer and Servicing Agreement and all proceeds of the foregoing. The rights
of the holders of the Trust Certificates to the assets of the Trust are
subordinated to the rights of the holders of the notes (the "Notes") issued
under a Master Indenture dated as of December 1, 1997 between the Trust and
Bankers Trust Company, as Indenture Trustee, as supplemented by a Terms
Supplement dated as of December 1, 1997.
Under the Trust Agreement, distributions will be made on the Trust
Certificates on each Quarterly Distribution Date in the manner set forth in the
Trust Agreement and the Transfer and Servicing Agreement.
Each holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate from
Available Funds and amounts on deposit in the Reserve Account are subordinated
to the rights of the Noteholders as described in the Transfer and Servicing
Agreement and the Indenture.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings, or other proceedings under any United
States federal or State bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes, the Trust Agreement
or any of the other Basic Documents.
Each Certificateholder, by its acceptance of a Trust Certificate, (i)
agrees, for federal, State and local income and franchise tax purposes, to treat
the Trust as a partnership, with the assets of the partnership being the
Financed Student Loans and other assets held by the Trust, the partners of the
partnership being the Certificateholders and the Depositor, and the Notes being
debt of the partnership (unless the Depositor elects to disregard the Trust as
an entity separate from itself for tax purposes), and (ii) acknowledges that the
Trust will file or cause to be filed annual or other necessary returns, reports
and other forms consistent with the characterization of the Trust as a
partnership for federal, State and local and franchise tax purposes (unless the
Depositor elects to disregard the Trust as an entity separate from itself for
tax purposes) and that the Depositor will not make, or cause to be made, an
election under the provisions of Treasury Regulation Section 301.7701.3 to
classify the Trust as an association.
Distributions on this Trust Certificate will be made as provided in the
Trust Agreement by the Eligible Lender Trustee by wire transfer or by check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Trust Certificate or the making of any
notation hereon.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized representative of the Eligible Lender Trustee or its
authenticating agent, by manual signature, this Trust Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or the
Transfer and Servicing Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Eligible Lender Trustee on behalf of the Trust
and not in its individual capacity has caused this Trust Certificate to be duly
executed as of the date set forth below.
CRESTAR STUDENT LOAN TRUST 1997-1
By: Star Bank, National Association, not in its
individual capacity but solely as Eligible Lender
Trustee,
By: _______________________________________________________
Authorized Signatory
Date:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
STAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee,
By:__________________________________
Authorized Representative
Date:
[Reverse of Trust Certificate]
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Administrator, the Eligible
Lender Trustee or any affiliates of any of them, and no recourse may be had
against such parties or their assets, except as may be expressly set forth
herein, in the Trust Agreement or in the other Basic Documents. In addition,
this Trust Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections
respecting the Financed Student Loans, all as more specifically set forth in the
Transfer and Servicing Agreement. A copy of each of the Transfer and Servicing
Agreement and the Trust Agreement may be examined during normal business hours
at the principal office of the Depositor, and at such other places, if any,
designated by the Depositor, by any Certificateholder upon request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Transferor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Eligible Lender Trustee with the consent of
the Majority Certificateholders. Any such consent by the holder of this Trust
Certificate shall be conclusive and binding on such holder and on all future
holders of this Trust Certificate and of any Trust Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon this Trust Certificate. The Trust Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by Star Bank, National
Association in its capacity as Certificate Registrar, or by any successor
Certificate Registrar, accompanied by a written instrument of transfer in form
satisfactory to the Eligible Lender Trustee and the Certificate Registrar duly
executed by the holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Trust Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee.
The Trust Certificates are issuable only as registered Trust
Certificates without coupons in minimum denominations of $10.00 and integral
multiples of $1.00 in excess thereof. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Trust Certificates are
exchangeable for new Trust Certificates of authorized denominations evidencing
the same percentage interest, as requested by the holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Eligible Lender Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Eligible Lender Trustee, the Certificate Registrar and any agent of
the Eligible Lender Trustee and the Certificate Registrar may treat the person
in whose name this Trust Certificate is registered as the owner hereof for all
purposes, and none of the Eligible Lender Trustee or the Certificate Registrar
or any such agent shall be affected by any notice to the contrary.
This Trust Certificate may not be transferred directly or indirectly to
(1) employee benefit plans, retirement arrangements, individual retirement
accounts or ▇▇▇▇▇ plans subject to either Title I of the Employee Retirement
Income Security Act of 1974, as amended, or Section 4975 of the Internal Revenue
Code of 1986, as amended, or (2) entities (including insurance company general
accounts) whose underlying assets include plan assets by reason of any such
plan's or account's investment in such entities. By accepting and holding this
Trust Certificate, the holder hereof shall be deemed to have represented and
warranted that it is not any of the foregoing entities.
This Trust Certificate may not be transferred to any person who is not
a U.S. Person, as such term is defined in Section 7701(a)(30) of the Internal
Revenue Code, as amended.
Each transferee of the Trust Certificates shall be required, prior to
purchasing a Trust Certificate, to execute the Purchaser's Representation and
Warranty Letter in the form attached to the Trust Agreement as Exhibit B.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the Transfer and Servicing Agreement and the disposition of all property held as
part of the Trust.
This Trust Certificate shall be construed in accordance with the laws
of the State of Delaware, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
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(Please print or type name and address, including postal zip code, of assignee)
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the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
______________________________________________________________________ Attorney
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
_________________________________*
Signature Guaranteed:
_________________________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by an approved eligible guarantor institution, an institution which
is a participant in a Securities Transfer Association recognized signature
guarantee program.
EXHIBIT B
TO THE
TRUST AGREEMENT
[Form of Purchaser's Representation and Warranty Letter]
Crestar Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Star Bank, National Association, as
Certificate Registrar
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: Crestar Student Loan Trust 1997-1 Student Loan Asset Backed
Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of Crestar Student Loan Trust
1997-1 Student Loan Asset Backed Certificates (the "Certificates") issued under
the Trust Agreement dated as of December 1, 1997 (the "Agreement"), between
Crestar Bank, as Depositor (the "Depositor"), Star Bank, National Association,
as Eligible Lender Trustee and Delaware Trust Capital Management Inc., as
Delaware trustee, the undersigned (the "Purchaser") represents, warrants and
agrees that:
1. It is an institutional "accredited investor" as defined in Rule
501(a)(1)-(3) under the Securities Act or a "qualified institutional buyer as
defined in Rule 144(a)(1) of the Securities Act" and is acquiring the
Certificates for its own institutional account or for the account of an
institutional accredited investor or qualified institutional buyer.
2. It is not (i) an employee benefit plan, retirement arrangement,
individual retirement account or ▇▇▇▇▇ plan subject to either Title I of the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended, or (ii) an entity (including an
insurance company general account) whose underlying assets include plan assets
by reason of any such plan's arrangements or account's investment in any such
entity.
3. It is a U.S. Person as defined in Section 7701(a)(30) of the Code.
4. It has such knowledge and experience in evaluating business and
financial matters so that it is capable of evaluating the merits and risks of an
investment in the Certificates. It understands the full nature and risks of an
investment in the Certificates and based upon its present and projected net
income and net worthy, it believes that it can bear the economic risk of an
immediate or future loss of its entire investment in the Certificates.
5. It understands that the Certificates will be offered in a
transaction not involving any public offering within the meaning of the
Securities Act, and that, if in the future it decides to resell, pledge or
otherwise transfer any Certificates, such Certificates may be resold, pledged or
transferred only (a) to a person who the seller reasonably believes is an
institutional "accredited investor" as defined in Rule 501(a)(1)-(3) under the
Securities Act that purchases for its own account or for the account of another
institutional accredited investor or (b) pursuant to an effective registration
statement under the Securities Act.
6. It understands that each Trust Certificate will bear a legend
substantially to the following effect:
"THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING
THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS AND (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(a)(1)-(3) UNDER
THE ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN
INSTITUTIONAL ACCREDITED INVESTOR, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT.
THIS CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1) EMPLOYEE
BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS OR ▇▇▇▇▇
PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL ACCOUNTS) WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH PLAN'S ARRANGEMENTS
OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS TRUST CERTIFICATE MAY BE
TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE MEANING OF SECTION
7701(a)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
THE CERTIFICATES DO NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR ANY INTEREST IN
CRESTAR BANK, STAR BANK, NATIONAL ASSOCIATION OR DELAWARE TRUST CAPITAL
MANAGEMENT INC.
THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.
7. It is acquiring the Certificates for its own account and not with a
view to the public offering thereof in violation of the Securities Act (subject,
nevertheless, to the understanding that disposition of its property shall at all
times be and remain within its control).
8. It has been furnished with all information regarding the Trust and
Certificates which it has requested from the Trust and the Depositor.
9. Neither it nor anyone acting on its behalf has offered, transferred,
pledged, sold or otherwise disposed of any Certificate, any interest in any
Certificate or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of any Certificate, any interest
in any Certificate or any other similar security from, or otherwise approached
or negotiated with respect to any Certificate, any interest in any Certificate
or any other similar security with, any person in any manner or made any general
solicitation by means of general advertising or in any other manner, which would
constitute a distribution of the Certificates under the Securities Act or which
would require registration pursuant to the Securities Act nor will the it act,
nor has it authorized or will authorize any person to act, in such manner with
respect to any Certificate.
10. It is not an "affiliate" (within the meaning of Rule 144
under the Securities Act) of the Depositor.
Dated:_____________
Very truly yours,
----------------------------------
NAME OF PURCHASER
By:_______________________________
Name:_____________________________
Title:______________________________
NOTE: To be executed by an executive officer