Exhibit 4.2
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TRUST AGREEMENT
among
USA GROUP SECONDARY MARKET SERVICES, INC.,
as depositor,
SECONDARY MARKET COMPANY, INC.
and
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of April 1, 2000
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
ARTICLE II
Organization
SECTION 2.01. Name .......................................................... 1
SECTION 2.02. Office ........................................................ 1
SECTION 2.03. Purposes and Powers ........................................... 1
SECTION 2.04. Appointment of Eligible Lender Trustee ........................ 2
SECTION 2.05. Initial Capital Contribution of Trust Estate .................. 2
SECTION 2.06. Declaration of Trust .......................................... 3
SECTION 2.07. [Reserved.] ................................................... 3
SECTION 2.08. Title to Trust Property ....................................... 3
SECTION 2.09. Representations and Warranties of the Seller and the Company .. 3
SECTION 2.10. Tax Treatment ................................................. 4
SECTION 2.11. Liability of Noteholders ...................................... 4
ARTICLE III
Ownership
SECTION 3.01. Beneficial Ownership ......................................... 5
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.01. Prior Notice to Company with Respect to Certain Matters ....... 5
SECTION 4.02. Action by Company with Respect to Bankruptcy .................. 7
SECTION 4.03. Restrictions on Company's Power ............................... 7
ARTICLE V
Certain Duties
SECTION 5.01. No Segregation of Monies; No Interest ......................... 8
SECTION 5.02. Accounting and Reports to the Noteholders,
the Internal Revenue Service and Others ..................... 8
SECTION 5.03. Incentive Programs ............................................ 8
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.01. General Authority ............................................. 9
SECTION 6.02. General Duties ................................................ 9
SECTION 6.03. Action upon Instruction ....................................... 9
SECTION 6.04. No Duties Except as Specified in this Agreement,
the Loan Sale Agreement, the Servicing Agreement,
the Administration Agreement or in Instructions ..............11
SECTION 6.05. No Action Except under Specified Documents or Instructions ....11
SECTION 6.06. Restrictions ..................................................11
SECTION 6.07. Origination of Consolidation Loans during the
Revolving Period .............................................11
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.01. Acceptance of Trusts and Duties ...............................13
SECTION 7.02. Furnishing of Documents .......................................14
SECTION 7.03. Representations and Warranties ................................15
SECTION 7.04. Reliance; Advice of Counsel ...................................15
SECTION 7.05. Not Acting in Individual Capacity; Responsibility
to Secretary and Guarantors .................................16
SECTION 7.06. Eligible Lender Trustee Not Liable for Notes or Student
Loans .......................................................16
SECTION 7.07. Eligible Lender Trustee May Own Trust Notes ...................17
SECTION 7.08. Licenses ......................................................17
ARTICLE VIII
Compensation of Eligible Lender Trustee
SECTION 8.01. Eligible Lender Trustee's Fees and Expenses ...................17
SECTION 8.02. Payments to the Eligible Lender Trustee .......................17
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement ................................18
SECTION 9.02. [Reserved.] ...................................................18
ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION 10.01. Eligibility Requirements for Eligible Lender Trustee .........18
SECTION 10.02. Resignation or Removal of Eligible Lender Trustee ............19
SECTION 10.03. Successor Eligible Lender Trustee ............................20
SECTION 10.04. Merger or Consolidation of Eligible Lender Trustee ...........20
SECTION 10.05. Appointment of Co-Eligible Lender Trustee or Separate
Eligible Lender Trustee ....................................21
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments ...................................22
SECTION 11.02. No Legal Title to Trust Estate in Company ....................23
SECTION 11.03. Limitations on Rights of Others ..............................23
SECTION 11.04. Notices ......................................................24
SECTION 11.05. Severability .................................................24
SECTION 11.06. Separate Counterparts ........................................24
SECTION 11.07. Successors and Assigns .......................................24
SECTION 11.08. No Petition ..................................................24
SECTION 11.09. No Recourse ..................................................25
SECTION 11.10. Headings .....................................................25
SECTION 11.11. Governing Law ................................................25
SECTION 11.12. [Reserved] ...................................................25
SECTION 11.13. Third-Party Beneficiaries ....................................25
SECTION 11.14. Consents .....................................................26
EXHIBIT A Certificate of Trust of SMS Student Loan Trust 2000-B
TRUST AGREEMENT dated as of April 1,2000, among USA GROUP SECONDARY
MARKET SERVICES, INC., a Delaware corporation, as depositor (the "Seller"),
SECONDARY MARKET COMPANY, INC., a Delaware corporation (the "Company"), and BANK
ONE, NATIONAL ASSOCIATION, a national banking association, not in its individual
capacity but solely as eligible lender trustee (the "Eligible Lender Trustee").
The Seller, the Company and the Eligible Lender Trustee hereby agree
as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A to the Administration Agreement, dated as of April 1, 2000, among the
SMS Student Loan Trust 2000-B, as Issuer, the Seller, as Administrator, and
Bankers Trust Company, as Indenture Trustee, which also contains rules as to
construction and usage that shall be applicable herein.
ARTICLE II
Organization
SECTION 2.01. Name. The Trust created hereby shall be known as "SMS
Student Loan Trust 2000-B", 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 2.02. Office. The office of the Trust shall be in care of
the Eligible Lender Trustee at its Corporate Trust Office or at such other
address as the Eligible Lender Trustee may designate by written notice to the
Seller.
SECTION 2.03. Purposes and Powers. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and to sell the
Notes in one or more transactions;
(ii) with the proceeds of the sale of the Notes, to purchase the
Initial Financed Student Loans, to deposit the Reserve Account Initial
Deposit in the Reserve Account, to deposit the Prefunding Account Closing
Date Deposit in the Prefunding Account, and to pay the organizational,
start-up and transactional expenses of the Trust and to pay the balance to
the Seller pursuant to the Loan Sale Agreement;
(iii) to enter into any Swap Agreements;
(iv) to originate Consolidation Loans during the Revolving Period
pursuant to Section 6.07 hereof, to increase the principal balance of
Consolidation Loans by adding the principal balances of any related Add-on
Consolidation Loans to the principal balances of such Consolidation Loans,
to acquire and hold the Prefunded Loans to be conveyed to the Trust
pursuant to the Loan Sale Agreement, to acquire and hold any New Loans to
be conveyed to the Trust during the Revolving Period pursuant to the Loan
Sale Agreement and to acquire and hold any Serial Loans or other Student
Loans to be conveyed to the Trust subsequent to the Closing Date pursuant
to the Loan Sale Agreement;
(v) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture;
(vi) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(vii) 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
(viii) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Trust Estate and the making of distributions to the Noteholders and
the others specified in Section 2(d) of the Administration Agreement.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the other Basic Documents.
SECTION 2.04. Appointment of Eligible Lender Trustee. The Seller
hereby appoints the Eligible Lender Trustee as trustee of the Trust effective as
of the date hereof, to have all of the rights, powers and duties set forth
herein.
SECTION 2.05. Initial Capital Contribution of Trust Estate. The
Seller hereby sells, assigns, transfers, conveys and sets over to the Eligible
Lender Trustee, as of the date hereof, the sum of $1.00. The Eligible Lender
Trustee hereby acknowledges receipt in trust from the Seller, as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
Estate and shall be deposited in the Collection Account. The Seller shall pay
the organizational expenses of the Trust as they may arise or shall, upon the
request of the Eligible Lender Trustee, promptly reimburse the Eligible Lender
Trustee for any such expenses paid by the Eligible Lender Trustee.
SECTION 2.06. 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
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herein for the use and benefit of the Company, 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 trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such trust. Effective as of the
date hereof, the Eligible Lender Trustee shall have all rights, powers and
duties set forth herein and in the Business Trust Statute with respect to
accomplishing the purposes of the Trust. The Eligible Lender Trustee and the
Delaware Trustee shall file the Certificate of Trust with the Secretary of State
of the State of Delaware pursuant to ss. 3801 of the Business Trust Statute on
or before the Closing Date.
SECTION 2.07. [Reserved.]
SECTION 2.08. Title to Trust Property. Subject to the Indenture,
legal title to 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, however,
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 2.09. Representations and Warranties of the Seller and the
Company. (a) Each of the Company and the Seller hereby represents and warrants,
as to itself, to the Eligible Lender Trustee and any Swap Counterparties that:
(i) It is duly organized and validly existing as a corporation in
good standing under the laws of the jurisdiction of its incorporation,
with corporate power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
currently conducted (subject, with respect to the Seller and its Student
Loans, to the vesting of legal title thereto in Bank One, National
Association ("Bank One") or another eligible lender, as trustee for the
Seller).
(ii) It is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals in
all jurisdictions in which the ownership or lease of property or the
conduct of its business shall require such qualifications except where
failure to do so (both singly and in the aggregate) will not have a
material adverse effect on the conduct of its business, operations or
financial condition.
(iii) It has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms; and the execution,
delivery and performance of this Agreement have been duly authorized by it
by all necessary corporate action; the Seller has full power and authority
to transfer and assign the property to be transferred and assigned to, and
to be deposited with, the Trustee; and the Seller has duly authorized such
transfer and assignment to the Trust by all necessary corporate action.
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(iv) This Agreement constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization and similar laws relating to
creditors' rights generally and subject to general principles of equity.
(v) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, its
certificate of incorporation or by-laws, or any indenture, agreement or
other instrument to which it is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the best of its knowledge, any order, rule or regulation
applicable to it of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over it or its properties.
(vi) There are no proceedings or investigations pending or, to its
best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by it of its obligations under, or the validity or
enforceability of, this Agreement.
SECTION 2.10. Tax Treatment. The Seller and the Company have entered
into this Agreement, and the Notes will be issued to and acquired by the
Noteholders, with the intention that, for federal, state, foreign and local
income and franchise tax and usury law purposes, the Notes will be indebtedness
of the Company secured by the Trust Estate. Each of the Seller and the Company,
by entering into this Agreement, and each Noteholder, by the acceptance of its
Note, agrees to treat the Notes for purposes of federal, state and local income
and franchise taxes and for any other tax imposed on or measured by income and
usury law purposes as indebtedness of the Company secured by the Trust Estate.
In accordance with the foregoing, the Eligible Lender Trustee hereby agrees to
treat the Trust as a security device only, and shall not file tax returns or
obtain an employer identification number on behalf of the Trust (except as may
be required as a result of changes in law or as may otherwise be required in the
Opinion of Counsel for the Company).
SECTION 2.11. Liability of Noteholders. No Noteholder shall have any
personal liability or obligation to or for the Trust and the Certificate of
Trust shall be fully paid and nonassessable.
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ARTICLE III
Ownership
SECTION 3.01. Beneficial Ownership. Upon the formation of the Trust
by the contribution by the Seller pursuant to Section 2.05, the Seller shall be
the sole beneficial owner of the Trust. Concurrently with the transfer of the
Initial Financed Student Loans to the Eligible Lender Trustee on behalf of the
Trust pursuant to the Loan Sale Agreement, the Seller does hereby irrevocably
assign to the Company all of its right, title and interest in and to the Trust,
and thereupon (subject to the Company's right to transfer pursuant to the next
succeeding sentence) the Company shall be the sole beneficial owner of the
Trust. For so long as any Notes remain Outstanding, the Company shall not
Transfer its ownership interest in the Trust, in whole or in part, unless (i)
either (A) the Company shall have delivered to the Eligible Lender Trustee, the
Indenture Trustee and any Swap Counterparties an Opinion of Counsel (with a copy
to the Rating Agencies) that neither the Trust nor the Company would be
consolidated with the purchaser of such ownership interest in the event of an
Insolvency Event with respect to such purchaser or (B) the Rating Agency
Condition is satisfied with respect to such Transfer, (ii) the Company shall
have delivered to the Eligible Lender Trustee, the Indenture Trustee and any
Swap Counterparties an Opinion of Counsel that such transaction will not result
in a material adverse federal or Indiana or Delaware state tax consequence to
the Issuer or the Noteholders, and (iii) there is delivered to the Eligible
Lender Trustee and the Indenture Trustee an Opinion of Counsel, in form and
substance satisfactory to them, that such Transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
Securities Act and under applicable state securities laws.
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.01. Prior Notice to Company with Respect to Certain
Matters. With respect to the following matters, neither the Eligible Lender
Trustee nor the Delaware Trustee shall take any action unless at least 30 days
before the taking of such action, the Eligible Lender Trustee or the Delaware
Trustee shall have notified the Company, the Rating Agencies and any Swap
Counterparties in writing of the proposed action and neither the Company nor the
Swap Counterparty shall have notified the Eligible Lender Trustee in writing
prior to the 30th day after such notice is given that the Company or any Swap
Counterparties has withheld consent or the Company has provided alternative
direction:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection of
the Financed Student Loans) and the compromise of any material action,
claim or lawsuit brought by or against the Trust (except with respect to
the aforementioned claims or lawsuits for collection of Financed Student
Loans);
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(b) the election by the Trust to file an amendment to the
Certificate of Trust;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder or any Swap
Counterparties is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder or any Swap
Counterparties is not required and such amendment materially adversely
affects the interests of the Company;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially
adversely affect the interests of the Company; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar or Indenture Trustee, or the consent to the assignment by the
Note Registrar or Indenture Trustee of its obligations under the
Indenture.
(g) the consent to the calling or waiver of any default under any
Basic Document;
(h) the consent to the assignment by the Indenture Trustee or the
Servicer of their respective obligations under any Basic Document;
(i) except as provided in Article IX hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(j) merge or consolidate the Trust with or into any other entity, or
convey or transfer all or substantially all of the Trust's assets to any
other entity;
(k) cause the Trust to incur, assume or guaranty any indebtedness
other than as set forth in this Agreement or the other Basic Documents;
(l) do any act that conflicts with any other Basic Document;
(m) do any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.03 hereof,
(n) confess a judgment against the Trust;
(o) possess Trust assets, or assign the Trust's right to property,
for other than a Trust purpose;
(p) cause the Trust to lend any funds to any entity; or
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(q) change the Trust's purpose and powers from those set forth in
this Agreement.
In addition the Trust shall not commingle its assets with those of any
other entity. The Trust shall maintain its financial and accounting books and
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness, operating expenses and liabilities
from its own funds, and the Trust shall not pay the indebtedness, operating
expenses and liabilities of any other entity. The Trust shall maintain
appropriate minutes or other records of all appropriate actions and shall
maintain its office separate from the offices of the Seller, the Company and
Loan Services.
Neither the Eligible Lender Trustee nor the Delaware Trustee shall have
the power, except upon the direction of the Company with the consent of any Swap
Counterparties, and to the extent otherwise consistent with the Basic Documents,
to (i) remove or replace the Servicer or the Indenture Trustee, (ii) institute
proceedings to have the Trust declared or adjudicated a bankrupt or insolvent,
(iii) consent to the institution of bankruptcy or insolvency proceedings against
the Trust, (iv) file a petition or consent to a petition seeking reorganization
or relief on behalf of the Trust under any applicable federal or state law
relating to bankruptcy, (v) consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or any similar official) of the
Trust or a substantial portion of the property of the Trust, (vi) make any
assignment for the benefit of the Trust's creditors, (vii) cause the Trust to
admit in writing its inability to pay its debts generally as they become due,
(viii) take any action, or cause the Trust to take any action, in furtherance of
any of the foregoing (any of the above, a "Bankruptcy Action"). So long as the
Indenture and the Insurance Agreement remain in effect, the Company shall not
have the power to take, and shall not take, any Bankruptcy Action with respect
to the Trust or direct the Eligible Lender Trustee to take any Bankruptcy Action
with respect to the Trust.
SECTION 4.02. Action by Company with Respect to Bankruptcy. The
Eligible Lender Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the prior approval of the
Company and the delivery to the Eligible Lender Trustee by the Company of a
certificate certifying that it reasonably believes that the Trust is insolvent.
SECTION 4.03. Restrictions on Company's Power. The Company shall not
direct the Eligible Lender Trustee to take or refrain from taking any action if
such action or inaction would be contrary to any obligations of the Trust or the
Eligible Lender Trustee under the Higher Education Act, this Agreement or any of
the other Basic Documents or would be contrary to Section 2.03 nor shall the
Eligible Lender Trustee be permitted to follow any such direction, if given.
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ARTICLE V
Certain Duties
SECTION 5.01. No Segregation of Monies; No Interest. Monies received
by the Eligible Lender Trustee hereunder need not be segregated in any manner
except to the extent required by law or the Basic Documents and may be deposited
under such general conditions as may be prescribed by law, and the Eligible
Lender Trustee shall not be liable for any interest thereon.
SECTION 5.02. Accounting and Reports to the Noteholders, the
Internal Revenue Service and Others. No federal income tax return shall be filed
on behalf of the Trust unless either (i) the Eligible Lender Trustee shall
receive an Opinion of Counsel that, based on a change in applicable law
occurring after the date hereof, or as a result of a transfer by the Company
permitted by Section 3.01, the Code requires such a filing or (ii) the Internal
Revenue Service shall determine that the Trust is required to file such a
return. In the event that the Trust is required to file tax returns, the
Eligible Lender Trustee shall prepare or shall cause to be prepared any tax
returns required to be filed by the Trust and shall remit such returns to the
Company at least five (5) days before such returns are due to be filed. The
Company shall promptly sign such returns and deliver such returns after
signature to the Eligible Lender Trustee and such returns shall be filed by the
Eligible Lender Trustee with the appropriate tax authorities. In no event shall
the Eligible Lender Trustee, the Company or the Seller be liable for any
liabilities, costs or expenses of the Trust or the Noteholders arising out of
the application of any tax law, including federal, state, foreign or local
income or excise taxes or any other tax imposed on or measured by income (or any
interest, penalty or addition with respect thereto or arising from a failure to
comply therewith) except for any such liability, cost or expense attributable to
any act or omission by the Eligible Lender Trustee, the Company or the Seller,
as the case may be, in breach of its obligations under this Agreement.
SECTION 5.03. Incentive Programs. Subject to compliance by the
Administrator with Section 2(i) of the Administration Agreement, the Trust shall
offer each Incentive Program to all qualified Borrowers except any Incentive
Program which the Administrator terminates pursuant to Section 2(i) of the
Administration Agreement. Upon the effective date specified in the notice of
termination required by Section 2(i) of the Administration Agreement, the Trust
shall cease offering the terminated Incentive Program to Borrowers affected by
the termination.
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ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.01. General Authority. The Eligible Lender Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is to be a
party, in each case, in such form as the Seller 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 Class
A-1 Notes in the aggregate principal amount of $200,000,000, Class A-2 Notes in
the aggregate principal amount of $958,000,000 and Subordinate Notes in the
aggregate principal amount of $42,000,000. The Eligible Lender Trustee is also
authorized and directed on behalf of the Trust (i) to acquire and hold legal
title to the Financed Student Loans from the Seller and (ii) to take all actions
required pursuant to Section 3.02(c) of the Servicing Agreement, and otherwise
follow the direction of and cooperate with the Servicer in submitting, pursuing
and collecting any claims to and with the Department with respect to any
Interest Subsidy Payments and Special Allowance Payments relating to the
Financed Student Loans.
In addition to the foregoing, the Eligible Lender Trustee is authorized,
but shall not be obligated, to take all actions required of the Trust pursuant
to the Basic Documents. The Eligible Lender Trustee is further authorized from
time to time to take such action as the Administrator directs or instructs with
respect to the Basic Documents and is directed to take such action to the extent
that the Administrator is expressly required pursuant to the Basic Documents to
cause the Eligible Lender Trustee to act.
SECTION 6.02. General Duties. It shall be the duty of the Eligible
Lender Trustee to discharge (or cause to be discharged) all its responsibilities
pursuant to the terms of this Agreement and the other Basic Documents to which
the Trust is a party and to administer the Trust, 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 6.03. Action upon Instruction. (a) Subject to Article IV,
Section 7.01 and in accordance with the terms of the Basic Documents, the
Company may by written instruction direct the Eligible Lender Trustee in the
management of the Trust. Such direction may be exercised at any time by written
instruction of the Company pursuant to Article IV.
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(b) The Eligible Lender Trustee shall not be required to take any
action hereunder or under any other Basic Document if the Eligible Lender
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Eligible
Lender Trustee or is contrary to the terms hereof or of any other Basic Document
or is otherwise contrary to law.
(c) Whenever the Eligible Lender Trustee is unable to determine the
appropriate course of action between alternative courses of action permitted or
required by the terms of this 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 Company 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 of the
Company received, the Eligible Lender Trustee shall not be liable on account of
such action to any Person. If the Eligible Lender Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or the
other Basic Documents, as it shall deem to be in the best interests of the
Company, and shall have no liability to any Person for such action or inaction.
(d) In the event that the Eligible Lender Trustee is unsure as to
the application of any provision of this Agreement or any other Basic Document
or any such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Eligible Lender Trustee or is silent
or is incomplete as to the course of action that the Eligible Lender Trustee is
required to take with respect to a particular set of facts, the Eligible Lender
Trustee may give notice (in such form as shall be appropriate under the
circumstances) to the Company and any Swap Counterparties requesting instruction
from the Company and, to the extent that the Eligible Lender Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Eligible Lender Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Eligible Lender Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or the
other Basic Documents, as it shall deem to be in the best interests of the
Company and shall have no liability to any Person for such action or inaction.
(e) Upon the satisfaction of the Rating Agency Swap Condition, if
the Administrator so directs, the Eligible Lender Trustee shall enter into, from
time to time, Swap Agreements. Upon satisfaction of the Rating Agency Swap
Condition, if the Administrator directs, the Eligible Lender Trustee shall enter
into an amendment to a Swap Agreement with a Swap Counterparty for the sole
purpose to cure any ambiguity to the Swap Agreement or to change the notional
amount of a Swap Agreement. Notwithstanding the foregoing, the cumulative
notional amount of any Swap Agreements may never exceed the outstanding
principal balance of the Notes.
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SECTION 6.04. No Duties Except as Specified in this Agreement, the
Loan Sale Agreement, the Servicing Agreement, the Administration 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 Loan Sale Agreement, the
Servicing Agreement, the Administration Agreement or in any document or written
instruction received by the Eligible Lender Trustee pursuant to Section 6.03;
and no implied duties or obligations shall be read into this 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, Bank One, 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 6.05. No Action Except under Specified Documents or
Instructions. The Eligible Lender Trustee shall not manage, control, use, sell,
service, dispose of or otherwise deal with any part of the Trust Estate except
(i) in accordance with the powers granted to and the authority conferred upon
the Eligible Lender Trustee pursuant to this Agreement, (ii) in accordance with
the other Basic Documents to which it is a party and (iii) in accordance with
any document or instruction delivered to the Eligible Lender Trustee pursuant to
Section 6.03.
SECTION 6.06. Restrictions. The Eligible Lender Trustee shall not
take any action (a) that is inconsistent with the purposes of the Trust set
forth in Section 2.03 or (b) that, to the actual knowledge of the Eligible
Lender Trustee, would result in the Trust's becoming taxable as a corporation
for Federal income tax purposes. The Company shall not direct the Eligible
Lender Trustee to take action that would violate the provisions of this Section.
SECTION 6.07. Origination of Consolidation Loans during the
Revolving Period. (a) From time to time during the Revolving Period the Servicer
will identify those Financed Student Loans as to which a Borrower qualifies to
receive a Consolidation Loan under the Federal Consolidation Loan Program from
the Eligible Lender Trustee and will inform the Administrator of the identity of
such loans. The Administrator will determine, in accordance with customary
industry standards, whether a Consolidation Loan should be offered to such
Borrower; provided, however, that a Consolidation Loan will not be offered to a
Borrower if any Student Loan of such Borrower which is not beneficially owned by
the Issuer and which is proposed to be discharged by the making of such
Consolidation Loan is past due more than 30 days; and provided, further, that a
Consolidation Loan will not be offered to a Borrower if the aggregate principal
balances of all Consolidation Loans originated pursuant to this Section would
thereby exceed the limitations set forth in Section 6.07(d).
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(b) If the Administrator determines that it is appropriate to offer
a Consolidation Loan to a Borrower in accordance with this Section, it will so
inform the Servicer who will send the necessary documentation to such Borrower
and will process such documentation on behalf of the Eligible Lender Trustee,
all in accordance with industry standards, the Higher Education Act and the
related Guarantee Agreement. The Servicer will inform the Eligible Lender
Trustee of the completion of the loan underwriting process and the necessary
documentation, whereupon the Eligible Lender Trustee, on behalf of the Trust and
upon the direction of the Administrator, will execute any documents required to
be executed by it to complete the origination of such loan and to subject such
loan to the related Guarantee Agreement. The Servicer will not permit any
Consolidation Loan to be originated which would violate the representations and
warranties and other restrictions of Section 3.01 of the Loan Sale Agreement.
Any Consolidation Loan which is determined to violate any of such
representations and warranties and other restrictions will be subject to
purchase or repurchase by the Seller as provided in Section 3.02 of the Loan
Sale Agreement.
(c) Each Consolidation Loan originated pursuant to this Section 6.07
shall be owned by the Issuer and be part of the Trust Estate and the Collateral
from and after the time of such origination. Upon origination of such loan and
such loan becoming part of the Trust Estate and the Collateral, the
Administrator will instruct the Indenture Trustee, pursuant to Section 2(f) or
Section 2(k) of the Administration Agreement, to authorize the transfer from the
Collateral Reinvestment Account or the Prefunding Account of an amount
sufficient to prepay in full any Student Loan that is to be consolidated through
such origination, including any Add-on Consolidation Loan that is prepaid in
full as a result of the principal balance of such Add-on Consolidation Loan
being added to the principal balance of a related Consolidation Loan held as
part of the Trust Estate. The Administrator will cause to be taken all actions,
and the Eligible Lender Trustee will cooperate with the Administrator in the
execution of any instruments or documents, required to establish and maintain
the ownership interest of the Trust and the first perfected security interest of
the Indenture Trustee in each Consolidation Loan originated pursuant to this
Section.
(d) In no event shall the Issuer or the Eligible Lender Trustee on
behalf of the Issuer originate Consolidation Loans in excess of $100,000,000
(including the addition of the principal balances of any Add-on Consolidation
Loans) in the aggregate during the Revolving Period; additionally, no
Consolidation Loan may be originated by the Issuer or the Eligible Lender
Trustee on behalf of the Issuer having a scheduled maturity after April 28, 2032
if at the time of such origination the aggregate principal balance of all
Consolidation Loans held as part of the Trust Estate that have a scheduled
maturity date after April 28, 2032 exceeds, or after giving effect to such
origination, would exceed $15,000,000; provided, however, that the Eligible
Lender Trustee will be permitted to fund the addition of the principal balance
of any Add-on Consolidation Loan in excess of such amounts, if the Eligible
Lender Trustee is required to do so by the Higher Education Act. In addition, in
no event shall the Issuer or the Eligible Lender Trustee on behalf of the Issuer
make Consolidation Loans after the Revolving Period; provided, however, that the
Eligible Lender Trustee may increase the principal balance of any Consolidation
Loan by the principal balance of any related Add-on Consolidation Loan during
the Add-on Period if the Eligible Lender Trustee is required to do so by the
Higher Education
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Act. After the Revolving Period, upon the addition of the principal balance of
such Add-on Consolidation Loan, and such amounts becoming part of the Trust
Estate and the Collateral, the Administrator will instruct the Indenture
Trustee, pursuant to Section 2(d)(iii)(A) of the Administration Agreement, to
authorize the transfer from the Collection Account of an amount sufficient to
prepay in full such Add-on Consolidation Loan.
(e) All Consolidation Fees payable with respect to Consolidation
Loans originated and the principal balances of any Add-on Consolidation Loans
added to the Trust pursuant to this Section will be payable by the Issuer as
provided in Section 2(d)(ii) of the Administration Agreement. All other costs or
fees incurred in originating Consolidation Loans (or in adding the principal
balances of any Add-on Consolidation Loans) shall be payable by the
Administrator.
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.01. Acceptance of Trusts and Duties. The Eligible Lender
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Eligible Lender Trustee also agrees to disburse all monies actually received
by it constituting part of the Trust Estate upon the terms of this Agreement and
the other Basic Documents. The Eligible Lender Trustee shall not be answerable
or accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful misconduct or negligence or (ii)
in the case of the inaccuracy of any representation or warranty contained in
Section 7.03 expressly made by the Eligible Lender Trustee. In particular, but
not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
(a) the Eligible Lender Trustee shall not be liable for any error of
judgment made by a responsible officer of the Eligible Lender Trustee;
(b) the Eligible Lender Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
direction or instructions of the Administrator or the Company;
(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;
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(d) under no circumstances shall the Eligible Lender Trustee be
liable for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
(e) the Eligible Lender Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Seller 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, and the
Eligible Lender Trustee shall in no event assume or incur any liability,
duty, or obligation to any Noteholder or to the Company, other than as
expressly provided for herein and in the other Basic Documents;
(f) the Eligible Lender Trustee shall not be liable for the action
or inaction, default or misconduct of the Administrator, the Seller, the
Indenture Trustee or the Servicer under any of the other Basic Documents
or otherwise and the Eligible Lender Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Agreement or
the other Basic Documents that are required to be performed by the
Administrator under the Administration Agreement, the Indenture Trustee
under the Indenture or the Servicer under the Servicing Agreement; and
(g) the Eligible Lender Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any other Basic Document, at
the request, order or direction of the Company, unless the Company has
offered to the Eligible Lender Trustee security or indemnity satisfactory
to it against the costs, expenses and liabilities that may be incurred by
the Eligible Lender Trustee therein or thereby. The right of the Eligible
Lender Trustee to perform any discretionary act enumerated in this
Agreement or in any other Basic Document shall not be construed as a duty,
and the Eligible Lender Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any such act.
SECTION 7.02. Furnishing of Documents. The Eligible Lender Trustee
shall furnish to the Company and each Swap Counterparty, if any, promptly upon
receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Eligible Lender Trustee under the Basic Documents.
SECTION 7.03. Representations and Warranties. The Eligible Lender
Trustee hereby represents and warrants to each of the Seller, the Company and
any Swap Counterparties, 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.
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(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will
contravene any federal or 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, for purposes of holding legal title to
the Financed Student Loans and originating Consolidation Loans as
contemplated by this Agreement and the other Basic Documents, has obtained
a lender identification number with respect to the Trust from the
Department, has in effect a Guarantee Agreement with the Initial Guarantor
with respect to the Initial Financed Student Loans and will have the
requisite power and authority to enter into Guarantee Agreements with
Additional Guarantors, if any.
(e) In originating each Consolidation Loan on behalf of the Trust,
as provided in Section 6.07, it shall comply with all applicable
provisions of the Higher Education Act, and it will not create or cause to
be created any lien, charge or encumbrance on any such Consolidation Loan
or in any way cause the Trust to not have good title thereto.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Eligible Lender
Trustee shall incur no liability to anyone in acting upon any signature,
instrument, direction, notice, resolution, request, consent, order, certificate,
report, opinion, bond, or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. The Eligible
Lender Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Eligible Lender Trustee may
for all purposes hereof rely on a certificate, signed by the president or any
vice president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Eligible Lender Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Basic Documents, the Eligible Lender Trustee (i) may act directly or through its
agents or attorneys pursuant to agreements entered into with any of them, and
the Eligible Lender Trustee shall not be liable for the conduct or misconduct of
such agents or attorneys if such agents or attorneys shall have been selected by
the Eligible Lender Trustee with reasonable care, and (ii) may consult with
counsel,
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accountants and other skilled persons to be selected with reasonable care and
employed by it. The Eligible Lender Trustee shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the written
opinion or advice of any such counsel, accountants or other such persons and not
contrary to this Agreement or any other Basic Document.
SECTION 7.05. Not Acting in Individual Capacity; Responsibility to
Secretary and Guarantors. Except as provided in this Article VII, in accepting
the trusts hereby created, Bank One, 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.
Notwithstanding any other provision in this Agreement or the other
Basic Documents, nothing in this Agreement or the other Basic Documents shall be
construed to limit the legal responsibility of the Eligible Lender Trustee or
the Indenture Trustee, to the U.S. Secretary of Education or a Guarantor for any
violations of statutory or regulatory requirements that may occur with respect
to loans held by the Eligible Lender Trustee or the Indenture Trustee pursuant
to, or to otherwise comply with their obligations under, the Higher Education
Act or implementing regulations.
SECTION 7.06. Eligible Lender Trustee Not Liable for Notes or
Student Loans. The recitals contained herein (other than the representations and
warranties in Section 7.03) shall be taken as the statements of the Seller, 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 or any other Basic Document or the Notes, or of
any Financed Student Loan or related documents. The Eligible Lender Trustee
shall at no time have any responsibility (or liability except for willfully or
negligently terminating or allowing to be terminated either of the Guarantee
Agreements, in a case where the Eligible Lender Trustee knows of any facts or
circumstances which will or could reasonably be expected to result in any such
termination) for or with respect to the legality, validity, enforceability and
eligibility for Guarantee Payments, Interest Subsidy Payments or Special
Allowance Payments, as applicable, of any Financed Student Loan, or for or with
respect to the sufficiency of the Trust Estate or its ability to generate the
payments to be distributed to the Noteholders under the Indenture, including:
the existence and contents of any computer or other record of any Financed
Student Loan; the validity of the assignment of any Financed Student Loan to the
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 Seller or the Servicer with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation or any action or
inaction of the Administrator, the Indenture Trustee or the Servicer or any
subservicer taken in the name of the Eligible Lender Trustee.
SECTION 7.07. Eligible Lender Trustee May Own Trust Notes. The
Eligible Lender Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may deal with the Seller, the Administrator, the
Indenture Trustee and the Servicer in
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banking transactions with the same rights as it would have if it were not the
Eligible Lender Trustee.
SECTION 7.08. Licenses. The Eligible Lender Trustee shall cause the
Trust to use its best efforts to obtain and maintain the effectiveness of any
licenses required in connection with this Agreement and the other Basic
Documents and the transactions contemplated hereby and thereby until such time
as the Trust shall terminate in accordance with the terms hereof. The Eligible
Lender Trustee shall receive from the Administrator the information necessary to
comply with this Section.
ARTICLE VIII
Compensation of Eligible Lender Trustee
SECTION 8.01. 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
Seller and the Eligible Lender Trustee, and the Eligible Lender Trustee shall be
entitled to be reimbursed by the Seller for its other reasonable expenses
hereunder, including the reasonable compensation, expenses and disbursements of
such agents, representatives, experts and counsel as the Eligible Lender Trustee
may employ in connection with the exercise and performance of its rights and
duties hereunder. The Eligible Lender Trustee shall have no recourse to the
Issuer for its fees and expenses hereunder.
SECTION 8.02. Payments to the Eligible Lender Trustee. Any amounts
paid to the Eligible Lender Trustee pursuant to Section 8.01 hereof or pursuant
to Section 4.03 of the Loan Sale Agreement or pursuant to Section 24 of the
Administration Agreement shall be deemed not to be a part of the Trust Estate
immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect upon the earlier of (i) the final distribution by the Eligible
Lender Trustee of all monies or other property or proceeds of the Trust Estate
in accordance with the terms of the Indenture and the Servicing Agreement and
the termination of the Indenture and (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. James's, living on the date
hereof.
(b) Neither the Seller nor the Company shall be entitled to revoke
or terminate the Trust.
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(c) Notice of any termination of the Trust, shall be given promptly
by the Eligible Lender Trustee by letter to the Company and any Swap
Counterparties mailed within five Business Days of receipt of notice of such
termination from the Administrator given pursuant to Section 2(b)(vii) of the
Administration Agreement.
(d) Upon the winding up of the Trust and its termination, the
Eligible Lender Trustee shall cause the Certificate of Trust to be canceled by
filing a certificate of cancellation with the Secretary of State of the State of
Delaware in accordance with the provisions of Section 3810 of the Business Trust
Statute.
SECTION 9.02. [Reserved.]
ARTICLE X
Successor Eligible Lender Trustees and Additional Eligible Lender Trustees
SECTION 10.01. Eligibility Requirements for Eligible Lender Trustee.
The Eligible Lender Trustee shall at all times be a corporation or association
(i) qualifying as an "eligible lender" as such term is defined in Section 435(d)
of the Higher Education Act for purposes of holding legal title to the Financed
Student Loans and originating Consolidation Loans on behalf of the Trust, with a
valid lender identification number with respect to the Trust from the
Department; (ii) being authorized to exercise corporate trust powers and hold
legal title to the Financed Student Loans; (iii) having in effect Guarantee
Agreements with the Initial Guarantor and any Additional Guarantors; (iv) having
a combined capital and surplus of at least $50,000,000 and being subject to
supervision or examination by Federal or state authorities; and (v) having (or
having a parent which has) a rating of at least "Baa3" by ▇▇▇▇▇'▇, "BBB" by S&P,
if rated by S&P and "BBB" by Fitch, if rated by Fitch. If the Eligible Lender
Trustee shall publish reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purpose of this Section, the combined capital and surplus of the
Eligible Lender Trustee shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. In case at any
time the Eligible Lender Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Eligible Lender Trustee shall resign
immediately in the manner and with the effect specified in Section 10.02. In
addition, at all times the Trustee or a co-trustee shall be a Person that
satisfies the requirements of Section 3807(a) of the Business Trust Statute (the
"Delaware Trustee").
SECTION 10.02. 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
any Swap Counterparties. Upon receiving such notice of resignation, the
Administrator shall promptly appoint a successor Eligible Lender Trustee meeting
the eligibility requirements of Section 10.01 by written instrument, in
duplicate, one copy of which instrument shall be delivered to the resigning
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Eligible Lender Trustee and one copy to the successor Eligible Lender Trustee.
If no successor Eligible Lender Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Eligible Lender Trustee may petition any court of
competent jurisdiction for the appointment of a successor Eligible Lender
Trustee; provided, however, that such right to appoint or to petition for the
appointment of any such successor shall in no event relieve the resigning
Eligible Lender Trustee from any obligations otherwise imposed on it under the
Basic Documents until such successor has in fact assumed such appointment.
If at any time the Eligible Lender Trustee shall cease to be
eligible in accordance with the provisions of Section 10.01 and shall fail to
resign after written request therefor by the Administrator, or if at any time
the Eligible Lender Trustee shall be legally unable to act, or an Insolvency
Event with respect to the Eligible Lender Trustee shall have occurred and be
continuing, then the Administrator may remove the Eligible Lender Trustee. If
the Administrator shall remove the Eligible Lender Trustee under the authority
of the immediately preceding sentence, the Administrator shall promptly appoint
a successor Eligible Lender Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the outgoing Eligible Lender
Trustee so removed and one copy to the successor Eligible Lender Trustee and
payment of all fees owed to the outgoing Eligible Lender Trustee.
Any resignation or removal of the Eligible Lender Trustee and
appointment of a successor Eligible Lender Trustee pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee pursuant to Section 10.03
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 any Swap Counterparties and to each of the
Rating Agencies.
SECTION 10.03. Successor Eligible Lender Trustee. Any successor
Eligible Lender Trustee appointed pursuant to Section 10.02 shall execute,
acknowledge and deliver to the Administrator, 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, monies and
properties held by it under this Agreement and shall assign, if permissible, to
the successor Eligible Lender Trustee the lender identification number obtained
from the Department on behalf of the Trust; and the Administrator and the
predecessor Eligible Lender Trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor Eligible Lender Trustee all such rights,
powers, duties and obligations.
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No successor Eligible Lender Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Eligible Lender Trustee shall be eligible pursuant to Section 10.01.
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 the Company, the Indenture Trustee,
the Noteholders, the Rating Agencies and any Swap Counterparties. 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 10.04. 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 10.01; provided further that
the Eligible Lender Trustee shall mail notice of such merger or consolidation to
the Rating Agencies and any Swap Counterparties not less than 10 Business Days
prior to the closing date of such merger or consolidation.
SECTION 10.05. 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 (and with written
notice to any Swap Counterparties) shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Eligible
Lender Trustee, which, except in the case of any Delaware Trustee, shall meet
the eligibility requirements of clauses (i) through (iii) of Section 10.01, to
act as co-trustee, jointly with the Eligible Lender Trustee, or separate trustee
or separate trustees, of all or any part of the Trust Estate, and to vest in
such Person, in such capacity, such title to the Trust Estate, or any part
thereof, and, subject to 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. Pursuant to the Co-Trustee Agreement, dated as of May 17, 2000
between Bank One, National Association and Bank One Delaware, Inc. the Eligible
Lender Trustee shall appoint Bank One Delaware, Inc. as a co-trustee hereunder
for the purpose of its acting as Delaware Trustee and such agreement is hereby
incorporated herein by reference. If the Delaware Trustee shall become incapable
of acting, resign or be removed, unless the Trustee is qualified to act as
Delaware Trustee, a successor co-trustee shall promptly be appointed in the
manner specified in this Section 10.05 to act as Delaware Trustee. No co-trustee
or separate trustee under this Agreement shall be required to meet the terms of
eligibility as a successor
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trustee pursuant to clauses (iv) and (v) of Section 10.01 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or imposed
upon the Eligible Lender Trustee shall be conferred upon and exercised or
performed by the Eligible Lender Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Eligible Lender
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed,
the Eligible Lender Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, solely at the direction of the
Eligible Lender Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Administrator and the Eligible Lender Trustee acting
jointly may at any time accept the resignation of or remove any separate
trustee or 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
and any Swap Counterparties.
Any separate trustee or co-trustee may at any time appoint the
Eligible Lender Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Eligible Lender Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee, except as otherwise
provided in this Section 10.05 in regard to the Delaware Trustee.
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ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments. This Agreement may be
amended by the Seller, the Company and the Eligible Lender Trustee, with the
prior written consent of any Swap Counterparties and with prior written notice
to the Rating Agencies, without the consent of any of the Noteholders, 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; 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.
This Agreement may also be amended from time to time by the Seller,
the Company and the Eligible Lender Trustee, with prior written consent of any
Swap Counterparties and with prior written notice to the Rating Agencies, with
the consent of the Noteholders of Notes evidencing not less than a majority of
the Outstanding Amount of the Notes, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders; 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 (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and required to consent to any such amendment, without the
consent of all the outstanding Noteholders.
The Eligible Lender Trustee shall furnish 10 Business Days' prior
written notification of the substance of any such amendment or consent to the
Indenture Trustee, each of the Rating Agencies and any Swap Counterparties.
It shall not be necessary for the consent of 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 shall be
subject to such reasonable requirements as the Eligible Lender Trustee may
prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Eligible Lender Trustee shall cause the filing of such amendment with
the Secretary of State of the State of Delaware. The Eligible Lender Trustee
shall furnish the Rating Agencies and any Swap Counterparties with ten Business
Days' prior written notice of any amendment to the Certificate of Trust.
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
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Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Eligible Lender Trustee's own rights, duties or immunities under
this Agreement or otherwise.
SECTION 11.02. No Legal Title to Trust Estate in Company. The
Company shall not have legal title to any part of the Trust Estate. The Company
shall be entitled to receive distributions with respect to its ownership
interest therein only in accordance with the Indenture, the Administration
Agreement and the Servicing Agreement. No transfer, by operation of law or
otherwise, of any right, title, or interest of the Company to and in its
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. If, contrary to this Section, the Company is deemed to have legal title
to any part of the Trust Estate, the Company shall be deemed to have granted,
and in such event does hereby grant to the Issuer, a first priority security
interest in all of the Company's right, title and interest in the Trust Estate,
other than in the distributions referred to in the second sentence of this
Section 11.02, and this Agreement shall be deemed to constitute a security
agreement under applicable law with respect to the Trust Estate.
SECTION 11.03. Limitations on Rights of Others. Except for Section
2.07, the provisions of this Agreement are solely for the benefit of the
Eligible Lender Trustee, the Seller, the Company, the Administrator, any Swap
Counterparties and, to the extent expressly provided herein, the Indenture
Trustee and the Noteholders, and nothing in this Agreement (other than Section
2.07), 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 11.04. Notices. Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing (or in the form
of facsimile notice, followed by written notice) and shall be deemed given upon
receipt by the intended recipient, if to the Eligible Lender Trustee, addressed
to its Corporate Trust Office; if to the Seller, addressed to USA Group
Secondary Market Services, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: President and Chief Executive Officer (telephone:
▇▇▇-▇▇▇-▇▇▇▇; facsimile: 317-951-5764), with a copy to Office of the General
Counsel, USA Group, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇ (telephone: ▇▇▇-▇▇▇-▇▇▇▇; facsimile:
317-951-5532); if to the Company, addressed to Secondary Market Company, Inc.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: President
(telephone: ▇▇▇-▇▇▇-▇▇▇▇; facsimile: 317-951-5764), with a copy to USA Group
Secondary Market Services, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, and a copy to Office of the General Counsel, USA Group, Inc., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇ (telephone: ▇▇▇-▇▇▇-▇▇▇▇; facsimile: 317-951-5532); and if to any Swap
Counterparty, addressed to each Swap Counterparty at the address indicated in
the related Swap Agreement or, as to each party, at such other address as shall
be designated by such party in a written notice to each other party.
SECTION 11.05. Severability. Any provision of this Agreement that as
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the
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extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Seller,
the Company, the Eligible Lender Trustee and their respective successors and
permitted assigns, all as herein provided.
SECTION 11.08. No Petition. (a) The Seller will not at any time
institute against the Trust or the Company any bankruptcy proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Agreement or any of the other Basic
Documents.
(b) The Eligible Lender Trustee, by entering into this Agreement,
and the Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Seller, the Company or the Trust, or join in any institution against
the Seller, the Company 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 Notes, this Agreement or any
of the other Basic Documents.
(c) The Company will not at any time institute against the Trust or
the Seller or approve of the institution by the Eligible Lender Trustee of any
bankruptcy proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Agreement or any of the other Basic Documents.
SECTION 11.09. No Recourse. The Company acknowledges that its
ownership interest in the Trust represents a beneficial interest in the Trust
only and does not represent an interest in or obligation of the Seller, the
Servicer, the Seller, the Administrator, the Eligible Lender Trustee, the
Indenture Trustee or any Affiliate thereof or any officer, director or employee
of any thereof and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated in this Agreement 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
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provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
SECTION 11.12. Reserved.
SECTION 11.13. Third-Party Beneficiaries. The parties hereto
acknowledge that any Swap Counterparties are express third-party beneficiaries
hereof entitled to enforce the provisions hereof as if they were actual parties
hereto; provided, however, that such right to enforcement and the right to
provide consents or waivers pursuant to the provisions hereof or to take other
actions as provided herein are conditioned upon its not being in default under
the related Swap Agreements.
SECTION 11.14. Consents. With respect to any action to be taken
hereunder that requires the consent of a party hereto or of the Indenture
Trustee or any Swap Counterparties. such consent shall not be unreasonably
withheld, delayed or conditioned.
[Signatures Follow on Next Page]
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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.
BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
USA GROUP SECONDARY MARKET
SERVICES, INC., as depositor
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice president and Chief
Financial Officer
SECONDARY MARKET COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman of the Board, President
and Chief Executive Officer
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CERTIFICATE OF TRUST OF
SMS STUDENT LOAN TRUST 2000-B
THIS Certificate of Trust of SMS Student Loan Trust 2000-B (the "Trust"),
dated as of May 17, 2000, is being duly executed and filed by Bank One, National
Association, a national banking association, and Bank One Delaware, Inc., a
Delaware banking corporation, as trustees, to form a business trust under the
Delaware Business Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is SMS Student Loan
Trust 2000-B.
2. Delaware Trustee. The name and business address of the trustee of the
Trust resident in the State of Delaware is Bank One Delaware, Inc. 3 ▇▇▇▇▇▇▇▇▇
Centre, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
3. This Certificate of Trust will be effective May 17, 2000.
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IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
trustee of the Trust
By: _____________________________
Name:
Title:
BANK ONE DELAWARE, INC.,
not in its individual capacity
but solely as trustee of the Trust
By: _____________________________
Name:
Title:
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