-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C3Xytv7E5SbMhO39KY5AQlLlxCtagbdfp2QfxY3nZGyVwXweKVjfJAt71zwictRc 3MIAbPu0EaYzS8+4KzReMg== 0000916641-98-000746.txt : 19980629 0000916641-98-000746.hdr.sgml : 19980629 ACCESSION NUMBER: 0000916641-98-000746 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 19980626 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CRESTAR SECURITIZATION LLC CENTRAL INDEX KEY: 0001060743 STANDARD INDUSTRIAL CLASSIFICATION: ASSET-BACKED SECURITIES [6189] STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-51725 FILM NUMBER: 98655466 BUSINESS ADDRESS: STREET 1: 919 EAST MAIN STREET CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8047825000 MAIL ADDRESS: STREET 1: 919 EAST MAIN STREET CITY: RICHMOND STATE: VA ZIP: 23219 S-3/A 1 CRESTAR SECURITIZATION, LLC S-3/A As filed with the Securities and Exchange Commission on June 26, 1998 Registration No. 333-51725 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Virginia CRESTAR SECURITIZATION, LLC 54-1901323 (State or other (I.R.S. Employer jurisdiction of (Exact name of registrant as specified in its charter) Identification No.) incorporation or 919 East Main Street organization) Richmond, Virginia 23219 (804) 782-5000 (Address,including zip code, and telephone number, including area code, of registrant's principal executive offices) EUGENE S. PUTNAM COPIES TO: AND TO: PRESIDENT AND CHIEF EXECUTIVE OFFICER RANDOLPH F. TOTTEN PAUL F. SEFCOVIC 919 EAST MAIN STREET JACK A. MOLENKAMP KIM L. SWANSON RICHMOND, VIRGINIA 23219 HUNTON & WILLIAMS SQUIRE, SANDERS & DEMPSEY L.L.P (804) 782-5619 951 EAST BYRD STREET 41 SOUTH HIGH STREET, SUITE 1300 (804) 782-7744 (TELECOPY) RICHMOND, VIRGINIA 23219 COLUMBUS, OHIO 43215 (Name, address, including zip code and (804) 788-8200 (614) 365-2700 telephone number, including area code (804) 788-8218 (TELECOPY) (614) 365-2499 (TELECOPY) of agent for service) APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO TIME AFTER REGISTRATION STATEMENT
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities are being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1993, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE ======================================== ========================== ======================= ===================== ================== PROPOSED PROPOSED MAXIMUM MAXIMUM TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF BEING REGISTERED REGISTERED(1)(2) PER UNIT(1)(2) OFFERING PRICE(1)(2) REGISTRATION FEE ======================================== ========================== ======================= ===================== ================== Student Loan Asset Backed Notes $1,000,000 100% $1,000,000 $295.00(3) ======================================== ========================== ======================= ===================== ================== (1) Estimated solely for calculating the registration fee. (2) Also registered are secondary market sales of Notes that may be effected by Crestar Securities Corporation, an affiliate of the Registrant. (3) Previously paid. ==================================================================================================================================== THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THE REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. ====================================================================================================================================
SUBJECT TO COMPLETION, DATED __________ __, 1998 PROSPECTUS SUPPLEMENT $____________ Student Loan Asset Backed Notes CRESTAR STUDENT LOAN TRUST 1998-__ Issuer CRESTAR SECURITIZATION, LLC Depositor CRESTAR BANK Transferor, Master Servicer and Administrator Consider carefully the risk factors beginning on page 1 in the Prospectus and page S-5 of this Prospectus Supplement. A Note is not a deposit and neither the Notes nor the underlying accounts or student loans are insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency, except as expressly provided herein. The Notes will represent obligations of the Trust only and will not represent interests in or obligations of Crestar Bank or any of its affiliates. The Notes are not insured or guaranteed by any person. This Prospectus Supplement may be used to offer and sell the Notes only if accompanied by the Prospectus.
The Trust will issue - Class A Notes Class B Notes1 Total Principal Amount $__________ $__________ $___________ Class Interest Rate One-Month One-Month LIBOR plus [ ] %2 LIBOR plus [ ]%2 Interest Paid Monthly Quarterly First Interest Payment Date [_______] [_______] First Scheduled Principal Payment Date [_______] [_______] Legal Final Maturity ____ __, 2___ ____ __, 2___ Price to Public __________% _________% $___________ Underwriting Discount __________% _________% $___________ Proceeds to Issuer __________% _________% $___________ - --------------
(1) The Class B Notes are subordinated to the Class A Notes. (2) Initially, ___% with respect to the Class A Notes, and ___% with respect to Class B Notes. Following the initial Interest Accrual Period, subject to a cap of [18%] and the Net Loan Rate. Trust Assets: The Trust will consist of Financed Student Loans with an aggregate principal balance as of the Cut-off Date of $____________, proceeds thereof, and a Reserve Account. [The principal amount of the Notes exceeds the principal amount of the Financed Student Loans and accrued interest thereon as of the Cut-off Date and the initial Reserve Fund deposit by approximately $__________.] Neither the SEC nor any state securities commission has approved these Notes or determined that this Prospectus Supplement or the Prospectus is accurate or complete. Any representation to the contrary is a criminal offense. Salomon Smith Barney Crestar Securities Corporation ____________ __, 1998 IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS The Issuer provides information to you about the Notes in two separate documents that progressively provide more detail: (a) the accompanying Prospectus, which provides general information, some of which may not apply to your Notes and (b) this Prospectus Supplement, which describes the specific terms of your Notes. If there is a conflict between this Prospectus Supplement and the accompanying Prospectus, you should rely on the information in this Prospectus Supplement. This Prospectus Supplement and the accompanying Prospectus include cross-references to captions in these materials where you can find further related discussions. The following Table of Contents and the Table of Contents included in the accompanying Prospectus provide the pages on which these captions are located. [The Issuer has filed preliminary information regarding the Trust's assets and the Notes with the SEC. The information contained in this document supersedes all of that preliminary information, which was prepared by the Underwriters for prospective investors.] ----------------------- Until ________, all dealers that effect transactions in the Notes, whether or not participating in this offering, may be required to deliver a Prospectus and Prospectus Supplement. This requirement is in addition to the dealers' obligation to deliver a Prospectus and Prospectus Supplement when acting as underwriters with respect to their unsold allotments or subscriptions. TABLE OF CONTENTS Page SUMMARY OF TERMS .....................................S-1 THE TRUST..........................................S-1 INTEREST...........................................S-1 PRINCIPAL..........................................S-2 PRIORITY OF PAYMENTS...............................S-2 TRUST ASSETS.......................................S-3 RESERVE ACCOUNT....................................S-3 OPTIONAL TERMINATION...............................S-4 Auction of Trust Assets.........................S-4 Optional Purchase...............................S-4 FEDERAL INCOME TAX CONSEQUENCES....................S-4 ERISA CONSIDERATIONS...............................S-4 REGISTRATION, CLEARING AND SETTLEMENT..............S-4 RATING.............................................S-4 RISK FACTORS..........................................S-5 THE TRUST.............................................S-5 The Trust.......................................S-5 Eligible Lender Trustee.........................S-5 Delaware Trustee................................S-6 Indenture Trustee...............................S-6 Master Servicer.................................S-6 Administrator...................................S-6 USE OF PROCEEDS.......................................S-6 THE FINANCED STUDENT LOANS............................S-7 Incentive Programs..............................S-12 MATURITY AND PREPAYMENT CONSIDERATIONS................S-12 Maturity and Prepayment Assumptions.............S-12 Weighted Average Life of the Notes..............S-13 THE SERVICERS.........................................S-14 General.........................................S-14 [Name of Servicer]..............................S-14 Servicing Compensation..........................S-14 THE GUARANTEE AGENCIES................................S-14 General.........................................S-14 [Name of Guarantee Agency]......................S-15 DESCRIPTION OF THE NOTES..............................S-15 General.........................................S-15 Interest........................................S-15 Principal.......................................S-16 Priority of Payments............................S-17 Advances........................................S-19 Reserve Account.................................S-20 Subordination of the Class B Notes..............S-20 Termination.....................................S-20 UNDERWRITING..........................................S-21 LEGAL MATTERS.........................................S-22 RATING ...............................................S-22 SUMMARY OF TERMS This summary highlights selected information from this document and does not contain all of the information that you need to consider in making your investment decision. To understand all of the terms of an offering of the Notes, read carefully this entire document and the accompanying Prospectus. This summary provides an overview of certain calculations, cash flows and other information to aid your understanding and is qualified by the full description of these calculations, cash flows and other information in this Prospectus Supplement and the accompanying Prospectus. You can find a definition of capitalized terms used in this summary and not otherwise defined herein under the caption "Glossary of Principal Definitions" beginning on page I-1 of the accompanying Prospectus. } THE TRUST The Trust is being organized by Crestar Securitization, LLC, an affiliate of Crestar Bank. The Trust will acquire student loans from Crestar Securitization and pledge them to the Indenture Trustee to secure payment of the Notes. Crestar Bank will be responsible for servicing the student loans although it may engage one or more other institutions to service the student loans on a day-to-day basis. Crestar Bank also will serve as the administrator of the Trust and be responsible for various accounting and administration functions with respect to the Trust. There are two institutional bank trustees of the Trust. __________ serves as trustee for Delaware law purposes and __________ serves as trustee for purposes of the Trust's beneficial ownership of the student loans. The Indenture Trustee is __________. See "The Trust - Eligible Lender Trustee," "-Delaware Trustee" and "- Indenture Trustee" in this Prospectus Supplement. Issuance of the Notes is scheduled for __________, 1998. INTEREST Class A. Interest on the Class A Notes is payable monthly on the 25th day of each month or, if such day is not a Business Day, on the next succeeding Business Day (each, a "Payment Date"). The Class A Notes will bear interest through __________ at _____% per annum. Thereafter, the interest rate will be adjusted monthly for each Interest Accrual Period to equal the lesser of One-Month LIBOR plus [ ]% per annum and 18% per annum (the "Formula Rate"), but not in excess of the Net Loan Rate for such period. Class B. Interest on the Class B Notes is payable quarterly on the Payment Dates occurring in ____________, ____________, ____________ and ____________ (each, a "Quarterly Payment Date"). The Class B Notes will bear interest through __________ at _____% per annum. Thereafter, the interest rate will be adjusted monthly for each Interest Accrual Period to equal the lesser of One-Month LIBOR plus [ ]% per annum and 18% per annum, but not in excess of the Net Loan Rate for such period. LIBOR is the rate for deposits in U.S. dollars for a one-month period which appears on the Dow Jones Telerate Page 5 (or substitute page) as of 11:00 a.m., London time, on the related monthly Interest Determination Date. The Net Loan Rate for an Interest Accrual Period generally equals the weighted average Effective Interest Rate of the Financed Student Loans as of the last day of the Collection Period immediately preceding the commencement of such Interest Accrual Period, less the Program Operating Expense Percentage (initially ___% per annum, which may be increased from time to time with the approval of the Rating Agencies). The Effective Interest Rate of a Financed Student Loan is the interest rate on such Loan after giving effect to all interest subsidies, rebate fees, Special Allowance Payments and borrower incentives. If interest at the Formula Rate for a Class exceeds interest at the Net Loan Rate for an Interest Accrual Period, the excess interest, together with interest thereon at the applicable Formula Rate ("Carryover Interest"), will be paid on subsequent Quarterly Payment Dates only to the extent funds are available after other required payments on the Notes, and may never be paid. See "Description of the Notes - Interest" in this Prospectus Supplement. The following time line shows the relevant dates for the first three Interest Accrual Periods. Quarterly Closing Payment Payment Payment Date Date Date Date - ---- ------ ------- --------- (8/13/98) (9/25/98) 10/27/98 11/25/98 | | | | Interest Interest Interest Interest Determination Determination Determination Determination Date Date Date Date 8/11/98 9/23/98 10/22/98 11/20/98 You may obtain applicable Class Interest Rates for the current and immediately preceding Interest Accrual Periods by telephoning the Indenture Trustee, at its Corporate Trust Office at ( ) ___-____. PRINCIPAL Payments of principal on the Notes will not commence until ___________, 19___. No principal will be paid on the Class B Notes until the Class A Notes have been paid in full. Principal will be payable on the Class A Notes o on each Payment Date in an amount (the "Principal Payment Amount") equal to the decline in the Pool Balance between the end of the second Collection Period preceding such Payment Date and the end of the immediately preceding Collection Period, and o on each Quarterly Payment Date until the Parity Percentage equals _____%. Principal will be payable on the Class B Notes on each Quarterly Payment Date o in an amount (the "Principal Payment Amount") equal to the decline in the Pool Balance between the end of the fourth Collection Period preceding such Payment Date and the end of the immediately preceding Collection Period, and o until the Parity Percentage equals _____%. A Collection Period is each calendar month, except that the first Collection Period begins on _______ (the "Cut-off Date") and ends on ___________. The Pool Balance as of the end of a Collection Period is equal to the aggregate principal balance of the Financed Student Loans (including accrued interest that is capitalized as of the end of the Collection Period), after giving effect to all payments in respect of principal received by the Trust during such Collection Period. The Parity Percentage for any Payment Date or Quarterly Payment Date is the percentage determined by dividing o the Pool Balance as of the end of the preceding Collection Period, plus accrued interest thereon, accrued Special Allowance Payments and Interest Subsidy Payments as of the end of such Collection Period and all amounts (including accrued interest thereon) in the Collection Account and Reserve Account as of the end of the Collection Period (adjusted for payments made on such Payment Date or Quarterly Payment Date), by o the sum of the principal balance of the Notes (after payments thereon on such Payment Date or Quarterly Payment Date), accrued interest thereon, and accrued and unpaid Transaction Fees and Consolidation Loan Fees. The final payment of principal and interest will be made no later than _________ on the Class A Notes, and no later than ________ on the Class B Notes (each, a "Legal Final Maturity"). The actual maturity of a Class of Notes could occur sooner as a result of a variety of factors. See "Maturity and Prepayment Considerations" in the Prospectus and this Prospectus Supplement. PRIORITY OF PAYMENTS Collections on the Financed Student Loans will be allocated first to pay any Consolidation Loan Fees and Transaction Fees (to the Master Servicer, Administrator, Eligible Lender Trustee, Delaware Trustee and Indenture Trustee) before being applied to pay the Notes. On each Payment Date that is not a Quarterly Payment Date any remaining Available Funds will be applied (i) to pay the Class Interest Amount on the Class A Notes; and (ii) to pay the Principal Payment Amount (and any overdue Principal Payment Amount) on the Class A Notes until the principal balance thereof has been reduced to zero. On each Quarterly Payment Date, any remaining Available Funds will be applied generally in the following priority: o First, to pay the Class Interest Amount on the Class A Notes; o Second, to pay the Class Interest Amount on the Class B Notes; o Third, to pay the Principal Payment Amount (and any overdue Principal Payment Amount) on the Class A Notes until the principal balance thereof has been reduced to zero; o Fourth, after the principal balance of the Class A Notes has been reduced to zero, to pay the Principal Payment Amount (and any overdue Principal Payment Amount) on the Class B Notes; o Fifth, to the Reserve Account, the amount, if any, necessary to attain the Specified Reserve Account Balance; o Sixth, to pay any Parity Payments, first to the Class A Notes , and thereafter to the Class B Notes; and o Seventh, to pay any Carryover Interest, first on the Class A Notes and thereafter on the Class B Notes. If, however, following such payments, the principal amount of the Class A Notes would exceed the sum of the Pool Balance and amounts in the Trust Accounts as of the end of the preceding Collection Period, or if a payment Event of Default has occurred with respect to the Notes, the Class B Notes will not receive their Class Interest Amount pursuant to clause "Second" until after the Class A Notes have received their Principal Payment Amount. See "Description of the Notes - Priority of Payments" in this Prospectus Supplement. Any remaining amounts on any Quarterly Distribution Date will be distributed to the Certificateholder, initially expected to be the Depositor. Any amounts so distributed will not thereafter be available to pay principal or interest on the Notes. TRUST ASSETS The primary assets of the Trust consist of Financed Student Loans with an aggregate principal balance of $________ as of the Cut-off Date. The Financed Student Loans consist of certain education loans to students and parents of students enrolled in accredited institutions of higher education. Of the initial principal amount of Financed Student Loans, approximately _____% have been originated by the Transferor and the balance have been acquired by the Transferor from independent third parties. [Of the initial principal amount of the Financed Student Loans, approximately ___% are FFELP Loans and approximately ___% are HEAL Loans.] See "Description of the FFEL Program" and "Description of the HEAL Program" in the Prospectus. ________, _______ and _______ are the Guarantee Agencies that guarantee more than 10% of the initial Financed FFELP Loans. Of the Financed FFELP Loans, approximately ___% are guaranteed as to the payment of 100% of principal and interest by a Guarantee Agency, and the balance are guaranteed as to [98]%. Reimbursement of a Guarantee Agency by the Secretary of Education ranges from 78% to 100%. For a description of the Guarantee Agencies and guarantee agreements, see "The Guarantee Agencies" in this Prospectus Supplement and "Description of the Guarantee Agencies" in the Prospectus. The HEAL Loans are insured as to payment of 100% of principal and interest by the United States Department of Health and Human Services. Additional Financed Student Loans may be substituted for those comprising the initial pool under certain circumstances, including loss of insurance or guarantee with respect to such Loan or the consolidation of loans made to the same borrower. RESERVE ACCOUNT The Depositor will make an initial deposit of $________ into a Reserve Account. The initial deposit will be supplemented on each Quarterly Payment Date with all amounts remaining after making all required distributions on such date until the Specified Reserve Account Balance is attained. The "Specified Reserve Account Balance" on any Quarterly Payment Date is equal to the greater of ___% of the outstanding principal balance of the Notes on such Payment Date, after giving effect to payments on such Payment Date, or $_______, but not in excess of the outstanding principal amount of the Notes. See "Description of the Notes - Reserve Account" in this Prospectus Supplement. OPTIONAL TERMINATION Auction of Trust Assets On or after __________, 20__, the Indenture Trustee will offer the Financed Student Loans for sale. If the Indenture Trustee receives at least two bids (which may include the Transferor or its affiliates), the Indenture Trustee will accept the higher bid if it will pay transaction costs and all amounts due the Noteholders (other than Carryover Interest), and the bid proceeds will be so applied. If the bid proceeds are not sufficient to pay transaction costs and the Notes, the Indenture Trustee will be under no obligation to continue to solicit bids, although it may do so from time to time. See "Description of the Notes - Termination - Auction Purchase" in this Prospectus Supplement. Optional Purchase At such time as the Pool Balance is equal to ___% or less of the Initial Pool Balance, the Depositor may elect to purchase the Financed Student Loans for a price equal to their principal amount, plus all accrued interest thereon, but not less than an amount necessary to pay transaction costs and all amounts due the Noteholders (other than Carryover Interest). The net proceeds of such purchase will be applied to the payment of the Notes (other than Carryover Interest). See "Description of the Notes - Termination - Optional Purchase" in this Prospectus Supplement. FEDERAL INCOME TAX CONSEQUENCES The Notes will evidence debt obligations under the Internal Revenue Code of 1986, as amended (the "Code"), and interest paid or accrued thereon will be taxable to Noteholders. It is [not] expected that the Notes will be issued with original issue discount. See "Federal Income Tax Consequences - Original Issue Discount" in the Prospectus. By acceptance of its Note, each Noteholder will be deemed to have agreed to treat its Note as a debt instrument for purposes of federal and state income tax, franchise tax and any other tax measured in whole or in part by income. See "Federal Income Tax Consequences" in the Prospectus for additional information concerning the application of federal income tax laws with respect to the Notes and the Trust. ERISA CONSIDERATIONS It is expected that the Notes will be treated as debt obligations without significant equity features for purposes of the regulations of the Department of Labor set forth in 29 C.F.R. 2510.3-101 (the "Plan Asset Regulations"). See "ERISA Considerations" in the Prospectus. REGISTRATION, CLEARING AND SETTLEMENT Persons acquiring beneficial ownership interests in the Notes will hold their interests through DTC in the United States or Cedel Bank, societe anonyme or the Euroclear System in Europe. The Noteholders will not be entitled to receive definitive certificates representing their interests in the Notes, except in certain limited circumstances. See "Description of the Notes - Book-Entry Registration" in the Prospectus. The Notes will be offered in minimum denominations of [$50,000] and integral multiples of [$1,000] in excess thereof. RATING It is a condition to the issuance and sale of the Class A Notes that they be rated by the following Rating Agencies as follows: Fitch Moody's S&P Class A Notes AAA Aaa AAA Class B Notes A A2 A See "Risk Factors - Rating" in the Prospectus. RISK FACTORS In addition to the Risk Factors set forth in the Prospectus, you should note the following: [Undercollateralization The aggregate principal amount of the Notes exceeds the aggregate principal amount of the Financed Student Loans and accrued interest thereon as of the Cut-off Date and the initial Reserve Fund deposit by approximately $______________. Payment of principal and interest on the Notes is dependent upon collections on the Financed Student Loans, particularly interest thereon. If the yield on the Financed Student Loans does not generally exceed the interest rate on the Notes and Trust expenses, the Trust may have insufficient funds to repay the Notes.] THE TRUST The Trust Crestar Student Loan Trust 1998-__ is a statutory business trust that will be formed on or prior to the Closing Date under the laws of the State of Delaware. The Trust will not engage in any activity other than (i) acquiring, holding, selling and managing the Financed Student Loans and the other assets of the Trust and proceeds therefrom, (ii) issuing one or more classes of its certificates and notes, (iii) making payments thereon and (iv) engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith. For so long as the Transferor or an affiliate of the Transferor is a Certificateholder, the Trust's activities will be further limited to activities that are part of, or incidental to, the business of banking as well. The Trust initially will be capitalized with nominal equity represented by a Certificate that initially will be held by the Depositor. The equity of the Trust, together with the proceeds from the sale of the Notes, will be used by the Eligible Lender Trustee in connection with its acquisition, on behalf of the Trust, of the initial Financed Student Loans from the Transferor. A portion of the net proceeds received from the transfer of the initial Financed Student Loans will be used by the Depositor to make a Reserve Account Deposit in the amount of $__________. Upon the consummation of such transactions, the assets of the Trust will consist of (a) the pool of Financed Student Loans, legal title to which is held by the Eligible Lender Trustee on behalf of the Trust, (b) all funds in respect thereof collected on or after the applicable Cut-off Date, and (c) all moneys and investments on deposit in the Collection Account, Note Payment Account, Expense Account, Advance Account, Reserve Account and Certificate Distribution Account. All of the foregoing accounts except the Certificate Distribution Account will be maintained with and in the name of the Indenture Trustee ("Trust Account"). To facilitate servicing and to minimize administrative burden and expense, the related Servicer will be appointed custodian of the promissory notes representing the Financed FFELP Loans by the Eligible Lender Trustee. The Trust's principal offices are located in the offices of the Eligible Lender Trustee, c/o [____________, ----------,-------- -----]. Eligible Lender Trustee [_____________________________] a [national banking association] organized under the laws of the [United States] is the Eligible Lender Trustee for the Trust under the Trust Agreement. The office of the Eligible Lender Trustee for purposes of administering the Trust is located at [____________, __________,________ _____]. The Eligible Lender Trustee, on behalf of the Depositor, will acquire the Financed Student Loans from the Transferor pursuant to a Sales Agreement. The Eligible Lender Trustee will acquire, on behalf of the Trust, legal title to the Financed Student Loans from the Eligible Lender Trustee acting on behalf of the Depositor pursuant to a Transfer and Servicing Agreement. The Eligible Lender Trustee on behalf of the Trust will enter into a Guarantee Agreement with each of the Guarantee Agencies with respect to each Financed FFELP Loan and a HEAL Insurance Contract with the Department of HHS with respect to each Financed HEAL Loan. The Eligible Lender Trustee qualifies as an eligible lender and owner of Financed Student Loans for all purposes under the Higher Education Act and the Guarantee Agreements with respect to such Financed FFELP Loans, and under the HEAL Act and the HEAL Insurance Contract with respect to such Financed HEAL Loans. Failure of the Financed Student Loans to be owned by an eligible lender would result in the loss of Guarantee Payments, Interest Subsidy Payments and Special Allowance Payments with respect to Financed FFELP Loans and the loss of Insurance Payments with respect to Financed HEAL Loans. See "Description of the FFEL Program," "Description of the HEAL Program" and "Risk Factors - Offset by Guarantee Agencies" in the Prospectus. The Depositor or its affiliates may maintain other banking relationships with [_______________] and its affiliates from time to time. Delaware Trustee [_____________], a [________________] banking corporation, will serve as Delaware Trustee of the Trust. Its address is [__________________]. The Depositor or its affiliates may maintain other banking relationships with [________________] and its affiliates from time to time. Indenture Trustee On the Closing Date, the Trust will pledge the Financed Student Loans to the Indenture Trustee under an indenture dated as of [____________], as supplemented by an indenture supplement dated as of [_______________] (collectively, the "Indenture"). The Indenture Trustee's corporate trust office is located at [__________], and its telephone number is [___________]. The Depositor or its affiliates may maintain other banking relationships with [________________] and its affiliates from time to time. Master Servicer Crestar Bank, in its capacity as Master Servicer, will be responsible for servicing the Financed Student Loans. The Master Servicer may arrange for Servicers to perform its obligations. The Master Servicer will be entitled to the Servicing Fee, but will be obligated to pay all costs of the Servicers without further reimbursement by the Trust. See "The Servicers" in this Prospectus Supplement. Administrator Crestar Bank, in its capacity as Administrator, is obligated (i) to direct the Indenture Trustee to make the required distributions from the Trust Accounts on each Payment Date and Quarterly Payment Date, (ii) to prepare (based on the reports received from the Master Servicer) and provide periodic and annual statements to the Eligible Lender Trustee and the Indenture Trustee with respect to distributions to Noteholders and Certificateholders and any related federal income tax reporting information and (iii) to provide the notices and to perform other administrative obligations required by the Indenture and the Trust Agreement. The Administrator will be entitled to the Administration Fee as compensation for the performance of its obligations and as reimbursement for its expenses related thereto. Affiliates of the Administrator may assist it in performing its obligations . USE OF PROCEEDS The net proceeds from the sale of the Notes will be used to acquire the initial Financed Student Loans from the Depositor on the Closing Date, which will, in turn, use such proceeds to make the initial Reserve Account deposit and to acquire the initial Financed Student Loans from the Transferor. The Transferor is expected to use such proceeds for general corporate purposes. THE FINANCED STUDENT LOANS The initial Financed Student Loans were, and the Subsequent Financed Student Loans will be, selected from the Transferor's portfolio of FFELP Loans and HEAL Loans by several criteria, including the following: each Financed Student Loan (i) was or will be originated in the United States or its territories or possessions under and in accordance with the FFEL Program or the HEAL Program, as the case may be, to or on behalf of a student who has graduated or is expected to graduate from an accredited institution of higher education within the meaning of the Higher Education Act or the HEAL Act, (ii) contains terms in accordance with those required by the FFEL Program, the Guarantee Agreements, the HEAL Program, the HEAL Insurance Contract and other applicable requirements, and (iii) is not more than 90 days past due as of the Cut-off Date or, in the case of a Subsequent Financed Student Loan, as of the subsequent cut-off date set forth in the related transfer agreement (each, a "Subsequent Cut-Off Date"). As of the Cut-off Date, $__________ in principal amount of the initial Financed Student Loans were delinquent for up to 59 days and none of the initial Financed Student Loans was delinquent for more than 59 days. For this purpose, delinquency refers to the number of days for which a payment is past due. Each Financed Student Loan is required (i) to be insured by the Department of HHS as to principal and interest to the extent provided under the HEAL Act, or (ii) to be guaranteed as to principal and interest by a Guarantee Agency and reinsured by the Department of Education to the extent provided under the Higher Education Act and eligible for Special Allowance Payments and, with respect to each Financed Student Loan that is a Stafford Loan, Interest Subsidy Payments paid by the Department of Education. See "Description of the FFEL Program" and "Description of the HEAL Program" in the Prospectus. Subsequent Financed Student Loans that may be so transferred by the Depositor include (i) Consolidation Loans or HEAL Consolidation Loans made by the Transferor, provided that in no event shall the aggregate amount of Subsequent Financed Student Loans that are Consolidation Loans or HEAL Consolidation Loans transferred into the Trust exceed $___________; and (ii) Serial Loans owned by the Transferor that are serial (i.e., made to the same borrower under the same loan program and guaranteed by the same Guarantee Agency or insured by the Department of HHS) to an existing Financed Student Loan owned by the Trust, provided that each such Subsequent Financed Student Loan entitles the holder thereof to receive interest based on the same interest rate index as the Financed Student Loan to which it is serial, and provided further, that in no event shall the aggregate amount of Subsequent Financed Student Loans that are Serial Loans transferred into the Trust exceed $_________. Except as described above, there will be no required characteristics of the Subsequent Financed Student Loans and no limitations on the amount of Subsequent Financed Student Loans that may be included in the Trust. Therefore, following the transfer of Subsequent Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust, the aggregate characteristics of the entire pool of Financed Student Loans, including the composition of the Financed Student Loans and of the borrowers thereof, the distribution by interest rate and the distribution by principal balance described in the following tables, will vary from those of the initial Financed Student Loans as described herein. Each of the Financed Student Loans provides for the amortization of the outstanding principal balance of such Financed Student Loan over a series of regular payments. Each regular payment consists of an installment of interest which is calculated on the basis of the outstanding principal balance of such Financed Student Loan multiplied by the applicable interest rate and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received in respect of such Financed Student Loan, the amount received is applied first to outstanding late fees, if collected, then to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if a borrower pays a regular installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if a borrower pays a monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, subject to any applicable Deferment Periods or Forbearance Periods, the borrower pays a regular installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance of such Financed Student Loan. Set forth below in the following tables is a description of certain additional characteristics of the initial Financed Student Loans as of the Cut- off Date. Composition of the Initial Financed Student Loans as of the Cut-off Date Aggregate Outstanding Principal Balance...................................... $ Aggregate Outstanding Accrued Interest....................................... Number of Borrowers.......................................................... Average Outstanding Principal Balance Per Borrower........................... Number of Loans.............................................................. Average Outstanding Principal Balance Per Loan............................... Weighted Average Annual Borrower Interest Rate............................... Weighted Average Remaining Term (months) (does not include the months remaining for the in-school, Grace, Deferment or Forbearance periods)..... Weighted Average Remaining Term (months) (including the months remaining for the in-school, Grace, Deferment or Forbearance periods)................... Distribution of the Initial Financed Student Loans by Loan Type as of the Cut-off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal Loan Type Loans Balance Balance Stafford-Subsidized..................................... Stafford-Unsubsidized................................... Consolidation........................................... PLUS.................................................... SLS..................................................... HEAL.................................................... Total.............................................
Distribution of the Initial Financed Student Loans by Borrower Interest Rate as of the Cut- off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal Interest Rate (1) Loans Balance Balance Less than 7.50%......................................... 7.50% to 7.99%.......................................... 8.00% to 8.49%.......................................... 8.50% to 8.99%.......................................... 9.00% to 9.49%.......................................... 9.50% or greater........................................ Total.............................................
- --------------------------- (1) Determined using the interest rates applicable to the initial Financed Student Loans as of the Cut-off Date. However, because certain of the Initial Financed Student Loans bear interest at variable rates per annum, the existing interest rates are not indicative of future interest rates on the Financed Student Loans. See "Description of the FFEL Program" and "Description of the HEAL Program" in the Prospectus. Distribution of the Initial Financed Student Loans by Range of Outstanding Principal Balances as of the Cut-off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal Principal Balance Loans Balance Balance Less than $1,000........................................ $1,000-$1,999........................................... $2,000-$2,999........................................... $3,000-$3,999........................................... $4,000-$4,999........................................... $5,000-$5,999........................................... $6,000-$6,999........................................... $7,000-$7,999........................................... $8,000-$8,999........................................... $9,000-$9,999........................................... $10,000-$10,999......................................... $11,000-$11,999......................................... $12,000-$12,999......................................... $13,000-$13,999......................................... $14,000-$14,999......................................... $15,000 or greater...................................... Total.............................................
Distribution of the Initial Financed Student Loans by Borrower Payment Status as of the Cut-off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal Borrower Payment Status Loans Balance Balance In School............................................... Grace................................................... Repayment............................................... Deferment............................................... Forbearance............................................. Total.............................................
Distribution of the Initial Financed Student Loans by Remaining Term to Scheduled Maturity as of the Cut-off Date
Percent of Loans by Remaining Months Outstanding Outstanding Until Scheduled Number of Principal Principal Maturity Loans Balance Balance 1 to 12 13 to 24 25 to 36 37 to 48 49 to 60 61 to 72 73 to 84 85 to 96 97 to 108 109 to 120 121 to 180 181 to 240 241 to 300 Over 300 Total.........................
Geographic Distribution of the Initial Financed Student Loans as of the Cut-off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal Location (1) Loans Balance Balance [Virginia............................................... Pennsylvania............................................ Maryland................................................ New York................................................ North Carolina]......................................... Others(2)............................................... Total........................................... - ---------------------------
(1) Based on the current permanent billing addresses of the borrowers of the initial Financed Student Loans shown on the Servicer's records. (2) Consist of locations that include [__] other states, U.S. territories, possessions and commonwealths, foreign countries, overseas military establishments, and unknown locations, none of the aggregate principal balance of the Financed Student Loans relating to which exceeds ___% of the Initial Pool Balance. To the extent that states with a large concentration of Financed Student Loans experience adverse economic or other conditions to a greater degree than other areas of the country, the ability of such borrowers to repay their Financed Student Loans may be impacted to a larger extent than if such borrowers were dispersed more geographically. Distribution of the Initial Financed Student Loans by Insurance or Guarantee Level as of the Cut-off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal Guaranteed or Insurance Level Loans Balance Balance FFELP Loan Guaranteed 100%.............................. FFELP Loan Guaranteed 98%............................... HEAL Loan Insured 100%.................................. Total...........................................
Distribution of the Initial Financed Student Loans by Guarantee Agency or by HEAL as of the Cut- off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal Guarantee Agency Loans Balance Balance _______________________ Corporation..................... _______________________ Agency.......................... HEAL Loans.............................................. Other Guarantors........................................ Total.............................................
Distribution of the Initial Financed Student Loans by School Types as of the Cut- off Date
Percent of Loans by Outstanding Outstanding Number of Principal Principal School Type Loans Balance Balance 4 Year Public 4 Year Private 2 Year Public 2 Year Private Proprietary/Vocational Other/Unknown Total.................................. .........Incentive Programs
The Transferor currently makes available and may hereafter make available certain incentive programs to borrowers, including the Crestar Bank Top Performer Program (the "TP Program"). The TP Program generally applies to all Stafford Loans, Unsubsidized Stafford Loans and PLUS Loans with a first disbursement made by the Transferor on or after November 1, 1996 ("TP Loans"). Under the TP Program, if the borrower makes 36 consecutive monthly payments of a TP Loan on time, the applicable interest rate on such TP Loan is reduced by 1.0% per annum for Stafford Loans and Unsubsidized Stafford Loans and 0.5% per annum for PLUS Loans. Although less than [ ]% of the initial Financed Student Loans are TP Loans, additional TP Loans may be included in the Subsequent Financed Student Loans. MATURITY AND PREPAYMENT CONSIDERATIONS Maturity and Prepayment Assumptions The rate of payment of principal of the Notes and the yield on the Notes will be affected by (i) prepayments of the Financed Student Loans that may occur as described below, (ii) the sale by the Trust of Financed Student Loans and (iii) Parity Percentage Payments. All the Financed Student Loans are prepayable in whole or in part by the borrowers at any time without penalty (including by means of Consolidation Loans or HEAL Consolidation Loans) and may be prepaid as a result of a borrower default, death, disability or bankruptcy and subsequent liquidation or collection of Guarantee Payments or Insurance Payments with respect thereto. The rate of such prepayments cannot be predicted and may be influenced by a variety of economic, social and other factors, including those described below. In general, the rate of prepayments may tend to increase to the extent that alternative financing becomes available at prevailing interest rates which fall significantly below the interest rates applicable to the Financed Student Loans. However, because many of the Financed Student Loans bear interest at a rate that either actually or effectively is floating, it is impossible to determine whether changes in prevailing interest rates will be similar to or vary from changes in the interest rates on the Financed Student Loans. To the extent borrowers of Financed Student Loans elect to borrow Consolidation Loans or HEAL Consolidation Loans, such Financed Student Loans will be prepaid. See "Description of the FFEL Program - Loan Terms - Consolidation Loans" and "Description of the HEAL Program - Consolidation of HEAL Loans" in the Prospectus. In addition, the Depositor (and ultimately the Transferor) and Master Servicer are obligated to repurchase any Financed Student Loan pursuant to the Transfer and Servicing Agreement as a result of a breach of any of their respective representations and warranties with respect to such Financed Student Loan, which breach results in a loss of the guarantee or insurance with respect to such Financed Student Loan and is not cured within the applicable cure period. See "Description of the Agreements - Transfer and Servicing Agreement Conveyance of Financed Student Loans; Representations and Warranties" and "- Master Servicer Covenants" in the Prospectus. See also "Description of the Notes - - Termination" in this Prospectus Supplement regarding the Transferor's option to purchase the Financed Student Loans when the aggregate Pool Balance is less than or equal to __% of the Initial Pool Balance and the auction by the Indenture Trustee of any Financed Student Loans remaining in the Trust on or after _________ __, 20__. Scheduled payments with respect to, and maturities of, the Financed Student Loans may be extended, including pursuant to Grace Periods, Deferment Periods and, under certain circumstances, Forbearance Periods. The rate of payment of principal of the Notes and the yield on the Notes may also be affected by the rate of defaults resulting in losses on Financed Student Loans, by the severity of those losses and by the timing of those losses, which may affect the ability of the Guarantee Agencies to make Guarantee Payments with respect thereto. The rate of prepayment on the Financed Student Loans cannot be predicted, and any reinvestment risks resulting from a faster or slower incidence of prepayment of Financed Student Loans or a faster or slower incidence of sales by the Trust will be borne entirely by the Noteholders. Such reinvestment risks may include the risk that interest rates and the relevant spreads above particular interest rate bases are lower at the time Noteholders receive payments from the Trust than such interest rates and such spreads would otherwise have been had such prepayments not been made or had such prepayments been made at a different time. Weighted Average Life of the Notes The following information is given solely to illustrate the effect of prepayments on the Financed Student Loans on the weighted average life of the Notes under the assumptions stated below and is not a prediction of the prepayment rate that might actually be experienced by the Financed Student Loans held in the Trust. Weighted average life refers to the average amount of time from the date of issuance of a security until each dollar of principal of such security will be repaid to the investor. The weighted average life of the Notes will be primarily a function of the rate at which payments are made on the Financed Student Loans held in the Trust. Payments on such Financed Student Loans may be in the form of scheduled amortization of principal or prepayments (including, without limitation, Guarantee Payments and Insurance Payments). The Constant Prepayment Rate prepayment model ("CPR") represents an assumed constant rate of prepayment of Financed Student Loans held in the Trust outstanding as of the beginning of each quarter expressed as a per annum percentage. There can be no assurance that such Financed Student Loans will experience prepayments at a constant prepayment rate or otherwise in the manner assumed by the prepayment model. The weighted average lives in the following table were determined assuming that (i) scheduled payments of principal on the Financed Student Loans are received in a timely manner and prepayments are made at the percentages of the prepayment model set forth in the table; (ii) the initial principal balance of the Financed Student Loans is $__________ and such Financed Student Loans have the characteristics described under "The Financed Student Loans;" (iii) payments are made on the Notes on the 25th day of each month commencing _____________; (iv) the Financed Student Loans are auctioned on the _________ Payment Date; and (v) the Notes are issued on the Closing Date. No representation is made that these assumptions will be correct, including the assumption that the Financed Student Loans held in the Trust will not experience delinquencies or unanticipated losses. In making an investment decision with respect to the Notes, investors should consider a variety of possible prepayment scenarios, including the limited scenarios described in the table below. Weighted Average Life of the Notes at the Respective CPRs Set Forth Below: Weighted Average Life (years)
0% CPR 3% CPR 5% CPR 7% CPR 9% CPR 15% CPR ------ ------ ------ ------ ------ ------- Class A Notes............ Class B Notes............
THE SERVICERS General Crestar Bank will act as Master Servicer with respect to the Financed Student Loans. __________, __________ and __________ each service more than 10% of the initial Financed Student Loans . The Financed Student Loans may be serviced by such other parties as may be approved by the Master Servicer from time to time (subject to the approval of the Rating Agencies). Pursuant to a servicing agreement, each servicer has agreed to service, and perform all other related tasks with respect to, the Financed Student Loans in compliance with applicable standards and procedures. See "Description of the Agreements - Transfer and Servicing Agreements" in the Prospectus. [Name of Servicer] [Description of Servicer to be inserted] Servicing Compensation The Master Servicer will be entitled to receive on each Quarterly Payment Date a fee (the "Servicing Fee") with respect to each quarter in an amount equal to (i) ___% per annum of the average of the Pool Balance as of the last day of the Collection Period preceding such Quarterly Payment Date and the last day of the Collection Period preceding the preceding Quarterly Payment Date (or the Cut-off Date with respect to the first quarter), or (ii) such greater amount acceptable to the Rating Agencies. The Servicing Fee will be payable in arrears, from Available Funds and amounts on deposit in the Reserve Account on each Quarterly Payment Date. The Servicing Fee will compensate the Master Servicer and each other Servicer for performing the functions of a third party servicer of student loans as an agent for their beneficial owner, including collecting and posting all payments, responding to inquiries of borrowers on the Financed Student Loans, investigating delinquencies, pursuing, filing and collecting any Guarantee Payments and Insurance Payments, including litigation costs, accounting for collections and furnishing monthly and annual statements to the Administrator. The Servicing Fee also will reimburse the Master Servicer for certain taxes, accounting fees, outside auditor fees, data processing costs and other costs incurred in connection with administering the Financed Student Loans. THE GUARANTEE AGENCIES General Of the Financed Student Loans included in the Initial Pool Balance, approximately [ ]% are guaranteed by [ ], a non-profit corporation ("[ ]"), approximately [ ]% are guaranteed by [ ], an agency of [ ] ("[ ]"), approximately [ ]% are HEAL Loans, and the remaining [ ]% are guaranteed by one of the following Guarantee Agencies: [ ] and [ ]. Information relating to the particular Guarantee Agencies set forth in this Prospectus Supplement has been provided by the respective Guarantee Agencies, and neither such information nor information included in the reports referred to herein has been verified by, or is guaranteed as to accuracy or completeness by, the Depositor, the Transferor or the Underwriters. No representation is made by the Depositor, the Transferor or the Underwriters as to the accuracy or adequacy of such information or the absence of material adverse changes in such information subsequent to the dates thereof. [Name of Guarantee Agency] [Description of Guarantee Agency to be inserted] DESCRIPTION OF THE NOTES General The Notes will be available for purchase in denominations of [$50,000] and integral multiples of [$1,000] in excess thereof in book-entry form only. The Notes will initially be represented by one or more Notes registered in the name of the nominee of DTC (together with any successor depository selected by the Administrator, the "Depository"). Unless and until Definitive Notes are issued under the limited circumstances described under "Description of the Notes - Definitive Notes" in the Prospectus, no Noteholder will be entitled to receive a physical certificate representing a Note. All references herein to actions by Noteholders refer to actions taken by DTC upon instructions from its participating organizations (the "Participants") and all references herein to distributions, notices, reports and statements to Noteholders refer to distributions, notices, reports and statements to DTC or its nominee, as the registered holder of the Notes, for distribution to Noteholders in accordance with DTC's procedures with respect thereto. See "Description of the Notes - Book-Entry Registration" in the Prospectus. Interest Interest will accrue during each Interest Accrual Period on the principal balance of each Class of Notes at a rate per annum equal to the related Class Interest Rate and will be payable (i) monthly on each Payment Date to the Class A Noteholders as of the related Record Date, and (ii) quarterly on each Quarterly Payment Date to the Class B Noteholders as of the related Record Date. The Record Date for each Class of Notes is the second Business Day preceding a Payment Date. Any interest not paid when due shall be payable on the succeeding Payment Date, together with interest thereon at the applicable Class Interest Rate. Interest will be paid pro rata to the holders of each such Class of Notes outstanding. An Interest Accrual Period for the Class A Notes with respect to any Payment Date begins on the preceding Payment Date and ends on the day preceding such Payment Date, except the first Interest Accrual Period will begin on the Closing Date. An Interest Accrual Period for the Class B Notes with respect to any Quarterly Payment Date corresponds to the three preceding Class A Interest Accrual Periods for so long as the Class A Notes are outstanding. Thereafter, an Interest Accrual Period begins on the 25th day of each month, except for the months in which a Quarterly Payment Date occurs, in which event it begins on such Quarterly Payment Date, and ends on the day prior to the succeeding Interest Accrual Period. An Interest Determination Date with respect to an Interest Accrual Period is the second London, New York and Richmond Business Day prior to the first day of such Interest Accrual Period. The Class Interest Rate for each Class of Notes for each Interest Accrual Period will equal the Formula Rate, subject to a cap of the Net Loan Rate for such Interest Accrual Period to the extent it needs to be determined. The Formula Rate for each Interest Accrual Period for the Class A Notes will equal One-Month LIBOR as of the Interest Determination Date for such Interest Period plus [ ]%, but in no event greater than [18.0]% per annum. The Formula Rate for each Interest Accrual Period for the Class B Notes will equal One-Month LIBOR as of the Interest Determination Date plus [__]%, but in no event greater than [18.0]% per annum. See "Description of the Notes - Determination of LIBOR" in the Prospectus. Interest on each Class of Notes will be calculated on the basis of the actual number of days elapsed in each Interest Accrual Period divided by 360. If, as of any Interest Determination Date, One-Month LIBOR as of the preceding Interest Determination Date (or, in the case of the initial Interest Determination Date, the Closing Date) exceeds by more than 100 basis points the average of the bond equivalent rates of the 91-day Treasury bills auctioned to the preceding Interest Determination Date during the calendar quarter in which such preceding Interest Determination Date occurs (or in the case of the initial Interest Determination Date, the Closing Date), the Administrator will be required to determine the Net Loan Rate that will be applicable to the succeeding Interest Accrual Period. The Net Loan Rate for any Interest Accrual Period will be the rate per annum (rounded to the next highest .01%) equal to (i) the weighted average Effective Interest Rate of the Financed Student Loans as of the last day of the Collection Period immediately preceding the commencement of such Interest Accrual Period, less (ii) the Program Operating Expense Percentage. The "Effective Interest Rate" is the per annum interest rate borne by a Financed Student Loan after giving effect to all applicable Interest Subsidy Payments, Special Allowance Payments, rebate fees on Consolidation Loans and reductions pursuant to borrower incentives. For this purpose, the Special Allowance Payment rate will be computed based upon the average of the bond equivalent rates of 91-day Treasury bills auctioned during that portion of the then current calendar quarter that ends on the date as of which the Effective Interest Rate is determined. The "Program Operating Expense Percentage" is the fraction (expressed as a percentage and calculated by the Administrator as of the end of a Collection Period preceding a Quarterly Payment Date), the numerator of which is the annualized operating expenses of the Trust for the calendar month then ended, including, without limitation, the Transaction Fees, and the denominator of which is the Pool Balance as of the last day of such Collection Period. The initial Program Operating Expense Percentage is _____%. If interest at the Formula Rate for any Class of Notes for any Interest Accrual Period exceeds interest at the Net Loan Rate, the excess interest, together with interest thereon at the applicable Formula Interest Rate ("Carryover Interest") will be paid on the subsequent Payment Dates or Quarterly Payment Dates only to the extent funds are available after other required payments on the Notes, and may never be paid. See"- Priority of Payments" in this Prospectus Supplement. Any Carryover Interest with respect to a Class of Notes remaining unpaid after the earlier of the Distribution Date on which the outstanding principal amount of such Class of Notes has been reduced to zero and the distribution of all Available Funds on the Legal Final Maturity of such Class of Notes, will never become due and payable and will be discharged as to the applicable Class of Notes on such date. The ratings of the Notes do not address the likelihood of payment of Carryover Interest. Any reference herein to "interest" excludes Carryover Interest. Principal Payments of principal on the Notes will not commence until __________, 19__. No principal will be paid on the Class B Notes until the Class A Notes have been paid in full. Principal of the Class A Notes will be payable monthly on each Payment Date, commencing [ ], 1998, and, following payment in full of the Class A Notes, principal on the Class B Notes will be payable quarterly on each Quarterly Payment Date. The Principal Payment Amount payable monthly on the Class A Notes is equal to the decline in the Pool Balance between the end of the second Collection Period preceding a Payment Date and the end of the immediately preceding Collection Period. The Principal Payment Amount payable quarterly on the Class B Notes after the Class A Notes have been paid in full is equal to the decline in the Pool Balance between the end of the fourth Collection Period preceding a Quarterly Payment Date and the end of the immediately preceding Collection Period (reduced with respect to the first Quarterly Payment Date on which principal is to be paid on the Class B Notes, by the Principal Payment Amount on the Class A Notes on such Quarterly Payment Date and on the two preceding Payment Dates). In addition, accelerated Parity Payments will be payable on each Quarterly Payment Date (to the class of Notes then receiving principal payments) until the Parity Percentage equals ___%. A "Collection Period" is each calendar month, except that the first Collection Period begins on the Cut-off Date and ends on the last day of the month preceding the month in which the first Payment Date occurs. The "Pool Balance" as of the end of a Collection Period is equal to the aggregate principal balance of the Financed Student Loans (including accrued interest that is capitalized as of the end of the Collection Period), after giving effect to all payments in respect of principal received by the Trust during such Collection Period. The Parity Percentage for any Payment Date or Quarterly Payment Date is determined by dividing (i) the Pool Balance as of the end of the preceding Collection Period, plus accrued interest thereon, accrued Special Allowance Payments and Interest Subsidy Payments as of the end of such Collection Period and all amounts (including accrued interest thereon) in the Collection Account and Reserve Account as of the end of the Collection Period (adjusted for payments made on such Payment Date or Quarterly Payment Date), by (ii) the sum of the principal balance of the Notes (after payments thereon on such Payment Date or Quarterly Payment Date), accrued interest thereon, and accrued and unpaid Transaction Fees and Consolidation Loan Fees. The Legal Final Maturity will be _________ on the Class A Notes, and ________ on the Class B Notes. The actual maturity of one or more Classes of Notes could occur sooner as a result of a variety of factors. See "Maturity and Prepayment Considerations" in the Prospectus and this Prospectus Supplement. If Available Funds are insufficient to pay the Principal Amount for a Payment Date or a Quarterly Payment Date, such shortfall will be added to the principal payable to the Noteholders on subsequent Payment Dates or Quarterly Payment Dates and (except with respect to the Legal Final Maturity of a Class of Notes) such shortfall will not constitute an Event of Default. Additionally, on the Legal Final Maturity for a Class of Notes, amounts in the Reserve Account will be available to reduce the principal balance of such Class of Notes to zero. See "- Priority of Payments" in this Prospectus Supplement. All principal payments of Notes of any Class shall be made pro rata within that Class. In connection with each principal payment of Notes of any Class, the Administrator shall compute the Principal Factor for that Class. The "Principal Factor" shall be a number, carried to a seven-digit decimal, indicating the principal balance of each Note of a Class as of a Payment Date (after giving effect to any payments made on that date) as a fraction of the original principal amount of such Note. The Principal Factor for each Class of Notes shall be initially 1.0000000 and will thereafter decline to reflect the reduction in the principal balance of the Notes of that Class after any payment of principal. The principal balance of any Note can be determined by multiplying the original principal amount of such Note by the Principal Factor applicable to that Class of Notes. Priority of Payments Deposits to Collection Account. On or before each Payment Determination Date, the Administrator will provide the Indenture Trustee and the Eligible Lender Trustee a report setting forth by component the Available Funds for the immediately preceding Collection Period (or the three preceding Collection Periods if the Class A Notes are no longer outstanding). For purposes hereof, the term "Available Funds" means the sum, without duplication, of the following amounts with respect to the related Collection Period: (i) all collections received by the Master Servicer or any Servicer on the Financed Student Loans (including any Guarantee Payments and Insurance Payments received with respect to the Financed Student Loans during such Collection Period); (ii) any payments, including without limitation, Interest Subsidy Payments and Special Allowance Payments received by the Eligible Lender Trustee during such Collection Period with respect to the Financed Student Loans; (iii) all proceeds from any sales of Financed Student Loans by the Trust during such Collection Period; (iv) any payments of or with respect to interest received by the Master Servicer or a Servicer during such Collection Period with respect to a Financed Student Loan for which a Realized Loss was previously allocated; (v) the aggregate Purchase Amounts received for those Financed Student Loans purchased by the Transferor or the Master Servicer during the related Collection Period; (vi) the aggregate amounts, if any, received from the Depositor or the Master Servicer as reimbursement of non-guaranteed or uninsured interest amounts (which shall not include, with respect to Financed FFELP Loans, the portion of such interest amounts (i.e., 2%) for which the Guarantee Agency did not have an obligation to make a Guarantee Payment), or lost Interest Subsidy Payments and Special Allowance Payments with respect to the Financed Student Loans pursuant to the Transfer and Servicing Agreement; (vii) net Adjustment Payments; and (viii) investment earnings during such Collection Period; provided, however, that Available Funds will exclude all payments and proceeds of any Financed Student Loans the Purchase Amount of which has been included in Available Funds for a prior Collection Period (which payments and proceeds shall be paid to the Transferor), and amounts used to reimburse the Master Servicer for Advances pursuant to the terms of the Transfer and Servicing Agreement. Distributions from Collection Account. On each Payment Determination Date, the Administrator will advise the Indenture Trustee and the Eligible Lender Trustee in writing of the applicable Class Interest Amount and Principal Payment Amount with respect to each Class of Notes . Further, on each Payment Determination Date relating to a Quarterly Payment Date, the Administrator will advise the Indenture Trustee in writing of the Transaction Fees payable with respect to the preceding quarter. On each Payment Date or Quarterly Payment Date (and with respect to clause (i)(A) below on each Payment Date while the Class A Notes are outstanding, and thereafter, on the 25th day of each month, or if such day is not a Business Day, the next succeeding Business Day), the Indenture Trustee will transfer from the Collection Account the following amounts in the following priority, subject to Available Funds for the immediately preceding Collection Period or three Collection Periods, as applicable: (i) to the Expense Account (A) an amount equal to accrued and unpaid Consolidation Loan Fees as of the end of the immediately preceding Collection Period, and (B) an amount equal to accrued and unpaid Transaction Fees payable on a Quarterly Payment Date; (ii) to the Note Payment Account, an amount equal to the Class Interest Amount for each Class of Notes due on such Payment Date or Quarterly Payment Date; (iii) to the Note Payment Account, an amount equal to the Principal Payment Amount due on such Payment Date or Quarterly Payment Date (and any overdue Principal Payment Amount). On each Quarterly Payment Date (and with respect to clause (i) below on each Payment Date while the Class A Notes are outstanding, and thereafter, on the 25th day of each month, or if such day is not a Business Day, the next succeeding Business Day) following the transfer to the Expense Account described in the preceding paragraph, the Indenture Trustee will distribute from the Expense Account (in addition to any amounts transferred from the Reserve Account as described herein) the following amounts in the following order of priority: (i) to the Department of Education, the Consolidation Loan Fees for the immediately preceding Collection Period together with any overdue Consolidation Loan Fees for any prior Collection Periods; (ii) to the Master Servicer, the Servicing Fee for the preceding quarter and all overdue Servicing Fees; (iii) to the Administrator, the Administration Fee for the preceding quarter and all overdue Administration Fees; (iv) to the Indenture Trustee, the Indenture Trustee Fee for the preceding quarter and all overdue Indenture Trustee Fees; and (v) to the Eligible Lender Trustee and the Delaware Trustee, the Eligible Lender Trustee Fee and the Delaware Trustee Fee, respectively, for the preceding quarter and all overdue Eligible Lender Trustee Fees and Delaware Trustee Fees. On each Payment Date or Quarterly Payment Date, following the transfers to the Note Payment Account described above, the Indenture Trustee will distribute to the Noteholders as of the related Record Date the amounts transferred to the Note Payment Account, together with any amounts transferred from the Reserve Account and the Advance Account, in the following order of priority: (i) (i) first, to the Class A Noteholders, the Class Interest Amount; (ii) second, if such Payment Date is a Quarterly Payment Date, to the Class B Noteholders, the Class Interest Amount; (iii) third, to the Class A Noteholders, the Principal Payment Amount (and any overdue Principal Payment Amount) until the outstanding amount of the Class A Notes has been reduced to zero; and (iv) fourth, after the principal balance of the Class A Notes has been reduced to zero, if such Payment Date is a Quarterly Payment Date, to the Class B Noteholders, the remaining Principal Payment Amount (and any overdue Principal Payment Amount) until the principal balance of the Class B Notes has been reduced to zero. On each Quarterly Payment Date, after making all required transfers to the Expense Account, the Note Payment Account and, if applicable, the Certificate Distribution Account, the Indenture Trustee will transfer any remaining Available Funds for the preceding three Collection Periods (and with respect to clause (ii) below, any amounts in the Reserve Account in excess of the Specified Reserve Account Balance) in the following order of priority: (i) to the Reserve Account, the amount, if any, necessary to increase the balance thereof to the Specified Reserve Account Balance; (ii) to the Note Payment Account (for payment on such Quarterly Payment Date to the Class A Noteholders, and upon payment in full thereof, to the Class B Noteholders), Parity Payments to the extent then required; and (iii) to the Note Payment Account (for payment on such Quarterly Payment Date to the Class A Noteholders, and upon payment of all Carryover Interest due to the Class A Noteholders, to the Class B Noteholders), the amount of any Carryover Interest. Any remaining Available Funds on a Quarterly Payment Date (other than amounts representing payments received during such month) will be distributed to the Certificateholders, and will not thereafter be available to make payments on the Notes or Certificates. Notwithstanding the foregoing, if on any Payment Date following all distributions to be made on such Payment Date, the principal amount of the Class A Notes would exceed the sum of the Pool Balance at the end of the immediately preceding Collection Period plus the aggregate balance on deposit in the Trust Accounts on such Payment Date following such distributions, or if a payment Event of Default has occurred with respect to the Notes, interest will not be paid on the Class B Notes until after payment of the Principal Payment Amount to the Class A Noteholders. Realized Losses. The Reserve Account is intended, among other things, to cover Realized Losses on the Financed Student Loans that may occur from time to time. See "Description of the Agreements - Transfer and Servicing Agreements - Realized Losses" in the Prospectus. Advances If the Master Servicer has applied for an Insurance Payment from the Department of HHS, a Guarantee Payment from a Guarantee Agency or an Interest Subsidy Payment or a Special Allowance Payment from the Department of Education, and the Master Servicer has not received the related payment prior to the end of the Collection Period immediately preceding the Payment Date on which such amount would be required to be distributed as a payment of interest, the Master Servicer may, no later than the Payment Determination Date relating to such Payment Date, deposit into the Advance Account an amount up to the amount of such payments applied for but not received (such deposits by the Master Servicer are referred to herein as "Advances"). On each related Payment Date, the Indenture Trustee will distribute from the Advance Account to the Noteholders the Advance for such Payment Date. Such Advances are recoverable by the Master Servicer (i) first, from the source for which such Advance was made and (ii) second, from payments received generally on or with respect to the Financed Student Loans. The Master Servicer will have no obligation, legal or otherwise, to make any Advance, and a determination by the Master Servicer to make an Advance will not create any obligation of the Master Servicer, legal or otherwise, to make any future Advances. Reserve Account On the Closing Date, the Depositor will deposit $_________ in cash or Eligible Investments in the Reserve Account. The Reserve Account will be augmented on each Quarterly Payment Date by deposit therein of the amount, if any, necessary to attain or reinstate the balance of the Reserve Account to the Specified Reserve Account Balance from the amount of Available Funds remaining after making all prior distributions on such date as described above under "- Priority of Payments." Also, if amounts were transferred from the Reserve Account to cover a Realized Loss on a Financed Student Loan, any subsequent payments of principal received on or with respect to such Financed Student Loan will be deposited into the Reserve Account. If on any Quarterly Payment Date (after giving effect to all deposits or withdrawals therefrom on such Payment Date) the amount of the Reserve Account is greater than the Specified Reserve Account Balance, the Administrator will, subject to certain limitations, instruct the Indenture Trustee to distribute the amount of the excess, after payment of any Parity Payments and Carryover Interest then due, to the Depositor. Upon any distribution to the Depositor of amounts from the Reserve Account, the Noteholders will not have any rights in, or claims to, such amounts. The Reserve Account is intended to enhance the likelihood of timely receipt by the Noteholders of the full amount of interest due them, the ultimate receipt by the Noteholders of the full amount of principal and to decrease the likelihood that the Noteholders will experience losses. In certain circumstances, however, the Reserve Account could be depleted. If the amount required to be withdrawn from the Reserve Account to cover shortfalls in the amount of Available Funds exceeds the amount of cash in the Reserve Account, a temporary shortfall in the amount of principal and interest distributed to the Noteholders could result. This could, in turn, increase the average life of the Notes. Moreover, amounts on deposit in the Reserve Account (other than amounts in excess of the Specified Reserve Account Balance) will not be available to cover any aggregate unpaid Carryover Interest. Subordination of the Class B Notes The rights of the holders of the Class B Notes to receive principal and interest payments will be subordinated to such rights of the holders of the Class A Notes to the extent described herein. This subordination is intended to enhance the likelihood of regular receipt of the Class Interest Rate and Principal Payment Amount by the Class A Noteholders. See "- Priority of Payments" in this Prospectus Supplement. Termination Optional Purchase. The obligations of the Master Servicer, the Transferor, the Depositor, the Administrator, the Eligible Lender Trustee and the Indenture Trustee pursuant to the Transfer and Servicing Agreements will terminate upon (i) the maturity or other liquidation of the last Financed Student Loan and the disposition of any amount received upon liquidation of any remaining Financed Student Loans and (ii) the payment to the Noteholders and the Certificateholders of all amounts required to be paid to them pursuant to the Transfer and Servicing Agreements. To avoid excessive administrative expense, the Master Servicer is permitted, at its option, to purchase from the Eligible Lender Trustee, as of the end of any Collection Period immediately preceding a Quarterly Payment Date, if the then outstanding Pool Balance is ___% or less of the Initial Pool Balance, all remaining Financed Student Loans at a price equal to the aggregate Purchase Amounts thereof as of the end of such Collection Period, but not less than an amount necessary to pay transaction costs and all amounts due the Noteholders (other than Carryover Interest). Upon payment and redemption of the Notes and Certificates and the attendant termination of the Trust, all remaining assets of the Trust will be conveyed and transferred to the Depositor. Auction Purchase. Any Financed Student Loans remaining in the Trust as of [ ] will be offered for sale by the Indenture Trustee. The Transferor, its affiliates and unrelated third parties may offer bids to purchase such Financed Student Loans on or prior to such Payment Date. If at least two bids are received, the Indenture Trustee will accept the highest bid if it will pay transaction costs and all amounts due the Noteholders (other than Carryover Interest). If at least two bids are not received or the bid proceeds are not sufficient to pay transaction costs and the Notes, the Indenture Trustee will not consummate such sale. The proceeds of any such sale will be used to redeem any outstanding Notes on such Payment Date, after which time the Trust shall be terminated. If the sale is not consummated in accordance with the foregoing, the Indenture Trustee may, but shall not be under any obligation to, solicit bids to purchase the Financed Student Loans on future Payment Dates upon terms similar to those described above. No assurance can be given as to whether the Indenture Trustee will be successful in soliciting acceptable bids to purchase the Financed Student Loans. UNDERWRITING Subject to the terms and conditions set forth in an Underwriting Agreement dated __________ __, 1998 (the "Underwriting Agreement"), among the Depositor, the Transferor, Salomon Brothers Inc and Crestar Securities Corporation (collectively, the "Underwriters"), the Depositor has agreed to sell to the Underwriters, and each Underwriter has severally agreed to purchase from the Depositor, the principal balance of each Class of Notes set forth below its name on the following chart:
Class of Notes Salomon Brothers Inc Crestar Securities Corporation Class A Notes............................. Class B Notes............................. Total............................
In the Underwriting Agreement, the Underwriters have severally agreed, subject to the terms and conditions set forth therein, to purchase all of the Notes offered hereby, if any Notes are purchased. In the event of a default by any Underwriter, the Underwriting Agreement provides that, in certain circumstances, purchase commitments of the non-defaulting Underwriter may be increased or purchase commitments of all Underwriters may be terminated. The Depositor has been advised by the Underwriters that the Underwriters propose initially to offer the Notes to the public at the public offering price with respect to each Class set forth on the cover page of this Prospectus. After the initial public offering, the public offering price may be changed. The Underwriting Agreement provides that the Depositor and the Transferor will indemnify the Underwriters against certain liabilities, including liabilities under applicable securities laws, or contribute to payments the Underwriters may be required to make in respect thereof. After the initial distribution of the Notes by the Underwriters, the Prospectus and Prospectus Supplement may be used by Crestar Securities Corporation, an affiliate of the Transferor and Depositor, in connection with offers and sales relating to market making transactions in the Notes. Crestar Securities Corporation may act as principal or agent in such transactions. Such sales will be made at prices related to prevailing market prices at the time of sale. The Underwriters may engage in over-allotment, stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Regulation M under the Exchange Act. Over-allotment involves syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specific maximum. Syndicate covering transactions involve purchases of the Notes in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the Underwriters to reclaim a selling concession from a syndicate member when the Notes originally sold by such syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Such stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the Notes to be higher than it would otherwise be in the absence of such transactions. Crestar Securities Corporation is an affiliate of the Transferor and Depositor, and a wholly owned indirect subsidiary of Crestar Financial Corporation. LEGAL MATTERS Certain legal matters relating to the Transferor, Depositor, Master Servicer and Administrator will be passed upon by Hunton & Williams and Foley & Lardner. Certain legal matters relating to the validity of the issuance of the Notes and federal income tax matters will be passed upon for the Trust by Hunton & Williams. Each of Hunton & Williams and Foley & Lardner has performed legal services for the Transferor and it is expected that they will continue to perform such services in the future. Certain legal matters will be passed upon for the Underwriters by Squire, Sanders & Dempsey L.L.P. RATING It is a condition to the issuance and sale of each Class of the Class A Notes that they each be rated "AAA" by [Standard & Poor's] and [Fitch] and "Aaa" by [Moody's]. It is a condition to the issuance of the Class B Notes that they be rated at least "A" by [Standard & Poor's] and [Fitch] and at least "A2" by [Moody's]. A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. The ratings of the Notes address the likelihood of the ultimate payment of principal of and interest on the Notes pursuant to their terms. The Rating Agencies do not evaluate, and the ratings on the Notes do not address, the likelihood of prepayments on the Notes or the likelihood of payment of the Carryover Interest. YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR IN OTHER INFORMATION TO WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL ANY SECURITIES OTHER THAN THE NOTES NOR AN OFFER OF SUCH NOTES TO ANY PERSON IN ANY STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AND PROSPECTUS SUPPLEMENT AT ANY TIME DOES NOT IMPLY THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. TABLE OF CONTENTS PROSPECTUS SUPPLEMENT SUMMARY OF TERMS.................................S-1 RISK FACTORS.....................................S-5 THE TRUST........................................S-5 USE OF PROCEEDS..................................S-6 THE FINANCED STUDENT LOANS.......................S-7 MATURITY AND PREPAYMENT CONSIDERATIONS................................S-12 THE SERVICERS...................................S-14 THE GUARANTEE AGENCIES..........................S-14 DESCRIPTION OF THE NOTES........................S-15 UNDERWRITING....................................S-21 LEGAL MATTERS...................................S-22 RATING..........................................S-22 PROSPECTUS RISK FACTORS.......................................1 FORMATION OF THE TRUSTS............................6 USE OF PROCEEDS....................................7 THE TRANSFEROR.....................................7 THE DEPOSITOR......................................8 THE FINANCED STUDENT LOAN POOL.....................8 MATURITY AND PREPAYMENT CONSIDERATIONS...................................9 DESCRIPTION OF THE FFEL PROGRAM...................10 DESCRIPTION OF THE GUARANTEE AGENCIES........................................22 DESCRIPTION OF THE HEAL PROGRAM...................24 THE PRIVATE LOAN PROGRAMS.........................28 DESCRIPTION OF THE AGREEMENTS.....................29 SERVICING.........................................39 DESCRIPTION OF THE NOTES..........................42 FEDERAL INCOME TAX CONSEQUENCES...................53 STATE TAX CONSIDERATIONS..........................62 ERISA CONSIDERATIONS..............................62 AVAILABLE INFORMATION.............................63 REPORTS TO NOTEHOLDERS............................63 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE..........................63 PLAN OF DISTRIBUTION..............................63 FINANCIAL INFORMATION.............................64 RATING............................................64 GLOSSARY OF PRINCIPAL TERMS......................I-1 $ ____________ CRESTAR STUDENT LOAN TRUST 1998-_____ STUDENT LOAN ASSET BACKED NOTES SENIOR LIBOR RATE CLASS A NOTES SUBORDINATE LIBOR RATE CLASS B NOTES PROSPECTUS SALOMON SMITH BARNEY CRESTAR SECURITIES CORPORATION ___________________ ___, 1998 PROSPECTUS CRESTAR SECURITIZATION, LLC DEPOSITOR CRESTAR BANK TRANSFEROR, MASTER SERVICER AND ADMINISTRATOR STUDENT LOAN ASSET BACKED NOTES CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 1 IN THIS PROSPECTUS. A Note is not a deposit and neither the Notes nor the underlying accounts or student loans are insured or guaranteed by the Federal Deposit Insurance Corporation or any governmental agency, except as expressly provided herein. The Notes will represent obligations of the Trust only and will not represent interests in or obligations of Crestar Bank or any of its affiliates. The Notes are not insured or guaranteed by any person. This Prospectus may be used to offer and sell any series of Notes only if accompanied by the Prospectus Supplement for that Series. EACH TRUST: may issue periodically student loan asset backed notes in one or more series with one or more classes; and will own: student loans; payments due on those student loans; and other property described ON THE COVER PAGE OF the accompanying prospectus supplement. THE NOTES: will be secured by the property of the Trust and will be paid only from the Trust's assets; will be rated in one of the four highest rating categories by at least one nationally recognized rating organization; may have one or more forms of credit enhancement; and will be issued as part of a designated series that may include one or more classes of notes and credit enhancement. THE NOTEHOLDERS: will receive interest and principal payments from collections on the student loans and the Trust's other assets; and are entitled to receive payments from collections on student loans and other assets securing their series of Notes, but have no entitlement to payments from student loans or other assets only securing other series of Notes. NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THESE NOTES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. JUNE 26, 1998 IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS AND THE ACCOMPANYING PROSPECTUS SUPPLEMENT The Issuer provides information to you about the Notes in two separate documents that progressively provide more detail: (a) this Prospectus, which provides general information, some of which may not apply to a particular Series of Notes, including your Series, and (b) the accompanying Prospectus Supplement, which will describe the specific terms of your Series of Notes, including: the timing of interest and principal payments; financial and other information about the Financed Student Loans; information about credit enhancement for each Class; the ratings for each Class; and the method for selling the Notes. IF THE TERMS OF A PARTICULAR SERIES OF NOTES VARY BETWEEN THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE INFORMATION IN THE PROSPECTUS SUPPLEMENT. You should rely only on the information provided in this Prospectus and the accompanying Prospectus Supplement, including the information incorporated by reference. The Issuer has not authorized anyone to provide you with different information. The Notes are not offered in any state where the offer is not permitted. The Issuer has included cross-references in this Prospectus and in the accompanying Prospectus Supplement to captions in these materials where you can find further related discussions. The following Table of Contents and the Table of Contents included in the accompanying Prospectus Supplement provide the pages on which these captions are located. ------------------ TABLE OF CONTENTS Page ---- RISK FACTORS............................................1 FORMATION OF THE TRUSTS.................................6 The Trusts...........................................6 Eligible Lender Trustee..............................7 USE OF PROCEEDS.........................................7 THE TRANSFEROR..........................................7 THE DEPOSITOR...........................................8 THE FINANCED STUDENT LOAN POOL..........................8 MATURITY AND PREPAYMENT CONSIDERATIONS..................9 DESCRIPTION OF THE FFEL PROGRAM........................10 General.............................................10 Loan Terms..........................................11 Contracts with Guarantee Agencies...................17 Federal Special Allowance Payments..................21 Federal Student Loan Insurance Fund.................21 Direct Loans........................................22 DESCRIPTION OF THE GUARANTEE AGENCIES..................22 General.............................................22 Federal Agreements..................................23 Effect of Annual Claims Rate........................24 DESCRIPTION OF THE HEAL PROGRAM........................24 Eligible Borrower...................................24 Eligible Lender.....................................25 Insurance Benefits..................................25 Authorized Amounts of HEAL Loans....................25 Terms of HEAL Loans.................................25 Interest............................................26 Insurance Premium...................................27 Consolidation of HEAL Loans.........................27 Payments by Secretary of HHS........................27 Due Diligence.......................................27 Claims..............................................27 General.............................................28 Insurance Fund......................................28 Collection/Litigation...............................28 THE PRIVATE LOAN PROGRAMS..............................28 DESCRIPTION OF THE AGREEMENTS..........................29 General.............................................29 Sales Agreements....................................29 Transfer and Servicing Agreements...................29 The Indenture.......................................33 Administration......................................38 SERVICING..............................................39 Servicing Procedures................................39 Certain Matters Regarding the Master Servicer.......40 Master Servicer Covenants...........................40 Master Servicer Default.............................41 Servicing Compensation..............................41 DESCRIPTION OF THE NOTES...............................42 General.............................................42 Payment of Available Funds..........................42 Interest............................................43 Principal...........................................44 Determination of LIBOR..............................45 T-Bill Rate.........................................45 Auction Procedures..................................46 Credit Enhancement..................................47 Termination.........................................48 Book-Entry Registration.............................49 Definitive Notes....................................52 List of Noteholders.................................52 Reports to Noteholders..............................52 FEDERAL INCOME TAX CONSEQUENCES........................53 General.............................................53 Original Issue Discount.............................53 Variable Rate Notes.................................57 Anti-Abuse Rule.....................................59 Market Discount.....................................59 Amortizable Premium.................................60 Gain or Loss on Disposition.........................60 Miscellaneous Tax Aspects...........................61 STATE TAX CONSIDERATIONS...............................62 ERISA CONSIDERATIONS...................................62 AVAILABLE INFORMATION..................................63 REPORTS TO NOTEHOLDERS.................................63 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........63 PLAN OF DISTRIBUTION...................................63 FINANCIAL INFORMATION..................................64 RATING.................................................64 GLOSSARY OF PRINCIPAL DEFINITIONS I-1 64 RISK FACTORS You should consider the following risk factors in deciding whether to purchase the Notes. Limited Ability To Resell Notes The underwriters may assist in resales of the Notes but they are not required to do so. A secondary market for any Series of Note may not develop. If a secondary market does develop, it might not continue or it might not be sufficiently liquid to allow you to resell any of your Notes. Limited Trust Assets Your Trust will not have any significant assets or sources of funds except for the Financed Student Loans and related assets. The Notes are obligations solely of the related Trust, and will not be insured or guaranteed by the Depositor, the Transferor, the Master Servicer, the Guarantee Agencies, the Eligible Lender Trustee, any of their affiliates, the Department of HHS or the Department of Education. Noteholders must rely for repayment upon proceeds realized from the Financed Student Loans, Credit Enhancement (if any), and related Trust assets. See "Description of the Notes--Payment of Available Funds" and "Description of the Notes-- Credit Enhancement" herein. Failure To Comply with Student Loan Origination and Servicing Procedures The Higher Education Act AND HEAL ACT REQUIRE loan holders and servicers to follow specified procedures to ensure that the FFELP Loans and HEAL Loans are properly originated and SERVICED. Failure to follow these procedures may result in: (i) Loss of Interest Subsidies and Special Allowance Payments. The Department of Education's refusal to make reinsurance payments to the Guarantee Agencies or to make Interest Subsidy Payments and Special Allowance Payments to the Eligible Lender Trustee with respect to the Financed FFELP Loans; (ii) Loss of Guarantee Payments. The Guarantee Agencies' inability or refusal to make Guarantee Payments with respect to Financed FFELP Loans; and (iii) Loss of Insurance Payments. The Department of HHS' refusal to make insurance payments under the insurance contract with respect to financed HEAL loans. Loss of any such payments may adversely affect your Trust's ability to pay principal and interest on the notes. See "Description of the FFEL Program," "Description of the HEAL Program" and "Servicing -- Servicing Procedures" herein. Subordination Where one or more Classes in a Series are subordinated, principal payments on the subordinated Class or Classes generally will not begin until the related senior Class or Classes are repaid. In addition, interest payments on a Payment Date on a subordinated Class or Classes generally will be made only after each senior class has received its interest entitlement on that Payment Date and sometimes will be made only after each senior Class has received its principal entitlement on that Payment Date. Consequently, a subordinated Class will bear losses on the Financed Student Loans prior to such losses being borne by the more senior Classes. In addition, subordinated Noteholders may be limited in the remedies that are available to them until the more senior Noteholders are paid in full. Obligations to Purchase Financed Student Loans The Depositor or the Master Servicer will be obligated to repurchase Financed Student Loans if a breach of any representation, warranty or obligation of the Depositor or the Master Servicer results in a loss of insurance or guaranty payments. The Transferor generally will be obligated to repurchase any financed student loan required to be repurchased by the Depositor. The Depositor, the Transferor or the Master Servicer may not have the financial resources to purchase any Financed Student Loan. The failure of the Depositor, the Transferor or the Master Servicer to purchase a Financed Student Loan is a breach of the Transfer and Servicing Agreement, enforceable by a Trust or by the Indenture Trustee, but is not an Event of Default under the Indenture. See "Description of the Agreements" herein. Issuance of Additional Series by a Trust A Trust identified as a master trust in the accompanying Prospectus Supplement may issue additional Series of Notes from time to time. Additional Series may have terms that are different from your Series without the prior consent or review of any Noteholders. It is a condition to the issuance of each new series from the same Trust that each Rating Agency that originally rated an outstanding Series at the request of the Depositor confirm in writing that the issuance of the new Series will not result in a reduction or withdrawal of its rating. However, the terms of a new Series could affect the timing and amounts of payments on any other outstanding Series of the same Trust. Offset by Guarantee Agencies or the Department of Education The Eligible Lender Trustee may use a Department of Education lender identification number that may also be used for other student loans held by the Eligible Lender Trustee on behalf of entities established by the Depositor, the Transferor or their affiliates under other indentures. If it does, the billings submitted to the department of education will be consolidated with the billings for payments for student loans under other indentures, and payments on such billings would be made by the Department of Education or the Guarantee Agency to the Eligible Lender Trustee in lump sum form. These payments would be allocated by the Eligible Lender Trustee among the various indentures using the same lender identification number. If the Department of Education or a Guarantee Agency determines that the Eligible Lender Trustee owes a liability to the Department of Education or the Guarantee Agency on any FFELP Loan for which the Eligible Lender Trustee is legal titleholder, the Eepartment of Education or the Guarantee Agency might seek to collect that liability by offsetting against payments due the Eligible Lender Trustee under your Trust. Such offsetting or shortfall of payments due to the Eligible Lender Trustee with respect to your Trust could adversely affect the amount of Available Funds for any Collection Period and your Trust's ability to pay interest and principal on the Notes. Although the various trusts and indentures will contain provisions for cross-indemnification with respect to such payments and offsets, there can be no assurance that the amount of funds available to your trust with respect to such right of indemnification may be adequate to compensate your Trust and Noteholders for any previous reduction in the Available Funds for a Collection Period. The Department of HHS does not currently limit lender identification numbers with respect to HEAL Loans, but the Trust Agreement and Indenture will provide for the sharing of lender identification numbers with respect to the Financed HEAL Loans in a similar manner to the sharing of lender identification numbers for the Financed FFELP Loans. See "Description of the FFEL Program," "Description of the Guarantee Agencies" and "Description of the Heal Program" herein. Financial Status of Guarantee Agencies The FFELP Loans are not secured by any collateral of the borrower. Payments of principal and interest are guaranteed by Guarantee Agencies to the extent described herein and in the related Prospectus Supplement. Excessive Borrower defaults could impair a Guarantee Agency's ability to meet its guarantee obligations. In addition, future legislation or regulations may reduce Guarantee Agency revenues by restricting the amount of guarantee fees or reducing Secretary of Education reimbursements. The financial status of a Guarantee Agency could affect the timing and amount of Available Funds for any Collection Period and your Trust's ability to pay principal of and interest on the Notes. Although a holder of FFELP Loans could submit claims for payment directly to the Department of Education if the Department determines that a Guarantee Agency is unable to meet its insurance obligations, there is no assurance that the Department of Education would make such a determination or that it would pay claims in a timely manner. See "Description of the FFEL Program" and "Description of the Guarantee Agencies" herein. Changes to HEAL Program and FFEL Program The HEAL Act, the Higher Education Act and other relevant federal or state laws may be amended or modified in the future against your interests. In particular, the level of Guarantee Payments or Insurance Payments may be adjusted from time to time. The issuer cannot predict whether any changes will be adopted or, if so, what impact such changes may have on your trust or the Notes. Federal Direct Student Loan Program The Higher Education act provides for a Federal Direct Student Loan Program. This program could result in reductions in the volume of loans made under the FFEL Program. If so, the Master Servicer and the Servicers may experience increased costs due to reduced economies of scale. These cost increases could reduce the ability of the Master Servicer and the Servicers to satisfy their obligations to service the Financed Student Loans. This could also reduce revenues received by the Guarantee Agencies available to pay claims on defaulted FFELP Loans. The competition currently existing in the secondary market for loans made under the FFEL Program and HEAL Program could be reduced, resulting in fewer potential buyers of the FFELP Loans and Heal Loans and lower prices available in the secondary market for those loans. The Department of Education has implemented a direct consolidation loan program, which may reduce the volume of loans made under the FFEL Program and the HEAL Program and is expected to result in prepayments of Financed Student Loans. See "Description of the FFEL Program herein." Reinvestment Risk and Prepayments Financed Student Loans may be prepaid by borrowers at any time without penalty. the rate of prepayments may be influenced by economic and other factors, such as interest rates, the availability of other financing, and the general job market. In addition, under certain circumstances, the Depositor and the Master Servicer will be obligated to purchase Financed Student Loans from your Trust pursuant to the Transfer and Servicing Agreement as a result of breaches of the Depositor's representations and warranties or the Master Servicer's servicing obligations, respectively. See "Description of the Agreements -- Transfer and Servicing Agreement -- Conveyance of Financed Student Loans; Representations and Warranties" and "Servicing" herein. To the extent borrowers elect to borrow money through Consolidation Loans or HEAL Consolidation Loans, the Noteholders will receive as a prepayment of principal the aggregate principal amount of the loan. If loan prepayments result in a Class of Notes being prepaid prior to its expected Legal Final Maturity, the holders of the Notes may not be able to reinvest their funds at the same yield as the yield on the Notes. We cannot predict the prepayment rate of any Notes, and reinvestment risks resulting from a faster or slower prepayment speed will be borne entirely by the holders of the Notes. Generally, the effect of such prepayments initially will be to increase the rate of payment on senior Notes and, therefore, increase the reinvestment risk with respect to senior Notes. After the senior Notes have been paid in full, the amount of such prepayments will be applied to the payment of the principal balance of more subordinated Notes until they are paid in full. Reinvestment risk resulting from prepayments is expected to be borne first by the holders of senior Classes of Notes, and then by the holders of more subordinated Classes of Notes. ** 1 Average Life Scheduled payments on the Financed Student Loans and the maturities of the financed student loans may be extended without your consent, which may lengthen the weighted average life of your investment. Prepayments of principal on the Financed Student Loans and Parity Payments may shorten the life of your investment. See "Maturity and Prepayment Considerations" herein. Basis Risk The Class Interest Rate for any Class of LIBOR Rate Notes will be based generally on the level of LIBOR. The Class Interest Rate for any Class of Auction Rate Notes will be based generally on the outcome of an Auction of Notes. The Class Interest Rate for other Classes of Notes may be based on the index, formula or other method, such as the T-Bill Rate, described in the related Prospectus Supplement. The Financed Student Loans, however, generally bear interest at the T-Bill Rate plus a stated margin. The foregoing interest rates generally will be limited by the Net Loan Rate, which will equal the weighted average Effective Interest Rate of the Financed Student Loans, less the Program Operating Expense Percentage. For a Payment Date on which the Net Loan Rate applies, the difference between the amount of interest at the Formula Rate described above and the amount of interest at the Net Loan Rate (together with interest thereon, "Carryover Interest"), will be paid on succeeding Payment Dates to the extent of Available Funds and may never be paid. See "Description of the Notes -- Interest" herein. Principal Balance of Notes May Exceed Pool Balance The principal amount of Notes issued by your Trust may exceed the related Pool Balance. If an Event of Default occurs and the assets of your Trust are liquidated, the Financed Student Loans would have to be sold at a premium for the subordinated Noteholders (and possibly the senior Noteholders) to avoid a loss. The Depositor cannot predict the rate or timing of accelerated payments of principal or when the aggregate principal amount of the Notes may be reduced to the aggregate principal amount of the Financed Student Loans. Indenture Trustee May Have Difficulty Liquidating Financed Student Loans Generally, during an Event of Default, the Indenture Trustee is authorized (with certain Noteholder consent) to sell the related Financed Student Loans. However, the Indenture Trustee may not find a purchaser for the Financed Student Loans. Also, the market value of the Financed Student Loans might not equal the principal amount of Notes plus accrued interest. In either event, the Noteholders may suffer a loss. The principal amount required to be paid on the Notes on any Payment Date under the Indenture generally is limited to amounts available for payment. Therefore, failure to pay principal may not result in the occurrence of an Event of Default until the Legal Final Maturity of the Notes. Receivership or conservatorship of transferor The Depositor views the transfer of the Financed Student Loans from the Transferor to the Depositor as a valid sale. However, a court could treat this transfer as a secured financing. If the Federal Deposit Insurance Corporation (the "FDIC") is appointed receiver or conservator of the Transferor, the FDOC's administrative expenses may have priority over the Eligible Lender Trustee's interest in the Financed Student Loans. In addition, the Federal Deposit Insurance Act ("FDIA"), as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA"), sets forth certain powers that the FDIC could exercise in its capacity as a receiver or conservator of the Transferor. To the extent that the transfer of the Financed Student Loans to the Depositor is deemed to be a secured financing and the security interest is validly perfected before the Transferor's insolvency (and was not taken in contemplation of insolvency or with the intent to hinder, delay or defraud the Transferor or its creditors), then, based upon opinions and statements of policy issued by the fFDIC the security interest should not be subject to avoidance, and payments to your Trust with respect to the Financed Student Loans should not be subject to recovery by the FDIC as receiver or conservator of the Transferor. Because the Depositor is an affiliate of the Transferor, however, the FDIC could assert a contrary position, and rely upon certain provisions of the FDIA which, at the request of the FDIC, have been applied in recent lawsuits to avoid security interests in collateral granted by depository institutions, to permit the FDIC to avoid such security interest, thereby resulting in possible delays and reductions in payments on the Notes. In addition, if the FDIC were to require the Indenture Trustee or the Eligible Lender Trustee to establish its right to such payments by submitting to and completing the administrative claims procedure under the FDIA, as amended by FIRREA, delays in payments on the Notes and possible reductions in the amount of those payments could occur. Bankruptcy of Depositor The Depositor is a limited purpose finance subsidiary of Crestar Bank. If the Depositor becomes bankrupt, the United States Bankruptcy Code could materially limit or prevent the enforcement of the Depositor's obligations, including, without limitation, its obligations under the Notes. The Depositor's trustee in bankruptcy (or the Depositor itself as debtor-in-possession) may seek to accelerate payment on the Notes and liquidate the assets in your Trust. If principal on the Notes is declared due and payable, you may lose the right to future payments and face reinvestment risks mentioned above. Perfected Security Interest in Financed Student Loans If any transfer of the Financed Student Loans is deemed to be a secured financing, other persons may have an interest in the loans prior to the Eligible Lender Trustee. The Transferor and the Depositor will represent that the Financed Student Loans are transferred to the Eligible Lender Trustee free and clear of all liens, and covenant that they will not sell, pledge, assign, transfer or grant any lien on = any Financed Student Loan (or any interest therein) other than to the Eligible Lender Trustee. Each Servicer will have custody of the promissory notes related to the Financed FFELP Loans. The Financed Student Loans may not be physically segregated in the Servicer's or other custodian's offices. If any interest in the Financed Student Loans were assigned to another party, that person could acquire an interest in the Financed Student Loans superior to the interest of the Eligible Lender Trustee and the Indenture Trustee. Pre-Funding Account If your Trust includes a Pre-Funding Account, the related Eligible Lender Trustee will own the Financed Student Loans and the Pre-Funded Amount on deposit in the Pre-Funding Account. If the amount of Financed Student Loans sold to your Trust during the Pre-Funding Period is less than the Pre-Funded Amount, your Trust will prepay principal equal to the difference. Each such Additional Student Loan must satisfy the eligibility criteria specified in the Transfer and Servicing Agreement. See "Prospectus Summary-- Pre-Funding Account" and "Description of the Agreements-- Transfer and Servicing Agreements-- Pre-Funding Account" herein. Changes in Repayment Terms Under certain incentive programs, the Transferor may terminate or change the terms of the incentives with respect to any or all of a borrower's loans. We cannot predict which borrowers will qualify or decide to participate in these programs. The effect of these incentive programs may be to reduce the yield on the Financed Student Loans. Consumer Protection Laws Consumer protection laws impose requirements upon lenders and servicers. Some state laws impose finance charge restrictions on certain transactions and require contract disclosures. These state laws are generally preempted by the Higher Education Act and the HEAL Act. However, the form of promissory notes required by the Department of Education for FFELP Loans provides that holders of such promissory notes evidencing certain loans made to borrowers attending for-profit schools are subject to any defenses that the borrower may have against the school. Private Loan Programs would be subject to applicable state laws regulating loans to consumers. Book-Entry Registration The notes may be represented by one or more certificates registered in the name of Cede & Co., the nominee for DTC, and will not be registered in the names of the holders of the Notes, if specified in the accompanying Prospectus Supplement. If so, you will not be recognized by the Indenture Trustee or the Eligible Lender Trustee as to "Noteholders." Also, you will only be able to exercise the rights of Noteholders indirectly through DTC and its participating organizations. See "Description of the Notes -- Book-Entry Registration" herein. Rating A Rating Agency will rate each note in one of its four highest rating categories. A rating is not a recommendation to buy or sell Notes or a comment concerning suitability for any investor. A rating only addresses the likelihood of the ultimate payment of principal and stated interest and does not address the likelihood of prepayments on the Notes or the likelihood of the payment of Carryover Interest. A rating may not remain in effect for the life of the Notes. See "Prospectus Summary -- Rating" and "Rating" herein and "Rating" in the accompanying Prospectus Supplement. FORMATION OF THE TRUSTS The Trusts Each Trust will be formed under the laws of the jurisdiction set forth in the related Prospectus Supplement pursuant to a Trust Agreement for the transactions described in this Prospectus and each Prospectus Supplement. Each Trust will be a statutory business trust. A Trust will not engage in any activity other than (i) acquiring, holding, selling and managing the Financed Student Loans and the other assets of the Trust and proceeds therefrom, (ii) issuing one or more classes of its certificates and notes, (iii) making payments thereon and (iv) engaging in other activities that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith. A Trust may be a "master trust" that issues more than one Series of Notes if specified in the accompanying Prospectus Supplement. For so long as the Transferor is a Certificateholder of a Trust, the Trust's activities will be FURTHER limited to activities that are part of, or incidental to, the business of banking as well. A Trust INITIALLY WILL BE CAPITALIZED WITH A NOMINAL CASH PAYMENT. THE RIGHT TO RECEIVE ANY AMOUNTS REMAINING AFTER PAYMENT OF THE NOTES WILL BE REPRESENTED BY THE CERTIFICATES, WHICH INITIALLY ARE EXPECTED TO BE HELD BY THE DEPOSITOR. The equity of the Trust, together with the proceeds from the sale of each Series of Notes, will be used by the related Eligible Lender Trustee in connection with its acquisition, on behalf of the Trust, of the Financed Student Loans from the Depositor pursuant to the Transfer and Servicing Agreement. A portion of the net proceeds received from the transfer of the Financed Student Loans may be used by the Depositor to make a Reserve Account Deposit or a Pre-Funding Account Deposit. Upon the consummation of each such transaction, the property of a Trust will consist of (a) the pool of Financed Student Loans, legal title to which is held by the Eligible Lender Trustee on behalf of the Trust, (b) all funds collected in respect thereof on or after the applicable Cut-off Date, (c) all moneys and investments on deposit in the Collection Account, the Certificate Distribution Account, the Note Payment Account, the Expense Account, the Advance Account, the Reserve Account and the Pre-Funding Account, and (d) any other property specified in the related Prospectus Supplement. The Notes will be secured by certain property of the related Trust. The Collection Account, the Note Payment Account, the Expense Account, the Reserve Account, the Pre-Funding Account and the Advance Account will be maintained with and in the name of the Indenture Trustee. To facilitate servicing and to minimize administrative burden and expense, the related Servicer will be appointed custodian of the promissory notes representing the Financed Student Loans by the Eligible Lender Trustee. A Trust's principal offices will be located at the address of the applicable Eligible Lender Trustee set forth in the related Prospectus Supplement. ELIGIBLE LENDER TRUSTEE The Eligible Lender Trustee for any Trust will be the entity named in the applicable Prospectus Supplement and will acquire on behalf of a Trust legal title to all the Financed Student Loans acquired by such Trust from time to time pursuant to a Transfer and Servicing Agreement. The Eligible Lender Trustee on behalf of a Trust will enter into a Guarantee Agreement with each of the Guarantee Agencies with respect to such Financed FFELP Loans and a HEAL Insurance Contract with the Department of HHS with respect to such Financed HEAL Loans. The Eligible Lender Trustee qualifies, or prior to taking title to the Financed Student Loans for which additional qualifications are necessary, will qualify, as an eligible lender and owner of Financed Student Loans for all purposes under the Higher Education Act and the Guarantee Agreements with respect to such Financed FFELP Loans, under the HEAL Act and the HEAL Insurance Contract with respect to such Financed HEAL Loans, and the applicable Private Loan Programs. Failure of the Financed Student Loans to be owned by an eligible lender would result in the loss of Guarantee Payments, Interest Subsidy Payments and Special Allowance Payments with respect to Financed FFELP Loans and the loss of Insurance Payments with respect to Financed HEAL Loans. See "Description of the FFEL Program" and "Description of the HEAL Program." The Transferor, the Depositor and their affiliates may maintain from time to time other banking relationships with any Eligible Lender Trustee and its affiliates. USE OF PROCEEDS The Trust will use the net proceeds from the sale of a Series of Notes to acquire Financed Student Loans from the Depositor and permit the Depositor to make various deposits with respect to the Notes. After any required funding of accounts relating to the Notes, the Depositor will use the proceeds to acquire such Financed Student Loans from the Transferor. The Transferor is expected to use such proceeds for general corporate purposes, including the origination or purchase of Financed Student Loans. THE TRANSFEROR Crestar Bank, the Transferor, is a Virginia banking corporation that offers a broad range of banking services, including various types of deposit accounts and instruments, commercial and consumer loans, trust and investment management., bank credit cards, and international banking to customers throughout Virginia, Maryland and Washington, D.C. Services are also provided through non-bank subsidiaries. Securities brokerage and investment banking services are offered by Crestar Securities Corporation. The Transferor and its predecessors have been originating and purchasing FFELP Loans since 1965 and HEAL Loans since 1995. The Transferor is a wholly owned indirect subsidiary of Crestar Financial Corporation, a bank holding company organized under the laws of the Commonwealth of Virginia and registered under the Bank Holding Company Act of 1956, as amended (the "BHCA"). Crestar Financial Corporation is supervised and examined by the Board of Governors of the Federal Reserve System under the BHCA. The BHCA requires Federal Reserve approval for bank acquisitions and regulates non-banking activities of bank holding companies. Crestar Bank is regulated by the State Corporation Commission of Virginia and the Federal Reserve Bank of Richmond. The Transferor generally will be obligated to purchase Financed Student Loans to the extent that the Depositor is obligated to do so. The principal executive office of the Transferor is located at Crestar Center, 919 East Main Street, Richmond, Virginia 23219. Its telephone number is (804) 782-5171. The Notes are neither obligations of nor guaranteed by Crestar Financial Corporation or any of Crestar Financial Corporation's Subsidiaries (including the Transferor) THE DEPOSITOR Crestar Securitization, LLC, the Depositor, is a Virginia limited liability company organized as a limited purpose finance company owned by the Transferor and Crestar SP Corporation (the "Manager"), a Virginia corporation. The Transferor owns all of the capital stock of the Manager. The Manager manages the business operations of the Depositor, and each of the Manager's officers are also officers of the Transferor. The Depositor and the Manager maintain their principal executive offices at Crestar Center, 919 East Main Street, Richmond, Virginia 23219. The Depositor and the Manager share the telephone number (804) 782-5171. As described herein, the only obligations, if any, of the Depositor with respect to any Series of Notes may be pursuant to certain limited representations and warranties and limited undertakings to repurchase or substitute Financed Student Loans under certain circumstances. The Depositor will have no ongoing servicing obligations or responsibilities with respect to any Financed Student Loan. The Depositor does not have, nor is it expected in the future to have, any significant assets. The Depositor will not insure or guarantee the Notes of any Series. THE FINANCED STUDENT LOAN POOL The pool of Financed Student Loans will include the Financed Student Loans acquired by the applicable Eligible Lender Trustee on behalf of a Trust from time to time as of the applicable Cut-off Date and, if set forth in the related Prospectus Supplement, any Subsequent Financed Student Loans, Additional Student Loans or other Financed Student Loans acquired by the applicable Eligible Lender Trustee on behalf of a Trust as described in the related Prospectus Supplement. The Financed Student Loans will be selected from the Transferor's portfolio of FFELP Loans, HEAL Loans and Private Loans by several criteria, including the following: each Financed Student Loan (i) was or will be originated in the United States or its territories or possessions under and in accordance with the FFEL Program, the HEAL Program or the applicable Private Loan Program, as the case may be, to, or on behalf of, a student who has graduated or is expected to graduate from an accredited institution of higher education, a for-profit educational institution or to, or on behalf of, a student who is enrolled in private primary or secondary schools, (ii) contains terms in accordance with those required by the applicable program, the Guarantee Agreements and other applicable requirements, and (iii) is not more than 90 days past due as of the related Cut-off Date. The relative percentages of each type of Financed Student Loan, as well as the relative percentages of Financed Student Loans originated by the Transferor, to be included in the pool of Financed Student Loans will be determined from time to time by the Transferor. See "Description of the FFEL Program," "Description of the Guarantee Agencies," "Description of the HEAL Program" and "The Private Loan Programs" herein. In addition to the criteria described in the preceding paragraphs, an applicable provider of Credit Enhancement may require certain other characteristics for additional Financed Student Loans. However, following each transfer of additional Financed Student Loans to an Eligible Lender Trustee on behalf of a Trust, the aggregate characteristics of the entire pool of Financed Student Loans, including the composition and type of the Financed Student Loans, the distribution by weighted average interest rate and the distribution by principal amount to be described in tables included in each Prospectus Supplement, may vary significantly from those of the Financed Student Loans, if any, previously transferred to such Trust. In addition, the distribution by weighted average interest rate applicable to the Financed Student Loans on any date following the related Cut-off Date may vary significantly from that set forth in the tables included in the related Prospectus Supplement as a result of variations in the effective rates of interest applicable to the Financed Student Loans. Moreover, the information included in the related Prospectus Supplement with respect to the original term to maturity and remaining term to maturity of Financed Student Loans as of the related Cut-off Date may vary significantly from the actual term to maturity of any of the Financed Student Loans as a result of the granting of deferral and forbearance periods with respect thereto. Each Prospectus Supplement will set forth, as of the related Cut-off Date, various information with respect to the initial Financed Student Loans for such Trust. Such information may include the composition of the Financed Student Loans, the distribution by loan type, the distribution by interest rates, the distribution by outstanding principal balance, the distribution by geography, the distribution by insurance or guarantee level, the distribution by school type, the distribution by Guarantee Agency, the distribution by remaining term to scheduled maturity and the distribution by borrower payment status. See "The Financed Student Loans" in the accompanying Prospectus Supplement. Each of the FFELP Loans and HEAL Loans provides or will provide for the amortization of the outstanding principal balance of such Financed Student Loan over a series of regular payments. Each regular payment consists of an installment of interest which is calculated on the basis of the outstanding principal balance of such Financed Student Loan multiplied by the applicable interest rate and further multiplied by the period elapsed (as a fraction of a calendar year) since the preceding payment of interest was made. As payments are received in respect of such Financed Student Loan, the amount received is applied first to interest accrued to the date of payment and the balance is applied to reduce the unpaid principal balance. Accordingly, if a borrower pays a regular installment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be less than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly greater. Conversely, if a borrower pays a monthly installment after its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made will be greater than it would have been had the payment been made as scheduled, and the portion of the payment applied to reduce the unpaid principal balance will be correspondingly less. In either case, subject to any applicable Grace Periods, Deferment Periods or Forbearance Periods, the borrower pays a regular installment until the final scheduled payment date, at which time the amount of the final installment is increased or decreased as necessary to repay the then outstanding principal balance of such Financed Student Loan. The Private Loans may contain different amortization provisions. MATURITY AND PREPAYMENT CONSIDERATIONS The rate of payment of principal of the Notes and the yield on the Notes will be affected by (i) prepayments of the Financed Student Loans that may occur as described below (including repurchases by the Transferor, the Depositor or the Master Servicer), (ii) the sale by the related Trust of Financed Student Loans, (iii) the application of additional principal payments, if any, and (iv) the issuance by a Trust of additional Notes. All the Financed Student Loans are prepayable in whole or in part by the borrowers at any time (including by means of Consolidation Loans as discussed below) and may be prepaid as a result of a borrower default, death, disability or bankruptcy and subsequent liquidation or collection of Guarantee Payments and Insurance Payments with respect thereto. The rate of such prepayments cannot be predicted and may be influenced by a variety of economic, social and other factors, including those described below. In general, the rate of prepayments may tend to increase to the extent that alternative financing becomes available at prevailing interest rates which fall significantly below the interest rates applicable to the Financed Student Loans. However, because many of the Financed Student Loans bear interest at a rate that either actually or effectively is floating, it is impossible to determine whether changes in prevailing interest rates will be similar to or vary from changes in the interest rates on the Financed Student Loans. The Transferor and the Depositor are obligated to purchase any Financed Student Loan pursuant to a Sales Agreement or Transfer and Servicing Agreement as a result of a breach of certain of their respective representations and warranties, and the Master Servicer is obligated to purchase any Financed Student Loan pursuant to a Transfer and Servicing Agreement as a result of a breach of certain covenants with respect to such Financed Student Loan, in each case where such breach results in the failure of a Guarantee Agency (including for this purpose any guarantor under a Private Loan Program) to make a Guarantee Payment or the Department of HHS to make an Insurance Payment. See "Description of the Agreements -- Transfer and Servicing Agreements -- Conveyance of Financed Student Loans; Representations and Warranties" herein. See also "Description of the Notes -- Termination" regarding early termination of the Notes of a Series as a consequence of the purchase of the related Financed Student Loans. Scheduled payments with respect to, and maturities of, the Financed Student Loans may be extended, including pursuant to Grace Periods, Deferment Periods and, under certain circumstances, Forbearance Periods or as a result of refinancings through Consolidation Loans to the extent such Consolidation Loans are sold to the applicable Eligible Lender Trustee on behalf of a Trust as described above. In that event, the fact that such Consolidation Loans will likely have longer maturities than the Financed Student Loans they are replacing may lengthen the remaining term of the Financed Student Loans and the average life of the Notes of the related Trust. The rate of payment of principal of the Notes and the yield on the Notes may also be affected by the rate of defaults resulting in losses on Financed Student Loans, by the severity of those losses and by the timing of those losses. Each Trust established as a master trust may issue, from time to time, several Series and Classes of Notes. The payment priorities of each Series and Class will be described in the applicable Prospectus Supplement. Such priorities may provide that a subsequently issued Class of Notes receive payments of principal prior to a previously issued Class of Notes, even if such previously issued Class of Notes had been receiving payments of principal. However, each Class of Notes will be payable in full by its Legal Final Maturity. The rate of prepayment on the Financed Student Loans cannot be predicted, and any reinvestment risks resulting from a faster or slower incidence of prepayment of Financed Student Loans or a faster or slower incidence of sales by the Trust will be borne entirely by the Noteholders. Such reinvestment risks may include the risk that interest rates and the relevant spreads above particular interest rate bases are lower at the time Noteholders receive payments from the related Trust than such interest rates and such spreads would otherwise have been had such prepayments not been made or had such prepayments been made at a different time. DESCRIPTION OF THE FFEL PROGRAM GENERAL The Higher Education Act sets forth provisions establishing the FFEL Program, pursuant to which state agencies or private nonprofit corporations administering student loan insurance programs (referred to as "Guarantee Agencies") are reimbursed for losses sustained in the operation of their programs, and holders of certain loans made under such programs are paid subsidies for owning such loans. The Higher Education Act currently authorizes certain student loans to be covered under the FFEL Program if they are contracted for and paid to the student prior to September 30, 2002, unless a student has received a loan under the FFEL Program prior to such date, in which case that student may receive a student loan covered by the FFEL Program until September 30, 2006. Congress has extended similar authorization dates in prior versions of the Higher Education Act; however, there can be no assurance that the current authorization dates will again be extended or that the other provisions of the Higher Education Act will be continued in their present form. Various amendments to the Higher Education Act have revised the FFEL Program from time to time. These amendments include, but are not limited to, THE INTERMODAL SURFACE TRANSPORTATION EFFICIENCY ACT OF 1998, the Balanced Budget Act of 1997, the Higher Education Technical Amendments Act of 1993, the Omnibus Budget Reconciliation Act of 1993 (the "1993 Amendments"), the Higher Education Amendments of 1992, which reauthorized the FFEL Program, the Omnibus Budget Reconciliation Act of 1990, the Omnibus Budget Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of 1987, the Higher Education Technical Amendments Act of 1987, the Higher Education Amendments of 1986, which reauthorized the FFEL Program, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Postsecondary Student Assistance Amendments of 1981 and the Education Amendments of 1980. There can be no assurance that relevant federal laws, including the Higher Education Act, will not be changed in a manner that may adversely affect the receipt of funds by the Guarantee Agencies or by the Transferor or the Eligible Lender Trustee with respect to Financed FFELP Loans. REAUTHORIZATION BILLS ARE PENDING IN BOTH THE HOUSE OF REPRESENTATIVES AND THE SENATE OF THE UNITED STATES which, if enacted into law, would amend the Higher Education Act TO make various changes to the FFEL Program, including changes that would reduce various payments to Guarantee Agencies and restructure guarantee agencies' operations and programs, and revise terms of student loans and payments to the Eligible Lender Trustee. There is no certainty that any of the PENDING LEGISLATION will be enacted into law in ITS current form or at all, and the Transferor cannot predict at this time how such legislation, if enacted, would affect a Servicer's business or operations, or those of the Transferor. This is only a summary of certain provisions of the Higher Education Act. Reference is made to the text of the Higher Education Act for full and complete statements of its provisions. LOAN TERMS General Four types of loans are currently available under the FFEL Program: Stafford Loans, Unsubsidized Stafford Loans, Plus Loans and Consolidation Loans. These loan types vary as to eligibility requirements, interest rates, repayment periods, loan limits and eligibility for interest subsidies and Special Allowance Payments. Some of these loan types have had other names in the past. References herein to the various loan types include, where appropriate, predecessors to such loan types. The primary loan under the FFEL Program is the Stafford Loan. Students who are not eligible for Stafford Loans based on their economic circumstances may be able to obtain Unsubsidized Stafford Loans. Parents of students may be able to obtain Plus Loans. Consolidation Loans are available to borrowers with existing loans made under the FFEL Program and certain other federal programs to consolidate repayment of such existing loans. For periods of enrollment beginning prior to July 1, 1994, SLS Loans were available to students with costs of education that were not met by other sources and that exceeded the Stafford or Unsubsidized Stafford Loan limits. Eligibility General. A student is eligible for loans made under the FFEL Program only if he or she: (i) has been accepted for enrollment or is enrolled in good standing at an eligible institution of higher education (which term includes certain vocational schools), (ii) is carrying or planning to carry at least one-half the normal full-time workload for the course of study the student is pursuing as determined by the institution (which, in the case of a loan to cover the cost of a period of enrollment beginning on or after July 1, 1987, must either lead to a recognized educational credential or be necessary for enrollment in a course of study that leads to such a credential), (iii) has agreed to notify promptly the holder of the loan concerning any change of address, (iv) if presently enrolled, is maintaining satisfactory progress in the course of study he or she is pursuing, (v) does not owe a refund on, and is not (except as specifically permitted under the Higher Education Act) in default under, any loan or grant made under the Higher Education Act, (vi) has filed with the eligible institution a statement of educational purpose, (vii) meets certain citizenship requirements, and (viii) except in the case of a graduate or professional student, has received a preliminary determination of eligibility or ineligibility for a Pell Grant. Stafford Loans. Stafford Loans generally are made only to student borrowers who meet certain needs tests. The educational institution must provide the lender with a statement evidencing a determination of need for a loan, and the amount of such need, calculated by subtracting from the estimated cost of attendance the sum of the expected family contribution with respect to the student plus the estimated financial assistance available to such student. The amounts of the expected family contribution, estimated available financial assistance, and estimated costs of attendance are to be computed in accordance with standards set forth in the Higher Education Act. Unsubsidized Stafford Loans. A student borrower meeting the requirements set forth under "General" above is eligible for an Unsubsidized Stafford Loan without regard to need. Unsubsidized Stafford Loans were not available before October 1, 1992. Plus Loans. Plus Loans are made only to borrowers who are parents (and, under certain circumstances, spouses of remarried parents) of dependent undergraduate students. For Plus Loans made on or after July 1, 1993, the parent borrower must not have an adverse credit history (as determined pursuant to criteria established by the Department of Education). Prior to the Higher Education Amendments of 1986, the Higher Education Act did not distinguish between Plus Loans and SLS Loans. Student borrowers were eligible for Plus Loans; however, parents of graduate and professional students were ineligible. SLS Loans. Eligible borrowers for SLS Loans were limited to (a) graduate or professional students, (b) independent undergraduate students, and (c) under certain circumstances, dependent undergraduate students, if such students' parents were unable to obtain a Plus Loan and were also unable to provide such students' expected family contribution. Except as described in clause (c), eligibility was determined without regard to need. Consolidation Loans. To be eligible for a Consolidation Loan a borrower must (a) have outstanding indebtedness on student loans made under the FFEL Program and/or certain other federal student loan programs, and (b) be in repayment status or in a Grace Period, or be a defaulted borrower who has made arrangements to repay the defaulted loan(s) satisfactory to the holder of the defaulted loan(s). A married couple who agree to be jointly liable on a Consolidation Loan for which the application is received on or after January 1, 1993 may be treated as an individual for purposes of obtaining a Consolidation Loan. For Consolidation Loans disbursed prior to July 1, 1994 the Borrower was required to have outstanding student loan indebtedness of at least $7,500. Prior to the adoption of the Higher Education Technical Amendments Act of 1993, Plus Loans could not be included in the Consolidation Loan. For Consolidation Loans for which the applications were received prior to January 1, 1993, the minimum student loan indebtedness was $5,000 and the borrower could not be delinquent more than 90 days in the payment of such indebtedness. Interest Rates The Higher Education Act establishes maximum interest rates for each of the various types of loans. These rates vary not only among loan types, but also within loan types depending upon when the loan was made or when the borrower first obtained a loan under the FFEL Program. The Higher Education Act allows lesser rates of interest to be charged. Many lenders, including the Transferor, have offered repayment incentives or other programs that involve reduced interest rates on certain loans made under the FFEL Program. Stafford Loans. For a Stafford Loan made prior to July 1, 1994, the applicable interest rate for a borrower who, on the date the promissory note was signed, did not have an outstanding balance on a previous loan which was made, insured or guaranteed under the FFEL Program (a "New Borrower"): (a) is 7% per annum for a loan covering a period of instruction beginning before January 1, 1981; (b) is 9% per annum for a loan covering a period of instruction beginning on or after January 1, 1981, but before September 13, 1983; (c) is 8% per annum for a loan covering a period of instruction beginning on or after September 13, 1983, but before July 1, 1988; (d) for a loan made prior to October 1, 1992, covering a period of instruction beginning on or after July 1, 1988, is 8% per annum for the period from the disbursement of the loan to the date which is four years after the loan enters repayment, and thereafter shall be adjusted annually, and for any 12-month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.25% per annum (but not to exceed 10% per annum); or (e) for a loan made on or after October 1, 1992 shall be adjusted annually, and for any 12- month period commencing on a July 1 shall be equal to the bond equivalent rate of 91- day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum (but not to exceed 9% per annum). For a Stafford Loan made prior to July 1, 1994, the applicable interest rate for a borrower who, on the date the promissory note evidencing the loan was signed, had an outstanding balance on a previous loan made, insured or guaranteed under the FFEL Program (a "Repeat Borrower"): (f) for a loan made prior to July 23, 1992 is the applicable interest rate on the previous loan or, if such previous loan is not a Stafford Loan, 8% per annum; or (g) for a loan made on or after July 23, 1992 shall be adjusted annually, and for any twelve month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum but not to exceed: (i) 7% per annum in the case of a Stafford Loan made to a borrower who has a loan described in clause (a) above; (ii) 8% per annum in the case of (A) a Stafford Loan made to a borrower who has a loan described in clause (c) above, (B) a Stafford Loan which has not been in repayment for four years and which was made to a borrower who has a loan described in clause (d) above or (C) a Stafford Loan for which the first disbursement was made prior to December 20, 1993 to a borrower whose previous loans do not include a Stafford Loan or an Unsubsidized Stafford Loan; (iii) 9% per annum in the case of (A) a Stafford Loan made to a borrower who has a loan described in clauses (b) or (e) above or (B) a Stafford Loan for which the first disbursement was made on or after December 20, 1993 to a borrower whose previous loans do not include a Stafford Loan or an Unsubsidized Stafford Loan; and (iv) 10% per annum in the case of a Stafford Loan which has been in repayment for four years or more and which was made to a borrower who has a loan described in clause (d) above. The interest rate on all Stafford Loans made on or after July 1, 1994 BUT PRIOR TO JULY 1, 1998, regardless of whether the borrower is a New Borrower or a Repeat Borrower, is the rate described in clause (g) above, except that such rate shall not exceed 8.25% per annum. For any Stafford Loan made on or after July 1, 1995, the interest rate is further reduced prior to the time the loan enters repayment and during any Deferment Periods. During such periods, the formula described in clause (g) above is applied, except that 2.5% is substituted for 3.1%, and the rate shall not exceed 8.25% per annum. FOR STAFFORD LOANS MADE ON OR AFTER JULY 1, 1998 BUT BEFORE OCTOBER 1, 1998, THE APPLICABLE INTEREST RATE SHALL BE ADJUSTED ANNUALLY, AND FOR ANY TWELVE MONTH PERIOD COMMENCING ON A JULY 1 SHALL BE EQUAL TO THE BOND EQUIVALENT RATE OF 91-DAY U.S. TREASURY BILLS AUCTIONED AT THE FINAL AUCTION PRIOR TO THE PRECEDING JUNE 1, PLUS (X) 1.7% PER ANNUM PRIOR TO THE TIME THE LOAN ENTERS REPAYMENT AND DURING ANY DEFERMENT PERIODS, AND (Y) 2.3% PER ANNUM DURING REPAYMENT, BUT NOT TO EXCEED 8.25% PER ANNUM. For loans made on or after OCTOBER 1, 1998, the applicable rate will continue to be adjusted annually, but for any 12-month period commencing on a July 1 will be equal to the bond equivalent rate of securities with a comparable maturity (as established by the Secretary of Education), plus 1% per annum, but not to exceed 8.25% per annum. There can be no assurance that the interest rate provisions for such loans will not be further amended, either before or after the rate described herein becomes effective. Unsubsidized Stafford Loans. Unsubsidized Stafford Loans are subject to the same interest rate provisions as Stafford Loans. Plus Loans. The applicable interest rate on a Plus Loan: (a) made on or after January 1, 1981, but before October 1, 1981, is 9% per annum; (b) made on or after October 1, 1981, but before November 1, 1982, is 14% per annum; (c) made on or after November 1, 1982, but before July 1, 1987, is 12% per annum; (d) made on or after July 1, 1987 BUT before October 1, 1992, shall be adjusted annually, and for any 12-month period beginning on July 1 shall be equal to the bond equivalent rate of 52-week U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.25% per annum (but not to exceed 12% per annum); (e) made on or after October 1, 1992, BUT BEFORE JULY 1, 1994, shall be adjusted annually, and for any 12-month period beginning on July 1 shall be equal to the bond equivalent rate of 52-week U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum (but not to exceed 10% per annum); (F) made on or after July 1, 1994, BUT BEFORE JULY 1, 1998, is the same as that described in clause (e) above, except that such rate shall not exceed 9% per annum; OR (G) made on or after July 1, 1998, BUT BEFORE OCTOBER 1, 1998, SHALL BE ADJUSTED ANNUALLY, AND FOR ANY 12-MONTH PERIOD BEGINNING ON JULY 1 SHALL BE EQUAL TO THE BOND EQUIVALENT RATE OF 91-DAY U.S. TREASURY BILLS AUCTIONED AT THE FINAL AUCTION PRIOR TO THE PRECEDING JUNE 1, PLUS 3.1% PER ANNUM (BUT NOT TO EXCEED 9% PER ANNUM). FOR PLUS LOANS MADE ON OR AFTER OCTOBER 1, 1998, the applicable rate will continue to be adjusted annually, but for any 12-month period commencing on a July 1 will be equal to the bond equivalent rate of securities with a comparable maturity (as established by the Secretary of Education), plus 2.1% per annum, but not to exceed 9% per annum. If requested by the borrower, an eligible lender may consolidate SLS or Plus Loans of the same borrower held by the lender under a single repayment schedule. The repayment period for each included loan shall be based on the commencement of repayment of the most recent loan. The consolidated loan shall bear interest at a rate equal to the weighted average of the rates of the included loans. Such a consolidation shall not be treated as the making of a new loan. In addition, at the request of the borrower, a lender may refinance an existing fixed rate SLS or Plus Loan (including an SLS or Plus Loan held by a different lender who has refused so to refinance such loan) at a variable interest rate. In such a case, proceeds of the new loan are used to discharge the original loan. SLS Loans. The applicable interest rates on SLS Loans made prior to October 1, 1992 are identical to the applicable interest rates on Plus Loans made at the same time. For SLS Loans made on or after October 1, 1992, the applicable interest rate is the same as the applicable interest rate on Plus Loans, except that the ceiling is 11% per annum instead of 10% per annum. Consolidation Loans. A Consolidation Loan made prior to July 1, 1994 bears interest at a rate equal to the weighted average of the interest rates on the loans retired, rounded to the nearest whole percent, but not less than 9% per annum. Except as described in the next sentence, a Consolidation Loan made on or after July 1, 1994 bears interest at a rate equal to the weighted average of the interest rates on the loans retired, rounded upward to the nearest whole percent, but with no minimum rate. For a Consolidation Loan for which the application is received by an eligible lender on or after November 13, 1997 and before October 1, 1998, the interest rate shall be adjusted annually, and for any twelve month period commencing on a July 1 shall be equal to the bond equivalent rate of 91-day U.S. Treasury bills auctioned at the final auction prior to the preceding June 1, plus 3.1% per annum, but not to exceed 8.25% per annum. Notwithstanding these general interest rates, the portion, if any, of a Consolidation Loan that repaid a loan made under the HEAL Program has a different variable interest rate. Such portion is adjusted on July 1 of each year, but is the sum of the average of the T-Bill Rates auctioned for the quarter ending on the preceding June 30, plus 3.0%, without any cap on the interest rate. For a discussion of required payments that reduce the return on Consolidation Loans, see "Fees -- Rebate Fees on Consolidation Loans" below. Loan Limits Each type of loan (other than Consolidation Loans, which are limited only by the amount of eligible loans to be consolidated) is subject to limits as to the maximum principal amount, both with respect to a given year and in the aggregate. All of the loans are limited to the difference between the cost of attendance and the other aid available to the student. Stafford Loans are also subject to limits based upon the needs analysis as described above under "Eligibility -- Stafford Loans" above. Additional limits are described below. Stafford and Unsubsidized Stafford Loans. Except as described in the next paragraph, Stafford and Unsubsidized Stafford Loans are generally treated as one loan type for loan limit purposes. A student who has not successfully completed the first year of a program of undergraduate education may borrow up to $2,625 in an academic year. A student who has successfully completed such first year, but who has not successfully completed the second year may borrow up to $3,500 per academic year. An undergraduate student who has successfully completed the first and second year, but who has not successfully completed the remainder of a program of undergraduate education, may borrow up to $5,500 per academic year. For students enrolled in programs of less than an academic year in length, the limits are generally reduced in proportion to the amount by which such programs are less than one year in length. A graduate or professional student may borrow up to $8,500 in an academic year. The maximum aggregate amount of Stafford and Unsubsidized Stafford Loans (including that portion of a Consolidation Loan used to repay such loans) which an undergraduate student may have outstanding is $23,000. The maximum aggregate amount for a graduate and professional student, including loans for undergraduate education, is $65,500. The Secretary is authorized to increase the limits applicable to graduate and professional students who are pursuing programs which the Secretary determines to be exceptionally expensive. At the time that SLS Loans were eliminated, the loan limits for Unsubsidized Stafford Loans to independent students, or dependent students whose parents cannot borrow a Plus Loan, were increased by amounts equal to the prior SLS Loan limits (as described below under "SLS Loans"). Prior to the enactment of the Higher Education Amendments of 1992, an undergraduate student who had not successfully completed the first and second year of a program of undergraduate education could borrow Stafford Loans in amounts up to $2,625 in an academic year. An undergraduate student who had successfully completed such first and second year, but who had not successfully completed the remainder of a program of undergraduate education could borrow up to $4,000 per academic year. The maximum for graduate and professional students was $7,500 per academic year. The maximum aggregate amount of Stafford Loans which a borrower could have outstanding (including that portion of a Consolidation Loan used to repay such loans) was $17,250. The maximum aggregate amount for a graduate or professional student, including loans for undergraduate education, was $54,750. Prior to the 1986 changes, the annual limits were generally lower. Plus Loans. For Plus Loans made on or after July 1, 1993, the amounts of Plus Loans are limited only by the student's unmet need. Prior to that time Plus Loans were subject to limits similar to those to which SLS Loans were then subject (see "SLS Loans" below), applied with respect to each student on behalf of whom the parent borrowed. SLS Loans. A student who had not successfully completed the first and second year of a program of undergraduate education could borrow an SLS Loan in an amount of up to $4,000. A student who had successfully completed such first and second year, but who had not successfully completed the remainder of a program of undergraduate education could borrow up to $5,000 per year. Graduate and professional students could borrow up to $10,000 per year. SLS Loans were subject to an aggregate maximum of $23,000 ($73,000 for graduate and professional students). Prior to the 1992 changes, SLS Loans were available in amounts of $4,000 per academic year, up to a $20,000 aggregate maximum. Prior to the 1986 changes, a graduate or professional student could borrow $3,000 of SLS Loans per academic year, up to a $15,000 maximum, and an independent undergraduate student could borrow $2,500 of SLS Loans per academic year minus the amount of all other FFEL Program loans to such student for such academic year, up to a maximum amount of all FFEL Program loans to that student of $12,500. In 1989, the amount of SLS Loans for students enrolled in programs of less than an academic year in length were limited (similar to the limits described above under "Stafford Loans"). Repayment Loans made under the FFEL Program (other than Consolidation Loans) must provide for repayment of principal in periodic installments over a period of not less than five nor more than ten years. A Consolidation Loan must be repaid during a period agreed to by the borrower and lender, subject to maximum repayment periods which vary depending upon the principal amount of the borrower's outstanding student loans (but no longer than 30 years). For Consolidation Loans for which the application was received prior to January 1, 1993, the repayment period could not exceed 25 years. The repayment period commences (a) not more than twelve months after the borrower ceases to pursue at least a half-time course of study with respect to Stafford Loans for which the applicable rate of interest is 7% per annum, (b) not more than six months after the borrower ceases to pursue at least a half-time course of study with respect to other Stafford Loans and Unsubsidized Stafford Loans (the six month or twelve month periods are the "Grace Periods") and (c) on the date of final disbursement of the loan in the case of SLS, Plus and Consolidation Loans, except that the borrower of an SLS Loan who also has a Stafford or Unsubsidized Stafford Loan may defer repayment of the SLS Loan to coincide with the commencement of repayment of the Stafford or Unsubsidized Stafford Loan. During periods in which repayment of principal is required, payments of principal and interest must in general be made at a rate of not less than the greater of $600 per year or the interest that accrues during the year, except that a borrower and lender may agree at any time before or during the repayment period that repayment may be at a lesser rate. A borrower may agree, with concurrence of the lender, to repay the loan in less than five years with the right subsequently to extend his minimum repayment period to five years. Borrowers are entitled to accelerate, without penalty, the repayment of all or any part of the loan. In addition, since 1992, lenders of Consolidation Loans have been required to establish graduated or income-sensitive repayment schedules and lenders of Stafford and SLS Loans have been required to offer borrowers the option of repaying in accordance with graduated or income-sensitive repayment schedules. The Transferor may implement graduated repayment schedules and income-sensitive repayment schedules. Use of income-sensitive repayment schedules may extend the ten-year maximum term for up to five years. In addition, if the repayment schedule on a loan that has been converted to a variable interest rate does not provide for adjustments to the amount of the monthly installment payments, the ten-year maximum term may be extended for up to three years. No principal repayments need be made during certain periods of deferment prescribed by the Higher Education Act ("Deferment Periods"). For loans to a borrower who first obtained a loan which was disbursed before July 1, 1993, deferments are available (i) during a period not exceeding three years while the borrower is a member of the Armed Forces, an officer in the Commissioned Corps of the Public Health Service or, with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan to cover the cost of instruction for a period of enrollment beginning on or after July 1, 1987, an active duty member of the National Oceanic and Atmospheric Administration Corps, (ii) during a period not in excess of three years while the borrower is a volunteer under the Peace Corps Act, (iii) during a period not in excess of three years while the borrower is a full-time volunteer under the Domestic Volunteer Act of 1973, (iv) during a period not exceeding three years while the borrower is in service, comparable to the service referred to in clauses (ii) and (iii), as a full-time volunteer for an organization which is exempt from taxation under Section 501(c)(3) of the Code, (v) during a period not exceeding two years while the borrower is serving an internship, the successful completion of which is required to receive professional recognition required to begin professional practice or service, or a qualified internship or residency program, (vi) during a period not exceeding three years while the borrower is temporarily totally disabled, as established by sworn affidavit of a qualified physician, or while the borrower is unable to secure employment by reason of the care required by a dependent who is so disabled, (vii) during a period not to exceed twenty-four months while the borrower is seeking and unable to find full-time employment, (viii) during any period that the borrower is pursuing a full-time course of study at an eligible institution (or, with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan to cover the cost of instruction for a period of enrollment beginning on or after July 1, 1987, is pursuing at least a half-time course of study for which the borrower has obtained a loan under the FFEL Program), or is pursuing a course of study pursuant to a graduate fellowship program or a rehabilitation training program for disabled individuals approved by the Secretary of Education, (ix) during a period, not in excess of 6 months, while the borrower is on parental leave, and (x) only with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan to cover the cost of instruction for a period of enrollment beginning on or after July 1, 1987, (A) during a period not in excess of three years while the borrower is a full-time teacher in a public or nonprofit private elementary or secondary school in a "teacher shortage area" (as prescribed by the Secretary of Education), and (B) during a period not in excess of 12 months for mothers, with preschool age children, who are entering or re-entering the work force and who are compensated at a rate not exceeding $1 per hour in excess of the federal minimum wage. For loans to a borrower who first obtains a loan on or after July 1, 1993, deferments are available (a) during any period that the borrower is pursuing at least a half-time course of study at an eligible institution or a course of study pursuant to a graduate fellowship program or rehabilitation training program approved by the Secretary, (b) during a period not exceeding three years while the borrower is seeking and unable to find full-time employment, and (c) during a period not in excess of three years for any reason which the lender determines, in accordance with regulations under the Higher Education Act, has caused or will cause the borrower economic hardship. Economic hardship includes working full time and earning an amount not in excess of the greater of the minimum wage or the poverty line for a family of two. Additional categories of economic hardship are based on the relationship between a borrower's educational debt burden and his or her income. Prior to the 1992 changes, only the Deferment Periods described above in clauses (vi) and (vii) (with respect to the parent borrower) and the Deferment Period described in clause (viii) (with respect to the parent borrower or a student on whose behalf the parent borrowed) were available to Plus Loan borrowers, and only the Deferment Periods described above in clauses (vi), (vii) and (viii) were available to Consolidation Loan borrowers. Prior to the 1986 changes, Plus Loan borrowers were not entitled to Deferment Periods. Deferment Periods extend the ten-year maximum term. The Higher Education Act also provides for periods of forbearance during which the borrower, in case of temporary financial hardship, may defer any payments (a "Forbearance Period"). A borrower is entitled to forbearance for a period not to exceed three years while the borrower's debt burden under Title IV of the Higher Education Act (which includes the FFEL Program) equals or exceeds 20% of the borrower's gross income, and also is entitled to forbearance while he or she is serving in a qualifying medical or dental internship program or in a "national service position" under the National and Community Service Trust Act of 1993. In addition, mandatory administrative forbearances are provided when exceptional circumstances such as a local or national emergency or military mobilization exist; or when the geographical area in which the borrower or endorser resides has been designated a disaster area by the President of the United States or Mexico, the Prime Minister of Canada, or by the governor of a state. In other circumstances, forbearance is at the lender's option. Such forbearance also extends the ten year maximum term. As described under "Contracts with Guarantee Agencies -- Federal Interest Subsidy Payments" below, the Secretary of Education makes interest payments on behalf of the borrower of certain eligible loans while the borrower is in school and during Grace and Deferment Periods. Interest that accrues during Forbearance Periods and, if the loan is not eligible for Interest Subsidy Payments, while the borrower is in school and during the Grace and Deferment Periods, may be paid monthly or quarterly or capitalized (added to the principal balance) not more frequently than quarterly. Disbursement Loans made under the FFEL Program (except Consolidation Loans) generally must be disbursed in two or more installments, none of which may exceed 50% of the total principal amount of the loan. Fees Guarantee Fee. A Guarantee Agency is authorized to charge a premium, or guarantee fee, of up to 1% of the principal amount of the loan, which must be deducted proportionately from each installment payment of the proceeds of the loan to the borrower. Guarantee fees may not currently be charged to borrowers of Consolidation Loans. However, lenders may be charged an insurance fee to cover the costs of increased or extended liability with respect to Consolidation Loans. For loans made prior to July 1, 1994, the maximum guarantee fee was 3% of the principal amount of the loan, but no such guarantee fee was authorized to be charged with respect to Unsubsidized Stafford Loans. Origination Fee. An eligible lender is authorized to charge the borrower of a Stafford or Plus Loan an origination fee in an amount not to exceed 3% of the principal amount of the loan, and is required to charge the borrower of an Unsubsidized Stafford Loan an origination fee in the amount of 3% of the principal amount of the loan. These fees must be deducted proportionately from each installment payment of the loan proceeds prior to payment to the borrower and are not retained by the lender, but must be passed on to the Secretary of Education. For loans made prior to July 1, 1994, the maximum authorized fee for Stafford, Plus and SLS Loans was 5%, and the required fee for Unsubsidized Stafford Loans was 6.5%, of the principal amount of the loan. Lender Origination Fee. The lender of any loan under the FFEL Program made on or after October 1, 1993 is required to pay to the Secretary of Education a fee equal to 0.5% of the principal amount of such loan. Rebate Fee on Consolidation Loans. The holder of any Consolidation Loan made on or after October 1, 1993 is required to pay to the Secretary of Education a monthly fee equal to .0875% (1.05% per annum) of the principal amount of, and accrued interest on, such Consolidation Loan. Loan Guarantees Under the FFEL Program, Guarantee Agencies are required to guarantee the payment of not less than 100% of the principal amount of loans made prior to October 1, 1993 and covered by their respective guarantee programs. For a description of the requirements for loans to be covered by such guarantees, see "Description of the Guarantee Agencies." For loans made on or after October 1, 1993, the minimum percentage of the principal amount of loans which a Guarantee Agency must pay is 98% and the Department of Education has taken the position that a Guarantee Agency may not pay more than 98% of the principal amount of and accrued interest on such a loan. Under certain circumstances, guarantees may be assumed by the Secretary of Education or another Guarantee Agency. See "-- Contracts with Guarantee Agencies" below. CONTRACTS WITH GUARANTEE AGENCIES Under the FFEL Program, the Secretary of Education is authorized to enter into guaranty and interest subsidy agreements with Guarantee Agencies. The FFEL Program provides for reimbursements to Guarantee Agencies for default claims paid by Guarantee Agencies, support payments to Guarantee Agencies for administrative and other expenses, advances for a Guarantee Agency's reserve funds, and Interest Subsidy Payments and Special Allowance Payments to the holders of qualifying student loans made pursuant to the FFEL Program. The Secretary of Education has certain oversight powers over Guarantee Agencies. Guarantee Agencies are required to maintain their reserves at certain levels based on the amount of outstanding loans that they have guaranteed. If a Guarantee Agency falls below the required level in two consecutive years, or its claims rate exceeds 9% in any year, or if the Secretary determines that the agency's administrative or financial condition jeopardizes its ability to meet its obligations, the Secretary can require the Guarantee Agency to submit and implement a plan by which it will correct such problem(s). If a Guarantee Agency fails to timely submit an acceptable plan or fails to improve its condition, or if the Secretary determines that the Guarantee Agency is in danger of financial collapse, the Secretary may terminate the Guarantee Agency's reimbursement contract. The circumstances under which the Secretary may terminate such reimbursement contracts also includes a determination that such action is necessary to protect the federal fiscal interest or to ensure continued availability of student loans or a smooth transition to direct lending. See "-- Direct Loans" below. The Secretary of Education is authorized to assume the guarantee obligations of a Guarantee Agency. The Higher Education Act now provides that, if the Secretary terminates a Guarantee Agency's agreements under the FFEL Program, the Secretary shall assume responsibility for all functions of the Guarantee Agency under its program. To that end, the Secretary is authorized to, among other options, transfer the guarantees to another Guarantee Agency or assume the guarantees. It also provides that in the event the Secretary has determined that a Guarantee Agency is unable to meet its guarantee obligations, holders of loans guaranteed by such Guarantee Agency may submit claims directly to the Secretary for payment, unless the Secretary has provided for the assumption of such guarantees by another Guarantee Agency. Federal Reimbursement A Guarantee Agency's right to receive federal reimbursements for various guarantee claims paid by such Guarantee Agency is governed by the Higher Education Act and various contracts entered into between Guarantee Agencies and the Secretary of Education. See "Description of the Guarantee Agencies -- Federal Agreements" herein. Under the Higher Education Act and the Federal Reimbursement Contracts, the Secretary of Education currently agrees to reimburse a Guarantee Agency for the amounts expended by the Guarantee Agency in the discharge of its guarantee obligation (i.e., the unpaid principal balance of and accrued interest on loans guaranteed by the Guarantee Agency, which loans are referred to herein as "guaranteed loans") as a result of the default of the borrower. With respect to loans made prior to October 1, 1993, the Secretary of Education currently agrees to reimburse the Guarantee Agency for up to 100% of the amounts so expended. For loans made on or after October 1, 1993, the Secretary currently agrees to reimburse the Guarantee Agency for a maximum of 98% of the amount expended with respect to guaranteed loans. Depending on the claims rate experience of a Guarantee Agency, such 100% (or 98%) reimbursement may be reduced as discussed in the formula described below. The Secretary of Education also agrees to repay 100% of the unpaid principal plus applicable accrued interest expended by a Guarantee Agency in discharging its guarantee obligation as a result of the bankruptcy, death, or total and permanent disability of a borrower (or in the case of a Plus Loan, the death of the student on behalf of whom the loan was borrowed), or in certain circumstances, as a result of school closures, which reimbursements are not to be included in the calculations of the Guarantee Agency's Claims Rate experience for the purpose of federal reimbursement under the Federal Reimbursement Contracts. The formula for computing the percentage of federal reimbursement under the Federal Reimbursement Contracts is not accumulated over a period of years but is measured by the amount of federal reimbursement payments in any one federal fiscal year as a percentage of the original principal amount of loans under the FFEL Program guaranteed by the Guarantee Agency and in repayment at the end of the preceding fiscal year. Under the formula, federal reimbursement payments to a Guarantee Agency in any one fiscal year not exceeding 5% of the original principal amount of loans in repayment at the end of the preceding fiscal year are to be paid by the Secretary of Education at 100% (or 98% for loans made on or after October 1, 1993). Beginning at any time during any fiscal year that federal reimbursement payments exceed 5%, and until such time as they may exceed 9%, of the original principal amount of loans in repayment at the end of the preceding fiscal year, then reimbursement payments on claims submitted during that period are to be paid at 90% (or 88% for loans made on or after October 1, 1993). Beginning at any time during any fiscal year that federal reimbursement payments exceed 9% of the original principal amount of loans in repayment at the end of the preceding fiscal year, then such payments for the balance of that fiscal year will be paid at 80% (or 78% for loans made on or after October 1, 1993). The original principal amount of loans in repayment for purposes of computing reimbursement payments to a Guarantee Agency means the original principal amount of all loans guaranteed by such Guarantee Agency less: (1) guarantee payments on such loans, (2) the original principal amount of such loans that have been fully repaid, and (3) the original principal amount of such loans for which the first principal installment payment has not become due or such first installment need not be paid because of a Deferment Period. Under present practice, after the Secretary of Education reimburses a Guarantee Agency for a default claim paid on a guaranteed loan, the Guarantee Agency continues to seek repayment from the borrower. The Guarantee Agency returns to the Secretary of Education payments that it receives from a borrower after deducting and retaining (i) a percentage amount equal to the complement of the reimbursement percentage in effect at the time the loan was reimbursed, and (ii) an amount equal to 27% (or 18 1/2% in the case of a payment from the proceeds of a Consolidation Loan) of such payments for certain administrative costs. The Secretary of Education may, however, require the assignment to the Secretary of defaulted guaranteed loans, in which event no further collections activity need be undertaken by the Guarantee Agency, and no amount of any recoveries shall be paid to the Guarantee Agency. Prior to the 1993 changes, the percentage of collections which Guarantee Agencies could retain (as described in clause (ii) above) was 30%. A Guarantee Agency may enter into an addendum to its Interest Subsidy Agreement (as hereinafter defined), which addendum provides for the Guarantee Agency to refer to the Secretary of Education certain defaulted guaranteed loans. Such loans are then reported to the Internal Revenue Service to "offset" any tax refunds which may be due any defaulted borrower. To the extent that the Guarantee Agency has originally received less than 100% reimbursement from the Secretary of Education with respect to such a referred loan, the Guarantee Agency will not recover any amounts subsequently collected by the federal government which are attributable to that portion of the defaulted loan for which the Guarantee Agency has not been reimbursed. Rehabilitation of Defaulted Loans Under Section 428F of the Higher Education Act, the Secretary of Education is authorized to enter into an agreement with a Guarantee Agency pursuant to which the Guarantee Agency shall sell defaulted loans that are eligible for rehabilitation to an eligible lender. The Guarantee Agency shall repay the Secretary of Education an amount equal to 81.5% of the then current principal balance of such loan, multiplied by the reimbursement percentage in effect at the time the loan was reimbursed. The amount of such repayment shall be deducted from the amount of federal reimbursement payments for the fiscal year in which such repayment occurs, for purposes of determining the reimbursement rate for that fiscal year. For a loan to be eligible for rehabilitation, the Guarantee Agency must have received consecutive payments for 12 months of amounts owed on such loan. Upon rehabilitation, a loan is eligible for all the benefits under the Higher Education Act for which it would have been eligible had no default occurred (except that a borrower's loan may only be rehabilitated once). Eligibility for Federal Reimbursement To be eligible for federal reimbursement payments, guaranteed loans must be made by an eligible lender under the applicable Guarantee Agency's Guarantee Program, which must meet requirements prescribed by the rules and regulations promulgated under the Higher Education Act, including the borrower eligibility, loan amount, disbursement, interest rate, repayment period and guarantee fee provisions described herein and the other requirements set forth in Section 428(b) of the Higher Education Act. Under the Higher Education Act, a guaranteed loan must be delinquent for 180 days if it is repayable in monthly installments or 240 days if it is payable in less frequent installments before a lender may obtain payment on a guarantee from the Guarantee Agency. The Guarantee Agency must pay the lender for the defaulted loan prior to submitting a claim to the Secretary of Education for reimbursement. The Guarantee Agency must submit a reimbursement claim to the Secretary of Education within 45 days after it has paid the lender's default claim. As a prerequisite to entitlement to payment on the guarantee by the Guarantee Agency, and in turn payment of reimbursement by the Secretary of Education, the lender must have exercised reasonable care and diligence in making, servicing and collecting the GUARANTEED LOAN. GENERALLY, THESE PROCEDURES REQUIRE THAT COMPLETED LOAN APPLICATIONS BE PROCESSED, A DETERMINATION OF WHETHER AN APPLICANT IS AN ELIGIBLE BORROWER ATTENDING AN ELIGIBLE INSTITUTION UNDER THE HIGHER EDUCATION ACT BE MADE, THE BORROWER'S RESPONSIBILITIES UNDER THE LOAN BE EXPLAINED TO HIM OR HER, THE PROMISSORY NOTE EVIDENCING THE LOAN BE EXECUTED BY THE BORROWER AND THAT THE LOAN PROCEEDS BE DISBURSED BY THE LENDER IN A SPECIFIED MANNER. AFTER THE LOAN IS MADE, THE LENDER MUST ESTABLISH REPAYMENT TERMS WITH THE BORROWER, PROPERLY ADMINISTER DEFERMENTS AND FORBEARANCES AND CREDIT THE BORROWER FOR PAYMENTS MADE. IF A BORROWER BECOMES DELINQUENT IN REPAYING A LOAN, A LENDER MUST PERFORM CERTAIN COLLECTION PROCEDURES (PRIMARILY TELEPHONE CALLS, DEMAND LETTERS, SKIPTRACING PROCEDURES AND REQUESTING ASSISTANCE FROM THE APPLICABLE GUARANTEE AGENCY) THAT VARY DEPENDING UPON THE LENGTH OF TIME A LOAN IS DELINQUENT. Federal Interest Subsidy Payments "Interest Subsidy Payments" are interest payments paid with respect to an eligible loan during the period prior to the time that the loan enters repayment and during Grace and Deferment Periods. The Secretary of Education and the Guarantee Agencies entered into the Interest Subsidy Agreements as described in "Description of the Guarantee Agencies -- Federal Agreements," whereby the Secretary of Education agrees to pay Interest Subsidy Payments to the holders of eligible guaranteed loans for the benefit of students meeting certain requirements, subject to the holders' compliance with all requirements of the Higher Education Act. Only Stafford Loans, and Consolidation Loans for which the application was received on or after January 1, 1993, are eligible for Interest Subsidy Payments. Consolidation Loans made after August 10, 1993 are eligible for Interest Subsidy Payments only if all loans consolidated thereby are Stafford Loans, except that Consolidation Loans for which the application is received by an eligible lender on or after November 13, 1997 and before October 1, 1998, are eligible for Interest Subsidy Payments on that portion of the Consolidation Loan that repays Stafford Loans or similar subsidized loans made under the direct loan program. In addition, to be eligible for Interest Subsidy Payments, guaranteed loans must be made by an eligible lender under the applicable Guarantee Agency's Guarantee Program, and must meet requirements prescribed by the rules and regulations promulgated under the Higher Education Act, including the borrower eligibility, loan amount, disbursement, interest rate, repayment period and guarantee fee provisions described herein and the other requirements set forth in Section 428(b) of the Higher Education Act. The Secretary of Education makes Interest Subsidy Payments quarterly on behalf of the borrower to the holder of a guaranteed loan in a total amount equal to the interest which accrues on the unpaid principal amount prior to the commencement of the repayment period of the loan or during any Deferment Period. A borrower may elect to forego Interest Subsidy Payments, in which case the borrower is required to make interest payments. Federal Administrative Expense Allowances Prior to the adoption of the 1993 Amendments, each Guarantee Agency was entitled to receive from the Secretary of Education an administrative cost allowance equal to 1% of the total principal amount of the loans (other than Consolidation Loans) guaranteed by the Guarantee Agency in any fiscal year, for the purposes of administrative costs of pre-claims assistance for default prevention and collection of defaulted guaranteed loans, administrative costs of promoting commercial lender participation, administrative costs of monitoring the enrollment and repayment status of students, and for other such costs related to the Guarantee Agency's Guarantee Program. The 1993 Amendments repealed such entitlement, effective October 1, 1993. The 1993 Amendments, however, authorized payments for transition support (including administrative costs) to Guarantee Agencies, in connection with the transition to direct lending. See "Direct Loans" below. Budget legislation adopted since that time has provided for the payment to Guarantee Agencies of an administrative expense allowance equal to 0.85% of the agency's annual new guarantee volume, which has been extended through the fiscal year ending September 30, 2002. After the fiscal year ending September 30, 1997, however, such amounts are subject to decreasing aggregate limits. There are no assurances as to the level of such payments that can be made within such aggregate limits, or that Congress will require such payments or that the Secretary of Education will determine to continue to make any such payments in future years. Federal Advances Pursuant to agreements entered into between the Guarantee Agencies and the Secretary of Education under Sections 422 and 422(c) of the Higher Education Act, the Secretary of Education was authorized to advance moneys from time to time to the Guarantee Agencies for the purpose of establishing and strengthening the Guarantee Agencies' reserves. Section 422(c) currently authorizes the Secretary of Education to make advances to Guarantee Agencies in various circumstances, on terms and conditions satisfactory to the Secretary, including if the Secretary is seeking to terminate the Guarantee Agency's reimbursement contract or assume the Guarantee Agency's functions, to assist the Guarantee Agency in meeting its immediate cash needs or to ensure the uninterrupted payment of claims. FEDERAL SPECIAL ALLOWANCE PAYMENTS The Higher Education Act provides for the payment by the Secretary of Education of additional subsidies, called Special Allowance Payments, to holders of qualifying student loans. The amount of the Special Allowance Payments, which are made on a quarterly basis, is computed by reference to the average of the bond equivalent rates of the 91-day Treasury bills auctioned during the preceding quarter (the "T-Bill Rate"). The quarterly rate for Special Allowance Payments for Student Loans made on or after October 1, 1981, and generally before November 16, 1986, is computed by subtracting the applicable interest rate on such loans from the T-Bill Rate, adding 3.5% to the resulting per centum, and dividing the resulting per centum by four. For loans disbursed on or after November 16, 1986, or loans to cover the costs of instruction for periods of enrollment beginning on or after November 16, 1986, 3.25% has been substituted for 3.5% in the foregoing formula. For loans disbursed on or after October 1, 1992, 3.1% has been substituted for 3.5% in such formula. For Stafford and Unsubsidized Stafford Loans made on or after July 1, 1995, 2.5% has been substituted for 3.1% in such formula prior to the time such loans enter repayment and during any Deferment Periods. For STAFFORD AND UNSUBSIDIZED STAFFORD LOANS made on or after July 1, 1998, 1998 AMENDMENTS SUBSTITUTE 2.1% FOR 3.1% IN SUCH FORMULA PRIOR TO THE TIME SUCH LOANS ENTER REPAYMENT AND DURING ANY DEFERMENT PERIODS, AND SUBSTITUTE 2.8% FOR 3.1% IN SUCH FORMULA WHILE SUCH LOANS ARE IN REPAYMENT. FOR LOANS MADE ON OR AFTER OCTOBER 1, 1998, the special allowance formula is to be revised similarly to the manner in which the applicable interest rate formula is revised, as described above under "Loan Terms -- Interest Rates -- Stafford Loans". For Plus and SLS Loans which bear interest at rates adjusted annually, Special Allowance Payments are made only in years during which the interest rate ceiling on such loans operates to reduce the rate that would otherwise apply based upon the applicable formula. See "Loan Terms -- Interest Rates -- Plus Loans" and "-- SLS Loans" above. Special Allowance Payments are paid with respect to Plus Loans made on or after July 1, 1994 only if the rate that would otherwise apply exceeds 10% per annum, notwithstanding that the interest rate ceiling on such loans is 9% per annum. The portion, if any, of a Consolidation Loan that repaid a loan made under the HEAL Program is ineligible for Special Allowance Payments. The Balanced Budget and Deficit Control Act of 1985, as amended (known as the "Gramm-Rudman Law") requires the President to issue a sequester order for any federal fiscal year in which the projected budget exceeds the target for that year. A sequester order for any fiscal year would apply to loans made on or after October 1 of that fiscal year. The sequester order would change the formula for calculating Special Allowance Payments for the first four Special Allowance Payment periods relating to loans originally disbursed during that fiscal year. The special allowance formula would be reduced to the T-Bill Rate plus 3.0% (for loans with a special allowance formula of the T-Bill Rate plus 3.1%). The Higher Education Act provides that if Special Allowance Payments or Interest Subsidy Payments have not been made within 30 days after the Secretary of Education receives an accurate, timely and complete request therefor, the special allowance payable to such holder shall be increased by an amount equal to the daily interest accruing on the special allowance and Interest Subsidy Payments due the holder. Special Allowance Payments and Interest Subsidy Payments are reduced by the amount which the lender is authorized or required to charge as an origination fee, as described above under "Loan Terms -- Fees -- Origination Fee." In addition, the amount of the lender origination fee described above under "Loan Terms -- Fees -- Lender Origination Fees" is collected by offset to Special Allowance Payments and Interest Subsidy Payments. FEDERAL STUDENT LOAN INSURANCE FUND The Higher Education Act authorizes the establishment of a Student Loan Insurance Fund by the Federal government for making the federal insurance and the federal reimbursement payments on defaulted student loans to Guarantee Agencies. If moneys in the fund are insufficient to make the federal payments on defaults of such loans, the Secretary of Education is authorized, to the extent provided in advance by appropriation acts, to issue to the Secretary of the Treasury obligations containing terms and conditions prescribed by the Secretary of Education and approved by the Secretary of the Treasury, bearing interest at a rate determined by the Secretary of the Treasury. The Secretary of the Treasury is authorized and directed by the Higher Education Act to purchase such obligations. DIRECT LOANS The 1993 Amendments authorized a program of "direct loans," to be originated by schools with funds provided by the Secretary of Education. Under the direct loan program, the Secretary of Education is directed to enter into agreements with schools, or origination agents in lieu of schools, to disburse loans with funds provided by the Secretary. Participation in the program by schools is voluntary. The goals set forth in the 1993 Amendments call for the direct loan program to constitute 5% of the total volume of loans made under the FFEL Program and the direct loan program for academic year 1994-1995, 40% for academic year 1995-1996, 50% for academic years 1996-1997 and 1997-1998 and 60% for academic year 1998-1999. No provision is made for the size of the direct loan program thereafter. Based upon information released by the General Accounting Office, participation by schools in the direct loan program has not been sufficient to meet the goals for the 1995-1996 or 1996-1997 academic years. The loan terms are generally the same under the direct loan program as under the FFEL Program, though more flexible repayment provisions are available under the direct loan program. At the discretion of the Secretary of Education, students attending schools that participate in the direct loan program (and their parents) may still be eligible for participation in the FFEL Program, though no borrower could obtain loans under both programs. It is difficult to predict the impact of the direct lending program. There is no way to accurately predict the number of schools that will participate in future years, or, if the Secretary authorizes students attending participating schools to continue to be eligible for FFEL Program loans, how many students will seek loans under the direct loan program instead of the FFEL Program. In addition, it is impossible to predict whether future legislation will eliminate, limit or expand the direct loan program or the FFEL Program. DESCRIPTION OF THE GUARANTEE AGENCIES GENERAL The Financed Student Loans for a Series of Notes may be guaranteed by any one or more Guarantee Agencies identified in the related Prospectus Supplement. The following discussion relates to Guarantee Agencies under the FFEL Program. The particular arrangements of a guarantor with respect to a Private Loan Program will be described in the Prospectus Supplement for a Series, as applicable. A Guarantee Agency guarantees loans made to students or parents of students by lending institutions such as banks, credit unions, savings and loan associations, certain schools, pension funds and insurance companies. A Guarantee Agency generally purchases defaulted student loans which it has guaranteed from its cash and reserves (generally referred to herein as its "Guarantee Fund"). A lender may submit a default claim to the Guarantee Agency after the student loan has been delinquent for at least 180 days; however, lenders are strongly encouraged not to file a claim until a loan is at least 210 days delinquent. The default claim package must include all information and documentation required under the FFEL Program regulations and the Guarantee Agency's policies and procedures. Under the Guarantee Agencies' current procedures, assuming that the default claim package complies with the Guarantee Agency's loan procedures manual or regulations, the Guarantee Agency pays the lender for a default claim within 90 days of the lender's filing the claim with the Guarantee Agency (WHICH GENERALLY IS EXPECTED TO BE 300 DAYS FOLLOWING THE DATE A LOAN BECOMES DELINQUENT). The Guarantee Agency will pay the lender interest accrued on the loan for up to 360 days after delinquency. The Guarantee Agency must file a reimbursement claim with the Department of Education within 45 days after the Guarantee Agency has paid the lender for the default claim. In general, a Guarantee Agency's Guarantee Fund has been funded principally by administrative cost allowances paid by the Secretary of Education, guarantee fees paid by lenders (the cost of which may be passed on to borrowers), investment income on moneys in the Guarantee Fund, and a portion of the moneys collected from borrowers on Guaranteed Loans that have been reimbursed by the Secretary of Education to cover the Guarantee Agency's administrative expenses. Various changes to the Higher Education Act have adversely affected the receipt of revenues by the Guarantee Agencies and their ability to maintain their Guarantee Funds at previous levels, and may adversely affect their ability to meet their guarantee obligations. These changes include the reduction in reinsurance payments from the Secretary of Education because of reduced reimbursement percentages; the reduction in maximum permitted guarantee fees from 3% to 1% for loans made on or after July 1, 1994; the reduction and possible elimination of administrative expense allowances from the Secretary of Education; the reduction in supplemental preclaims assistance payments from the Secretary of Education; and the reduction in retention by a Guarantee Agency of collections on defaulted loans from 30% to 27%. Additionally, the adequacy of a Guarantee Agency's Guarantee Fund to meet its guarantee obligations with respect to existing student loans depends, in significant part, on its ability to collect revenues generated by new loan guarantees. The Federal Direct Student Loan Program may adversely affect the volume of new loan guarantees. Pending legislation and future legislation may make additional changes to the Higher Education Act that would significantly affect the revenues received by Guarantee Agencies and the structure of the guarantee agency program. For a more complete description of provisions of the Higher Education Act that relate to payments described in this paragraph or affect the funding of a Guarantee Fund, see "Description of the FFEL Program." The Higher Education Act gives the Secretary of Education various oversight powers over Guarantee Agencies. These include requiring a Guarantee Agency to maintain its Guarantee Fund at a certain required level and taking various actions relating to a Guarantee Agency if its administrative and financial condition jeopardizes its ability to meet its obligations. These actions include, among others, providing advances to the Guarantee Agency, terminating the Guarantee Agency's Federal Reimbursement Contracts, assuming responsibility for all functions of the Guarantee Agency, and transferring the Guarantee Agency's guarantees to another guarantee agency or assuming such guarantees. The Higher Education Act provides that a Guarantee Agency's Guarantee Fund shall be considered to be the property of the United States to be used in the operation of the FFEL Program or the Federal Direct Student Loan Program, and, under certain circumstances, the Secretary of Education may demand payment of amounts in the Guarantee Fund. The Secretary of Education is required to demand payment on September 1, 2002 of a total of one billion dollars from all the Guarantee Agencies participating in the FFEL Program. The amounts to be demanded of each Guarantee Agency shall be determined in accordance with formulas included in the Higher Education Act. Each Guarantee Agency will be required to deposit funds in a restricted account in installments, beginning in the federal fiscal year ending September 30, 1998, to provide for such payment. The Secretary of Education has made the determinations, and advised the Guarantee Agencies, of the amounts required to be so transferred by the Guarantee Agencies. There can be no assurance that relevant federal laws, including the Higher Education Act, will not be further changed in a manner that may adversely affect the ability of a Guarantee Agency to meet its guarantee obligations. See "Description of the FFEL Program." There are no assurances as to the Secretary of Education's actions if a Guarantee Agency encounters administrative or financial difficulties or that the Secretary of Education will not demand that a Guarantee Agency transfer additional portions or all of its Guarantee Fund to the Secretary of Education. Information relating to the particular Guarantee Agencies guaranteeing the Financed Student Loans will be set forth in the Prospectus Supplement. Such information will be provided by the respective Guarantee Agencies, and neither such information nor information included in the reports referred to therein has been verified by, or is guaranteed as to accuracy or completeness by, the Depositor, the Transferor or the Underwriters. No representation is made by the Depositor, the Transferor or the Underwriters as to the accuracy or adequacy of such information or the absence of material adverse changes in such information subsequent to the dates thereof. FEDERAL AGREEMENTS Each Guarantee Agency and the Secretary of Education have entered into Federal Reimbursement Contracts pursuant to Section 428(c) of the Higher Education Act (which include, for older Guarantee Agencies, a supplemental contract pursuant to former Section 428A of the Higher Education Act), which provide for the Guarantee Agency to receive 80% to 100% reimbursement of insurance payments that the Guarantee Agency makes to eligible lenders with respect to loans guaranteed by the Guarantee Agency prior to the termination of the Federal Reimbursement Contracts or the expiration of the authority of the Higher Education Act. The 1993 Amendments reduced the reimbursement percentages referred to above with respect to claims on most loans made on or after October 1, 1993. See "-- Effect of Annual Claims Rate" below. The Federal Reimbursement Contracts provide for termination under certain circumstances and also provide for certain actions short of termination by the Secretary of Education to protect the federal interest. See "Description of the FFEL Program -- Contracts with Guarantee Agencies -- Federal Reimbursement." In addition to guarantee benefits, qualified Student Loans acquired under the FFEL Program benefit from certain federal subsidies. Each Guarantee Agency and the Secretary of Education have entered into an interest subsidy agreement under Section 428(b) of the Higher Education Act (as amended, an "Interest Subsidy Agreement"), which entitles the holders of eligible loans guaranteed by the Guarantee Agency to receive Interest Subsidy Payments from the Secretary of Education on behalf of certain students while the student is in school, during a six to twelve month Grace Period after the student leaves school, and during certain Deferment Periods, subject to the holders' compliance with all requirements of the Higher Education Act. See "Description of the FFEL Program - -- Contracts with Guarantee Agencies -- Federal Interest Subsidy Payments" for a more detailed description of the Interest Subsidy Payments. United States Courts of Appeals have held that the federal government, through subsequent legislation, has the right unilaterally to amend the contracts between the Secretary of Education and the Guarantee Agencies described herein. Amendments to the Higher Education Act in 1986, 1987, 1992 and 1993, respectively (i) abrogated certain rights of guarantee agencies under contracts with the Secretary of Education relating to the repayment of certain advances from the Secretary of Education, (ii) authorized the Secretary of Education to withhold reimbursement payments otherwise due to certain guarantee agencies until specified amounts of such guarantee agencies' reserves had been eliminated, (iii) added new reserve level requirements for guarantee agencies and authorized the Secretary of Education to terminate the Federal Reimbursement Contracts under circumstances that did not previously warrant such termination, and (iv) expanded the Secretary of Education's authority to terminate such contracts and to seize guarantee agencies' reserves. There can be no assurance that future legislation will not further adversely affect the rights of the Guarantee Agencies, or holders of loans guaranteed by a Guarantee Agency under such contracts. EFFECT OF ANNUAL CLAIMS RATE A Guarantee Agency's ability to meet its obligation to pay default claims on Financed Eligible Loans will depend on the adequacy of its Guarantee Fund and, under the current federal reinsurance arrangement, the default experience of all lenders under the Guarantee Agency's Guarantee Program. A high default experience among lenders participating in a Guarantee Agency's Guarantee Program may cause the Guarantee Agency's Claims Rate (as defined below) for its Guarantee Program to exceed the 5% and 9% levels described below, and result in the Secretary of Education reimbursing the Guarantee Agency at lower percentages of default claims payments made by the Guarantee Agency. In general, Guarantee Agencies are currently entitled to receive reimbursement payments under the Federal Reimbursement Contracts in amounts that vary depending on the Claims Rate experience of the Guarantee Agency. The "Claims Rate" is computed by dividing total default claims since the previous September 30 by the total original principal amount of the Guarantee Agency's guaranteed loans in repayment on such September 30. On October 1 of each year the Claims Rate begins at zero, regardless of the experience in preceding years. For loans made prior to October 1, 1993, if the Claims Rate remains equal to or below 5% within a given federal fiscal year (October 1 through September 30), the Secretary of Education is currently obligated to provide 100% reimbursement; if and when the Claims Rate exceeds 5% and until such time, if any, as it exceeds 9% during the fiscal year, the reimbursement rate is at 90%; if and when the Claims Rate exceeds 9% during the fiscal year, the reimbursement rate for the remainder of the fiscal year is at 80%. For loans made prior to October 1, 1993, each Guarantee Agency is currently entitled to at least 80% reimbursement from the Secretary of Education on default claims that it purchases, regardless of its Claims Rate. The reimbursement percentages for loans made on or after October 1, 1993 are reduced from 100%, 90% and 80% to 98%, 88% and 78%, respectively. See "Description of the FFEL Program." DESCRIPTION OF THE HEAL PROGRAM ELIGIBLE BORROWER An eligible borrower under the HEAL Program is a student who (i) meets certain citizen, national or resident requirements, (ii) has been accepted for enrollment at a school of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, pharmacy, public health or chiropractic, or a graduate program in health administration or clinical psychology (an "eligible institution") or, if attending an eligible institution, is in good standing at that institution, but, in the case of a medical, dental or osteopathic student, including only the last four years of an accelerated, integrated program of study, (iii) is or will be a full-time student at the eligible institution, (iv) has agreed that all funds received under the loan will be used solely for tuition and other reasonable educational expenses and the insurance premium charged on the loan, (v) requires the loan to pursue the course of study at the institution, and (vi) if a pharmacy student, has satisfactorily completed three years of training. Certain individuals who meet the same citizen, national or resident requirements and have previously received a loan insured under the HEAL Program while a full-time student at an eligible institution may also receive a loan during the period before principal must be paid on the loan to repay interest due on the previous loans under the HEAL Program. ELIGIBLE LENDER An eligible institution may apply to the Secretary of HHS to become a lender under the HEAL Program. Various types of organizations may qualify to be eligible lenders or holders of HEAL loans. Eligible lenders include an agency or instrumentality of a state; a bank, savings and loan association, credit union or insurance company which is subject to examination and supervision in its capacity as a lender by an agency of the United States or of the state in which it has its principal place of business; a pension fund approved by the Secretary of HHS; and certain other entities specified in the HEAL Act. If the Secretary of HHS approves the lender's application, the Secretary of HHS and the lender enter into an insurance contract whereby the Secretary of HHS agrees to insure each eligible HEAL Loan held by the lender against the borrower's default, death, total and permanent disability, or bankruptcy. An approved eligible lender can have either a standard insurance contract or a comprehensive insurance contract with the Secretary of HHS. A lender with a standard insurance contract must submit to the Secretary of HHS a borrower's application for each loan that the lender determines to be eligible for insurance. The Secretary of HHS notifies the lender whether or not the loan is insurable, the amount of the insurance and the expiration of the loan commitment. A lender with a comprehensive insurance contract may disburse a loan without submitting an individual borrower's application to the Secretary of HHS for initial approval. All eligible loans made by a lender with a comprehensive insurance contract before a specified date are automatically insured up to the aggregate amount stated in the insurance contract. The Secretary of HHS may limit, suspend or terminate the lender's eligibility under the HEAL Program if the lender violates any provision of the HEAL Act or agreements with the Secretary of HHS concerning the HEAL Program. The Transferor and the Eligible Lender Trustee are each a currently approved holder of a Comprehensive Insurance Contract with the Secretary of HHS. INSURANCE BENEFITS The insurance provided by the Secretary of HHS covers 100% of the lender's losses on both unpaid principal and interest except to the extent that a borrower may have a defense on the loan (other than infancy). HEAL insurance is not unconditional. The Secretary of HHS insures HEAL Loans on the implied representation of the lender that all the requirements for the initial insurability have been met. HEAL insurance is further conditioned upon compliance by all holders of the loan with all laws, regulations and other requirements. The insurance coverage on a loan under the HEAL Program ceases to be effective after a 60-day default by the lender in the payment of the insurance premium charged by the Secretary of HHS. Payment on an approved insurance claim generally covers interest that accrues through the date the claim is paid, except that the Secretary of HHS does not pay interest that accrues between the end of the period that a claim is required to be filed and the date the Secretary of HHS receives the claim, and, if a claim is returned to the lender for additional documentation necessary for approval of the claim, interest is only paid for the first 30 days following the return of the claim to the lender. AUTHORIZED AMOUNTS OF HEAL LOANS An eligible student borrower may borrow an amount for an academic year equal to the difference between the student's estimated cost of education for that period and the amount of other financial aid the student will receive for that period. An eligible non-student borrower may borrow in an amount that is no greater than the sum of the HEAL insurance premium plus the interest that is expected to accrue and must be paid on the borrower's HEAL Loan during the period for which the new loan is intended. The total amount of HEAL Loans made to any borrower which may be covered by federal insurance may not exceed $20,000 in any academic year for a student enrolled in a school of, or in the field of, medicine, osteopathy, dentistry, veterinary medicine, optometry or podiatry, up to a maximum aggregate of $80,000, and $12,500 in any academic year for a borrower enrolled in a school of, or in the field, of pharmacy, public health, or chiropractic, or a graduate program in health administration or clinical psychology, up to an aggregate maximum of $50,000. TERMS OF HEAL LOANS A loan made under the HEAL Program must be made without security, except that in certain limited instances an endorsement may be required. The borrower may prepay the whole or any part of the loan at any time without penalty. The principal amount of the HEAL Loan must be repaid in installments over a period of not less than 10 years or more than 25 years, beginning not earlier than nine months nor later than twelve months (the "Grace Period") after the date on which (i) the borrower ceases to be a participant in an accredited internship or residency program of not more than four years in duration, or the borrower completes the fourth year of an accredited internship or residency program of more than four years in duration (for loans made on or after October 22, 1985), or the borrower ceases to carry, at an eligible institution, the normal full-time academic workload, or (ii) the borrower, who is a graduate student of an eligible institution, ceases to be a participant in a fellowship training program not in excess of two years or a participant in a full-time educational activity not in excess of two years, which is directly related to the health profession for which the borrower prepared at an eligible institution, as determined by the Secretary of HHS, and which may be engaged in by the borrower during such a two-year period which begins within twelve months after the completion of the borrower's participation in a program described in clause (i) of this sentence or prior to the completion of the borrower's participation in such program (for loans made on or after October 22, 1985), except during periods of deferment (described below). The repayment period of the loan may not exceed 33 years from the date of execution of the note or written agreement evidencing it. Principal and interest need not be paid, but interest accrues, during any period (i) during which the borrower is pursuing a full-time course of study at an eligible institution (or at an eligible institution under the FFEL Program), (ii) not in excess of four years during which the borrower is a participant in an accredited internship or residency program, (iii) not in excess of three years during which the borrower is a member of the Armed Forces of the United States, (iv) not in excess of three years during which the borrower is in service as a volunteer under the Peace Corps Act (22 USCA ss.2501 et seq.) or is a member of the National Health Service Corps, (v) not in excess of three years during which the borrower is in service as a full-time volunteer under Title I of the Domestic Volunteer Service Act of 1973, (vi) not in excess of three years for a borrower who has completed an accredited internship or residency training program in osteopathic general practice, family medicine, general internal practice, preventive medicine or general pediatrics and who is practicing primary care, (vii) not in excess of one year, for borrowers who are graduates of schools of chiropractic, (viii) not in excess of two years which is described in clause (ii) of the first sentence of this paragraph, and (ix) in addition to all other deferments for which the borrower is eligible under clauses (i) through (viii) of this sentence during which the borrower is a member of the Armed Forces on active duty during the Persian Gulf conflict. The periods described in (i) through (ix) are "Deferment Periods." In certain circumstances a Deferment Period may not be included in determining the 25- and 33-year maximum repayment periods referred to above. At least 30 and not more than 60 days before the commencement of the repayment period, the borrower must contact the lender to establish the precise term of repayment. The note must offer, in accordance with criteria prescribed by regulation of the Secretary of HHS, a graduated repayment schedule. The borrower may choose to repay under the graduated repayment schedule or a repayment schedule which provides for substantially equal installment payments. The Secretary of HHS has not promulgated regulations which set the criteria for a graduated repayment schedule. Unless agreed otherwise, in writing, the total of the payments by a borrower during any year of the repayment period with respect to all loans of the borrower under the HEAL Program should be at least equal to the annual interest on the outstanding principal, except during Deferment Periods. INTEREST At the lender's option, the interest rate on the HEAL Loan may be calculated on a fixed rate or on a variable rate basis. Whichever method is selected, that method must continue over the life of the loan, except where the loan is consolidated with another HEAL Loan. Interest that is calculated on a fixed rate basis is determined for the life of the loan during the calendar quarter in which the loan is disbursed. It may not exceed the maximum rate determined for that quarter by the Secretary of HHS. Interest that is calculated on a variable rate basis varies every calendar quarter throughout the life of the loan as the market price of U.S. Treasury bills changes. For any quarter, it may not exceed the maximum rate determined by the Secretary of HHS. For each calendar quarter, the Secretary of HHS determines the general maximum annual HEAL interest rate by (i) determining the average of the bond equivalent rates reported for the 91-day U.S. Treasury bills auctioned for the preceding calendar quarter, (ii) adding 3 percentage points, and (iii) rounding that figure to the next higher one-eighth of one percent. The HEAL Loans may bear interest at less than the statutory rates to the extent specified in the related Prospectus Supplement. As a general rule, unpaid accrued interest may be compounded semi-annually and added to principal. However, if a borrower postpones payment of interest before the beginning of the repayment period or during Deferment Periods or the lender permits postponement during forbearance, the lender may refrain from semi-annual compounding of interest and add accrued interest to principal only at the time repayment of principal begins or resumes. A lender may do so only if this practice does not result in interest being compounded more frequently than semi-annually. Interest begins to accrue when a loan is disbursed. However, a borrower may postpone payment of interest before the beginning of the repayment period or during the Deferment Periods or a lender may permit postponement during the forbearance. In these cases, payment of interest must begin or resume on the date on which repayment of principal begins or resumes. If payment of interest is postponed, it may be added to the principal for purposes of calculating a repayment schedule. INSURANCE PREMIUM The Secretary of HHS charges each lender an insurance premium to provide the insurance on HEAL Loans at the time of disbursement. The HEAL Act authorizes the Secretary of HHS to charge an insurance premium payable in advance based on the default rate of the educational institution and whether only the borrower executes the loan or obtains a co-signer. Presently, the insurance premium varies between 3% and 8%. The lender may pass along the cost of the insurance premium to the borrower by billing for it separately or deducting the amount from disbursed loan proceeds. Premiums are not refundable by the Secretary of HHS and need not be refunded by the lender to the borrower. Eligible lenders and eligible institutions may also be assessed additional risk based premiums based on the eligible entity's default rate. The risk-based premium to be assessed shall range from 6 percent of the principal amount of the loan to 10 percent of the principal amount of the loan. CONSOLIDATION OF HEAL LOANS If a lender or holder holds two or more HEAL Loans made to the same borrower, the lender or holder and the borrower may agree to consolidate the loans into a single HEAL Loan obligation evidenced by one promissory note if the consolidation will not result in terms less favorable to the borrower than if no consolidation had occurred and certain other requirements are satisfied. PAYMENTS BY SECRETARY OF HHS The Secretary of HHS insures each lender for the losses which the lender may incur on insured loans in the event that a borrower dies, becomes permanently and totally disabled, files for bankruptcy or defaults on the loans. If a borrower dies or becomes disabled, the Secretary of HHS discharges the borrower's liability on the loan by repaying the amount owed. If the borrower defaults after a substantial collection effort, the Secretary of HHS pays the amount of the loss to the lender, and the borrower's loan is assigned to the Secretary of HHS. DUE DILIGENCE A lender must follow certain procedures in making HEAL Loans, and must exercise due diligence in the collection of a HEAL Loan with respect to both a borrower and any endorser, in accordance with regulations of the Secretary of HHS. GENERALLY, THESE PROCEDURES REQUIRE THAT COMPLETED LOAN APPLICATIONS BE PROCESSED, A DETERMINATION OF WHETHER AN APPLICANT IS AN ELIGIBLE BORROWER ATTENDING AN ELIGIBLE INSTITUTION UNDER THE HEAL ACT BE MADE, THE BORROWER'S RESPONSIBILITIES UNDER THE LOAN BE EXPLAINED TO HIM OR HER, THE PROMISSORY NOTE EVIDENCING THE LOAN BE EXECUTED BY THE BORROWER AND THAT THE LOAN PROCEEDS BE DISBURSED BY THE LENDER IN A SPECIFIED MANNER. AFTER THE LOAN IS MADE, THE LENDER MUST ESTABLISH REPAYMENT TERMS WITH THE BORROWER, PROPERLY ADMINISTER DEFERMENTS AND FORBEARANCES AND CREDIT THE BORROWER FOR PAYMENTS MADE. IF A BORROWER BECOMES DELINQUENT IN REPAYING A LOAN, A LENDER MUST PERFORM CERTAIN COLLECTION PROCEDURES (PRIMARILY TELEPHONE CALLS, DEMAND LETTERS AND SKIPTRACING PROCEDURES) THAT VARY DEPENDING UPON THE LENGTH OF TIME A LOAN IS DELINQUENT. If these procedures are not followed or such due diligence is not exercised, the LENDER'S CLAIM FOR INSURANCE MAY BE REJECTED BY THE DEPARTMENT OF HHS. CLAIMS "Default" means the persistent failure of the borrower to make a payment when due, or to comply with other terms of the note or other written agreement evidencing a loan under circumstances where the Secretary of HHS finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay. In the case of a loan repayable (or on which interest is payable) in monthly installments, this failure must have persisted for 120 days. In the case of a loan repayable (or on which interest is payable) in less frequent installments, this failure must have persisted for 180 days. Upon the occurrence of a default, the Secretary of HHS shall require the eligible lender or holder to commence and prosecute an action for default. If, for a particular loan, an automatic stay is imposed on collection activities by a Bankruptcy Court, and the lender receives written notification of the automatic stay prior to initiating legal proceedings against the borrower, the 120 or 180-day period does not include any period prior to the end of the automatic stay. Unless a lender has notified the Secretary of HHS that it has filed suit against a defaulted borrower, it must file a default claim with the Secretary of HHS within 30 days after a loan has been determined to be in default. Under various circumstances, a lender must commence and prosecute an action for default against a borrower before filing a default claim. A lender must file a death claim with the Secretary of HHS within 30 days after the lender determines that a borrower is dead. A lender must file a disability claim with the Secretary of HHS within 30 days after it is notified that the Secretary of HHS had determined a borrower to be totally and permanently disabled. A lender must file a bankruptcy claim with the Secretary of HHS within 10 days of the initial date of receipt of court notice or written notice from the borrower's attorney that the borrower has filed for bankruptcy under chapters 11 or 13 of the Bankruptcy Code, or has filed a complaint to determine the dischargeability of the HEAL Loan under chapter 7 of the Bankruptcy Code. GENERAL The Secretary of HHS may enter into a special contract with a borrower who has obtained a degree from an eligible institution. Under the contract, the borrower agrees to serve for a continuous period of (i) not less than 12 months for each 12-month period the Secretary of HHS assumes such obligations, or (ii) 24 months, whichever is greater in a health manpower shortage area as a member of the National Health Service Corps or as a private practitioner. In return, the Secretary of HHS will pay an amount, not to exceed $10,000 per 12-month period, to the holder of the borrower's HEAL Loan to be applied toward interest and principal. INSURANCE FUND The federal government has established pursuant to the HEAL Act a student loan insurance fund which is available without fiscal year limitation to the Secretary of HHS for making payments in connection with the collection or default of loans insured under the HEAL Program. If moneys in the fund are insufficient to make the payments on collection or default of insured loans, the Secretary of the Treasury may lend the fund such amounts as may be necessary to make the payments involved, subject to the Federal Credit Reform Act of 1990 (42 USC ss.ss. 661 et seq.) COLLECTION/LITIGATION The use of litigation by the lender could affect the cost of collection on defaulted HEAL Loans. THE PRIVATE LOAN PROGRAMS To the extent described in the Prospectus Supplement for a Series, the assets securing the Notes of a Series may include Financed Private Loans issued under one or more Private Loan Programs. The Private Loan Programs will be specifically identified in the Prospectus Supplement with respect to such Series. The Prospectus Supplement for a Series secured by Financed Private Loans may specify a maximum percentage of Financed Private Loans that may comprise part of the Financed Student Loans securing one or more Series of Notes. This summary identifies characteristics common to most Private Loan Programs but is qualified by the specific disclosure set forth in the related Prospectus Supplement. Private Loans made under most Private Loan Programs are based on the credit of the Obligor or his or her parents or co-borrowers. In general, applicants are required to have a minimum annual income and a monthly debt burden, including the Financed Student Loan, of no greater than a specified percentage of their monthly income. In determining whether a student or co-borrower is creditworthy, a credit bureau report is obtained for each applicant, including the student. The various Private Loan Programs have different standards as to what constitutes a satisfactory credit history. Eligible post-secondary borrowers of a Private Loan often are required to be engaged in a course of study at a qualifying educational institution, which may include two-year colleges, four-year colleges and for-profit schools. Certain Private Loan Programs are specifically designed for graduate or professional students, or for students attending elementary or secondary private schools. The institutions generally must be located in the United States or Canada. Often, the borrower (or a co-applicant) must be a citizen or resident of the United States. Some Private Loans may be a consolidation of existing Private Loans. The amount that may be borrowed under a Private Loan Program varies based upon the Private Loan Program. Typically, borrowers must borrow at least a minimum amount with respect to any academic year, and may not borrow more than a maximum amount per academic year, or a maximum amount under the Private Loan Program. However, the amount of the Private Loan plus other financial aid received by a student, normally may not exceed the cost of education, as determined by the school. A guarantee fee typically is deducted from the Private Loan proceeds. All or a portion of this fee is paid to the agency that has established the Private Loan Program and that guarantees the repayment of all or a substantial portion of the Private Loan under certain specified circumstances. The obligation to guarantee is typically dependent upon the proper servicing of such Private Loan by the Servicer thereof. The interest rate on a Private Loan varies based upon the Private Loan Program and can either be fixed or variable. Floating rates may be based upon the prime rate or the T-Bill Rate, or some other objective standard. Interest typically accrues at a rate equal to the index plus a margin, but subject to a maximum rate per annum, with the interest rate being adjusted periodically. Repayment of a Private Loan usually is required to commence within 45 to 90 days following the borrowing. However, certain Private Loan Programs permit a borrower to defer the repayment of principal while the student is in school (often up to a maximum number of years). In such event, principal repayments typically begin promptly following graduation. Most Private Loan Programs permit prepayment of the Private Loan at any time without penalty. Borrowers typically may schedule repayment over a 10- to 25-year period, subject to a minimum monthly payment obligation. DESCRIPTION OF THE AGREEMENTS GENERAL The following is a summary of the material terms of each Sales Agreement, pursuant to which the Transferor will transfer the Financed Student Loans to an eligible lender trustee on behalf of the Depositor; each Transfer and Servicing Agreement, pursuant to which the Depositor will cause the eligible lender trustee to transfer the Financed Student Loans to the Trust in the name of the Eligible Lender Trustee and the Master Servicer will service the Financed Students Loans; the Indenture, as supplemented from time to time, pursuant to which each Series of Notes is issued; and each Administration Agreement, pursuant to which the Administrator will undertake certain administrative duties with respect to the Trust and the Financed Student Loans under the Transfer and Servicing Agreement and the Indenture (collectively, the "Agreements"). The summary does not purport to be complete and is qualified in its entirety by reference to the provisions of the Agreements. Each of such Agreements will be substantially in the form filed as an exhibit to the Registration Statement of which this Prospectus is a part. SALES AGREEMENTS On the Closing Date for any Series of Notes, the Transferor will convey the related Financed Student Loans to an eligible lender trustee on behalf of the Depositor pursuant to the terms of a Sales Agreement between the Transferor and the Depositor. The Sales Agreement will contain representations substantially similar to those contained in the Transfer and Servicing Agreement. Consequently, any obligation of the Depositor to repurchase Financed Student Loans will likewise be an obligation of the Transferor. See "The Transferor" and "-- Transfer and Servicing Agreements -- Conveyance of Financed Student Loans; Representations and Warranties" herein. TRANSFER AND SERVICING AGREEMENTS On the Closing Date for any Series of Notes, the Depositor will cause its eligible lender trustee to contribute and assign to the Eligible Lender Trustee on behalf of the related Trust, without recourse, its entire interest in the Financed Student Loans described in the Transfer and Servicing Agreement, all collections received and to be received with respect thereto for the period on or after the Cut-off Date and all rights under the Sales Agreement. Each Financed Student Loan will be identified in schedules appearing as an exhibit to the Transfer and Servicing Agreement. Conveyance of Financed Student Loans; Representations and Warranties. The Depositor will make certain representations and warranties with respect to the Financed Student Loans to the related Trust, including, among other things, that (i) each Financed Student Loan, at the time of transfer to the Trust, is free and clear of all security interests, liens, charges and encumbrances, and no offsets, defenses or counterclaims have been asserted or, to the Depositor's knowledge, threatened; (ii) the information provided with respect to the Financed Student Loans is true and correct in all material respects as of the Cut-off Date; and (iii) each Financed Student Loan, at the time it was originated, complied and, at the Closing Date, complies in all material respects with applicable federal and state laws (including, without limitation, the Higher Education Act, the HEAL Act, consumer credit, truth-in-lending, equal credit opportunity and disclosure laws) and applicable restrictions imposed by (A) the FFEL Program or under any Guarantee Agreement with respect to FFELP Loans, (B) the HEAL Program or under the HEAL Insurance Contract with respect to HEAL Loans, and (C) any related Private Loan Program with respect to Private Loans. Following the discovery by or notice to the Depositor of a breach of any such representation or warranty with respect to any Financed Student Loan that results in the failure of a Guarantee Agency (including for this purpose any guarantor under a Private Loan Program) to make a Guarantee Payment or the Department of HHS to make an Insurance Payment to the Eligible Lender Trustee, the Depositor will, unless such breach is cured within 120 days, purchase such Financed Student Loan from the Eligible Lender Trustee as of the first day following the end of such 120-day period that is the last day of a Collection Period, at a price equal to the applicable Purchase Amount; provided, however, that in the case of any representation or warranty the breach of which may be cured by reinstatement of the Guarantee Agency's obligation to guarantee payment or the Department of HHS' obligation to insure payment, such cure period shall be 360 days, in each case following the earlier of the date on which such breach is discovered by the Depositor and the date of the Servicer's receipt of the Guarantee Agency or Department of HHS reject transmittal form with respect to such Financed Student Loan. Notwithstanding the foregoing, unless otherwise provided in the Prospectus Supplement for a Series, if as of the last day of any Collection Period the aggregate principal amount of Financed Student Loans with respect to which claims have been filed with and rejected by a Guarantee Agency or the Department of HHS as a result of a breach of a representation or warranty of the Depositor or a breach of the obligations of the Master Servicer or with respect to which the Master Servicer determines that claims cannot be filed pursuant to the Higher Education Act or the HEAL Act, as the case may be, as a result of such a breach exceeds the lesser of $250,000 or 0.25% of the Pool Balance as of such date, the Depositor shall repurchase within 120 days of a written request by the Eligible Lender Trustee or the Indenture Trustee, affected Financed Student Loans in an aggregate principal amount such that after such repurchases (or purchases by the Master Servicer as described below under "Master Servicer Covenants") the aggregate principal amount of affected Financed Student Loans is equal to or less than the lesser of $250,000 or 0.25% of the Pool Balance. The Financed Student Loans to be repurchased by the Depositor or the Transferor or purchased by the Master Servicer will be based on the date of claim rejection, with the Financed Student Loans with the earliest such dates to be repurchased or purchased first. The Prospectus Supplement for a Series may specify shorter or longer cure periods, and establish different dollar or percentage thresholds, to the extent set forth therein. In addition, the Depositor or the Transferor will be obligated to reimburse the related Trust (i) for any accrued interest amounts that the Department of HHS refuses to pay with respect to Financed HEAL Loans, and (ii) for any accrued interest amounts that a Guarantee Agency (including for this purpose any guarantor under a Private Loan Program) refuses to pay pursuant to its Guarantee Agreement, and for any Interest Subsidy Payments and Special Allowance Payments that are lost or that must be repaid to the Department of Education with respect to Financed FFELP Loans, as a result of a breach of any such representation or warranty by the Depositor. Under certain circumstances, the Depositor also has the right to repurchase, or transfer a Subsequent Financed Student Loan in exchange for, a Financed Student Loan for which it has a reimbursement obligation as described in the preceding sentence. The repurchase and reimbursement obligations of the Depositor or the Transferor will constitute, together with the right to receive certain amounts from Credit Enhancement, if any, the sole remedy available to or on behalf of such Trust, the Certificateholders or the Noteholders for any such uncured breach. The Transferor's and the Depositor's repurchase and reimbursement obligations are contractual obligations pursuant to the Transfer and Servicing Agreement that may be enforced against the Transferor and the Depositor, but the breach of which will not constitute an Event of Default under the Notes. Pre-Funding Account. If a Pre-Funding Account has been established with respect to a Trust and a Pre-Funded Amount has been deposited therein with respect to a Series of Notes, the Trust will use such amounts to acquire additional Financed Student Loans ("Additional Student Loans") from the Depositor from time to time during the applicable Pre-Funding Period. The amount on deposit in any Pre-Funding Account may not exceed a specified percentage of the initial Pool Balance of the related Trust as set forth in the related Prospectus Supplement. Additional Student Loans may include FFELP Loans, HEAL Loans and/or Private Loans in such amounts as may be determined by the Depositor and satisfying any conditions imposed by the Rating Agencies and any provider of Credit Enhancement, if applicable. The Trust may acquire from the Depositor during a Pre-Funding Period Additional Student Loans having an aggregate principal balance up to the amount then on deposit in the Pre-Funding Account. Monies in the Pre-Funding Account will be invested exclusively in Eligible Investments. The obligation to accept any Additional Student Loan by the Eligible Lender Trustee on behalf of the Trust is subject to the condition, among others as may be set forth in the related Prospectus Supplement, that such Additional Student Loan must satisfy all applicable origination requirements and all other requirements specified in the Transfer and Servicing Agreement. On such dates as may from time to time be designated by the Depositor during a Pre-Funding Period, the Depositor may sell and assign, without recourse, to the Eligible Lender Trustee on behalf of the Trust, its entire interest in Additional Student Loans. Each agreement of transfer will include as an exhibit a schedule identifying each Additional Student Loan transferred. Upon such conveyance of Additional Student Loans to the Eligible Lender Trustee on behalf of the Trust, the Pool Balance will be adjusted. Any amounts remaining in the Pre-Funding Account at the end of the related Pre-Funding Period will be paid to the Noteholders as a prepayment of principal, as set forth in the related Prospectus Supplement. Subsequent Finance Period and Subsequent Financed Student Loans. During a period from the Closing Date for a Series to a subsequent date identified in the related Prospectus Supplement (the "Subsequent Finance Period"), the Depositor may, at its option but subject to the conditions set forth in the Transfer and Servicing Agreement, transfer to the Eligible Lender Trustee on behalf of the related Trust, Subsequent Financed Student Loans, and direct the Eligible Lender Trustee and the Indenture Trustee to apply Consolidation prepayments on deposit in the Collection Account to pay the Purchase Price for such Subsequent Financed Student Loans. Subsequent Financed Student Loans that may be so transferred by the Depositor include (i) Consolidation Loans or HEAL Consolidation Loans made by the Transferor, provided, however, that in no event shall the aggregate amount of Subsequent Financed Student Loans that are Consolidation Loans or HEAL Consolidation Loans transferred into the related Trust exceed any maximum amount identified in the Prospectus Supplement; (ii) Serial Loans owned by the Depositor that are serial (i.e., made to the same borrower under the same loan program and guaranteed by the same Guarantee Agency or insured by the Department of HHS) to an existing Financed Student Loan owned by the related Trust, provided that each such Subsequent Financed Student Loan entitles the holder thereof to receive interest based on the same interest rate index as the Financed Student Loan to which it is serial, and provided further, that in no event shall the aggregate amount of Subsequent Financed Student Loans that are Serial Loans transferred into the related Trust exceed any maximum amount identified in the Prospectus Supplement; and (iii) similar consolidation or serial loans under applicable Private Loan Programs. In addition, during the Subsequent Finance Period for any Series, subject to the conditions set forth in the related Transfer and Servicing Agreement, the Depositor may, at its option, in lieu of reimbursing certain lost interest payments and Special Allowance Payments or depositing into the Collection Account the Purchase Amount of a Financed Student Loan which has become ineligible for lost interest payments or Special Allowance Payments (see "Description of the Agreements -- Transfer and Servicing Agreements -- Conveyance of Financed Student Loans; Representations and Warranties" and "Servicing -- Master Servicer Covenants"), the Depositor may transfer to the Eligible Lender Trustee on behalf of the related Trust, a Subsequent Financed Student Loan which satisfies the following criteria (or such other criteria as may be set forth in the Prospectus Supplement for a Series): (A) the Subsequent Financed Student Loan was originated under the same loan program as the Financed Student Loan for which it is being exchanged and entitles the holder thereof to receive interest based on the same interest rate index as the Financed Student Loan for which it is being exchanged, (B) the Subsequent Financed Student Loan will not, at any level of such interest rate index, have an interest rate that is less than the Financed Student Loan for which it is being exchanged and (C) the average principal balance per Obligor of the Subsequent Financed Student Loans that are being transferred into the related Trust and the existing Financed Student Loans for which they are being exchanged is within 10% (plus or minus) of the average principal balance per Obligor of the Financed Student Loans being transferred to the Depositor. If the aggregate outstanding principal balance of the Subsequent Financed Student Loans is less than that of the Financed Student Loans for which they are being exchanged, the Depositor shall deposit the difference in the Collection Account concurrently with such transfer. If the aggregate outstanding principal balance of the Subsequent Financed Student Loans is greater than that of the Financed Student Loans for which they are being exchanged, the Depositor shall be entitled to the difference from amounts on deposit in the Collection Account. In either case, such payments are referred to herein as "Adjustment Payments." The Trust may not acquire Subsequent Financed Student Loans at any time that an Event of Default under the Indenture, a Master Servicer Default under the Transfer and Servicing Agreement or an Administrator Default under the Administration Agreement has occurred and is continuing. Accounts. The Indenture Trustee will establish and maintain the Collection Account, Note Payment Account, Expense Account, Advance Account and, if set forth in the related Prospectus Supplement, a Reserve Account and Pre-Funding Account. The Eligible Lender Trustee will establish and maintain the Certificate Distribution Account in the name of the Eligible Lender Trustee on behalf of the Certificateholders. The foregoing accounts are referred to collectively as the "Trust Accounts." Funds in the Trust Accounts will be invested as provided in the Transfer and Servicing Agreement in Eligible Investments. "Eligible Investments" include the following: (i) cash (insured at all times by the FDIC); (ii) direct obligations of (including obligations issued or held n book entry form on the books of) the Department of the Treasury of the United States of America; (iii) obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: - Export-Import Bank - Farm Credit System Financial Assistance Corporation - Farmers Home Administration - General Services Administration - U.S. Maritime Administration - Small Business Administration - Government National Mortgage Association (GNMA) - U.S. Department of Housing & Urban Development (PHA's) - Federal Housing Administration; (iv) senior debt obligations rated "AAA" or "Aaa" by each Rating Agency and issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation (v) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1+" or "P-1" by each Rating Agency and maturing no more than 360 days after the date of purchase (ratings on holding companies not being considered the rating of the bank); (vi) commercial paper which is rated at the time of purchase in the single highest classification, "A- 1+" or "P-1" by each Rating Agency and which matures not more than 270 days after the date of purchase; (vii) investments in money market funds (including, but not limited to, money market mutual funds) rated "AAAm" or "AAAm-G" or better by each Rating Agency; (viii) investment agreements acceptable to each Rating Agency, written confirmation of which shall be furnished to the Indenture Trustee prior to any such investment; and (ix) other forms of investments acceptable to each Rating Agency, written confirmation of which shall be furnished to the Indenture Trustee prior to any such investment. Notwithstanding anything in the Transfer and Servicing Agreement to the contrary, for so long as the Transferor or any of its affiliates is a Certificateholder, all investments of the related Trust shall be made in investments permissible for a national bank. Investment earnings on funds deposited in the Trust Accounts, net of losses and investment expenses, will be deposited in the Collection Account. The Trust Accounts will be maintained as Eligible Deposit Accounts. "Eligible Deposit Account" means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade. An "Eligible Institution" is generally a depository institution organized under the federal or any state banking laws whose deposits are insured by the Federal Deposit Insurance Corporation and whose unsecured long-term debt obligations or short-term debt ratings are acceptable to each Rating Agency rating the related Series of Notes. Amendment. Each Transfer and Servicing Agreement may be amended by the parties thereto, with the consent of the Indenture Trustee, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of a Transfer and Servicing Agreement or of modifying in any manner the rights of Noteholders or Certificateholders; provided, however, that no such amendment may (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments with respect to the Financed Student Loans or distributions that are required to be made for the benefit of the Noteholders or the Certificateholders, or (ii) reduce the percentage of the Notes which are required to consent to any such amendment, without the consent of the holders of all the outstanding Notes affected thereby. Evidence as to Compliance . Each Transfer and Servicing Agreement with respect to any Series of Notes will provide that a firm of independent public accountants will furnish to the Eligible Lender Trustee and the Indenture Trustee annually a statement (based on the examination of certain documents and records and on such accounting and auditing procedures considered appropriate under the circumstances) as to compliance by the Master Servicer during the preceding calendar year with certain provisions of the Transfer and Servicing Agreement relating to the servicing of the Financed Student Loans. Each Transfer and Servicing Agreement will further provide that a firm of independent public accountants (which may be the same firm referred to in the immediately preceding paragraph) will furnish to the Eligible Lender Trustee and the Indenture Trustee annually a statement (based on the examination of certain documents and records and on such accounting and auditing procedures considered appropriate under the circumstances) as to compliance by the Administrator during the preceding calendar year with certain provisions of the Transfer and Servicing Agreement relating to the administration of the Trust and the Financed Student Loans. Each Transfer and Servicing Agreement will also provide for delivery to the Eligible Lender Trustee and the Indenture Trustee, concurrently with the delivery of each statement of compliance referred to above, of a certificate signed by an officer of the Master Servicer or the Administrator, as the case may be, stating that, to his knowledge, the Master Servicer or the Administrator, as the case may be, has fulfilled in all material respects all its obligations under the Transfer and Servicing Agreement throughout the preceding calendar year or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof. Each of the Master Servicer and the Administrator has agreed to give the Indenture Trustee and the Eligible Lender Trustee notice of certain Master Servicer Defaults and Administrator Defaults, respectively, under the Transfer and Servicing Agreement. Copies of such statements and certificates may be obtained by Noteholders by a request in writing addressed to the Indenture Trustee at the address identified in the related Prospectus Supplement. THE INDENTURE General. The Notes will be issued pursuant to an Indenture by and between the applicable Trust and Indenture Trustee, as supplemented from time to time by a Terms Supplement. The Administrator will perform certain obligations of the Trust under the Indenture for any Series. The Indenture Trustee. The Indenture Trustee with respect to a Series of Notes will be the entity named in the related Prospectus Supplement. An Indenture Trustee may serve from time to time as trustee under indentures or trust agreements with the Transferor or its affiliates relating to other issues of their securities. In addition, the Transferor or its affiliates may have other banking relationships with the Indenture Trustee and its affiliates. Modification of Indenture; Supplemental Indentures. With the consent of the holders of a majority of the aggregate principal amount of Directing Notes of a Trust then outstanding (or, with respect to any change affecting only certain Series or Classes of Notes, the holders of a majority of the aggregate principal amount of Notes of such Series or Class) and the consent of any applicable provider of Credit Enhancement, the applicable Indenture Trustee and the related Trust may execute a supplemental indenture to add provisions to, or change in any manner or eliminate any provisions of, the Indenture with respect to one or more Series of Notes, or to modify (except as provided below) in any manner the rights of the Noteholders. Without the consent of the holder of each outstanding Note of a Series affected thereby, however, no supplemental indenture will (i) change the date of payment of any installment of principal of or interest on any Note of such Series or reduce the principal amount thereof or the interest rate thereon, change the provisions of the Indenture relating to the application of collections on, or the proceeds of the sale of, the assets of the related Trust to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or any interest thereon is payable, (ii) impair the right to institute suit for the enforcement of certain provisions of the Indenture regarding payment, (iii) reduce the percentage of the aggregate amount of the outstanding Notes of any Series or Class the consent of the holders of which is required for any such supplemental indenture or the consent of the holders of which is required for any waiver of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences as provided for in the Indenture, (iv) modify or alter certain provisions of the Indenture regarding the determination of Notes that are considered "outstanding" for consent, waivers and other matters, (v) reduce the percentage of the aggregate outstanding amount of the Notes the consent of the holders of which is required to direct the Indenture Trustee to direct the related Trust to sell or liquidate the Financed Student Loans, (vi) decrease the percentage of the aggregate principal amount of the Notes required to amend the sections of the Indenture which specify the applicable percentage of aggregate principal amount of the Notes necessary to amend the Indenture or certain other related agreements, (vii) modify any of the provisions of the Indenture in such manner as to affect the calculation of the amount of any payment of interest on any Note, or (viii) except as otherwise permitted or contemplated in the Indenture, terminate the lien of the Indenture on any such collateral or deprive the holder of any Note of the security afforded by the lien of the Indenture. Generally, a Trust and the related Indenture Trustee may also enter into supplemental indentures, but without obtaining the consent of Noteholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or modifying in any manner the rights of Noteholders so long as such action will not, in the opinion of counsel satisfactory to the Indenture Trustee, materially and adversely affect the interest of any Noteholder. Any such amendment or supplemental indenture shall be deemed not to materially and adversely affect any Noteholder if there is delivered to the Indenture Trustee written notification from each Rating Agency to the effect that such amendment or supplement will not cause that Rating Agency to reduce the then current rating assigned to such Notes. Events of Default; Rights Upon Event of Default. Generally, an "Event of Default" with respect to the Notes of a Series is defined in the Indenture as consisting of the following: (i) a default for five business days or more in the payment of any Principal Payment Amount (subject to the caveat noted below) or Class Interest Rate on the Notes after the same becomes due and payable; (ii) a default in the observance or performance of any covenant or agreement of the applicable Trust made in the Indenture or the Transfer and Servicing Agreement and the continuation of any such default for a period of 30 days after notice thereof is given to such Trust by the Indenture Trustee or to such Trust and the Indenture Trustee by the holders of at least 25% in aggregate principal amount of the Directing Notes then outstanding; (iii) any representation or warranty made by a Trust in the Indenture or in any certificate delivered pursuant thereto or in connection therewith having been incorrect in a material respect as of the time made, and such breach not having been cured within 30 days after notice thereof is given to the Trust by the Indenture Trustee or to the Trust and the Indenture Trustee by the holders of at least 25% in aggregate principal amount of the Directing Notes then outstanding; or (iv) certain events of bankruptcy, insolvency, receivership or liquidation of a Trust. Because the amount of principal required to be distributed to Noteholders on any Payment Date may be limited to the amount of Available Funds after payment of Transaction Fees, Consolidation Loan Fees and the aggregate Class Interest Rate, ANY DIFFERENCE BETWEEN THE PRINCIPAL PAYMENT AMOUNT AND THE REMAINING AVAILABLE FUNDS WILL BE CARRIED OVER TO BE PAID ON SUCCEEDING PAYMENT DATES. THEREFORE, THE FAILURE TO PAY PRINCIPAL ON ANY CLASS OF NOTES MAY NOT RESULT IN THE OCCURRENCE OF AN EVENT OF DEFAULT UNTIL THE LEGAL FINAL MATURITY OF SUCH CLASS OF NOTES. IN ADDITION, THE FAILURE TO PAY THE AGGREGATE AMOUNT OF CARRYOVER INTEREST AS A RESULT OF INSUFFICIENT AVAILABLE FUNDS WILL NOT RESULT IN THE OCCURRENCE OF AN EVENT OF DEFAULT. If an Event of Default should occur and be continuing with respect to any Class or Series of Notes, the Indenture Trustee or holders of a majority in aggregate principal amount of the Directing Notes then outstanding may declare all outstanding Notes to be immediately due and payable, by notice to the related Trust or notice to the Indenture Trustee if given by the Noteholders. Such declaration may be rescinded by the holders of a majority in aggregate principal amount of the Directing Notes then outstanding at any time prior to the entry of judgment in a court of competent jurisdiction for the payment of such amount if (i) such Trust has paid to the Indenture Trustee a sum equal to all amounts then due with respect to the Notes (without giving effect to such acceleration) and due to the Indenture Trustee and (ii) all Events of Default (other than nonpayment of amounts due solely as a result of such acceleration) have been cured or waived. If the Notes of any Series have been declared to be due and payable following an Event of Default with respect thereto, the Indenture Trustee may, in its discretion, require the Eligible Lender Trustee to sell the Financed Student Loans or elect to have the Eligible Lender Trustee maintain possession of the Financed Student Loans and continue to apply collections with respect to such Financed Student Loans as if there had been no declaration of acceleration. The Indenture Trustee, however, is prohibited from directing the Eligible Lender Trustee to sell the Financed Student Loans following an Event of Default, other than a default for five days or more in the payment of any principal or a default for five days or more in the payment of any interest on any Note, unless (i) the Noteholders of 100% of the aggregate amount of such Series of Notes outstanding consent to such sale, (ii) the proceeds of such sale are sufficient to pay in full the principal of and the accrued interest on the Notes outstanding at the date of such sale or (iii) the Indenture Trustee determines that the collections on the Financed Student Loans and other assets of the related Trust would not be sufficient on an ongoing basis to make all payments on the Notes as such payments would have become due if such obligations had not been declared due and payable, and the Indenture Trustee obtains the consent of the Noteholders of at least 66-2/3% of the aggregate principal amount of the Notes then outstanding. In addition, the Indenture Trustee may not sell or otherwise liquidate the Financed Student Loans following an Event of Default, other than a default for five days or more in the payment of any principal or a default for five days or more in the payment of any interest on any Note, unless (i) the proceeds of such sale or liquidation payable to any Class of subordinated Notes are sufficient to pay such Notes in full or (ii) following notice that the proceeds of such sale or liquidation of Notes would be insufficient to pay amounts due on such Notes at least a majority of the aggregate outstanding amount of such Class of subordinated Notes consent thereto. The Indenture Trustee may not become the owner or holder of the Financed Student Loans without entering into guarantee agreements with the applicable Guarantor of each Financed FFELP Loan and with the Secretary of HHS with respect to the Financed HEAL Loans. The Indenture Trustee has not entered into any such agreements. As a result, if the Indenture Trustee determined to take title to or hold the loans itself, it would not be permitted to do so without meeting the criteria for an eligible lender under the Higher Education Act and the HEAL Act at the time and entering into such agreements or retaining an eligible lender trustee to do it on its behalf. See "Description of the FFEL Program" and "Description of the HEAL Program" herein. Subject to the provisions of the Indenture relating to the duties of the Indenture Trustee, if an Event of Default should occur and be continuing with respect to a Series of Notes, the Indenture Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the holders of a Series of Notes, if the Indenture Trustee reasonably believes it will not be adequately indemnified against the costs, expenses and liabilities which might be incurred by it in complying with such request. Subject to such provisions for indemnification and certain limitations contained in the Indenture, the holders of a majority in aggregate principal amount of the outstanding Directing Notes will have the right to direct the time, method and place of conducting any proceeding or any remedy available to the Indenture Trustee and the holders of a majority in aggregate principal amount of the Directing Notes then outstanding, may, in certain cases, waive any default with respect thereto, except a default in the payment of principal or interest or a default in respect of a covenant or provision of the Indenture that cannot be modified without the waiver or consent of all the holders of the outstanding Directing Notes. No holder of any Series of Note will have the right to institute any proceeding with respect to the Indenture, unless (i) such holder previously has given to the Indenture Trustee written notice of a continuing Event of Default, (ii) the holders of not less than 25% in principal amount of the outstanding Directing Notes have requested in writing that the Indenture Trustee institute such proceeding in its own name as Indenture Trustee, (iii) such holder or holders have offered the Indenture Trustee reasonable indemnity, (iv) the Indenture Trustee has for 60 days after notice failed to institute such proceeding and (v) no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the holders of a majority in aggregate principal amount of the outstanding Directing Notes. None of the Indenture Trustee, the Transferor, the Depositor, the Administrator, the Master Servicer, any Servicer or the Eligible Lender Trustee in its individual capacity, nor any holder of a Certificate, nor any of their respective owners, beneficiaries, agents, officers, directors, employees, successors or assigns will, in the absence of an express agreement to the contrary, be personally liable for the payment of the principal of or interest on the Notes or for the agreements of the related Trust contained in the related Indenture. Certain Covenants. A Trust may not consolidate with or merge into any other entity unless (i) the entity formed by or surviving such consolidation or merger is organized under the laws of the United States, or any state thereof, and such entity expressly assumes the Trust's obligation to make due and punctual payments upon the Notes and the performance or observance of every agreement and covenant of the Trust under the Indenture and any supplemental indenture, (ii) no Event of Default has occurred and is continuing immediately after such merger or consolidation, (iii) the Trust has received an opinion of counsel to the effect that such consolidation or merger would have no material adverse federal or applicable state tax consequence to the Trust or to any Certificateholder or Noteholder, (iv) any action as is necessary to maintain the lien and security interest created by the Indenture shall have been taken and (v) the Trust shall have delivered to the Indenture Trustee an officer's certificate of the Administrator and an opinion of counsel each stating that such consolidation or merger and any supplemental indenture relating thereto comply with the terms of the Indenture and that all conditions precedent provided for in the Indenture to such transaction have been complied with (including any Exchange Act filings) in all material respects. Except as otherwise permitted by the Agreements, a Trust may not convey or transfer all or substantially all its properties or assets, including the assets securing the Notes, unless the conditions specified in (i) through (v) above with respect to a permitted merger or consolidation are substantially met, plus the acquiror must agree (a) that all right, title and interest in the property and assets so conveyed or transferred are subordinate to the rights of the Noteholders, (b) to indemnify the Trust (unless otherwise provided in a supplemental indenture) and (c) to make all filings with the Commission required by the Exchange Act in connection with the Notes. A Trust will not, among other things, (i) except as expressly permitted by the Agreements, sell, transfer, exchange or otherwise dispose of any of the assets of the Trust, (ii) claim any credit on or make any deduction from the principal and interest payable in respect of any Notes (other than amounts withheld under the Code or applicable state law) or assert any claim against any present or former holder of Notes because of the payment of taxes levied or assessed upon the Trust, (iii) except as contemplated by the Agreements, dissolve or liquidate in whole or in part, (iv) permit the validity or effectiveness of the Indenture or any supplemental indenture to be impaired, or permit the lien of the Indenture and any supplemental indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any person to be released from any covenants or obligations with respect to any Notes under the Indenture except as may be expressly permitted thereby, (v) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of the Indenture and any supplemental indenture) to be created on or extend to or otherwise arise upon or burden the assets of the Trust or any part thereof, or any interest therein or the proceeds thereof (other than certain tax and other liens arising by operation of law, except as expressly permitted by the Agreements) or (vi) permit the lien of the Indenture and any supplemental indenture not to constitute a valid first priority (other than with respect to such tax or other lien) security interest in the assets securing the Notes. No Trust may engage in any activity other than financing, purchasing, owning, selling, servicing and managing the Financed Student Loans and activities incidental thereto. No Trust will issue, incur, assume or guarantee or otherwise become liable for any indebtedness other than the Series of Notes or otherwise in accordance with the Agreements. Annual Compliance Statement and Other Notices. The Administrator, on behalf of each Trust, will be required to file annually with the Indenture Trustee a written statement as to the fulfillment of the Trust's obligations under the Indenture. Each Trust is required to give the Indenture Trustee written notice of each Event of Default among other notices. The Indenture Trustee is obligated to notify Noteholders of known defaults under the Indenture within 90 days after their occurrence. Satisfaction and Discharge of Indenture. The Indenture will be discharged with respect to the collateral securing the Series of Notes upon the delivery to the Indenture Trustee for cancellation of all the Notes of such Series or, with certain limitations, upon deposit with the Indenture Trustee of funds sufficient for the payment in full of all the Notes of such Series. Statements to Indenture Trustee. On each Payment Determination Date immediately preceding a Payment Date, the Master Servicer or the Administrator will provide to the Indenture Trustee, and the Indenture Trustee will forward to each Noteholder (other than a Noteholder of Auction Rate Notes, which may obtain the following statement to the extent available upon written request to the Indenture Trustee) a statement which will include the following information with respect to such Payment Date or for the preceding Collection Period or Collection Periods, to the extent applicable: (i) the Principal Factor for each Class of Notes; (ii) the amount of the payment allocable to principal of each Class Notes; (iii) the amount of the payment allocable to interest on each Class of Notes, together with the interest rates applicable with respect thereto (indicating whether such interest rates are based on the Class Interest Rate or on the Net Loan Rate with respect to each Class of Notes, and specifying what each such interest rate would have been if it had been calculated using the alternate; (iv) the amount of the payment, if any, allocable to any Carryover Interest together with the outstanding amount, if any, thereof after giving effect to any such distribution; (v) the Pool Balance as of the close of business on the last day of the preceding Collection Period; (vi) the aggregate outstanding principal balance of each Class of Notes as of such Payment Date, after giving effect to payments allocated to principal reported under clause (ii) above; (vii) the amount of the Servicing Fee to be allocated to the Master Servicer, the amount of the Administration Fee to be allocated to the Administrator, the amount of the Indenture Trustee Fee to be allocated to the Indenture Trustee, the amount of the Eligible Lender Trustee Fee to be allocated to the Eligible Lender Trustee, and the amount of fees paid to any other entity described in the related Prospectus Supplement, respectively, with respect to the upcoming Payment Date; (viii) the amount of the aggregate Realized Losses, if any, for the preceding Collection Period and the aggregate amount, if any, received (stated separately for interest and principal) with respect to Financed Student Loans for which Realized Losses were allocated previously; (ix) the amount of the distribution attributable to amounts in any Reserve Account, Pre-Funding Account, or other account identified in the related Prospectus Supplement, the amount of any other withdrawals from such accounts for such Payment Date, the balance of such accounts on such Payment Date, after giving effect to changes therein on such Payment Date, the then applicable Parity Percentage and the amount of the distribution, if any, attributable to Parity Percentage Payments; (x) the aggregate amount, if any, paid for Financed Student Loans purchased from the related Trust during the preceding Collection Period; (xi) during the Subsequent Finance Period only, the Adjustment Payments, stated separately, for the preceding Collection Period; (xii) the number and principal amount of Financed Student Loans, as of the preceding Collection Period, that are (A) 31 to 60 days delinquent, (B) 61 to 90 days delinquent, (C) 91 to 120 days delinquent, (D) more than 120 days delinquent and (E) for which claims have been filed with the appropriate Guarantee Agency, guarantor or the Department of HHS and which are awaiting payment; (xiii) any other information specified in the related Prospectus Supplement. Rights Upon Servicer Default or Administrator Default. As long as a Servicer Default OR AN ADMINISTRATOR'S DEFAULT under a Transfer and Servicing Agreement remains unremedied, the Indenture Trustee or holders of Directing Notes evidencing not less than 25% in principal amount of then outstanding Directing Notes may terminate all the rights and obligations of the Master Servicer OR ADMINISTRATOR, as the case may be, UNDER SUCH TRANSFER AND SERVICING AGREEMENT, whereupon a successor servicer or administrator appointed by the Indenture Trustee or the Indenture Trustee will succeed to all the responsibilities, duties and liabilities of the Master Servicer OR THE ADMINISTRATOR, as the case may be, UNDER THE TRANSFER AND SERVICING AGREEMENT, and will be entitled to similar compensation arrangements. If a successor Master Servicer or Administrator, as the case may be, has not been appointed at the time when the predecessor Master Servicer or Administrator has ceased to act as Master Servicer or Administrator, then the Indenture Trustee shall automatically be appointed successor Master Servicer or Administrator. Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling or legally unable so to act, appoint or petition a court of competent jurisdiction to appoint, any established institution whose regular business shall include the servicing of student loans, as the successor to the Master Servicer or Administrator, as the case may be, under this Agreement. If a successor Master Servicer or Administrator, as the case may be, has not been appointed at the time when the predecessor Master Servicer or Administrator has ceased to act as Master Servicer or Administrator, then the Indenture Trustee shall automatically be appointed as successor Master Servicer or Administrator. Waiver of Past Defaults. The holders of Directing Notes evidencing at least a majority in principal amount of the then outstanding Directing Notes may, on behalf of all Noteholders, waive any default by the Master Servicer OR THE ADMINISTRATOR, as the case may be, IN THE PERFORMANCE OF ITS RESPECTIVE OBLIGATIONS UNDER THE RELATED TRANSFER AND SERVICING AGREEMENT, except a default in making any required payments from any of the Trust Accounts or giving instructions regarding the same in accordance with such Transfer and Servicing Agreement. No such waiver will impair the Noteholders' rights with respect to subsequent defaults. Termination. With respect to any Series, the obligations of the Master Servicer, the Transferor, the Depositor, the Administrator, the Eligible Lender Trustee and the Indenture Trustee pursuant to each Transfer and Servicing Agreement will terminate upon (i) the maturity or other liquidation of the last Financed Student Loan and the disposition of any amount received upon liquidation of any remaining Financed Student Loans and (ii) the payment to the related Noteholders and the Certificateholders of all amounts required to be paid to them pursuant to the related Transfer and Servicing Agreement. See "Description of the Notes--Termination" herein. ADMINISTRATION Crestar Bank, in its capacity as Administrator, will enter into A TRANSFER AND SERVICING AGREEMENT pursuant to which IT will agree, to the extent provided therein, (i) to direct the Indenture Trustee to make the required distributions from the Trust Accounts on each Payment Date, (ii) to prepare (based on the reports received from the Master Servicer) and provide periodic and annual statements to the Eligible Lender Trustee and the Indenture Trustee with respect to distributions to Noteholders and Certificateholders and any related Federal income tax reporting information and (iii) to provide the notices and to perform other administrative obligations required by the Indenture and the Trust Agreement. As compensation for the performance of the Administrator's obligations and as reimbursement for its expenses related thereto, the Administrator will be entitled to the Administration Fee. Affiliates of the Administrator may assist it in performing its obligations. An "Administrator Default" under each TRANSFER AND SERVICING Agreement will consist of (i) any failure by the Administrator to direct the Indenture Trustee or the Eligible Lender Trustee, as applicable, to make any required distributions from any of the Trust Accounts, which failure continues unremedied for three Business Days after written notice from the Indenture Trustee or the Eligible Lender Trustee is received by the Administrator or after discovery of such failure by the Administrator; (ii) any failure by the Administrator duly to observe or perform in any material respect any other covenant or agreement in a Transfer and Servicing Agreement which failure materially and adversely affects the rights of Noteholders, and which continues unremedied for 60 days after the giving of written notice of such failure (A) to the Administrator by the Indenture Trustee or the Eligible Lender Trustee or (B) to the Administrator and to the Indenture Trustee and the Eligible Lender Trustee by holders of Directing Notes evidencing not less than 25% in principal amount of the outstanding Directing Notes; and (iii) certain events of insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings with respect to the Administrator and certain actions by the Administrator indicating its insolvency or inability to pay its obligations. SERVICING SERVICING PROCEDURES Pursuant to the Transfer and Servicing Agreement for each Series, the Master Servicer will agree to service, and perform all other related tasks with respect to, the Financed Student Loans. The Master Servicer is obligated to perform all services and duties customary to the servicing of Financed Student Loans (including all collection practices), and to do so with reasonable care and in compliance with all standards and procedures provided for in the Higher Education Act, the Guarantee Agreements, the Heal Act, the HEAL Insurance Contract, all regulations and agreements respecting Private Loans and all other applicable federal and state laws. Without limiting the foregoing, the duties of the Master Servicer include, but are not limited to, collecting and depositing into the Collection Account all payments with respect to the Financed Student Loans, including claiming and obtaining any Insurance Payments with respect to Financed HEAL Loans, and, with respect to Financed FFELP Loans, any Guarantee Payments, Interest Subsidy Payments and Special Allowance Payments and guarantee payments with respect to Private Loans; responding to inquiries from borrowers on the Financed Student Loans; and investigating delinquencies and sending out statements, payment coupons and tax reporting information to borrowers. In addition, the Master Servicer will keep ongoing records with respect to such Financed Student Loans and collections thereon and will furnish monthly and annual statements to the Administrator with respect to such information, in accordance with the customary standards and as otherwise required in the Transfer and Servicing Agreement. The Master Servicer may enter into servicing agreements with Servicers pursuant to which some or all of the Financed Student Loans may be serviced on behalf of the Master Servicer. No such servicing arrangement will relieve the Master Servicer of its duties and obligations under any Transfer and Servicing Agreement. The initial Servicers for a particular pool of Financed Student Loans will be set forth in the related Prospectus Supplement. The Master Servicer shall cause each Servicer to deposit in the Collection Account, no less frequently than bi-weekly, all payments on Financed Student Loans for which such Servicer is acting as primary servicer (from whatever source) and all proceeds of such Financed Student Loans collected by it during each Collection Period. Advances. If the Master Servicer has applied for an Insurance Payment from the Department of HHS, a Guarantee Payment from a Guarantee Agency or an Interest Subsidy Payment or a Special Allowance Payment from the Department of Education or a guarantee payment from a guarantor of a Private Loan, and the Master Servicer has not received the related payment prior to the end of the Collection Period immediately preceding the Payment Date on which such amount would be required to be distributed as a payment of interest, the Master Servicer may, no later than the Payment Determination Date relating to such Payment Date, deposit into the Advance Account an amount up to the amount of such payments applied for but not received (such deposits by the Master Servicer are referred to herein as "Advances"). On each related Payment Date for a Series, the Indenture Trustee will distribute from the Advance Account to the Noteholders the Advance for such Payment Date. Such Advances are recoverable by the Master Servicer (i) first, from the source for which such Advance was made and (ii) second, from payments received generally on or with respect to the Financed Student Loans. The Master Servicer will have no obligation, legal or otherwise, to make any Advance, and a determination by the Master Servicer to make an Advance will not create any obligation of the Master Servicer, legal or otherwise, to make any future Advances. Year 2000 Information Systems Procedures. The Master Servicer currently is implementing its information systems so that they will be fully operable for date recognition and information processing when the year 2000 begins. An assessment of needed changes was completed by a corporate-wide task force, led by the Master Servicer's Technology and Operations Group, with representation from all major internal business segments. This task force continues to monitor the Master Servicer's progress, in addition to communicating with external service providers and selected customers to ensure they are taking appropriate actions to address date recognition issues. A combination of internal and external resources are being used by the Master Servicer to implement the needed changes to its many different information systems. Some of the necessary changes in the Master Servicer's computer code have been made during the course of normal maintenance. Other changes will necessitate re-writing of the computer code, which is expected to be completed at some point in 1998. Information with respect to the Master Servicer's year 2000 date recognition and information processing program is contained in Crestar Financial Corporation's Exchange Act reports, which may be obtained from the Commission at the sources identified herein under "Available Information." The Master Servicer expects to require each Servicer to represent and warrant, among other things, that the information systems used by such Servicers in connection with the servicing of the Financed Student Loans will be fully operable for date recognition and information processing when the year 2000 begins. CERTAIN MATTERS REGARDING THE MASTER SERVICER Each Transfer and Servicing Agreement will provide that the Master Servicer may not resign from its obligations and duties as Master Servicer thereunder, except upon determination that the Master Servicer's performance of such duties is no longer permissible under applicable law or will violate any final order of a court or administrative agency with jurisdiction over the Master Servicer or its properties. Generally, no such resignation will become effective until the Indenture Trustee or a successor servicer has assumed the Master Servicer's servicing obligations and duties under the Transfer and Servicing Agreement. Each Transfer and Servicing Agreement will further provide that neither the Transferor, the Depositor, the Master Servicer nor any of their directors, officers, employees or agents will be under any liability to the related Trust, the Noteholders, the Certificateholders, the Indenture Trustee or the Eligible Lender Trustee, except as provided under the Transfer and Servicing Agreement for taking any action or for refraining from taking any action pursuant to the Transfer and Servicing Agreement, or for errors in judgment; provided however, that neither the Transferor, the Depositor, the Master Servicer nor any such person will be protected against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of their respective duties thereunder. In addition, each Transfer and Servicing Agreement will provide that the Transferor and the Master Servicer shall not be under any obligation to appear in, prosecute, or defend any legal action that is not incidental to its duties in accordance with the Transfer and Servicing Agreement and that, in its opinion, may cause it to incur any expense or liability. Each Transfer and Servicing Agreement will provide that the Master Servicer will be permitted to perform its services thereunder through any of its affiliates, provided that the Master Servicer shall continue to be responsible for all performance of such services. Under the circumstances and subject to conditions specified in each Transfer and Servicing Agreement, any entity into which the Master Servicer may be merged or consolidated, or any entity resulting from any merger or consolidation to which the Master Servicer is a party, or any entity succeeding to the business of the Master Servicer will be the successor of the Master Servicer under the Transfer and Servicing Agreement. Successors (other than Crestar Financial Corporation or a Crestar Subsidiary (as defined below)) must execute an agreement expressly assuming the Master Servicer's obligations under the related Transfer and Servicing Agreement. Nothing in any Agreement prohibits or restricts the merger of Crestar Bank with Crestar Financial Corporation or certain subsidiaries of Crestar Financial Corporation (each a "Crestar Subsidiary"), the consolidation of Crestar Bank and Crestar Financial Corporation or any Crestar Subsidiary, or the sale of all or substantially all of the assets of Crestar Bank to Crestar Financial Corporation or another Crestar Subsidiary. MASTER SERVICER COVENANTS In each Transfer and Servicing Agreement, the Master Servicer covenants that: (a) it will duly satisfy or cause to be duly satisfied all obligations on its part to be fulfilled under or in connection with the Financed Student Loans, maintain in effect all qualifications required to service the Financed Student Loans and comply in all material respects with all requirements of law and program requirements for Private Loans in connection with servicing the Financed Student Loans, the failure to comply with which would have a materially adverse effect on the Noteholders; (b) it will not permit any rescission or cancellation of a Financed Student Loan except as ordered by a court of competent jurisdiction or other government authority or as otherwise consented to by the Eligible Lender Trustee and the Indenture Trustee; (c) it will do nothing to impair in any material respect the rights of the Noteholders in the Financed Student Loans; and (d) it will not reschedule, revise, defer or otherwise compromise with respect to payments due on any Financed Student Loan except pursuant to any applicable Deferment or Forbearance Periods or otherwise in accordance with its guidelines with respect to the servicing of the Financed Student Loans; provided, however, that the Master Servicer may not agree to any decrease of the interest rate on, or the principal amount payable with respect to, any Financed Student Loan except as otherwise permitted by the applicable student loan program. Notwithstanding the foregoing, the Master Servicer may, in its sole discretion, without having to obtain the consent or approval of any other party, (i) not collect late charges that may be due on Financed Student Loans, and (ii) waive remaining amounts owing under a Financed Student Loan up to and including $250 (or such other amount as may be specified in a Prospectus Supplement for a Series). Following the discovery by or notice to the Master Servicer of a breach of any such obligations with respect to any Financed Student Loan that results in the failure of a Guarantee Agency (including for this purpose a guarantor under a Private Loan Program) to make a Guarantee Payment or the Department of HHS to make an Insurance Payment, the Master Servicer is obligated to purchase such Financed Student Loan and reimburse the Trust for certain payments, all on terms corresponding to those for the Depositor. See "Description of the Agreements--Transfer and Servicing Agreements--Conveyance of Financed Student Loans; Representations and Warranties" herein. The purchase and reimbursement obligations of the Master Servicer will constitute, together with any rights to receive certain amounts from Credit Enhancement, the sole remedy available to or on behalf of the related Trust, the Certificateholders or the Noteholders for any such uncured breach. The Master Servicer's purchase and reimbursement obligations are contractual obligations pursuant to the Transfer and Servicing Agreement that may be enforced against the Master Servicer, but the breach thereof will not constitute an Event of Default under the Notes. MASTER SERVICER DEFAULT A "Master Servicer Default" under a Transfer and Servicing Agreement will consist of: (i) any failure by the Master Servicer to deliver to the Indenture Trustee for deposit in any of the Trust Accounts at the time required for such deposit any collections, Guarantee Payments, Insurance Payments, any payments by a guarantor under a guarantee agreement for a Private Loan or other amounts received by the Master Servicer with respect to the Financed Student Loans, which failure continues unremedied for three Business Days after written notice from the Indenture Trustee, the Administrator or the Eligible Lender Trustee is received by the Master Servicer or after discovery by the Master Servicer; (ii) any failure by the Master Servicer duly to observe or perform in any material respect any other covenant or agreement of the Master Servicer in the Transfer and Servicing Agreement which failure materially and adversely affects the rights of Noteholders and which continues unremedied for 60 days after the giving of written notice of such failure (A) to the Master Servicer by the Indenture Trustee, the Eligible Lender Trustee or the Administrator or (B) to the Master Servicer and to the Indenture Trustee and the Eligible Lender Trustee by holders of Directing Notes evidencing not less than 25% in principal amount of the outstanding Directing Notes; (iii) certain events of insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings with respect to the Master Servicer and certain actions by the Master Servicer indicating its Insolvency, reorganization pursuant to bankruptcy proceedings or inability to pay its obligations; and (iv) any limitation, suspension or termination by the Department of Education or the Department of HHS or by a guarantor of Financed Private Loans of the Master Servicer's eligibility to service Student Loans which materially and adversely affects the Master Servicer's ability to service Financed Student Loans. SERVICING COMPENSATION The Master Servicer will be entitled to receive a fee (the "Servicing Fee") with respect to each Series of Notes in an amount identified in the related Prospectus Supplement. The Servicing Fee may be payable in advance or arrears, out of Available Funds on each Payment Date or Quarterly Payment Date (or in the case of the initial Servicing Fee payable in advance, on the Closing Date). The Servicing Fee is intended to compensate the Master Servicer and each other Servicer for performing the functions of a third party servicer of student loans as an agent for their beneficial owner, including collecting and posting all payments, responding to inquiries of borrowers on the Financed Student Loans, investigating delinquencies, pursuing, filing and collecting any Guarantee Payments, Insurance Payments and guarantee payments by guarantors of Financed Private Loans, including litigation costs, accounting for collections and furnishing monthly and annual statements to the Administrator. The Servicing Fee also will reimburse the Master Servicer for certain taxes, accounting fees, outside auditor fees, data processing costs and other costs incurred in connection with administering the Financed Student Loans. The amount of the Servicing Fee and method of calculating the same with respect to the Financed Student Loans for a Series will be as set forth in the Prospectus Supplement for such Series. DESCRIPTION OF THE NOTES GENERAL The Notes of any Series will be issued pursuant to the terms of the Indenture, which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The following summary describes the material terms of the Notes and the Indenture. The summary does not purport to be complete and is qualified in its entirety by reference to the provisions of the Notes, the Indenture and the Terms Supplement, which provisions are incorporated by reference herein. It is expected that each Class of the Notes of a Series will initially be represented by one or more Notes registered in the name of the nominee of DTC (together with any successor depository selected by the Administrator, the "Depository"). Notes generally will be available for purchase in denominations of $50,000 and integral multiples of $1,000 in excess thereof in book-entry form. The Depositor has been informed by DTC that DTC's nominee will be Cede & Co. Accordingly, Cede & Co. is expected to be the holder of record of the Notes. Unless and until Definitive Notes are issued under the limited circumstances described herein or in the accompanying Prospectus Supplement, no Noteholder will be entitled to receive a physical certificate representing his Note. All references herein to actions by Noteholders refer to actions taken by DTC upon instructions from its participating organizations (the "Participants") and all references herein to distributions, notices, reports and statements to Noteholders refer to distributions, notices, reports and statements to DTC or Cede & Co., as the registered holder of the Notes, for distribution to Noteholders in accordance with DTC's procedures with respect thereto. See "-- Book-Entry Registration" and "-- Definitive Notes" herein. Each Class of Notes of a Series will evidence the interests specified in the related Prospectus Supplement, which may (i) include the right to receive payments allocable only to principal, only to interest or to any combination thereof; (ii) include the right to receive payments only of prepayments of principal throughout the lives of the Notes or during specified periods; (iii) be subordinated in its right to receive distributions of scheduled payments of principal, prepayments or principal, interest or any combination thereof to one or more other Classes of Notes of the related Trust throughout the lives of the Notes or during specified periods or may be subordinated with respect to certain losses or delinquencies; (iv) include the right to receive such payments only after the occurrence of events specified in the Prospectus Supplement; (v) include the right to receive payments in accordance with a schedule or formula or on the basis of collections from designated portions of the assets in the related Trust; (vi) include, as to Notes entitled to payments allocable to interest, the right to receive interest at a fixed rate or an adjustable rate; (vii) include the right to have interest accrue but not be paid until the occurrence of a specified event or the passing of time; and (viii) include, as to Notes entitled to payments allocable to interest, the right to payments allocable to interest only after the occurrence of events specified in the related Prospectus Supplement. PAYMENT OF AVAILABLE FUNDS THE ADMINISTRATOR WILL PROVIDE THE INDENTURE TRUSTEE AND THE ELIGIBLE LENDER TRUSTEE with respect to each Series of Notes A MONTHLY report setting forth by component the Available Funds for the immediately preceding Collection Period. "Available Funds" means the sum, without duplication, of the following amounts with respect to the related Collection Period: (i) all collections received by the Master Servicer or any Servicer on the Financed Student Loans (and any Guarantee Payments and any payments by any guarantor under any Private Loan Program) and Insurance Payments received with respect to the Financed Student Loans during such Collection Period); (ii) any payments, including without limitation, Interest Subsidy Payments and Special Allowance Payments received by the Eligible Lender Trustee during such Collection Period with respect to the Financed Student Loans; (iii) all proceeds from any sales of Financed Student Loans by the Trust during such Collection Period; (iv) any payments of or with respect to interest received by the Master Servicer or a Servicer during such Collection Period with respect to a Financed Student Loan for which a Realized Loss was previously allocated; (v) the aggregate Purchase Amounts received for those Financed Student Loans purchased by the Depositor or the Master Servicer during the related Collection Period; (vi) the aggregate amounts, if any, received from the Depositor or the Master Servicer as reimbursement of non-guaranteed or uninsured interest amounts (which shall not include, with respect to Financed FFELP Loans, the portion of such interest amounts (i.e., 2%) for which the Guarantee Agency did not have an obligation to make a Guarantee Payment), or lost Interest Subsidy Payments and Special Allowance Payments with respect to the Financed Student Loans pursuant to the Transfer and Servicing Agreement; (vii) net Adjustment Payments, if any, during such Collection Period; (viii) investment earnings for such Collection Period; and (ix) any other sums identified in the related Prospectus Supplement; provided, however, that Available Funds will exclude all payments and proceeds of any Financed Student Loans the Purchase Amount of which has been included in Available Funds for a prior Collection Period (which payments and proceeds shall be paid to the Depositor), and amounts used to reimburse the Master Servicer for Advances pursuant to the terms of the applicable Transfer and Servicing Agreement. On each Payment Determination Date described in the Prospectus Supplement, the Administrator will advise the Indenture Trustee and the Eligible Lender Trustee in writing of the applicable Class Interest Rate payable on each Class of Notes (and the Certificates) and the applicable Principal Payment Amount payable on the Notes (or, after all the Notes have been paid in full, the Certificates) on such Payment Date or Quarterly Payment Date. In addition, on each Payment Determination Date the Administrator will advise the Indenture Trustee in writing of the estimated Transaction Fees payable on such Payment Date or Quarterly Payment Date. Prior to making payments to the Note Payment Account, the Indenture Trustee will, if so provided in the Prospectus Supplement for a Series, transfer from the applicable Collection Account to the Expense Account an amount sufficient to pay Transaction Fees. On each Payment Date or Quarterly Payment Date (other than those relating to Accrual Notes during the related Accrual Period), the Indenture Trustee will, subject to the amount of Available Funds, transfer from the Collection Account to the Note Payment Account an amount equal to the Class Interest Rate on each Class of the Notes, as described in the related Prospectus Supplement. For each Payment Date during the related Accrual Period relating to a Class of Accrual Notes, the related Class Interest Rate will be added to the principal amount of such Class of Notes. On each Payment Date or Quarterly Payment Date on which principal is payable on the Notes, the Indenture Trustee will, subject to the amount of Available Funds, transfer from the Collection Account to the Note Payment Account an amount equal to the Principal Payment Amount, as described in the related Prospectus Supplement. On each Payment Date or Quarterly Payment Date, the Indenture Trustee will pay to the Noteholders of the applicable Class as of the related Record Date all amounts transferred to the Note Payment Account as set forth above and in the related Prospectus Supplement. Following the payment of all required amounts due on the Notes on any Payment Date or Quarterly Payment Date (and deposit of any required amounts in any Reserve Account), the Indenture Trustee will, to the extent of Available Funds, transfer from the Collection Account to the Certificate Distribution Account, an amount equal to the related Interest Distribution Amount on the Certificates on such Payment Date, and after payment in full of the Notes of a Series, the amount required to reduce the Certificate principal balance to zero. On each Payment Date or Quarterly Payment Date, as specified in the related Prospectus Supplement, the Indenture Trustee will, after making all required transfers to the Note Payment Account, Expense Account, Reserve Account and Certificate Distribution Account, transfer any remaining available funds to the Depositor. Payments made to the Depositor will not thereafter be available to make payments on the Notes. Notwithstanding the foregoing, if there has been an Event of Default with respect to payment of the Notes issued by a Trust, the Certificateholders of such Trust will not be entitled to any payments of principal or interest until each outstanding Class of Notes of such Trust has been paid in full. INTEREST Interest will accrue on the principal balance of each Class of Notes of a Series at a rate per annum (calculated as provided below or in the related Prospectus Supplement) equal to the related Class Interest Rate. Interest is expected to accrue initially from and including the Closing Date on which the related Series was issued through and including the date set forth in the related Prospectus Supplement and, thereafter, except as otherwise set forth in the related Prospectus Supplement, for periods (each, an "Interest Accrual Period") consisting of (i) with respect to LIBOR Rate Notes, generally a one-month or three-month period beginning and ending on the dates set forth in the related Prospectus Supplement, (ii) with respect to T-Bill Rate Notes, generally a three-month period beginning and ending on the dates set forth in the related Prospectus Supplement, (iii) with respect to Auction Rate Notes, as set forth in the related Prospectus Supplement, or (iv) with respect to Notes accruing interest based on some other method, the period set forth in the related Prospectus Supplement. Interest on each Class of Notes will be payable (or with respect to Accrual Notes during the related Accrual Period, added to the principal amount thereof) on the Payment Dates described in the applicable Prospectus Supplement. Generally, the Class Interest Rate on each Class of Notes will equal the lesser of (i) the interest rate and applicable margin, if any, and (ii) a cap specified in the related Prospectus Supplement (the "Formula Rate"); provided that it will not exceed the Net Loan Rate when it is required to be determined. The Net Loan Rate NEED NOT BE DETERMINED ON ANY INTEREST DETERMINATION DATE UNLESS ONE-MONTH LIBOR AS OF THE PRECEDING INTEREST DETERMINATION DATE EXCEEDS BY MORE THAN 100 BASIS POINTS THE AVERAGE OF THE BOND EQUIVALENT RATES OF THE 91-day Treasury bills AUCTIONED TO THE preceding Interest Determination Date DURING THE CALENDAR QUARTER IN WHICH SUCH PRECEDING Interest Determination Date OCCURS (OR IN THE CASE OF THE INITIAL INTEREST DETERMINATION DATE, THE CLOSING DATE). If on any Interest Determination Date, an Auction for a Class of Notes is not held for any reason, then the Class Interest Rate for such Class of Notes will be the Net Loan Rate or such other rate as may be described in a Prospectus Supplement. The Class Interest Rate on each Class of Notes bearing interest based upon a method other than LIBOR, T-Bill or Auction Rate will be described in the related Prospectus Supplement. With respect to Auction Rate Notes, the Administrator may, from time to time, change the length of one or more Auction Periods to conform with then current market practice or accommodate other economic or financial factors that may affect or be relevant to the length of the Auction Period or any Class Interest Rate (an "Auction Period Adjustment"). An Auction Period Adjustment will not cause an Auction Period to be less than 7 days nor more than one year and will not be allowed unless certain conditions described in the Auction Procedures in Appendix I to the related Prospectus Supplement are satisfied. If an Auction Period Adjustment is made, the intervals between Payment Dates will be adjusted accordingly. Payment of Interest. Payments of interest will be made on each Payment Date or Quarterly Payment Date, as specified in the accompanying Prospectus Supplement. Interest payments may include interest accrued on the assets of the related Trust during one or more Interest Accrual Periods. Interest payments on the Notes will generally be funded from Available Funds and Advances (and, when applicable, amounts on deposit in any Reserve Account, Pre-Funding Account or such other account as may be set forth in a Prospectus Supplement) remaining after the deposit of the Transaction Fees in the Expense Account. If insufficient funds are available to pay the applicable Class Interest Rate on a Payment Date or Quarterly Payment Date, such shortfall will be paid from draws on the applicable forms of Credit Enhancement to the extent described in the related Prospectus Supplement. Carryover Interest. If set forth in a Prospectus Supplement, with respect to any Class of Notes of a Series for any Interest Accrual Period the LIBOR Rate, T-Bill Rate, Auction Rate or other applicable interest rate plus the applicable margin exceeds the Net Loan Rate, the applicable Class Interest Rate for such Interest Accrual Period will be the Net Loan Rate, and the excess of the amount of interest on such Class of Notes that would have accrued at a rate equal to the LIBOR Rate, T-Bill Rate, Auction Rate or other applicable interest rate plus any applicable margin, over the amount of interest on such Class actually accrued at the Net Loan Rate will accrue as the Carryover Interest with respect to such Class of Notes. Such determination of the Carryover Interest will be made separately for each Class of Notes. The Carryover Interest on any Class of Notes will bear interest at a rate equal to the Formula Rate, or the rate set forth in the related Prospectus Supplement, from the Payment Date for the Interest Accrual Period for which the Carryover Interest was calculated until paid. Carryover Interest will be paid as described in the related Prospectus Supplement. PRINCIPAL All payments of principal of Notes of a Series will be made in an aggregate amount determined as set forth in the related Prospectus Supplement and will be paid at the times and will be allocated among the Classes of Notes of such Series in the order and amounts, all as specified in the related Prospectus Supplement. Principal may be paid pro rata to the Noteholders of any Class, or may be repaid by lot, in either case as described in the related Prospectus Supplement. As described herein, each Trust that is a master trust may issue, from time to time, several Series and Classes of Notes. A Series of Notes may contain one or more Classes of Notes with a higher payment priority than one or more Classes of Notes of a previously issued or subsequently issued Series. In such event, the Classes of Notes with the lower payment priority will receive limited or no payments of principal until each of the Classes of Notes with a higher payment priority, regardless of when issued, have been paid to the extent set forth in a Prospectus Supplement. The aggregate outstanding principal amount of each Class of Notes of a Series will be payable in full on the Payment Date identified in the related Prospectus Supplement (the "Legal Final Maturity"). The actual date on which the aggregate outstanding principal and accrued interest of any Class of Notes are paid may be earlier than its respective Legal Final Maturity, based on a variety of factors, including those described under "Maturity and Prepayment Considerations" herein. Realized Losses. The Trust may experience losses with respect to the Financed Student Loans. If such Realized Losses are not absorbed by the equity of the Trust, they may result in the inability to pay the Notes of a Series in full. With respect to each Financed FFELP Loan submitted to a Guarantee Agency for a Guarantee Payment, a "Realized Loss" means the excess, if any, of (i) the unpaid principal balance of such Financed FFELP Loan on the date it was first submitted to a Guarantee Agency for a Guarantee Payment over (ii) all amounts received on or with respect to principal on such Financed FFELP Loan up through the earlier to occur of (A) the date a related Guarantee Payment is made or (B) the last day of the Collection Period occurring 12 months after the date the claim for such Guarantee Payment is first denied. With respect to each Financed HEAL Loan submitted to the Department of HHS for an Insurance Payment, a "Realized Loss" means the excess, if any, of (i) the unpaid principal balance of such Financed HEAL Loan on the date it was first submitted to the Department of HHS for an Insurance Payment over (ii) all amounts received on or with respect to principal on such Financed HEAL Loan up through the earlier to occur of (A) the date a related Insurance Payment is made or (B) the last day of the Collection Period occurring 12 months after the date the claim for such Insurance Payment is first denied. With respect to each Private Loan, a "Realized Loss" generally will mean the excess, if any, of (i) the unpaid principal balance of such Private Loan at the time of default, plus accrued and unpaid interest thereon, if any, at such time over (ii) all amounts received on or with respect to the liquidation of such Private Loan. The Prospectus Supplement for any Series of Notes containing Private Loans will describe the particular procedures with respect to the realization of Realized Losses on the Private Loans of such Series. DETERMINATION OF LIBOR Pursuant to each Transfer and Servicing Agreement and each Prospectus Supplement, for each Interest Accrual Period after the initial Interest Accrual Period, the Master Servicer will determine the applicable LIBOR rate for purposes of calculating the Class Interest Rate on the LIBOR Rate Notes for each given Interest Accrual Period on the date which is both two Business Days (in New York and Virginia) and two London Banking Days preceding the commencement of each Interest Accrual Period (each, an "Interest Determination Date"). "London Banking Day" means a business day on which dealings in deposits in United States dollars are transacted in the London interbank market. "LIBOR" means the rate of interest per annum equal to the London interbank offered rate for deposits in U.S. dollars having the applicable maturity (i.e., one month or three months) commencing on the related Interest Determination Date (the "Index Maturity") which appears on Telerate Page 5 as of 11:00 a.m., London time, on such Interest Determination Date. If such rate does not appear on Telerate Page 5, the rate for that day will be determined by reference to the Reuters Screen LIBOR Page. If such rate does not appear on Telerate Page 5 or the Reuters Screen LIBOR Page, the rate for that day will be determined on the basis of the rates at which deposits in U.S. dollars, having the Index Maturity and in a principal amount of not less than U.S. $1,000,000, are offered at approximately 11:00 a.m., London time, on such Interest Determination Date to prime banks in the London interbank market by the Reference Banks. The Master Servicer will request the principal London office of each of such Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for that day will be the arithmetic mean (rounded upwards, if necessary, to the nearest .01%) of the quotations. If fewer than two quotations are provided, LIBOR for that day will be the arithmetic mean (rounded upwards, if necessary, to the nearest .01%) of the rates quoted by three major banks in New York City, selected by the Master Servicer, or by the Trustee, as applicable, at approximately 11:00 a.m., New York City time, on such Interest Determination Date for loans in U.S. dollars to leading European banks having the Index Maturity and in a principal amount equal to an amount of not less than U.S. $1,000,000; provided, however, that if the banks selected as aforesaid are not quoting as mentioned in this sentence, LIBOR in effect for the applicable Interest Accrual Period will be LIBOR in effect for the previous Interest Accrual Period. T-BILL RATE Pursuant to each Transfer and Servicing Agreement and the accompanying Prospectus Supplement, for each Interest Accrual Period after the initial Interest Accrual Period, the Master Servicer will determine the T-Bill Rate for purposes of calculating the Class Interest Rate on each Class of T-Bill Rate Notes of the related Series for each given Interest Accrual Period on the related Interest Determination Date. The T-Bill Rate means the rate of interest per annum equal to the average of the bond equivalent yields of the 91-day Treasury bills auctioned during the preceding quarter (the "T-Bill Rate"). AUCTION PROCEDURES A Series of Notes may contain one or more Classes of Auction Rate Notes. The following discussion summarizes certain procedures that will be used in determining the interest rates on the Auction Rate Notes. If any Auction Rate Notes are included in a Series, the Prospectus Supplement will contain a more detailed description of these procedures in an Appendix. Prospective investors in the Auction Rate Notes should read carefully the following summary, along with the more detailed description in the Prospectus Supplement. The interest rate on each Class of Auction Rate Notes will be determined periodically (generally, for periods ranging from 7 days to one year) by means of a "Dutch Auction." In this Dutch Auction, investors and potential investors submit orders through an eligible broker/dealer as to the principal amount of Auction Rate Notes such investors wish to buy, hold or sell at various interest rates. The broker/dealers submit their clients' orders to the auction agent, who processes all orders submitted by all eligible broker/dealers and determines the interest rate for the upcoming interest period. The broker/dealers are notified by the auction agent of the interest rate for the upcoming interest period and are provided with settlement instructions relating to purchases and sales of Auction Rate Notes. In the auction procedures, the following types of orders may be submitted: (i) Bid/Hold Orders - the minimum interest rate that a current investor is willing to accept in order to continue to HOLD some or all of its Auction Rate Notes for the upcoming interest period; (ii) Sell Orders - an order by a current investor to SELL a specified principal amount of Auction Rate Notes, regardless of the upcoming interest rate; and (iii) Potential Bid Orders - the minimum interest rate that a potential investor (or a current investor wishing to purchase additional Auction Rate Notes) is willing to accept in order to BUY a specified principal amount of Auction Rate Notes. If an existing investor does not submit orders with respect to all its Auction Rate Notes of the applicable Class, the investor will be deemed to have submitted a Hold Order at the new interest rate for that portion of the Auction Rate Notes for which no order was received. In connection with each auction, Auction Rate Notes will be purchased and sold between investors and potential investors at a price equal to their then outstanding principal balance (i.e., par) plus any accrued interest. The following example helps illustrate how the above-described procedures are used in determining the interest rate on the Auction Rate Notes. (a) Assumptions: 1. Denominations (Units) = $100,000 2. Interest Period = 28 Days 3. Principal Amount Outstanding = $50 Million (500 Units) (b) Summary of All Orders Received For The Auction
BID/HOLD ORDERS SELL ORDERS POTENTIAL BID ORDERS --------------- ----------- -------------------- 10 Units at 2.90% 50 Units Sell 20 Units at 2.95% 30 Units at 3.02% 50 Units Sell 30 Units at 3.00% 60 Units at 3.05% 100 Units Sell 50 Units at 3.05% 100 Units at 3.10% 50 Units at 3.10% 100 Units at 3.12% 50 Units at 3.11% 50 Units at 3.14% 100 Units at 3.15%
Total units under existing Bid/Hold Orders and Sell Orders must always equal issue size (in this case 500 Units). (c) Auction Agent Organizes Orders In Ascending Order
Order Number Cumulative Order Number Cumulative Number of Units Total (Units) % Number of Units Total (Units) % ------ -------- ------------- --- ------ -------- ------------- --- 1 10(W) 10 2.90% 7 100(W) 300 3.10% 2 20(W) 30 2.95% 8 50(W) 350 3.10% 3 30(W) 60 3.00% 9 50(W) 400 3.11% 4 30(W) 90 3.02% 10 100(W) 500 3.12% 5 50(W) 140 3.05% 11 50(L) 3.14% 6 60(W) 200 3.05% 12 100(L) 3.15%
- ------------------------ (W) Winning Order (L) Losing Order Order #10 is the order that clears the market of all available units. All winning orders are awarded the winning rate (in this case, 3.12%) as the interest rate for the next Interest Accrual Period. Multiple orders at the winning rate are allocated units on a pro rata basis. Notwithstanding the foregoing, in no event will the interest rate exceed the lesser of the Net Loan Rate or the Maximum Auction Rate. The above example assumes that a successful auction has occurred (i.e., all Sell Orders and all Bid/Hold Orders below the new interest rate were fulfilled). In certain circumstances, there may be insufficient Potential Bid Orders to purchase all the Auction Rate Notes offered for sale. In such circumstances, the interest rate for the upcoming Interest Accrual Period will equal the lesser of the Net Loan Rate and the Maximum Auction Rate. Also, if all the Auction Rate Notes are subject to Hold Orders (i.e., each holder of Auction Rate Notes wishes to continue holding its Auction Rate Notes, regardless of the interest rate) the interest rate for the upcoming Interest Accrual Period will equal the lesser of the Net Loan Rate and the rate at which all investors are willing to hold the Notes. CREDIT ENHANCEMENT The amounts and types of Credit Enhancement arrangements and the provider thereof, if applicable, with respect to a Series or any Class of Notes will be set forth in the related Prospectus Supplement. If specified in the applicable Prospectus Supplement, Credit Enhancement for any Series of Notes may cover one or more Classes of Notes or Certificates, and, accordingly, may be exhausted for the benefit of a particular Class of Notes or Certificates and thereafter be unavailable to such other Classes of Notes or Certificates. Further information regarding any provider of Credit Enhancement, including financial information when material, will be included or incorporated by reference in the related Prospectus Supplement. If and to the extent provided in the related Prospectus Supplement, Credit Enhancement may include one or more of the following or any combination thereof: Reserve Account. A Reserve Account may be created with respect to any Series of Notes, and on each Closing Date the Depositor may deposit cash or Eligible Investments in an amount, if any, equal to the Reserve Account Deposit identified in the related Prospectus Supplement. The Reserve Account may be augmented on certain Payment Dates, as set forth in the related Prospectus Supplement, by deposit therein of the amount, if any, necessary to cause the balance of the Reserve Account to equal the Specified Reserve Account Balance from the amount of Available Funds remaining after making all prior distributions on such date as described in the related Prospectus Supplement; provided, however, that, if and as set forth in the related Prospectus Supplement, such Available Funds may be applied as an additional principal payment. Also, if amounts were transferred from the Reserve Account to cover a Realized Loss on a Financed Student Loan, any subsequent payments of principal received on or with respect to such Financed Student Loan will be deposited into the Reserve Account or, if so provided in the related Prospectus Supplement, applied as an additional Principal Payment. Amounts on deposit in the Reserve Account exceeding the Specified Reserve Account Balance will be distributed as set forth in the related Prospectus Supplement. A Reserve Account is intended to enhance the likelihood of timely receipt by the Noteholders of the full amount of principal and interest due them and to decrease the likelihood that the Noteholders will experience losses. In certain circumstances, however, a Reserve Account could be depleted. Further, as described above, amounts otherwise required to be deposited into the Reserve Account may, with the consent of any provider of Credit Enhancement, if any, be applied as additional Principal Payments. If the amount required to be withdrawn from the Reserve Account to cover shortfalls in the amount of Available Funds exceeds the amount of cash in the Reserve Account, a temporary shortfall in the amount of principal and interest distributed to the Noteholders could result. This shortfall could, in turn, increase the average life of the Notes. Moreover, amounts on deposit in the Reserve Account (other than amounts in excess of the Specified Reserve Account Balance) will not be available to cover any aggregate unpaid Carryover Interest. Subordination. The rights of the holders of a Class of Notes may be subordinated to the rights of more senior Noteholders to the extent described herein and in the related Prospectus Supplement. Surety Bonds. A Surety Bond with respect to one or more Classes of a Series of Notes may be obtained by the Depositor in favor of the Eligible Lender Trustee solely on behalf of the Noteholders of the related Series. Except as provided below or in a Prospectus Supplement, a Surety Bond will provide for coverage of timely payment of all interest and ultimate payment of all principal due on the related Series of Notes; provided, however, that Surety Bonds will not ensure payment of any Carryover Interest. The amount required to be paid to the issuer of each Surety Bond will be described in the applicable Prospectus Supplement. Other Forms of Credit Enhancement. If and to the extent specified in the related Prospectus Supplement, Credit Enhancement with respect to a Series or any Class of Notes may also include overcollateralization, letters of credit, liquidity facilities, INTEREST RATE CAP AGREEMENTS, INTEREST RATE SWAP AGREEMENTS, CURRENCY SWAP AGREEMENTS, insurance policies, spread accounts, one or more Classes of subordinate securities, derivative products or other forms of credit enhancement including but not limited to third party guarantees (collectively, "Credit Enhancement"). The Credit Enhancement with respect to any Series or Class of Notes may be structured to provide protection against delinquencies and/or losses on the Financed Student Loans, against changes in interest rates, or other risks, to the extent and under the conditions specified in the related Prospectus Supplement. Any form of Credit Enhancement will have certain limitations and exclusions from coverage thereunder, which will be described in the related Prospectus Supplement. TERMINATION To avoid excessive administrative expense, the Master Servicer is permitted at its option to purchase from the Eligible Lender Trustee, as of the end of any Collection Period immediately preceding a Payment Date if the then outstanding Pool Balance with respect to the related Trust is equal to or less than a percentage specified in a Prospectus Supplement of the Initial Pool Balance, all remaining Financed Student Loans at a price equal to the aggregate Purchase Amounts thereof as of the end of such Collection Period, but not less than an amount necessary to pay transaction costs and all amounts due the Noteholders (other than Carryover Interest). The net proceeds of such purchase will be used to retire the Notes of such Series. Upon termination of a Trust, remaining assets will be conveyed and transferred to the Depositor after giving effect to any final distributions to Noteholders and Certificateholders. If specified in the Prospectus Supplement for any Series, as of a date specified therein or as of a date when the Pool Balance is reduced to a specified percentage of the Initial Pool Balance, any Financed Student Loans remaining in the related Trust will be offered for sale by the Indenture Trustee. The Transferor, the Depositor, their affiliates and unrelated third parties may offer bids to purchase the related Financed Student Loans on or prior to such Payment Date. If at least two bids are received, the Indenture Trustee will accept the highest bid equal to or in excess of the greater of (a) the aggregate Purchase Amounts of such Financed Student Loans as of the end of the Collection Period immediately preceding such Payment Date or (b) an amount sufficient to pay transaction costs and all amounts due the Noteholders (other than Carryover Interest). If at least two bids are not received or the highest bid is not equal to or in excess of the foregoing minimum, the Indenture Trustee will not consummate such sale. The net proceeds of any such sale will be used to retire the Notes of such Series. If the sale is not consummated in accordance with the foregoing, the Indenture Trustee may, but shall not be under any obligation to, solicit bids to purchase the Financed Student Loans on future Payment Dates upon terms similar to those described above. No assurance can be given as to whether the Indenture Trustee will be successful in soliciting acceptable bids to purchase the Financed Student Loans on either such Payment Date or any subsequent Payment Date. BOOK-ENTRY REGISTRATION The description which follows of the procedures and record keeping with respect to beneficial ownership interests in a Series of Notes, payment of principal of and interest on the Notes to DTC Participants, Cedel Participants and Euroclear Participants or to purchasers of the Notes, confirmation and transfer of beneficial ownership interests in the Notes, and other securities-related transactions by and between DTC, Cedel, Euroclear, DTC Participants, Cedel Participants, Euroclear Participants and Note Owners, is based solely on information furnished by DTC, Cedel and Euroclear and has not been independently verified by the Depositor, the Transferor or the Underwriters. If specified in the accompanying Prospectus Supplement, Noteholders may hold their certificates through DTC (in the United States) or Cedel or Euroclear (in Europe) if they are participants of such systems, or indirectly through organizations that are participants in such systems. DTC will hold the global Notes. Cedel and Euroclear will hold omnibus positions on behalf of the Cedel Participants and the Euroclear Participants, respectively, through customers securities accounts in Cedel's and Euroclear's names on the books of their respective depositories (collectively, the "Depositories") which in turn will hold such positions in customers' securities accounts in the Depositories' names on the books of DTC. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities for its Participants ("DTC Participants") and facilitates the clearance and settlement among DTC Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic book-entry changes in DTC Participants' accounts, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly ("Indirect Participants"). The rules applicable to DTC and its DTC Participants are on file with the Commission. Transfers between DTC Participants will occur in accordance with DTC rules. Transfers between Cedel Participants and Euroclear Participants will occur in the ordinary way in accordance with their applicable rules and operating procedures. Cross-market transfers between persons holding directly or indirectly through DTC, on the one hand, and directly or indirectly through Cedel Participants or Euroclear Participants, on the other, will be effected in DTC in accordance with DTC rules on behalf of the relevant European international clearing system by its Depository; however, such cross-market transactions will require delivery of instructions to the relevant European international clearing system by the counterparty in such system in accordance with its rules and procedures and within its established deadlines (European time). The relevant European international clearing system will, if the transaction meets its settlement requirements, deliver instructions to its Depository to take action to effect final settlement on its behalf by delivering or receiving securities in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Cedel Participants and Euroclear Participants may not deliver instructions directly to the Depositories. Because of time-zone differences, credits of securities in Cedel or Euroclear as a result of a transaction with a DTC Participant will be made during the subsequent securities settlement processing, dated the business day following the DTC settlement date, and such credits or any transactions in such securities settled during such processing will be reported to the relevant Cedel Participant or Euroclear Participant on such business day. Cash received in Cedel or Euroclear as a result of sales of securities by or through a Cedel Participant or a Euroclear Participant to a DTC Participant will be received with value on the DTC settlement date but will be available in the relevant Cedel or Euroclear cash account only as of the business day following settlement in DTC. Day traders that use Cedel or Euroclear and that purchase the globally offered Notes from DTC Participants for delivery to Cedel Participants or Euroclear Participants should note that these trades may fail on the sale side unless affirmative actions are taken. Participants should consult with their clearing system to confirm that adequate steps have been taken to assure settlement. Purchases of Notes under the DTC system must be made by or through DTC Participants, which will receive a credit for the Notes on DTC's records. The ownership interest of each actual owner of a Note (a "Note Owner") is in turn to be recorded on the DTC Participants' and Indirect Participants' records. Note Owners will not receive written confirmation from DTC of their purchase, but Note Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the DTC Participant or Indirect Participant through which the Note Owner entered into the transaction. Transfers of ownership interests in the Notes are to be accomplished by entries made on the books of DTC Participants acting on behalf of Note Owners. Note Owners will not receive certificates representing their ownership interest in Notes, except in the event that use of the book-entry system for the Notes is discontinued. To facilitate subsequent transfers, all Notes deposited by DTC Participants with DTC are registered in the name of DTC's nominee, Cede & Co. The deposit of Notes with DTC and their registration in the name of Cede & Co. effects no change in beneficial ownership. DTC has no knowledge of the actual Note Owners of the Notes; DTC's records reflect only the identity of the DTC Participants to whose accounts such Notes are credited, which may or may not be the Note Owners. The DTC Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to DTC Participants, by DTC Participants to Indirect Participants, and by DTC Participants and Indirect Participants to Note Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Neither DTC nor Cede & Co. will consent or vote with respect to the Notes. Under its usual procedures, DTC mails an omnibus proxy to the issuer as soon as possible after the record date, which assigns Cede's consenting or voting rights to those DTC Participants to whose accounts the Notes are credited on the record date (identified in a listing attached thereto). Principal and interest payments on the Notes will be made to DTC. DTC's practice is to credit DTC Participants' accounts on the applicable Payment Date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on such Payment Date. Payments by DTC Participants to Note Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name" and will be the responsibility of such DTC Participant and not of DTC, the Indenture Trustee or the Transferor, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Indenture Trustee, disbursement of such payments to DTC Participants shall be the responsibility of DTC, and disbursement of such payments to Note Owners shall be the responsibility of DTC Participants and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Notes at any time by giving reasonable notice to the Transferor or the Indenture Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Definitive Notes are required to be printed and delivered. The Administrator may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Definitive Notes will be delivered to Noteholders. See "-- Definitive Notes" herein. Cedel is incorporated under the laws of Luxembourg as a professional depository. Cedel holds securities for its participating organizations ("Cedel Participants") and facilitates the clearance and settlement of securities transactions between Cedel Participants through electronic book-entry changes in accounts of Cedel Participants, thereby eliminating the need for physical movement of certificates. Transactions may be settled in Cedel in any of 32 currencies, including United States dollars. Cedel provides to its Cedel Participants, among other things, services for safekeeping, administration, clearance and settlement of internationally traded securities and securities lending and borrowing. Cedel interfaces with domestic markets in several countries. As a professional depository, Cedel is subject to regulation by the Luxembourg Monetary Institute. Cedel Participants are recognized financial institutions around the world, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters of any Series of Notes. Indirect access to Cedel is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Cedel Participant, either directly or indirectly. The Euroclear System was created in 1968 to hold securities for participants of the Euroclear System ("Euroclear Participants") and to clear and settle transactions between Euroclear Participants through simultaneous electronic book-entry delivery against payment, thereby eliminating the need for physical movement of certificates and any risk from lack of simultaneous transfers of securities and cash. Transactions may now be settled in any of 32 currencies, including United States dollars. The Euroclear System includes various other services, including securities lending and borrowing and interfaces with domestic markets in 25 countries generally similar to the arrangements for cross-market transfers with DTC described above. The Euroclear System is operated by Morgan Guaranty Trust Company of New York, Brussels, Belgium office (the "Euroclear Operator" or "Euroclear"), under contract with Euroclear Clearance System, Societe Cooperative, a Belgian cooperative corporation (the "Cooperative"). All operations are conducted by the Euroclear Operator, and all Euroclear securities clearance accounts and Euroclear cash accounts are accounts with the Euroclear Operator, not the Cooperative. The Cooperative Board establishes policy for the Euroclear System. Euroclear Participants include banks (including central banks), securities brokers and dealers and other professional financial intermediaries and may include the underwriters of any Series of Notes. Indirect access to the Euroclear System is also available to other firms that maintain a custodial relationship with a Euroclear Participant, either directly or indirectly. The Euroclear Operator is the Belgian branch of a New York banking corporation which is a member bank of the Federal Reserve System. As such, it is regulated and examined by the Board of Governors of the Federal Reserve System and the New York State Banking Department, as well as the Belgian Banking Commission. Securities clearance accounts and cash accounts with the Euroclear Operator are governed by the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System (collectively, the "Terms and Conditions"). The Terms and Conditions govern transfers of securities and cash within the Euroclear System, withdrawal of securities and cash from the Euroclear System, and receipts of payments with respect to securities in the Euroclear System. All securities in the Euroclear System are held on a fundable basis without attribution of specific certificates to specific securities clearance accounts. The Euroclear Operator acts under the Terms and Conditions only on behalf of Euroclear Participants and has no record of or relationship with persons holding through Euroclear Participants. The Euroclear Operator has advised as follows: Under Belgian law, investors that are credited with securities on the records of the Euroclear Operator have a co-property right in the fungible pool of interests in securities on deposit with the Euroclear Operator in an amount equal to the amount of interests in securities credited to their accounts. In the event of the insolvency of the Euroclear Operator, Euroclear Participants would have a right under Belgian law to the return of the amount and type of interests in securities credited to their accounts with the Euroclear Operator. If the Euroclear Operator did not have a sufficient amount of interests in securities on deposit of a particular type to cover the claims of all Euroclear Participants credited with such interests in securities on the Euroclear Operator's records, all Euroclear Participants having an amount of interests in securities of such type credited to their accounts with the Euroclear Operator would have the right under Belgian law to the return of their pro-rata share of the amount of interests in securities actually on deposit. Under Belgian law, the Euroclear Operator is required to pass on the benefits of ownership in any interests in securities on deposit with it (such as dividends, voting rights and other entitlements) to any person credited with such interests in securities on its records. Distributions with respect to Notes held through Cedel or Euroclear will be credited to the cash accounts of Cedel Participants or Euroclear Participants in accordance with the relevant system's rules and procedures, to the extent received by its Depository. Such distributions will be subject to tax reporting in accordance with relevant United States tax laws and regulations. See "Federal Income Tax Consequences" herein. Cedel or the Euroclear Operator, as the case may be, will take any other action permitted to be taken by a Noteholder under the Agreement on behalf of a Cedel Participant or Euroclear Participant only in accordance with its relevant rules and procedures and subject to its Depository's ability to effect such actions on its behalf through DTC. Although DTC, Cedel and Euroclear have agreed to the foregoing procedures in order to facilitate transfers of Notes among participants of DTC, Cedel and Euroclear, they are under no obligation to perform or continue to perform such procedures and such procedures may be discontinued at any time. DEFINITIVE NOTES If set forth in the accompanying Prospectus Supplement, Notes of any Series will be issued in fully registered, certificated form (the "Definitive Notes") to Note owners or their nominees rather than to DTC or its nominee, if (i) the Administrator advises the Indenture Trustee for such Series in writing that DTC is no longer willing or able to discharge properly its responsibilities as Depository with respect to such Series of Notes, and the Administrator is unable to locate a qualified successor, (ii) the Administrator, at its option, advises the Trustee in writing that it elects to terminate the book-entry system through DTC or successor securities depository or (iii) after the occurrence of an Event of Default, Master Servicer Default or Administrator Default Noteholders representing not less than 50% of the outstanding principal balance of the Directing Notes advise the Indenture Trustee and DTC through DTC Participants in writing that the continuation of a book-entry system through DTC (or a successor thereto) is no longer in the best interest of the Noteholders. Upon the occurrence of any of the events described in the immediately preceding paragraph, the Indenture Trustee will cause DTC to notify all DTC Participants of the availability through DTC of Definitive Notes. Upon surrender by DTC of the definitive certificate representing the Notes and instructions for registration, the Indenture Trustee will issue the Notes as Definitive Notes, and thereafter the Indenture Trustee will recognize the holders of such Definitive Notes as Noteholders under the Indenture. Distribution of principal of and interest on the Notes will be made by the Indenture Trustee directly to Noteholders of Definitive Notes in accordance with the procedures set forth herein and in the Transfer and Servicing Agreement. Interest payments and any principal payments on each Payment Date will be made to Noteholders in whose names the Definitive Notes were registered at the close of business on the related Record Date. The final payment on any Note (whether Definitive Notes or the Notes registered in the name of Cede & Co. representing the Notes), will he made only upon presentation and surrender of such Note at the office or agency specified in the notice of final distribution to Noteholders. The Indenture Trustee will provide such notice to registered Noteholders prior to the Payment Date on which it expects such final distributions to occur. Definitive Notes will be transferable and exchangeable at the offices of the transfer agent and registrar for the Notes, which shall initially be the Indenture Trustee. No service charges will be imposed for any registration of transfer or exchange, but the Transfer Agent and Registrar may require payment of a sum sufficient to cover any tax or other governmental charge imposed in connection therewith. LIST OF NOTEHOLDERS A Noteholder may, by written request to the Indenture Trustee, obtain access to the list of all Noteholders of the related Trust maintained by the Indenture Trustee for the purpose of communicating with other Noteholders with respect to their rights under the Indenture or the Notes. The Indenture Trustee may elect not to afford the requesting Noteholders access to the list of Noteholders if it agrees to mail the desired communication or proxy, on behalf and at the expense of the requesting Noteholders, to all Noteholders. REPORTS TO NOTEHOLDERS On each Payment Date, the Indenture Trustee will provide to the applicable Noteholders of record as of the related Record Date, a statement setting forth substantially the same information as is required to be provided on the report provided to the Indenture Trustee and the Trust described under "Description of Agreements -- Statements to Indenture Trustee" herein. Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the Indenture, the Indenture Trustee will mail to each person who at any time during such calendar year was a Noteholder and received any payment thereon, a statement containing certain information for the purposes of such Noteholder's preparation of federal income tax returns. See "Federal Income Tax Consequences" herein. FEDERAL INCOME TAX CONSEQUENCES GENERAL The following REPRESENTS THE OPINION OF HUNTON & WILLIAMS AS TO the anticipated material federal income tax consequences of the purchase, ownership and disposition of the Notes. The summary is based upon the provisions of the Code, the regulations promulgated thereunder, and the judicial and administrative rulings and decisions now in effect, all of which are subject to change or possible differing interpretations. The statutory provisions, regulations, and interpretations on which this summary is based are subject to change, and such a change could apply retroactively. The summary does not purport to deal with all aspects of federal income taxation that may affect particular investors in light of their individual circumstances, nor with certain categories of investors subject to special treatment under the federal income tax laws. This summary focuses primarily on investors who will hold Notes as "capital assets" (generally held for investment) within the meaning of Section 1221 of the Code, but much of the discussion is applicable to other investors as well. The summary does not purport to address the anticipated state income tax consequences to investors of owning and disposing of the Notes. Consequently, potential purchasers of Notes are advised to consult their own tax advisors concerning the federal, state or local tax consequences to them of the purchase, holding, and disposition of the Notes. For each Series of Notes, HUNTON & WILLIAMS, SPECIAL TAX COUNSEL TO THE TRUST ("SPECIAL TAX COUNSEL"), WILL CONFIRM TO THE ISSUER ITS OPINION that, based upon the facts as they exist, the Notes OF SUCH SERIES will be treated for federal income tax purposes as indebtedness, and not as an ownership interest in the Financed Student Loans or an equity interest in a separate association taxable as a corporation. However, there are no regulations, published rulings or judicial decisions involving the characterization for federal income tax purposes of securities with terms substantially the same as the Notes. Accordingly, although that opinion will be based on existing law, there can be no assurance that the law will not change or that contrary positions will not be taken by the Internal Revenue Service (the "Service"). If the Service were to make and prevail upon the contention that the Notes did not constitute indebtedness for federal income tax purposes, the Notes could be treated as equity interests in the Trust. HOWEVER, IN THAT EVENT, AS LONG AS AT LEAST 90% OF THE GROSS INCOME DERIVED BY THE TRUST CONSTITUTES QUALIFYING PASSIVE-TYPE INCOME (E.G., INTEREST) AND SUCH INCOME IS NOT DERIVED IN THE CONDUCT OF A FINANCIAL BUSINESS, THE TRUST WOULD be treated as a partnership that is not a publicly traded partnership. It is anticipated that more than 90% of the Trust's gross income will consist of passive-type income. Furthermore, although the applicable law is not entirely clear, Hunton & Williams is of the opinion that such income should not be treated as derived in the conduct of a financing business. The Issuer may redeem a Class or Classes of Notes at any time upon a determination by the Issuer, based upon an opinion of counsel, that a substantial risk exists that the Notes of the Class to be redeemed will not be treated for federal income tax purposes as evidences of indebtedness. Such redemption could occur when a Noteholder could not reinvest the proceeds at an interest rate at least equal to the applicable Class Interest Rate. Payments received by Noteholders on the Notes generally WILL be accorded the same tax treatment under the Code as payments received on other taxable debt instruments. Except as described below for Notes issued with original issue discount, acquired with market discount, or issued or acquired at a premium, interest paid or accrued on a Note will be treated as ordinary income to the Noteholder and a principal payment on a Note will be treated as a return of capital. In general, interest paid to Noteholders who report their income on the cash receipts and disbursements method should be taxable to them when received. Interest earned by Noteholders who report their income on the accrual method will be taxable when accrued, regardless of when it is actually received. The Trustee will report annually to the Service and to Noteholders of record with respect to interest paid or accrued, and original issue discount and market discount, if any, accrued, on the Notes. One or more Classes of Notes may be subordinated to one or more other Classes of Notes of the same Series. In general, such subordination WILL not affect the federal income tax treatment of either the subordinated or the senior Notes. Employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), should consult their tax advisors before purchasing any subordinated Note. See "ERISA Considerations" herein and in the accompanying Prospectus Supplement. ORIGINAL ISSUE DISCOUNT Notes issued at a price less than their stated principal amount ("Discount Notes"), Notes upon which interest is accrued and is compounded and added to the principal balance thereof periodically ("Accretion Notes"), and certain other Classes of Notes will be issued with "original issue discount" within the meaning of Section 1273(a) of the Code. SUCH original issue discount will equal the difference between the "stated redemption price at maturity" of the Note (generally, its principal amount) and its issue price. Original issue discount is treated as ordinary interest income, and Holders of Notes with original issue discount must include the amount of original issue discount in income on an accrual basis in advance of the receipt of the cash to which it relates. The amount of original issue discount required to be included in a Noteholder's income in any taxable year will be computed in accordance with Section 1272(a)(6) of the Code, which provides rules for the accrual of original issue discount under a constant yield method for certain debt instruments, such as the Notes, that are subject to prepayment by reason of prepayments of underlying debt obligations. Under Section 1272(a)(6), the amount and rate of accrual of original issue discount on a Note generally is to be calculated based on (i) a single constant yield to maturity and (ii) the prepayment rate of the Financed Student Loans and the reinvestment rate on amounts held pending distribution that were assumed in pricing the Note (the "Pricing Prepayment Assumptions"). No regulatory guidance currently exists under Code Section 1272(a)(6). Accordingly, until the Treasury issues guidance to the contrary, the Master Servicer or other person responsible for computing the amount of original issue discount to be reported to a Noteholder each taxable year (the "Tax Administrator"), except as otherwise provided herein, expects to base its computations on Code Section 1272(a)(6) and final regulations governing the accrual of original issue discount on debt instruments (the "OID Regulations"). Investors should be aware, however, that the OID regulations do not address directly the treatment of instruments that are subject to Code Section 1272(a)(6), and, accordingly, there can be no assurance that such methodology, which is described below, represents the correct manner of calculating original issue discount on the Notes. The Tax Administrator intends to account for income on certain Notes that provide for one or more contingent payments as described in "-- Variable Rate Notes" herein. The amount of original issue discount on a Note equals the excess, if any, of the Note's "stated redemption price at maturity" over its "issue price." Under the OID Regulations, a debt instrument's stated redemption price at maturity is the sum of all payments provided by the instrument other than "qualified stated interest" ("Deemed Principal Payments"). Qualified stated interest, in general, is stated interest that is unconditionally payable in cash or property (other than debt instruments of the Issuer) at least annually at (i) a single fixed rate or (ii) a variable rate that meets certain requirements set out in the OID Regulations. See "-- Variable Rate Notes" herein. Thus, in the case of any Note providing for such stated interest other than an Accretion Note, the stated redemption price at maturity generally will equal the total amount of all Deemed Principal Payments due on that Note. Because an Accretion Note generally does not require unconditional payments of interest at least annually, the stated redemption price at maturity of such a Note will equal the aggregate of all payments due, whether designated as principal, accrued interest, or current interest. The issue price of a Note generally will equal the initial price at which a substantial amount of such Notes is sold to the public. Under a de minimis rule, a Note will be considered to have no original issue discount if the amount of original issue discount is less than 0.25% of the Note's stated redemption price at maturity multiplied by the weighted average maturity ("WAM") of the Note. For that purpose, the WAM of a Note is the sum of the amounts obtained by multiplying the amount of each Deemed Principal Payment by a fraction, the numerator of which is the number of complete years from the Note's issue date until the payment is made, and the denominator of which is the Note's stated redemption price at maturity. Although no Treasury regulations have been issued with respect to computing the WAM of instruments like a Note, it is expected that the WAM of a Note will be computed using the Pricing Prepayment Assumptions. A Noteholder will include de minimis original issue discount in income on a pro rata basis as stated principal payments on the Note are received or, if earlier, upon disposition of the Note, unless the Noteholder makes an "All OID Election" (as defined below). Notes of certain Series may bear interest under terms that provide for a teaser rate period, interest holiday, or other period during which the rate of interest payable on the Notes is lower than the rate payable during the remainder of the life of the Notes ("Teaser Notes"). The OID Regulations provide a more expansive test under which a Teaser Note may be considered to have a de minimis amount of original issue discount even though the amount of the original issue discount on the Note would be more than de minimis as determined under the regular test. The expanded test applies to a Teaser Note only if the stated interest on such Note would be qualified stated interest but for the fact that during one or more accrual periods its interest rate is below the rate applicable for the remainder of its term. Under the expanded test, the amount of original issue discount on a Teaser Note that is measured against the de minimis amount of original issue discount allowable on the Note is the greater of (i) the excess of the stated principal amount of the Note over its issue price ("True Discount") and (ii) the amount of interest that would be necessary to be payable on the Note in order for all stated interest to be qualified stated interest (the "Additional Interest Amount"). The holder of a Note must include in gross income the sum, for all days during his taxable year on which he holds the Note, of the "daily portions" of the original issue discount on such Note. THE daily portions of original issue discount with respect to A Note will be determined by allocating to each day in any accrual period the Note's ratable portion of the excess, if any, of (i) the sum of (a) the present value of all payments under the Note yet to be received as of the close of such period and (b) the amount of any Deemed Principal Payments received on the Note during such period over (ii) the Note's "adjusted issue price" at the beginning of such period. The present value of payments yet to be received on a Note is computed by using the Pricing Prepayment Assumptions and the Note's original yield to maturity (adjusted to take into account the length of the particular accrual period), and taking into account Deemed Principal Payments actually received on the Note prior to the close of the accrual period. The adjusted issue price of a Note at the beginning of the first accrual period is its issue price. The adjusted issue price at the beginning of each subsequent period is the adjusted issue price of the Note at the beginning of the preceding period increased by the amount of original issue discount allocable to that period and decreased by the amount of any Deemed Principal Payments received during that period. Thus, an increased (or decreased) rate of prepayments received with respect to a Note will be accompanied by a correspondingly increased (or decreased) rate of recognition of original issue discount by the holder of such Note. The yield to maturity of a Note is calculated based on (i) the Pricing Prepayment Assumptions and (ii) any contingencies not already taken into account under the Pricing Prepayment Assumptions that, considering all the facts and circumstances as of the issue date, are more likely than not to occur. Contingencies, such as the exercise of "mandatory redemptions," that are taken into account by the parties in pricing the Note typically will be subsumed in the Pricing Prepayment Assumptions and thus will be reflected in the Note's yield to maturity. The Tax Administrator's determination of whether a contingency relating to a Class of Notes is more likely than not to occur is binding on each holder of a Note of such Class unless the holder explicitly discloses on its federal income tax return that its determination of the yield and maturity of the Note is different from that of the Tax Administrator. The Notes of a Series may be subject to optional redemption by the Issuer before their stated maturity dates. Under the OID Regulations, the Issuer will be presumed to exercise its option to redeem for purposes of computing the accrual of original issue discount if, and only if, by using the optional redemption date as the maturity date and the optional redemption price as the stated redemption price at maturity, the yield to maturity of the Notes is lower than it would be if the Notes were not redeemed early. If the Issuer is presumed to exercise its option to redeem the Notes, original issue discount on such Notes will be calculated as if the redemption date were the maturity date and the optional redemption price were the stated redemption price at maturity. In cases in which all of the Notes of a particular Series are issued at par or at a discount, the Issuer will not be presumed to exercise its option to redeem the Notes because a redemption by the Issuer would not lower the yield to maturity of the Notes. If, however, some Notes of a particular Series are issued at a premium, the Issuer may be able to lower the yield to maturity of the Notes by exercising its redemption option. In determining whether the Issuer will be presumed to exercise its option to redeem Notes when one or more Classes of the Notes are issued at a premium, the Tax Administrator will take into account all Classes of Notes that are subject to the optional redemption to the extent that they are expected to remain outstanding as of the optional redemption date, based on the Pricing Prepayment Assumptions. If, determined on a combined weighted average basis, the Notes of such Classes were issued at a premium, the Tax Administrator will presume that the Issuer will exercise its option. However, the OID Regulations are unclear as to how the redemption presumption rules should apply to instruments such as the Notes, and there can be no assurance that the Service will agree with the Tax Administrator's position. The OID Regulations provide that a Noteholder may make an election (an "All OID Election") to include in gross income all stated interest, original issue discount, de minimis original issue discount, market discount (as described below under "-- Market Discount"), and de minimis market discount that accrues on the Note (as reduced by any amortizable premium, as described below under "Amortizable Premium," or acquisition premium, as described below) under the constant yield method used to account for original issue discount. To make an All OID Election, the holder of the Note must attach a statement to its timely filed federal income tax return for the taxable year in which the holder acquired the Note. The statement must identify the instruments to which the election applies. An All OID Election is irrevocable unless the holder obtains the consent of the Service. If an All OID Election is made for a debt instrument with market discount, the holder is deemed to have made an election to include in income currently the market discount on all of the holder's other debt instruments with market discount, as described in "-- Market Discount" below. In addition, if an All OID Election is made for a debt instrument with amortizable premium, the holder is deemed to have made an election to amortize the premium on all of the holder's other debt instruments with amortizable premium under the constant yield method. See "-- Amortizable Premium." Noteholders should be aware that the law is unclear as to whether an All OID Election is effective for a Note that is subject to the contingent payment rules. See "-- Variable Rate Notes" herein. A Note having original issue discount may be acquired in a transaction subsequent to its issuance for more than its adjusted issue price. If the subsequent holder's adjusted basis in such a Note, immediately after its acquisition, exceeds the sum of all Deemed Principal Payments to be received on the Note after the acquisition date, the Note will no longer have original issue discount, and the holder may be entitled to reduce the amount of interest income recognized on the Note by the amount of amortizable premium. See "-- Amortizable Premium" herein. If the subsequent holder's adjusted basis in the Note immediately after the acquisition exceeds the adjusted issue price of the Note, but is less than or equal to the sum of the Deemed Principal Payments to be received under the Note after the acquisition date, the amount of original issue discount on the Note will be reduced by a fraction, the numerator of which is the excess of the Note's adjusted basis immediately after its acquisition over the adjusted issue price of the Note and the denominator of which is the excess of the sum of all Deemed Principal Payments to be received on the Note after the acquisition date over the adjusted issue price of the Note. For that purpose, the adjusted basis of a Note is reduced by the amount of any qualified stated interest that is accrued but unpaid as of the acquisition date. Alternately, the subsequent purchaser of a Note having original issue discount may make an All OID Election with respect to the Note. If the interval between the issue date of a Note that pays interest at the Class Interest Rate on a current basis (a "Current Interest Note") and the first Distribution Date (the "First Distribution Period") contains more days than the number of days of stated interest that are payable on the first Distribution Date, the effective interest rate received by the Noteholder during the first Distribution Period will be less than the Note's stated interest rate making such Note a Teaser Note. If the amount of original issue discount on the Note measured under the expanded de minimis test exceeds the de minimis amount of original issue discount allowable on the Note, the amount by which the stated interest on the Note exceeds the interest that would be payable on the Note at the effective rate of interest for the First Distribution Period (the "Nonqualified Interest Amount") would be treated as part of the Note's stated redemption price at maturity. Accordingly, the holder of a Teaser Note may be required to recognize ordinary income arising from original issue discount attributable to the First Distribution Period in addition to any qualified stated interest that accrues in that period. Similarly, if the First Distribution Period is shorter than the interval between subsequent Distribution Dates, the effective rate of interest payable on a Note during the First Distribution Period will be higher than the stated rate of interest if a Noteholder receives interest on the first Distribution Date based on a full accrual period. Unless the "Pre-Issuance Accrued Interest Rule" described below applies, such Note (a "Rate Bubble Note") would be issued with original issue discount unless the amount of original issue discount is de minimis. The amount of original issue discount on a Rate Bubble Note attributable to the First Distribution Period would be the amount by which the interest payment due on the first Distribution Date exceeds the amount that would have been payable had the effective rate for that Period been equal to the stated interest rate. However, under the Pre-Issuance Accrued Interest Rule, if (i) a portion of the initial purchase price of a Rate Bubble Note is allocable to interest that has accrued under the terms of the Note prior to its issue date ("Pre-Issuance Accrued Interest") and (ii) the Note provides for a payment of stated interest on the first payment date within one year of the issue date that equals or exceeds the amount of the Pre-Issuance Accrued Interest, the Note's issue price may be computed by subtracting from the issue price the amount of Pre-Issuance Accrued Interest. If the Noteholder opts to apply the Pre-Issuance Accrued Interest Rule, the portion of the interest received on the first Distribution Date equal to the Pre-Issuance Accrued Interest would be treated as a return of such interest and would not be treated as a payment on the Note. Thus, where the Pre-Issuance Accrued Interest Rule applies, a Rate Bubble Note will not have original issue discount attributable to the First Distribution Period, provided that the increased effective interest rate for that Period is attributable solely to Pre-Issuance Accrued Interest, as typically will be the case. The Tax Administrator intends to apply the Pre-Issuance Accrued Interest Rule to each Rate Bubble Note for which it is available if the Note `s stated interest otherwise would be qualified stated interest. If, however, the First Distribution Period of a Rate Bubble Note is longer than subsequent Distribution Periods, the application of the Pre-Issuance Accrued Interest Rule typically will not prevent disqualification of the Note's stated interest because its effective interest rate during the First Distribution Period typically will be less than its stated interest rate. Thus, a Note with a long First Distribution Period typically will be a Teaser Note, as discussed above. The Pre-Issuance Accrued Interest Rule will not apply to any amount paid at issuance for such a Teaser Note that is normally allocable to interest accrued under the terms of such Note before its issue date. All amounts paid for such a Teaser Note at issuance, regardless of how designated, will be included in the issue price of such Note for federal income tax accounting purposes. In view of the complexities and current uncertainties as to the manner of inclusion in income of original issue discount on the Notes, each investor should consult his own tax advisor to determine the appropriate amount and method of inclusion in income of original issue discount on the Notes for federal income tax purposes. VARIABLE RATE NOTES A Note may pay interest at a variable rate (a "Variable Rate Note"). A Variable Rate Note that qualifies as a "variable rate debt instrument" as that term is defined in the OID Regulations (a "VRDI") will be governed by the rules applicable to VRDIs in the OID Regulations, which are described below. A Variable Rate Note qualifies as a VRDI under the OID Regulations if (i) the Note is not issued at a premium to its noncontingent principal amount in excess of the lesser of (a) .015 multiplied by the product of such noncontingent principal amount and the WAM (as that term is defined above in the discussion of the de minimis rule) of the Note or (b) 15 percent of such noncontingent principal amount (an "Excess Premium"); (ii) stated interest on the Note compounds or is payable unconditionally at least annually at (a) one or more qualified floating rates, (b) a single fixed rate and one or more qualified floating rates, (c) a single "objective rate," or (d) a single fixed rate and a single objective rate that is a "qualified inverse floating rate," and (iii) the qualified floating rate or the objective rate in effect during an accrual period is set at a current value of that rate (i.e., the value of the rate on any day occurring during the interval that begins three months prior to the first day on which that value is in effect under the Note and ends one year following that day). However, if the Variable Rate Note provides for any contingent payments (which do not include qualified stated interest), the Tax Administrator intends to account for the income thereon as described below. Under the OID Regulations, a rate is a qualified floating rate if variations in the rate reasonably can be expected to measure contemporaneous variations in the cost of newly borrowed funds in the currency in which the debt instrument is denominated. A qualified floating rate may measure contemporaneous variations in borrowing costs for the Issuer of the debt instrument or for Depositors in general. A multiple of a qualified floating rate is considered a qualified floating rate only if the rate is equal to either (a) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35 or (b) the product of a qualified floating rate and a fixed multiple that is greater than 0.65 but not more than 1.35, increased or decreased by a fixed rate. If a Note provides for two or more qualified floating rates that reasonably can be expected to have approximately the same values throughout the term of the Note, the qualified floating rates together will constitute a single qualified floating rate. Two or more qualified floating rates conclusively will be presumed to have approximately the same values throughout the term of a Note, if the values of all such rates on the issue date of the Note are within 25 basis points of each other. A variable rate will be considered a qualified floating rate if it is subject to a restriction or restrictions on the maximum stated interest rate (a "Cap"), a restriction or restrictions on the minimum stated interest rate (a "Floor"), a restriction or restrictions on the amount of increase or decrease in the stated interest rate (a "Governor"), or other similar restriction only if: (a) the Cap, Floor, or Governor is fixed throughout the term of the related Note or (b) the Cap, Floor, Governor, or similar restriction is not reasonably expected, as of the issue date, to cause the yield on the Note to be significantly less or significantly more than the expected yield on the Note determined without such Cap, Floor, Governor, or similar restriction, as the case may be. Although the OID Regulations are unclear, it appears that a VRDI, the principal rate on which is subject to a Cap, Floor, or Governor that itself is a qualified floating rate, bears interest at an objective rate. Under the OID Regulations, an objective rate is a rate (other than a qualified floating rate) that (i) is determined using a single fixed formula, (ii) is based on objective financial or economic information, and (iii) is not based on information that either is within the control of the Issuer (or a related party) or is unique to the circumstances of the Issuer (or related party), such as dividends, profits, or the value of the Issuer's (or related party's) stock. That definition would include a rate that is based on changes in a general inflation index. In addition, a rate would not fail to be an objective rate merely because it is based on the credit quality of the Issuer. Under the OID Regulations if interest on a Variable Rate Note is stated at a fixed rate for an initial period of less than one year followed by a variable rate that is either a qualified floating rate or an objective rate for a subsequent period, and the value of the variable rate on the issue date is intended to approximate the fixed rate, the fixed rate and the variable rate together constitute a single qualified floating rate or objective rate. A variable rate conclusively will be presumed to approximate an initial fixed rate if the value of the variable rate on the issue date does not differ from the value of the fixed rate by more than 25 basis points. Under the OID Regulations, all interest payable on a Variable Rate Note that qualifies as a VRDI and provides for stated interest unconditionally payable in cash or property at least annually at a single qualified floating rate or a single objective rate (a "Single Rate VRDI Note") is treated as qualified stated interest. The amount and accrual of OID on a Single Rate VRDI Note is determined, in general, by converting such Note into a hypothetical fixed rate Note and applying the rules applicable to fixed rate Notes described under "Original Issue Discount" above to such hypothetical fixed rate Note. Qualified stated interest or original issue discount allocable to an accrual period with respect to a Single Rate VRDI Note also must be increased (or decreased) if the interest actually accrued or paid during such accrual period exceeds (or is less than) the interest assumed to be accrued or paid during such accrual period under the related hypothetical fixed rate Note. Except as provided below, the amount and accrual of OID on a Variable Rate Note that qualifies as a VRDI but is not a Single Rate VRDI Note (a "Multiple Rate VRDI Note") is determined by converting such Note into a hypothetical equivalent fixed rate Note that has terms that are identical to those provided under the Multiple Rate VRDI Note, except that such hypothetical equivalent fixed rate Note will provide for fixed rate substitutes in lieu of the qualified floating rates or objective rates provided for under the Multiple Rate VRDI Note. A Multiple Rate VRDI Note that provides for a qualified floating rate or rates or a qualified inverse floating rate is converted to a hypothetical equivalent fixed rate Note by assuming that each qualified floating rate or the qualified inverse floating rate will remain at its value as of the issue date. A Multiple Rate VRDI Note that provides for an objective rate or rates is converted to a hypothetical equivalent fixed rate Note by assuming that each objective rate will equal a fixed rate that reflects the yield that reasonably is expected for the Multiple Rate VRDI Note. Qualified stated interest or original issue discount allocable to an accrual period with respect to a Multiple Rate VRDI Note must be increased (or decreased) if the interest actually accrued or paid during such accrual period exceeds (or is less than) the interest assumed to be accrued or paid during such accrual period under the hypothetical equivalent fixed rate Note. Under the OID Regulations, the amount and accrual of OID on a Multiple Rate VRDI Note that provides for stated interest at either one or more qualified floating rates or at a qualified inverse floating rate and in addition provides for stated interest at a single fixed rate (other than an initial fixed rate that is intended to approximate the subsequent variable rate) is determined using the method described above for all other Multiple Rate VRDI Notes except that prior to its conversion to a hypothetical equivalent fixed rate Note, such Multiple Rate VRDI Note is treated as if it provided for a qualified floating rate (or a qualified inverse floating rate), rather than the fixed rate. The qualified floating rate (or qualified inverse floating rate) replacing the fixed rate must be such that the fair market value of the Multiple Rate VRDI Note as of its issue date would be approximately the same as the fair market value of an otherwise identical debt instrument that provides for the qualified floating rate (or qualified inverse floating rate), rather than the fixed rate. Notes of certain Series may provide for the payment of interest at a rate determined as the difference between two interest rate parameters, one of which is a variable rate and the other of which is a fixed rate or a different variable rate ("Inverse Floater Notes"). Under the OID Regulations, Inverse Floater Notes generally bear interest at objective rates because their rates either constitute "qualified inverse floating rates" under those Regulations or, although not qualified floating rates themselves, are based on one or more qualified floating rates. Consequently, if such Notes are not issued at an Excess Premium and their interest rates otherwise meet the test for qualified stated interest, the income on such Notes will be accounted for under the rules applicable to VRDIs described above. The OID Regulations contain provisions (the "Contingent Payment Regulations") that address the federal income tax treatment of debt obligations with one or more contingent payments ("Contingent Payment Obligations"). Under the Contingent Payment Regulations, any variable rate debt instrument that is not a VRDI is classified as a Contingent Payment Obligation. However, the Contingent Payment Regulations, by their terms, do not apply to debt instruments that are subject to Section 1272(a)(6) of the Code. In the absence of further guidance, the Tax Administrator will account for Notes that are Contingent Payment Obligations in accordance with Code Section 1272(a)(6). Income will be accrued on such Notes based on a constant yield that is derived from a projected payment schedule as of the Closing Date. The projected payment schedule will take into account the Pricing Payment Assumptions and the interest payments that are expected to be made based on the value of any relevant indices on the issue date. To the extent that actual payments differ from projected payments for a particular taxable year, appropriate adjustments to interest income and expense accruals will be made for that year. The method described in the foregoing paragraph for accounting for Notes that are Contingent Payment Obligations is consistent with Code section 1272(a)(6) and the legislative history thereto. Because of the uncertainty with respect to the treatment of such Notes under the OID Regulations, however, there can be no assurance that the Service will not assert successfully that a method less favorable to Noteholders will apply. In view of the complexities and the current uncertainties as to income inclusions with respect to Notes that are Contingent Payment Obligations, each investor should consult his own tax advisor to determine the appropriate amount and method of income inclusion on such Notes for federal income tax purposes. ANTI-ABUSE RULE Concerned that taxpayers might be able to structure debt instruments or transactions, or to apply the bright-line or mechanical rules of the OID Regulations in a way that produces unreasonable tax results, the Treasury issued regulations containing an anti-abuse rule. Those regulations provide that if a principal purpose in structuring a debt instrument, engaging in a transaction, or applying the OID Regulations is to achieve a result that is unreasonable in light of the purposes of the applicable statutes, the Service can apply or depart from the OID Regulations as necessary or appropriate to achieve a reasonable result. A result is not considered unreasonable under regulations, however, in the absence of a substantial effect on the present value of a taxpayer's tax liability. MARKET DISCOUNT A subsequent purchaser of a Note at a discount from its outstanding principal amount (or, in the case of a Note having original issue discount, its "adjusted issue price") will acquire such Note with market discount. The purchaser generally will be required to recognize the market discount (in addition to any original issue discount remaining with respect to the Note) as ordinary income. A person who purchases a Note at a price lower than the Note's outstanding principal amount but higher than its adjusted issue price does not acquire the Note with market discount, but will be required to report original issue discount, appropriately adjusted to reflect the excess of the price paid over the adjusted issue price. See "Original Issue Discount." A Note will not be considered to have market discount if the amount of such market discount is de minimis, i.e., less than the product of (i) 0.25% of the remaining principal amount (or, in the case of a Note having original issue discount, the adjusted issue price of such Note), multiplied by (ii) the WAM of the Note (determined as for original issue discount) remaining after the date of purchase. Regardless of whether the subsequent purchaser of a Note with more than a de minimis amount of market discount is a cash-basis or accrual-basis taxpayer, market discount generally will be taken into income as principal payments (including, in the case of a Note having original issue discount, any Deemed Principal Payments) are received, in an amount equal to the lesser of (i) the amount of the principal payment received or (ii) the amount of market discount that has "accrued" (as described below), but that has not yet been included in income. The purchaser may make a special election, which applies to all market discount instruments held or acquired by the purchaser in the taxable year of election or thereafter, to recognize market discount currently on an uncapped accrual basis (the "Current Recognition Election"). In addition, the purchaser may make an All OID Election with respect to a Note purchased with market discount. See "-- Original Issue Discount" herein. Until the Treasury promulgates applicable regulations, the purchaser of a Note with market discount may elect to accrue the market discount either: (i) on the basis of a constant interest rate; (ii) in the case of a Note not issued with original issue discount, in the ratio of stated interest payable in the relevant period to the total stated interest remaining to be paid from the beginning of such period; or (iii) in the case of a Note issued with original issue discount, in the ratio of original issue discount accrued for the relevant period to the total remaining original issue discount at the beginning of such period. Regardless of which computation method is elected, the Pricing Prepayment Assumptions must be used to calculate the accrual of market discount. A Noteholder who has acquired any Note with market discount generally will be required to treat a portion of any gain on a sale or exchange of the Note as ordinary income to the extent of the market discount accrued to the date of disposition under one of the foregoing methods, less any accrued market discount previously reported as ordinary income as partial principal payments were received. Moreover, such Noteholder generally must defer interest deductions attributable to any indebtedness incurred or continued to purchase or carry the Note to the extent they exceed income on the Note. Any such deferred interest expense, in general, is allowed as a deduction not later than the year in which the related market discount income is recognized. If a Noteholder makes a Current Recognition Election or an All OID Election, the interest deferral rule will not apply. Under the Contingent Payment Regulations, a secondary market purchaser of a Contingent Payment Obligation at a discount generally would continue to accrue interest and determine adjustments on such Note based on the original projected payment schedule devised by the Issuer of such Note. See "-- Original Issue Discount" herein. The holder of such a Note would be required, however, to allocate the difference between the adjusted issue price of the Note and its basis in the Note as positive adjustments to the accruals or projected payments on the Note over the remaining term of the Note in a manner that is reasonable (e.g., based on a constant yield to maturity). Treasury regulations implementing the market discount rules have not yet been issued, and uncertainty exists with respect to many aspects of those rules. For example, the treatment of a Note subject to redemption at the option of the Issuer that is acquired at a market discount is unclear. It appears likely, however, that the market discount rules applicable in such a case would be similar to the rules pertaining to original issue discount. Due to the substantial lack of regulatory guidance with respect to the market discount rules, it is unclear how those rules will affect any secondary market that develops for a given Class of Notes. Prospective investors should consult their own tax advisors regarding the application of the market discount rules to the Notes. AMORTIZABLE PREMIUM A purchaser of a Note who purchases the Note at a premium over the total of its Deemed Principal Payments may elect to amortize such premium under a constant yield method that reflects compounding based on the interval between payments on the Notes. The legislative history of the 1986 Act indicates that premium is to be accrued in the same manner as market discount. Accordingly, it appears that the accrual of premium on a Note will be calculated using the Pricing Prepayment Assumptions. Amortized premium would be treated as an offset to interest income on a Note and not as a separate deduction item. If a holder makes an election to amortize premium on a Note, such election will apply to all taxable debt instruments (including all Notes) held by the holder at the beginning of the taxable year in which the election is made, and to all taxable debt instruments acquired thereafter by such holder, and will be irrevocable without the consent of the Service. Purchasers who pay a premium for the Notes should consult their tax advisors regarding the election to amortize premium and the method to be employed. Amortizable premium on a Note that is subject to redemption at the option of the Issuer must be amortized as if the optional redemption price and date were the Note's principal amount and maturity date if doing so would result in a smaller amount of premium amortization during the period ending with the optional redemption date. Thus, a Noteholder would not be able to amortize any premium on a Note that is subject to optional redemption at a price equal to or greater than the Noteholder's acquisition price unless and until the redemption option expires. In cases where premium must be amortized on the basis of the price and date of an optional redemption, the Note will be treated as having matured on the redemption date for the redemption price and then having been reissued on that date for that price. Any premium remaining on the Note at the time of the deemed reissuance will be amortized on the basis of (i) the original principal amount and maturity date or (ii) the price and date of any succeeding optional redemption, under the principles described above. Under the Contingent Payment Regulations, a secondary market purchaser of a Contingent Payment Obligation at a premium generally would continue to accrue interest and determine adjustments on such Note based on the original projected payment schedule devised by the Issuer of such Note. See "-- Original Issue Discount" herein. The holder of such a Note would allocate the difference between its basis in the Note and the adjusted issue price of the Note as negative adjustments to the accruals or projected payments on the Note over the remaining term of the Note in a manner that is reasonable (e.g., based on a constant yield to maturity). GAIN OR LOSS ON DISPOSITION If a Note is sold, the Noteholder will recognize gain or loss equal to the difference between the amount realized on the sale and his adjusted basis in the Note. The adjusted basis of a Note generally will equal the cost of the Note to the Noteholder, increased by any original issue discount or market discount previously includible in the Noteholder's gross income with respect to the Note and reduced by the portion of the basis of the Note allocable to payments on the Note (other than qualified stated interest) previously received by the Noteholder and by any amortized premium. Similarly, a Noteholder who receives a scheduled or prepaid principal payment with respect to a Note will recognize gain or loss equal to the difference between the amount of the payment and the allocable portion of his adjusted basis in the Note. Except to the extent that the market discount rules apply and except as provided below, any gain or loss on the sale or other disposition of a Note generally will be capital gain or loss. Such gain or loss will be long-term gain or loss if the Note is held as a capital asset for the applicable long term holding period. If the holder of a Note is a bank, thrift, or similar institution described in Section 582 of the Code, any gain or loss on the sale or exchange of the Note will be treated as ordinary income or loss. In addition, a portion of any gain from the sale of a Note that might otherwise be capital gain may be treated as ordinary income to the extent that such Note is held as part of a "conversion transaction" within the meaning of Section 1258 of the Code. A conversion transaction generally is one in which the taxpayer has taken two or more positions in Notes or similar property that reduce or eliminate market risk, if substantially all of the taxpayer's return is attributable to the time value of the taxpayer's net investment in such transaction. The amount of gain realized in a conversion transaction that is recharacterized as ordinary income generally will not exceed the amount of interest that would have accrued on the taxpayer's net investment at 120% of the appropriate "applicable federal rate" (which rate is computed and published monthly by the Service) at the time the taxpayer entered into the conversion transaction, subject to appropriate reduction for prior inclusion of interest and other ordinary income from the transaction. The highest marginal individual income tax bracket is 39.6%. The alternative minimum tax rate for individuals is 26% with respect to alternative minimum tax income up to $175,000 and 28% with respect to alternative minimum tax income over $175,000. The recently enacted Taxpayer Relief Act of 1997 (the "Relief Act") established a three-tier rate structure with respect to the net capital gain of individuals. Under the Relief Act, the highest marginal federal tax rate on net capital gains for individuals with respect to assets held for more than one year but not more than 18 months is 28%. However, the Relief Act reduces the highest marginal federal tax rate with respect to net capital gain on assets held by individuals for more than 18 months from 28% to 20%, and, for taxable years beginning after, and for assets acquired after, December 31, 2000 and with respect to assets held for more than 5 years, to 18%. Accordingly, there can be a significant marginal tax rate differential between net capital gains and ordinary income for individuals. The highest marginal corporate tax rate is 35% for corporate taxable income over $10 million, and the marginal tax rate on corporate net capital gains is 35%, although the distinction between capital gains and ordinary income remains relevant for other purposes. Investors should note that the deductibility of capital losses is subject to certain limitations. MISCELLANEOUS TAX ASPECTS Backup Withholding. A Note may, under certain circumstances, be subject to "backup withholding" at the rate of 31% with respect to "reportable payments," which include interest payments and principal payments to the extent of accrued original issue discount as well as distributions of proceeds from a sale of Notes. This withholding generally applies if the Noteholder of a Note (i) fails to furnish the Trustee with its taxpayer identification number ("TIN"); (ii) furnishes the Trustee or the Issuer an incorrect TIN; (iii) fails to report properly interest, dividends or other "reportable payments" as defined in the Code; or (iv) under certain circumstances, fails to provide the Trustee or the Issuer or such Noteholder's securities broker with a certified statement, signed under penalty of perjury, that the TIN is its correct number and that the Noteholder is not subject to backup withholding. Backup withholding will not apply, however, with respect to certain payments made to Noteholders, including payments to certain exempt recipients (such as exempt organizations) and to certain Nonresidents (as defined below) complying with requisite certification procedures. Noteholders should consult their tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining the exemption. The Trustee will report to the Noteholders and to the Internal Revenue Service each calendar year the amount of any "reportable payments" during such year and the amount of tax withheld, if any, with respect to payments on the Notes within a reasonable time after the end of each calendar year. Foreign Noteholders. Under the Code, interest and original issue discount income (including accrued interest or original issue discount recognized on sale or exchange) paid or accrued with respect to Notes held by Noteholders who are nonresident alien individuals, foreign corporations, foreign partnerships or certain foreign estates and trusts ("Nonresidents") or Noteholders holding on behalf of a Nonresident generally will be treated as "portfolio interest" and therefore will not be subject to any United States tax provided that (i) such interest is not effectively connected with a trade or business in the United States of the Noteholder and (ii) the Issuer (or other person who would otherwise be required to withhold tax from such payments) is provided with an appropriate statement that the beneficial owner of a Note is a Nonresident. Interest (including original issue discount) paid on Notes to Noteholders who are foreign persons will not be subject to withholding if such interest is effectively connected with a United States business conducted by the Noteholder. Such interest (including original issue discount) will, however, generally be subject to the regular United States income tax. Effective January 1, 2000, any foreign investor that seeks the protection of an income tax treaty with respect to the imposition of United States withholding tax will generally be required to obtain a TIN from the Service in advance and provide verification that such investor is entitled to the protection of the relevant income tax treaty. In addition, foreign tax-exempt investors will generally be required to provide verification of their tax-exempt status. Foreign investors are urged to consult with their tax advisors with respect to these new withholding rules. DUE TO THE COMPLEXITY OF THE FEDERAL INCOME TAX RULES APPLICABLE TO NOTEHOLDERS AND THE CONSIDERABLE UNCERTAINTY THAT EXISTS WITH RESPECT TO MANY ASPECTS OF THOSE RULES, POTENTIAL INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX TREATMENT OF THE ACQUISITION, OWNERSHIP, AND DISPOSITION OF THE NOTES. STATE TAX CONSIDERATIONS In addition to the federal income tax consequences described in "Certain Federal Income Tax Consequences," potential investors should consider the state income tax consequences of the acquisition, ownership, and disposition of the Notes. State income tax law may differ substantially from the corresponding federal law, and this discussion does not purport to describe any aspect of the income tax laws of any state. Therefore, potential investors should consult their own tax advisors with respect to the various state tax consequences of an investment in the Notes. ERISA CONSIDERATIONS Fiduciaries of employee benefit plans and certain other retirement plans and arrangements that are subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or corresponding provisions of the Code, including individual retirement accounts and annuities, Keogh plans and collective investment funds in which such plans, accounts, annuities or arrangements are invested (any of the foregoing, a "Plan"), persons acting on behalf of a Plan, or persons using the assets of a Plan ("Plan Investors"), should review carefully with their legal advisors whether the purchase or holding of a Series of Notes could either give rise to a transaction that is prohibited under ERISA or the Code or cause the assets of the Trust to be treated as plan assets for purposes of regulations of the Department of Labor set forth in 29 C.F.R. 2510.3-101 (the "Plan Asset Regulations"). Prospective investors should be aware that, although certain exceptions from the application of the prohibited transaction rules and the Plan Asset Regulations exist, there can be no assurance that any such exception will apply with respect to the acquisition of a Note. Under the Plan Asset Regulations, if the Notes of a Series are treated as having substantial equity features, the purchaser of a Note could be treated as having acquired a direct interest in the Trust assets securing the Notes. In that event, the purchase, holding, or resale of the Notes could result in a transaction that is prohibited under ERISA or the Code. It is expected that each Series of Notes will be treated as debt obligations without significant equity features for purposes of the Plan Asset Regulations. Accordingly, a Plan that acquires a Note should not be treated as having acquired a direct interest in the Trust assets. However, there can be no complete assurance that the Notes of a Series will be treated as debt obligations without significant equity features for purposes of the Plan Asset Regulations. The Prospectus Supplement for a Series of Notes will indicate whether, and to what extent, a Class or Classes of Notes of a Series would be treated as debt obligations with significant equity features for purposes of the Plan Asset Regulations. The Prospectus Supplement for any Class or Classes of Notes so treated will indicate whether any such Class or Classes will be restricted in their availability to Plan Investors. Regardless whether the Notes are treated as debt or equity for purposes of ERISA, however, the acquisition or holding of the Notes by or on behalf of a Plan could still be considered to give rise to a prohibited transaction if the parties to the issuance transaction, or any of their respective affiliates is or becomes a party in interest or a disqualified person with respect to such Plan. However, one or more exemptions may be available with respect to certain prohibited transaction rules of ERISA and might apply in connection with the initial purchase, holding and resale of the Notes, depending in part upon the type of Plan fiduciary making the decision to acquire Notes and the circumstances under which such decision is made. Those exemptions include, but are not limited to: (i) Prohibited Transaction Class Exemption ("PTCE") 95-60, regarding investments by insurance company pooled accounts; (ii) PTCE 91-38, regarding investments by bank collective investment funds; (iii) PTCE 90-1, regarding investments by insurance company pooled separate accounts; or (iv) PTCE 84-14, regarding transactions negotiated by qualified professional asset managers. Before purchasing Notes, a Plan subject to the fiduciary responsibility provisions of ERISA or described in Section 4975(e)(1) (and not exempt under Section 4975(g)) of the Code should consult with its counsel to determine whether the conditions of any exemption would be met. A purchaser of a Note should be aware, however, that even if the conditions specified in one or more exemptions are met, the scope of the relief provided by an exemption might not cover all acts that might be construed as prohibited transactions. AVAILABLE INFORMATION The Depositor has filed with the Commission a registration statement (together with all amendments and exhibits thereto, the "Registration Statement") under the Securities Act with respect to the Notes offered hereby. This Prospectus and the accompanying Prospectus Supplement, which forms part of the Registration Statement, does not contain all the information contained therein. For further information, reference is made to the Registration Statement which may be inspected and copied at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington D.C. 20549; and at the Commission's regional offices at Seven World Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of all or any part thereof may be obtained from the Public Reference Branch of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 upon the payment of certain fees prescribed by the Commission. In addition, the Registration Statement may be accessed electronically through the Commission's Electronic Data Gathering, Analysis and Retrieval system at the Commission's site on the World Wide Web located at http:/ /www.sec.gov. REPORTS TO NOTEHOLDERS Unless Definitive Notes are issued for any Series of Notes, monthly unaudited reports and annual unaudited reports containing information concerning the Financed Student Loans will be prepared by the Administrator and sent on behalf of each Trust only to Cede, as nominee of DTC and registered holder of the Notes but will not be sent to any beneficial holder of the Notes. Such reports will not constitute financial statements prepared in accordance with generally accepted accounting principles. See "Description of the Notes -- Book-Entry Registration" and "-- Reports to Noteholders" herein Each Trust will file with the Commission such periodic reports as are required under the Exchange ACT and the rules and regulations of the Commission thereunder. Each Trust intends to suspend the filing of such reports under the Exchange Act when and if the filing of such reports is no longer statutorily required. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE All reports and other documents filed by the Administrator, on behalf of the Trust, pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of any Series of Notes shall be deemed to be incorporated by reference into this Prospectus and the accompanying Prospectus Supplement and to be a part hereof. After the initial distribution of the Notes by the Underwriters and in connection with market making transactions by Crestar Securities Corporation, this Prospectus will be distributed together with, and should be read in conjunction with, an accompanying supplement to the Prospectus. Such supplement will contain the reports described above and generally will include the information contained in the quarterly statements furnished to Noteholders. See "Description of the Notes -- Reports to Noteholders" and "Description of the Agreements -- Statements to Indenture Trustee" herein. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus and the accompanying Prospectus Supplement to the extent that a statement contained herein or therein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein or therein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus and the accompanying Prospectus Supplement. The Administrator will provide without charge to each person to whom a copy of this Prospectus and the accompanying Prospectus Supplement are delivered, on the written or oral request of any such person, a copy of any or all of the documents incorporated herein by reference, except the exhibits to such documents (unless such exhibits are specifically incorporated by reference in such documents). Written requests for such copies should be directed to Mr. Eugene S. Putnam, Jr., Senior Vice President - Investor Relations, Crestar Financial Corporation, 919 East Main Street, P.O. Box 26665, Richmond, VA 23261-6665 or "eugene.putnam@crestar.com" on the Internet. Telephone requests for such copies should be directed to (804) 782-7821. PLAN OF DISTRIBUTION The Notes will be offered in one or more Series and one or more Classes through one or more underwriters or underwriting syndicates ("Underwriters"), which may include Crestar Securities Corporation, an affiliate of the Transferor. The Prospectus Supplement for each Series of Notes will set forth the terms of the offering of such Series and of each Class within such Series, including the name or names of the Underwriters, the proceeds to the Depositor, and either the initial public offering price, the discounts and commissions to the Underwriters and any discounts or concessions allowed or reallowed to certain dealers, or the method by which the price at which the Underwriters will sell the Notes will be determined. The Notes may be acquired by Underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of any Underwriters will be subject to certain conditions precedent, and such Underwriters will be severally obligated to purchase all of a Series of Notes described in the related Prospectus Supplement, if any are purchased. If Notes of a Series are offered other than through Underwriters, the related Prospectus Supplement will contain information regarding the nature of such offering and any agreements to be entered into between the seller and purchasers of Notes of such Series. The time of delivery for the Notes of a Series in respect of which this Prospectus is delivered will be set forth in the related Prospectus Supplement. FINANCIAL INFORMATION The Depositor has determined that its financial statements are not material to the offering made hereby. A Trust will engage in no activities other than as described herein. Accordingly, no financial statements with respect to any Trust are included in this Prospectus. RATING It is a condition to the issuance and sale of each Series and Class of Notes that they each be rated by at least one nationally recognized statistical rating organization in one its four highest applicable rating categories. A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning Rating Agency. See "Rating" in the accompanying Prospectus Supplement. APPENDIX I GLOSSARY OF PRINCIPAL DEFINITIONS Set forth below is a glossary of the principal defined terms used in this Prospectus. "Additional FINANCED Student Loans" means additional Financed Student Loans conveyed by the Depositor to the related Trust during the Pre-Funding Period. "Adjustment Payment" means an amount equal to the difference between the aggregate principal balance of any Subsequent Financed Student Loans that are being exchanged into the related Trust and the aggregate principal balance of the Financed Student Loans they are replacing. "Administration Fee" means the fee to be payable to the Administrator. "Administrator" means one who performs administrative duties concerning the Trust and the Financed Student Loans under the Administration Agreement. "Administrator Default" means any failure by the Administrator to perform in any material respect its duties under an Administration Agreement. "Accrual Notes" means any Class of Notes on which all or a portion of the interest thereon accrues and is capitalized and not payable until a date certain or until one or more other Classes are paid in full. "Accrual Period" means the period of time during which interest accrues but is not payable with respect to a Class of Accrual Notes. "Advance Account" means the account maintained by the Indenture Trustee into which Advances from the Master Servicer are to be deposited. "Advances" means deposits made by the Master Servicer with respect to anticipated future collections on the Financed Student Loans. "Auction Agent" is the party identified as such in the Prospectus Supplement. "Auction Period" means, with respect to each AUCTION RATE Note, the Interest Accrual Period applicable to such Note during which time the applicable Class Interest Rate is determined pursuant to the related Indenture. "Auction Period Adjustment" means, with respect to ANY Auction Rate Notes, the ability of the Administrator to change the length of one or more Auction Periods to conform with then current market practice or accommodate other economic or financial factors that may affect or be relevant to the length of the Auction Period or any Class Interest Rate. "Auction Procedures" shall mean the auction procedures that will be used in determining the interest rates on the Auction Rate Notes, as set forth in this Prospectus and in an Appendix to any Prospectus Supplement relating to a Class of Auction Rate Notes. "Auction Rate Notes" means any Class of Notes bearing interest at an Auction Rate, as identified in the Prospectus Supplement. "Available Funds" means the sum, without duplication, of the following amounts with respect to the related Collection Period: (i) all collections received by the Master Servicer or any Servicer on the Financed Student Loans (including any Guarantee Payments (including payments received from any guarantor under any Private Loan Program) and Insurance Payments received with respect to the Financed Student Loans during such Collection Period); (ii) any payments, including without limitation, Interest Subsidy Payments and Special Allowance Payments received by the Eligible Lender Trustee during such Collection Period with respect to the Financed Student Loans; (iii) all proceeds from any sales of Financed Student Loans by the Trust during such Collection Period; (iv) any payments of or with respect to interest received by the Master Servicer or a Servicer during such Collection Period with respect to a Financed Student Loan for which a Realized Loss was previously allocated; (v) the aggregate Purchase Amounts received for those Financed Student Loans purchased by the Depositor or the Master Servicer during the related Collection Period; (vi) the aggregate amounts, if any, received from the Depositor or the Master Servicer as reimbursement of non-guaranteed or uninsured interest amounts (which shall not include, with respect to Financed FFELP Loans, the portion of such interest amounts (i.e., 2%) for which the Guarantee Agency did not have an obligation to make a Guarantee Payment), or lost Interest Subsidy Payments and Special Allowance Payments with respect to the Financed Student Loans pursuant to the Transfer and Servicing Agreement; (vii) net Adjustment Payments, if any, during such Collection Period; (viii) investment earnings for such Collection Period; and (ix) any other sums identified in the related Prospectus Supplement; provided, however, that Available Funds will exclude all payments and proceeds of any Financed Student Loans the Purchase Amount of which has been included in Available Funds for a prior Collection Period (which payments and proceeds shall be paid to the Depositor), and amounts used to reimburse the Master Servicer for Advances pursuant to the terms of the applicable Transfer and Servicing Agreement. "BHCA" means the Bank Holding Company Act of 1956, as amended. "Carryover Interest" means the difference between the interest that would accrue on any Class of Notes or Certificates at the Formula Rate and the interest that accrues at the Net Loan Rate, together with interest thereon AT THE FORMULA RATE from the Payment Date or Quarterly Payment Date on which it is due until paid. "Cede" means Cede & Co., the Depository Trust Company's nominee with respect to book-entry Notes. "Cedel" means a professional depository incorporated under the laws of Luxembourg which holds securities for its participating organizations and facilitates the clearance and settlement of securities transactions between Cedel Participants through electronic book-entry. "Cedel Participants" means recognized financial institutions around the world that utilize the services of Cedel, including underwriters, securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations and may include the underwriters of any Series of Notes. "Certificates" means the certificated equity interest in any Trust. "Claims Rates" means those rates determined by dividing total default claims since the previous September 30 by the total original principal amount of the Guarantee Agency's guaranteed loans in repayment on such September 30. "Class" means any class of the Notes of a Series as specified in the related Prospectus Supplement. "CLASS INTEREST AMOUNT" MEANS THE INTEREST PAYABLE IN A CLASS OF NOTES ON ANY PAYMENT DATE OR QUARTERLY PAYMENT DATE. "Class Interest Rate" means with respect to any Class of Notes the annual rate at which interest accrues on the Notes of such Class, as specified in the related Prospectus Supplement. "Closing Date" means, for any Series, the date on which such Series is issued, which will be specified in the related Prospectus Supplement. "Code" means the Internal Revenue Code of 1986, as amended. "Collection Account" means the account maintained by the Indenture Trustee into which all collections on the Financed Student Loans are to be deposited. "Collection Period" means, unless otherwise provided in a related Prospectus Supplement, any calendar month. "Commission" means the United States Securities and Exchange Commission. "Consolidation Loan Fees" means, as to any Collection Period, an amount equal to the per annum rate identified in the related Prospectus Supplement of the outstanding principal balances of and accrued interest on the Consolidation Loans owned by the related Trust as of the last day of such Collection Period. "Cooperative" means Societe Cooperative, a Belgian cooperative corporation. "Credit Enhancement" means the credit support available to one or more Classes of a Series of Notes, including overcollateralization, letters of credit, liquidity facilities, insurance policies, spread accounts, one or more Classes of subordinate securities, derivative products or other forms of credit enhancement including but not limited to third party guarantees. "Crestar Subsidiary" means Crestar Bank and certain other subsidiaries of Crestar Financial Corporation. "Cut-off Date" means, for any Series, the date specified in the related Prospectus Supplement as the date on or after which principal and interest payments on the related Financed Student Loans are to be included in the related Trust Estate. "Default" means with respect to a HEAL Loan, the persistent failure of the borrower of a HEAL Loan to make a payment when due, or to comply with other terms of the note or other written agreement evidencing a loan under circumstances where the Secretary of HHS finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay. In the case of a loan repayable (or on which interest is payable) in monthly installments, this failure must have persisted for 120 days. In the case of a loan repayable (or on which interest is payable) in less frequent installments, this failure must have persisted for 180 days. "Deferment Period" means certain periods when no principal repayments need be made on certain Financed Student Loans. "Definitive Notes" means Notes to be issued in fully registered, certificated form to Note Owners or their nominees rather than to DTC or its nominee. "Delaware Trustee" means the entity so specified in the related Prospectus Supplement serving as Delaware Trustee of the Trust offering the Notes. "Delaware Trustee Fee" means the fees payable to the Delaware Trustee. "Department of Education" means the U.S. Department of Education. "Department of HHS" means the U.S. Department of Health and Human Services. "Depositor" means Crestar Securitization, LLC, a Virginia limited liability company. "Depositories" means DTC, Cedel and Euroclear, collectively. "Depository" means DTC or any successor or other Clearing Agency selected by the Company as depository for any Book-Entry Certificates. "Directing Notes" means those Notes entitled to direct the action of the Indenture Trustee under certain specified conditions. "DTC" means the Depository Trust Company. "DTC Participants" means the participating organizations that utilize the services of DTC, including securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. "Effective Interest Rate" means, with respect to any Financed Student Loan, the interest rate on such Loan after giving effect to all applicable Interest Subsidy Payments, Special Allowance Payments, rebate fees on Consolidation Loans and reductions pursuant to borrower incentives. For this purpose, the Special Allowance Payment rate will be computed based upon the average of the bond equivalent rates of 91-day Treasury bills auctioned during that portion of the current calendar quarter that ends on the date as of which the Effective Interest Rate is determined, or some other method as described in the Prospectus Supplement. "Eligible Deposit Account" means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the states thereof or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade. "Eligible Institution" is generally a depository institution organized under the federal or any state banking laws whose deposits are insured by the Federal Deposit Insurance Corporation and whose unsecured long-term debt obligations or short-term debt ratings are acceptable to the Rating Agencies. "Eligible Investments" means one or more of the investments specified in the Transfer and Servicing Agreement in which moneys in the related Payment Account and certain other accounts are permitted to be invested. "Eligible Lender Trustee" means the trustee under the related Trust Agreement, so specified in the related Prospectus Supplement serving as eligible lender trustee of the Trust offering the Notes. "Eligible Lender Trustee Fee" means the fee payable to the Eligible Lender Trustee. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Euroclear Operator" means Morgan Guaranty Trust Company of New York, Brussels, Belgium office. "Euroclear Participants" means the participating organizations that utilize the services of Euroclear, including banks, securities brokers and dealers and other professional financial intermediaries and may include the underwriters of any Series of Notes. "Event of Default" with respect to the Notes of a Series, as defined in the Indenture, consists of: (i) a default for five business days or more in the payment of any Class Interest Rate or Principal Payment Amount on the Notes after the same becomes due and payable; (ii) a default in the observance or performance of any covenant or agreement of the applicable Trust made in the Indenture or the Transfer and Servicing Agreement and the continuation of any such default for a period of 30 days after notice thereof is given to such Trust by the Indenture Trustee or to such Trust and the Indenture Trustee by the holders of at least 25% in aggregate principal amount of the Directing Notes then outstanding; (iii) any representation or warranty made by a Trust in the Indenture or in any certificate delivered pursuant thereto or in connection therewith having been incorrect in a material respect as of the time made, and such breach not having been cured within 30 days after notice thereof is given to the Trust by the Indenture Trustee or to the Trust and the Indenture Trustee by the holders of at least 25% in aggregate principal amount of the Directing Notes then outstanding; or (iv) certain events of bankruptcy, insolvency, receivership or liquidation of a Trust. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Expense Account" means an account established and maintained by the Indenture Trustee to pay Consolidation Loan Fees and Transaction Fees. "FDIA" means the Federal Deposit Insurance Act, as amended. "FDIC" means the Federal Deposit Insurance Corporation. "FFEL Program" means the Federal Family Education Loan Program established by the Higher Education Act pursuant to which loans are made to borrowers pursuant to certain guidelines, and the repayment of such loans is guaranteed by a Guarantee Agency, and any predecessor or successor program. "FFELP Loans" means student loans made under the FFEL Program. "Financed FFELP Loans" means those FFELP Loans that secure one or more Series of Notes. "Financed HEAL Loans" means those HEAL Loans that secure one or more Series of Notes. "Financed Private Loans" means those Private Loans that secure one or more Series of Notes. "Financed Student Loans" means Financed FFELP Loans, Financed HEAL Loans and Financed Private Loans, as applicable. "FIRREA" means Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended. "Fitch" means Fitch IBCA, Inc. "Forbearance Period" means a period of time during which a borrower, in case of temporary financial hardship, may defer the repayment of principal. "Formula Rate" means, with respect to any Class of a Series of Notes, the lesser of (a) the rate established pursuant to an index or market (LIBOR, T-Bill or Auction), and (b) a cap, if any, all as specified in the related Prospectus Supplement for such Series. "Grace Period" means a period of time, following a borrower's ceasing to pursue at least a half-time course of study and prior to the commencement of a repayment period, during which principal need not be paid on certain Financed Student Loans. "Guarantee Agency" means a state agency or private nonprofit corporation which guarantees certain payments of principal and interest on Financed FFELP Loans pursuant to a Guarantee Agreement. "Guarantee Agreements" means agreements between a Guarantee Agency and a financial institution. "Guarantee Fund" means cash and reserves used for the purchase of defaulted student loans by a Guarantee Agency. "Guarantee Payments" means those payments made by a Guarantee Agency with respect to a Financed Student Loan. "HEAL Act" means TITLE VII, Section 700-721 OF THE PUBLIC HEALTH SERVICES ACT, as amended, together with ANY rules and regulations promulgated thereunder BY THE DEPARTMENT OF HHS. "HEAL Consolidation Loan" means a loan that combines two or more HEAL Loans made to the same borrower. "HEAL Insurance Contract" means an insurance contract with the Department of HHS with respect to Financed HEAL Loans. "HEAL Loans" means loans made under the HEAL Program. "HEAL Program" is a loan program established under the HEAL Act. "Higher Education Act" means TITLE IV, PART B OF the Higher Education Act of 1965, as amended, TOGETHER WITH ANY RULES AND REGULATIONS PROMULGATED BY THE DEPARTMENT OF EDUCATION OR THE GUARANTEE AGENCIES. "Indenture" means the indenture between the Issuer and the Indenture Trustee, pursuant to which a Series of Notes is issued, as such indenture may be supplemented or amended from time to time by a Series Supplement. "Indenture Trustee" means the trustee under the related Indenture. "Indenture Trustee Fee" means the amount allocated to the Indenture Trustee, as specified in the related Indenture. "Index Maturity" means, with respect to a LIBOR Rate Class of Notes, the offered rate for deposits having a maturity equal to the related Interest Accrual Period. "Indirect Participants" means organizations which have indirect access to a Clearing Agency, such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly. "Initial Pool Balance" generally will mean the Pool Balance of the Financed Student Loans as of the Cut-off Date. "Insurance Payments" means with respect to any Financed HEAL Loans, payments of insurance with respect thereto. "Interest Accrual Period" means, with respect to a Class of Notes, the period of time in which Interest may accrue, as set forth in the related Prospectus Supplement. "Interest Determination Date" means the date preceding the commencement of each Interest Accrual Period on which the Class Interest Rate is determined. "Interest Payment Period" means, with respect to any Class of Notes, the period set forth in the related Prospectus Supplement. "Interest Subsidy Agreement" means, with respect to any Financed Student Loans, the agreement between a Guarantee Agency and the Secretary of Education pursuant to Section 428(b) of the Higher Education Act, as amended, which entitles the holders of eligible loans guaranteed by the Guarantee Agency to receive Interest Subsidy Payments from the Secretary of Education on behalf of certain students while the student is in school, during a six to twelve month Grace Period after the student leaves school, and during certain Deferment Periods, subject to the holders' compliance with all requirements of the Higher Education Act. "Interest Subsidy Payments" are interest payments paid with respect to an eligible loan during the period prior to the time that the loan enters repayment and during Grace and Deferment Periods. "Issuer" means the particular Trust issuing the Notes. "Legal Final Maturity" means the Payment Date on which the aggregate outstanding principal amount of each Class of Notes will be payable in full, as identified in the related Prospectus Supplement. "LIBOR" means the London Interbank Offered Rate that the most creditworthy international banks dealing in Eurodollars charge each other for large loans. "LIBOR Rate Notes" means any Class of Notes the Class Interest Rate of which is based upon LIBOR. "London Banking Day" means a business day on which dealings in deposits in United States dollars are transacted in the London interbank market. "Manager" means Crestar SP Corporation, a Virginia corporation. "Master Servicer" means Crestar Bank or the entity specified in the Prospectus Supplement for a Series that will administer and supervise the performance by the Servicers of their duties and responsibilities under Servicing Agreements in respect to Notes securing a Series. "Master Servicer Default" under a Transfer and Servicing Agreement will consist of: (i) any failure by the Master Servicer to deliver to the Indenture Trustee for deposit in any of the Trust Accounts at the time required for such deposit any collections, Guarantee Payments, Insurance Payments, any payments by a guarantor under a guarantee agreement for a Private Loan or other amounts received by the Master Servicer with respect to the Financed Student Loans, which failure continues unremedied for three Business Days after written notice from the Indenture Trustee, the Administrator or the Eligible Lender Trustee is received by the Master Servicer or after discovery by the Master Servicer; (ii) any failure by the Master Servicer duly to observe or perform in any material respect any other covenant or agreement of the Master Servicer in the Transfer and Servicing Agreement which failure materially and adversely affects the rights of Noteholders and which continues unremedied for 60 days after the giving of written notice of such failure (A) to the Master Servicer by the Indenture Trustee, the Eligible Lender Trustee or the Administrator or (B) to the Master Servicer and to the Indenture Trustee and the Eligible Lender Trustee by holders of Directing Notes evidencing not less than 25% in principal amount of the outstanding Directing Notes; (iii) certain events of insolvency, readjustment of debt, marshaling of assets and liabilities, or similar proceedings with respect to the Master Servicer and certain actions by the Master Servicer indicating its Insolvency, reorganization pursuant to bankruptcy proceedings or inability to pay its obligations; and (iv) any limitation, suspension or termination by the Department of Education or the Department of HHS or by a guarantor of Financed Private Loans of the Master Servicer's eligibility to service Student Loans which materially and adversely affects the Master Servicer's ability to service Financed Student Loans. "Net Loan Rate" for any Interest Accrual Period will equal the weighted average Effective Interest Rate as of the last day of the Collection Period immediately preceding such Interest Accrual Period less the Operating Expense Percentage. "New Borrower" means a borrower who, on the date the promissory note was signed, did not have an outstanding balance on a previous loan which was made, insured or guaranteed under the FFEL Program. "Nonresidents" means holders who are nonresident alien individuals, foreign corporations, foreign partnerships or certain foreign estates and trusts. "Noteholder" means a holder of a Note. "Notes" means a manually executed written instrument evidencing the Borrower's promise to repay a stated sum of money, plus interest, to the Noteholder by a specific date. "Note Owner" means the registered owner of a Note. "Note Payment Account" means the account maintained by the Indenture Trustee from which distributions of principal and interest are made to the Noteholders. "Obligor" means a person who is indebted under a Financed Student Loan. "Parity Percentage" means with respect to any Series of Notes, the percentage set forth in the related Prospectus Supplement, which percentage for any Payment Date or Quarterly Payment Date is determined by dividing (i) the applicable Pool Balance as of the end of the preceding Collection Period, plus accrued interest thereon, accrued Special Allowance Payments and Interest Subsidy Payments as of the end of such Collection Period and all amounts (INCLUDING ACCRUED INTEREST THEREON) in the Collection Account and Reserve Account as of the end of the Collection Period (adjusted for payments made on such Payment Date or Quarterly Payment), by (ii) the sum of the principal balance of the Notes (after payment thereon on such Payment Date or Quarterly Payment Date), accrued interest thereon, and accrued and unpaid Transaction Fees and Consolidation Loan Fees. "Parity Payment" means those principal amounts required to be paid on the Notes until the Parity Percentage is achieved, as specified in the Prospectus Supplement. "Participants" means the participating organizations that utilize the services of the Depository. "Payment Date" means with respect to any Class of Notes of a Series, the date specified in the related Prospectus Supplement for payment on the Notes of such Series. "Payment Determination Date" means with respect to any Payment Date, the date set forth in the related Prospectus Supplement when the Administrator is obligated to determine the amounts to be distributed to the Noteholders on such Payment Date. "Plan" means any employee benefit plan or retirement arrangement, including individual retirement accounts and annuities, Keogh plans, and collective investment funds in which such plans, accounts, annuities or arrangements are invested, that are described in or subject to the Plan Asset Regulations, ERISA, or corresponding provisions of the Code. "Plan Asset Regulations" means the Department of Labor regulations set forth in 29 C.F.R. ss. 2510.3-101, as amended from time to time. "Plan Investors" are persons acting on behalf of a Plan, or persons using the assets of a Plan. "PLUS Loans" are loans made only to borrowers who are parents (and, under certain circumstances, spouses of remarried parents) of dependent undergraduate students. "Pool Balance" means, with respect to the end of any Collection Period with respect to Financed Student Loans, an amount equal to the aggregate principal balance of the Financed Student Loans (including accrued interest thereon capitalized through such date) as of the end of the Collection Period, after giving effect to all payments in respect of principal received by the Trust during such Collection Period. "Pre-Funding Account" means an account established for the purpose of enabling a Trust to purchase Additional FINANCED Student Loans during the Pre-Funding Period. ** 2 "Pre-Funding Account Deposit" means for any Series of Notes, the amount specified in the related Prospectus Supplement. "Pre-Funding Period" means any period specified as such in a Prospectus Supplement during which the related Trust may acquire ADDITIONAL FINANCED STUDENT LOANS using funds on deposit in the related Pre-Funding Account. "Principal Factor" means the seven digit number that, when multiplied by the initial principal amount of a Note, produces its outstanding principal balance. "Principal Payment Amount" means the amount required to be paid on a Series of Notes on any Payment Date, as set forth in the related Prospectus Supplement. "Private Loans" means loans that are originated under Private Loan Programs. "Private Loan Programs" mean one or more of the Private Loan Programs that are identified in the related Prospectus Supplement. "Purchase Amount" means, as of the end of any Collection Period, the principal amount of a Financed Student Loan (including any interest required to be capitalized through such date), together with accrued and unpaid interest thereon. "Quarterly Payment Date" means every THIRD Payment Date as provided in the related Prospectus Supplement. "Rating Agency" means a nationally recognized statistical rating organization identified in the related Prospectus Supplement that has been requested by the Depositor to provide a credit rating with respect to one or more Classes of a Series of Notes as of the Closing Date for such Series. "RATING AGENCY CONDITION" MEANS, WITH RESPECT TO ANY ACTION RELATING TO A SERIES OF NOTES, THAT EACH RATING AGENCY SHALL HAVE BEEN GIVEN 10 DAYS PRIOR NOTICE THEREOF AND THAT EACH RATING AGENCY SHALL HAVE NOTIFIED THE DEPOSITOR, THE MASTER SERVICER, THE ELIGIBLE LENDER TRUSTEE AND THE INDENTURE TRUSTEE IN WRITING THAT SUCH ACTION WILL NOT RESULT IN AND OF ITSELF IN A REDUCTION OR WITHDRAWAL OF THE THEN CURRENT RATINGS OF EACH CLASS OF NOTES OF SUCH SERIES. "Realized Loss" means, FOR EACH FINANCED STUDENT LOAN submitted to a Guarantee Agency for a Guarantee Payment, THE DEPARTMENT OF HHS FOR AN INSURANCE PAYMENT OR A PRIVATE LOAN PROGRAM, THE EXCESS, IF ANY, OF (I) THE UNPAID PRINCIPAL BALANCE OF SUCH FINANCED STUDENT LOAN ON THE DATE IT WAS FIRST SUBMITTED TO A GUARANTEE AGENCY FOR A GUARANTEE PAYMENT, THE DEPARTMENT OF HHS FOR AN INSURANCE PAYMENT OR A PRIVATE LOAN PROGRAM over (ii) all amounts received on or with respect to principal on such Financed STUDENT Loan up through the earlier to occur of (A) the date a related Guarantee Payment, INSURANCE PAYMENT OR PRIVATE LOAN PROGRAM PAYMENT is made or (B) the last day of the Collection Period occurring 12 months after the date the claim for such Guarantee Payment INSURANCE PAYMENT OR PRIVATE LOAN PROGRAM PAYMENT IS FIRST DENIED. "Record Date" means, for any Payment Date, the date on which the identities of the Noteholders entitled to distributions on the related Notes on such Payment Date are fixed, as specified in the related Prospectus Supplement. "Reference Bank" means four leading banks, selected by the Master Servicer, or by the Trustee, as applicable, (i) engaged in transactions in Eurodollar deposits in the international Eurocurrency market, (ii) not controlling, controlled by or under common control with the Administrator or the Transferor and (iii) having an established place of business in London. "Registration Statement" means a registration statement (together with all amendments and exhibits thereto) filed by the Depositor with the Commission under the Securities Act with respect to the Notes offered hereby. "Relief Act" means the Taxpayer Relief Act of 1997, as amended. "Repayment Phase" means, with respect to any Financed Student Loan, that period of time during which principal is repayable. "Repeat Borrower" means a borrower who, on the date the promissory note evidencing the loan was signed, had an outstanding balance on a previous loan made, insured or guaranteed under the FFEL Program. "Reserve Account" means an Eligible Account established with the Indenture Trustee for a Series, the balance of which may be used to fund certain payments by the Trust. "Reserve Account Deposit" means the INITIAL deposit into the Reserve Fund on the Closing Date for a Series. "Reuters Screen LIBOR Page" means the display designated as page "LIBOR" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBOR page for the purposes of displaying London interbank offered rates of major banks). "Sales Agreement" means any sales agreement among the Transferor, the Depositor and the Eligible Lender Trustee, whereby the Transferor will transfer Financed Student Loans for the benefit of the Depositor. "Securities Act" means the Securities Act of 1933, as amended. "Serial Loan" means a loan made to the same borrower under the same loan program and guaranteed by the same Guarantee Agency (or a successor) or insured by the Department of HHS. "Service" means the Internal Revenue Service. "Servicer" means any servicer of Financed Student Loans, as specified in a related Prospectus Supplement. "Servicing Fee" means the fee payable to the Master Servicer or Servicer in respect of a Series, as specified in the related Prospectus Supplement. "SLS Loans" are loans that were limited to (a) graduate or professional students, (b) independent undergraduate students, and (c) under certain circumstances, dependent undergraduate students, if such students' parents were unable to obtain a Plus Loan and were also unable to provide such students' expected family contribution. "Special Allowance Payments" means payments designated as such made by the Department of Education with respect to certain FFELP Loans pursuant to Section 438 of the Higher Education Act. "Special Tax Counsel" means Hunton & Williams, in its capacity as special tax counsel to a Trust. "Specified Reserve Account Balance" means, with respect to any Trust or Series of Notes, the required amount of the Reserve Fund Account. "Stafford Loans" means loans that are generally made only to student borrowers who meet certain needs tests, as set forth in the Higher Education Act. "Subsequent Cut-off Date" means the date specified in a transfer agreement with respect to Subsequent Financed Student Loans as the date on and after which payments on Subsequent Financed Student Loans will belong to the Trust. "Subsequent Finance Period" means the period from the Closing Date for any Series to a subsequent date identified in the accompanying Prospectus Supplement, if any, when Subsequent Financed Student Loans may be conveyed to a Trust. "Subsequent Financed Student Loans" means those Financed Student Loans that are conveyed to a Trust after the Closing Date with respect to a Series of Notes in exchange for Financed Student Loans, and do not include Additional Student Loans. "Surety Bond" means a bond that insures the timely payment of all interest and ultimate payment of all principal due on a Series of Notes; provided, however, that a Surety Bond will not insure payment of any Carryover Interest. "T-Bill Rate" means the average of the bond equivalent rates of the 91-day Treasury bills auctioned during the calendar quarter immediately preceding any date of determination. "T-BILL RATE NOTES" MEANS ANY CLASS OF NOTES THE CLASS INTEREST RATE OF WHICH IS BASED ON THE T-BILL RATE. "Telerate Page 5" means the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). "Terms and Conditions" means the Terms and Conditions Governing Use of Euroclear and the related Operating Procedures of the Euroclear System. "TIN" means taxpayer identification number assigned by the Internal Revenue Service. "TP Program" means the Crestar Bank Top Performer Program whereby borrowers with satisfactory payment records receive a reduced interest rate, AND ANY SIMILAR PROGRAM WITH RESPECT TO WHICH A RATING AGENCY CONDITION IS SATISFIED. "TP Loans" means those Financed Student Loans covered by the TP Program. "Transaction Fees" means the Servicing Fee, Administration Fee, Eligible Lender Trustee Fee, Indenture Trustee Fee and Delaware Trustee Fee. "Transfer Agreement" means an agreement between the Depositor and the Eligible Lender Trustee whereby the Depositor conveys the Additional Student Loans to the Eligible Lender Trustee on behalf of the Trust. "Transfer and Servicing Agreement" means any transfer and servicing agreement among the Depositor, the Trust, the Eligible Lender Trustee, and the Master Servicer, pursuant to which the Depositor will transfer Financed Student Loans to the Trust. "Transferor" means Crestar Bank, a Virginia banking corporation. "Transferor Trusts" means the separate trusts created under the Trust Agreement and the indentures or trust agreements under which the Eligible Lender Trustee may separately hold student loans that share the lender identification number. "Trust" means a trust that issues one or more Series of Notes. "Trust Accounts" means the Collection Account, Note Payment Account, Expense Account, Reserve Account Advance Account and Pre-Funding Account, each established and maintained by the Indenture Trustee on behalf of the Noteholders, and the Certificate Distribution Account and the Certificate Advance Account, each established and maintained by the Eligible Lender Trustee on behalf of the Certificateholders. "Trust Agreement" means the agreement pursuant to which a trust is formed, by and among the Depositor, Eligible Lender Trustee and Delaware Trustee. "U.S. Person" means (i) a citizen or resident of the United States, (ii) a corporation or partnership organized in or under the laws of the United States or any political subdivision thereof, (iii) an estate the income of which is INCLUDIBLE in gross income for United States tax purposes, regardless of its source, or (iv) a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. fiduciaries have the authority to control all substantial decisions of the trust. "UCC" means the Uniform Commercial Code, as amended. "Underwriters" means any firm that agrees to purchase one or more Classes of Notes of a Series from the Depositor. "Underwriting Agreement" means an agreement among the Transferor, the Depositor and the Underwriter(s) for purchase of the Notes of a Series. PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The following table sets forth the estimated expenses in connection with the offering of $1,000,000 of the Student Loan Asset Backed Notes being registered under this Registration Statement, other than underwriting discounts and commission: SEC Registration .........................................$ 295.00 Printing and Engraving ..........................................* Legal Fees and Expenses..........................................* Accounting Fees and Exp..........................................* Trustee Fees and Expens..........................................* Blue Sky Fees and Expen..........................................* Rating Agency Fees ..............................................* Miscellaneous ...................................................* TOTAL ............................................$ * To be provided by amendment ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Registrant's Operating Agreement implements the provisions of the Virginia Limited Liability Company Act ("VLLCA"), which permit the limitation of liability of the Registrant's Manager (as defined below) and Members in a variety of circumstances, which may include liabilities under the Securities Act of 1933. Under Section 13.1-1025 of the VLLCA, a Virginia limited liability company generally is authorized to limit the liability of its Members and Manager if specified in writing in its Articles of Organization or Operating Agreement. The Registrant's Operating Agreement limits the liability of its Members and Manager to the fullest extent permitted under the VLLCA. The liability of the Registrant's Members or Manager shall not be limited if such persons engage in willful misconduct or a knowing violation of the criminal law or any federal or state securities law. The Articles of Incorporation of Crestar SP Corporation, the Registrant's manager (the "Manager") implement the provisions of the Virginia State Corporation Act ("VSCA"), which provide for the indemnification of the Manager's directors and officers in a variety of circumstances, which may include indemnification for liabilities under the Securities Act of 1933. Under Sections 13.1-697 and 13.1-702 of the VSCA, a Virginia corporation generally is authorized to indemnify its directors and officers in civil and criminal actions if they acted in good faith and believed their conduct to be in the best interests of the corporation and, in the case of criminal actions, had no reasonable cause to believe that their conduct was unlawful. The Manager's Articles of Incorporation require indemnification of directors and officers with respect to certain liabilities, expenses and other amounts imposed upon them by reason of having been a director or officer, except in the case of willful misconduct or a knowing violation of criminal law. In addition, the VSCA and the Manager's Articles of Incorporation eliminate the liability of a director or officer in a stockholder or derivative proceeding. This elimination of liability will not apply in the event of willful misconduct or a knowing violation of the criminal law or any federal or state securities law. Reference is made to the Underwriting Agreement filed as an exhibit hereto for provisions relating to the indemnification of directors, officers and controlling persons of the Registrant and the Manager against certain liabilities, including liabilities under the Securities Act of 1933, as amended. Crestar Financial Corporation, the parent of the Registrant and the Manager, carries an insurance policy providing directors' and officers' liability insurance for any liability its directors or officers or the directors or officers of any of its subsidiaries, including the Registrant and the Manager, may incur in their capacities as such. ITEM 16. EXHIBITS. All financial statements, schedules and historical financial information have been omitted as they are not applicable. 1.1 Form of Underwriting Agreement 3.1 Articles of Organization of Registrant+ 3.2 Operating Agreement of Registrant+ 3.3 Form of Trust Agreement among the Registrant, the Eligible Lender Trustee and the Delaware Trustee 4.1 Form of Master Indenture between the Trust and the Indenture Trustee 4.2 Form of Terms Supplement to Master Indenture between the Trust and the Indenture Trustee 4.3 Form of Sales Agreement between the Transferor and Depositor* 4.4 Form of Transfer and Servicing Agreement among the Depositor, the Trust, the Administrator, the Master Servicer and the Eligible Lender Trustee 4.5 Form of Standard Terms to Transfer and Servicing Agreement among the Depositor, the Trust, the Administrator, the Master Servicer and the Eligible Lender Trustee 5.1 Opinion of Hunton & Williams 8.1 Opinion of Hunton & Williams with respect to tax matters 23.1 Consent of Hunton & Williams is contained in their opinions filed as Exhibits 5.1 and 8.1 24.1 Power of Attorney+ 25.1 T-1 Statement of Eligibility of the Trustee under the Trust Indenture Act of 1939* 99.1 Form of Auction Procedures Appendix+ - ----------------------------
* To be filed by amendment + Previously filed. ITEM 17. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the Prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change of such information in the Registration Statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in the post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are included by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) The undersigned Registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act. (d) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements (including, without limitation, the security rating requirement at time of sale) for filing on Form S-3 and has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Richmond, Commonwealth of Virginia, on June 26, 1998. CRESTAR SECURITIZATION, LLC (REGISTRANT) By: CRESTAR SP CORPORATION, as Manager By: /s/ Eugene S. Putnam ------------------------- Eugene S. Putnam, President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 has been signed by the following persons in the capacities and on the dates indicated. Signature Capacity Date - --------- --------- ----- /s/ Eugene S. Putnam Director, Chief Executive June 26, 1998 - ------------------------ Officer and President Eugene S. Putnam (Principal Executive Officer) /s/ Mark Smith Chief Financial/Accounting Officer June 26, 1998 - ------------------------ (Principal Financial Offider Mark Smith and Principal Accounting Officer) /s/ Eugene S. Putnam* Director June 26, 1998 - ------------------------ Richard F. Katchuk /s/ Eugene S. Putnam* Director June 26, 1998 - ------------------------- James D. Barr* * Pursuant to a Power of Attorney previously filed with the Securities and Exchange Commission EX-1 2 EXHIBIT 1.1 CRESTAR STUDENT LOAN TRUST 1998-____ EXHIBIT 1.1 $____________ STUDENT LOAN ASSET BACKED NOTES UNDERWRITING AGREEMENT _______________, 1998 SALOMON BROTHERS INC As Representative of the several Underwriters named herein 388 Greenwich Street, 32nd Floor New York, New York 10013 Ladies and Gentlemen: Crestar Bank, a Virginia banking corporation (as transferor of the Financed Student Loans to the Depositor (each as defined below), the "Bank"), will contribute or sell the Financed Student Loans to Crestar Securitization, LLC, a Virginia limited liability company. The Depositor has formed a trust known as Crestar Student Loan Trust 1998-____ (the "Trust") under the laws of the State of Delaware to which the Depositor will transfer the Financed Student Loans and the Bank and the Depositor propose to cause the Trust to sell to the underwriters named in Schedule I hereto (collectively, the "Underwriters" and each individually an "Underwriter"), for whom you (the "Representative") are acting as representative, pursuant to the terms of this Underwriting Agreement, Student Loan Asset Backed Notes in the following Classes and initial principal amounts: $_______________ Senior LIBOR Rate Class A Student Loan Asset Backed Notes (the "Class A Notes") and $_____________ Subordinate LIBOR Rate Class B Student Loan Asset Backed Notes (the "Class B Notes" and together with the Class A Notes, the "Notes"). _________________________, a _______________________, acts as eligible lender trustee (the "Eligible Lender Trustee") for the Depositor and of the Trust. The Trust has been formed pursuant to a Trust Agreement, dated as _________________, 1998 (the "Trust Agreement") by and among the Depositor, ______________________________, as Delaware trustee, and the Eligible Lender Trustee. On or before the Closing Date, the Financed Student Loans will have been transferred by the Bank to the Eligible Lender Trustee on behalf of the Depositor. On the Closing Date, the Financed Student Loans will have been transferred to the Eligible Lender Trustee on behalf of the Trust by the Depositor. The Notes will be issued under an Indenture dated as of __________________, 1998 (the "Master Indenture") between the Trust and Bankers Trust Company, as indenture trustee ("Indenture Trustee"), as supplemented by a related Terms Supplement (the "Terms Supplement", and collectively with the Master Indenture, the "Indenture"). Upon issuance, the Notes will be secured by, among other things, Financed Student Loans pledged to the Indenture Trustee and described in the Prospectus (as defined in Section 3 below). This Agreement, the Sales Agreement dated as of _________________, 1998 (the "Sales Agreement") among the Bank, the Eligible Lender Trustee and the Depositor, the Transfer and Servicing Agreement dated as of ________________, 1998, including the Standard Terms to Transfer and Servicing Agreement (June 1998 Edition) (collectively, the "Transfer and Servicing Agreement") among the Trust, the Depositor, the Bank (as Master Servicer and Administrator) and the Eligible Lender Trustee, the Indenture and the Trust Agreement shall collectively hereinafter be referred to as the "Basic Documents." Capitalized terms used herein without definition shall have the meanings ascribed to them in the Transfer and Servicing Agreement. 1. Purchase, Sale and Delivery of the Notes. (a) On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Bank and the Depositor jointly and severally agree to cause the Trust to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Trust: the Class A Notes, at a purchase price of _______% of the principal amount of the Class A Notes; and the Class B Notes at a purchase price of _______% of the principal amount of the Class B Notes, the respective principal amounts of each Class of Notes set forth opposite the names of the Underwriters in Schedule I hereto. The Notes will bear interest at the rates as set forth in Schedule I. (b) Delivery to the Representative of and payment for the Notes shall be made at the offices of Hunton & Williams in Richmond, Virginia, at 10:00 A.M., New York City time, on __________________, 1998 (the "Closing Date"). The place of such closing and the Closing Date may be varied by agreement between the Representative and the Depositor. The Notes will be delivered by the Depositor to the Representative for the respective accounts of the Underwriters against payment of the purchase price therefor to or upon the order of the Depositor in Federal Funds, by wire, or such other form of payment as to which the parties may agree. Each Class of Notes will be evidenced by a single global security in definitive form and/or by additional definitive securities, and will be registered, in the case of the global Classes of Notes, in the name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), and in the other cases, in such names and in such denominations as the Representative shall request prior to 1:00 p.m., New York City time, no later than the business day preceding the Closing Date. The Notes to be delivered to the Representative shall be made available to the Representative in New York City for inspection not later than 9:30 a.m., New York City time, on the business day next preceding the Closing Date. 2. Offering by the Underwriters. (a) It is understood that, after the Registration Statement becomes effective, the Underwriters propose to offer the Notes for sale to the public (which may include selected dealers) as set forth in the Prospectus. The Underwriters agree not to offer or sell the Notes in any state or jurisdiction where registration, qualification or any filing to effect any exemption is required under such state's or jurisdiction's securities or Blue Sky laws, except where, with the consent of the Depositor (which may be withheld in the Depositor's sole discretion), such registration, qualification or filing has been completed. The Underwriters agree that all offers and sales of the Notes will be made in accordance with applicable federal and state securities laws and regulations. To the extent the Underwriters engage in overallotment, stabilizing transactions, syndicate covering transactions and penalty bids, the Underwriters agree that such activities shall be in accordance with Regulation M under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). (b) Each Underwriter severally represents and agrees that (i) it has not offered or sold and will not offer or sell any Notes to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has complied and will comply with all applicable provisions of the Financial Services Act of 1986 with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom; and (iii) it has only issued or passed on, and will only issue or pass on, in the United Kingdom any document received by it in connection with the issue of the Notes to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or to a person to whom such document may otherwise lawfully be issued, distributed or passed on. 3. Representations and Warranties of the Bank and the Depositor. The Bank and the Depositor each represent and warrant to and agree with the Underwriters that: (a) A registration statement on Form S-3 (No. ____________), including a prospectus and such amendments thereto as may have been required to the date hereof, relating to the Notes and the offering thereof from time to time in accordance with Rule 415 under the Securities Act of 1933, as amended (the "Act") has been filed with the Securities and Exchange Commission (the "SEC") and such registration statement, as amended, has become effective under the Act; such registration statement, as amended, including all information (if any) deemed to be a part of such registration statement as of the Effective Time (as defined below), and including the exhibits thereto and any material incorporated by reference therein, and the prospectus and prospectus supplement relating to the sale of the Notes offered thereby constituting a part thereof, as amended or supplemented including any prospectus filed under Rule 424(b) under the Act, are respectively referred to herein as the "Registration Statement" and the "Prospectus"; and the conditions to the use of a registration statement on Form S-3 under the Act, as set forth in the General Instructions to Form S-3, and the conditions of Rule 415 under the Act have been satisfied with respect to the Registration Statement. For purposes of this Agreement, "Effective Time" means (x) if the Depositor has advised the Representative that it does not propose to amend the Registration Statement, the date and time as of which the Registration Statement, or the most recent post-effective amendment thereto (if any) filed prior to the execution and delivery of this Agreement, was declared effective by the SEC, or (y) if the Depositor has advised the Representative that it proposes to file an amendment or post-effective amendment to the Registration Statement, the date and time as of which the Registration Statement, as amended by such amendment or post-effective amendment, as the case may be, is declared effective by the SEC. "Effective Date" means the date of the Effective Time. (b) On the Effective Date and on the date of this Agreement, the Registration Statement and the Prospectus, conformed and conform in all material respects to the requirements of the Act, the rules and regulations of the SEC (the "Rules and Regulations") and the Trust Indenture Act of 1939, as amended, and the rules and regulations thereunder (the "Trust Indenture Act"), and in the case of the Registration Statement, did not and does not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, in the case of the Prospectus, did not and does not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the foregoing does not apply to statements in or omissions from the Registration Statement or the Prospectus based upon written information furnished to the Depositor by any Underwriter specifically for use therein. 4. Representations and Warranties of the Bank. The Bank represents and warrants to and agrees with the Underwriters that: (a) The SEC has not issued and, to the best knowledge of the Bank, is not threatening to issue any order preventing or suspending the use of the Registration Statement. (b) This Agreement has been duly authorized, executed and delivered by the Bank. The execution, delivery and performance of this Agreement and the issuance and sale of the Notes and compliance with the terms and provisions hereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, the organizational documents or by-laws of the Bank or any agreement or instrument to which the Bank is a party or by which the Bank is bound or to which any of the properties of the Bank is subject which could reasonably be expected to have a material adverse effect on the transactions contemplated herein. (c) The Bank is duly organized and validly existing as a Virginia banking corporation with the 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 Bank or its ability to consummate the transactions contemplated hereby. (d) There are no legal or governmental proceedings pending or, to the knowledge of the Bank, threatened, against the Bank, or to which the Bank or any of its properties is subject, of a character required to be disclosed in the Prospectus that are not disclosed in the Prospectus. (e) All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by the Bank in connection with the execution and delivery by the Bank of this Agreement and the performance by the Bank of the transactions expressly contemplated by this Agreement, have been duly obtained, effected or given and are in full force and effect, except such as may be required by the blue sky laws of any jurisdiction in connection with the sale and distribution of the Notes for which no representation is being given. (f) The Bank has all requisite corporate power and authority to execute and deliver this Agreement and carry out its terms. (g) The Bank is not required to register as an "investment company" under the Investment Company Act of 1940, as amended (the "1940 Act") by reason of the issuance of the Notes. (h) The representations and warranties made by the Bank in the Sales Agreement and as Master Servicer and Administrator in the Transfer and Servicing Agreement will be true and correct in all material respects on and as of the Closing Date. (i) Other than as contemplated by this Agreement or as disclosed in the Prospectus, there is no broker, finder or other party that is entitled to receive from the Bank or any of its subsidiaries any brokerage or finder's fee or other fee or commission as a result of any of the transactions contemplated by this Agreement. 5. Representations and Warranties of the Depositor. The Depositor represents and warrants to and agrees with the Underwriters that: (a) The SEC has not issued and, to the best knowledge of the Depositor, is not threatening to issue any order preventing or suspending the use of the Registration Statement. (b) This Agreement has been duly authorized, executed and delivered by the Depositor. The execution, delivery and performance of this Agreement and the issuance and sale of the Notes and compliance with the terms and provisions hereof will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, the organizational documents or the operating agreement of the Depositor or any agreement or instrument to which the Depositor is a party or by which the Depositor is bound or to which any of the properties of the Depositor is subject which could reasonably be expected to have a material adverse effect on the transactions contemplated herein. (c) The Depositor is duly organized and validly existing as a Virginia limited liability company with the 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 or its ability to consummate the transactions contemplated hereby. (d) There are no legal or governmental proceedings pending or, to the knowledge of the Depositor, threatened, against the Depositor, or to which the Depositor or any of its properties is subject, of a character required to be disclosed in the Prospectus that are not disclosed in the Prospectus. (e) All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by the Depositor in connection with the execution and delivery by the Depositor of this Agreement and the performance by the Depositor of the transactions expressly contemplated by this Agreement, have been duly obtained, effected or given and are in full force and effect, except such as may be required by the blue sky laws of any jurisdiction in connection with the sale and distribution of the Notes for which no representation is being given. (f) The Depositor has all requisite power and authority to execute and deliver this Agreement and carry out its terms. (g) The Depositor is not required to register as an "investment company" under the Investment Company Act of 1940, as amended (the "1940 Act") by reason of the issuance of the Notes. (h) The representations and warranties made by the Depositor in the Transfer and Servicing Agreement will be true and correct in all material respects on and as of the Closing Date. (i) Other than as contemplated by this Agreement or as disclosed in the Prospectus, there is no broker, finder or other party that is entitled to receive from the Depositor or any of its subsidiaries any brokerage or finder's fee or other fee or commission as a result of any of the transactions contemplated by this Agreement. 6. Agreements of the Bank and the Depositor. The Bank and the Depositor each agree with the Underwriters as follows: (a) Immediately following the execution of this Agreement, the Depositor will pursuant to Rule 424(b) prepare and file a prospectus supplement, properly completed, with the SEC. The Depositor will advise the Representative promptly of any such filing. The Depositor will advise the Representative promptly of any proposal to amend or supplement the Registration Statement or the Prospectus and will not effect such amendment or supplement without the consent of the Representative prior to the Closing Date, and thereafter will not effect any such amendment or supplement relating to or affecting the Notes to which the Representative reasonably objects; provided, however, except for the Current Report on Form 8-K described in Section 6(m), no consent of the Representative shall be required in connection with any filing made pursuant to the Exchange Act and the rules and regulations promulgated thereunder; the Depositor will also advise the Representative promptly of any request by the Commission for any amendment of or supplement to the Registration Statement or the Prospectus or for any additional information; and the Depositor will also advise the Representative promptly of the effectiveness of the Registration Statement and of any amendment or supplement to the Registration Statement or the Prospectus and of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or known threat of any proceeding for that purpose and the Depositor will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible the lifting of any issued stop order. (b) If, at any time when the Prospectus relating to the Notes is required to be delivered under the Act, any event occurs as a result of which such Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the Prospectus to comply with the Act or the Rules and Regulations, the Depositor promptly will prepare and file with the SEC, an amendment or supplement to such Prospectus that will correct such statement or omission or an amendment that will effect such compliance. (c) The Depositor will immediately inform the Representative (i) of the receipt by the Bank, the Depositor or the Trust of any communication from the SEC or any state securities authority concerning the offering or sale of the Notes and (ii) of the commencement of any lawsuit or proceeding to which the Bank, the Depositor or the Trust is a party relating to the offering or sale of the Notes; provided, however, with respect to the Trust, the Trust has so informed the Depositor to the extent the Depositor did not receive such communication provided in clause (i) or is not a party to the lawsuit or proceeding as provided in clause (ii) and did not receive notice of such lawsuit, and with respect to the Bank, the Bank has so informed the Depositor to the extent the Depositor did not receive such communication provided in clause (i) or is not a party to the lawsuit or proceeding as provided in clause (ii) and did not receive notice of such lawsuit. (d) The Depositor will furnish to the Underwriters, without charge, copies of the Registration Statement (including all documents and exhibits thereto or incorporated by reference therein), the Prospectus, and all amendments and supplements to such documents relating to the Notes, in each case in such quantities as the Underwriters may reasonably request. (e) No amendment or supplement relating to or affecting the Notes will be made to the Registration Statement or Prospectus unless the Representative shall have previously been advised thereof and the Representative shall not have reasonably objected thereto after being so advised; provided, however, after the Closing Date, excluded from this provision shall be filings made pursuant to the Exchange Act. (f) The Bank and the Depositor will cooperate with the Representative and with its counsel in connection with the qualification of, or procurement of exemptions with respect to, the Notes for offering and sale by the Underwriters and by dealers under the securities or Blue Sky laws of such jurisdictions as any Underwriter may designate and to which the Depositor shall consent (which consent may be withheld in the Depositor's sole discretion) and, in such jurisdictions, will file or cause the Trust to file such consents to service of process or other documents necessary or appropriate in order to effect such qualification or exemptions; provided that in no event shall the Bank, the Depositor or the Trust be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to service of process in suits, other than those arising out of the offering or sale of the Notes, in any jurisdiction where it is not now so subject. (g) Subject to Section 2, the Bank, the Depositor and the Trust consent to the use, in accordance with the securities or Blue Sky laws of such jurisdictions in which the Notes are offered by the Underwriters and by dealers, of the Prospectus furnished by the Bank. (h) To the extent, if any, that the rating or ratings provided with respect to the Notes by the rating agency or agencies that initially rate a series of Notes is conditional upon the furnishing of documents or the taking of any other actions by the Bank, the Depositor or the Trust, the Depositor shall cause to be furnished such documents and such other reasonable actions to be taken. (i) For two years from the Closing Date, the Depositor will furnish to the Representative (i) as soon as available, a copy of each document relating to the Trust or the Notes required to be filed with the SEC pursuant to the Exchange Act or any order of the SEC thereunder, and (ii) such other information concerning the Bank, the Depositor or the Trust as the Representative may reasonably request from time to time insofar as such information reasonably relates to the Registration Statement or the transactions contemplated by the Basic Documents. (j) If this Agreement shall terminate or shall be terminated after execution and delivery pursuant to any provisions hereof (otherwise than by notice given by an Underwriter terminating this Agreement pursuant to Section 11 or Section 12 hereof) or if this Agreement shall be terminated by the Representative because of any failure or refusal on the part of the Bank or the Depositor to comply with the terms or fulfill any of the conditions of this Agreement, the Bank agrees to reimburse the Underwriters for all out-of-pocket expenses (including reasonable fees and expenses of their counsel) reasonably incurred in connection herewith. In no event shall the Bank, the Depositor or the Trust be liable to the Underwriters for loss of anticipated profits from the transactions contemplated by this Agreement. (k) The net proceeds from the sale of the Notes hereunder will be applied substantially in accordance with the description set forth in the Prospectus. (l) Except as stated in this Agreement and in the Prospectus, neither the Bank nor the Depositor has not taken, nor will it take, directly or indirectly, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Notes to facilitate the sale or resale of the Notes; it being understood and agreed that no such action by any Underwriter shall be deemed an action of the Bank or the Depositor. (m) Provided that the Depositor received the Computational Materials (as defined in Section 10 below) within the time frame set forth in Section 10, the Bank will cause such Computational Materials to be filed with the SEC on a Current Report on Form 8-K (the "Current Report") not later than the second Business Day following the receipt of each Computational Materials. (n) For the period beginning on the date of this Agreement and ending 90 days after the Closing Date, the Bank, the Depositor and any trust originated, directly or indirectly, by the Bank or the Depositor will not, without the prior written consent of the Representative, offer to sell or sell notes (other than the Notes) collateralized by, or certificates evidencing an ownership interest in, student loans; provided, however, that this shall not be construed to prevent the sale of student loans by the Bank. 7. Indemnification and Contribution. (a) The Bank and the Depositor agree to jointly and severally indemnify and hold harmless each Underwriter and each person, if any, who controls an Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages, liabilities and expenses (including reasonable costs of investigation) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, or in any amendment or supplement thereto, or the preliminary prospectus supplement dated _______________, 1998 (the "Preliminary Prospectus"), or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or expenses arise out of or are based upon any untrue statement or omission or alleged untrue statement or omission which has been made therein or omitted therefrom in reliance upon and in conformity with the information relating to the Underwriter furnished in writing to the Bank by or on behalf of any Underwriter through the Representative expressly for use in connection therewith; provided, however, that the foregoing indemnity with respect to the Prospectus or the Preliminary Prospectus shall not inure to the benefit of any Underwriter (or any person controlling such Underwriter) from whom the person asserting any such loss, claim, damage or liability purchased Notes, if such person did not receive a copy of the Prospectus (as then amended or supplemented) at or prior to the written confirmation of the sale of such Notes to such person and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage or liability. The foregoing indemnity agreement shall be in addition to any liability which the Bank or the Depositor may otherwise have. (b) If any action, suit or proceeding shall be brought against an Underwriter or any person controlling an Underwriter in respect of which indemnity may be sought against the Bank or the Depositor, such Underwriter or such controlling person shall promptly notify the parties against whom indemnification is being sought (the "indemnifying parties"), and such indemnifying parties shall assume the defense thereof, including the employment of counsel and payment of all reasonable fees and expenses. Such Underwriter or any such controlling person shall have the right to employ separate counsel in any such action, suit or proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Underwriter or such controlling person unless (i) the indemnifying parties have agreed in writing to pay such fees and expenses, (ii) the indemnifying parties have failed to assume the defense and employ counsel within a reasonable period of time, or (iii) the named parties to any such action, suit or proceeding (including any impleaded parties) include both the Underwriter or such controlling person and the indemnifying parties and the Underwriter or such controlling person shall have been advised by its counsel that representation of such indemnified party and any indemnifying party by the same counsel would be inappropriate under applicable standards of professional conduct (whether or not such representation by the same counsel has been proposed) due to actual or potential differing interests between them (in which case the indemnifying party shall not have the right to assume the defense of such action, suit or proceeding on behalf of the Underwriter or such controlling person). It is understood, however, that the indemnifying parties shall, in connection with any one such action, suit or proceeding or separate but substantially similar or related actions, suits or proceedings in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of only one separate firm of attorneys (in addition to any local counsel) at any time for the Underwriter and controlling persons not having actual or potential differing interests with the Underwriter or among themselves, which firm shall be designated in writing by the Underwriter, and that all such fees and expenses shall be reimbursed on a monthly basis as provided in paragraph (a) hereof. The indemnifying parties shall not be liable for any settlement of any such action, suit or proceeding effected without their written consent, but if settled with such written consent, or if there be a final judgment for the plaintiff in any such action, suit or proceeding, the indemnifying parties agree to indemnify and hold harmless the Underwriter and any such controlling person from and against any loss, claim, damage, liability or expense by reason of such settlement or judgment to the extent provided in paragraph (a). (c) Each Underwriter agrees severally but not jointly to indemnify and hold harmless the Bank and the Depositor and their respective directors and officers, and any person who controls the Bank or the Depositor within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the same extent as the indemnity from the Bank and the Depositor to such Underwriter set forth in paragraph (a) hereof, but only with respect to information relating to such Underwriter furnished in writing by or on behalf of such Underwriter through the Representative expressly for use in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus. If any action, suit or proceeding shall be brought against the Bank or the Depositor, any of their directors or officers, or any such controlling person based on the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus and in respect of which indemnity may be sought against an Underwriter pursuant to this paragraph (c), such Underwriter shall have the rights and duties given to the Bank and the Depositor by paragraph (b) above (except that if the Bank or the Depositor shall have assumed the defense thereof no Underwriter shall be required to do so, but may employ separate counsel therein and participate in the defense thereof, but the fees and expenses of such counsel shall be at such Underwriter's expense, except as otherwise provided in paragraph (b) above), and the Bank, the Depositor, their respective directors and officers, and any such controlling person shall have the rights and duties given to such Underwriter by paragraph (b) above. The foregoing indemnity agreement shall be in addition to any liability which the Underwriters may otherwise have. (d) If the indemnification provided for in this Section 7 is unavailable to an indemnified party under paragraphs (a) or (c) hereof in respect of any losses, claims, damages, liabilities or expenses referred to therein, then an indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Bank and the Depositor on the one hand and the applicable Underwriter on the other hand from the offering of the Notes, or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Bank and the Depositor on the one hand and such Underwriter on the other in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Bank and the Depositor on the one hand and such Underwriter on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Notes (before deducting expenses) received by the Bank and the Depositor bear to the total underwriting discounts and commissions received by such Underwriter. The relative fault of the Bank and the Depositor on the one hand and such Underwriter on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Bank or the Depositor on the one hand or by such Underwriter on the other hand and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (e) The Bank, the Depositor and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by a pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities and expenses referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating any claim or defending any such action, suit or proceeding. Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Notes hereunder. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. (f) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 7 shall be paid by the indemnifying party to the indemnified party as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Bank and the Depositor set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of an Underwriter, the Bank, the Depositor or any person controlling any of them or their respective directors or officers, (ii) acceptance of any Notes and payment therefor hereunder, and (iii) any termination of this Agreement. A successor to any Underwriter, the Bank, the Depositor or any person controlling any of them or their respective directors or officers, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Section 7. 8. Conditions of the Underwriters' Obligations. The obligations of the Underwriters to purchase the Notes hereunder are subject to the following conditions: (a) All actions required to be taken and all filings required to be made by the Bank and the Depositor under the Act prior to the sale of the Notes shall have been duly taken or made. At and prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Bank, the Depositor or the Underwriters, shall be threatened by the SEC. (b) Since the respective dates as of which information is given in the Registration Statement (or any amendment or supplement thereto), except as may otherwise be stated therein or contemplated thereby, there shall not have occurred (i) any change, or any development involving a prospective change, in or affecting the condition (financial or other), business, properties, net worth, or results of operations of the Bank and the Depositor not contemplated by the Registration Statement, which in the opinion of the Representative, would materially adversely affect the market for the Notes, or (ii) any event or development which makes any statement made in the Registration Statement or Prospectus untrue in any material respect or which, in the opinion of the Bank and its counsel or the Underwriters and their counsel, requires the filing of any amendment to or change in the Registration Statement or Prospectus in order to state a material fact required by any law to be stated therein or necessary in order to make the statements therein not misleading, if amending or supplementing the Registration Statement or Prospectus to reflect such event or development would, in the opinion of the Representative, materially adversely affect the market for the Notes. (c) The Representative shall have received on the Closing Date an opinion of Prickett, Jones, Elliott, Kristol & Schnee, special Delaware counsel for the Trust, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibit A hereto. (d) The Representative shall have received on the Closing Date the opinions of Foley & Lardner, special counsel for the Bank, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibits B-1 and B-2 hereto. (e) The Representative shall have received on the Closing Date an opinion of Hunton & Williams, counsel for the Bank and the Depositor, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibit[s] C[-1 and C-2] hereto. (f) The Representative shall have received on the Closing Date an opinion of the Law Department of the Eligible Lender Trustee, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibit D hereto. (g) The Representative shall have received on the Closing Date an opinion of White & Case, counsel for the Indenture Trustee, dated the Closing Date and addressed to the Underwriters, in form and scope satisfactory to the Representative and its counsel and substantially in the form of Exhibit E hereto. (h) The Representative shall have received on the Closing Date the opinion of Squire, Sanders & Dempsey L.L.P., special counsel for the Underwriters, dated the Closing Date, and addressed to the Underwriters, in form and scope satisfactory to the Representative and substantially in the form of Exhibit F hereto. (i) The Representative shall have received on the Closing Date the opinion of Hunton & Williams, counsel for the Bank and the Depositor, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibit G. (j) The Representative shall have received on the Closing Date the opinion of Foley & Lardner, counsel for the Bank and the Depositor, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibit H hereto. (k) The Representative shall have received on the Closing Date the opinion of Hunton & Williams, counsel for the Bank and the Depositor, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibit I hereto. (l) The Representative shall have received on the Closing Date the opinion of Hunton & Williams, counsel for the Bank and the Depositor, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the form of Exhibit J hereto. (m) The Representative shall have received on the Closing Date the opinions of Squire, Sanders & Dempsey L.L.P. and __________________________________, respectively, dated the Closing Date and addressed to the Underwriters, in form and scope reasonably satisfactory to the Representative and its counsel and substantially in the forms of Exhibits K-1 and K-2 respectively, hereto. (n) The Representative shall have received a letter dated the date of delivery thereof (which shall be on or prior to the date of this Agreement) from KPMG Peat Marwick, and in form and substance reasonably satisfactory to the Representative, to the effect that they have carried out certain specified procedures, not constituting an audit, with respect to certain information regarding the Financed Student Loans and setting forth the results of such specified procedures. (o) All the representations and warranties of the Bank contained in this Agreement and the Basic Documents shall be true and correct in all material respects on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date and the Representative shall have received a certificate, dated the Closing Date and signed by an executive officer of the Bank, to the effect set forth in this Section 8(o) and in Section 8(q) hereof. (p) All the representations and warranties of the Depositor contained in this Agreement the Basic Documents shall be true and correct in all material respects on and as of the date hereof and on and as of the Closing Date as if made on and as of the Closing Date and the Representative shall have received a certificate, dated the Closing Date and signed by an executive officer of the Depositor, to the effect set forth in this Section 8(p) and in Section 8(r) hereof. (q) The Bank shall not have failed at or prior to the Closing Date to have performed or complied in any material respect with any of its agreements herein contained and required to be performed or complied with by it hereunder at or prior to the Closing Date. (r) The Depositor shall not have failed at or prior to the Closing Date to have performed or complied in any material respect with any of its agreements herein contained and required to be performed or complied with by it hereunder at or prior to the Closing Date. (s) The Representative shall have received by instrument dated the Closing Date (at the option of the Representative), in lieu of or in addition to the opinions referred to in clauses (c) through (m) of this Section (8), the right to rely on opinions provided by such counsel and all other counsel under the terms of the Basic Documents to Moody's Investors Service, Inc. ("Moody's") and Fitch IBCA, Inc. ("Fitch"). (t) Moody's and Fitch shall have rated the Class A Notes "Aaa" and "AAA", respectively, and the Class B Notes at least "A2" and "A", respectively, and there shall not have been any announcement by Moody's or Fitch that (i) it is downgrading any of its ratings assigned to any Class of Notes or (ii) it is reviewing its ratings assigned to any Class of Notes with a view to possible downgrading, or with negative implications, or direction not determined. (u) The Bank shall have furnished or caused to be furnished to the Representative an executed copy or certified copy of an executed copy of each of the Basic Documents, each Guarantee Agreement, each Subservicing Agreement and such further certificates and documents as the Representative shall have reasonably requested. (v) The Representative shall have received evidence satisfactory to it that, on or before the Closing Date, UCC-1 financing statements have been or are being filed in the office of the State Corporation Commission of Virginia, reflecting the transfer of the interest of the Bank in Financed Student Loans to the Eligible Lender Trustee on behalf of the Depositor and reflecting the transfer by the Eligible Lender Trustee on behalf of the Depositor of the interest of the Depositor in the Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust and the proceeds thereof to the Trust and in the offices of the Secretaries of State of the States of Ohio and Delaware reflecting the grant of the security interest by the Trust in the Financed Student Loans and the proceeds thereof to the Indenture Trustee. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance to the Representative and counsel for the Representative. 9. Expenses. The Bank agrees to pay or to otherwise cause the payment of the following costs and expenses and all other costs and expenses incident to the performance by it and the Trust of their respective obligations hereunder: (i) the preparation, printing or reproduction of the Registration Statement, each Prospectus and each amendment or supplement to any of them, this Agreement and each other Basic Document; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Prospectus and all amendments or supplements to any of them as may be reasonably requested for use in connection with the offering and sale of the Notes; (iii) the preparation, printing, authentication, issuance and delivery of definitive certificates for the Notes; (iv) the printing (or reproduction) and delivery of this Agreement, the Blue Sky Memorandum and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Notes; (v) qualification of the Indenture under the Trust Indenture Act; (vi) the qualification of the Notes for offer and sale under the securities or Blue Sky laws of such states as the Bank and the Representative may agree (including the reasonable fees, expenses and disbursements of counsel for the Underwriters relating to the preparation, printing or reproduction, and delivery of any Blue Sky Memorandum prepared in connection with such qualification); (vii) the fees and disbursements of (A) the Bank's counsel and the Depositor's counsel, (B) the Representative's counsel (which fee shall not exceed $_______________), (C) the Indenture Trustee and its counsel, (D) the Eligible Lender Trustee and its counsel, (E) The Depository Trust Company in connection with the book-entry registration of the Notes, (F) KPMG Peat Marwick, accountants for the Bank and the Depositor and issuer of the letters described in Section 8(n), and (G) Prickett, Jones, Elliott, Kristol & Schnee, Special Delaware Counsel to the Trust in connection with the preparation of the opinion referred to in Section 8(c), and (viii) the fees charged by Moody's and Fitch for rating the Notes. 10. Computational Materials. Not later than 4:00 p.m. New York City time, on the date on which Computational Materials (as defined below) are first used by an Underwriter, said Underwriter shall deliver to the Depositor electronically a complete copy of all materials, if any, provided by such Underwriter to prospective investors in such Notes which constitute "Computational Materials" within the meaning of the no-action letter dated May 20, 1994 issued by the Division of Corporation Finance of the SEC to Kidder, Peabody Acceptance Corporation I, Kidder, Peabody & Co. Incorporated, and Kidder Structured Asset Corporation, the no-action letter dated May 27, 1994 issued by the Division of Corporation Finance of the SEC to the Public Securities Association and the no-action letter of February 17, 1995 issued by the SEC to the Public Securities Association (collectively, the "Kidder/PSA Letters") and the filing of which is a condition of the relief granted in such letters (such materials being the "Computational Materials"). Each Underwriter severally and not jointly represents and warrants to and agrees with the Depositor, as of the date hereof and as of the Closing Date, that the Computational Materials furnished to the Depositor by such Underwriter pursuant to this Section 10 constitute (either in original, aggregated or consolidated form) all of the materials furnished to prospective investors in the Notes by such Underwriter prior to the time of delivery thereof to the Depositor that are required to be filed with the SEC with respect to the Notes in accordance with the Kidder/PSA Letters and such Computational Materials comply with the requirements of the Kidder/PSA Letters. Notwithstanding the foregoing, such Underwriter makes no representation or warranty with respect to statements in any Computational Materials relating to the Financed Student Loans which were furnished by or on behalf of the Bank or the Depositor to such Underwriter. 11. Default by One of the Underwriters. If any of the Underwriters shall fail at the Closing Date to purchase the Notes which it is obligated to purchase hereunder (the "Defaulted Notes") and the principal amount of the Defaulted Notes does not exceed 10% of the total principal amount of the Notes set forth on the first page hereof, the Representative may make arrangements satisfactory to the Depositor for the purchase of such Defaulted Notes by other persons, including the remaining Underwriter or Underwriters (the "Non-Defaulting Underwriters"), but if no such arrangements are made within one (1) Business Day thereafter, the Non-Defaulting Underwriters shall be obligated severally, in proportion to their respective total commitments hereunder, to purchase the Notes which such defaulting Underwriters agreed but failed to purchase. If any Underwriter or Underwriters so default and the aggregate principal amount of the Notes with respect to which such default or defaults occur is more than 10% of the total principal amount of the Notes set forth on the first page hereof and arrangements satisfactory to the Representative and the Depositor for the purchase of such Notes by other persons are not made within two (2) Business Days after such default, then this Agreement shall terminate without liability on the part of the Non-Defaulting Underwriters. No action taken pursuant to this Section 11 shall relieve any defaulting Underwriter from liability in respect of its default. In the event of any such default which does not result in a termination of this Agreement, either the Non-Defaulting Underwriters or the Depositor shall have the right to postpone the Closing Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement or Prospectus or in any other documents or arrangements. 12. Effective Date of Agreement. This Agreement shall become effective upon the execution and delivery hereof by all the parties hereto. Until such time as this Agreement shall have become effective, it may be terminated by the Bank or the Depositor, by notifying the Representative, or by the Representative, by notifying the Bank and the Depositor. Any notice under this Section 12 may be given by telegram, telecopy or telephone but shall be subsequently confirmed by letter. 13. Termination of Agreement. This Agreement shall be subject to termination in the absolute discretion of the Representative, without liability on the part of any Underwriter, by notice to the Bank and the Depositor, if prior to the Closing Date, (i) trading in securities generally on the New York Stock Exchange shall have been suspended or materially limited, (ii) a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York state authorities, (iii) there shall have occurred any outbreak or escalation of hostilities or other international or domestic calamity, crisis or change in political, financial or economic conditions, the effect of which on the financial markets of the United States is such as to make it, in the reasonable judgment of the Representative, impracticable or inadvisable to commence or continue the offering of the Notes on the terms set forth in the Prospectus, or to enforce contracts for the resale of the Notes by the Underwriters, (iv) legislation shall be enacted by the Congress of the United States or a decision by a court of the United States or the Tax Court of the United States shall be rendered, or an officially published ruling, regulation, proposed regulation or official statement by or on behalf of the Treasury Department of the United States, the Internal Revenue Service or any other governmental agency shall be made, with respect to federal taxation upon revenues or other income of the general character expected to be pledged under the Indenture or upon interest received on securities of the general character of the Notes, or which would have the effect of changing, directly or indirectly, the federal income tax consequences of interest on securities of the general character of the Notes in the hands of the holders thereof, which in the opinion of counsel to the Representative materially affects the market price of the Notes, or (v) legislation shall be enacted by the States of Delaware or Ohio or the Commonwealths of Virginia or Pennsylvania, or a decision by a court of competent jurisdiction of the States of Delaware or Ohio or the Commonwealths of Virginia or Pennsylvania or any administrative tribunal of the States of Delaware or Ohio or the Commonwealths of Virginia or Pennsylvania or other governmental agency or department thereof shall be rendered with respect to taxation by the States of Delaware or Ohio or the Commonwealths of Virginia or Pennsylvania or any of their political subdivisions upon revenues or other income of the general character expected to be pledged under the Indenture, or upon interest received on securities of the general character of the Notes, or which would have the effect of changing, directly or indirectly, the tax consequences under the States of Delaware or Ohio or the Commonwealths of Virginia or Pennsylvania tax law of interest on securities of the general character of the Notes in the hands of the holders thereof, which in the opinion of counsel to the Representative materially affects the market price of the Notes. Notice of such termination may be given to the Bank and the Depositor, by telegram, telecopy or telephone and shall be subsequently confirmed by letter. 14. Information Furnished by the Underwriter. The statements set forth under the subsection "Weighted Average Life of the Notes" under the heading "Maturity and Prepayment Considerations" and under the heading "Underwriting" in the Prospectus Supplement dated ______________, 1998 and the computational material contained in the Form 8-K filed with the SEC on ___________________, 1998 relating to the Notes constitute the only information furnished by or on behalf of the Underwriters as such information is referred to in Sections 3(b) and 7 hereof, and each Underwriter confirms that such statements relating to such Underwriter are correct and the Representative confirms that the information under the subsection "Weighted Average Life of the Notes" under the heading "Maturity and Prepayment Considerations" and the computational material contained in the Form 8-K filed with the SEC on ________________________, 1998 relating to the Notes is correct; provided that with respect to the information contained under the subsection "Weighted Average Life of the Notes" under the heading "Maturity and Prepayment Considerations" and the computational material contained in the Form 8-K filed with the SEC on ___________________, 1998 relating to the Notes each Underwriter has assumed that the underlying financial information regarding the Financed Student Loans as furnished by or on behalf of the Bank or the Depositor to such Underwriter is accurate and each Underwriter makes no representation, warranty or confirmation with respect to such underlying financial information regarding the Financed Student Loans. Anything to the contrary notwithstanding in this Agreement, the Bank and the Depositor agree that the information contained under the subsection "Weighted Average Life of the Notes" under the heading "Maturity and Prepayment Considerations" and the computational material contained in the Form 8-K filed with the SEC on ___________________, 1998 relating to the Notes is not included in the indemnification of each Underwriter contained in Section 7(c) hereof. 15. Representation of Underwriters. The Representative shall act for the several Underwriters in connection with this financing, and any action under this Agreement taken by the Representative will be binding upon all the Underwriters. 16. Miscellaneous. Except as otherwise provided in Sections 6, 12 and 13 hereof, notice given pursuant to any provision of this Agreement shall be in writing and shall be delivered (i) if to the Bank, to Crestar Bank, Riverview Center, 1001 Semmes Avenue, Richmond, Virginia 23224, Attention: W. Clark McGhee, Senior Vice President, facsimile (804) 319-4823, with copies to Crestar Bank, 919 E. Main Street, Richmond, Virginia 23219, Attention: Marke A. Thomas, Vice President-Securitizations Manager, facsimile (804) 782-7155, and the Bank's Legal Department, at 919 E. Main Street, Richmond, Virginia 23219, Attention: Linda Rigsby, Senior Vice President and General Counsel, (ii) if to the Depositor to Crestar Securitization LLC, at ____________________, Richmond, Virginia _______, Attention: Eugene S. Putnam, with copies to Crestar Bank, at 919 E. Main Street, Richmond, Virginia 23219, Attention: Linda Rigsby, Senior Vice President and General Counsel and Crestar Bank at 919 E. Main Street, Richmond, Virginia 23219, Attention: Marke A. Thomas, Vice President-Securitizations Manager, facsimile (804) 782-7155, (iii) if to the Trust, to the Eligible Lender Trustee, at the Corporate Trust Office of the Eligible Lender Trustee and (iv) if to the Representative, to Salomon Brothers Inc, 388 Greenwich Street, 32nd Floor, New York, NY 10013, Attention: Debt Organization Group, facsimile (212) 816-0598. This Agreement has been and is made solely for the benefit of the Underwriters, the Trust, the Depositor and the Bank, their respective directors, officers, trustees and controlling persons referred to in Section 7 hereof and their respective successors and assigns, to the extent provided herein, and no other person shall acquire or have any right under or by virtue of this Agreement. Neither the term "successor" nor the term "successors and assigns" as used in this Agreement shall include a purchaser from any Underwriter of any of the Notes in its status as such purchaser. 17. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York without giving effect to the choice of laws or conflict of laws principles thereof. 18. Counterparts. This Agreement may be signed in various counterparts which together constitute one and the same instrument. If signed in counterparts, this Agreement shall not become effective unless at least one counterpart hereof or thereof shall have been executed and delivered on behalf of each party hereto. Please confirm that the foregoing correctly sets forth the agreement among the Bank, the Depositor, the Trust and the Underwriters. Very truly yours, CRESTAR BANK By:___________________________________ Name: Title: CRESTAR SECURITIZATION, LLC By: CRESTAR SP CORPORATION, as Manager By:_______________________________ Name: Title CRESTAR STUDENT LOAN TRUST 1998-____ By: STAR BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Eligible Lender Trustee on behalf of the Trust, By:__________________________ Name: Title: Confirmed as of the date first above mentioned. SALOMON BROTHERS INC By:____________________________ Name: Title: Acting on behalf of itself and as Representative of the several Underwriters named herein. SCHEDULE I
Underwriters ------------ Principal Balance -------------------------------------------------------------- Crestar Securities Salomon Brothers Inc Corporation Class of Notes Total - -------------- ----------------------- -------------------- ----------------- Class A Notes........ $ $ $ Class B Notes........ $ $ $ Total................ $ $ $ =================== ==================== =================
Interest Rate During the initial Interest Period (as defined in the Prospectus), the Class A Notes and the Class B Notes will bear interest at __________% and __________%, respectively. Following the initial Interest Period, the Class Interest Rates (as defined in the Prospectus) for the Class A Notes and the Class B Notes will equal, subject to certain limitations described in the Prospectus, One-Month LIBOR (as defined in the Prospectus) plus ________% and ________%, respectively. EX-3 3 EXHIBIT 3.3 EXHIBIT 3.3 TRUST AGREEMENT AMONG CRESTAR SECURITIZATION, LLC, AS DEPOSITOR -----------------------------, AS ELIGIBLE LENDER TRUSTEE AND ----------------------------, AS DELAWARE TRUSTEE DATED AS OF ________, _____ 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 CERTIFICATES AND TRANSFER OF INTERESTS...............................................................8 Section 3.1. Initial Beneficial Ownership............................................................8 Section 3.2. The Certificates........................................................................8 Section 3.3. Authentication of Certificates..........................................................8 Section 3.4. Registration of Transfer and Exchange of Certificates...................................9 Section 3.5. Restrictions on Transfer...................................................................10 Section 3.6. Mutilated, Destroyed, Lost or Stolen Certificates..........................................11 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............................................................14 Section 5.1. Application of Trust Funds.................................................................14 Section 5.2. Method of Payment..........................................................................15 Section 5.3. Segregation of Moneys; No Interest.........................................................15 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......................................................16 Section 6.1. General Authority..........................................................................16 Section 6.2. General Duties.............................................................................17 Section 6.3. Action upon Instruction....................................................................17 Section 6.4. No Duties Except as Specified in this Agreement, the Transfer and Servicing Agreement or in Instructions...............................................................18 Section 6.5. No Action Except Under Specified Documents or Instructions.................................18 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....................................................................20 Section 7.3. Representations and Warranties.............................................................20 Section 7.4. Reliance; Advice of Counsel................................................................21 Section 7.5. Not Acting in Individual Capacity..........................................................22 Section 7.6. Eligible Lender Trustee Not Liable for Certificates or Financed Student Loans..............22 Section 7.7. Eligible Lender Trustee May Own Certificates and Notes.....................................23 Section 7.8. Representations and Warrantees of Delaware Trustee.........................................23 ARTICLE VIII COMPENSATION OF TRUSTEES...........................................................................23 Section 8.1. Eligible Lender Trustee's Fees and Expenses................................................23 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 ARTICLE X SUCCESSOR ELIGIBLE LENDER TRUSTEES AND ADDITIONAL ELIGIBLE LENDER TRUSTEES............................25 -------------------------------------------------------------------------- Section 10.1. Eligibility Requirements for Eligible Lender Trustee......................................25 Section 10.2. Resignation or Removal of Eligible Lender Trustee.........................................26 Section 10.3. Successor Eligible Lender Trustee.........................................................27 Section 10.4. Merger or Consolidation of Eligible Lender Trustee........................................27 Section 10.5. Appointment of Co-Eligible Lender Trustee or Separate Eligible Lender Trustee.............28 ARTICLE XI MISCELLANEOUS........................................................................................29 Section 11.1. Supplements and Amendments................................................................29 Section 11.2. No Legal Title to Trust Estate in Certificateholders......................................30 Section 11.3. Limitations on Rights of Others...........................................................30 Section 11.4. Notices. 31 Section 11.5. Severability..............................................................................31 Section 11.6. Separate Counterparts.....................................................................31 Section 11.7. Successors and Assigns....................................................................31 Section 11.8. No Petition...............................................................................32 Section 11.9. No Recourse...............................................................................32 Section 11.10. Headings.................................................................................32 Section 11.11. Governing Law............................................................................32
EXHIBIT A -- Form of Certificate EXHIBIT B -- Form of Purchaser's Representation and Warranty Letter APPENDIX A -- Definitions TRUST AGREEMENT dated as of _____________, ____, between CRESTAR SECURITIZATION, LLC, a Virginia limited liability company, as Depositor (the "Depositor") and ______________________, not in its individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender Trustee") and ________________________, 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 Exhibit A to the Standard Terms to Transfer and Servicing Agreement, which Exhibit is attached hereto as Exhibit A. The Exhibit 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 ________," 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 sue 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 ___________________, ______________, Delaware _____ 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 Certificates pursuant to this Agreement and to sell the 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 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 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. 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 limited liability company under the laws of the Commonwealth of Virginia, with entity 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 entity 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 entity 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 entity 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 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 Certificates, the Depositor shall be the sole beneficial owner of the Trust. SECTION 3.2. THE CERTIFICATES. The Certificates shall be substantially in the form of Exhibit B. The Certificates shall be issued in minimum Percentage Interests of 10% and integral multiples of 10% in excess thereof. The Certificates shall be executed on behalf of the Trust by manual or facsimile signature of an authorized officer of the Eligible Lender Trustee. 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 Certificates or did not hold such offices at the date of authentication and delivery of such Certificates. SECTION 3.3. AUTHENTICATION OF CERTIFICATES. (a) On the Closing Date, the Eligible Lender Trustee shall cause the Certificates representing the entire beneficial interest in the Trust 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. Such Certificates shall be designated as the Crestar Student Loan Trust ____ Student Loan Asset-Backed Certificates. No Certificate shall entitle its holder to any benefit under this Agreement, or shall be valid for any purpose, unless there shall appear on such Certificate a certificate of authentication substantially in the form set forth in Exhibit B, executed by the Eligible Lender Trustee by manual signature; such authentication shall constitute conclusive evidence that such Certificate shall have been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication. No further Certificates shall be issued except pursuant to Section 3.4 or 3.5 hereunder. (b) In connection with the initial issuance of the 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 Keogh 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 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. SECTION 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF 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 Certificates and of transfer and exchanges of Certificates as provided herein. The Eligible Lender Trustee shall be the Certificate Registrar. Upon surrender for registration of transfer of any 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 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, Certificates may be exchanged for other Certificates of authorized denominations of a like aggregate amount upon surrender of the Certificates to be exchanged at the office or agency maintained pursuant to Section 3.9. Every 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 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 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 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 Certificates for a period of 15 days preceding any Payment Date. SECTION 3.5. RESTRICTIONS ON TRANSFER. (a) Except for the initial sale of the Certificates, the 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 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 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 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 ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS 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 KEOGH 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 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 CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR ANY INTEREST IN CRESTAR BANK, ______________ OR ______________. THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY. SECTION 3.6. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a) any mutilated 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 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 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 Certificate, a new Certificate of like tenor and denomination. In connection with the issuance of any new 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 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 Certificate shall be found at any time. Section 3.7. Persons Deemed Owners. Prior to due presentation of a 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 Certificate shall be registered in the Certificate Register as the owner of such 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 Percentage Interests 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 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 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 _________________ an office or offices or agency or agencies where 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 Certificates and the other Basic Documents may be served. The Eligible Lender Trustee initially designates its corporate trust office at [Address], 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 consent to any amendment of the Sales Agreement or Transfer and Servicing 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 written direction of the Majority Certificateholders or, with the Majority Certificateholder's consent, to sell the Financed Student Loans after the termination of the Indenture, except as expressly provided in the Basic Documents. 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 each Manager of a Certificateholder that is a limited liability company) and the delivery to the Eligible Lender Trustee by each such Certificateholder of a certificate certifying that such Certificateholder (or Manager) 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 Percentage Interests. 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 Percentage Interests 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 the applicable Transfer and Servicing Agreement, the Certificate Paying Agent will distribute such amounts to Certificateholders on a pro rata basis, based upon Percentage Interests 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. (b) No later than the Business Day following its receipt thereof, the Eligible Lender Trustee shall send to each 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 relating to payments on the Notes and Certificates on such Quarterly Payment Date pursuant to Section 6.6 of the Standard Terms to Transfer and Servicing Agreement. (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 Payment 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 Payment 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 5.2(c) of the Standard Terms to 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, any Guarantee Agency and any Private Loan Program 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 Transfer and Servicing 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 Transfer and Servicing 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 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, _________________ 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 Percentage Interests; (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 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 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 _____________________ 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 CERTIFICATES OR FINANCED STUDENT LOANS. The recitals contained in any Trust Supplement and in the Certificates (other than the signature and countersignature of the Eligible Lender Trustee on the 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 Certificates or any other Basic Document (other than the signature and countersignature of the Eligible Lender Trustee on the Certificates) or the Notes, or of any Financed Student Loan or related documents. Except as to a Guarantee Agency, 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 (other than with respect to its own actions as Eligible Lender Trustee on behalf of the Depositor); 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 Guarantee Agency 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 CERTIFICATES AND NOTES. The Eligible Lender Trustee in its individual or any other capacity may become the owner or pledgee of the Certificates or Notes and may deal with the Depositor, the Administrator, the Indenture Trustee, the Master Servicer and any Guarantee Agency 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 fees shall be payable as provided in the applicable 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 the applicable 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, and (ii) the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of the United States to the Court of St. James, living on the date hereof. The bankruptcy, liquidation, dissolution, death or incapacity of any Certificateholder 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 Payment Date upon which the Certificateholders shall surrender their 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 the Transfer and Servicing Agreement, stating (i) the Payment Date upon which final payment of the Certificates shall be made upon presentation and surrender of the 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 Payment Date is not applicable, payments being made only upon presentation and surrender of the 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 Certificates the Certificate Paying Agent shall cause to be distributed to Certificateholders amounts distributable on such Payment 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 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 Certificates for cancellation and receive the final distribution with respect thereto. If within one year after the second notice all the 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 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. 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 Moody's 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 Percentage Interests of 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 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 __________________, addressed to its Corporate Trust Office at [address]; if to the Delaware Trustee, to ____________, addressed to its Corporate Trust Office at [address]; if to the Depositor, c/o Crestar Bank, addressed to 919 East Main Street, Richmond, Virginia 23219, Attention: Vice President - Securitizations Manager, 804-343-9400 (Tel); 804-782-7155 (Fax); with a copy to Crestar Bank, 919 East Main Street, Richmond, Virginia 23219; Attention: Linda Rigsby; 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 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 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 Certificates, the Notes, this Agreement or any of the other Basic Documents. SECTION 11.9. NO RECOURSE. Each Certificateholder by accepting a Certificate acknowledges that such Certificateholder's 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 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. ----------------------------------, as Eligible Lender Trustee By:________________________________ Name: Title: ----------------------------------, as Delaware Trustee By:________________________________ Name: Title: CRESTAR SECURITIZATION, LLC, as Depositor By:________________________________ Name: Title: COMMONWEALTH OF VIRGINIA, ) ) SS: CITY OF RICHMOND, ) On this, the _____ day of _____________, ____, before me, the undersigned officer, personally appeared ______________, who acknowledged himself to be a __________________________ of _____________, and that he as such, being authorized to do so, executed the foregoing for the purpose of creating Crestar Student Loan Trust _______ with _________________, 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: - ------------------------------ STATE OF DELAWARE, ) ) ss.: CITY OF WILMINGTON ) 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 ________________________, not in its individual capacity but solely as Delaware Trustee of CRESTAR STUDENT LOAN TRUST _____, 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 ___________, ____. ----------------------------- Notary Public in and for the State of Delaware [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 SECURITIZATION, LLC, a Virginia limited liability company, 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 ________, ____. ----------------------------- Notary Public in and for the Commonwealth of Virginia [SEAL] My commission expires: - ---------------------- Exhibit B FORM OF 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 CERTIFICATE, AGREES THAT THIS 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 CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1) EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS OR KEOGH 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 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 CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN INTEREST IN CRESTAR BANK, _____________ OR __________________. THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY. Percentage Interest: CRESTAR STUDENT LOAN TRUST ____ STUDENT LOAN ASSET BACKED CERTIFICATES 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 Securitization, LLC THIS CERTIFIES THAT ________________ is the registered owner of a _________________________ Percentage Interest in the Crestar Student Loan Trust _____ (the "Trust"), a business trust formed under the laws of Delaware by Crestar Securitization, LLC, (the "Depositor"). The Trust was created pursuant to a Trust Agreement dated as of ___________________ (the "Trust Agreement") among the Depositor, _________________, as eligible lender trustee (the "Eligible Lender Trustee"), and _________________, 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 Exhibit A to the Trust Agreement; such Exhibit 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 ____ Student Loan Asset Backed Certificates" (herein called the "Certificates") issued under the Trust Agreement, to which Trust Agreement the holder of this 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 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 ________________ between the Trust and __________________, as Indenture Trustee, as supplemented by a Terms Supplement dated as of _________________. Under the Trust Agreement, distributions will be made on the Certificates on each Quarterly Payment Date in the manner set forth in the Trust Agreement and the Transfer and Servicing Agreement. Each holder of this Certificate acknowledges and agrees that its rights to receive distributions in respect of this 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 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 Certificates, the Notes, the Trust Agreement or any of the other Basic Documents. Each Certificateholder, by its acceptance of a 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 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 Certificate or the making of any notation hereon. Reference is hereby made to the further provisions of this 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 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 Certificate to be duly executed as of the date set forth below. CRESTAR STUDENT LOAN TRUST ______ By: __________________, 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 Certificates referred to in the within-mentioned Trust Agreement. ---------------------------------------, not in its individual capacity but solely as Eligible Lender Trustee, By:_________________________________________________ Authorized Representative Date: [Reverse of Certificate] The 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 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 Depositor and the rights of the Certificateholders under the Trust Agreement at any time by the Depositor and the Eligible Lender Trustee with the consent of the Majority Certificateholders. Any such consent by the holder of this Certificate shall be conclusive and binding on such holder and on all future holders of this Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the holders of any of the Certificates. As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Certificate is registerable in the Certificate Register upon surrender of this Certificate for registration of transfer at the offices or agencies maintained by __________________ 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 Certificates of authorized denominations evidencing the same aggregate interest in the Trust will be issued to the designated transferee. The Certificates are issuable only as registered Certificates without coupons in minimum Percentage Interests of 10% and integral multiples of 10% in excess thereof. As provided in the Trust Agreement and subject to certain limitations therein set forth, Certificates are exchangeable for new 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 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 Certificate may not be transferred directly or indirectly to (1) employee benefit plans, retirement arrangements, individual retirement accounts or Keogh 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 Certificate, the holder hereof shall be deemed to have represented and warranted that it is not any of the foregoing entities. This 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 Certificates shall be required, prior to purchasing a Certificate, to execute the Purchaser's Representation and Warranty Letter in the form attached to the Trust Agreement as Exhibit C. 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 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 - ----------------------------------------------------------------------------- (Please print or type name and address, including postal zip code, of assignee) - ----------------------------------------------------------------------------- the within Certificate, and all rights thereunder, hereby irrevocably constituting and appointing _____________________________________________________________________ Attorney to transfer said 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 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 C TO THE TRUST AGREEMENT [Form of Purchaser's Representation and Warranty Letter] Crestar Securitization, LLC 919 East Main Street Richmond, VA 23219 __________________________, as Certificate Registrar [address] Re: Crestar Student Loan Trust _____ Student Loan Asset Backed Certificates Ladies and Gentlemen: In connection with our proposed purchase of Crestar Student Loan Trust ______ Student Loan Asset Backed Certificates (the "Certificates") issued under the Trust Agreement dated as of ______________ (the "Agreement"), between Crestar Securitization, LLC, as Depositor (the "Depositor"), ____________________, as Eligible Lender Trustee and _____________________, 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 Keogh 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 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 CERTIFICATE, AGREES THAT THIS 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 KEOGH 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 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 SECURITIZATION, LLC, _____________________________ 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 EX-4 4 EXHIBIT 4.1 MASTER INDENTURE BETWEEN CRESTAR STUDENT LOAN TRUST _______ AS ISSUER AND ---------------------------------- NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS INDENTURE TRUSTEE DATED AS OF _______________
CROSS-REFERENCE TABLE1 TIA Indenture Section Section - ------- ------- 310 (a)(1) ............................................................. 6.12 (a)(2) ............................................................. 6.12 (a)(3) ............................................................. 6.10 (a)(4) ............................................................. N.A.2 (a)(5) ............................................................. 6.12 (b) ............................................................. 6.8; 6.10; 6.12 (c) ............................................................. N.A. 311 (a) ............................................................. 6.13 (b) ............................................................. 6.13 (c) ............................................................. N.A. 312 (a) ............................................................. 7.1; 7.2(a) (b) ............................................................. 7.2(b) (c) ............................................................. 7.2(c) 313 (a) ............................................................. 6.6 (b) ............................................................. 6.6 (c) ............................................................. 10.5 (d) ............................................................. 6.6 314 (a) ............................................................. 3.9; (b) ............................................................. 3.6 (c) ............................................................. 10.1 (d) ............................................................. 2.9; 10.1 (e) ............................................................. 10.1 (f) ............................................................. 3.9 315 (a) ............................................................. 6.1 (b) ............................................................. 6.5 (c) ............................................................. 6.1 (d) ............................................................. 6.1 (e) ............................................................. 5.13 316 (a)(1)(A) ............................................................. 5.11 (a)(1)(B) ............................................................. 5.12 (a)(2) ............................................................. N.A. (b) ............................................................. 5.7 (c) ............................................................. 1.1 317 (a) ............................................................. 5.3 (b) ............................................................. 3.3 318 (a) ............................................................. 10.7
------------------------- 1 Note: This Cross-Reference Table shall not, for any purpose, be deemed to be part of the Indenture. 2 N.A. means Not Applicable.
TABLE OF CONTENTS ARTICLE I DEFINITIONS AND USAGE...................................................................................1 Section 1.1. Definitions and Usage.......................................................................1 Section 1.2. Incorporation by Reference of Trust Indenture Act...........................................1 ARTICLE II THE NOTES..............................................................................................2 Section 2.1. Form........................................................................................2 Section 2.2. Execution, Authentication and Delivery......................................................2 Section 2.3. Notes Issuable in Series and Classes; General Provisions with Respect to Principal and Interest Payments.......................................................................2 Section 2.4. Denominations...............................................................................4 Section 2.5. Temporary Notes.............................................................................4 Section 2.6. Registration; Registration of Transfer and Exchange.........................................4 Section 2.7. Mutilated, Destroyed, Lost or Stolen Notes..................................................5 Section 2.8. Persons Deemed Owner........................................................................6 Section 2.9. Payments of Principal and Interest..........................................................6 Section 2.10. Cancellation...............................................................................7 Section 2.11. Authentication and Delivery of Notes.......................................................7 Section 2.12. Release of Indenture Trust Estate..........................................................9 Section 2.13. Restrictions on Transfer..................................................................10 Section 2.14. Book-Entry Notes..........................................................................10 Section 2.15. Notices to Clearing Agency................................................................11 Section 2.16. Definitive Notes..........................................................................11 ARTICLE III COVENANTS............................................................................................12 Section 3.1. Payment to Noteholders.....................................................................12 Section 3.2. Maintenance of Office or Agency............................................................12 Section 3.3. Money for Payments to be Held in Trust.....................................................12 Section 3.4. Existence..................................................................................13 Section 3.5. Protection of Indenture Trust Estate.......................................................13 Section 3.6. Opinions as to Indenture Trust Estate......................................................14 Section 3.7. Performance of Obligations; Servicing of Financed Student Loans............................14 Section 3.8. Negative Covenants.........................................................................15 Section 3.9. Annual Statement as to Compliance..........................................................15 Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.......................................15 Section 3.11. Successor or Transferee...................................................................17 Section 3.12. No Other Business.........................................................................17 Section 3.13. No Borrowing..............................................................................17 Section 3.14. Obligations of Master Servicer and Administrator..........................................17 Section 3.15. Guarantees, Loans, Advances and Other Liabilities.........................................17 Section 3.16. Capital Expenditures......................................................................17 Section 3.17. Restricted Payments.......................................................................17 Section 3.18. Notice of Events of Default...............................................................18 Section 3.19. Further Instruments and Acts..............................................................18 ARTICLE IV SATISFACTION AND DISCHARGE............................................................................18 Section 4.1. Satisfaction and Discharge of Indenture....................................................18 Section 4.2. Application of Trust Money.................................................................19 Section 4.3. Repayment of Moneys Held by Paying Agent...................................................19 ARTICLE V DEFAULTS AND REMEDIES..................................................................................19 Section 5.1. Events of Default..........................................................................19 Section 5.2. Acceleration of Maturity; Rescission and Annulment.........................................20 Section 5.3. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..................21 Section 5.4. Remedies; Priorities.......................................................................22 Section 5.5. Optional Preservation of the Financed Student Loans........................................24 Section 5.6. Limitation of Suits........................................................................24 Section 5.7. Unconditional Rights of Noteholders to Receive Principal and Interest......................24 Section 5.8. Restoration of Rights and Remedies.........................................................24 Section 5.9. Rights and Remedies Cumulative.............................................................25 Section 5.10. Delay or Omission Not a Waiver............................................................25 Section 5.11. Control by Noteholders....................................................................25 Section 5.12. Waiver of Past Defaults...................................................................25 Section 5.13. Undertaking for Costs.....................................................................26 Section 5.14. Waiver of Stay or Extension Laws..........................................................26 Section 5.15. Action on Notes...........................................................................26 Section 5.16. Performance and Enforcement of Certain Obligations........................................26 ARTICLE VI THE INDENTURE TRUSTEE.................................................................................27 Section 6.1. Duties of Indenture Trustee................................................................27 Section 6.2. Rights of Indenture Trustee................................................................28 Section 6.3. Individual Rights of Indenture Trustee.....................................................28 Section 6.4. Indenture Trustee's Disclaimer.............................................................28 Section 6.5. Notice of Defaults.........................................................................29 Section 6.6. Reports by Indenture Trustee to Noteholders................................................29 Section 6.7. Compensation and Indemnity.................................................................29 Section 6.8. Replacement of Indenture Trustee...........................................................30 Section 6.9. Successor Indenture Trustee by Merger......................................................30 Section 6.10. Appointment of Co-Trustee or Separate Trustee.............................................31 Section 6.11. Appointment of Custodian..................................................................31 Section 6.12. Eligibility; Disqualification.............................................................32 Section 6.13. Preferential Collection of Claims Against Issuer..........................................32 ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.......................................................................32 Section 7.1. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.....................32 Section 7.2. Preservation of Information; Communications to Noteholders.................................32 Section 7.3. Fiscal Year of Issuer......................................................................33 ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES................................................................33 Section 8.1. Collection of Money........................................................................33 Section 8.2. Trust Accounts.............................................................................33 Section 8.3. General Provisions Regarding Accounts......................................................33 ARTICLE IX SUPPLEMENTAL INDENTURES...............................................................................34 Section 9.1. Supplemental Indentures Without Consent of Noteholders.....................................34 Section 9.2. Supplemental Indentures with Consent of Noteholders........................................35 Section 9.3. Execution of Supplemental Indentures.......................................................36 Section 9.4. Effect of Supplemental Indenture...........................................................36 Section 9.5. Conformity with Trust Indenture Act........................................................37 Section 9.6. Reference in Notes to Supplemental Indentures..............................................37 ARTICLE X MISCELLANEOUS..........................................................................................37 Section 10.1. Compliance Certificates and Opinions, etc.................................................37 Section 10.2. Form of Documents Delivered to Indenture Trustee..........................................38 Section 10.3. Acts of Noteholders.......................................................................39 Section 10.4. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies...........................39 Section 10.5. Notices to Noteholders; Waiver............................................................40 Section 10.6. Alternate Payment and Notice Provisions...................................................40 Section 10.7. Conflict with Trust Indenture Act.........................................................40 Section 10.8. Effect of Headings and Table of Contents..................................................40 Section 10.9. Successors and Assigns....................................................................41 Section 10.10. Separability.............................................................................41 Section 10.11. Benefits of Indenture....................................................................41 Section 10.12. Legal Holidays...........................................................................41 Section 10.13. Governing Law............................................................................41 Section 10.14. Counterparts.............................................................................41 Section 10.15. Recording of Indenture...................................................................41 Section 10.16. Trust Obligations........................................................................41 Section 10.17. No Petition..............................................................................42 Section 10.18. Inspection...............................................................................42 Section 10.19. Usury....................................................................................43 Exhibit A Definitions
MASTER INDENTURE dated as of ___________________, between CRESTAR STUDENT LOAN TRUST _____, a Delaware business trust (the "Issuer"), __________________, as trustee and not in its individual capacity (the "Indenture Trustee"). PRELIMINARY STATEMENT The Issuer has duly authorized the execution and delivery of this Indenture to provide for the issuance of one or more Series (each a "Series") of its notes (the "Notes") as provided herein. Each Series of such Notes will be issued only under a separate supplement to this Indenture duly executed and delivered by the Issuer and the Indenture Trustee and limited to the amount therein described. All covenants and agreements made by the Issuer herein are for the benefit and security of the holders of the Notes. The Issuer is entering into this Indenture and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. All things necessary to make this Indenture a valid agreement of the Issuer in accordance with its terms have been done. ARTICLE I DEFINITIONS AND USAGE SECTION 1.1. DEFINITIONS AND USAGE. Except as otherwise specified herein or as the context may otherwise require, capitalized terms used but not defined herein are defined in Exhibit A to the Transfer and Servicing Agreement, a copy of which is attached hereto (as supplemented to the extent indicated therein, by the provisions of the Terms Supplement for a particular Series) which Exhibit A also contains rules as to usage that shall be applicable herein. SECTION 1.2. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever this Indenture refers to a provision of the Trust Indenture Act ("TIA"), the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "Commission" means the Securities and Exchange Commission. "indenture securities" means the Notes. "indenture security holder" means a Noteholder. "indenture trustee" or "institutional trustee" means the Indenture Trustee. "obligor" on the indenture securities means the Issuer and any other obligor on the indenture securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions. ARTICLE II THE NOTES SECTION 2.1. FORM. The Notes and the Indenture Trustee's certificate of authentication shall be in substantially the form set forth in an Exhibit to the Terms Supplement, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture or any Terms Supplement and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note. The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes. Each Note shall be dated the date of its authentication. The terms of the Notes are part of the terms of this Indenture. SECTION 2.2. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notesmay be manual or facsimile. Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Issuer shall bind the Issuer, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes. At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes executed by the Issuer to the Indenture Trustee for authentication; and the Indenture Trustee shall authenticate and deliver such Notes as provided in this Indenture and not otherwise. Each Note shall be dated as of the date specified in the related Terms Supplement. No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. SECTION 2.3. NOTES ISSUABLE IN SERIES AND CLASSES; GENERAL PROVISIONS WITH RESPECT TO PRINCIPAL AND INTEREST PAYMENTS. The Notes may, as provided herein, be issued in one or more Series, each of which Series may consist of only one Class of Notes or may be divided into two or more Classes, and shall be designated generally as the "Crestar Student Loan Trust ______ Student Loan Asset Backed Notes" of the Issuer, with such further particular designations added or incorporated in such title for the Notes of any particular Series or Class as the Issuer may determine. The principal of each Note shall be payable on the related Legal Final Maturity unless the unpaid principal of such Note becomes due and payable at an earlier date by declaration of acceleration or otherwise. Payments of principal of a Class of Notes of a Series shall be made pro rata among all Outstanding Notes of such Class, without preference or priority of any kind. Unless otherwise provided in the Terms Supplement, all payments made with respect to any Note shall be applied first to the interest then due and payable on such Note and then to the principal thereof. Computations of interest accrued on any Note shall be made as provided in the Terms Supplement. Interest on the unpaid principal amount of each Outstanding Note of a Class shall be payable on each Payment Date for such Class at the Class Interest Rates applicable to such Note for the related Interest Payment Periods. Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Notes, if the Notes of a Series have become or been declared due and payable following an Event of Default and such acceleration of maturity and its consequences have not been rescinded and annulled and the provisions of Section 5.5 are not applicable to such Series, then payments of principal of and interest on such Notes shall be made in accordance with Section 5.4. Each Note shall bear upon the face thereof the designation so selected for the Series and Class to which it belongs. All Notes of the same Series and Class shall be identical in all respects except for the denominations and dates thereof. All Notes of all Classes within any one Series at any time Outstanding shall be identical except for differences among the Notes of the different Classes within such Series as specified in the applicable Terms Supplement. Each Series of Notes shall be created by a Terms Supplement authorized by the Trust Agreement and establishing the terms and provisions of such Series, specifying the Financed Student Loans and any other property to be included in the Indenture Trust Estate therefor and Granting such Indenture Trust Estate as security for the Series of Notes created thereby. The several Series may differ in respect of any of the following matters: (1) designation of the Series; (2) dating of the Notes of the Series; (3) the number of Classes and the maximum aggregate principal amount of Notes of each such Class which may be issued; (4) Class Interest Rate for each Class and the method for determining such Class Interest Rate, including the applicable Interest Accrual Periods and Interest Payment Periods; (5) Legal Final Maturity on which the final installment of principal of each Class is to be paid; (6) place or places for the payment of the final installment of principal or the manner in which Noteholders will be informed of such place or places; (7) denominations; (8) whether the Notes of such Series may be authenticated by an Authenticating Agent, and, if so, the Person appointed as Authenticating Agent for such Series; (9) Record Dates and Payment Dates for each Class; (10) the amount, if any, to be deposited at the Closing Date in each of the Collection Account, the Expense Account, the Reserve Account, the Pre-Funding Account and any other account; (11) the Specified Reserve Account Balance for such Series, the circumstances under which withdrawals from such Reserve Account are permitted or required to be made and whether a Qualified Letter of Credit may be delivered to the Indenture Trustee in lieu of a cash deposit in such Reserve Account, and, if so, the standards applicable to such Qualified Letter of Credit; (12) whether any surplus funds in the Collection Account for such Series are required to be used to restore amounts on deposit in the Reserve Account to the Specified Reserve Account Balance; (13) any items required to be delivered to the Indenture Trustee on the date of issuance of such Series pursuant to Section 2.11; (14) whether or the extent to which Financed Student Loans may be substituted for Financed Student Loans and the conditions relating thereto; (15) provisions with respect to terms defined in Exhibit A for which the definitions set forth therein require or permit further specification in the related Terms Supplement or Transfer and Servicing Agreement; (16) restrictions, if any, on the transferability of the Notes of such Series; (17) providing for Swap Agreements; and (18) any other provisions expressing or referring to the terms and conditions upon which the Notes of that Series are to be issued under this Indenture which are not in conflict with the provisions of this Indenture. In authorizing the issuance of any Series, the Issuer shall determine and specify all matters in respect of the Notes of such Series set forth in clauses (1) to (18), inclusive, to the extent applicable, and shall also determine and specify the forms of Notes of such Series, in compliance with the terms of this Article II. SECTION 2.4. DENOMINATIONS. The Notes shall be issuable only as registered Notes in the denominations prescribed by the terms of the Terms Supplement creating the particular Series. SECTION 2.5. TEMPORARY NOTES. Pending the preparation of Definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes which are printed, lithographed, typewritten, photocopied, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes. If temporary Notes are issued, the Issuer will cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.2, without charge to the Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in exchange therefor a like principal amount of Definitive Notes of the same Series and Class and of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes of the same Series and Class. SECTION 2.6. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The Issuer shall cause to be kept a register (the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Indenture Trustee shall be the "Note Registrar" for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar. If a Person other than the Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Registrar, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate executed on behalf of the Note Registrar by an officer thereof as to the names and addresses of the Noteholders and the principal amounts and number of such Notes. Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.2, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes in any authorized denominations, of the same class and a like aggregate principal amount. At the option of the Noteholder, Notes may be exchanged for other Notes of any authorized denominations, of the same Series and Class and a like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes which the Noteholder making the exchange is entitled to receive. All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. Restrictions on transfer, if any, of a Series or Class of Notes shall be set forth herein or in the related Terms Supplement. Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by the Noteholder thereof or such Noteholder's attorney duly authorized in writing, with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Note Registrar, which requirements includes membership or participation in the Securities Transfer Agent's Medallion Program ("STAMP") or such other signature guarantee program as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act. No service charge shall be made to a Noteholder for any registration of transfer or exchange of Notes, but the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.5 or 9.6 not involving any transfer. SECTION 2.7. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide purchaser, the Issuer shall execute and upon its request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note of the same Series, tenor, aggregate initial principal amount and Class bearing a number not contemporaneously outstanding; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within 15 days shall be due and payable, instead of issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith. Upon the issuance of any replacement Note under this Section, the Issuer may require the payment by the Noteholder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the indenture Trustee) connected therewith. Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone in accordance with the provisions of this Indenture and the applicable Terms Supplement. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. SECTION 2.8. PERSONS DEEMED OWNER. Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of, interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary. SECTION 2.9. PAYMENTS OF PRINCIPAL AND INTEREST. (a) Any installment of interest or principal payable on any Notes of any Series which is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the Record Date for such Payment Date by either (i) check mailed to such Person's address as it appears in the Note Register on such Record Date, or (ii) wire transfer in immediately available funds to the account of such Noteholders at a bank or other entity having appropriate facilities therefore, if such Noteholder shall have provided the Note Registrar appropriate written instructions (which may be standing instructions) at least five business days prior to such Payment Date; provided, however, the final installment of principal payable with respect to such Note shall be payable as provided in subsection (b) of this Section 2.9. (b) All reductions in the principal amount of a Note (or one or more Predecessor Notes) effected by payments of installments of principal made on any Payment Date shall be binding upon all Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, whether or not such payment is noted in such Note. The final installment of principal of each Note shall be payable only upon presentation and surrender thereof on or after the Payment Date therefor to the Indenture Trustee. (c) The principal of each Class of Notes shall be payable in installments on each Payment Date as provided in the applicable Terms Supplement. Notwithstanding the foregoing, the entire unpaid principal amount of each Class of Notes shall be due and payable, if not previously paid, on the date on which an Event of Default shall have occurred and be continuing, if either the Indenture Trustee or the Noteholders of the Directing Notes representing not less than a majority of the Outstanding Amount of Directing Notes have declared the Notes to be immediately due and payable in the manner provided in Section 5.2. All principal payments on each Class of Notes shall be made to the Noteholders of such Class entitled thereto as provided in the applicable Terms Supplement. The Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment. (d) If the Issuer defaults in a payment of interest on any Class of Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the applicable Class Interest Rate in any lawful manner. The Issuer may pay such defaulted interest to the persons who are Noteholders of such Class on a subsequent special record date, which date shall be at least five Business Days prior to the payment date. The Issuer shall fix or cause to be fixed any such special record date and payment date, and, at least 15 days before any such special record date, the Issuer shall mail to each Noteholder of such Class a notice that states the special record date and the amount of defaulted interest to be paid. (e) Subject to the foregoing provisions of this Section, each Note delivered under this Indenture, upon registration of transfer of or in exchange for or in lieu of any other Note, shall carry the rights to unpaid principal and interest that were carried by such other Note. Any checks mailed pursuant to this Section 2.9 and returned undelivered shall be held in accordance with Section 3.3. (f) Unless otherwise provided in the relevant Terms Supplement, not later than each Payment Determination Date relating to each Payment Date for a Series of Notes, the Administrator shall prepare and deliver to the Issuer, the Eligible Lender Trustee and the Indenture Trustee a statement substantially in the form of Exhibit B to the Standard Terms to Transfer and Servicing Agreement. SECTION 2.10. CANCELLATION. All Notes surrendered for payment, registration of transfer or exchange shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time, unless the Issuer shall direct by an Issuer Order that they be returned to it and so long as such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee. SECTION 2.11. AUTHENTICATION AND DELIVERY OF NOTES. Notes of any one or more Series may from time to time be executed by the Issuer and delivered to the Indenture Trustee for authentication, and thereupon the same shall be authenticated and delivered by the Indenture Trustee, upon Issuer Request and upon receipt by the Indenture Trustee of the following: (a) an Issuer Order authorizing the execution, authentication and delivery of such Notes by the Issuer and specifying the Series, the Classes within such Series, the Legal Final Maturity of each Class, the principal amount and the Class Interest Rate and the method of determining such Class Interest Rate, of each Class of such Notes to be authenticated and delivered; (b) in case the Notes to be authenticated and delivered are of any Series not theretofore created, an appropriate Terms Supplement, accompanied by an Issuer Order authorizing such Terms Supplement (and, in the case of the first Series to be authenticated and delivered hereunder, authorizing this Indenture), and designating the new Series to be created; (c) Opinions of Counsel addressed to the Indenture Trustee substantially to the effect that: (i) the Eligible Lender Trustee is an "eligible lender" under the terms of the Higher Education Act and HEAL Act, has corporate power to execute and deliver the Trust Agreement, the Trust Agreement authorizes the Issuer to execute and deliver the Indenture and Terms Supplement relating to such Notes (and, in the case of the first Series to be authenticated and delivered hereunder, this Indenture) and to issue such Notes, and the Issuer has duly taken all necessary action under the Trust Agreement for those purposes; (ii) the Issuer is a Delaware business trust; (iii) assuming due execution and delivery thereof by the Indenture Trustee, this Indenture and the related Terms Supplement, as executed and delivered by the Issuer, are the valid, legal and binding obligations of the Issuer, enforceable in accordance with their terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors' rights generally, and such counsel need express no opinion with respect to the availability of equitable remedies, and the execution of such Terms Supplement is authorized or permitted by Section 9.1 of this Indenture; (iv) the Series of Notes then applied for, when issued, delivered, authenticated and paid for, will be the valid, legal and binding obligations of the Issuer, entitled to the benefits of this Indenture and the related Terms Supplement, subject to the effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws relating to or affecting creditors' rights generally, and such counsel need express no opinion with respect to the availability of equitable remedies; (v) the Issuer has Granted to the Indenture Trustee a lien and first perfected security interest in all of its right, title and interest in each such Financed Student Loan (with priority being based solely on UCC searches conducted, as specified in the opinion and only as to priority over other security interests perfected by UCC filings); (vi) such action has been taken with respect to delivery of possession of the Indenture Trust Estate and with respect to the recording and filing of this Indenture, the Terms Supplement for such Series, any other indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements as is necessary to perfect a first priority security interest in the Indenture Trust Estate for such Series, with either the details of such action being recited therein, or the absence of any such action being necessary to make such lien and security interest effective being stated therein; and, with any recording, filing, re-recording and re-filing of this Indenture, the Terms Supplement for such Series, any other indentures supplemental hereto and any other requisite documents and any execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest created by this Indenture and the related Terms Supplements in the Indenture Trust Estate for such Series until April 30 of the year in which the first Opinion of Counsel with respect to such Series is required to be delivered under Section 3.6 being described therein; (vii) this Indenture and the Terms Supplement for such Series have been duly qualified under the TIA, or that no qualification of this Indenture or the related Terms Supplement under the TIA is necessary; the execution of the Terms Supplement for such Series requires the requalification of this Indenture under the TIA, or that no requalification of the Indenture under the TIA is necessary by virtue of the execution of such Terms Supplement; and (viii) no authorization, approval or consent of any governmental body having jurisdiction over the Issuer which has not been obtained by the Issuer is required for the valid issuance and delivery of the Notes, except such as may be required by the blue sky laws of any jurisdiction in connection with the sale and distribution of the Notes, for which no opinion need be given. (d) an Officer's Certificate of the Administrator on behalf of the Issuer stating substantially to the effect that: (i) all instruments furnished to the Indenture Trustee in connection with such Notes conform to the requirements of this Indenture and constitute all the documents required to be delivered hereunder for the Indenture Trustee to authenticate and deliver the Notes then applied for; (ii) all conditions precedent provided for in this Indenture relating to the authentication and delivery of the Notes applied for have been complied with; (iii) the Issuer is not in Default under this Indenture and the issuance of the Notes applied for will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, the Trust Agreement, any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuer is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which the Issuer is a party or by which it may be bound or to which it may be subject; (iv) the Issuer is the beneficial owner of each Financed Student Loan securing such Series, has not assigned any interest or participation in any such Financed Student Loan (or, if any such interest or participation has been assigned, it has been released) and has the right to Grant each such Financed Student Loan to the Indenture Trustee; and (v) Except with respect to the first Series of Notes, attached thereto are true and correct copies of letters signed by each Rating Agency rating such new Series of Notes confirming that the Notes of such new Series have been rated in the rating category set forth in the applicable Terms Supplement by such Rating Agencies and that the issuance of such new Series will not adversely affect the ratings assigned by such Rating Agencies to any previously issued Series of Notes then Outstanding. (e) Unless any of the requirements set forth herein shall be deleted by the related Terms Supplement, an Officer's Certificate of the Administrator on behalf of the Issuer stating that all of the Financed Student Loans and any other assets securing such Series: (i) satisfy each of the requirements established for such Financed Student Loans in the related Terms Supplement; and (ii) have been endorsed as provided in the Transfer and Servicing Agreement; (f) Cash in the amount, if any, required by the terms of the related Terms Supplement to be deposited in the Collection Account and held by the Indenture Trustee and applied in accordance with the terms hereof or as otherwise provided in the related Terms Supplement; (g) Cash, Eligible Investments or (if permitted by the related Terms Supplement) a Qualified Letter of Credit or any other assets specified in or permitted by the related Terms Supplement in the respective amounts, if any, required by the terms of the related Terms Supplement to be maintained in the Reserve Account and held by the Indenture Trustee; (h) An executed counterpart of the Terms Supplement; and (i) Such other documents, certificates, instruments or opinions as may be reasonably required by the terms of the Terms Supplement creating such Series of Notes. SECTION 2.12. RELEASE OF INDENTURE TRUST ESTATE. Except as otherwise permitted by Section 11.1 and the terms of the Basic Documents, the Indenture Trustee shall release property from the lien of this Indenture and the related Terms Supplement only upon (i) prior confirmation by the Rating Agencies that such release will not cause a reduction or withdrawal of the then current ratings of each Class of Notes and (ii) receipt of an Issuer Request accompanied by an Officer's Certificate of the Issuer, an Opinion of Counsel and Independent Certificates in accordance with TIA ss.ss. 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates. SECTION 2.13. RESTRICTIONS ON TRANSFER. THE PROVISIONS OF THIS SECTION SHALL APPLY ONLY TO A CLASS OF NOTES ISSUED IN A TRANSACTION NOT REGISTERED UNDER THE SECURITIES ACT AND NOT EXEMPT PURSUANT TO REGULATION S UNDER THE SECURITIES ACT (the "Non-Registered Notes"). Except as otherwise set forth in the Terms Supplement, the Notes may not be offered or sold except to institutional "accredited investors" (as defined in Rule 501(a) (1) - (3) under the Securities Act and "qualified institutional buyers" as defined in Rule 144A under the Securities Act in reliance on an exemption from the registration requirements of the Securities Act. The Non-Registered Notes will not have been registered or qualified under the Securities Act, or any state securities law. No transfer, sale, pledge or other disposition of any Non-Registered Note 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 Indenture Trustee may require, in order to assure compliance with the Securities Act, that the Noteholders' prospective transferee certify to the Indenture Trustee in writing the facts surrounding such disposition. Unless the Indenture 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 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 Indenture Trustee or of the Trust. Except as otherwise set forth in a Terms Supplement, each Non-Registered Note will bear a legend substantially to the following effect: "THIS NOTE 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 NOTE, AGREES THAT THIS NOTE 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 OR A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF AN INSTITUTIONAL ACCREDITED INVESTOR OR QUALIFIED INSTITUTIONAL BUYER, OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT. THIS NOTE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1) EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS OR KEOGH 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. SECTION 2.14. BOOK-ENTRY NOTES. Unless otherwise provided in the related Terms Supplement, the Notes, upon original issuance, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to DTC, the initial Depository, by, or on behalf of, the Issuer. Such Notes shall initially be registered on the Note Register in the name of Cede & Co., the nominee of the initial Depository, and no Note Owner will receive a Definitive Note (as defined below) representing such Note Owner's interest in such Note, except as provided in Section 2.16. Unless and until definitive, fully registered Notes (the "Definitive Notes") have been issued to Note Owners pursuant to Section 2.16: (i) the provisions of this Section shall be in full force and effect; (ii) the Indenture Trustee may deal with the Depository for all purposes (including the payment of principal of and interest and other amounts on the Notes) as the authorized representative of the Note Owners; (iii) to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control; (iv) the rights of Note Owners shall be exercised only through the Depository and shall be limited to those established by law and agreements between such Note Owners and the Depository and/or the Depository Participants pursuant to the Note Depository Agreements. Unless and until Definitive Notes are issued pursuant to Section 2.16, the initial Depository will make book-entry transfers among the Depository Participants and receive and transmit payments of principal of and interest and other amounts on the Notes to such Clearing Agency Participants; and (v) whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Noteholders of Notes evidencing a specified percentage of the Outstanding Amount of the Notes, the Depository shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Depository Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee. SECTION 2.15. NOTICES TO CLEARING AGENCY. Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to Note Owners pursuant to Section 2.16, the Indenture Trustee shall give all such notices and communications specified herein to be given to Noteholders to the Clearing Agency. SECTION 2.16. DEFINITIVE NOTES. Unless the Terms Supplement provides otherwise, and if (i) the Administrator advises the Indenture Trustee in writing that the Depository is no longer willing or able to properly discharge its responsibilities with respect to the Notes, and the Administrator is unable to locate a qualified successor, or (ii) the Administrator at its option advises the Indenture Trustee in writing that it elects to terminate the book-entry system through the Depository or (iii) after the occurrence of an Event of Default, a Master Servicer Default or an Administrator Default, Note Owners representing beneficial interests aggregating at least a majority of the Outstanding Amount of the Directing Notes advise the Depository (which shall then notify the Indenture Trustee) in writing that the continuation of a book-entry system through the Depository is no longer in the best interests of the Note Owners, then the Indenture Trustee will cause the Clearing Agency to notify all Note Owners, through the Clearing Agency, of the occurrence of any such event and of the availability of Definitive Notes to Note Owners requesting the same. Upon surrender to the Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by the Depository, accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the instructions of the Depository. None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the holders of the Definitive Notes as Noteholders. ARTICLE III COVENANTS SECTION 3.1. PAYMENT TO NOTEHOLDERS. The Issuer will pay or cause to be duly and punctually paid, from the property of the Issuer, the principal of and interest on the Notes of each Series in accordance with the terms of such Notes, this Indenture and the related Terms Supplement and Transfer and Servicing Agreement. Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture. SECTION 3.2. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain in the Borough of Manhattan, the City of New York, the State of New York, an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes. The Issuer will give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency. If at any time the issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands. The Issuer may also from time to time designate one or more other offices or agencies (in or outside the City of New York) where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that (i) no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York, the State of New York for the purposes set forth in the preceding paragraph, (ii) presentations or surrenders of Notes for payment may be made only in the City of New York, the State of New York and (iii) any designation of an office or agency for payment of Notes shall be subject to Section 3.3. The Issuer will give prompt written notice to the Indenture Trustee of any such designation or rescission and of any change in the location of any such other office or agency. SECTION 3.3. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in Section 8.2(a) and (b), all payments of amounts due and payable with respect to any Notes that are to be made from amounts distributed from the Collection Account or any other Trust Account pursuant to Section 8.2(c) shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so distributed from the Collection Account for payments of Notes shall be paid over to the Issuer except as provided in this Section. The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will: (i) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided; (ii) give the Indenture Trustee notice of any default by the Issuer of which it has actual knowledge (or any other obligor upon the Notes) in the making of any payment required to be made with respect to the Notes; (iii) at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; (iv) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; and (v) comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith. The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money. Subject to applicable laws with respect to escheat of funds, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Noteholder thereof shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The Indenture Trustee shall also adopt and employ, at the expense of the Issuer, any other reasonable means of notification of such repayment (including mailing notice of such repayment to Noteholders whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Noteholder). SECTION 3.4. EXISTENCE. The Issuer will keep in full effect its existence and rights as a trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence and rights under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Financed Student Loans and each other instrument or agreement included in the Indenture Trust Estate. SECTION 3.5. PROTECTION OF INDENTURE TRUST ESTATE. The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to: (i) maintain or preserve the lien and security interests (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof; (ii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture or any Terms Supplement; (iii) enforce any of the Indenture Trust Estate; or (iv) preserve and defend title to the Indenture Trust Estate and the rights of the Indenture Trustee and the Noteholders in such Indenture Trust Estate against the claims of all persons and parties. The Issuer hereby designates the Indenture Trustee its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required to be executed pursuant to this Section. SECTION 3.6. OPINIONS AS TO INDENTURE TRUST ESTATE. On or before April 30 in each calendar year, beginning with the first calendar year commencing more than six months after the Closing Date for a Series, the Administrator, on behalf of the Issuer, shall furnish to the Indenture Trustee an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and re-filing of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation on statements as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe the recording, filing, re-recording and re-filing of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until April 30 in the following calendar year. SECTION 3.7. PERFORMANCE OF OBLIGATIONS; SERVICING OF FINANCED STUDENT LOANS. (a) The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person's material covenants or obligations under any instrument or agreement included in the Indenture Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the related Terms Supplement or Transfer and Servicing Agreement or such other instrument or agreement. (b) The Issuer may contract with other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer's Certificate of the Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer has contracted with the Master Servicer and the Administrator to assist the Issuer in performing its duties under this Indenture. (c) The Issuer will punctually perform and observe in all material respects all its obligations and agreements contained in this Indenture, the other Basic Documents and in the instruments and agreements included in the Indenture Trust Estate, including filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the related Terms Supplement and Transfer and Servicing Agreement in accordance with and within the time periods provided for herein and therein. Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the consent of the Indenture Trustee. (d) Without derogating from the absolute nature of the assignment Granted to the Indenture Trustee under any Terms Supplement or the rights of the Indenture Trustee hereunder, the Issuer agrees that it will not, without the prior written consent of the Noteholders of at least a majority in Outstanding Amount of the Directing Notes of each Series then outstanding, amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of (i) any portion of the Trust Estate, or, as applicable, (ii) the Basic Documents, except to the extent otherwise provided herein or in the related Transfer and Servicing Agreement, or waive timely performance or observance by the Master Servicer, the Administrator, the Issuer or the Eligible Lender Trustee under the related Transfer and Servicing Agreement; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are required to be made for the benefit of the Noteholders or the Counterparties, or (ii) reduce the aforesaid percentage of the Notes which are required to consent to any such amendment, without the consent of the Noteholders of all the Outstanding Notes and the Counterparties affected thereby. If any such amendment, modification, supplement or waiver should be so consented to by the Indenture Trustee or such Noteholders and the Counterparties, the Issuer agrees, promptly following a request by the Indenture Trustee to do so, to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as the Indenture Trustee may deem necessary or appropriate in the circumstances. SECTION 3.8. NEGATIVE COVENANTS. So long as any Notes are Outstanding, the Issuer shall not: (i) except as expressly permitted by this Indenture or any other Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Indenture Trust Estate, unless directed to do so by the Indenture Trustee; (ii) claim any credit on, or make any deduction from the principal of or interest on any of the Notes (other than amounts properly withheld from such payments under the Code or applicable state law) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Indenture Trust Estate; (iii) except as contemplated by the Basic Documents, dissolve or liquidate in whole or in part; or (iv) (A) permit the validity or effectiveness of this Indenture or any Terms Supplement to be impaired, or permit the lien of this Indenture and any Terms Supplement to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may be expressly permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture and any Terms Supplement) to be created on or extend to or otherwise arise upon or burden the Indenture Trust Estate or any part thereof or any interest therein or the proceeds thereof (other than tax liens and other liens that arise by operation of law, in each case arising solely as a result of an action or omission of the related Obligor, and other than as expressly permitted by the Basic Documents) or (C) permit the lien of this Indenture and any Terms Supplement not to constitute a valid first priority (other than with respect to any such tax or other lien) security interest in the Indenture Trust Estate and the Swap Agreement. SECTION 3.9. ANNUAL STATEMENT AS TO COMPLIANCE. The Administrator, on behalf of the Issuer, will deliver to the Indenture Trustee, on or before April 30 following the first fiscal year of the Issuer that ends more than six months after the Closing Date for a Series, and on or before April 30 of each fiscal year thereafter, an Officer's Certificate of the Issuer stating that: (i) a review of the activities of the Issuer during such year and of performance under this Indenture has been made under such Authorized Officers' supervision; and (ii) to the best of such Authorized Officer's knowledge, based on such review, the Issuer has complied, in all material respects, with all conditions and covenants under this Indenture throughout such year, or, if there has been a default in the compliance in any material respect of any such condition or covenant, specifying each such default known to such Authorized Officers and the nature and status thereof. SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. (a) The Issuer shall not consolidate or merge with or into any other Person, unless: (i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any State and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form reasonably satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture and any Terms Supplement on the part of the Issuer to be performed or observed, all as provided herein or therein; (ii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing; (iii) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal, Ohio or Delaware state income tax consequence to the Issuer, any Noteholder or any Certificateholder; (iv) any action as is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and (v) the Issuer shall have delivered to the Indenture Trustee an Officer's Certificate of the Issuer and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act) in all material respects. (b) Except as otherwise permitted by the Basic Documents, the Issuer shall not consolidate with or merge into any entity or convey or transfer all or substantially all its properties or assets, including those included in the Indenture Trust Estate, to any Person, unless: (i) the Person that the entity formed by or serving such consolidation or merger or that acquires by conveyance or transfer the properties and assets of the Issuer the conveyance or transfer of which is hereby restricted shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any state, (B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in form satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein, (C) expressly agrees by means of such supplemental indenture that all right, title and interest so conveyed or transferred shall be subject and subordinate to the rights of Noteholders and the Swap Counterparties, (D) unless otherwise provided in such supplemental indenture, expressly agrees to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agrees by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes; (ii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing; (iii) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse federal, Ohio or Delaware state income tax consequence to the Issuer, any Noteholder or any Certificateholder; (iv) any action as is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and (v) the Issuer shall have delivered to the Indenture Trustee an Officer's Certificate of the Issuer and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act). SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or merger of the Issuer in accordance with Section 3.10(a), the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture and any Terms Supplement with the same effect as if such Person had been named as the Issuer herein. (b) Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.10(b), Crestar Student Loan Trust ______ will be released from every covenant and agreement of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery by the Issuer of written notice to the Indenture Trustee stating that Crestar Student Loan Trust ______ is to be so released. SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any business other than financing, purchasing, owning, selling, servicing and managing Financed Student Loans and activities incidental thereto. SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume, guarantee or otherwise become liable, directly or indirectly, for any indebtedness except for the Notes and such other obligations as are authorized under the Basic Documents. SECTION 3.14. OBLIGATIONS OF MASTER SERVICER AND ADMINISTRATOR. The Issuer shall cause the Master Servicer and the Administrator to comply with the applicable provisions of the Transfer and Servicing Agreement. SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as contemplated by the Transfer and Servicing Agreement, this Indenture or any Terms Supplement, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another's payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person. SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty). SECTION 3.17. RESTRICTED PAYMENTS. The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Eligible Lender Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer or the Administrator, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions to the Master Servicer, the Depositor, the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders, the Noteholders, and the Administrator as contemplated by, and to the extent funds are available for such purpose under the Transfer and Servicing Agreement and the other Basic Documents. SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the Indenture Trustee written notice of each Event of Default hereunder and each Default on the part of the Transferor of its obligations under the Transfer and Servicing Agreement, the Master Servicer of its obligations under the Transfer and Servicing Agreement under the Transfer and Servicing Agreement. In addition, the Issuer shall deliver to the Indenture Trustee, within five days after the foregoing notice of Default, written notice in the form of an Officer's Certificate of the Issuer of any event which with the giving of notice and the lapse of time would become an Event of Default under Section 5.1(iii), its status and what action the Issuer is taking or proposes to take with respect thereto. SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. ARTICLE IV SATISFACTION AND DISCHARGE SECTION 4.1. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall cease to be of further effect with respect to the Indenture Trust Estate and the Swap Agreements except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13 and 3.15 of this Agreement, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.7 and the obligations of the Indenture Trustee under Section 4.2), and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when: (a) either (i) all Notes theretofore authenticated and delivered (other than (A) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.7 and (B) Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 3.3) have been delivered to the Indenture Trustee for cancellation; or (ii) all Notes not theretofore delivered to the Indenture Trustee for cancellation (A) have become due and payable, or (B) will become due and payable within one year, and the Issuer, in the case of (A) or (B) above, has irrevocably deposited or caused to be irrevocably deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due on the applicable Legal Final Maturity; (b) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer with respect to such Notes and has paid or caused to be paid all unpaid Trust Swap Payments; and (c) in the case of (a)(ii) above, the Issuer has delivered to the Indenture Trustee an Officer's Certificate of the Issuer, an Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirement of Section 10.l(a) and, subject to Section 10.2, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture with respect to such Notes have been complied with. SECTION 4.2. APPLICATION OF TRUST MONEY. All moneys deposited with the Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Noteholders of the particular Notes for the payment of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Transfer and Servicing Agreement or required by law. SECTION 4.3. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with the satisfaction and discharge of this Indenture with respect to a Series of Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Series of Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held and applied according to Section 3.3 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys. ARTICLE V DEFAULTS AND REMEDIES SECTION 5.1. EVENTS OF DEFAULT. "Event of Default," wherever used herein, means, with respect to all Outstanding Notes issued hereunder, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (i) Default in the payment of any Class Interest Amount on any Note or any Trust Swap Payment when the same becomes due and payable, and such Default shall continue for a period of five Business Days; or (ii) Default in the payment of the principal of any Note when the same becomes due and payable, and such Default shall continue for a period of five Business Days; or (iii) Default in the observance or performance of any covenant or agreement in any material respect of the Issuer made in this Indenture, or the Transfer and Servicing Agreement (other than a covenant or agreement, a Default in the observance or performance of which is specifically dealt with elsewhere in this Section), or any representation or warranty of the Issuer made in this Indenture or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such Default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Noteholders of at least 25% of the Outstanding Amount of the Outstanding Directing Notes, a written notice specifying such Default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder; or (iv) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Indenture Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Indenture Trust Estate, or ordering the winding-up or liquidation of the Issuer's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (v) the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Indenture Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of action by the Issuer in furtherance of any of the foregoing. SECTION 5.2. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default should occur and be continuing with respect to any Series of Notes, then and in every such case the Indenture Trustee or Noteholders of Directing Notes representing no less than a majority of the Outstanding Amount of Directing Notes may declare all the Outstanding Notes to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any such declaration the unpaid principal amount of all the Outstanding Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable. At any time after such a declaration of acceleration of maturity of the Outstanding Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter provided in this Article V, the Noteholders of Directing Notes representing a majority of the Outstanding Amount of Directing Notes by written notice to the Issuer and the Indenture Trustee, may, rescind and annul such declaration and its consequences if: (i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay (A) all payments of principal of and interest on all Outstanding Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and (B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel; and (ii) all Events of Default, other than the nonpayment of the principal of the Outstanding Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12. No such rescission shall affect any subsequent default or impair any right consequent thereto. SECTION 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE. (a) The Issuer covenants that if (i) Default is made in the payment of any Class Interest Amount on any Series of Notes when the same becomes due and payable, and such Default continues for a period of five days, or (ii) Default is made in the payment of the principal of or any installment of the principal of any Series of Notes when the same becomes due and payable, and such Default continues for a period of five days, the Issuer will, upon demand of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the Noteholders, the whole amount then due and payable on the Outstanding Notes for principal and interest, with interest upon the overdue principal, and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest at the respective Class Interest Rate and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel. (b) In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon any Series of Notes and collect in the manner provided by law out of the property of the Issuer or other obligor upon any Series of Notes, wherever situated, the moneys adjudged or decreed to be payable. (c) If an Event of Default occurs and is continuing, the Indenture Trustee may, as more particularly provided in Section 5.4, in its discretion, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law. (d) In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Indenture Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such proceedings or otherwise: (i) to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of such Series of Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence, willful misconduct or bad faith) and of the Noteholders allowed in such Proceedings; (ii) unless prohibited by applicable law and regulations, to vote on behalf of the Noteholders in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings; (iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders and of the Indenture Trustee on their behalf; and (iv) to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee or the Noteholders allowed in any judicial proceedings relative to the Issuer, its creditors and its property; and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee, and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence, willful misconduct or bad faith. (e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Outstanding Notes or the rights of any Noteholder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person. (f) All rights of action and of asserting claims under this Indenture, or under any of the Outstanding Notes, may be enforced by the Indenture Trustee without the possession of any of the Outstanding Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Noteholders. (g) In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Noteholders, and it shall not be necessary to make any Noteholder a party to any such Proceedings. SECTION 5.4. REMEDIES; PRIORITIES. (a) If an Event of Default shall have occurred and be continuing in respect of the Outstanding Notes and the Outstanding Notes have been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may do one or more of the following: (i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Outstanding Notes or under this Indenture with respect to such Notes, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Outstanding Notes moneys adjudged due; (ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Indenture Trust Estate securing the Outstanding Notes; (iii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee and the Noteholders; and (iv) sell the Indenture Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and conducted in any manner permitted by law; provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Indenture Trust Estate following an Event of Default, other than an Event of Default described in Section 5.1(i) or (ii), unless (A) the Noteholders of 100% of the Outstanding Amount of the Notes consent thereto, (B) the proceeds of such sale or liquidation distributable to the Noteholders are sufficient to discharge in full all amounts then due and unpaid upon the Outstanding Notes and any Trust Swap Payments for principal and interest or (C) the Indenture Trustee determines that the Indenture Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes and any Trust Swap Payments as they would have become due if the Outstanding Notes had not been declared due and payable, and the Indenture Trustee obtains the consent of Noteholders of at least 66-2/3% of the Outstanding Amount of Notes; provided, further, that the Indenture Trustee may not sell or otherwise liquidate the Indenture Trust Estate following an Event of Default, other than an Event of Default described in Section 5.1(i) or (ii), unless (D) the proceeds of such sale or liquidation distributable to the Subordinated Noteholders are sufficient to enable the Indenture Trustee to pay amounts due on the Subordinated Notes (as provided in clauses FOURTH and FIFTH of Section 5.4(b) below), or (E) following notice that the proceeds of such sale or liquidation distributable to the Subordinated Noteholders would be insufficient to pay amounts due on the Subordinated Notes (as provided in clauses FOURTH and FIFTH of Section 5.4(b) below), Subordinated Noteholders of at least a majority of the Outstanding Amount of Subordinated Notes consent thereto. In determining such sufficiency or insufficiency with respect to clauses (B) through (E), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Indenture Trust Estate for such purpose. (b) If the Indenture Trustee collects any money or property pursuant to this Article V, it shall pay out the money or property in the following order: FIRST: to pay (i) an amount equal to Consolidation Loan Fees with respect to the calendar month most recently ended and all overdue Consolidation Loan Fees, and (ii) any amounts due the Indenture Trustee, the Eligible Lender Trustee, and the Delaware Trustee for their respective fees and expenses, and (iii) any amounts due the Servicer and the Administrator for their respective fees and expenses; SECOND: to Senior Noteholders for amounts due and unpaid on the Senior Notes for the Class Interest Amount of each Series for interest and any Trust Swap Payment, ratably, according to the amounts due and payable on each Series; THIRD: to Senior Noteholders for amounts due and unpaid on the Senior Notes of each Series for principal, ratably according to the amounts due and payable on the Senior Notes of each Series for principal; FOURTH: to Subordinated Noteholders for amounts due and unpaid on each Series of Subordinated Notes for the Class Interest Amountfor interest, ratably, according to the amounts due and payable on each Series of Senior Notes for interest; FIFTH: to Subordinated Noteholders for amounts due and unpaid on the Subordinated Notes of each Series for principal ratably according to the amounts due and payable on the Subordinated Notes of each Series for principal; SIXTH: to Senior Noteholders for amounts due and unpaid on the Senior Notes (and thereafter to the Subordinated Noteholders for amounts due and unpaid on the Subordinated Notes), for Carryover Interest; and SEVENTH: to the Issuer, for distribution in accordance with the terms of the Transfer and Servicing Agreement. The Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section. At least 15 days before such record date, the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that states the record date, the payment date and the amount to be paid. SECTION 5.5. OPTIONAL PRESERVATION OF THE FINANCED STUDENT LOANS. If the Outstanding Notes have been declared to be due and payable under Section 5.2 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Indenture Trust Estate. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Indenture Trust Estate. In determining whether to maintain possession of the Indenture Trust Estate, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Indenture Trust Estate for such purpose. SECTION 5.6. LIMITATION OF SUITS. No Noteholder of any Series shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (i) such Noteholder has previously given written notice to the Indenture Trustee of a continuing Event of Default; (ii) Noteholders of not less than 25% of the Outstanding Directing Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder; ((iii) such Noteholder or Noteholders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request; (iv) the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceeding; and (v) no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Noteholders of a majority of the Outstanding Amount of Directing Notes; it being understood and intended that no one or more Noteholders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority or preference over any other Noteholders or to enforce any right under this Indenture, except in the manner herein provided. In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Noteholders, each representing less than a majority of the Outstanding Amount of the Directing Notes, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture based upon the larger percentage of Noteholders as of a date certain. SECTION 5.7. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST. Notwithstanding any other provisions in this Indenture, any Noteholder shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Noteholder. SECTION 5.8. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted. SECTION 5.9. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of the Indenture Trustee or any Noteholder to exercise any right or remedy accruing upon any Default shall impair any such right or remedy or constitute a waiver of any such Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be. SECTION 5.11. CONTROL BY NOTEHOLDERS. The Noteholders of a majority of the Outstanding Amount of the Directing Notes shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that (i) such direction shall not be in conflict with any rule of law or with this Indenture; (ii) subject to the express terms of Section 5.4, any direction to the Indenture Trustee to sell or liquidate the Indenture Trust Estate shall be by the Noteholders of not less than 66-2/3% of the Outstanding Amount of Directing Notes; (iii) if the conditions set forth in Section 5.5 have been satisfied and the Indenture Trustee elects to retain the Indenture Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by Noteholders of less than 66-2/3% of the Outstanding Amount of Directing Notes to sell or liquidate the Trust Estate shall be of no force and effect; (iv) the Indenture Trustee may take any other action deemed properby the Indenture Trustee that is not inconsistent with such direction; provided, however, that, subject to Section 6.1, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholders not consenting to such action. SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the time a judgment or decree for payment of money due has been obtained as described in Section 5.2, the Noteholders of not less than a majority of the Outstanding Amount of Directing Notes may waive any past Default hereunder and its consequences except a Default (a) in payment when due of principal of or interest on any of the Outstanding Notes or (b) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of each Noteholder. In the case of any such waiver, the Issuer, the Indenture Trustee and the Noteholders shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. Upon any such waiver, such Default shall cease but to exist and be deemed to have been cured and not to have occurred for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture agree, not in their individual capacity but solely in their capacity as Indenture Trustee or Eligible Lender Trustee, as applicable, and each Noteholder by such Noteholder's acceptance of any Note shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount of the Outstanding Notes or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note. SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. SECTION 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture and each Terms Supplement nor any rights or remedies of the Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Indenture Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.4(b). SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a) Promptly following a request from the Indenture Trustee to do so and at the Administrator's expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Depositor, the Administrator and the Master Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Transfer and Servicing Agreement in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Transfer and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Depositor, the Administrator or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Depositor, the Administrator or the Servicer of each of their obligations under the Transfer and Servicing Agreement. (b) If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Noteholders of 66-2/3% of the Outstanding Amount of the Directing Notes shall exercise all rights, remedies, powers, privileges and claims of the Issuer against the Depositor, the Administrator or the Master Servicer under or in connection with the Transfer and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Depositor, the Administrator or the Servicer of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Transfer and Servicing Agreement and any right of the Issuer to take such action shall be suspended. ARTICLE VI THE INDENTURE TRUSTEE SECTION 6.1. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and any Terms Supplement and no implied covenants or obligations shall be read into this Indenture or any Terms Supplement against the Indenture Trustee; and (ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, that the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own bad faith, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent; and (iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.11. (d) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section. (e) The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer. (f) Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the Transfer and Servicing Agreement. (g) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayments of such funds or adequate indemnity satisfactory to it against any loss, liability or expense is not reasonably assured to it; provided, however, that the Indenture Trustee shall not refuse or fail to perform any of its duties hereunder solely as a result of nonpayment of its normal fees and expenses and further provided that nothing in this Section 6.1(g) shall be construed to limit the exercise by the Indenture Trustee of any right or remedy permitted under this Indenture or otherwise in the event of the Issuer's failure to pay the Indenture Trustee's fees and expenses pursuant to Section 6.7. (h) Except as expressly provided in the Basic Documents, the Indenture 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. (i) In the event that the Indenture Trustee is the Paying Agent or the Note Registrar, the rights and protections afforded to the Indenture Trustee pursuant to this Indenture shall also be afforded to the Indenture Trustee in its capacity as Paying Agent or Note Registrar. (j) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provision of this Section and to the provisions of the TIA. SECTION 6.2. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may conclusively rely on any document believed by it to be genuine and to have been signed or presented by the proper Person. The Indenture Trustee need not investigate any fact or matter stated in such document. (b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer's Certificate of the Issuer or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officer's Certificate or Opinion of Counsel. (c) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee, and the Indenture Trustee shall not be responsible for any willful misconduct or negligence on the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed with due care by it hereunder. (d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Indenture Trustee's conduct does not constitute willful misconduct, negligence or bad faith. (e) The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. SECTION 6.3. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Sections 6.12 and 6.13. SECTION 6.4. INDENTURE TRUSTEE'S DISCLAIMER. Neither the Indenture Trustee nor the Eligible Lender Trustee shall be responsible for and neither makes any representation as to the validity or adequacy of this Indenture or the Notes, neither shall be accountable for the Issuer's use of the proceeds from the sale of the Notes, and neither shall be responsible for any statement of the Issuer in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee's certificate of authentication. SECTION 6.5. NOTICE OF DEFAULTS. If a Default occurs and is continuing and written notice of the existence thereof has been delivered to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail notice of the Default to each Noteholder and the Swap Counterparty within 90 days after it occurs. Except in the case of a Default in payment of principal of or interest on any Note, the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders. SECTION 6.6. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS. The Indenture Trustee shall deliver to each Noteholder (and to each Person who was a Noteholder at any time during the applicable calendar year) such information as may be requested of it to enable such holder to prepare its Federal and state income tax returns. Within 60 days after each December 31 beginning with the December 31 following the first issuance of a Series of Notes, the Indenture Trustee shall mail to each Noteholder a brief report as of such December 31 that complies with TIA ss. 313(a) if required by said section. The Indenture Trustee shall also comply with TIA ss. 313(b). If the issuance of any Series of Notes has been registered under the Securities Act of 1933, as amended, a copy of each such report required pursuant to TIA ss.ss. 313(a) or (b) shall, at the time of such transmission to Noteholders, be filed by the Indenture Trustee with the Commission and with each securities exchange, if any, upon which the Notes of such Series are listed, provided that the Issuer has previously notified the Indenture Trustee of such listing. SECTION 6.7. COMPENSATION AND INDEMNITY. The Issuer shall pay, or cause to be paid, to the Indenture Trustee for its services, a fee equal to the amount agreed to in writing between the Indenture Trustee and the Administrator (the "Indenture Trustee Fee") at the times set forth in the related Transfer and Servicing Agreement and shall or shall cause the Administrator from its own funds to reimburse the Indenture Trustee for all reasonable out-of-pocket expenses (including the reasonable fees and expenses of Trustee's counsel) incurred or made by it in accordance with any provision of this Indenture or in the performance of its duties hereunder, or in connection with review of the Terms Supplement, amendment or other documentation. The Indenture Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall or shall cause the Administrator from its own funds to indemnify the Indenture Trustee, its directors, officers, agents and employees against any and all loss, liability or expense (including reasonable attorneys' fees and expenses) incurred by it in connection with the administration of this Trust and the performance of its duties hereunder and the other Basic Documents. The Indenture Trustee shall notify the Issuer and the Administrator promptly of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the Administrator shall not relieve the Issuer or the Administrator of its obligations hereunder and under the other Basic Documents. The Issuer shall or shall cause the Administrator to defend the claim and the Administrator shall not be liable for any separate legal fees and expenses of the Indenture Trustee after it has assumed such defense; provided, however, that, in the event that there may be a conflict between the positions of the Indenture Trustee and the Administrator in conducting the defense of such claim, the Indenture Trustee shall be entitled to separate counsel the reasonable fees and expenses of which shall be paid by the Administrator from its own funds on behalf of the Issuer. Neither the Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee or its directors, officers, agents and employees to the extent any such loss, liability or expenditure arises out of or results from the Indenture Trustee's own willful misconduct, negligence or bad faith or a breach of the representations, warranties and covenants of the Indenture Trustee. The Issuer's payment obligations to the Indenture Trustee pursuant to this Section (including the obligation of the Issuer or Administrator to indemnify the Indenture Trustee) shall survive the discharge of this Indenture or the resignation or removal of the Indenture Trustee. When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.1(iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or State bankruptcy, insolvency or similar law. SECTION 6.8. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.8. The Indenture Trustee may resign at any time by so notifying the Issuer. The Issuer shall remove the Indenture Trustee if: (i) the Indenture Trustee fails to comply with Section 6.12; (ii) an Insolvency Event occurs with respect to the Indenture Trustee; (iii) a receiver or other public officer takes charge of the Indenture Trustee or its property; or (iv) The Indenture Trustee otherwise becomes incapable of acting. If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee. A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee, and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee. If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Noteholders of a majority in Outstanding Amount of Directing Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. If the Indenture Trustee fails to comply with Section 6.12, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer's and the Administrator's obligations under Section 6.7 shall continue for the benefit of the retiring Indenture Trustee. SECTION 6.9. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee; provided that such corporation or banking association shall be otherwise qualified and eligible under Section 6.12. In case at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have. SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Indenture Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Indenture Trust Estate, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Indenture Trust Estate, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.12 and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.8 hereof. (b) Every 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 Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture 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 Indenture 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 Indenture 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 Indenture Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee; (ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (iii) the Indenture Trustee may at any time accept the resignation of a co-trustee. (c) Any notice, request or other writing given to the Indenture 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 Indenture and the conditions of this Article VI. 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 Indenture Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee. (d) Any separate trustee or co-trustee may at any time constitute the Indenture Trustee, 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 Indenture 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 Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. SECTION 6.11. APPOINTMENT OF CUSTODIAN. The Issuer acknowledges and agrees that the Indenture Trustee will appoint a custodian for the sole purpose of perfecting the Indenture Trustee's security interest in any Financed HEAL Loans or Financed Private Loans comprising a portion of the Indenture Trust Estates for a series, which custodian will be set forth in the related Terms Supplement. The Indenture Trustee shall not be liable for any negligence by such custodian. Any costs of such custodianship incurred by the Indenture Trustee shall be reimbursed to it by the Issuer or Administrator pursuant to Section 6.7 hereof. SECTION 6.12. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall at all times satisfy the requirements of TIA Section 310(a). The Indenture Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition and it shall have a long term debt rating of Baa3 or better by Moody's or BBB or better by Standard & Poor's. The Indenture Trustee shall at all times meet the eligibility criteria for an "eligible lender" under the terms of the Higher Education Act and HEAL Act. The Indenture Trustee shall comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b)(9); provided, however, that there shall be excluded from the operation of TIA Section 310(b)(1) any indenture or indentures under which other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met. SECTION 6.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated. ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS SECTION 7.1. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after the earlier of (i) each Record Date for a Series and (ii) three months after the last Record Date for such Series, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Noteholders, of such Series as of such Record Date, (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished. SECTION 7.2. PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Noteholders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.1 and the name and addresses of Noteholders received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.1 upon receipt of a new list so furnished. (b) Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes. Upon receipt by the Indenture Trustee of any request by a Noteholder to receive a copy of the current list of Noteholders (whether or not made pursuant to TIA Section 312(b)), the Indenture Trustee shall promptly notif the Administrator thereof by providing to the Administrator a copy of such request and a copy of the list of Noteholders produced in response thereto. (c) The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section 312(c). (d) The Indenture Trustee shall furnish to the Noteholders 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 Indenture Trustee under the Basic Documents. SECTION 7.3. FISCAL YEAR OF ISSUER. Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year. ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES SECTION 8.1. COLLECTION OF MONEY. Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money received by it on behalf of the Noteholders pursuant to the Transfer and Servicing Agreement as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default under this Indenture and any right to proceed thereafter as provided in Article V. SECTION 8.2. TRUST ACCOUNTS. (a) On or prior to the Closing Date of the first Series, the Indenture Trustee shall establish and maintain, in the name of and with the Indenture Trustee, for the benefit of the Noteholders and the Certificateholders, the Trust Accounts as provided in Section 6.1 of the Standard Terms to Transfer and Servicing Agreement, with the exception of the Certificate Distribution Account. (b) On or before the Business Day preceding each Payment Date, all Available Funds for the related Class of Notes with respect to the preceding Collection Period will be deposited in the Collection Account as provided in Section 6.2 of the Standard Terms to Transfer and Servicing Agreement. On or before each Payment Date for each Class of Notes, the appropriate amounts with respect to the preceding Collection Period(s) will be distributed from the Collection Account and any other Trust Account to the Indenture Trustee (or any other Paying Agent) on behalf of the Noteholders as provided in the related Transfer and Servicing Agreement. (c) On each Payment Date, the Indenture Trustee (or any other Paying Agent)shall distribute all amounts received by it on behalf of Noteholders of aparticular Class pursuant to paragraph (b) above to such Noteholders in respectof the Notes to the extent of amounts due and unpaid on the Notes of such Class as provided in the related Terms Supplement. SECTION 8.3. GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no Default shall have occurred and be continuing, all or a portion of the funds in the Trust Accounts shall be invested in Eligible Investments and reinvested by the Indenture Trustee upon Issuer Order, subject to the provisions of Section 6.1(b) of the Standard Terms to Transfer and Servicing Agreement. All income or other gain from investments of moneys deposited in the Trust Accounts with the exception of the Certificate Distribution Account relating to a particular Series shall be deposited by the Indenture Trustee in the Collection Account, and any loss resulting from such investments shall be charged to such Trust Account. (b) Subject to Section 6.1(c), the Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Eligible Investment included therein except for losses attributable to the Indenture Trustee's failure to make payments on such Eligible Investments issued by the Indenture Trustee in its commercial capacity as principal obligor and not as trustee, in accordance with their terms. (c) If (i) the Issuer shall have failed to give investment directions for any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00 a.m. New York City time (or such other time as may be agreed by the Issuer and Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.2, or, (iii) if such Notes shall have been declared due and payable following an Event of Default, and amounts collected or receivable from the Indenture Trust Estate are being applied in accordance with Section 5.5 as if there had not been such a declaration; the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Trust Accounts (with the exception of the Certificate Distribution Account) in one or more Eligible Investments listed in paragraph (7) of the definition of Eligible Investments, provided that for so long as _____________is the Indenture Trustee, the Indenture Trustee shall invest and reinvest funds as provided above, in the ___________________________. ARTICLE IX SUPPLEMENTAL INDENTURES SECTION 9.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. (a) Without the consent of any Noteholders or the Counterparties, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act, to the extent this Indenture is qualified under the Trust Indenture Act, as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes: (i) to correct or amplify the description of any property at any time subject to the lien of each Terms Supplement, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of the Indenture, or to subject to the lien of the Indenture additional property; (ii) to evidence the succession, in compliance with the applicable provisions hereof, of another Person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained; (iii) to add to the covenants of the Issuer, for the benefit of the Noteholders of all Notes or of the Notes of any Series, or to surrender any right or power herein conferred upon the Issuer; (iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee; (v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture which may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided that such action shall not materially adversely affect the interests of the Noteholders of any Series; (vi) to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI; (vii) to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of the issuance, authentication and delivery of any Series of Notes, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; (viii) to set forth the terms of, and security for, any Series that has not theretofore been authorized by a Terms Supplement; (ix) to modify or eliminate any of the terms of this Indenture; provided, however, that (A) such supplemental indenture shall expressly provide that any such modifications or eliminations shall not be effective with respect to any Outstanding Note of any Series created prior to the execution of such supplemental indenture; and (B) the Indenture Trustee may, in its discretion, decline to enter into any such supplemental indenture which, in its opinion, would adversely affect its own rights, duties or immunities. (x) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA. The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained. (b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Noteholders under this Indenture; 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 the Counterparties. (c) An amendment or supplemental indenture shall be deemed not to materially and adversely affect any Noteholder if there is delivered to the Indenture Trustee written notification from each Rating Agency to the effect that such amendment or supplement will not cause that Rating Agency to reduce the then-current rating assigned to the Notes. SECTION 9.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may with the consent of the Noteholders of not less than a majority of the Outstanding Amount of all the Notes in case Outstanding Notes of all Series are to be affected, or with the consent of the Noteholders of not less than a majority of the Outstanding Amount of the Notes to be affected in case one or more, but less than all, of the Series of Outstanding Notes are to be affected, by Act of such Noteholders delivered to the Issuer and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture relating to such Series or of modifying in any manner the rights of the Noteholders of such Series under this Indenture; provided, however, that so long as a Swap Agreement is in effect, no change adversely affecting the rights of the Counterparty may be made without the consent of such Counterparty (so long as such Counterparty is not in default under such Swap Agreement) and provided, further, that no such supplemental indenture shall, without the consent of the Noteholders of each Outstanding Note affected thereby: (i) change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof or the interest rate thereon, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Indenture Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof; (ii) reduce the percentage of the Outstanding Amount of the Notes of any Series, the consent of the Noteholders of which is required for any such supplemental indenture, or the consent of the Noteholders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture; (iii) modify or alter the provisions of the proviso to the definition of the term "Outstanding"; (iv) reduce the percentage of the Outstanding Amount of the Notes of any Series required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Indenture Trust Estate pursuant to Section 5.4; (v) modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the other Basic Documents cannot be modified or waived without the consent of the Noteholder of each Outstanding Note affected thereby; (vi) modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest; (vii) permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Indenture Trust Estate or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive any Noteholder of any Note of the security provided by the lien of this Indenture; or (viii) impair the rights provided such Noteholder under the TIA, except as permitted therein. It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Noteholders of the Notes of each Series to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 9.3. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise. SECTION 9.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and be deemed to be modified and amended in accordance therewith with respect to the Notes of each Series affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes. SECTION 9.5. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect to the extent this Indenture is qualified under the Trust Indenture Act. SECTION 9.6. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX which relates to the Series of which such Notes are a part may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture which relates to the Series of which such Notes are a part may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes of such Series. Notwithstanding anything to the contrary contained in this Article IX, no supplemental indenture may be entered into unless the Rating Agency Condition has been satisfied with respect to such supplemental indenture. ARTICLE X MISCELLANEOUS SECTION 10.1. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer, or the Administrator on behalf of the Issuer, shall furnish to the Indenture Trustee (i) an Officer's Certificate of the Issuer stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (i) a statement that such signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with. (b) (i) Other than any property released as contemplated by clause (iii) below, whenever any property or securities are to be released from the lien of this Indenture and the related Terms Supplements, the Issuer shall also furnish to the Indenture Trustee an Officer's Certificate of the Issuer certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof. (ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer's Certificate of the Issuer certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property, other than property as contemplated by clause (iii) below, or securities released from the lien of this Indenture and the related Terms Supplements since the commencement of the then-current calendar year, as set forth in the certificates required by clause (i) above and this clause (ii), equals 10% or more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer's Certificate is less than $25,000 or less than one percent of the then Outstanding Amount of the Notes Outstanding. (iii) Notwithstanding Section 2.12 or any other provisions of this Section, the Issuer may, without compliance with the requirements of Section 2.12 or the other provisions of this Section, (A) collect, liquidate, sell, service, convey, administer, manage or otherwise dispose of Financed Student Loans as and to the extent permitted or required by the Basic Documents, (B) make cash payments out of the Trust Accounts as and to the extent permitted or required by the Basic Documents and (C) convey to the Depositor those specified Financed Student Loans as and to the extent permitted or required by and in accordance with Section 2.2 of the Standard Terms to Transfer and Servicing Agreement, so long as the Issuer shall deliver to the Indenture Trustee every six months, commencing six months after the first issuance of a Series of Notes, an Officer's Certificate of the Issuer stating that all the dispositions of any portion of the Indenture Trust Estate described in clauses (A), (B) or (C) above that occurred during the immediately preceding six calendar months were applied in accordance with the Basic Documents. SECTION 10.2. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an Authorized Officer of the Issuer may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Depositor, the Issuer or the Administrator, stating that the information with respect to such factual matters is in the possession of the Servicer, the Depositor, the Issuer or the Administrator, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the granting of such application, or as evidence of the Issuer's compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee's right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI. SECTION 10.3. ACTS OF NOTEHOLDERS. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section. (b) The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient. (c) The ownership of Notes shall be proved by the Note Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Noteholder of any Notes shall bind the Noteholder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note. SECTION 10.4. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING AGENCIES. Any request, demand, authorization, direction, notice, consent, filing, waiver or Act of Noteholders or other documents provided or permitted by this Indenture or any of the Basic Documents, shall be in writing and if such request, demand, authorization, direction, notice, consent, filing waiver or Act of Noteholders is to be made upon, given or furnished to or filed with: (a) the Indenture Trustee by any Noteholder or by the Issuer shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing and mailed, first class, postage prepaid or sent by overnight courier or by facsimile transmission to or with the Indenture Trustee at its Corporate Trust Office, or (b) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, or via overnight courier to the Issuer addressed to: Crestar Student Loan Trust ______, Attention: Corporate Trust Department, [address], [phone] (Tel); [fax #] (Fax); with a copy to the Administrator addressed to: [Crestar Bank], 919 East Main Street, Richmond, Virginia 23219, Attention: Vice President - Securitizations Manager, 804-343-9400 (Tel); 804-782-7155 (Fax); with a copy to [Crestar Bank], 919 East Main Street, Richmond, Virginia 23219; Attention: Linda Rigsby; Senior Vice President and General Counsel, or at any other address previously furnished in writing to the Indenture Trustee by the Issuer or the Administrator. The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee. (c) any Rating Agencies shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, or via overnight courier to such Rating Agency addressed, as applicable, to: Fitch IBCA, Inc., One State Street Plaza, New York, New York 10004, 212-908-0500 Tel); 212-480-4438 (Fax), Attention: Asset-Backed Securities Group; Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, 212-553-3884 (Tel); 212-553-0573 (Fax), Attention: Assistant Vice President - Analyst Structured Finance; Standard & Poor's Rating Services, 25 Broadway, New York, New York 10004, 212-208-8000 (Tel); 212-208-0030 (Fax), Attention: Asset-Backed Surveillance Group; or at any other address previously furnished to the Issuer, Administrator or Indenture Trustee by such Rating Agency. SECTION 10.5. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at his address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given. Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver. In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice. Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default. SECTION 10.6. ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding any provision of this Indenture or any of the Notes to the contrary, the Issuer and the Indenture Trustee may enter into any agreement with any Noteholder providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Noteholder, that is different from the methods provided for in this Indenture for such payments or notices. The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements. SECTION 10.7. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. The provisions of TIA ss.ss. 310 through 317 that impose duties on any Person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein. SECTION 10.8. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 10.9. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind the successors, co-trustees and agents (excluding any legal representatives or accountants) of the Indenture Trustee. SECTION 10.10. SEPARABILITY. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 10.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders, and any other party secured hereunder, and any other Person with an ownership interest in any part of the Indenture Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture. SECTION 10.12. LEGAL HOLIDAYS. In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date. SECTION 10.13. GOVERNING LAW. This Indenture, each Terms Supplement and the Notes shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws. SECTION 10.14. COUNTERPARTS. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. SECTION 10.15. RECORDING OF INDENTURE. If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Issuer or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture. SECTION 10.16. TRUST OBLIGATIONS. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Eligible Lender Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Eligible Lender Trustee in its individual capacity or (ii) any partner, owner, beneficiary, custodian, officer, director, employee or agent of the Indenture Trustee or the Eligible Lender Trustee in its individual capacity, any holder or owner of a beneficial interest in the Issuer, the Eligible Lender Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Eligible Lender Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Eligible Lender Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Eligible Lender Trustee shall be subject to, and entitled to the benefit of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Eligible Lender Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against the Delaware Trustee, in its individual capacity or as Delaware Trustee, or any officer, director, employee, agent, owner, or interestholder of the Delaware Trustee or of any successor or assign of the Delaware Trustee. SECTION 10.17. NO PETITION. The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that prior to the date which is one year and a day after to the termination of this Indenture, they will not at any time institute against the Issuer, or join in any institution against the Issuer 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 Indenture or any of the other Basic Documents. SECTION 10.18. INSPECTION. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer's normal business hours, to examine all the books of account, records, reports, and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer's affairs, finances and accounts with the Issuer's officers, employees and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested; provided, however, that the Indenture Trustee may only cause the books of the Issuer to be audited on an annual basis, unless there occurs an Event of Default hereunder. The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine with advice of counsel and after consultation with the Issuer and Administrator that such disclosure is consistent with its obligations hereunder. Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) disclosure of any and all information that is or becomes publicly known through no fault of the Indenture Trustee, (ii) disclosure of any and all information (which makes reference to the Issuer, the Administrator or the Crestar Student Loan Trust ______ transaction) obtained by the Indenture Trustee from sources (other than the Issuer, Eligible Lender Trustee, the Administrator or the Master Servicer) that have not notified the Indenture Trustee that such information is subject to a confidentiality obligation with the Issuer, the Eligible Lender Trustee, the Administrator or the Master Servicer (iii) disclosure of any and all information (A) if required to do so by any applicable statute, law, rule or regulation, (B) to any government agency or regulatory body having or claiming authority to regulate or oversee any aspects of the Indenture Trustee's business or that of its affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Indenture Trustee or an affiliate or an officer, director or employee thereof is a party, (D) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated herein approved in advance by the Issuer or (E) to any affiliate, independent or internal auditor, agent, employee or attorney of the Indenture Trustee having a need to know the same, provided that the Indenture Trustee advises such recipient of the confidential nature of the information being disclosed or (iv) any other disclosure authorized by the Issuer. SECTION 10.19. USURY. The amount of interest payable or paid on any Note under the terms of this Indenture shall be limited to an amount which shall not exceed the maximum non usurious rate of interest allowed by the applicable laws of the United States or the lesser of New York or Ohio, which could lawfully be contracted for, charged or received (the "Highest Lawful Rate"). If any payment of interest on any Note exceeds the Highest Lawful Rate, the Issuer stipulates that such excess amount will be deemed to have been paid as a result of an error on the part of the Issuer, and the Noteholder receiving such excess payment shall promptly, upon discovery of such error or upon notice thereof from the Issuer or the Indenture Trustee, refund the amount of such excess and, at the option of the Indenture Trustee, apply the excess to the payment of principal of such Note, if any, remaining unpaid. IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers, thereunto duly authorized and duly attested, all as of the day and year first above written. CRESTAR STUDENT LOAN TRUST ______ By: ________________ not in its individual capacity but solely as Eligible Lender Trustee By:_______________________________ Name: _______________ Title: _______________ ___________________, not in its individual capacity but solely as Indenture Trustee, By:_______________________________ Name: Title: 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 _________________________, not in its individual capacity but solely as Eligible Lender Trustee of CRESTAR STUDENT LOAN TRUST _______, 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 ___________, 199__. ________________________________ Notary Public in and for the Commonwealth of Virginia [SEAL] My commission expires: ______________________ STATE OF NEW YORK, ) ) ss.: COUNTY OF NEW YORK ) 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 _________________, a [state] [banking corporation], and that she 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 ___________, 199__. __________________________________ Notary Public in and for the Commonwealth of Virginia [SEAL] My commission expires: ______________________ EX-4 5 EXHIBIT 4.2 TERMS SUPPLEMENT TO THE MASTER INDENTURE DATED AS OF _______ __, 1998 BETWEEN CRESTAR STUDENT LOAN TRUST __________ ISSUER AND ----------------------------- INDENTURE TRUSTEE ----------------------------- DATED AS OF _________________ SECURING CRESTAR STUDENT LOAN TRUST _________ $------------- STUDENT LOAN ASSET BACKED NOTES
TABLE OF CONTENTS PAGE ---- ARTICLE I DEFINITIONS..............................................................................................2 ARTICLE II AUTHORIZATION, TERMS AND ISSUANCE.......................................................................3 Section 2.1. Authorization of Notes.......................................................................3 Section 2.2. Purposes.....................................................................................3 Section 2.3. Terms of the Notes...........................................................................4 Section 2.4. Interest.....................................................................................4 Section 2.5. Determination of Interest....................................................................6 ARTICLE III PAYMENTS...............................................................................................7 Section 3.1. Payments of Interest and Principal...........................................................7 Section 3.2. Early Payment................................................................................7 ARTICLE IV MISCELLANEOUS...........................................................................................7 Section 4.1. Adoption of This Terms Supplement............................................................7 Section 4.2. Counterparts. ...............................................................................7 Section 4.3. Indenture Constitutes a Security Agreement...................................................7 Section 4.4. Governing Law................................................................................8 Section 4.5. Ratification of Indenture....................................................................8
EXHIBIT A Form of Senior LIBOR Rate Note EXHIBIT B Form of Subordinated LIBOR Rate Note EXHIBIT C Form of Trust Receipt and Certification SCHEDULE A Schedule of Financed Student Loans THIS TERMS SUPPLEMENT, dated as of ___________ 1, ____, between CRESTAR STUDENT LOAN TRUST ______, a Delaware business trust (the "Issuer") acting through _______________________________, a [national banking association], not in its individual capacity but solely as eligible lender trustee (the "Eligible Lender Trustee"), and _____________________, a New York banking corporation duly established, existing and authorized to accept and execute trusts of the character herein set out under and by virtue of the laws of the State of New York, with its principal corporate trust office in New York, New York (the "Indenture Trustee"), as Indenture Trustee under an Indenture dated as of _____________, 1998, as may be further amended and supplemented from time to time (the "Indenture"). PRELIMINARY STATEMENT Section 2.3 of the Indenture provides, among other things, that the Issuer, as provided in the Trust Agreement, and the Indenture Trustee may enter into an indenture supplemental to the Indenture for the purpose of authorizing the Notes and to specify certain terms of such Notes. The Issuer has duly authorized the creation of Notes in an aggregate principal amount not to exceed $___________ to be known as the Issuer's Student Loan Asset Backed Notes (the "Notes"), and the Issuer and the Indenture Trustee are executing and delivering this Terms Supplement in order to provide for the Notes. GRANTING CLAUSES The Issuer hereby Grants to the Indenture Trustee, for the exclusive benefit of the Noteholders, all of the Issuer's right, title and interest in and to (a) the Financed Student Loans listed in the Schedule of Financed Student Loans (as such Schedule may be amended or supplemented from time to time including, but not limited to, for purposes of adding any Subsequent Financed Student Loans acquired by the Trust during the Subsequent Finance Period) and all obligations of the Obligors thereunder including all moneys paid thereunder (other than Interest Subsidy Payments and Special Allowance Payments payable to the Cut-off Date (or with respect to the Subsequent Financed Student Loans, through the applicable Subsequent Cut-off Date)), and all written communications received from the Transferor with respect thereto (including borrower correspondence, notices of death, disability or bankruptcy and requests for deferrals or forbearance), on or after the Cut-off Date (or with respect to the Subsequent Financed Student Loans, after the applicable Subsequent Cut-off Date), (b) all funds on deposit from time to time in the Trust Accounts (other than the Certificate Distribution Account) and in all investments and proceeds thereof (including all income thereon), (c) the Issuer's right, title and interest in the Sales Agreement and the Transfer and Servicing Agreement, and (d) all proceeds of the foregoing, including without limitation any proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or other liquid property. Such Grants are made, however, in trust, to secure the Notes, equally and ratably without prejudice, priority or distinction, between any Note and any other Note by reason of difference in time of issuance or otherwise, provided, however, that the Class B Notes are subordinated to all amounts owing on the Class A Notes (other than Carryover Interest) as described herein, in the Indenture or any other Basic Document; and to secure (i) the payment of all amounts due on the Notes, as such amounts become due in accordance with their terms, (ii) the payment of all other sums payable under the Indenture, this Terms Supplement, or any other Basic Document with respect to the Notes and (iii) compliance with the provisions of the Indenture, this Terms Supplement or any other Basic Document with respect to the Notes, all as provided in the Indenture and this Terms Supplement. The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions hereof and of the Indenture and agrees to perform the duties herein or therein required. ARTICLE I DEFINITIONS Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Exhibit A to the Standard Terms to Transfer and Servicing Agreement and Article I of the Transfer and Servicing Agreement. Exhibit A to the Standard Terms to Transfer and Servicing Agreement also contains rules of usage that shall be applicable herein. Additionally, the following terms shall be as defined below. "Authorized Denominations" means, with respect to each Class of Notes, $50,000 and integral multiples of $1,000 in excess thereof. "Book-Entry Form" or "Book-Entry System" means a form or system under which (i) the beneficial right to principal and interest may be transferred only through a book-entry, (ii) physical securities in registered form are issued only to a Depository or its nominee as registered owner, with the securities "immobilized" to the custody of the Depository, and (iii) the book-entry is the record that identifies the owners of beneficial interests in that principal and interest. "Class A Notes" has the meaning set forth in Section 2.1 herein. "Class B Notes" has the meaning set forth in Section 2.1 herein. "Class Interest Rate" means with respect to i)" (i) the Class A Notes, each variable rate of interest per annum borne by the Class A Notes during each Interest Accrual Period and determined in accordance with the provisions of Section 2.4 and 2.5 hereof; and ii)" (ii) the Class B Notes, each variable rate of interest per annum borne by the Class B Notes during each Interest Accrual Period and determined in accordance with the provisions of Sections 2.4 and 2.5 hereof. "Directing Notes" means, for so long as the Class A Notes are Outstanding, the Class A Notes, and thereafter, the Class B Notes. "Formula Rate" means, (i) with respect to the Class A Notes for any Interest Accrual Period, One-Month LIBOR as of the related Interest Determination Date plus ___% per annum and (ii) with respect to the Class B Notes for any Interest Accrual Period, One-Month LIBOR as of the related Interest Determination Date plus ___% per annum, but in either case not more than [18]% per annum. "Legal Final Maturity" means (i) ____________ with respect to the Class A Notes, and (ii) _____________ with respect to the Class B Notes. "Notes" has the meaning set forth in the Preliminary Statement. "Program Operating Expense Percentage" means a fraction (expressed as a percentage and calculated as of the end of each calendar quarter by the Administrator) the numerator of which is the annualized operating expenses of the Issuer for the calendar month then ended, including, without limitation, Transaction Fees, and the denominator of which is the Pool Balance as of the last day of such calendar quarter. "Sales Agreement" means the agreement of that name by and among the Transferor, the Depositor and the Eligible Lender Trustee, dated as of _________ 1, ____, whereby the Transferor sold the Financed Student Loans to the Depositor. "Senior Notes" means the Class A Notes. "Subordinated Notes" means the Class B Notes. "Terms Supplement" means this Terms Supplement, as from time to time amended or supplemented. "Transfer and Servicing Agreement" means the agreement of that name by and among the Depositor, the Issuer, the Eligible Lender Trustee, the Master Servicer and the Administrator, dated as of _____, __, which incorporates by reference the Standard Terms thereto. ARTICLE II AUTHORIZATION, TERMS AND ISSUANCE SECTION 2.1. AUTHORIZATION OF NOTES. There is hereby authorized the borrowing of funds, and to evidence such borrowing there are hereby authorized two Classes of Notes (collectively, the "Notes"), designated as (i) the "Crestar Student Loan Trust _____ , Senior LIBOR Rate Class A Student Loan Asset Backed Notes" (the "Class A Notes") in the aggregate principal amount of $_________, and (ii) the "Crestar Student Loan Trust ______, Subordinate LIBOR Rate Class B Student Loan Asset Backed Notes" (the "Class B Notes") in the aggregate principal amount of $_________. SECTION 2.2. PURPOSES. The Notes are authorized to finance the acquisition by the Issuer of Financed Student Loans, and to make deposits to the Trust Accounts required hereby. SECTION 2.3. TERMS OF THE NOTES. (a) The Notes shall be issued in fully registered form, in substantially the forms set forth in Exhibit A hereof (with respect to the Class A Notes) and Exhibit B (with respect to the Class B Notes), in each case with such variations, omissions and insertions as may be required by the circumstances, as may be required or permitted by the Indenture and this Terms Supplement, or be consistent with the Indenture and this Terms Supplement and necessary or appropriate to conform to the rules and requirements of any governmental authority or any usage or requirement of law with respect thereto. (b) The Notes may be issued only in Authorized Denominations. The Notes shall be dated as of the Closing Date. The Notes shall be issued to a Depository for use in a Book-Entry System in accordance with the provisions of Section 2.14 of the Master Indenture. (c) Interest on each Note shall accrue on the Outstanding Amount of such Note until such Note has been paid in full or payment has been duly provided for, as the case may be, and shall accrue from the later of the Closing Date or the most recent Payment Date to which interest has been paid or duly provided for. Each Note shall bear interest at an interest rate determined in accordance with the provisions and subject to the limitations set forth herein, and interest on Notes shall be paid for the related Interest Payment Period on each Payment Date (or on each Quarterly Payment Date in the case of the Class B Notes). (d) Principal will be paid on the Notes on each Payment Date (or on each Quarterly Payment Date in the case of the Class B Notes) in an amount and priorities set forth in the Transfer and Servicing Agreement and the Indenture. Each Class of Notes will mature on its Final Legal Maturity. (e) Except as otherwise set forth in the Indenture and the Transfer and Servicing Agreement, the rights of the Class B Noteholders to receive payments of interest shall be subordinated to the prior rights of the Class A Noteholders to receive all payments of interest to which they are entitled and, after each Class of Notes has received the full amount of interest to which it is entitled, the rights of the Class B Noteholders to receive payments of principal shall be subordinated to the prior rights of the Class A Noteholders to receive all payments of principal to which they are entitled. SECTION 2.4. INTEREST. (a) During the first Interest Accrual Period, the Class A Notes shall bear interest at ___% per annum, and the Class B Notes shall bear interest at ___% per annum. Thereafter, each Class of Notes shall bear interest during each Interest Accrual Period at the lesser of (i) the Formula Rate or (ii) the Net Loan Rate for such Interest Accrual Period; provided, however, that no determination of the Net Loan Rate is required to be made on an Interest Determination Date unless One-Month LIBOR as of the preceding Interest Determination Date exceeds by more than 100 basis points the average of the bond equivalent rates of the 91-day Treasury bills auctioned to the preceding Interest Determination Date during the calendar quarter in which such preceding Interest Determination Date occurs (or in the case of the initial Interest Determination Date, the Closing Date). (b) Interest shall accrue daily on each Class of Notes at the related Class Interest Rate and shall be computed for the actual number of days elapsed in such Interest Accrual Period on the basis of a year consisting of 360 days. (c) If the Class Interest Rate applicable to a Class of Notes for any Interest Period is the Net Loan Rate, the Master Servicer shall determine the Carryover Interest with respect to such Class of Notes for such Carryover Interest Accrual Period. Such Carryover Interest shall bear interest calculated at the Formula Rate for such Class from the Payment Date for the Interest Accrual Period with respect to which such Carryover Interest was calculated, until paid. For purposes of this Terms Supplement, any reference to "principal" or "interest" herein shall not include within the meaning of such words Carryover Interest or any interest accrued on any such Carryover Interest. Such Carryover Interest shall be separately calculated for each Note of such Class by the Master Servicer during such Interest Period in sufficient time for the Indenture Trustee to give notice to each Noteholder of such Carryover Interest as required in the next succeeding sentence. On the Quarterly Payment Date for an Interest Accrual Period with respect to which such Carryover Interest for a Class of Notes has been calculated by the Master Servicer, the Indenture Trustee shall give written notice to each Noteholder of the applicable Class of the Carryover Interest applicable to each Noteholder's Note of such Class, which written notice may be included in any other written statement sent by the Indenture Trustee to such Noteholders, and shall be mailed on such Payment Date by first-class mail, postage prepaid, to each such Noteholder at such Noteholder's address as it appears on the registration books maintained by the Note Registrar. (d) The Carryover Interest for a Class of Notes shall be paid by the Indenture Trustee on Outstanding Notes of such Class on the first occurring Quarterly Payment Date for such Class if and to the extent funds are available therefor, in accordance with all priorities set forth in the Transfer and Servicing Agreement. To the extent that any portion of the Carryover Interest for a Class of Notes remains unpaid after payment of a portion thereof, and subject to the next sentence below, such unpaid portion of the Carryover Interest shall be paid in whole or in part as required hereunder until fully paid by the Indenture Trustee on the next occurring Quarterly Payment Date or Dates, as necessary, to the extent funds are available therefor in accordance with all priorities set forth in the Transfer and Security Agreement. Any Carryover Interest (and any interest accrued thereon) on any Note which is due and payable on the earlier of the Payment Date on which the Outstanding Amount of such Class is reduced to zero and the related Legal Final Maturity Date for such Class shall be paid to the Noteholder thereof on such Legal Final Maturity to the extent that moneys are available therefor in accordance with the provisions of this Terms Supplement and the Transfer and Servicing Agreement; provided, however, that any amount of Carryover Interest with respect to a Class of Notes remaining after the earlier of the Payment on which the Outstanding Amount of such Class has been reduced to zero and the distribution of all Available Funds on the Legal Final Maturity of such Class of Notes, will never become due and payable and will be discharged as to the applicable Class of Notes on such date. On any Quarterly Payment Date on which the Indenture Trustee pays only a portion of the Carryover Interest on a Note of such Class, the Indenture Trustee shall give written notice in the manner set forth in the immediately preceding paragraph to the Noteholders of such Note receiving such partial payment of the Carryover Interest remaining unpaid on such Note. (e) The failure to pay the aggregate amount of Carryover Interest as a result of insufficient Available Funds will not result in the occurrence of an Event of Default. (f) In the event that the Master Servicer no longer determines, or fails to determine, when required, the Class Interest Rate with respect to a Class of Notes, or, if for any reason such manner of determination shall be held to be invalid or unenforceable by a court of competent jurisdiction, the Class Interest Rate for the next succeeding Interest Accrual Period for such Class of Notes shall be determined by the Indenture Trustee provided it is notified in writing by the Master Servicer on or prior to the Interest Determination Date, or, if the Indenture Trustee fails to make such determinations, such Class Interest Rate shall be the Net Loan Rate for such next succeeding Interest Accrual Period. (g) In no event shall the cumulative amount of interest paid or payable on a Class of Notes (including interest calculated as provided herein, plus any other amounts that constitute interest on the Notes of such Class under applicable law, which are contracted for, charged, reserved, taken or received pursuant to the Notes of such Class or related documents) calculated from the date of issuance of the Notes of such Class through any subsequent day during the term of the Notes of such Class or otherwise prior to payment in full of the Notes of such Class exceed the amount permitted by applicable law. If the applicable law is ever judicially interpreted so as to render usurious any amount called for under the Notes of such Class or related documents or otherwise contracted for, charged, reserved, taken or received in connection with the Notes of such Class, or if the acceleration of the maturity of the Notes of such Class results in payment to or receipt by the Noteholder or any former Noteholder of the Notes of such Class of any interest in excess of that permitted by applicable law, then, notwithstanding any provision of the Notes of such Class or related documents to the contrary, all excess amounts theretofore paid or received with respect to the Notes of such Class shall be credited on the principal balance of the Notes of such Class (or, if the Notes of such Class have been paid or would thereby be paid in full, refunded by the recipient thereof), and the provisions of the Notes of such Class and related documents shall automatically and immediately be deemed reformed and the amounts thereafter collectible hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the recovery of the fullest amount otherwise called for under the Notes of such Class and under the related documents. SECTION 2.5. DETERMINATION OF INTEREST. (a) On each Interest Determination Date, the Master Servicer shall determine the Formula Rate for each Class of Notes that will be applicable to the Interest Accrual Period immediately following such Interest Determination Date. In connection therewith, the Master Servicer shall calculate One-Month LIBOR, and shall notify the Indenture Trustee and the Eligible Lender Trustee in writing of One-Month LIBOR. The determination by the Master Servicer of One-Month LIBOR shall (in the absence of manifest error) be final and binding upon all parties. On each Interest Determination Date, the Master Servicer also shall determine the Net Loan Rate for the related Interest Period when required pursuant to Section 2.4(a). Based upon such calculations, the Master Servicer shall determine the Class Interest Rate applicable to each Class of Notes for the applicable Interest Accrual Period. (b) The determination of a Class Interest Rate by the Master Servicer or the Indenture Trustee or any other Person pursuant to the provisions of this Article II shall be conclusive and binding on the Noteholders of the Class of Notes to which such Class Interest Rate applies, and the Issuer and the Indenture Trustee may rely thereon for all purposes. ARTICLE III PAYMENTS SECTION 3.1. PAYMENTS OF INTEREST AND PRINCIPAL. The Indenture Trustee shall make distributions from and to the several Trust Accounts in the manner provided for in Article IV of the Transfer and Servicing Agreement, as such Article may be amended from time to time. All principal payments of Notes of any Class shall be made pro rata to the Noteholders of such Class. No later than each Payment Determination Date, the Master Servicer shall compute the Principal Factor of each Class of Notes for the upcoming Payment Date and shall notify the Indenture Trustee in writing of such Principal Factors. SECTION 3.2. EARLY PAYMENT. The Notes shall be subject to early repayment upon sale of the Financed Student Loans as provided in Article V of the Transfer and Servicing Agreement. ARTICLE IV MISCELLANEOUS SECTION 4.1. ADOPTION OF THIS TERMS SUPPLEMENT. This Terms Supplement is adopted pursuant to the provisions of the Indenture. SECTION 4.2. COUNTERPARTS. This Terms Supplement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. SECTION 4.3. INDENTURE CONSTITUTES A SECURITY AGREEMENT. This Terms Supplement constitutes a security agreement for the purposes of the Uniform Commercial Code. The Indenture Trustee hereby appoints _______________ as custodian of the Financed HEAL Loans solely for the purpose of maintaining in _________ the instruments evidencing such Financed HEAL loans. SECTION 4.4. GOVERNING LAW. This Terms Supplement shall be governed by and construed in accordance with the laws of the State of New York. SECTION 4.5. RATIFICATION OF INDENTURE. As supplemented by this Terms Supplement, the Indenture is in all respects ratified and confirmed, and the Indenture so supplemented by this Terms Supplement shall be read, taken and construed as one and the same instrument. Each addition to and amendment of the Indenture contained herein is solely for purposes of the Notes. If any term of this Terms Supplement conflicts with any term of the Indenture, this Terms Supplement shall control for purposes of the Notes. IN WITNESS WHEREOF, the parties hereto have caused this Terms Supplement to be duly executed as of the day and year first above written. CRESTAR STUDENT LOAN TRUST _____ By: _______________________, not in its individual capacity but solely as Eligible Lender Trustee By: _______________________ Name: Title: Trust Officer ____________________________, not in its individual capacity but solely as Indenture Trustee By:________________________________ Name: Title: 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 [Assistant] Vice President of _________________________, not in its individual capacity but solely as Eligible Lender Trustee of CRESTAR STUDENT LOAN TRUST ______, 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 ___________. ______________________________ Notary Public in and for the Commonwealth of Virginia. [SEAL] My commission expires: ________________________ STATE OF NEW YORK, ) ) ss: COUNTY OF NEW YORK ) 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 _______________________, a New York banking corporation, and that she executed the same as the act of said corporation 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 ________. ------------------------------- Notary Public in and for the State of New York [SEAL] My commission expires: _________________________ EXHIBIT A [FORM OF SENIOR LIBOR RATE NOTE] CRESTAR STUDENT LOAN TRUST 1997-1 SENIOR LIBOR RATE CLASS A STUDENT LOAN ASSET BACKED NOTE UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR INTEREST IN CRESTAR BANK, CRESTAR SECURITIZATION, LLC, _______________, ____________________, _______________________________________ OR _____________________. THIS NOTE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.
No. A- _____ $_________ LEGAL CLASS FINAL DATED INTEREST Class MATURITY DATE RATE CUSIP ----- -------- ---- ---- ----- A One-Month LIBOR [-] [+] ___% as herein provided
REGISTERED NOTEHOLDER: CEDE & CO. CRESTAR BANK STUDENT LOAN TRUST _________, a Delaware business trust (the "Issuer"), for value received, promises to pay, from the sources herein described, to the Registered Noteholder identified above, or registered assigns, upon presentation and surrender hereof at the Corporate Trust Office of ______________________, as Paying Agent, or at the principal office of any successor or additional Paying Agent, the principal amount identified above on the Legal Final Maturity identified above, and to pay to the registered owner hereof, interest and principal hereon in lawful money of the United States of America at the Class Interest Rate on the dates as provided herein. Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings given to such terms in the Indenture dated as of ________________ (the "Master Indenture") and as supplemented by a Terms Supplement dated as of ________________, (the "Terms Supplement" and, together with the Master Indenture, the "Indenture") between the Issuer and _____________________, as Indenture Trustee, as further amended and supplemented from time to time. This is one of a duly authorized issue of notes of the Issuer designated as "Crestar Student Loan Trust ______, Senior LIBOR Rate Class A Student Loan Asset Backed Notes", in the aggregate principal amount of $ (herein referred to as the "Class A Notes," and together with the Crestar Student Loan Trust ______, Subordinate LIBOR Rate Class B Student Loan Asset Backed Notes in the aggregate principal amount of $_________ (the "Class B Notes"), the "Notes") issued under the Indenture. The Notes are issued to finance the acquisition of Financed Student Loans by the Trust, and to make certain deposits into the Pledged Accounts. The Notes are secured under the Indenture which, together with certain other documents, assigns to the Indenture Trustee for the benefit of the Noteholders all the rights and remedies of the Issuer under certain Financed Student Loans and rights under various contracts providing for the issuance, guarantee and servicing of such Financed Student Loans. Reference is hereby made to the Indenture for the provisions, among others, with respect to the custody and application of the proceeds of the Notes, the nature and the extent of the liens and security of the Indenture, the collection and disposition of revenues, the funds charged with and pledged to the payment of the principal of and the interest on the Notes, the rights, duties and immunities of the Indenture Trustee, the rights of the registered owners of the Notes, and the rights and obligations of the Issuer. By the acceptance of this Note, the registered owner hereof assents to all of the provisions of the Indenture. Distributions of principal and interest will made on each Distribution Date to the holders of this Note in the manner described in the Transfer and Servicing Agreement. The rate of interest on the Class A shall be determined in accordance with the Terms Supplement. If an Event of Default as defined in the Indenture occurs, the principal of and interest on all Notes issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture and the rights and obligations of the Issuer, the Indenture Trustee and the Noteholder hereof may be modified or amended in the manner and subject to the conditions set forth in the Indenture. The holder of this Note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. The transfer of this Note may be registered only upon surrender hereof to the Indenture Trustee together with an assignment duly executed by the registered owner or its attorney or legal representative in such form as shall be satisfactory to the Indenture Trustee. Upon any such registration of transfer of this Note and subject to the payment of any fees and charges as provided by the Indenture, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in exchange for this Note a new Note or Notes registered in the name of the transferee, in any denomination or denominations authorized by the Indenture, of the same maturity and in an aggregate principal amount equal to the unredeemed principal amount of this Note and bearing the same interest as this Note. In any case where the date fixed for the payment of principal of or interest on this Note shall not be a Business Day, then payment of such principal or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date fixed for the payment thereof. This Note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been manually signed by the Indenture Trustee. IN WITNESS WHEREOF, the Issuer has caused this Note to be executed in its name by the manual or facsimile signature of an Authorized Officer. CRESTAR STUDENT LOAN TRUST ________ By: __________________________________, not in its individual capacity but solely as Eligible Lender Trustee By: _______________________________________ Its Authorized Officer CERTIFICATE OF AUTHENTICATION This Note is one of the Class A Notes designated in and issued under the provisions of the within mentioned-Indenture. - ----------------------- New York, New York, as Indenture Trustee By:___________________________ Authorized Representative Date of Authentication: ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto ______________________, the within Note and irrevocably appoints ________________________, attorney-in-fact, to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: ____________ _____________________________ NOTICE: The signature to Signature Guaranteed: this assignment must correspond with the name as _____________________________ it appears upon the face of the within Note in every particular, without any alteration whatsoever. Name and Address: ___________________________ Tax Identification Number or Social Security Number(s): __________________________ EXHIBIT B [FORM OF SUBORDINATE LIBOR RATE NOTE] CRESTAR STUDENT LOAN TRUST _______________ SUBORDINATE LIBOR RATE CLASS B STUDENT LOAN ASSET BACKED NOTE UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS NOTE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR INTEREST IN CRESTAR BANK, CRESTAR SECURITIZATION LLC _______________, ___________________, ___________________ OR ________________________. THIS NOTE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.
No. B-_______ $_______ LEGAL CLASS FINAL DATED INTEREST Class MATURITY DATE RATE CUSIP ----- -------- ---- ---- ----- B One-Month Libor +_____% as herein provided
REGISTERED NOTEHOLDER: CEDE & CO. CRESTAR BANK STUDENT LOAN TRUST ______, a Delaware business trust (the "Issuer"), for value received, promises to pay, from the sources herein described, to the Registered Noteholder identified above, or registered assigns, upon presentation and surrender hereof at the Corporate Trust Office of _____________________, as Paying Agent, or at the principal office of any successor or additional Paying Agent, the principal amount identified above on the Legal Final Maturity identified above, and to pay to the registered owner hereof, interest and principal hereon in lawful money of the United States of America at the Class Interest Rate on the dates as provided herein. Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings given to such terms in the Indenture dated as of ________________ (the "Master Indenture"), as supplemented by the Terms Supplement dated as of ________________, (the "Terms Supplement" and, together with the Master Indenture, the "Indenture") between the Issuer and _____________________, as Indenture Trustee, as further amended and supplemented from time to time. This is one of a duly authorized issue of notes of the Issuer designated as "Crestar Student Loan Trust ______, Subordinate LIBOR Rate Class B Student Loan Asset Backed Notes", in the aggregate principal amount of $_________ (herein referred to as the "Class B Notes," and together with the Crestar Student Loan Trust ______, Senior LIBOR Rate Class A Student Loan Asset Backed Notes in the aggregate principal amount of $___________, the "Notes") issued under the Indenture. The Notes are issued to finance the acquisition of Financed Student Loans by the Trust, and to make certain deposits into the Pledged Accounts. The Notes are secured under the Indenture which, together with certain other documents, assigns to the Indenture Trustee for the benefit of the Noteholders all the rights and remedies of the Issuer under certain Financed Student Loans and rights under various contracts providing for the issuance, guarantee and servicing of such Financed Student Loans. Reference is hereby made to the Indenture for the provisions, among others, with respect to the custody and application of the proceeds of the Notes, the nature and the extent of the liens and security of the Indenture, the collection and disposition of revenues, the funds charged with and pledged to the payment of the principal of and the interest on the Notes, the rights, duties and immunities of the Indenture Trustee, the rights of the registered owners of the Notes, and the rights and obligations of the Issuer. By the acceptance of this Note, the registered owner hereof assents to all of the provisions of the Indenture. DISTRIBUTIONS OF INTEREST AND PRINCIPAL ON THE CLASS B NOTES ARE SUBORDINATED IN PRIORITY OF PAYMENT TO DISTRIBUTIONS OF INTEREST AND PRINCIPAL ON THE CLASS A NOTES AS DESCRIBED IN THE TERMS SUPPLEMENT AND THE TRANSFER AND SERVICING AGREEMENT. Distributions of principal and interest on this Class B Note will made on each Quarterly Distribution Date to the holders of this Class B Note in the manner described in the Transfer and Servicing Agreement. The rate of interest on the Class B Notes shall be determined in accordance with the Terms Supplement. If an Event of Default as defined in the Indenture occurs, the principal of and interest on all Notes issued under the Indenture may be declared due and payable upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture and the rights and obligations of the Issuer, the Indenture Trustee and the Noteholder hereof may be modified or amended in the manner and subject to the conditions set forth in the Indenture. The holder of this Note shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any Event of Default under the Indenture, or to institute, appear in or defend any suit or other proceeding with respect thereto, except as provided in the Indenture. The transfer of this Note may be registered only upon surrender hereof to the Indenture Trustee together with an assignment duly executed by the registered owner or its attorney or legal representative in such form as shall be satisfactory to the Indenture Trustee. Upon any such registration of transfer of this Note and subject to the payment of any fees and charges as provided by the Indenture, the Issuer shall execute and the Indenture Trustee shall authenticate and deliver in exchange for this Note a new Note or Notes registered in the name of the transferee, in any denomination or denominations authorized by the Indenture, of the same maturity and in an aggregate principal amount equal to the unredeemed principal amount of this Note and bearing the same interest as Note. In any case where the date fixed for the payment of principal of or interest on this Note shall not be a Business Day, then payment of such principal or interest need not be made on such date but may be made on the next succeeding Business Day with the same force and effect as if made on the date fixed for the payment thereof. It is hereby certified, recited and declared that all acts, conditions and things required to have happened, to exist and to have been performed precedent to and in the execution and delivery of the Indenture and issuance of this Note have happened, do exist and have been performed in due time, form and manner as required by law. This Note shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been manually signed by the Indenture Trustee. IN WITNESS WHEREOF, the Issuer has caused this Note to be executed in its name by the manual or facsimile signature of an Authorized Officer. CRESTAR STUDENT LOAN TRUST ______ By: _______________________________, not in its individual capacity but solely as Eligible Lender Trustee By: _____________________________________ Its Authorized Officer CERTIFICATE OF AUTHENTICATION This Note is one of the Class B Notes designated in and issued under the provisions of the within mentioned Indenture. - --------------------------- New York, New York, as Indenture Trustee By: ____________________________ Authorized Representative Date of Authentication: - -------------------------------- ASSIGNMENT FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto ___________________, the within Note and irrevocably appoints ____________________, attorney-in-fact, to transfer the within Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: ____________ _____________________________ NOTICE: The signature to Signature Guaranteed: this assignment must correspond with the name as _____________________________ it appears upon the face of the within Note in every particular, without any alteration whatsoever. Name and Address: ___________________________ Tax Identification Number or Social Security Number(s): __________________________ EXHIBIT C TRUST RECEIPT AND CERTIFICATION - ------------------------- - ------------------------- New York, New York 10006 Re: The Indenture between Crestar Student Loan Trust ______ an ______________, dated as of ________________ , as Supplemented by a Terms Supplement, dated as of ____________. Ladies and Gentlemen: In accordance with the provisions of Section 4.3 of the above-referenced Terms Supplement, the undersigned, as Custodian, hereby certifies as to each HEAL Loan in the Schedule of Financed Student Loans that it has received the original HEAL Note relating thereto. The Custodian makes no representations as to and shall not be responsible to verify (i) the validity, legality, enforceability, sufficiency, due authorization or genuineness of any of the documents contained in each custodial file or of any of the HEAL Loans, or (ii) the collectibility, insurability, effectiveness or suitability of any such HEAL Loan. The Custodian hereby confirms that it is holding the HEAL Notes as agent and bailee of, and custodian for the exclusive use and benefit, and subject to the sole direction, of the Indenture Trustee pursuant to the terms and conditions of the Indenture. The Custodian agrees to hold such HEAL Notes continuously in the ____________________________, without the prior approval of ______________________. This Trust Receipt and Certification is not divisible or negotiable. Capitalized terms used herein shall have the meaning ascribed to them in the Indenture. ------------------------------------- -------------------------------------, Custodian By:_________________________________________ Name:________________________________________ Title:_______________________________________ EX-4 6 EXHIBIT 4.4 EXHIBIT 4.4 TRANSFER AND SERVICING AGREEMENT --------------------------------- AMONG CRESTAR SECURITIZATION, LLC, AS DEPOSITOR, CRESTAR STUDENT LOAN TRUST ___-__, AS ISSUER, CRESTAR BANK, AS MASTER SERVICER AND ADMINISTRATOR AND --------------------------------- NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS ELIGIBLE LENDER TRUSTEE DATED AS OF ______ __, ____ TABLE OF CONTENTS Page ---- ARTICLE I.....................................................................1 DEFINITIONS...................................................................1 ARTICLE II....................................................................3 CONVEYANCE OF FINANCED STUDENT LOANS..........................................3 Section 2.1. Conveyance of Financed Student Loans....................3 Section 2.2. Assignment and Acknowledgment...........................4 ARTICLE III...................................................................4 REPRESENTATIONS, WARRANTIES AND COVENANTS.....................................4 Section 3.1. Principal Balance.......................................4 Section 3.2. TP Program..............................................4 Section 3.3. Subservicing Agreements.................................4 Section 3.4. Compliance by the Eligible Lender Trustee with Insurance Agreements with the Secretary of HHS.....5 ARTICLE IV....................................................................5 PAYMENTS AND ACCOUNTS.........................................................5 Section 4.1. Payments................................................5 Section 4.2. Reserve Account.........................................8 Section 4.3. Determination of LIBOR..................................9 ARTICLE V.....................................................................9 TERMINATION...................................................................9 Section 5.1. Termination.............................................9 Section 5.2. Optional Purchase of Financed Student Loans............10 Section 5.3. Auction of Financed Student Loans......................10 ARTICLE VI...................................................................10 MISCELLANEOUS................................................................10 Section 6.1. Limitation on Subsequent Financed Student Loans........10 Section 6.2. Schedules..............................................11 Section 6.3. Amendment of Standard Terms............................11 TRANSFER AND SERVICING AGREEMENT THIS TRANSFER AND SERVICING AGREEMENT, dated as of _________1, ____, is hereby executed by and among CRESTAR SECURITIZATION, LLC, a Virginia limited liability company (the "Depositor"), CRESTAR STUDENT LOAN TRUST _____-__, a Delaware business trust (the "Issuer"), CRESTAR BANK, a Virginia banking corporation (the "Master Servicer" or "Administrator" in such respective capacities), and _______________________, a national banking association, not in its individual capacity but solely as eligible lender trustee (the "Eligible Lender Trustee"), which agreement incorporates by reference as if set forth herein in full all the provisions of the Standard Terms to Transfer and Servicing Agreement (June 1998 Edition) (the "Standard Terms," and as incorporated herein, the "Transfer and Servicing Agreement). RECITALS The Eligible Lender Trustee, on behalf of the Depositor, has acquired student loans from the Transferor; The Depositor desires to sell the student loans to the Issuer, and the Eligible Lender Trustee is willing to hold legal title to, and serve as eligible lender trustee with respect to, such student loans on behalf of the Issuer; The Master Servicer and the Administrator are willing to service such student loans and to undertake certain administrative responsibilities with respect thereto; The Issuer proposes to issue Notes secured by such student loans; and The parties are entering into this Transfer and Servicing Agreement to document their respective obligations with respect to the student loans and the Notes; NOW THEREFORE, in consideration of the promises and the mutual covenants contained herein, the parties agree, intending to be legally bound, as follows: ARTICLE I DEFINITIONS In addition to the definitions set forth in the Standard Terms, the following provisions shall govern the defined terms set forth below. To the extent the meanings assigned to the defined terms set forth below are inconsistent with the meanings assigned to such terms in the Standard Terms, the meanings assigned herein shall control. "Administration Fee" means an amount equal to ___% of the Outstanding Amount of the Notes as of the first day of the initial Collection Period (or Closing Date with respect to the first Quarterly Payment Date) with respect to such Quarterly Payment Date. "Class A Notes" means Notes of the Issuer designated as "Crestar Student Loan Trust ____, Senior LIBOR Rate Class A Student Loan Asset Backed Notes." "Class B Notes" means Notes of the Issuer designated as "Crestar Student Loan Trust 199_-_, Subordinate LIBOR Rate Class B Student Loan Asset Backed Notes." "Closing Date" means _________, ____. "Cut-off Date" means ____________________________________. "Guarantee Agency" means ________________________. "Initial Pool Balance" means $___________, representing the Pool Balance for the Initial Financed Student Loans set forth on Schedule A as of the Cut-off Date. "Interest Accrual Period" means, (i) with respect to the Class A Notes for any Payment Date, the period beginning on the preceding Payment Date and ending on the day preceding such Payment Date, except that the first Interest Accrual Period will begin on the Closing Date; and (ii) with respect to the Class B Notes for any Quarterly Payment Date, the three preceding Interest Accrual Periods corresponding to the Class A Interest Accrual Periods for so long as the Class A Notes are outstanding, and thereafter, an Interest Accrual Period for the Class B Notes begins on the 25th day of each month (except for the months in which a Quarterly Payment Date occurs, in which event it begins on such Quarterly Payment Date), and ends on the day prior to the succeeding Interest Accrual Period. "Interest Determination Date" means the date which is both two Business Days (in New York and Virginia) and two London Banking Days preceding the related Interest Accrual Period. "Interest Payment Period" means, (i) with respect to the Class A Notes, the preceding Interest Accrual Period; and (ii) with respect to the Class B Notes, the three preceding Interest Accrual Periods. "Issuer" means Crestar Student Loan Trust ____. "Notes" means the notes designated as the Issuer's Student Loan Asset-Backed Notes issued pursuant to the terms of the Master Indenture and the Terms Supplement and having an original principal amount equal to $__________. "Payment Date" means the 25th day of each month or if such day is not a Business Day, the next succeeding Business Day, commencing __________. "Principal Payment Amount" means, (i) with respect to the Class A Notes, the amount, if any, by which the Pool Balance as of the last day of the second Collection Period immediately preceding a Payment Date (or Closing Date, with respect to the first Payment Date) exceeds the Pool Balance as of the last day of the immediately preceding Collection Period, and (ii) upon reduction of the Outstanding Amount of the Class A Notes to zero, the amount by which the Pool Balance as of the end of the fourth Collection Period immediately preceding a Quarterly Payment Date exceeds the Pool Balance as of the last day of the immediately preceding Collection Period (reduced, with respect to the first Quarterly Payment Date on which principal is to be paid on the Class B Notes, by the Principal Payment Amount on the Class A Notes on such Quarterly Payment Date and on the two preceding Payment Dates). "Quarterly Payment Date" means the Payment Date in each _________ __ ____ and _______ commencing _______. "Rating Agency" means [Fitch, Moody's and S&P]. "Reserve Account Initial Deposit" means $___________. "Servicing Fee" means a quarterly fee in an amount equal to (i) _____% per annum of the average of the Pool Balance as of the last day of the calendar quarter and the last day of the immediately preceding calendar quarter (or the Cut-off Date with respect to the calendar quarter ending ___________), or (ii) such greater amount upon satisfaction of the Rating Agency Condition. "Specified Reserve Account Balance" means, with respect to any Distribution Date, an amount equal to the greater of (i) _____% of the sum of the Outstanding Amount of the Notes and the Certificate Balance on such Payment Date, after giving effect to all payments to be made on such date; or (ii) $_______; provided, however, that such balance shall not exceed the sum of the aggregate Outstanding Amount of the Notes and the Certificate Balance. ARTICLE II CONVEYANCE OF FINANCED STUDENT LOANS Section 2.1. Conveyance of Financed Student Loans. (a) As evidenced by a duly executed written assignment in the form of Exhibit D to the Standard Terms, the Depositor and the Eligible Lender Trustee on its behalf, hereby contribute, transfer, sell, assign, set over and otherwise convey to the Eligible Lender Trustee on behalf of the Issuer, without recourse (subject to the obligations herein): (i) All right and interest (and, with respect to the Eligible Lender Trustee, title) in and to the Financed Student Loans listed on Schedule A to this Agreement (the "Initial Financed Student Loans") and all obligations of the Obligors thereunder, including all moneys paid thereunder (other than Interest Subsidy Payments and Special Allowance Payments payable to the Cut-off Date), and all written communications received by the Transferor with respect thereto and still retained by Transferor in accordance with its retention policies (including borrower correspondence, notices of death, disability or bankruptcy and requests for deferrals or forbearance), on or after the Cut-off Date; (ii) all right, title and interest in all funds on deposit from time to time in the Trust Accounts and in all investments and proceeds thereof (including all income thereon); and (iii) the proceeds of any and all of the foregoing. (b) The purchase price for the Initial Financed Student Loans shall be an amount equal to $________, payable in immediately available funds on the Closing Date. Section 2.2. Assignment and Acknowledgment. The Depositor and Eligible Lender Trustee on its behalf hereby assign their rights under the Sales Agreement to the Issuer and the Eligible Lender Trustee on its behalf. The Depositor and the Eligible Lender Trustee on its behalf further acknowledge the further assignment of the Sales Agreement to the Indenture Trustee pursuant to the Indenture. ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS Section 3.1. Principal Balance. The Depositor represents and warrants that the aggregate principal balance of the Initial Financed Student Loans as of the Cut-off Date was $[ ] and the accrued interest thereon (other than with respect to Interest Subsidy Payments and Special Allowance Payments) was $[ ]. Section 3.2. TP Program. The Servicer shall be permitted to reduce the applicable interest rate on a TP Loan by up to (i) 1.0% per annum for Stafford Loans and Unsubsidized Stafford Loans and 0.5% per annum for PLUS Loans, if the Obligor related to such TP Loan makes 36 consecutive monthly payments of such TP Loan on or prior to the applicable due dates of such TP Loan, or (ii) such greater percentage upon satisfaction of the Rating Agency Condition. Section 3.3. Subservicing Agreements. (a) The Master Servicer hereby represents and warrants that: (i) as of the Closing Date it has entered into a Subservicing Agreement with ________ (the "Subservicing Agreement"); (ii) the Subservicing Agreement requires the Servicer thereunder to service the Financed Student Loans subject thereto in accordance in all material respects with all applicable federal and state laws, including all applicable standards, guidelines and requirements of the Higher Education Act with respect to Financed FFELP Loans and the HEAL Act with respect to Financed HEAL Loans. (b) The Master Servicer hereby represents and warrants that: (i) as of the Closing Date it has entered into a Subservicing Agreement with ________ (the "Subservicing Agreement"); (ii) the Subservicing Agreement requires the Servicer thereunder to service the Financed Student Loans subject thereto in accordance in all material respects with all applicable federal and state laws, including all applicable standards, guidelines and requirements of the Higher Education Act with respect to Financed FFELP Loans. Section 3.4. Compliance by the Eligible Lender Trustee with Insurance Agreements with the Secretary of HHS. [Pursuant to paragraph 5 of the Comprehensive Insurance Contract Health Education Assistance Loan Program, between _______ and the Secretary of HHS, dated October 1, 1992 (as amended, the "1992 Insurance Agreement"), paragraph 4 of the Comprehensive Insurance Contract Health Education Assistance Loan Program, between _______ and the Secretary of HHS, dated October 1, 1993 (as amended, the "1993 Insurance Agreement"), and Paragraph 6 of the Secondary Market Insurance Contract Health Education Assistance Loan Program, between the Transferor and the Secretary of HHS, dated September 27, 1996 (the "1996 Insurance Agreement"), the Eligible Lender Trustee agrees to comply, as if it were the lender, with the procedures set forth, respectively, in paragraph 3 of the 1992 Insurance Agreement, paragraphs 1 and 2 of the 1993 Insurance Agreement and paragraph 6 of the 1996 Insurance Agreement.] ARTICLE IV PAYMENTS AND ACCOUNTS Section 4.1. Payments. (a) On each Payment Date or Quarterly Payment Date (and with respect to clause (i)(A) below on each Payment Date while the Class A Notes are Outstanding, and thereafter, on the 25th day of each month, or if such day is not a Business Day, the next succeeding Business Day), pursuant to the Administrator's written instructions, the Indenture Trustee will transfer from the Collection Account the following amounts in the following priority, subject to Available Funds for the immediately preceding Collection Period or three Collection Periods, as applicable: (i) first, to the Expense Account, (A) an amount equal to accrued and unpaid Consolidation Loan Fees as of the end of the immediately preceding Collection Period and (B) an amount equal to accrued and unpaid Transaction Fees payable on a Quarterly Payment Date; (ii) second, to the Note Payment Account, an amount equal to the Class Interest Amount for each Class of Notes due on such Payment Date or Quarterly Payment Date; and (iii) third, to the Note Payment Account, an amount equal to the Principal Payment Amount due on such Payment Date or Quarterly Payment Date and any overdue Principal Payment Amount. (b) On each Quarterly Payment Date (and with respect to clause (i) below on each Payment Date while the Class A Notes are Outstanding, and thereafter, on the 25th day of each month, or if such day is not a Business Day, the next succeeding Business Day), the Indenture Trustee, pursuant to information contained in the Administrator's Certificate delivered in accordance with Section 5.7 of the Standard Terms, will distribute from the Expense Account (in addition to any amounts transferred from the Reserve Account pursuant to Section 4.2 hereof) the following amounts in the following order of priority: (i) to the Department of Education, the Consolidation Loan Fees for the immediately preceding Collection Period and all overdue Consolidation Loan Fees for any prior Collection Periods; (ii) to the Master Servicer, the Servicing Fee for the preceding quarter and all overdue Servicing Fees; (iii) to the Administrator, the Administration Fee for the preceding quarter and all overdue Administration Fees; (iv) to the Indenture Trustee, the Indenture Trustee Fee for the preceding quarter and all overdue Indenture Trustee Fees; and (v) to the Eligible Lender Trustee and the Delaware Trustee, the Eligible Lender Trustee Fee and Delaware Trustee Fee, respectively, for the preceding quarter and all overdue Eligible Lender Trustee Fees and Delaware Trustee Fees. (c) On each Payment Date or Quarterly Payment Date, the Indenture Trustee will distribute to the Noteholders as of the related Record Date all amounts transferred to the Note Payment Account pursuant to Section 4.1(a)(ii) and (iii) and Section 4.1(d) hereof (in addition to any amounts transferred from the Advance Account) in the following order of priority: (i) first, to the Class A Noteholders, the Class Interest Amount; (ii) second, if such Payment Date is a Quarterly Payment Date, to the Class B Noteholders, the Class Interest Amount; (iii) third, to the Class A Noteholders, the Principal Payment Amount (and any overdue Principal Payment Amount) and if such Payment Date is a Quarterly Payment Date, the Parity Payments, until the Outstanding Amount of the Class A Notes has been reduced to zero; (iv) fourth, after the Outstanding Amount of the Class A Notes has been reduced to zero, if such Payment Date is a Quarterly Payment Date, to the Class B Noteholders, the remaining Principal Payment Amount (and any overdue Principal Payment Amount) until the Outstanding Amount of the Class B Notes has been reduced to zero; and (v) fifth, if such Payment Date is a Quarterly Payment Date, Carryover Interest due on the Class A Notes and following payment thereof, Carryover Interest due on the Class B Notes. (d) On each Quarterly Payment Date, after making any and all required transfers to the Expense Account and the Note Payment Account pursuant to Section 4.1(a), the Indenture Trustee will transfer any remaining Available Funds for the preceding three Collection Periods (and with respect to clause (ii) below, any amounts in the Reserve Fund in excess of the Specified Reserve Account Balance) in the following order of priority: (i) to the Reserve Account, the amount, if any, necessary to increase the balance thereof to the Specified Reserve Account Balance; (ii) to the Note Payment Account (for payment on such Quarterly Payment Date to the Class A Noteholders, and upon payment in full thereof, to the Class B Noteholders), the Parity Payments, if any, for such Quarterly Payment Date; and (iii) to the Note Payment Account (for payment on such Quarterly Payment Date to the Class A Noteholders, and following payment of all Carryover Interest due the Class A Noteholders, to the Class B Noteholders), the amount of any Carryover Interest. (e) Any remaining Available Funds on a Quarterly Payment Date (other than amounts representing payments received during such months) will be distributed by the Indenture Trustee to the Eligible Lender Trustee for deposit into the Certificate Distribution Account. On such Quarterly Payment Date, the Eligible Lender Trustee will distribute such amounts to the Certificateholders. All amounts so distributed will be released from the lien of the Indenture, and will not thereafter be available to pay principal or interest (or Carryover Interest) on the Notes. The Depositor shall have the right, at its option, to transfer and assign, in whole or in part, its right to receive any amounts required to be paid to it pursuant to this subsection (e). (f) Notwithstanding the foregoing, if (x) on any Payment Date following all distributions to be made on such Payment Date, the Outstanding Amount of the Class A Notes would exceed the sum of the Pool Balance at the end of the immediately preceding Collection Period plus the aggregate balance on deposit in the Trust Accounts on such Payment Date following such distributions, or (y) an Event of Default has occurred with respect to payment of the Notes, the Class Interest Amount shall not be payable on the Class B Notes until after payment of the Principal Payment Amount to the Class A Noteholders. (g) All distributions made to the Noteholders of a Class or the Certificateholders on each Payment Date shall be made on a pro rata basis among the Noteholders of such Class and Certificateholders of record as of the related Record Date based upon the Outstanding Amount of such Class (or, with respect to payments of principal on such Class of Notes, the applicable Principal Factor with respect to such Class) or percentage interest of Certificates so owned. (h) If the amount of Available Funds on any Payment Date or Quarterly Payment Date is insufficient to pay in full the Principal Payment Amount on such Payment Date or Quarterly Payment Date, the difference will be carried over to be paid on succeeding Payment Dates or Quarterly Payment Dates. The failure to pay the full Principal Payment Amount on any Class on any Payment Date or Quarterly Payment Date will not result in an Event of Default until the Legal Final Maturity of such Class of Notes. Section 4.2. Reserve Account. (a) On the Closing Date, the Depositor shall deposit the Reserve Account Initial Deposit into the Reserve Account. (b) If the amount on deposit in the Reserve Account on any Quarterly Payment Date (after giving effect to all deposits or withdrawals therefrom on such Quarterly Payment Date) is greater than the then applicable Specified Reserve Account Balance, the Administrator shall instruct the Indenture Trustee in writing to withdraw such excess from the Reserve Account and (i) to deposit into the Note Payment Account, an amount equal to the lesser of such excess and the amount, if any, described in Section 4.1(d)(ii) and (iii) for such Payment Date (to the extent not otherwise paid to the Note Payment Account on such Payment Date); (ii) to deposit into the Note Payment Account the lesser of such excess (after giving effect to clause (i) above) and any amounts required to be paid by the Depositor or the Master Servicer pursuant to Sections 3.2 or 5.5 of the Standard Terms as a result of breaches of representations, warranties and agreements made in Sections 3.1, 5.1 through 5.4, 7.1 or 8.1 of the Standard Terms to the extent the Depositor or the Master Servicer, as the case may be, has not made such payments within the required time period; and (iii) to distribute the remaining amount of such excess (after giving effect to clauses (i) and (ii) above) to the Depositor. Amounts properly distributed pursuant to this paragraph (b) shall be deemed released from the Trust Estate and the security interest therein granted to the Indenture Trustee, and the Depositor shall in no event thereafter be required to refund any such distributed amounts. The Depositor shall have the right, at its option, to transfer and assign, in whole or in part, its right to receive any amounts required to be paid to it pursuant to clause (iii). (c) Following the payment in full of the aggregate Outstanding Amount of the Notes and of all other amounts owing or to be distributed hereunder or under the Indenture or the Trust Agreement to Noteholders, Certificateholders, the Master Servicer or the Administrator and the termination of the Trust, any amount remaining on deposit in the Reserve Account shall be distributed to the Depositor. The Depositor shall in no event be required to refund any amounts properly distributed pursuant to this Section 4.2(c). (d) (i) If on any Quarterly Payment Date (and with respect to Section 4.1(b)(i) hereof, the 25th day of each month, or if such day is not a Business Day the next succeeding Business Day), any amounts to be distributed as calculated pursuant to Section 4.1(b)(i)-(v) hereof exceed the amount on deposit in the Expense Account available for such purposes, the Administrator shall instruct the Indenture Trustee to withdraw from the Reserve Account the lesser of such excess and the amount on deposit in the Reserve Account (after giving effect to each withdrawal in the order specified in Section 4.1(b) (i)-(v)) hereof and deposit such withdrawn amount in the Expense Account for distribution as provided in Section 4.1 hereof; (ii) If the Class Interest Amount for all Classes of Notes and the Principal Payment Amount for a Payment Date or Quarterly Payment Date exceeds the amount in the Note Payment Account for such Payment Date or Quarterly Payment Date available for such purposes, the Administrator shall instruct the Indenture Trustee to withdraw from the Reserve Account an amount equal to the lesser of such excess and the amount on deposit in the Reserve Account (after giving effect to paragraph (d)(i) above), and deposit such withdrawn amount into the Note Payment Account for distribution as provided in Section 4.1 hereof; and. (iii) If the Certificateholders' Distribution Amount for a Quarterly Payment Date exceeds the amount for such Quarterly Payment Date available for such purposes, the Administrator shall instruct the Indenture Trustee on such Quarterly Payment Date to withdraw from the Reserve Account an amount equal to the lesser of such excess and the amount on deposit in the Reserve Account (after giving effect to paragraphs (d)(i) and (d) (ii) above), and to deposit such withdrawn amount in the Certificate Distribution Account for distribution as provided in Section 4.1 hereof. Section 4.3. Determination of LIBOR. The Master Servicer shall calculate One-Month LIBOR on each Interest Determination Date and shall notify the Eligible Lender Trustee and the Indenture Trustee of One-Month LIBOR. The determination by the Master Servicer of One-Month LIBOR shall (in the absence of manifest error) be final and binding upon all parties. ARTICLE V TERMINATION Section 5.1. Termination. The Trust shall be terminated on the earlier of (i) the maturity or other liquidation of the last Financed Student Loan and the disposition of any amount received upon liquidation of any Financed Student Loans, and (ii) the payment of the Noteholders and Certificateholders of all amounts required to be paid to them in accordance with this Transfer and Servicing Agreement. Section 5.2. Optional Purchase of Financed Student Loans. As of the last day of any Collection Period immediately preceding a Quarterly Payment Date as of which the then outstanding Pool Balance is __% or less of the Initial Pool Balance, the Depositor shall have the option to purchase the Indenture Trust Estate, other than the Trust Accounts. To exercise such option, the Depositor shall deposit in the Collection Account pursuant to Section 4.1 hereof an amount equal to the aggregate Purchase Amount for the Financed Student Loans and the related rights with respect thereto, plus the appraised value of any such other property held by the Trust, such value to be determined by an appraiser mutually agreed upon by the Depositor, the Eligible Lender Trustee and the Indenture Trustee, and shall succeed to all interests in and to the Trust; provided, however, that the Depositor may not effect such purchase if the aggregate Purchase Amount to be so deposited in the Collection Account does not equal or exceed an amount equal to the sum of (x) the unpaid principal balance of the Notes plus accrued and unpaid interest thereon at the related Class Interest Rate to the last day of the Interest Accrual Period preceding the applicable Quarterly Payment Date, (y) unpaid Transaction Fees, if any, and (z) transaction costs of the Indenture Trustee and Eligible Lender Trustee with respect to the purchase. Section 5.3. Auction of Financed Student Loans. Any Financed Student Loans remaining in the Trust as of _________, ______ will be offered for sale by the Indenture Trustee on or prior to the _________ Payment Date. The Depositor, its Affiliates and unrelated third parties may offer bids to purchase such Financed Student Loans on or prior to such Payment Date. The Trustee shall notify each Servicer of the auction and invite each Servicer to submit a bid. If at least two bids are received, the Indenture Trustee will accept the highest bid equal to or in excess of (a) the unpaid Transaction Fees, if any, and the transaction costs of the Indenture Trustee and Eligible Lender Trustee with respect to such auction, and (b) the greater of (i) the aggregate Purchase Amounts of such Financed Student Loans as of the end of the Collection Period immediately preceding such Payment Date or (ii) an amount that would be sufficient to (x) reduce the Outstanding Amount of the Notes on such Payment Date to zero and (y) pay to the Noteholders the related Class Interest Amounts payable on such Payment Date. If at least two bids are not received or the highest bid is not equal to or in excess of the foregoing amount, the Indenture Trustee will not consummate such sale. The proceeds of any such sale will be used to redeem any Outstanding Notes on such Payment Date. The proceeds of any sale will be applied in the order and priority set forth in 4.1 hereof. If the sale is not consummated in accordance with the foregoing, the Indenture Trustee may, but shall not be under any obligation to, solicit bids to purchase the Financed Student Loans on future Payment Dates upon terms similar to those described above. ARTICLE VI MISCELLANEOUS Section 6.1. Limitation on Subsequent Financed Student Loans. (a) The aggregate amount of Subsequent Financed Student Loans that are Consolidated Loans or HEAL Consolidation Loans shall not exceed $________________. (b) The aggregate amount of Subsequent Financed Student Loans that are Serial Loans shall not exceed $_________________. Section 6.2. Schedules. Schedules A and B are attached hereto and incorporated by reference. Section 6.3. Amendment of Standard Terms. Not applicable. IN WITNESS WHEREOF, the parties hereto have caused this Transfer and Servicing Agreement to be duly executed by their respective officers as of the day and year first above written. CRESTAR SECURITIZATION, LLC By: Crestar SP Corporation, its Manager By: __________________________________ Name: ___________________________ Title: __________________________ ______________________________________, as Eligible Lender Trustee, not in its individual capacity but solely as Eligible Lender Trustee on behalf of the Depositor By: __________________________________ Name: ___________________________ Title: __________________________ CRESTAR STUDENT LOAN TRUST ____-__ By: __________________________________, not in its individual capacity but solely as Eligible Lender Trustee on behalf of the Issuer CRESTAR BANK Master Servicer and Administrator By: __________________________________ Name: ____________________________ Title: ___________________________ Acknowledged as of the day and year first above written: BANKERS TRUST COMPANY, not in its individual capacity but solely as Indenture Trustee By: ______________________________ Name: ____________________ Title: Vice President SCHEDULE A TO THE TRANSFER AND SERVICING AGREEMENT Schedule of Financed Student Loans SCHEDULE B TO THE TRANSFER AND SERVICING AGREEMENT Location of Financed Student Loan Files Name of subcustodian Location of Related Financed Student Loan Files EX-5 7 EXHIBIT 5.1 EXHIBIT 4.5 STANDARD TERMS TO TRANSFER AND SERVICING AGREEMENT ----------------------------------- CRESTAR SECURITIZATION, LLC June 1998 Edition
TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS AND USAGE..................................................................................1 ARTICLE II FINANCED STUDENT LOANS................................................................................1 Section 2.1. Conveyance of Subsequent Financed Student Loans...............................................1 Section 2.2. Exchange of Financed Student Loans............................................................3 Section 2.3. Additional Financed Student Loans.............................................................3 Section 2.4. Security Agreement............................................................................4 ARTICLE III THE FINANCED STUDENT LOANS...........................................................................4 Section 3.1. Representations, Warranties and Agreements of Depositor with Respect to the Financed Student Loans.........................................................4 Section 3.2. Repurchase upon Breach; Reimbursement.........................................................6 ARTICLE IV CUSTODY...............................................................................................8 Section 4.1. Custody of Financed Student Loan Files........................................................8 Section 4.2. Duties of Master Servicer as Custodian........................................................8 Section 4.3. Instructions; Authority to Act................................................................9 Section 4.4. Custodian's Indemnification...................................................................9 Section 4.5. Effective Period and Termination.............................................................10 Section 4.6. Appointment of Subcustodian..................................................................10 ARTICLE V ADMINISTRATION AND SERVICING OF FINANCED STUDENT LOANS................................................10 Section 5.1. Duties of Master Servicer....................................................................10 Section 5.2. Collection of Financed Student Loan Payments.................................................12 Section 5.3. Realization upon Financed Student Loans......................................................13 Section 5.4. No Impairment................................................................................13 Section 5.5. Purchase of Financed Student Loans; Reimbursement............................................13 Section 5.6. Servicing Fee................................................................................14 Section 5.7. Administrator's Certificate..................................................................14 Section 5.8. Annual Statement as to Compliance; Notice of Default.........................................15 Section 5.9. Annual Independent Certified Public Accountants' Report or Reports...........................15 Section 5.10. Access to Certain Documentation and Information Regarding Financed Student Loans............16 Section 5.11. Master Servicer and Administrator Expenses..................................................16 Section 5.12. Appointment of Servicer.....................................................................16 ARTICLE VI ACCOUNTS, COLLECTIONS AND DISTRIBUTIONS..............................................................17 Section 6.1. Establishment of Trust Accounts..............................................................17 Section 6.2. Collections..................................................................................18 Section 6.3. Application of Collections...................................................................19 Section 6.4. Additional Deposits..........................................................................19 Section 6.5. Distributions................................................................................19 Section 6.6. Statements to Certificateholders and Noteholders.............................................19 Section 6.7. Expense Account..............................................................................21 Section 6.8. Note Payment Account and Certificate Distribution Account....................................21 Section 6.9. Advances.....................................................................................21 ARTICLE VII THE DEPOSITOR.......................................................................................21 Section 7.1. Representations of the Depositor.............................................................21 Section 7.2. Existence....................................................................................23 Section 7.3. Indemnification..............................................................................23 Section 7.4. Limitation on Liability......................................................................25 Section 7.5. Merger or Consolidation of, or Assumption of the Obligations, of the Depositor...............25 Section 7.6. Depositor May Own Certificates or Notes......................................................26
ARTICLE VIII THE MASTER SERVICER................................................................................26 Section 8.1. Representations of the Master Servicer.......................................................26 Section 8.2. Existence....................................................................................28 Section 8.3. Indemnification..............................................................................28 Section 8.4. Limitation on Liability......................................................................29 Section 8.5. Merger or Consolidation of, or Assumption of the Obligations, of the Master Servicer.........29 Section 8.6. Master Servicer Not to Resign................................................................30 ARTICLE IX THE ADMINISTRATOR....................................................................................31 Section 9.1. Representations of the Administrator.........................................................31 Section 9.2. Indemnification..............................................................................32 Section 9.3. Limitation of Liability......................................................................33 Section 9.4. Merger or Consolidation of, or Assumption of the Obligations, of the Administrator...........33 Section 9.5. Administrator Not to Resign..................................................................34 Section 9.6. Additional Services..........................................................................34 Section 9.7. Compensation.................................................................................38 Section 9.8. Information..................................................................................38 Section 9.9. Independence of the Administrator............................................................38 ARTICLE X DEFAULT...............................................................................................38 Section 10.1. Master Servicer Default; Administrator Default..............................................38 Section 10.2. Appointment of Successor....................................................................40 Section 10.3. Notification to Noteholders and Certificateholders..........................................41 Section 10.4. Waiver of Past Defaults.....................................................................41 ARTICLE XI MISCELLANEOUS........................................................................................42 Section 11.1. Amendment...................................................................................42 Section 11.2. Protection of Interests in Trust............................................................42 Section 11.3. Notices.....................................................................................44 Section 11.4. Assignment..................................................................................44 Section 11.5. Limitations on Rights of Others.............................................................45 Section 11.6. Severability................................................................................45 Section 11.7. Separate Counterparts.......................................................................45 Section 11.8. Headings....................................................................................45 Section 11.9. Governing Law...............................................................................45 Section 11.10. Assignment to Indenture Trustee............................................................45 Section 11.11. Nonpetition Covenants......................................................................45 Section 11.12. Limitation of Liability of Eligible Lender Trustee, Indenture Trustee and Delaware Trustee..............................................46
EXHIBIT A Definitions and Usage EXHIBIT B Form of Payment Statement EXHIBIT C Form of Administrator's Certificate EXHIBIT D Assignment for Financed Student Loans EXHIBIT E Transfer Agreement RECITALS Crestar Securitization, LLC (the "Depositor") intends from time to time to acquire student loans originated or acquired by Crestar Bank (the "Transferor") in the ordinary course of business pursuant to one or more Sales Agreements; Star Bank, National Association (the "Eligible Lender Trustee") is willing to hold legal title to, and serve as eligible lender trustee with respect to, such student loans on behalf of the Depositor; The Depositor intends from time to time to direct the Eligible Lender Trustee to sell the student loans acquired by it to one or more trusts formed by it (each, an "Issuer"); The Eligible Lender Trustee is willing to hold legal title to, and serve as eligible lender trustee with respect to, such student loans on behalf of an Issuer; An Issuer intends from time to time to issue its Student Loan Asset Backed Notes secured by student loans; Crestar Bank (as such, the "Master Servicer") is willing to service the student loans; Crestar Bank (as such, the "Administrator") is willing to undertake certain administrative functions of each Issuer under a Transfer and Servicing Agreement and Indenture; An Issuer, Depositor, Eligible Lender Trustee and Administrator have entered into a Transfer and Servicing Agreement that provides for the transfer of Financed Student Loans and the servicing thereof, as well as certain administrative matters relating to one or more Series of Notes. These Standard Terms are a part of, and are incorporated by reference into, each such Transfer and Servicing Agreement in accordance with its terms. NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties to a Transfer and Servicing Agreement agree, intending to be legally bound hereby, as follows: ARTICLE I DEFINITIONS AND USAGE Capitalized terms used but not defined herein are defined in Appendix A hereto, which also contains rules as to usage and construction that shall be applicable herein. ARTICLE II FINANCED STUDENT LOANS SECTION 2.1. CONVEYANCE OF SUBSEQUENT FINANCED STUDENT LOANS. (a) In addition to the Financed Student Loans transferred on the Closing Date, the Depositor may, from time to time, sell Subsequent Financed Student Loans to an Issuer in accordance with the provisions of this Article II. The sale shall include all right, title and interest of the Depositor and the Eligible Lender Trustee on behalf of the Depositor in and to each Subsequent Financed Student Loan, and all obligations of the Obligors thereunder, including all moneys paid thereunder (other than Interest Subsidy Payments and Special Allowance Payments payable through the related Subsequent Cut-off Date), and all written communications received by the Depositor with respect thereto and still retained by the Depositor in accordance with its retention policies (including borrower correspondence, notices of death, disability or bankruptcy and requests for deferrals or forbearances), on and after the related Subsequent Cut-off Date, and the proceeds of any and all of the foregoing. (b) Subsequent Financed Student Loans that may be transferred by the Depositor pursuant to this Section 2.1 include: (i) A Consolidation Loan or a HEAL Consolidation Loan being made by the Transferor and acquired by or on behalf of the Depositor, provided that in no event shall the aggregate amount of Subsequent Financed Student Loans that are Consolidation Loans or HEAL Consolidation Loans transferred to the Issuer for a Series exceed the amount specified in the Transfer and Servicing Agreement; and (ii) One or more Serial Loans owned by the Depositor that are serial (i.e., made to the same borrower under the same loan program and guaranteed by the same Guarantee Agency or Private Loan Program, or insured by the Department of HHS) to an existing Financed Student Loan owned by the Issuer; provided that each such Subsequent Financed Student Loan entitles the holder thereof to receive interest based on the same interest rate index as the Financed Student Loan to which it is serial, and provided further, that in no event shall the aggregate amount of Subsequent Financed Student Loans that are Serial Loans transferred to the Issuer for a Series exceed the amount specified in the Transfer and Servicing Agreement. (c) Any sale of Subsequent Financed Student Loans shall be subject to the following conditions: (i) The Depositor shall have delivered to the Eligible Lender Trustee and the Indenture Trustee a duly executed Transfer Agreement (including an acceptance by the Eligible Lender Trustee and the Indenture Trustee) in substantially the form of Exhibit F, which shall include supplements to Schedule A, listing such Subsequent Financed Student Loans; (ii) The Depositor shall have delivered, at least two days' prior to the Transfer Date, notice of such transfer to the Eligible Lender Trustee and the Indenture Trustee, with a copy to the Rating Agencies, including a listing of the aggregate principal balance of such Subsequent Financed Student Loans; (iii) The Depositor shall, to the extent required by Section 2.2, have deposited in the Collection Account all collections received in respect of the Subsequent Financed Student Loans on or after each applicable Subsequent Cut-off Date and all required Adjustment Payments; (iv) As of such Transfer Date, the Depositor was not insolvent nor will it have been made insolvent by such transfer nor is it aware of any pending insolvency; (v) Such transfer will not result in a material adverse federal or state tax consequence to the Issuer relating to its tax classification or the Noteholders, considered as a whole, relating to a change in the characterization of the Notes; (vi) No Event of Default shall have occurred and be continuing as of such Transfer Date and no Master Servicer Default or Administrator Default shall have occurred and be continuing as of such Transfer Date; (vii) The Subsequent Finance Period shall not have terminated; (viii) The Depositor shall have delivered to the Indenture Trustee and the Eligible Lender Trustee an Officers' Certificate in substantially the form of Annex C to the Transfer Agreement, confirming the satisfaction of each condition precedent specified in this paragraph (c); (ix) The Depositor shall have taken all action required to maintain the ownership interest of the Issuer in the Trust Estate and the first perfected security interest of the Indenture Trustee in the Financed Student Loans; and (x) No selection procedures believed by the Depositor to be adverse to the interests of the Certificateholders or the Noteholders shall have been utilized in selecting the Subsequent Financed Student Loans; provided, however, that the Depositor shall not incur any liability as a result of transferring Subsequent Financed Student Loans on any Transfer Date at a time when the condition set forth in clause (v) was not satisfied, if at the time of such transfer the Depositor was not aware of any fact that would reasonably suggest that such condition would not be satisfied as of such date. (d) Upon delivery of Subsequent Financed Student Loans to the Issuer pursuant to this Section 2.1, the Depositor may direct the Eligible Lender Trustee and the Indenture Trustee to apply Consolidation Prepayments on deposit in the Collection Account to pay to the Depositor the Subsequent Financing Purchase Price for such Subsequent Financed Student Loans in immediately available funds. SECTION 2.2. EXCHANGE OF FINANCED STUDENT LOANS. (a) In lieu of purchasing or repurchasing Financed Student Loans for cash pursuant to Sections 3.2(b) or 5.5(b), the Depositor may, subject to Section 2.1(c), transfer to the Issuer during the Subsequent Finance Period a Subsequent Financed Student Loan which satisfies the following additional criteria: (A) the Subsequent Financed Student Loan was originated under the same loan program as the Financed Student Loan for which it is being exchanged and entitles the holder thereof to receive interest based on the same interest rate index as the Financed Student Loan for which it is being exchanged, (B) the Subsequent Financed Student Loan will not, at any level of such interest rate index, have an interest rate that is less than the Financed Student Loan for which it is being exchanged and (C) the average principal balance per Obligor of the Subsequent Financed Student Loans that are being transferred into the Issuer on each Transfer Date and the existing Financed Student Loans for which they are being exchanged pursuant to this Section 2.2(a) is within 10% (plus or minus) of the average principal balance per Obligor of the Financed Student Loans being transferred to the Depositor on such Transfer Date. (b) Upon receipt of such Subsequent Financed Student Loans, the Eligible Lender Trustee shall execute and deliver to the Depositor an Assignment in substantially the form of Annex B to the Transfer Agreement. (c) Adjustment Payments. (i) If on any Transfer Date the aggregate outstanding principal balance as of the related Subsequent Cut-off Date of all the Subsequent Financed Student Loans being exchanged on such Transfer Date is less than that of all the Financed Student Loans for which they are being exchanged, the Depositor shall deposit into the Collection Account on the related Transfer Date an amount equal to such difference. (ii) If on any Transfer Date the aggregate outstanding principal balance as of the related Subsequent Cut-off Date of all the Subsequent Financed Student Loans being exchanged on such Transfer Date is greater than that of all the Financed Student Loans for which they are being exchanged, the Depositor may instruct the Indenture Trustee to pay to the Depositor from Consolidation Prepayments on deposit in the Collection Account an amount equal to such excess. SECTION 2.3. ADDITIONAL FINANCED STUDENT LOANS. (a) If the Transfer and Servicing Agreement provides for a Pre-Funding Account, the Issuer will use the amount deposited therein to acquire through the Eligible Lender Trustee Additional Financed Student Loans from the Depositor during the Pre-Funding Period. (b) The purchase price for such Additional Financed Student Loans on any Transfer Date shall be set forth in the applicable Transfer Agreement. (c) If (x) the Pre-Funding Account has not been reduced to zero on the last day of the Funding Period, or (y) the Pre-Funding Account has been reduced to less than $100,000, the Administrator shall instruct the Indenture Trustee to withdraw the remaining balance in the Pre-Funding Account and apply it as an additional principal payment on the Notes on the Payment Date next following the last day of the Pre-Funding Period, or date when the Pre-Funding Account has been reduced to less than $100,000, as applicable. SECTION 2.4. SECURITY AGREEMENT. Although it is the intent of the parties that the conveyance of the Depositor's right, title and interest in and to the Financed Student Loans pursuant to the Transfer and Servicing Agreement or Subsequent Financed Student Loans or Additional Financed Student Loans pursuant to any Transfer Agreement shall constitute a contribution and sale and not a loan, if such conveyance is deemed to be a loan, it is the intent of the parties that the Depositor shall be deemed to have Granted to the Eligible Lender Trustee, on behalf of the Issuer, a first priority perfected security interest in all of the Depositor's right, title and interest in, to and under the Financed Student Loans and the proceeds thereof, and that the Transfer and Servicing Agreement shall constitute a security agreement under applicable law. It is the further intent of the parties that if the Issuer is disregarded for whatever reason or purpose, the Depositor's foregoing Grant of a first priority perfected security interest shall be deemed to be directly to, and for the direct benefit of, the Indenture Trustee. ARTICLE III THE FINANCED STUDENT LOANS SECTION 3.1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF DEPOSITOR WITH RESPECT TO THE FINANCED STUDENT LOANS. The Depositor hereby makes the following representations and warranties as to the Financed Student Loans on which the Issuer is deemed to have relied in acquiring (through the Eligible Lender Trustee) such Financed Student Loans. Such representations and warranties speak as of the Closing Date, in the case of the Initial Financed Student Loans, and as of the applicable Transfer Dates in the case of the Subsequent Financed Student Loans or Additional Financed Student Loans, but shall survive the contribution, transfer and assignment of such Financed Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (i) Characteristics of Financed Student Loans. Each Financed Student Loan (A) was originated in the United States of America, its territories, its possessions or other areas subject to its jurisdiction to an eligible borrower under applicable law and agreements and was fully and properly executed by the parties thereto, (B) was originated or acquired by the Transferor in the ordinary course of its business and acquired by the Eligible Lender Trustee on behalf of the Depositor from the Transferor, and (C) provides or, when the payment schedule with respect thereto is determined, will provide for payments on a periodic basis that fully amortize the principal amount of such Financed Student Loan by its maturity and yields interest at the rate applicable thereto (except as otherwise provided in the Transfer and Servicing Agreement), as such maturity may be modified in accordance with any applicable deferment or forbearance periods granted in accordance with applicable laws and restrictions, including those of the Higher Education Act, the HEAL Act, the HEAL Insurance Contract, any Guarantee Agreement or any Private Loan Program. Each Financed Student Loan that is a Stafford Loan qualifies the holder thereof (assuming such holder is an eligible lender under the Higher Education Act and has a guarantee agreement with the applicable Guarantee Agency of such loan) to receive Interest Subsidy Payments and Special Allowance Payments from the Department of Education. Each Financed Student Loan that is a Consolidation Loan, a PLUS Loan, a SLS Loan or an Unsubsidized Stafford Loan qualifies the holder thereof (assuming such holder is an eligible lender under the Higher Education Act and has a guarantee agreement with the applicable Guarantee Agency of such loan) to receive Special Allowance Payments from the Department of Education to the extent applicable. Each Financed FFELP Loan qualifies the holder thereof (assuming such holder is an eligible lender under the Higher Education Act and has a guarantee agreement with the applicable Guarantee Agency of such loan) to receive Guarantee Payments from the applicable Guarantee Agency in accordance with the applicable Guarantee Agreement. Each Financed HEAL Loan qualifies the holder thereof (assuming such holder is an eligible lender under the HEAL Act and has an insurance contract with the Secretary of HHS) to receive Insurance Payments from the Department of HHS in accordance with the HEAL Insurance Contract. Each Financed Private Loan qualifies the holder thereof (assuming such holder is an eligible lender under the related Private Loan Program) to receive applicable benefits accruing to the holder under such Private Loan Program. At all times prior to the transfer of the Financed Student Loans to the Eligible Lender Trustee on behalf of the Issuer under the Transfer and Servicing Agreement, the Depositor (through the Eligible Lender Trustee) and each predecessor originator or holder of the Financed Student Loans (a) with respect to each Financed FFELP Loan was an eligible lender under the Higher Education Act and had a guarantee agreement with the applicable Guarantor of such loan, (b) with respect to each Financed HEAL Loan was an eligible lender under the HEAL Act and had an insurance contract with the Secretary of HHS; and (c) with respect to each Financed Private Loan, was an eligible lender with respect thereto. (ii) Schedule of Financed Student Loans. The information concerning the Financed Student Loans set forth in Schedule A to the Transfer and Servicing Agreement and Schedule A of the related Transfer Agreement is true and correct in all material respects as of the close of business on the Cut-off Date (with respect to Schedule A to the Transfer and Servicing Agreement) or each applicable Subsequent Cut-off Date (with respect to Schedule A to such Transfer Agreement), as applicable. The computer tape or electronic data transmission regarding the Initial Financed Student Loans is true and correct in all material respects as of the Cut-off Date and each computer tape or electronic data transmission regarding the Subsequent Financed Student Loans and Additional Student Loans will be true and correct in all material respects as of the related Subsequent Cut-off Date. (iii) Compliance with Law. Except with respect to any VELA Service Errors that have been waived by the Department of Education and the applicable Guarantee Agency, at the time each Financed Student Loan was originated or made and at the execution of the Transfer and Servicing Agreement or the applicable Transfer Agreement, as the case may be, each Financed Student Loan complied or complies, and the Depositor and its agents, with respect to each such Financed Student Loan, have at all times complied, in all material respects with all requirements of applicable federal, state and local laws and regulations thereunder, including the Higher Education Act with respect to FFELP Loans, the HEAL Act with respect to HEAL Loans, the Equal Credit Opportunity Act, the Federal Reserve Board's Regulation B and other applicable consumer credit laws and equal credit opportunity laws. (iv) Binding Obligation. Each Financed Student Loan represents the genuine, legal, valid and binding payment obligation in writing of the related borrower, enforceable by or on behalf of the holder thereof against such borrower in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and similar laws relating to creditors' rights generally and subject to general principles of equity, and no Financed Student Loan has been satisfied, subordinated or rescinded. (v) No Defenses. No right of rescission, setoff, counterclaim or defense has been asserted or, to the Depositor's knowledge, threatened with respect to any Financed Student Loan. (vi) No Default. No Initial Financed Student Loan has a payment that is more than 90 days overdue as of the Cut-off Date, and no Subsequent Financed Student Loan or Additional Financed Student Loan will have a payment that is more than 90 days overdue as of its related Subsequent Cut-off Date, and, except as permitted in this paragraph, no default, breach, violation or event permitting acceleration under the terms of any Financed Student Loan has occurred; and, except for payment defaults and other circumstances creating a delinquency continuing for a period of not more than 90 days, no continuing condition that with notice or the lapse of time or both would constitute a default, breach, violation or event permitting acceleration under the terms of any Financed Student Loan has arisen; and the Depositor has not waived and shall not waive any of the foregoing other than as permitted by the Basic Documents. (vii) Title. It is the intention of the Depositor that the transfer and assignment herein contemplated constitutes a sale of the Financed Student Loans from the Depositor to the Eligible Lender Trustee on behalf of the Issuer, and the beneficial interest in and title to such Financed Student Loans shall not be part of the debtor's estate in the event of the Depositor's bankruptcy or insolvency. No Financed Student Loan has been transferred, assigned or pledged by the Depositor to any Person other than the Eligible Lender Trustee on behalf of the Issuer, or any such assignment or pledge has been released. Immediately prior to the transfer and assignment herein contemplated, the Depositor had good title to each Financed Student Loan, free and clear of all Liens and, immediately upon the transfer thereof, the Eligible Lender Trustee on behalf of the Issuer shall have good title to each such Financed Student Loan, free and clear of all Liens, and the transfer to the Indenture Trustee shall have been perfected under the UCC. No Financed Student Loan was subject to a third party's right of first refusal with respect to the transfer from the Depositor provided for herein, and the transfer of the Financed Student Loans as contemplated hereby will not violate in any material respect the terms of any Subservicing Agreement or any other material agreement or arrangement to which the Depositor is a party. (viii) Lawful Assignment. No Financed Student Loan has been originated in, or is subject to the laws of, any jurisdiction under which the contribution, transfer and assignment of such Financed Student Loan under the Transfer and Servicing Agreement or any Transfer Agreement is unlawful, void or voidable. (ix) All Filings Made. All filings (including UCC filings) necessary in any jurisdiction to give the Issuer a first perfected security interest in the Financed Student Loans (if, despite the express intention of the parties hereto, the transfer of the Financed Student Loans is deemed a loan), and to give the Indenture Trustee a first perfected security interest therein, shall have been made or have been delivered for filing. (x) One Original. To the best knowledge of the Depositor, there is only one original executed copy of each promissory note evidencing a Financed Student Loan. (xi) Interest Rate. Except as may be provided in the Transfer and Servicing Agreement, each Financed FFELP Loan included in the Initial Financed Student Loans bears interest at the "applicable interest rate" permitted for such loan under the Higher Education Act. Except as provided in the Transfer and Servicing Agreement, the Financed HEAL Loans included in the Initial Financed Student Loans bear interest, calculated on a variable rate basis, that varies every calendar quarter throughout the life of the loan. Under the HEAL Act, for each calendar quarter, the Department of HHS determines the general maximum annual HEAL interest rate by (i) determining the average of the bond equivalent rates reported for the 91-day U.S. Treasury bills auctioned for the preceding calendar quarter, (ii) adding 3 percentage points, and (iii) rounding that figure to the next higher one-eighth of one percent. (xii) Interest Accruing. Each Financed Student Loan is accruing interest (whether or not such interest is being paid currently, by the Obligor or is being capitalized), except as otherwise expressly permitted by the Basic Documents. SECTION 3.2. REPURCHASE UPON BREACH; REIMBURSEMENT. (a) The Depositor, the Master Servicer or the Eligible Lender Trustee, as the case may be, shall notify the other parties to the Transfer and Servicing Agreement and the Indenture Trustee promptly, in writing, upon the discovery of any breach of the representations and warranties of the Depositor made pursuant to Sections 3.1 and 7.1 hereof that has resulted in the failure of a Guarantee Agency (including for this purpose a guarantor under a Private Loan Program) to make a Guarantee Payment (or guarantee payment) or the Department of HHS to make an Insurance Payment to the Eligible Lender Trustee. Unless any such breach shall have been cured within 120 days following the discovery thereof by the Depositor or receipt by the Depositor of written notice from the Eligible Lender Trustee or the Master Servicer of such breach, the applicable Financed Student Loan shall be retransferred, reassigned, resetover and otherwise reconveyed to the Eligible Lender Trustee on behalf of the Depositor as of the first day succeeding the end of such 120-day period that is the last day of a Collection Period; provided, however, that in the case of any representation or warranty the breach of which may be cured by reinstatement of the Guarantee Agency's obligation to guarantee payment or the Department of HHS' obligation to insure payment, such cure period shall be 360 days (instead of 120 days), in each case following the earlier of the date on which such breach is discovered by the Depositor and the date of the Servicer's receipt of the Guarantee Agency, Department of HHS or Private Loan Program reject transmittal form with respect to such Financed Student Loan. Notwithstanding the foregoing, if as of the last day of any Collection Period the aggregate principal amount of Financed Student Loans with respect to which claims have been filed with and rejected by a Guarantee Agency (including for this purpose a guarantor under a Private Loan Program) or the Department of HHS as a result of a breach of a representation or warranty of the Depositor in Sections 3.1 or Section 7.1 hereof or a breach of the obligations of the Master Servicer under Sections 5.1 through 5.4 hereof or with respect to which the Master Servicer determines that claims cannot be filed pursuant to the Higher Education Act or the HEAL Act, as the case may be, as a result of such a breach exceeds the lesser of $250,000 or 0.25% of the Pool Balance as of such date, the Depositor shall repurchase within 120 days of a written request by the Eligible Lender Trustee or the Indenture Trustee, affected Financed Student Loans in an aggregate principal amount such that after such repurchases (or purchases by the Master Servicer pursuant to Section 5.5 hereof) the aggregate principal amount of affected Financed Student Loans is equal to or less than the lesser of $250,000 or 0.25% of the Pool Balance. The Financed Student Loans to be repurchased by the Depositor pursuant to the preceding sentence (or by the Master Servicer pursuant to Section 5.5 hereof) will be based on the date of claim rejection, with the Financed Student Loans with the earliest such dates to be repurchased or purchased first. In consideration of and simultaneously with the repurchase of the Financed Student Loan, the Depositor shall remit the Purchase Amount in the manner specified in Section 6.4, and the Issuer shall execute such assignments and other documents reasonably requested by the Transferor in order to effect such transfer. Upon any such transfer of a Financed Student Loan, legal title to, and beneficial ownership and control of, the related Financed Student Loan File will thereafter belong to the Eligible Lender Trustee on behalf of the Depositor. (b) In addition, if any such breach does not trigger such a repurchase obligation but does result in (i) the refusal by the Department of HHS to insure the applicable portion of the accrued interest with respect to any Financed HEAL Loan, or (ii) the refusal by a Guarantee Agency to guarantee the applicable portion of the accrued interest, or the loss of (including any obligation of the Issuer to repay to the Department of Education) certain Interest Subsidy Payments and Special Allowance Payments, with respect to a Financed FFELP Loan, then, unless such breach, if curable, is cured within 120 days following the discovery thereof by the Transferor or receipt by the Transferor of written notice from the Eligible Lender Trustee, the Depositor shall, at its option, either (y) repurchase through the Eligible Lender Trustee such Financed Student Loan (but only if an actual failure to pay any such amount to the Eligible Lender Trustee occurs or the Eligible Lender is required to repay such an amount which has been previously paid) at the applicable Purchase Amount, or (z) reimburse the Issuer by remitting an amount equal to the sum of all amounts that would have been payable if not for such breach in the manner specified in Section 6.4 not later than the last day of the Collection Period in which such 120th day occurs (or, to the extent that all or a portion of such amount is not otherwise due and payable as of such date, that portion shall be remitted to the Collection Account on the last day of the Collection Period during which such amount would otherwise be due and payable). (c) In lieu of remitting the Purchase Price with respect to a Financed Student Loan to be repurchased pursuant to Section 3.2(b), the Depositor may transfer to the Eligible Lender Trustee Subsequent Financed Student Loans as provided in Section 2.2(a). (d) The sole remedy of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Noteholders or the Certificateholders with respect to a breach of the representations and warranties of the Transferor pursuant to Sections 3.1 and 7.1 hereof and the agreement contained in this Section 3.2 shall be to require the Depositor to repurchase Financed Student Loans or to reimburse the Issuer as provided above pursuant to this Section 3.2, subject to the conditions contained herein. The Eligible Lender Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the repurchase of any Financed Student Loan or the reimbursement for any interest penalty pursuant to this Section 3.2. ARTICLE IV CUSTODY SECTION 4.1. CUSTODY OF FINANCED STUDENT LOAN FILES. (a) To assure uniform quality in servicing the Financed Student Loans and to reduce administrative costs, the Issuer hereby revocably appoints the Master Servicer as custodian of the Financed Student Loan Files with respect to the Financed FFELP Loans. To that end, the Master Servicer (or its designee pursuant to Subsection 4.1(b), shall maintain as custodian the following documents or instruments with respect to each Financed FFELP Loan: (i) the original fully executed copy of the note evidencing the Financed FFELP Loan (which may be included in the application) unless such note is in the custody of a Guarantee Agency; (ii) the original loan application fully executed by the related borrower (which may be included in the note evidencing a Financed FFELP Loan); and (iii) any and all other documents and computerized records that any of the Master Servicer, the Administrator or the Depositor shall keep on file, in accordance with its customary procedures, relating to such Financed Student Loan or any Obligor with respect thereto. (b) Notwithstanding the foregoing, each Subcustodian appointed pursuant to Section 4.6 who enters into a Subservicing Agreement may act as a custodian of the Related Financed Student Loan Files. (c) The custodian for the Financed Student Loan File relating to a Financed HEAL Loan or Financed Private Loan shall be selected by the Indenture Trustee at the request of the Issuer, provided, however, such custodian shall not be the Master Servicer and such custodian shall not hold such documents pursuant to this Transfer and Servicing Agreement. SECTION 4.2. DUTIES OF MASTER SERVICER AS CUSTODIAN. (a) Safekeeping. The Master Servicer, as custodian, shall hold or cause one or more Subcustodians appointed pursuant to Section 4.6, to (i) hold the Financed Student Loan Files for the benefit of the Issuer, and (ii) maintain such accurate and complete accounts, records and computer systems pertaining to each Financed Student Loan File as shall enable the Issuer to comply with the Transfer and Servicing Agreement and the other Basic Documents. In performing its duties as custodian, the Master Servicer shall act with reasonable care and shall ensure that it complies in all material respects with all applicable federal and state laws, including the Higher Education Act, with respect thereto. The Master Servicer shall promptly report to the Issuer and the Indenture Trustee any failure on its part to hold the Financed Student Loan Files and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial review or any periodic review by the Issuer, the Eligible Lender Trustee or the Indenture Trustee of the Financed Student Loan Files. (b) Maintenance of and Access to Records. The Master Servicer shall cause each Subcustodian to maintain the Related Financed Student Loan Files at the office specified opposite such Subcustodian's name in an Exhibit to the Transfer and Servicing Agreement or shall cause the Financed Student Loan Files to be maintained at such other offices as shall be specified by written notice to the Issuer and the Indenture Trustee not later than 60 days after any change in location. Upon reasonable prior notice, the Master Servicer shall make available, or cause each Subcustodian to make available, to the Issuer and the Indenture Trustee or their respective duly authorized representatives, attorneys or auditors (i) a list of locations of the Financed Student Loan Files and (ii) the related accounts, records and computer systems at the locations identified in the list provided pursuant to clause (i) of this Section 4.2(b) and at such times which are in accordance with the applicable Subservicing Agreements. SECTION 4.3. INSTRUCTIONS; AUTHORITY TO ACT. The Master Servicer shall be deemed to have received proper instructions with respect to the Financed Student Loan Files upon its receipt of written instructions signed by a Responsible Officer of the Indenture Trustee. SECTION 4.4. CUSTODIAN'S INDEMNIFICATION. (a) The Master Servicer shall pay from its own funds for any Indemnifiable Expense that may be imposed on, incurred by or asserted against the Issuer, the Eligible Lender Trustee, the Delaware Trustee or the Indenture Trustee or any of their officers, directors, employees and agents to the extent such Indemnifiable Expense results from the Master Servicer's failure to perform its duties as specified in this Article IV where the final determination that any such improper act or omission by the Master Servicer or any Subcustodian resulted in such Indemnifiable Expense is established by a court of law, by an arbitrator or by way of settlement agreed to by the Master Servicer; provided, however, that the Master Servicer shall not be liable (i) to the Eligible Lender Trustee for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Eligible Lender Trustee, (ii) to the Delaware Trustee for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Delaware Trustee and (iii) to the Indenture Trustee for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Indenture Trustee. This provision shall not be construed to limit the Master Servicer's or any other party's rights, obligations, liabilities, claims or defenses which arise as a matter of law or pursuant to any other provision of the Transfer and Servicing Agreement; provided, however, the Master Servicer shall not be liable for any such Indemnifiable Expense imposed upon such Person to the extent that they arise out of or result from such Person's negligence, willful malfeasance or bad faith or a breach of the representations and warranties of such Person in the Transfer and Servicing Agreement. Notwithstanding anything to the contrary contained in this Article IV, in no event shall the Master Servicer 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 Master Servicer has been advised of the possibility of such damages. (b) Promptly after receipt by an indemnified party under this Section 4.4 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 4.4, notify the indemnifying party of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under Section 4.4, except to the extent the indemnifying party is materially prejudiced by such failure. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party, and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnifying party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of the indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 4.4 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In no event shall the indemnifying party be liable for fees and expenses for more than one counsel separate from its own counsel for all indemnified parties in connection with any one action or related actions in the same jurisdiction arising out of the same general allegations or circumstances. An indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (c) The indemnified party will not, without the prior written consent of the indemnifying party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in which indemnification may be sought hereunder. SECTION 4.5. EFFECTIVE PERIOD AND TERMINATION. The Master Servicer's appointment as custodian of the Financed Student Loan Files shall become effective as of the applicable Closing Date or Transfer Date and shall continue in full force and effect for so long as the Master Servicer shall remain the Master Servicer hereunder. If the Master Servicer or any successor Master Servicer shall resign as Master Servicer in accordance with the provisions of the Transfer and Servicing Agreement or if all the rights and obligations of the Master Servicer or any such successor Master Servicer shall have been terminated under Section 10.1 of the Transfer and Servicing Agreement, the appointment of the Master Servicer or such successor Master Servicer as custodian shall be terminated simultaneously with the effectiveness of such termination. As soon as practicable on or after any termination of such appointment (and in any event within (i) 10 Business Days, with respect to that portion of the Financed Student Loan Files consisting of electronic records and information that is reasonably available and deliverable within 10 Business Days, and (ii) 30 Business Days, with respect to the remaining portion of the Financed Student Loan Files), the Master Servicer shall deliver, to the extent in its possession, the Financed Student Loan Files to the Indenture Trustee or the Indenture Trustee's agent at such reasonable place or places as the Indenture Trustee may designate. SECTION 4.6. APPOINTMENT OF SUBCUSTODIAN. (a) The Master Servicer may at any time appoint one or more Servicers to act as a subcustodian (each a "Subcustodian") of the Financed Student Loan Files of the Financed Student Loans being serviced by such Servicer (the "Related Financed Student Loan Files") to perform all or any portion of its obligations as custodian hereunder; provided, however, that the Master Servicer shall remain obligated and be liable to the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and the Noteholders for the custodial services with respect to the Financed Student Loan Files in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such Subcustodian and to the same extent and under the same terms and conditions as if the Master Servicer alone were performing the custodial services. The fees and expenses of the Subcustodian shall be as agreed between the Master Servicer and its Subcustodian from time to time and none of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Delaware Trustee, the Certificateholders or the Noteholders shall have any responsibility therefor. (b) The appointment of a Subcustodian by the Master Servicer shall become effective as of the date specified in the related Subservicing Agreement and shall continue in full force and effect with respect to each such Subcustodian and its Related Financed Student Loan Files for so long as such Subcustodian is a Servicer of the Financed Student Loans relating to such Financed Student Loan Files. As soon as practicable following the occurrence of an event of default as to which the Master Servicer is aware or has received notice of that is continuing under a Subservicing Agreement, the Master Servicer shall cause each applicable Subcustodian to deliver the Related Financed Student Loan Files as directed by the Master Servicer. ARTICLE V ADMINISTRATION AND SERVICING OF FINANCED STUDENT LOANS SECTION 5.1. DUTIES OF MASTER SERVICER. The Master Servicer, for the benefit of the Issuer (to the extent provided herein), shall manage, service, administer and make collections on the Financed Student Loans with reasonable care. Without limiting the generality of the foregoing or of any other provision set forth in the Transfer and Servicing Agreement and notwithstanding any other provision to the contrary set forth herein, the Master Servicer shall manage, service, administer and make collections with respect to the Financed Student Loans (other than collection of any Interest Subsidy Payments and Special Allowance Payments, which the Eligible Lender Trustee will perform on behalf of the Issuer) in accordance in all material respects with all applicable federal and state laws, including all applicable standards, guidelines and requirements of the Higher Education Act and any Guarantee Agreement with respect to the Financed FFELP Loans, of the HEAL Act and the HEAL Insurance Contract with respect to the Financed HEAL Loans, and of the applicable Private Loan Program with respect to the Financed Private Loans, the failure to comply with which would adversely affect the eligibility of one or more of the Financed FFELP Loans for Interest Subsidy Payments, Special Allowance Payments or Guarantee Payments, the eligibility of one or more of the Financed HEAL Loans for Insurance Payments, the eligibility of one or more of the Financed Private Loans for benefits under the applicable Private Loan Program, or would have a material adverse effect on the Certificateholders or the Noteholders. The Master Servicer's duties shall include collection and posting of all payments, responding to inquiries of borrowers on such Financed Student Loans, monitoring borrowers' status, making required disclosures to borrowers, investigating delinquencies, sending bills or payment coupons to borrowers and otherwise establishing repayment terms, reporting tax information to borrowers, if applicable, accounting for collections and furnishing monthly and annual statements with respect thereto to the Administrator. Subject to the provisions of Section 5.2, the Master Servicer shall follow customary standards, policies and procedures in performing its duties as Master Servicer. Without limiting the generality of the foregoing, the Master Servicer is authorized and empowered to execute and deliver, on behalf of itself, the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and the Noteholders, or any of them, instruments of satisfaction or cancellation, or partial or full release or discharge, and all other comparable instruments, with respect to such Financed Student Loans; provided, however, that the Master Servicer agrees that it will not (a) permit any rescission or cancellation of a Financed Student Loan except as ordered by a court of competent jurisdiction or governmental authority or as otherwise consented to in writing by the Eligible Lender Trustee and the Indenture Trustee or (b) except as otherwise provided in Section 5.13, reschedule, revise, defer or otherwise compromise with respect to payments due on any Financed Student Loan except pursuant to any applicable deferment or forbearance periods or otherwise in accordance with all applicable standards, guidelines and requirements with respect to the servicing of the Financed Student Loans; provided further, however, that the Master Servicer shall not agree to any decrease of the interest rate on, or the principal amount payable with respect to, any Financed Student Loan except as otherwise permitted in accordance with applicable standards, guidelines and requirements of the Higher Education Act and any Guarantee Agreement with respect to the Financed FFELP Loans, by the HEAL Act and the HEAL Insurance Contract with respect to the Financed HEAL Loans and by the applicable Private Loan Program, with respect to the Financed Private Loans. Notwithstanding the foregoing, the Master Servicer may, in its sole discretion, without having to obtain the consent or approval of any other party, (i) not collect late charges that may be due on Financed Student Loans, and (ii) waive remaining amounts owing under a Financed Student Loan up to and including $250.00. The Master Servicer also shall be responsible for advising the Eligible Lender Trustee and the Indenture Trustee of any action required to be taken to maintain each Guarantee Agreement, any HEAL Insurance Contract and any applicable agreement with a Private Loan Program. The Eligible Lender Trustee on behalf of the Issuer hereby grants a power of attorney and all necessary authorization to the Master Servicer to sign endorsements of the notes relating to the Financed Student Loans on behalf of the Eligible Lender Trustee in connection with conveyances pursuant to Section 2.2 hereof and to maintain any and all collection procedures with respect to the Financed Student Loans, including filing, pursuing and recovering claims against the Guarantee Agencies for Guarantee Payments, the Department of HHS for Insurance Payments and the applicable Private Loan Program, and taking any steps to enforce such Financed Student Loan such as commencing a legal proceeding to enforce a Financed Student Loan in the name of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders or the Noteholders. The Eligible Lender Trustee or the Indenture Trustee shall upon the written request of the Master Servicer or the Administrator furnish the Master Servicer or the Administrator with any other powers of attorney and other documents reasonably necessary or appropriate to enable the Master Servicer or the Administrator to carry out its servicing and administrative duties hereunder. SECTION 5.2. COLLECTION OF FINANCED STUDENT LOAN PAYMENTS. (a) The Master Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Financed Student Loans as and when the same shall become due. The Master Servicer may in its discretion waive any late payment charge or any other fees in addition to any fee or waiver permitted under Section 5.1 that may be collected in the ordinary course of servicing a Financed Student Loan. (b) The Master Servicer shall make reasonable efforts to claim, pursue and collect all (i) Guarantee Payments from the Guarantee Agency pursuant to the Guarantee Agreements, (ii) all Insurance Payments from the Department of HHS pursuant to the HEAL Insurance Contract and (iii) all payments due from the applicable Private Loan Program, with respect to any of the Financed Student Loans as and when the same shall become due and payable, and shall comply in all material respects with all applicable laws and agreements with respect to claiming, pursuing and collecting such payments. In connection therewith, the Master Servicer is hereby authorized and empowered to convey (x) to any Guarantee Agency the note and the related Financed Student Loan File representing any Financed FFELP Loan in connection with submitting a claim to such Guarantee Agency for a Guarantee Payment in accordance with the terms of the applicable Guarantee Agreement (y) to the Department of HHS the note and the related Financed Student Loan File representing any Financed HEAL Loan in connection with submitting a claim to the Department of HHS for an Insurance Payment in accordance with the terms of the HEAL Insurance Contract and (z) to the applicable Private Loan Program the note and related Financed Student Loan File representing any Financed Private Loan in connection with submitting a claim to the Private Loan Program in accordance with the terms of such Program, whereupon the Lien of the Indenture Trustee relating to such Financed Student Loan shall be released without any further action of any kind. (c) The Eligible Lender Trustee shall, with the assistance of the Master Servicer and on behalf of the Issuer, make reasonable efforts to claim, pursue and collect all Interest Subsidy Payments and Special Allowance Payments from the Department of Education with respect to any of the Financed FFELP Loans as and when the same shall become due and payable, shall comply in all material respects with all applicable laws and agreements with respect to claiming, pursuing and collecting such payments. All amounts so collected by the Eligible Lender Trustee shall constitute Available Funds for the applicable Collection Period and shall be deposited into the Collection Account in accordance with Section 6.4. In connection therewith, the Master Servicer shall prepare and file with the Department of Education on a timely basis all claims, forms and other documents and filings necessary or appropriate in connection with the claiming of Interest Subsidy Payments and Special Allowance Payments on behalf of the Eligible Lender Trustee and shall otherwise assist the Eligible Lender Trustee in pursuing and collecting such Interest Subsidy Payments and Special Allowance Payments from the Department of Education. The Eligible Lender Trustee shall, upon the written request of the Master Servicer, furnish the Master Servicer with any power of attorney and other documents reasonably necessary or appropriate to enable the Master Servicer to prepare and file such claims, forms and other documents and filings. (d) The Eligible Lender Trustee may permit trusts, other than the Issuer pursuant to a Transfer and Servicing Agreement, established by the Depositor or the Transferor to securitize student loans to use the Department of Education and the Department of HHS lender identification numbers applicable to such Issuer. In such event, the Eligible Lender Trustee may claim and collect Interest Subsidy Payments and Special Allowance Payments with respect to Financed Student Loans of the Issuer and student loans in such other trusts using such common lender identification number. Notwithstanding anything herein or in the Basic Documents to the contrary, any amounts assessed against payments (including, but not limited to, Interest Subsidy Payments and Special Allowance Payments) due from the Department of Education, any Guarantee Agency or the Department of HHS to any such other trust using such common lender identification number as a result of amounts (including, but not limited to, consolidation fees) owing to the Department of Education, any Guarantee Agency or the Department of HHS from the Issuer will be deemed for all purposes hereof and of the Basic Documents (including for purposes of determining amounts paid by the Department of Education, any Guarantee Agency or the Department of HHS with respect to the student loans in the Issuer and such other trust) to have been assessed against the Issuer and shall be deducted by the Eligible Lender Trustee or the Master Servicer and paid to such other trust from any collections made by them which would otherwise have been payable to the Collection Account for the Issuer. Any amounts assessed against payments due from the Department of Education, any Guarantee Agency or the Department of HHS to the Issuer as a result of amounts owing to the Department of Education, any Guarantee Agency or the Department of HHS to the Issuer from such other trust using such common lender identification number will be deemed to have been assessed against such other trust and will be deducted by the Eligible Lender Trustee or the Master Servicer from any collections made by them which would otherwise be payable to the collection account for such other trust and paid to the Issuer. SECTION 5.3. REALIZATION UPON FINANCED STUDENT LOANS. For the benefit of the Issuer, the Master Servicer shall use reasonable efforts consistent with customary servicing practices and procedures and including all efforts that may be specified under the Higher Education Act or any Guarantee Agreement with respect to the Financed FFELP Loans, under the HEAL Act and the HEAL Insurance Contract with respect to the Financed HEAL Loans and any applicable Private Loan Program requirements with respect to the Financed Private Loans, in its servicing of any delinquent Financed Student Loans. SECTION 5.4. NO IMPAIRMENT. The Master Servicer shall not impair in any material respect the rights of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders or the Noteholders in the Financed Student Loans, in any Guaranty Agreement, in the HEAL Insurance Contract or in any agreement relating to the Financed Private Loans. SECTION 5.5. PURCHASE OF FINANCED STUDENT LOANS; REIMBURSEMENT. (a) The Master Servicer or the Eligible Lender Trustee, as the case may be, shall inform the other parties to the Transfer and Servicing Agreement and the Indenture Trustee promptly, in writing, upon the discovery of any breach of an obligation under Section 5.1, 5.2, 5.3 or 5.4 hereof that has resulted in the failure of a Guarantee Agency (including for this purpose a guarantor under a Private Loan Program) to make a Guarantee Payment (or guarantee payment) or the Department of HHS to make an Insurance Payment to the Eligible Lender Trustee. Unless any such breach shall have been cured within 120 days following the discovery thereof by the Master Servicer or receipt by the Master Servicer of written notice from the Eligible Lender Trustee of such breach, the applicable Financed Student Loan shall be transferred, assigned, setover and otherwise conveyed to the Master Servicer as of the first day succeeding the end of such 120-day period that is the last day of a Collection Period; provided, however, that in the case of any obligation the breach of which may be cured by reinstatement of the Guarantee Agency's obligation to guarantee payment or the Department of HHS' obligation to insure payment, such cure period shall be 360 days (instead of 120 days), in each case following the earlier of the date on which such breach is discovered by the Master Servicer and the date of the Servicer's receipt of the Guarantee Agency, Department of HHS or Private Loan Program reject transmittal form with respect to such Financed Student Loan. Notwithstanding the foregoing, if as of the last day of any Collection Period the aggregate principal amount of Financed Student Loans with respect to which claims have been filed with and rejected by a Guarantee Agency (including for this purpose a guarantor under a Private Loan Program) or the Department of HHS as a result of a breach of a representation or warranty of the Depositor in Sections 3.1 or Section 7.1 hereof or a breach of the obligations of the Master Servicer under Sections 5.1 through 5.4 hereof or with respect to which the Master Servicer determines that claims cannot be filed pursuant to the Higher Education Act or the HEAL Act, as the case may be, as a result of such a breach exceeds the lesser of $250,000 or 0.25% of the Pool Balance as of such date, the Master Servicer shall purchase (or Depositor shall repurchase pursuant to Section 3.2 hereof) within 120 days of a written request by the Eligible Lender Trustee or the Indenture Trustee, affected Financed Student Loans in an aggregate principal amount such that after such purchases or repurchases the aggregate principal amount of affected Financed Student Loans is equal to or less than the lesser of $250,000 or 0.25% of the Pool Balance. The Financed Student Loans to be purchased by the Master Servicer pursuant to the preceding sentence (or repurchased by the Depositor pursuant to Section 3.2 hereof) will be based on the date of claim rejection, with the Financed Student Loans with the earliest such dates to be purchased or repurchased first. In consideration of and simultaneously with the purchase of the Financed Student Loan, the Master Servicer shall remit the Purchase Amount, in the manner specified in Section 6.4, and the Issuer shall execute such assignments and other documents reasonably requested by the Master Servicer in order to effect such transfer. Upon any such transfer of a Financed Student Loan, legal title to, and beneficial ownership and control of, the related Financed Student Loan File will thereafter belong to the Master Servicer. (b) In addition, if any such breach does not trigger such a purchase obligation but does result in (i) the refusal by the Department of HHS to insure the applicable portion of the accrued interest with respect to any Financed HEAL Loan, or (ii) the refusal by a Guarantee Agency to guarantee the applicable portion of the accrued interest, or the loss of (including any obligation of the Issuer to repay to the Department of Education) certain Interest Subsidy Payments and Special Allowance Payments, with respect to a Financed FFELP Loan, then, unless such breach, if curable, is cured within 120 days following the discovery thereof by the Master Servicer or receipt by the Master Servicer of written notice from the Eligible Lender Trustee, the Master Servicer shall, at its option, either (y) purchase such Financed Student Loan (but only if an actual failure to pay any such amount to the Eligible Lender Trustee occurs or the Eligible Lender is required to repay such an amount which has been previously paid) at the applicable Purchase Amount, or (z) reimburse the Issuer by remitting an amount equal to the sum of all amounts that would have been payable if not for such breach in the manner specified in Section 6.4 not later than the last day of the Collection Period in which such 120th day occurs (or, to the extent that all or a portion of such amount is not otherwise due and payable as of such date, that portion shall be remitted to the Collection Account on the last day of the Collection Period during which such amount would otherwise be due and payable). (c) If agreed between the Depositor and the Master Servicer at the time of such transfer, the Depositor, on behalf of the Master Servicer, may transfer to the Eligible Lender Trustee Subsequent Financed Student Loans as provided in Section 2.2(a) in lieu of remitting the Purchase Price with respect to a Financed Student Loan to be repurchased pursuant to Section 5.5(b). (d) The sole remedy of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Noteholders or the Certificateholders with respect to a breach of the obligations of the Master Servicer under Sections 5.1 through 5.4 hereof and the agreement contained in this Section 5.5 shall be to require the Master Servicer to purchase Financed Student Loans or to reimburse the Issuer as provided above pursuant to this Section 5.5, subject to the conditions contained herein. The Eligible Lender Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the purchase of any Financed Student Loan or the reimbursement for any interest penalty pursuant to this Section 5.5. SECTION 5.6. SERVICING FEE. For its services hereunder, the Master Servicer shall be entitled to receive the Servicing Fee in the amount of manner set forth in the Transfer and Servicing Agreement. SECTION 5.7. ADMINISTRATOR'S CERTIFICATE. (a) On each Payment Determination Date for a Series of Notes, the Administrator shall deliver to the Indenture Trustee and the Eligible Lender Trustee in writing the Class Interest Amount and Principal Payment Amount applicable to each Class of such Series of Notes, and all amounts to be paid to Certificateholders on the related Payment Date. On each Payment Determination Date relating to a Quarterly Payment Date, the Administrator also shall deliver to the Indenture Trustee and the Eligible Lender Trustee in writing the Transaction Fees (separately and in the aggregate) payable on such Quarterly Payment Date. Two Business Days prior to the 25th day of each month, the Administrator will advise the Indenture Trustee and the Eligible Lender Trustee in writing of the Consolidation Loan Fees for the preceding Collection Period. (b) On each Payment Determination Date for a Series, the Administrator shall identify Financed Student Loans securing such Series to be repurchased by the Depositor or purchased by the Master Servicer (whether pursuant to Section 2.2, 3.2 or 5.5), or acquired by any Guarantee Agency, by the Department of HHS or Private Loan Program, by borrower social security number. (c) On or before each Payment Determination Date, the Administrator shall deliver to the Eligible Lender Trustee, the Indenture Trustee and the Depositor, the Administrator's Certificate substantially in the form of Exhibit D. SECTION 5.8. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT. (a) Each of the Master Servicer and the Administrator shall deliver to the Depositor, the Eligible Lender Trustee and the Indenture Trustee, on or before April 30 of each year with respect to each Series of Notes issued prior to July 1 of the preceding year, an Officer's Certificate of the Master Servicer and the Administrator, as the case may be, dated as of December 31 of the preceding year, stating that (i) a review of the activities of the Master Servicer or the Administrator, as the case may be, during the preceding 12-month period (or, in the case of the first such certificate with respect to a Series, during the period from the Closing Date to the end of December) and of its performance under each Transfer and Servicing Agreement has been made under such officers' supervision and (ii) to the best of such officers' knowledge, based on such review, the Master Servicer or the Administrator, as the case may be, has fulfilled in all material respects all its obligations under the Transfer and Servicing Agreement throughout such year or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof. The Eligible Lender Trustee shall send a copy of each such Officers' Certificate and each report referred to in Section 5.9 to the Rating Agencies. A copy of each such Officers' Certificate and each report referred to in Section 5.9 may be obtained by any Noteholder or Note Owner by a request in writing to the Eligible Lender Trustee addressed to its Corporate Trust Office, together with evidence satisfactory to the Eligible Lender Trustee that such Person is a Noteholder or Note Owner. Pursuant to the Indenture, upon the telephone request of the Eligible Lender Trustee, the Indenture Trustee will promptly furnish the Eligible Lender Trustee a list of Noteholders as of the date specified by the Eligible Lender Trustee. (b) The Master Servicer shall deliver to the Eligible Lender Trustee, the Indenture Trustee, the Transferor and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice in an Officer's Certificate of the Master Servicer of any event which with the giving of notice or lapse of time, or both, would become a Master Servicer Default under Section 10.1(a). (c) The Administrator shall deliver to the Eligible Lender Trustee, the Indenture Trustee, the Master Servicer and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice in an Officer's Certificate of the Administrator of any event which with the giving of notice or lapse of time, or both, would become an Administrator Default under Section 10.1(b). SECTION 5.9. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT OR REPORTS. Each of the Master Servicer and the Administrator shall cause KPMG Peat Marwick LLP, or any other nationally recognized firm of independent certified public accountants (which may also render its services to the Master Servicer and the Administrator), to deliver to the Depositor, the Eligible Lender Trustee, the Indenture Trustee and any Servicer on or before April 30 of each year one or more reports addressed to the Depositor, the Eligible Lender Trustee and the Indenture Trustee with respect to each Series of Notes issued prior to July 1 of the preceding year to the effect that such accountants have relied upon the assertions by the Master Servicer's and Administrator's management about the Master Servicer's and Administrator's compliance with Sections 4.1, 4.2, 5.1, 5.2, 5.3, 5.4, 5.6, 5.7, 6.2, 6.5, 6.6, 6.7, 9.6(ii), (iv), (vii), (xxi) and 9.8(a) hereof, the payment provisions of each Transfer and Servicing Agreement during the preceding calendar year (or, in the case of the first such report with respect to a Series, during the period from the Closing Date to the end of December) and in any such accountant's opinion(s), such assertions are fairly stated in all material respects, except for (i) such exceptions as any such firm shall believe to be immaterial and (ii) such other exceptions as shall be set forth in such report(s). If any such firm requires the Indenture Trustee or the Eligible Lender Trustee to agree to the procedures performed by such firm, the Master Servicer shall direct the Indenture Trustee or the Eligible Lender Trustee in writing to so agree; it being understood and agreed that the Indenture Trustee or the Eligible Lender Trustee, as applicable, will deliver such letter of agreement in conclusive reliance upon the direction of the Master Servicer, and the Indenture Trustee and the Eligible Lender Trustee make no independent inquiry or investigation as to and shall have no obligation or liability in respect of, the sufficiency, validity or correctness of such procedures. Such report(s) will also indicate that the firm is independent of the Master Servicer and the Administrator within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants. SECTION 5.10. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING FINANCED STUDENT LOANS. Upon reasonable prior notice, the Master Servicer shall, or shall cause each Servicer to, provide access to the Related Financed Student Loan Files and the related accounts, records and computer systems maintained by the Master Servicer or such Servicer, as the case may be, to (i) the Eligible Lender Trustee and (ii) the Indenture Trustee and their respective duly authorized representatives, attorneys or auditors; provided, however, that, except as otherwise set forth in Section 10.18 of the Master Indenture, agreed to by the Master Servicer or required by law, (A) such Persons shall maintain the confidentiality of the information in such Financed Student Loan Files and the related accounts, records and computer systems and not use any of such information for any purpose except in connection with performing their obligations as Eligible Lender Trustee or Indenture Trustee, and (B) access to the computer systems shall be limited to obtaining, and only to the extent necessary to obtain, information relating to the Financed Student Loans for purposes of performing their obligations as Eligible Lender Trustee or Indenture Trustee. Access shall be afforded without charge (except that the reasonable cost of photocopying shall be borne by the party requesting copies), but only upon reasonable request and during the normal business hours at the respective offices of the applicable Servicer. Nothing in this Section shall affect the obligation of the Master Servicer (or a Servicer) to observe any applicable law prohibiting disclosure of information regarding the Obligors and the failure of the Master Servicer to provide (or cause each Servicer to provide) access to information as a result of such obligation shall not constitute a breach of this Section. SECTION 5.11. MASTER SERVICER AND ADMINISTRATOR EXPENSES. The Master Servicer and the Administrator shall be severally required to pay all expenses incurred by them in connection with their respective activities hereunder, including fees and disbursements of independent accountants, taxes imposed on the Master Servicer or the Administrator, as the case may be, and expenses incurred in connection with distributions and reports to the Administrator, the Noteholders and the Eligible Lender Trustee, as the case may be. SECTION 5.12. APPOINTMENT OF SERVICER. (a) The Master Servicer may at any time appoint a Servicer to perform all or any portion of its obligations as Master Servicer hereunder; provided, however, that the Rating Agency Condition shall have been satisfied in connection therewith; provided further, that the Master Servicer shall remain obligated and be liable to the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and the Noteholders for the servicing and administering of the Financed Student Loans in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such subservicer and to the same extent and under the same terms and conditions as if the Master Servicer alone were servicing and administering the Financed Student Loans. The fees and expenses of each Servicer shall be as agreed between the Master Servicer and such Servicer from time to time and none of the Issuer, the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee, the Certificateholders and the Noteholders shall have any responsibility therefor. (b) The Master Servicer may at any time appoint one or more of its Affiliates to perform all or any portion of its obligations hereunder; provided, however, that the Master Servicer shall remain obligated and liable to the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and the Noteholders for the servicing and administering of the Financed Student Loans in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such Affiliate and to the same extent and under the same terms and conditions as if the Master Servicer alone were servicing and administering the Financed Student Loans. The fees and expenses of each such Affiliate shall be as agreed between the Master Servicer and such Affiliate from time to time and none of the Issuer, the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee, the Certificateholders and the Noteholders shall have any responsibility therefor ARTICLE VI ACCOUNTS, COLLECTIONS AND DISTRIBUTIONS SECTION 6.1. ESTABLISHMENT OF TRUST ACCOUNTS. (a) The Indenture Trustee, for the benefit of the Noteholders for a Series of Notes (or one or more Series of Notes ratably secured by the same Financed Student Loans), shall establish and maintain in the name of the Indenture Trustee each of the Collection Account, the Note Payment Account, the Expense Account, the Advance Account and, if applicable, the Reserve Account and the Pre-Funding Account. The Eligible Lender Trustee, for the benefit of the Certificateholders, shall establish and maintain in the name of the Eligible Lender Trustee the Certificate Distribution Account. The foregoing accounts are referred to collectively as the "Trust Accounts." Each such Trust Account shall be an Eligible Deposit Account and, except for the Certificate Distribution Account, shall be entitled as follows: "[Name of Account] for the benefit of [Name of Issuer] and [Name of Indenture Trustee], as Indenture Trustee, as their interests may appear." The Certificate Payment Account shall be entitled as follows: "[Name of Issuer] Certificate Payment Account." (b) Funds on deposit in the Trust Accounts shall be invested by the Indenture Trustee and, in the case of the Certificate Distribution Account, the Eligible Lender Trustee, in Eligible Investments pursuant to written instructions from the Administrator on behalf of the Issuer; provided, however, it is understood and agreed that the Indenture Trustee and the Eligible Lender Trustee shall not be liable for any loss arising from such investment in Eligible Investments. All such Eligible Investments shall be held by the Indenture Trustee and the Eligible Lender Trustee for the benefit of the Issuer. Except as may be specified otherwise in the Transfer and Servicing Agreement, all interest and other investment income (net of losses and investment expenses) on funds on deposit in the Trust Accounts shall be deposited in the Collection Account on the Business Day preceding each Payment Date or Quarterly Payment Date; provided, however, that net investment income on funds on deposit in the Certificate Distribution Account need only be transferred to the Collection Account when the amount of such investment income exceeds $1,000, but at least annually. Funds on deposit in the Trust Accounts shall be invested in Eligible Investments that will mature or otherwise be available so that such funds will be available at the close of business on the Business Day preceding the day on which funds in the applicable Trust Account may be required to be withdrawn; provided, however, that funds on deposit in such Trust Accounts may be invested in Eligible Investments of the Indenture Trustee or of the Eligible Lender Trustee in the case of the Certificate Distribution Account which may mature so that such funds will be available on the following Business Day. Funds deposited in a Trust Account on a Business Day that immediately precedes a Payment Date or Quarterly Payment Date upon the maturity of any Eligible Investments are not required to be invested overnight unless otherwise directed by telephone or facsimile and confirmed within 24 hours in writing by the Administrator. (c) (i) The Indenture Trustee (or the Eligible Lender Trustee with respect to the Certificate Distribution Account) shall possess all right, title and interest in all funds on deposit from time to time in the Trust Accounts and in all proceeds thereof (including all income thereon) and all such funds, investments, proceeds and income shall be part of the Trust Estate. Subject to the Administrator's power to give instructions pursuant to paragraph (b) above and paragraph (c) (iii) below, the Trust Accounts shall be under the sole dominion and control of the Indenture Trustee (or the Eligible Lender Trustee with respect to the Certificate Distribution Account) for the benefit of the Noteholders (and the Certificateholders). If, at any time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the Administrator, on behalf of the Issuer, agrees that it shall within 10 Business Days (or such longer period not to exceed 30 days as to which the Rating Agencies may consent) establish a new Trust Account as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Trust Account. In connection with the foregoing, the Administrator, on behalf of the Issuer, agrees that, if any of the Trust Accounts are not accounts with the Indenture Trustee (or the Eligible Lender Trustee with respect to the Certificate Distribution Account), the Administrator shall notify the Indenture Trustee and the Eligible Lender Trustee in writing promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit Account. (ii) With respect to the Trust Account Property, the Indenture Trustee agrees (or, with respect to the Certificate Distribution Account, the Eligible Lender Trustee agrees), by its acceptance thereof, that: (A) any Trust Account Property that is held in deposit accounts shall be held solely in Eligible Deposit Accounts, subject to the last sentence of Section 6.1(c)(i); and, subject to Section 6.1(b), each such Eligible Deposit Account shall be subject to the exclusive custody and control of the Indenture Trustee (or the Eligible Lender Trustee with respect to the Certificate Distribution Account), and the Indenture Trustee (or the Eligible Lender Trustee with respect to the Certificate Payment Account) shall have sole signature authority with respect thereto; (B) any Trust Account Property that constitutes Physical Property shall be Delivered to the Indenture Trustee in accordance with paragraph (a) of the definition of "Delivery" and shall be held, pending maturity or disposition, solely by the Indenture Trustee or a financial intermediary (as such term is defined in Article 8 of the UCC) acting solely for the Indenture Trustee; (C) any Trust Account Property that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulation shall be Delivered in accordance with paragraph (b) of the definition of "Delivery" and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued book-entry registration of such Trust Account Property as described in such paragraph; and (D) any Trust Account Property that is an "uncertificated security" under Article 8 of the UCC and that is not governed by clause (C) above shall be Delivered to the Indenture Trustee in accordance with paragraph (c) of the definition of "Delivery" and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued registration of the Indenture Trustee's (or its nominee's) ownership of such security. (iii) The Administrator shall have the power, revocable for cause or upon the occurrence and during the continuance of an Administrator Default by the Indenture Trustee or by the Eligible Lender Trustee with the consent of the Indenture Trustee, to instruct the Indenture Trustee to make withdrawals and payments from the Trust Accounts (or the Eligible Lender Trustee with respect to the Certificate Distribution Account) for the purpose of permitting the Master Servicer, the Administrator or the Eligible Lender Trustee to carry out its respective duties hereunder or under the Trust Agreement or permitting the Indenture Trustee to carry out its duties under the Indenture. SECTION 6.2. COLLECTIONS. (a) The Master Servicer shall cause each Servicer to remit to the Collection Account, no less frequently than once every two weeks, all payments by or on behalf of the Obligors with respect to the Financed Student Loans for which it is acting as Primary Servicer (other than Purchased Student Loans). For purposes of this Article VI, the phrase "payments by or on behalf of Obligors" shall mean payments made with respect to the Financed Student Loans by or on behalf of borrowers thereof, the Guarantee Agencies, the Department of HHS and the applicable Private Loan Programs. The Master Servicer shall require each Servicer to provide notice by facsimile to the Indenture Trustee of all wire transfers made by such Servicer to the Indenture Trustee for deposits to the Collection Account. (b) Upon receipt of written notice (or telephonic or facsimile notice promptly followed by written notice) from the Master Servicer by the Eligible Lender Trustee and the Indenture Trustee, the Eligible Lender Trustee will convey to the Master Servicer (or the Master Servicer's designee) the Financed Student Loans identified in such notice, which are to be transferred to a Guarantee Agency in consideration of a related Guarantee Payment, the Department of HHS in consideration of an Insurance Payment or a private guarantor in consideration of guarantee payments. SECTION 6.3. APPLICATION OF COLLECTIONS. With respect to each Financed Student Loan, all collections (including all Guarantee Payments, all Insurance Payments and Private Loan Program payments) with respect thereto shall be applied in accordance with regulations of the Department of Education and the applicable Guarantee Agency in the case of Financed FFELP Loans, (ii) the Department of HHS in the case of Financed HEAL Loans and (iii) Private Loan Program in the case of Financed Private Loans. SECTION 6.4. ADDITIONAL DEPOSITS. Within two Business Days after receipt thereof, the Eligible Lender Trustee (or the Master Servicer on its behalf) shall deposit in the Collection Account the aggregate amount of Interest Subsidy Payments and Special Allowance Payments received by it with respect to the Financed Student Loans, and the Depositor shall deposit in the Collection Account any amount owed pursuant to the Transfer and Servicing Agreement no later than the last day of the Collection Period during which any such amount is owed. The Master Servicer shall deposit or cause to be deposited in the Collection Account the aggregate Purchase Amount with respect to Purchased Student Loans and all other amounts to be paid by the Master Servicer under Section 5.5 when such amounts are due, and the Depositor shall deposit or cause to be deposited in the Collection Account the aggregate Purchase Amount with respect to Purchased Student Loans and all other amounts to be paid by the Depositor under Section 3.2 when such amounts are due. The Depositor, the Master Servicer and the Administrator also shall deposit in the Collection Account all amounts required to be deposited therein pursuant to, and within the time periods provided by, Section 2.2. Notwithstanding the foregoing, the Master Servicer shall deposit, or cause to be deposited, directly into the Reserve Account any payments of or with respect to principal relating to a Financed Student Loan for which any payment on account of a Realized Loss was previously distributed (but only up to the amount of such Realized Loss), and shall deposit, or cause to be deposited, directly into the Collection Account any payments of or with respect to interest relating to a Financed Student Loan for which any payment on account of a Realized Loss was previously distributed. The Master Servicer also shall, in its sole discretion, deposit into the Advance Account the amount of any Monthly Advances determined to be made by the Master Servicer pursuant to Section 6.9 no later than the Payment Determination Date relating to the Payment Date or Quarterly Payment Date when such amounts are to be applied as a payment of interest. Pursuant to Section 6.9, if after making a Monthly Advance the Master Servicer receives the Guarantee Payment, Special Allowance Payment, Interest Subsidy Payment, Insurance Payment or Private Loan Program payment for which such Monthly Advance was made, the Master Servicer shall be reimbursed immediately from such Guarantee Payment, Special Allowance Payment, Interest Subsidy Payment, Insurance Payment or Private Loan Program payment, as the case may be, on deposit in the Collection Account up to the amount of the related Monthly Advance or, if such Guarantee Payment, Special Allowance Payment, Interest Subsidy Payment, Insurance Payment or Private Loan Program payment is not received, the Master Servicer may reimburse itself from any funds on deposit in the Collection Account up to the amount of the related Monthly Advance. SECTION 6.5. DISTRIBUTIONS. The Indenture Trustee and Eligible Lender Trustee shall make payments and distributions out of the Trust Accounts with respect to a Series of Notes or Certificates as provided in the related Transfer and Servicing Agreement. SECTION 6.6. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. On each Payment Determination Date for a Series, the Master Servicer or the Administrator shall provide to the Indenture Trustee (for the Indenture Trustee to forward on such succeeding Payment Date to each Noteholder of record of the applicable Series other than a Noteholder of Auction Rate Notes, which may obtain the following statement to the extent available upon written request to the Indenture Trustee) and to the Eligible Lender Trustee (for the Eligible Lender Trustee to forward on such succeeding Quarterly Payment Date to each Certificateholder of record), with a copy to the Rating Agencies, a statement substantially in the form of Exhibit B, setting forth at least the following information with respect to such Payment Date or the preceding Collection Period or Collection Periods, to the extent applicable: (i) the Principal Factor for each Class of Notes of a Series; (ii) the amount of the payment allocable to principal on each Class of Notes of a Series; (iii) the amount of the payment allocable to interest on each Class of Notes of a Series and on the related Certificates, together with the interest rates applicable with respect thereto (indicating, whether such interest rates are based on the Formula Interest Rate or on the Net Loan Rate with respect to each Class of Notes, and specifying what each such interest rate would have been if it had been calculated using the alternate basis; provided that no such calculation of the Net Loan Rate will be required to be made unless One-Month LIBOR as of the preceding Interest Determination Date exceeds by more than 100 basis points the average of the bond equivalent rates of the 91-day Treasury bills auctioned to the preceding Interest Determination Date during the calendar quarter in which such preceding Interest Determination Date occurs (or in the case of the initial Interest Determination Date, the Closing Date); (iv) the amount of the payment, if any, allocable to any Carryover Interest with respect to each Class of Notes of a Series, together with the outstanding amount, if any, thereof after giving effect to any such distribution; (v) the Pool Balance of the related Financed Student Loans as of the close of business on the last day of the preceding Collection Period; (vi) the aggregate outstanding principal amount of each Class of Notes of a Series as of such Payment Date, after giving effect to payments allocated to principal reported under clause (ii) above; (vii) with respect to a Series, the amount of the Servicing Fee, the Administration Fee, the Indenture Trustee Fee, the Delaware Trustee Fee and the Eligible Lender Trustee Fee to be paid on the upcoming Payment Date; (viii) the amount of the aggregate Realized Losses, if any, experienced by the Issuer for the preceding Collection Period with respect to the related Financed Student Loans, and the aggregate amount, if any, received (stated separately for interest and principal) during such Collection Period relating to such Financed Student Loans for which a Realized Loss was previously allocated; (ix) the amount of the distribution attributable to amounts in the Reserve Account, Pre-Funding Account, or other account identified in the Transfer and Servicing Agreement, the amount of any other withdrawals from the Reserve Account for such Payment Date, the balance of the Reserve Account on such Distribution Date, after giving effect to changes therein on such Payment Date, the then applicable Parity Percentage and the amount of the distribution, if any, attributable to Parity Payments; (x) the aggregate amount, if any, paid for related Financed Student Loans purchased from the Issuer during the preceding Collection Period; (xi) during the Subsequent Finance Period only, the Adjustment Payments with respect to a Series, stated separately, for the preceding Collection Period; (xii) the number and principal amount of related Financed Student Loans, as of the end of the preceding Collection Period, that are (A) 31 to 60 days delinquent, (B) 61 to 90 days delinquent, (C) 91 to 120 days delinquent, (D) more than 120 days delinquent and (E) for which claims have been filed with the appropriate Guaranty Agency, guarantor or the Department of HHS and which are awaiting payment; and (xiii) any other information specified in the Transfer and Servicing Agreement with respect to a Series of Notes. SECTION 6.7. EXPENSE ACCOUNT. The Administrator shall instruct the Indenture Trustee to deposit funds into, and withdraw funds from, the Expense Account as set forth in Sections 6.5 and 6.6. Any funds remaining in the Expense Account upon termination of the Issuer shall be distributed to the Master Servicer as additional servicing compensation. SECTION 6.8. NOTE PAYMENT ACCOUNT AND CERTIFICATE DISTRIBUTION ACCOUNT. The Administrator shall instruct the Indenture Trustee and the Eligible Lender Trustee to deposit funds into, and withdraw funds from, the Note Payment Account and the Certificate Distribution Account, as applicable. SECTION 6.9. ADVANCES. If the Master Servicer has applied for a Guarantee Payment from a Guarantee Agency, an Interest Subsidy Payment or a Special Allowance Payment from the Department of Education, an Insurance Payment from the Department of HHS or a payment from the applicable Private Loan Program, and the Master Servicer has not received the related payment prior to the end of the Collection Period immediately preceding the Distribution Date on which such amount would be required to be distributed as a payment of interest, the Master Servicer may, no later than the Payment Determination Date relating to such Payment Date, in its sole discretion, deposit into the Advance Account an amount up to the amount of such payments applied for but not received (such deposits by the Master Servicer are referred to herein as "Advances"). Such Advances are recoverable by the Master Servicer (i) first, from the Guarantee Payment, Interest Subsidy Payment, Special Allowance Payment, Insurance Payment or Private Loan Program payment, as the case may be, for which such Monthly Advance was made and (ii) second, if such amounts have not been received, from collections received generally on or with respect to the Financed Student Loans. The Master Servicer shall have no obligation, legal or otherwise, to make any Monthly Advance, and the making of or decision to make a particular Monthly Advance shall not create any obligation on the Master Servicer, legal or otherwise, to make any future Advances. ARTICLE VII THE DEPOSITOR SECTION 7.1. REPRESENTATIONS OF THE DEPOSITOR. The Depositor makes the following representations on which the Issuer is deemed to have relied in acquiring (through the Eligible Lender Trustee) the Financed Student Loans being conveyed pursuant to a Transfer and Servicing Agreement. The representations speak as of the Closing Date with respect to a Series in the case of the Initial Financed Student Loans, and as of the applicable Transfer Date in the case of the Subsequent Financed Student Loans or Additional Financed Student Loans transferred on such Transfer Date, but shall survive the contribution, transfer and assignment of the Financed Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (a) Organization and Good Standing. The Depositor is duly organized as a limited liability company under Virginia law with the 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 or its ability to consummate the transactions contemplated by the Basic Documents, and the Depositor, through the Eligible Lender Trustee, had at all relevant times, and has, the power, authority and legal right to acquire and own the Financed Student Loans. (b) Due Qualification. The Depositor is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership and lease of property or the conduct of its business shall require such qualifications except for such licenses and approvals the absence of which would not have a material adverse effect on the Depositor or its ability to consummate the transactions contemplated by the Basic Documents. (c) Power and Authority. The Depositor has the requisite entity power and authority to execute and deliver the Transfer and Servicing Agreement and to carry out its terms; the Depositor has requisite entity power and authority to transfer and assign the property to be contributed and assigned to and deposited with the Issuer (or with the Eligible Lender Trustee on behalf of the Issuer) and the Transferor has duly authorized such transfer and assignment to the Issuer (or to the Eligible Lender Trustee on behalf of the Issuer) by all necessary entity action on Depositor's part; and the execution, delivery and performance of the Transfer and Servicing Agreement have been duly authorized by the Depositor by all necessary corporate action on its part. (d) Binding Obligation. The Transfer and Servicing Agreement constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and similar laws relating to creditors' rights generally and subject to general principles of equity. (e) No Violation. The consummation of the transactions contemplated by the Transfer and Servicing Agreement and the fulfillment of the terms thereof 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 Operating Agreement of the Depositor, or any material indenture, material agreement or other material instrument to which the Depositor is a party or by which it shall be bound; or 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 material law or, to the knowledge of the Depositor, any material 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 the Depositor or its properties. (f) No Proceedings. To its best knowledge, there are no proceedings or investigations pending or threatened against the Depositor, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over it or its properties: (i) asserting the invalidity of the Transfer and Servicing Agreement or any of the other Basic Documents, any Series of Notes or the Certificates, (ii) seeking to prevent the issuance of any Series of Notes or the Certificates or the consummation of any of the transactions contemplated by the Transfer and Servicing Agreement or any of the other Basic Documents, (iii) seeking any determination or ruling that could reasonably be expected to have a material and adverse effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, the Transfer and Servicing Agreement or any of the other Basic Documents, any Series of Notes or the Certificates or (iv) seeking to affect adversely the federal or state income tax attributes of an Issuer, any Series of Notes or the Certificates. (g) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by the Depositor in connection with the execution and delivery by the Depositor of the Transfer and Servicing Agreement and the performance by the Depositor of the transactions expressly contemplated by the Transfer and Servicing Agreement, have been duly obtained, effected or given and are in full force and effect, except such as may be required by the blue sky laws of any jurisdiction in connection with the sale and distribution of any Series of Notes and the Certificates for which no representation or warranty is being given. (h) No Amendment or Waiver. Except as provided in Section 5.13, no provision of a Financed Student Loan has been waived, altered or modified in any respect, except pursuant to a document, instrument or writing included in the Financed Student Loan File, and no such amendment, waiver, alteration or modification causes such Financed Student Loan not to conform in any material respect to the other warranties contained in this Section. SECTION 7.2. EXISTENCE. Except as permitted by Section 7.4, during the term of the Transfer and Servicing Agreement, the Depositor will keep in full force and effect its existence under the laws of the jurisdiction of its organization. SECTION 7.3. INDEMNIFICATION. (a) The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Depositor, under the Transfer and Servicing Agreement. (b) The Depositor shall indemnify, defend and hold harmless the Issuer, the Eligible Lender Trustee and the Indenture Trustee and their officers, directors, employees and agents from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated by the Transfer and Servicing Agreement (except (i) taxes arising out of fees paid to the Eligible Lender Trustee or the Indenture Trustee, (ii) taxes arising out of the transfer of the Financed Student Loans to the Eligible Lender Trustee, (iii) taxes arising out of the issuance and sale of the Notes or Certificates of a Series, (iv) taxes arising out of the ownership of the Financed Student Loans (including, without limitation, income taxes), and (v) taxes arising out of distributions on the Notes or Certificates of a Series) and costs and expenses in defending against the same). (c) The Depositor shall indemnify, defend and hold harmless the Issuer, the Eligible Lender Trustee, the Indenture Trustee, and the Noteholders and the officers, directors, employees and agents of the Issuer, the Eligible Lender Trustee and the Indenture Trustee from and against any and all Indemnifiable Expenses arising out of, or imposed upon such Person through, (i) the Depositor's willful misfeasance, bad faith or negligence in the performance of its duties under the Transfer and Servicing Agreement, or by reason of reckless disregard of its obligations and duties under the Transfer and Servicing Agreement and (ii) the Depositor's or the Issuer's violation of federal or state securities laws in connection with the offering and sale of the Notes or Certificates of a Series; provided, however, the Depositor shall not be liable for any such Indemnifiable Expenses imposed upon such Person to the extent that they arise out of or result from such Person's negligence, willful malfeasance or bad faith or a breach of the representations and warranties of such Person in the Transfer and Servicing Agreement. Notwithstanding anything to the contrary contained in the Transfer and Servicing Agreement, in no event shall the Depositor 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 Depositor has been advised of the possibility of such damages. (d) The Depositor shall indemnify, defend and hold harmless the Eligible Lender Trustee, the Delaware Trustee and the officers, directors, employees and agents of the Eligible Lender Trustee and the Delaware Trustee from and against, Indemnifiable Expenses arising out of, incurred in connection with or relating to the Trust Agreement, the other Basic Documents, the Trust Estate, the acceptance or performance of the trusts and duties set forth in the Transfer and Servicing Agreement and in the Trust Agreement or the action or the inaction of such Person hereunder and under the Trust Agreement, except to the extent that such Indemnifiable Expenses: (i) shall be due to the willful misfeasance, bad faith or negligence of such Person, (ii) shall arise from any breach by such Person of its covenants under any of the Basic Documents; or (iii) shall arise from the breach by such Person of any of its representations or warranties set forth in Section 7.3 of the Trust Agreement. Notwithstanding anything to the contrary contained in the Transfer and Servicing Agreement, in no event shall the Depositor 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 Depositor has been advised of the possibility of such damages. (e) The Depositor shall pay any and all taxes levied or assessed upon all or any part of the Trust Estate (other than those taxes expressly excluded from the Depositor's responsibilities pursuant to the parenthetical in paragraph (b) above). (f) Pursuant to Section 6.7 of the Master Indenture, and subject to the limitations therein, the Depositor shall pay reasonable compensation to the Indenture Trustee and shall reimburse the Indenture Trustee for all reasonable expenses, disbursements and advances, and indemnify, defend and hold harmless the Indenture Trustee and its officers, directors, employees and agents from and against all Indemnifiable Expenses, to the extent and in the manner provided in the Indenture. Notwithstanding anything to the contrary contained in the Transfer and Servicing Agreement, in no event shall the Depositor 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 Depositor has been advised of the possibility of such damages. (g) Indemnification under this Section shall survive the resignation or removal of the Eligible Lender Trustee, the Delaware Trustee or the Indenture Trustee and the termination of the Transfer and Servicing Agreement or the Indenture or the Trust Agreement, as applicable, and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Depositor shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Depositor without interest. (h) Promptly after receipt by an indemnified party under this Section 7.3 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 7.3, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under Section 7.3, except to the extent the indemnifying party is materially prejudiced by such failure. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnifying party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of the indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 7.3 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In no event shall the indemnifying party be liable for fees and expenses for more than one counsel separate from their own counsel for all indemnified parties in connection with any one action or related actions in the same jurisdiction arising out of the same general allegations or circumstances. An indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (i) The indemnified party will not, without the prior written consent of the indemnifying party, settle, compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in which indemnification may be sought hereunder. SECTION 7.4. LIMITATION ON LIABILITY. (a) The Depositor and any director or officer or employee or agent of either may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder. (b) Neither the Depositor nor any of its directors, officers, employees or agents shall be under any liability to any Issuer, the Noteholders of any Series, the Certificateholders of any Issuer, the Indenture Trustee or the Eligible Lender Trustee except as provided under the Transfer and Servicing Agreement for any action taken or for refraining from the taking of any action pursuant to the Transfer and Servicing Agreement or for errors in judgment; provided, however, that this provision shall not protect the Depositor or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of their respective duties under the Transfer and Servicing Agreement. (c) Except as provided in the Transfer and Servicing Agreement, the Depositor shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its duties in accordance with the Transfer and Servicing Agreement, and that in its opinion may involve it in any expense or liability; provided, however, that the Depositor may undertake any reasonable action that it may deem necessary or desirable in respect of the Transfer and Servicing Agreement and the other Basic Documents, the rights and duties of the parties to the Transfer and Servicing Agreement and the other Basic Documents, the interests of the Certificateholders under the Transfer and Servicing Agreement, and the Noteholders of a Series under the Indenture. SECTION 7.5. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS, OF THE DEPOSITOR. Any Person (a) into which the Depositor may be merged or consolidated, (b) which may result from any merger or consolidation to which the Depositor shall be a party or (c) which may succeed to the properties and assets of the Depositor, substantially as a whole, shall be the successor to the Depositor without the execution or filing of any document or any further act by any of the parties to the Transfer and Servicing Agreement; provided, however, that the Depositor hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Depositor, if other than Crestar Bank or a Crestar Subsidiary or Crestar Financial Corporation, executes an agreement of assumption to perform every obligation of the Depositor under the Transfer and Servicing Agreement, (ii) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing, (iii) the Depositor, if other than Crestar Bank or a Crestar Subsidiary or Crestar Financial Corporation, shall have delivered to the Eligible Lender Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in the Transfer and Servicing Agreement relating to such transaction have been complied with, (iv) such transaction will not result in a material adverse federal or applicable state tax consequence to the Issuer relating to its tax classification, or to the Noteholders of any Series, considered as a whole, relating to a change in the characterization of the Notes and (v) unless "Crestar Securitization, LLC" is the name of the surviving entity, the Depositor shall have delivered to the Eligible Lender Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Eligible Lender Trustee and Indenture Trustee, respectively, in the Financed Student Loans, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests. Nothing in the Transfer and Servicing Agreement or any other Basic Document shall be deemed to restrict or prohibit, and no consent of Noteholders or Certificateholders of any Series, supplemental agreement, Officer's Certificate (except to the extent provided in clause (3) below of this Section 7.5) or Opinion of Counsel (except to the extent provided in clause (v) above of this Section 7.5) shall be required in the case of, the merger of a Crestar Subsidiary with a Crestar Subsidiary or Crestar Financial Corporation, the consolidation of a Crestar Subsidiary and a Crestar Subsidiary or Crestar Financial Corporation, or the sale or other disposition of all or substantially all of the assets of a Crestar Subsidiary to another Crestar Subsidiary or Crestar Financial Corporation, if, in any such case in which the surviving, resulting or acquiring entity is not Crestar Financial Corporation, Crestar Financial Corporation would own, directly or indirectly, at least 80% of the voting securities of the Crestar Subsidiary surviving such merger, resulting from such consolidation or acquiring such assets. For the purpose of this Section 7.5, "Crestar Subsidiary" means each of (1) Crestar Securitization, LLC, Crestar Bank, (2) any other banking subsidiaries of Crestar Financial Corporation the consolidated assets of which constitute 20% or more of the consolidated assets of Crestar Financial Corporation and its consolidated subsidiaries, (3) any other banking subsidiary of Crestar Financial Corporation designated as a Crestar Subsidiary pursuant to a Board Resolution and set forth in an Officer's Certificate delivered to the Eligible Lender Trustee and the Indenture Trustee, and (4) any subsidiary of Crestar Financial Corporation that owns, directly or indirectly any voting securities, or options, warrants or rights to subscribe for or purchase voting securities of any Crestar Subsidiary under clauses (1) through (3), and in the case of each of clauses (1) through (4) their respected successors (whether by consolidation, merger, conversion, transfer of substantially all their assets and business or otherwise) so long as any successor is a banking subsidiary (in the case of clauses (1) through (3)) or a subsidiary (in the case of clause (4)) of Crestar Financial Corporation. References to Crestar Financial Corporation include any name change. "Board Resolution" means a copy of a resolution certified by the Secretary or any Assistant Secretary of Crestar Financial Corporation to have been duly adopted by the Board of Directors of Crestar Financial Corporation, or such committee of the Board of Directors or officers of Crestar Financial Corporation to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Eligible Lender Trustee and the Indenture Trustee. SECTION 7.6. DEPOSITOR MAY OWN CERTIFICATES OR NOTES. The Depositor and any Affiliate thereof may in its individual or any other capacity become the owner or pledgee of Certificates or Notes of any Series with the same rights as it would have if it were not the Depositor or an Affiliate thereof, except as expressly provided herein or in any other Basic Document. ARTICLE VIII THE MASTER SERVICER SECTION 8.1. REPRESENTATIONS OF THE MASTER SERVICER. The Master Servicer makes the following representations on which the Issuer is deemed to have relied in acquiring (through the Eligible Lender Trustee) the Financed Student Loans being conveyed pursuant to a Transfer and Servicing Agreement. The representations speak as of the Closing Date with respect to a Series in the case of the Initial Financed Student Loans, and as of the applicable Transfer Date in the case of the Subsequent Financed Student Loans or Additional Financed Student Loans transferred on such Transfer Date, but shall survive the contribution, transfer and assignment of the Financed Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (a) Organization and Good Standing. The Master Servicer is duly organized and validly existing as a Virginia banking corporation with the 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 Master Servicer or its ability to consummate the transactions contemplated by the Basic Documents, and the Master Servicer had at all relevant times, and has the power, authority and legal right to service the Financed Student Loans. (b) Due Qualification. The Master Servicer is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership and lease of property or the conduct of its business (including the servicing of the Financed Student Loans for which it acts as Primary Servicer as required by the Transfer and Servicing Agreement) shall require such qualifications except for such licenses and approvals the absence of which would not have a material adverse effect on the Master Servicer or its ability to consummate the transactions contemplated by the Basic Documents. (c) Power and Authority. The Master Servicer has the requisite corporate power and authority to execute and deliver the Transfer and Servicing Agreement and to carry out its terms; and the execution, delivery and performance of the Transfer and Servicing Agreement have been duly authorized by the Master Servicer by all necessary corporate action on its part. (d) Binding Obligation. The Transfer and Servicing Agreement constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against the Master Servicer in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and similar laws relating to creditors' rights generally or the rights of creditors of banks the deposit accounts of which are insured by the FDIC and subject to general principles of equity. (e) No Violation. The consummation of the transactions contemplated by the Transfer and Servicing 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 charter or by-laws of the Master Servicer, or any material indenture, material agreement or other material instrument to which the Master Servicer is a party or by which it shall be bound; or 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 material law or, to the knowledge of the Master Servicer, any material 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 the Master Servicer or its properties. (f) No Proceedings. To its best knowledge, there are no proceedings or investigations pending or threatened against the Master Servicer, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over it or its properties: (i) asserting the invalidity of the Transfer and Servicing Agreement or any of the other Basic Documents, any Series of Notes or the Certificates, (ii) seeking to prevent the issuance of any Series of Notes or the Certificates or the consummation of any of the transactions contemplated by the Transfer and Servicing Agreement or any of the other Basic Documents, (iii) seeking any determination or ruling that could reasonably be expected to have a material and adverse effect on the performance by the Master Servicer of its obligations under, or the validity or enforceability of, the Transfer and Servicing Agreement, any of the other Basic Documents, any Series of Notes or the Certificates or (iv) seeking to affect adversely the federal or state income tax attributes of an Issuer, the Notes or the Certificates. (g) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by the Master Servicer in connection with the execution and delivery by the Master Servicer of the Transfer and Servicing Agreement and the performance by the Master Servicer of the transactions expressly contemplated by the Transfer and Servicing Agreement, have been duly obtained, effected or given and are in full force and effect, except such as may be required by the blue sky laws of any jurisdiction in connection with the sale and distribution of any Series of Notes and the Certificates for which no representation or warranty is being given. (h) No Amendment or Waiver. Except as may be provided in the Transfer and Servicing Agreement, no provision of a Financed Student Loan has been waived, altered or modified in any respect, except pursuant to a document, instrument or writing included in the Financed Student Loan File, and no such amendment, waiver, alteration or modification causes such Financed Student Loan not to conform in any material respect to the other warranties contained in this Section. (i) Location of Financed Student Loan Files. The Financed Student Loan Files are kept in accordance with Section 4.2(b). SECTION 8.2. EXISTENCE. Except as permitted by Section 8.4, during the term of the Transfer and Servicing Agreement, the Master Servicer will keep in full force and effect its existence, rights and franchises as a Virginia banking corporation under the laws of the jurisdiction of its organization. SECTION 8.3. INDEMNIFICATION. (a) The Master Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Master Servicer under the Transfer and Servicing Agreement. (b) The Master Servicer shall indemnify, defend and hold harmless the Issuer, the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee, the Certificateholders, and the Noteholders and the officers, directors, employees and agents of the Issuer, the Eligible Lender Trustee, the Delaware Trustee and the Indenture Trustee from and against any and all Indemnifiable Expenses arising out of, or imposed upon such Person through, the Master Servicer's willful misfeasance, bad faith or negligence in the performance of its duties under the Transfer and Servicing Agreement, where the final determination that any such loss, liability or expense arose out of, or was imposed upon any such Person through, any such negligence, willful misfeasance or bad faith on the part of the Master Servicer is established by a court of law, by an arbitrator or by way of settlement agreed to by the Master Servicer; provided, however, the Master Servicer shall not be liable for any such Indemnifiable Expenses imposed upon such Person to the extent that they arise out of or result from such Person's negligence, willful malfeasance or bad faith or a breach of the representations and warranties of such Person in the Transfer and Servicing Agreement. Notwithstanding the foregoing, if the Master Servicer is rendered unable, in whole or in part, by a force outside the control of the Master Servicer (including acts of God, acts of war, severe weather, communications failures or failures to receive electronic data or labor disputes or strikes, fires, earthquakes and other disasters) to satisfy its obligations under the Transfer and Servicing Agreement, the Master Servicer shall not be deemed to have breached any such obligation upon delivery of written notice of such event to the other parties hereto, for so long as the Master Servicer remains unable to perform such obligation as a result of such event. Notwithstanding anything to the contrary contained in the Transfer and Servicing Agreement, in no event shall the Master Servicer 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 Master Servicer has been advised of the possibility of such damages. (c) Indemnification under this Section shall survive the resignation or removal of the Eligible Lender Trustee, the Delaware Trustee or the Indenture Trustee and the termination of the Transfer and Servicing Agreement or the Indenture or the Trust Agreement, as applicable, and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Depositor or the Master Servicer, as the case may be, shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Depositor or the Master Servicer, as the case may be without interest. (d) Promptly after receipt by an indemnified party under this Section 8.3 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8.3, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under Section 8.3, except to the extent the indemnifying party is materially prejudiced by such failure. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnifying party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of the indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 8.3 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In no event shall the indemnifying party be liable for fees and expenses for more than one counsel separate from their own counsel for all indemnified parties in connection with any one action or related actions in the same jurisdiction arising out of the same general allegations or circumstances. An indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (e) The indemnified party will not, without the prior written consent of the indemnifying party, settle, compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in which indemnification may be sought hereunder. SECTION 8.4. LIMITATION ON LIABILITY. (a) The Master Servicer and any director or officer or employee or agent of either may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder. (b) Neither the Master Servicer nor any of its directors, officers, employees or agents shall be under any liability to any Issuer, the Noteholders of any Series, the Certificateholders of any Issuer, the Indenture Trustee or the Eligible Lender Trustee except as provided under the Transfer and Servicing Agreement for any action taken or for refraining from the taking of any action pursuant to the Transfer and Servicing Agreement or for errors in judgment; provided, however, that this provision shall not protect the Master Servicer or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of their respective duties under the Transfer and Servicing Agreement. (c) Except as provided in the Transfer and Servicing Agreement, the Master Servicer shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its duties in accordance with the Transfer and Servicing Agreement, and that in its opinion may involve it in any expense or liability; provided, however, that the Master Servicer may undertake any reasonable action that it may deem necessary or desirable in respect of the Transfer and Servicing Agreement and the other Basic Documents, the rights and duties of the parties to the Transfer and Servicing Agreement and the other Basic Documents, the interests of the Certificateholders under the Transfer and Servicing Agreement, and the Noteholders of a Series under the Indenture. SECTION 8.5. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS, OF THE MASTER SERVICER. Any Person (a) into which the Master Servicer may be merged or consolidated, (b) which may result from any merger or consolidation to which the Master Servicer shall be a party or (c) which may succeed to the properties and assets of the Master Servicer substantially as a whole, shall be the successor to the Master Servicer without the execution or filing of any document or any further act by any of the parties to the Transfer and Servicing Agreement; provided, however, that the Master Servicer hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Master Servicer if other than Crestar Bank or a Crestar Subsidiary or Crestar Financial Corporation, executes an agreement of assumption to perform every obligation of the Master Servicer under the Transfer and Servicing Agreement, (ii) immediately after giving effect to such transaction, no Master Servicer Default shall have occurred and be continuing, (iii) the Master Servicer, if other than Crestar Bank or a Crestar Subsidiary or Crestar Financial Corporation shall have delivered to the Eligible Lender Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in the Transfer and Servicing Agreement relating to such transaction have been complied with, (iv) such transaction will not result in a material adverse federal or applicable state tax consequence to the Issuer relating to its tax classification, or to the Noteholders of any Series, considered as a whole, relating to a change in the characterization of the Notes of such Series and (v) unless "Crestar Bank" is the name of the surviving entity, the Master Servicer shall have delivered to the Eligible Lender Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Eligible Lender Trustee and Indenture Trustee, respectively, in the Financed Student Loans, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests. Nothing in the Transfer and Servicing Agreement or any other Basic Document shall be deemed to restrict or prohibit, and no consent of Noteholders or Certificateholders of any Series, supplemental agreement, Officer's Certificate (except to the extent provided in clause (3) below of this Section 8.5) or Opinion of Counsel (except to the extent provided in clause (v) above of this Section 8.5) shall be required in the case of, the merger of a Crestar Subsidiary with a Crestar Subsidiary or Crestar Financial Corporation, the consolidation of a Crestar Subsidiary and a Crestar Subsidiary or Crestar Financial Corporation, or the sale or other disposition of all or substantially all of the assets of a Crestar Subsidiary to another Crestar Subsidiary or Crestar Financial Corporation, if, in any such case in which the surviving, resulting or acquiring entity is not Crestar Financial Corporation, Crestar Financial Corporation would own, directly or indirectly, at least 80% of the voting securities of the Crestar Subsidiary surviving such merger, resulting from such consolidation or acquiring such assets. For the purpose of this Section 8.5, "Crestar Subsidiary" means each of (1) Crestar Bank, (2) any other banking subsidiaries of Crestar Financial Corporation the consolidated assets of which constitute 20% or more of the consolidated assets of Crestar Financial Corporation and its consolidated subsidiaries, (3) any other banking subsidiary of Crestar Financial Corporation designated as a Crestar Subsidiary pursuant to a Board Resolution and set forth in an Officer's Certificate delivered to the Eligible Lender Trustee and the Indenture Trustee, and (4) any subsidiary of Crestar Financial Corporation that owns, directly or indirectly any voting securities, or options, warrants or rights to subscribe for or purchase voting securities of any Crestar Subsidiary under clauses (1) through (3), and in the case of each of clauses (1) through (4) their respected successors (whether by consolidation, merger, conversion, transfer of substantially all their assets and business or otherwise) so long as any successor is a banking subsidiary (in the case of clauses (1) through (3)) or a subsidiary (in the case of clause (4)) of Crestar Financial Corporation. References to Crestar Financial Corporation include any name change. "Board Resolution" means a copy of a resolution certified by the Secretary or any Assistant Secretary of Crestar Financial Corporation to have been duly adopted by the Board of Directors of Crestar Financial Corporation, or such committee of the Board of Directors or officers of Crestar Financial Corporation to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Eligible Lender Trustee and the Indenture Trustee. SECTION 8.6. MASTER SERVICER NOT TO RESIGN. Subject to the provisions of Section 8.5, Crestar Bank shall not resign from the obligations and duties imposed on it as Master Servicer under the Transfer and Servicing Agreement except upon (i) determination that the performance of its duties under the Transfer and Servicing Agreement shall no longer be permissible under applicable law or shall violate any final order of a court or administrative agency with jurisdiction over it or its properties, or (ii) satisfaction of the Rating Agency Condition with respect to such resignation. Notice of any such determination permitting resignation shall be communicated to the Eligible Lender Trustee and the Indenture Trustee at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently with or promptly after such notice. No such resignation shall become effective until the Indenture Trustee or a successor Master Servicer shall have assumed the responsibilities and obligations of Crestar Bank as Master Servicer in accordance with Section 10.2. ARTICLE IX THE ADMINISTRATOR SECTION 9.1. REPRESENTATIONS OF THE ADMINISTRATOR. The Administrator makes the following representations on which the Issuer is deemed to have relied in acquiring (through the Eligible Lender Trustee) the Financed Student Loans being conveyed pursuant to the Transfer and Servicing Agreement. The representations speak as of the Closing Date with respect to a Series in the case of the Initial Financed Student Loans, and as of the applicable Transfer Date in the case of the Subsequent Financed Student Loans or Additional Financed Student Loans being transferred on such Transfer Date, but shall survive the contribution, transfer and assignment of the Financed Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (a) Organization and Good Standing. The Administrator is duly organized and validly existing as a Virginia banking corporation with the 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 Administrator or its ability to consummate the transactions contemplated by the Basic Documents, and had at all relevant times, and has, the power, authority and legal right, to administer the Financed Student Loans. (b) Power and Authority of the Administrator. The Administrator has the requisite corporate power and authority to execute and deliver the Transfer and Servicing Agreement and to carry out their respective terms; and the execution, delivery and performance of the Transfer and Servicing Agreement have been duly authorized by the Administrator by all necessary corporate action on its part. (c) Binding Obligation. The Transfer and Servicing Agreement constitutes a legal, valid and binding obligation of the Administrator, enforceable against the Administrator in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent conveyance and similar laws relating to creditors' rights generally or the rights of creditors of banks the deposit accounts of which are insured by the FDIC or and subject to general principles of equity. (d) No Violation. The consummation of the transactions contemplated by the Transfer and Servicing Agreement and the fulfillment of the terms hereof or thereof do not violate, result in any breach of any of the terms and provisions of, nor constitute (with or without notice of lapse of time or both) a default under, the charter or by-laws of the Administrator, or any material indenture, material agreement or other material instrument to which the Administrator is a party or by which it shall be 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 material law or, to the knowledge of the Administrator, any material 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 the Administrator or its properties. (e) No Proceedings. To its best knowledge, there are no proceedings or investigations pending or threatened against the Administrator, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over it or its properties: (i) asserting the invalidity of the Transfer and Servicing Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by the Transfer and Servicing Agreement or (iii) seeking any determination or ruling that could reasonably be expected to have a material and adverse effect on the performance by the Administrator, of its obligations under, or the validity or enforceability of, the Transfer and Servicing Agreement. (f) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by the Administrator in its capacity as the Administrator in connection with the execution and delivery by the Administrator of the Transfer and Servicing Agreement and the performance by the Administrator in its capacity as the Administrator of the transactions contemplated by the Transfer and Servicing Agreement have been duly obtained, effected or given and are in full force and effect. SECTION 9.2. INDEMNIFICATION. (a) The Administrator shall indemnify, defend and hold harmless from its funds, the Issuer, the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee, the Master Servicer, the Noteholders and the Certificateholders and the officers, directors, employees and agents of the Issuer, the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee, the Noteholders of a Series and the Certificateholders from and against any and all Indemnifiable Expenses arising out of, or imposed upon such Person through, the Administrator's willful misfeasance, bad faith or negligence in the performance of its duties under the Transfer and Servicing Agreement, or by reason of reckless disregard of its obligations and duties under the Transfer and Servicing Agreement, where the final determination that any such loss, liability or expense arose out of, or was imposed upon any such Person through, any such negligence, willful misfeasance or bad faith on the part of the Administrator is established by a court of law, by an arbitrator or by way of settlement agreed to by the Administrator. Notwithstanding the foregoing, if the Administrator is rendered unable, in whole or in part, by a force outside the control of the Administrator (including acts of God, acts of war, severe weather, communications failures or failures to receive electronic data or labor disputes or strikes, fires, earthquakes and other disasters) to satisfy its obligations under the Transfer and Servicing Agreement, the Administrator shall not be deemed to have breached any such obligation upon delivery of written notice of such event to the other parties hereto, for so long as the Administrator remains unable to perform such obligation as a result of such event; provided, however, the Administrator shall not be liable for any such Indemnifiable Expenses imposed upon such Person to the extent that they arise out of or result from such Person' s negligence, willful malfeasance or bad faith or a breach of the representations and warranties of such Person in the Transfer and Servicing Agreement. Notwithstanding anything to the contrary contained in the Transfer and Servicing Agreement, in no event shall the Administrator 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 Administrator has been advised of the possibility of such damages. (b) Indemnification under this Section shall survive the resignation or removal of the Eligible Lender Trustee, the Delaware Trustee or the Indenture Trustee and the termination of the Transfer and Servicing Agreement or the Indenture or the Trust Agreement, as applicable, and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Administrator shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Administrator without interest. (c) Promptly after receipt by an indemnified party under this Section 9.2 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9.2, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under Section 9.2, except to the extent the indemnifying party is materially prejudiced by such failure. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, the indemnifying party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of the indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 9.2 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. In no event shall the indemnifying party be liable for fees and expenses for more than one counsel separate from their own counsel for all indemnified parties in connection with any one action or related actions in the same jurisdiction arising out of the same general allegations or circumstances. An indemnifying party will not, without the prior written consent of the indemnified party, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (d) The indemnified party may not, without the prior written consent of the indemnifying party, settle, compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in which indemnification may be sought hereunder. SECTION 9.3. LIMITATION OF LIABILITY. (a) The Administrator shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Administrator under the Transfer and Servicing Agreement. The Administrator and any of its directors, officers, employees or agents may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person. (b) Neither the Administrator nor any of its directors, officers, employees or agents shall be under any liability to any Issuer, the Noteholders of any Series, the Certificateholders of any Issuer, the Indenture Trustee or the Eligible Lender Trustee except as provided under the Transfer and Servicing Agreement for any action taken or for refraining from the taking of any action pursuant to the Transfer and Servicing Agreement or for errors in judgment; provided, however, that this provision shall not protect the Administrator or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of their respective duties under the Transfer and Servicing Agreement. (c) Except as provided in the Transfer and Servicing Agreement, the Administrator shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its duties to administer the Financed Student Loans and the Issuer in accordance with the Transfer and Servicing Agreement, and that in its opinion may involve it in any expense or liability; provided, however, that the Administrator may undertake any reasonable action that it may deem necessary or desirable in respect of the Transfer and Servicing Agreement and the other Basic Documents, the rights and duties of the parties to the Transfer and Servicing Agreement and the other Basic Documents, the interests of the Certificateholders under the Transfer and Servicing Agreement, and the Noteholders of a Series under the Indenture. SECTION 9.4. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS, OF THE ADMINISTRATOR. Any Person (a) into which the Administrator may be merged or consolidated, (b) which may result from any merger or consolidation to which the Administrator shall be a party or (c) which may succeed to the properties and assets of the Administrator substantially as a whole, shall be the successor to the Administrator without the execution or filing of any document or any further act by any of the parties to the Transfer and Servicing Agreement; provided, however, that the Administrator hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Administrator if other than Crestar Bank or a Crestar Subsidiary or Crestar Financial Corporation, executes an agreement of assumption to perform every obligation of the Administrator under the Transfer and Servicing Agreement, (ii) immediately after giving effect to such transaction, no Administrator Default shall have occurred and be continuing, (iii) the Administrator, if other than Crestar Bank or a Crestar Subsidiary or Crestar Financial Corporation shall have delivered to the Eligible Lender Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in the Transfer and Servicing Agreement relating to such transaction have been complied with, (iv) such transaction will not result in a material adverse federal or applicable state tax consequence to the Issuer relating to its tax classification, or to the Noteholders of any Series, considered as a whole, relating to a change in the characterization of the Notes of such Series and (v) unless "Crestar Bank" is the name of the surviving entity, the Administrator shall have delivered to the Eligible Lender Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Eligible Lender Trustee and Indenture Trustee, respectively, in the Financed Student Loans, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests. Nothing in the Transfer and Servicing Agreement or any other Basic Document shall be deemed to restrict or prohibit, and no consent of Noteholders or Certificateholders of any Series, supplemental agreement, Officer's Certificate (except to the extent provided in clause (3) below of this Section 9.4) or Opinion of Counsel (except to the extent provided in clause (v) above of this Section 9.4) shall be required in the case of, the merger of a Crestar Subsidiary with a Crestar Subsidiary or Crestar Financial Corporation, the consolidation of a Crestar Subsidiary and a Crestar Subsidiary or Crestar Financial Corporation, or the sale or other disposition of all or substantially all of the assets of a Crestar Subsidiary to another Crestar Subsidiary or Crestar Financial Corporation, if, in any such case in which the surviving, resulting or acquiring entity is not Crestar Financial Corporation, Crestar Financial Corporation would own, directly or indirectly, at least eighty percent (80%) of the voting securities of the Crestar Subsidiary surviving such merger, resulting from such consolidation or acquiring such assets. For the purpose of this Section 9.4, "Crestar Subsidiary" means each of (1) Crestar Bank, (2) any other banking subsidiaries of Crestar Financial Corporation the consolidated assets of which constitute twenty percent (20%) or more of the consolidated assets of Crestar Financial Corporation and its consolidated subsidiaries, (3) any other banking subsidiary of Crestar Financial Corporation designated as a Crestar Subsidiary pursuant to a Board Resolution and set forth in an Officer's Certificate delivered to the Eligible Lender Trustee and the Indenture Trustee, and (4) any subsidiary of Crestar Financial Corporation that owns, directly or indirectly any voting securities, or options, warrants or rights to subscribe for or purchase voting securities of any Crestar Subsidiary under clauses (1) through (3), and in the case of each of clauses (1) through (4) their respected successors (whether by consolidation, merger, conversion, transfer of substantially all their assets and business or otherwise) so long as any successor is a banking subsidiary (in the case of clauses (1) through (3)) or a subsidiary (in the case of clause (4)) of Crestar Financial Corporation. References to Crestar Financial Corporation include any name change. "Board Resolution" means a copy of a resolution certified by the Secretary or any Assistant Secretary of Crestar Financial Corporation to have been duly adopted by the Board of Directors of Crestar Financial Corporation, or such committee of the Board of Directors or officers of Crestar Financial Corporation to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification, and delivered to the Eligible Lender Trustee and the Indenture Trustee. SECTION 9.5. ADMINISTRATOR NOT TO RESIGN. Subject to the provisions of Section 9.4, Crestar Bank shall not resign from the obligations and duties imposed on it as Administrator under the Transfer and Servicing Agreement except upon (i) determination that the performance of its duties under the Transfer and Servicing Agreement shall no longer be permissible under applicable law or shall violate any final order of a court or administrative agency with jurisdiction over it or its properties, or (ii) satisfaction of the Rating Agency Condition with respect to such resignation. Notice of any such determination permitting resignation shall be communicated to the Eligible Lender Trustee and the Indenture Trustee at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently with or promptly after such notice. No such resignation shall become effective until the Indenture Trustee or a successor Administrator shall have assumed the responsibilities and obligations of Crestar Bank as Administrator in accordance with Section 10.2. SECTION 9.6. ADDITIONAL SERVICES. Duties with Respect to the Indenture and Trust Agreement. The Administrator shall perform all its duties as Administrator under the Trust Agreement, the Indenture and the Transfer and Servicing Agreement. In addition, the Administrator shall consult with the Eligible Lender Trustee as the Administrator deems appropriate regarding the duties of the Issuer under the Master Indenture, the Terms Supplement and the Trust Agreement. The Administrator shall monitor the performance of the Issuer and shall advise the Eligible Lender Trustee when action by the Issuer or the Eligible Lender Trustee is necessary to comply with the Issuer's or the Eligible Lender Trustee's duties under the Master Indenture, the Terms Supplement, the Trust Agreement and any of the other Basic Documents. The Administrator shall prepare for execution, if required, by the Issuer or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Master Indenture, the Terms Supplement, the Trust Agreement or any of the other Basic Documents. In furtherance of the foregoing, the Administrator shall take all appropriate action that is the duty of the Administrator and of the Issuer to take pursuant to the Trust Agreement, the Master Indenture and the Terms Supplement, including such of the foregoing as are required of the Issuer with respect to the following matters (references are to sections of the Master Indenture): (i) the duty to cause the Note Registrar to keep the Note Register and to give the Indenture Trustee notice of any appointment of a new Note Registrar and the location, or change in location, of the Note Registrar (Section 2.6); (ii) the fixing or causing to be fixed of any specified record date and the notification of the Indenture Trustee and Noteholders with respect to special payment dates, if any (Section 2.9(d)); (iii) the preparation of or obtaining of the documents and instruments required for authentication of the Notes and delivery of the same to the Indenture Trustee (Section 2.11); (iv) the preparation, obtaining or filing of the instruments, opinions and certificates and other documents required for the release of collateral (Section 2.12); (v) the duty to cause the Note Registrar to maintain on behalf of the Issuer an office in the Borough of Manhattan, City of New York, for registration of transfer or exchange of Notes (Section 3.2); (vi) the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument specified in the Master Indenture regarding funds held in trust (Section 3.3); (vii) the direction of the Paying Agents to deposit moneys with the Indenture Trustee (Section 3.3); (viii) the obtaining and preservation of the Issuer's qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Master Indenture, the Notes and each other instrument and agreement included in the Indenture Trust Estate (Section 3.4); (ix) the preparation of all supplements, amendments, financing statements, continuation statements, instruments of further assurance and other instruments, in accordance with Section 3.5 of the Master Indenture, necessary to protect the Indenture Trust Estate (Section 3.5); (x) the identification of the Indenture Trustee in an Officer's Certificate of the Issuer of a Person with whom the Issuer has contracted to perform its duties under the Master Indenture (Section 3.7(b)); (xi) the notification of the Indenture Trustee and the Rating Agencies (if any Notes or Certificates are then rated by the Rating Agencies) of a Master Servicer Default known to the Administrator pursuant to the Transfer and Servicing Agreement and, if such Master Servicer Default arises from the failure of the Master Servicer to perform any of its duties under the Transfer and Servicing Agreement, and taking of all reasonable steps available to enforce the Issuer's rights under the Basic Documents in respect of such failure (Section 3.7(d); (xii) the preparation and obtaining of documents and instruments required for the release of the Issuer from its obligations under the Master Indenture (section 3.10); (xiii) the delivery of notice to the Indenture Trustee and the Rating Agencies (if any Notes or Certificates are then rated by the Rating Agencies) of each Event of Default, any Default under Section 5.1(iii) of the Master Indenture and each default by the Master Servicer, the Administrator or the Depositor under the Transfer and Servicer Agreement or any Supplemental Transfer and Servicing Agreement known to the Administrator (Section 3.18); (xiv) the monitoring of the Issuer's obligations as to the satisfaction and discharge of the Master Indenture and the preparation of the Officers' Certificate of the Issuer and the obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.1); (xv) the compliance with any written directive of the Indenture Trustee to compel performance by the Master Servicer under the Transfer and Servicing Agreement (Section 5.16); (xvi) the reimbursement to the Indenture Trustee to the extent provided in Section 6.7 of the Master Indenture of all reasonable out-of-pocket expenses (including the fees and expenses of counsel) incurred or made by it in accordance with any provision of the Indenture as well as the indemnification, to the extent provided in the Master Indenture, of the Indenture Trustee in connection with the administration of the Indenture Trust Estate and the performance of the Indenture Trustee's duties under the Indenture and the other Basic Documents (Section 6.7); (xvii) the removal of the Indenture Trustee and appointment of a successor Indenture Trustee (Section 6.8); (xviii)the preparation of any written instruments required to confirm more fully the authority of any co-trustee or separate trustee and any written instruments necessary in connection with the resignation or removal of any co-trustee or separate trustee (Section 6.10); (xix) the furnishing of the Indenture Trustee with the names and addresses of Noteholders during any period when the Indenture Trustee is not the Note Registrar (Section 7.1); (xx) the preparation and, after execution by the Issuer, the filing with the Commission, any applicable state agencies and the Indenture Trustee of documents required to be filed on a periodic basis with, and summaries thereof as may be required by rules and regulations prescribed by, the Commission and any applicable state agencies and the transmission of such summaries, as necessary, to the Noteholders (Section 7.2); (xxi) the opening of one or more accounts in the Issuer's, the Indenture Trustee's or the Eligible Lender Trustee's name, the preparation of Issuer Orders, Officer's Certificates of the Issuer and Opinions of Counsel and all other actions reasonably necessary with respect to investment and reinvestment of funds in the Trust Accounts (Section 8.2 and 8.3); (xxii) the preparation of Issuer Orders and the obtaining of Opinions of Counsel with respect to the execution of supplemental indentures and the mailing to the Noteholders of notices with respect to such supplemental indentures (Section 9.1, 9.2 and 9.3); (xxiii) the preparation of or obtaining of the documents and instruments required for the execution and authentication of new Notes conforming to any supplemental indenture and the delivery of the same to the Eligible Lender Trustee and the Indenture Trustee, respectively (Section 9.6); (xxiv) the preparation of all Officers' Certificates of the Issuer, or obtaining Opinions of Counsel and Independent Certificates with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Master Indenture (Section 10.1(a)); (xxv) the preparation and delivery of Officers' Certificates of the Issuer and the obtaining of Independent Certificates, if necessary, for the release of property from the lien of the Indenture (Section 10.1(b)); (xxvi) the preparation and delivery to Noteholders and the Indenture Trustee of any agreements with respect to alternate payment and notice provisions (Section 10.6); and (xxvii) the recording of the Master Indenture, if applicable (Section 10.15). (b) Duties with Respect to the Issuer. (i) In addition to the foregoing, the Administrator shall perform such calculations and shall prepare for execution by the Issuer or the Eligible Lender Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer or the Eligible Lender Trustee to prepare, file or deliver pursuant to the Trust Agreement or any of the other Basic Documents, and at the request of the Eligible Lender Trustee shall take all appropriate action that it is the duty of the Issuer to take pursuant to the Trust Agreement or any of the other Basic Documents. Subject to Section 9.9 of these Standard Terms, and in accordance with the directions of the Eligible Lender Trustee, the Administrator shall administer, perform or supervise the performance of such other activities in connection with the Trust Estate (including the Basic Documents) as are not covered by any of the foregoing provisions and as are expressly requested by the Eligible Lender Trustee and are reasonably within the capability of the Administrator. (ii) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions with or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Administrator's opinion, no less favorable to the Issuer than would be available from unaffiliated parties. (c) Non-Ministerial Matters. With respect to matters that in the reasonable judgment of the Administrator are non-ministerial, the Administrator shall not take any action unless with a reasonable time before the taking of such action, the Administrator shall have notified the Eligible Lender Trustee of the proposed action and the Eligible Lender Trustee shall not have withheld consent or provided an alternative direction. For the purpose of the preceding sentence, "non-ministerial matters" shall include: (i) the amendment of or any supplement to the Indenture or any Terms Supplement; (ii) the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Financed Student Loans); (iii) the amendment, change or modification of the Basic Documents; (iv) the appointment of successor Note Registrars, successor Certificate Paying Agents and successor Indenture Trustees pursuant to the Indenture or to the appointment of successor Administrators or successor Master Servicers, or the consent of the assignment by the Note Registrar, Certificate Paying Agent or Indenture Trustee of its obligations under the Indenture; (v) the removal of the Indenture Trustee; and (vi) the buying or selling of assets in the Trust Estate, includin student loans. (d) Exceptions. Notwithstanding anything to the contrary in this Agreement, except as expressly provided herein or in the other Basic Documents, the Administrator shall not be obligated to, and shall not, (i) make any payments to the Noteholders under the Basic Documents, (ii) make any payments to Certificateholders under the Trust Agreement or the Transfer and Servicing Agreement, (iii) sell the Trust Estate pursuant to Section 5.4 of the Indenture, (iv) take any other action that the Issuer directs the Administrator not to take on its behalf, (v) in connection with its duties hereunder assume any indemnification obligation of any other Person or (vi) service the Financed Student Loans. SECTION 9.7. COMPENSATION. As compensation for the performance of the Administrator's obligations under the Transfer and Servicing Agreement and as reimbursement for its expenses related thereto, the Administrator shall be entitled to the Administration Fee, payable as provided in the Transfer and Servicing Agreement. SECTION 9.8. INFORMATION. (a) The Administrator shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall be reasonably accessible for inspection by the Issuer at any time during normal business hours. (b) The Administrator shall furnish the Issuer from time to time such additional information regarding the Trust Estate as the Issuer shall reasonably request. (c) The Administrator is authorized and directed to prepare, execute on behalf of the Issuer and file any and all reports required to be filed under the Exchange Act by the Issuer as a result of the registration of any Series of Notes (or Classes thereof) under the Securities Act. SECTION 9.9. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Eligible Lender Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer or provided in the Basic Documents, the Administrator shall have no authority to act for or represent the Issuer or the Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Eligible Lender Trustee. ARTICLE X DEFAULT SECTION 10.1. MASTER SERVICER DEFAULT; ADMINISTRATOR DEFAULT. (a) If any one of the following events (a "Master Servicer Default") shall occur and be continuing: (i) any failure by the Master Servicer to deliver to the Indenture Trustee for deposit in any of the Trust Accounts at the time required for such deposit any collections, Guarantee Payments, Insurance Payments or other amounts received by the Master Servicer with respect to the Financed Student Loans, which failure continues unremedied for three Business Days after written notice of such failure is received by the Master Servicer from the Eligible Lender Trustee, the Indenture Trustee or the Administrator or after discovery of such failure by an officer of the Master Servicer; or (ii) any failure by the Master Servicer duly to observe or to perform in any material respect any other covenants or agreements of the Master Servicer set forth in the Transfer and Servicing Agreement or any other Basic Document, which failure shall (i) materially and adversely affect the rights of Noteholders of a Series or Certificateholders and (ii) continue unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Master Servicer by the Indenture Trustee, the Eligible Lender Trustee, or the Administrator or (B) to the Master Servicer and to the Indenture Trustee and the Eligible Lender Trustee by the holders of Directing Notes, representing not less than 25% of the Outstanding Amount of the Directing Notes of a Series; or (iii) an Insolvency Event occurs with respect to the Master Servicer; or (iv) any limitation, suspension or termination by the Department of Education or the Department of HHS of the Master Servicer's eligibility to service Student Loans which materially and adversely affects the Master Servicer's ability to service the Financed Student Loans; then, and in each and every case, so long as the Master Servicer Default shall not have been remedied, the Indenture Trustee or the holders of Directing Notes evidencing not less than 25% of the Outstanding Amount of the Directing Notes of a Series, by notice then given in writing to the Master Servicer (and to the Indenture Trustee and the Eligible Lender Trustee if given by the Noteholders of a Series) may terminate all the rights and obligations (other than the obligations set forth in Section 8.3 hereof) of the Master Servicer under the Transfer and Servicing Agreement. On or after the receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer under the Transfer and Servicing Agreement, whether with respect to the Notes of a Series, the Certificates or the Financed Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such successor Master Servicer as may be appointed under Section 10.2, and, without limitation, the Indenture Trustee and the Eligible Lender Trustee are hereby authorized and empowered to execute and deliver, for the benefit of the predecessor Master Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Financed Student Loans and related documents, or otherwise. The predecessor Master Servicer shall cooperate with the successor Master Servicer, the Indenture Trustee and the Eligible Lender Trustee in effecting the termination of the responsibilities and rights of the predecessor Master Servicer under the Transfer and Servicing Agreement, including the transfer to the successor Master Servicer for administration by it of all cash amounts that shall at the time be held by the predecessor Master Servicer for deposit, or shall thereafter be received by it with respect to a Financed Student Loan. All reasonable costs and expenses (including attorneys' fees) incurred in connection with transferring the Financed Student Loan Files from a current Master Servicer to the successor Master Servicer and amending the Transfer and Servicing Agreement and any other Basic Documents to reflect such succession as Master Servicer pursuant to this Section shall be paid by the predecessor Master Servicer upon presentation of reasonable documentation of such costs and expenses. Upon receipt of notice of the occurrence of a Master Servicer Default, the Eligible Lender Trustee shall give notice thereof to the Rating Agencies. Notwithstanding the termination of the Master Servicer and the engagement of a successor Master Servicer, each Servicer shall continue to serve in its capacity as Servicer or subservicer, unless it is in breach of the related Servicing or Subservicing Agreement. (b) Administrator Default. If any one of the following events (an "Administrator Default") shall occur and be continuing: (i) any failure by the Administrator to direct the Indenture Trustee or the Eligible Lender Trustee, as applicable, to make any required distributions from any of the Trust Accounts, which failure continues unremedied for three Business Days after written notice of such failure is received by the Administrator from the Indenture Trustee or the Eligible Lender Trustee or after discovery of such failure by an officer of the Administrator; (ii) any failure by the Administrator duly to observe or to perform in any material respect any other covenants or agreements of the Administrator set forth in the Transfer and Servicing Agreement, or any other Basic Document, which failure shall (i) materially and adversely affect the rights of Noteholders and (ii) continue unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Administrator by the Indenture Trustee or the Eligible Lender Trustee or (B) to the Administrator and to the Indenture Trustee and the Eligible Lender Trustee by the holders of Directing Notes of a Series representing not less than 25% of the Outstanding Amount of the Directing Notes; or (iii) an Insolvency Event occurs with respect to the Administrator; then, and in each and every case, so long as the Administrator Default shall not have been remedied, the Indenture Trustee or the holders of Directing Notes evidencing not less than 25% of the Outstanding Amount of the Directing Notes of a Series, by notice then given in writing to the Administrator (and to the Indenture Trustee and the Eligible Lender Trustee if given by the Noteholders) may terminate all the rights and obligations (other than the obligations set forth in Section 9.2 hereof) of the Administrator under the Transfer and Servicing Agreement. On or after the receipt by the Administrator of such written notice, all authority and power of the Administrator under the Transfer and Servicing Agreement, whether with respect to the Notes of a Series, the Certificates or the Financed Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such successor Administrator as may be appointed under Section 10.2; and, without limitation, the Indenture Trustee and the Eligible Lender Trustee are hereby authorized and empowered to execute and deliver, for the benefit of the predecessor Administrator, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination. The predecessor Administrator shall cooperate with the successor Administrator, the Indenture Trustee and the Eligible Lender Trustee in effecting the termination of the responsibilities and rights of the predecessor Administrator under the Transfer and Servicing Agreement. All reasonable costs and expenses (including attorneys' fees) incurred in connection with amending the Transfer and Servicing Agreement to reflect such succession as Administrator pursuant to this Section shall be paid by the predecessor Administrator upon presentation of reasonable documentation of such costs and expenses. Upon receipt of notice of the occurrence of an Administrator Default, the Eligible Lender Trustee shall give notice thereof to the Rating Agencies. SECTION 10.2. APPOINTMENT OF SUCCESSOR. (a) Upon receipt by the Master Servicer or the Administrator, as the case may be, of notice of termination pursuant to Section 10.1, or the resignation by the Master Servicer or the Administrator, as the case may be, in accordance with the terms of the Transfer and Servicing Agreement, the predecessor Master Servicer or the Administrator, as the case may be, shall continue to perform its functions as Master Servicer or Administrator, as the case may be, under the Transfer and Servicing Agreement in the case of termination, only until the date specified in such termination notice or, if no such date is specified in a notice of termination, until receipt of such notice and, in the case of resignation, until the later of (x) the date 120 days from the delivery to the Eligible Lender Trustee and the Indenture Trustee of written notice of such resignation (or written confirmation of such notice) in accordance with the terms of the Transfer and Servicing Agreement and (y) the date upon which the predecessor Master Servicer or Administrator, as the case may be, shall become unable to act as Master Servicer or Administrator, as the case may be, as specified in the notice of resignation and accompanying Opinion of Counsel. In the event of the termination hereunder of the Master Servicer or the Administrator, as the case may be, the Issuer shall appoint a successor Master Servicer or Administrator, as the case may be, acceptable to the Indenture Trustee, and the successor Master Servicer or Administrator, as the case may be, shall accept its appointment by a written assumption in form acceptable to the Indenture Trustee. If a successor Master Servicer or Administrator, as the case may be, has not been appointed at the time when the predecessor Master Servicer or Administrator, as the case may be, has ceased to act as Master Servicer or Administrator, as the case may be, in accordance with this Section, the Indenture Trustee without further action shall automatically be appointed the successor Master Servicer or Administrator, as the case may be, and the Indenture Trustee shall be entitled to the Master Servicing Fee or the Administration Fee, as the case may be in accordance with the provisions of the Basic Documents. Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling or legally unable so to act, appoint or petition a court of competent jurisdiction to appoint, any established institution whose regular business shall include the servicing of student loans, as the successor to the Master Servicer or Administrator, as the case may be, under the Transfer and Servicing Agreement; provided, however, that such right to appoint or to petition for the appointment of any such successor servicer shall in no event relieve the Indenture Trustee from any obligations otherwise imposed on it under the Basic Documents until such successor has in fact assumed such appointment. (b) Upon appointment, the successor Master Servicer or Administrator, as the case may be (including the Indenture Trustee acting as successor Master Servicer or Administrator as the case may be), shall be the successor in all respects to the predecessor Master Servicer or Administrator, as the case may be, and shall be subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Master Servicer or Administrator, as the case may be, and shall be entitled to an amount agreed to by such successor Master Servicer or Administrator as the case may be, in accordance with the provisions of the Basic Documents (which shall not exceed the Master Servicing Fee or Administration Fee, as the case may be, unless such compensation arrangements satisfy the Rating Agency Condition with respect to the affected Series of Notes) and all the rights granted to the predecessor Master Servicer or Administrator, as the case may be, by the terms and provisions of the Transfer and Servicing Agreement. (c) Neither the Master Servicer nor the Administrator may resign unless it is prohibited from serving as such by law as evidenced by an Opinion of Counsel to such effect delivered to the Indenture Trustee and the Eligible Lender Trustee. Notwithstanding the foregoing or anything to the contrary herein or in the other Basic Documents, the Indenture Trustee, to the extent it is acting as successor Master Servicer or Administrator, as the case may be, pursuant hereto shall be entitled to resign to the extent a qualified successor Master Servicer or Administrator, as the case may be, has been appointed and has assumed all the obligations of the Master Servicer or Administrator, as the case may be, in accordance with the terms of the Transfer and Servicing Agreement and the other Basic Documents. (d) Any successor Master Servicer shall assume all the obligations and responsibilities of the Master Servicer under each Subservicing Agreement with a Servicer and shall only be able to modify or terminate such Subservicing Agreements pursuant to the provisions thereof. SECTION 10.3. NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon any termination of, or appointment of a successor to, the Master Servicer or Administrator, as the case may be, pursuant to this Article X, the Eligible Lender Trustee shall give prompt written notice thereof to Certificateholders and the Indenture Trustee shall give prompt written notice thereof to Noteholders and the Rating Agencies (which, in the case of any such appointment of a successor, shall consist of prior written notice thereof to the Rating Agencies). SECTION 10.4. WAIVER OF PAST DEFAULTS. The holders of Directing Notes of a Series evidencing not less than a majority of the Outstanding Amount of the Directing Notes of a Series may, on behalf of all Noteholders and Certificateholders of such Series, waive in writing any default by the Master Servicer or Administrator, as the case may be, in the performance of its obligations hereunder and any consequences thereof, except a default in making any required payments from any of the Trust Accounts (or giving instructions regarding the same) in accordance with the Transfer and Servicing Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Master Servicer Default or Administrator Default, as the case may be, arising therefrom shall be deemed to have been remedied for every purpose of the Transfer and Servicing Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. ARTICLE XI MISCELLANEOUS SECTION 11.1. AMENDMENT. (a) The Transfer and Servicing Agreement may be amended by the Depositor, the Master Servicer and the Eligible Lender Trustee, with the prior consent of the Indenture Trustee (which consent shall not be unreasonably withheld) to cure any ambiguity, to correct or supplement any provisions in the Transfer and Servicing Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in the Transfer and Servicing Agreement or of modifying in any manner the rights of the Noteholders of a Series or the Certificateholders; provided, however, that such action shall not, as evidenced by an Opinion of Counsel delivered to the Eligible Lender Trustee and the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder of such Series. (b) The Transfer and Servicing Agreement may also be amended from time to time by the Depositor, the Master Servicer and the Eligible Lender Trustee, with the prior consent of the Indenture Trustee and the consent of the holders of Directing Notes evidencing not less than a majority of the Outstanding Amount of the Directing Notes of a Series, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of the Transfer and Servicing Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders of such Series; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments with respect to Financed Student Loans or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders of such Series or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes and the Certificate Balance, the Noteholders and the Certificateholders of which are required to consent to any such amendment, without the consent of all outstanding Noteholders and Certificateholders affected thereby. (c) Promptly after the execution of any amendment pursuant to clause (b) above, the Eligible Lender Trustee shall furnish written notification of the substance of such amendment or consent to each Certificateholder and the Indenture Trustee. (d) It shall not be necessary for the consent of Certificateholders or Noteholders 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. (e) Prior to the execution of any amendment to the Transfer and Servicing Agreement, the Eligible Lender Trustee and the Indenture 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 the Transfer and Servicing Agreement and the Opinion of Counsel referred to in Section 11.2(i)(i). The Eligible Lender Trustee and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects the Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own rights, duties or immunities under the Transfer and Servicing Agreement or otherwise. Notwithstanding anything to the contrary contained in this Section 11.1, neither the Transfer and Servicing Agreement nor the Indenture may be amended unless such amendment satisfies the Rating Agency Condition. SECTION 11.2. PROTECTION OF INTERESTS IN ISSUER. (a) The Depositor shall execute and file such financing statements and cause to be executed and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain, and protect the interest of the Issuer, the Eligible Lender Trustee and the Indenture Trustee in the Financed Student Loans and in the proceeds thereof. The Depositor shall deliver (or cause to be delivered) to the Eligible Lender Trustee and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. (b) The Depositor shall not change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed in accordance with paragraph (a) above seriously misleading within the meaning of ss. 9-402(7) of the UCC, unless it shall have given the Eligible Lender Trustee and the Indenture Trustee at least five days prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements. (c) The Depositor shall be obligated to give the Eligible Lender Trustee and the Indenture Trustee at least 30 days prior written notice of any relocation of its principal executive office if, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly file any such amendment. The Master Servicer shall at all times maintain each office from which it shall service Financed Student Loans, and its principal executive office, within the United States of America. (d) The Master Servicer shall maintain, or cause the Servicers to maintain, accounts and records as to each Financed Student Loan for which it is the Primary Servicer (or provide access to such accounts and records being serviced by a Servicer) accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of such Financed Student Loan, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect to) each Financed Student Loan and the amounts from time to time deposited in the Collection Account in respect of such Financed Student Loan. (e) The Master Servicer shall cause each Subcustodian to maintain its computer systems so that, from and after the time of transfer under the Transfer and Servicing Agreement of the Financed Student Loans, each Subcustodian's master computer records (including any backup archives) that refer to a Financed Student Loan shall indicate clearly the interest of the Issuer and the Indenture Trustee in such Financed Student Loan and that such Financed Student Loan has been assigned by the Depositor to the Issuer and has been pledged to the Indenture Trustee. Indication of the Issuer's and the Indenture Trustee's interest in a Financed Student Loan shall be deleted from or modified on the applicable Subcustodian's computer systems when, and only when, the related Financed Student Loan shall have been paid in full or repurchased. (f) If at any time the Depositor shall propose to contribute, grant a security interest in, or otherwise transfer any interest in Financed Student Loans to any prospective purchaser, lender or other transferee, the Master Servicer shall give notice to such prospective purchaser, lender or other transferee that such Financed Student Loan has been assigned to the Issuer and has been pledged to the Indenture Trustee. (g) Upon reasonable notice, the Master Servicer shall permit the Indenture Trustee and its agents once each calendar year (unless there is a Servicer Default, in which case at any time) during normal business hours to inspect, audit and make copies of and abstracts from the Master Servicer's records regarding any Financed Student Loan. (h) Upon request at any time the Eligible Lender Trustee or the Indenture Trustee shall have reasonable grounds to believe that such request would be necessary in connection with its performance of its duties under the Basic Documents, the Master Servicer shall furnish to the Eligible Lender Trustee or to the Indenture Trustee, within twenty Business Days following the receipt by the Master Servicer and the Servicer of such a request, a list of all Financed Student Loans (by borrower social security number and date of issuance) then held as part of the Issuer, and a comparison of such list to the list of the Initial Financed Student Loans set forth in Schedule A to the Transfer and Servicing Agreement as of the Closing Date, and, for each Financed Student Loan that has been added to or removed from the pool of loans held by the Eligible Lender Trustee on behalf of the Issuer, information as to the date as of which and circumstances under which each such Financed Student Loan was so added or removed. (i) The Depositor shall deliver to the Eligible Lender Trustee and the Indenture Trustee with respect to each Series of Notes: (i) promptly after the execution and delivery of the Transfer and Servicing Agreement and of each amendment thereto an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary to preserve and perfect the interest of the Eligible Lender Trustee and the Indenture Trustee in the Financed Student Loans, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and maintain such interest; and (ii) within 120 days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the Closing Date, an Opinion of Counsel, dated as of a date during such 120-day period, either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary to preserve and perfect the interest of the Eligible Lender Trustee and the Indenture Trustee in the Financed Student Loans, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and maintain such interest; provided that a single Opinion of Counsel may be delivered in satisfaction of the foregoing requirement and that of Section 3.6 of the Indenture. Each Opinion of Counsel referred to in clause (i) or (ii) above shall specify (as of the date of such opinion and given all applicable laws as in effect on such date) any action necessary to be taken in the following year to preserve and protect such interest. (j) The Administrator shall file all reports with respect to the Notes and the Certificates as may be required by the Commission or state securities authorities. SECTION 11.3. NOTICES. All demands, notices and communications upon or to the Depositor, the Master Servicer, the Administrator, the Eligible Lender Trustee or the Indenture Trustee under the Transfer and Servicing Agreement shall be in writing, personally delivered or mailed by certified mail or overnight courier, return receipt requested or overnight courier (or in the form of telex or facsimile notice, followed by written notice delivered as aforesaid) and shall be deemed to have been duly given upon receipt (a) in the case of the Depositor, two copies, one to Crestar Securitization, LLC ___________, Richmond, Virginia _____, Attention: Eugene S. Putnam, President, and one to Crestar Bank, 919 East Main Street, Richmond, Virginia 23219, Attention: Linda Rigsby, Senior Vice President and General Counsel (facsimile (804) 782-7244); (b) with respect to the Master Servicer or Administrator, two copies, one to Crestar Bank, 919 East Main Street, Richmond, Virginia 23219, Attention: Marke A. Thomas, Vice President - Securitizations Manager (telephone: (804) 343-9400; facsimile: (804) 782-7155), and one to Crestar Bank, 919 East Main Street, Richmond, Virginia 23219, Attention: Linda Rigsby, Senior Vice President and General Counsel (facsimile (804) 782-7244); (c) in the case of the Issuer or the Eligible Lender Trustee, at the Corporate Trust Office of the Eligible Lender Trustee, (d) in the case of the Indenture Trustee, at its Corporate Trust Office; (e) in the case of Moody's, to Moody's Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: Structured Finance Department / Student Loans (telephone: (212) 553-0300; facsimile: (212) 553-4792): (f) in the case of Standard & Poor's, to Standard & Poor's Ratings Service, 25 Broadway (20th Floor), New York, New York 10004, Attention: Asset Backed Surveillance Department (telephone: (212) 208-8000; facsimile: (212) 412-0225); (g) in the case of Fitch, to Fitch IBCA, Inc., One State Street Plaza, New York, New York 10007, Attention: Asset-Backed Securities Group (telephone: (212) 908-0500; facsimile: (212) 480-4438); or, as to each of the foregoing, at such other address as shall be designated by written notice to the other parties. SECTION 11.4. ASSIGNMENT. Notwithstanding anything to the contrary contained herein, except as provided in Sections 5.12, 8.5, 8.6, 9.4 or 9.5, the Transfer and Servicing Agreement may not be assigned by the Depositor, the Master Servicer or the Administrator. The Transfer and Servicing Agreement may only be assigned by the Eligible Lender Trustee to its permitted successor pursuant to the Trust Agreement. The Issuer may assign the Transfer and Servicing Agreement and its rights thereunder to the Indenture Trustee, which is an intended beneficiary of this Agreement. SECTION 11.5. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of the Transfer and Servicing Agreement are solely for the benefit of the Depositor, the Master Servicer, the Issuer and the Eligible Lender Trustee and for the benefit of the Certificateholders, the Indenture Trustee, the Delaware Trustee and the Noteholders as third party beneficiaries, and nothing in the Transfer and Servicing 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 the Transfer and Servicing Agreement or any covenants, conditions or provisions contained herein. SECTION 11.6. SEVERABILITY. Any provision of the Transfer and Servicing 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 11.7. SEPARATE COUNTERPARTS. The Transfer and Servicing 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 11.8. 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 11.9. GOVERNING LAW. The Transfer and Servicing Agreement shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. SECTION 11.10. ASSIGNMENT TO INDENTURE TRUSTEE. The Depositor hereby acknowledges and consents to any mortgage, pledge, assignment and grant by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of a Series of a security interest in all right, title and interest of the Issuer in, to and under the related Financed Student Loans and/or the assignment of any or all of the Issuer's rights and obligations hereunder to the Indenture Trustee. SECTION 11.11. NONPETITION COVENANTS. Notwithstanding any prior termination of the Transfer and Servicing Agreement, the Master Servicer, the Administrator and the Depositor shall not, prior to the date that is one year after the termination of the Transfer and Servicing Agreement, with respect to the Issuer acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any federal or State bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. SECTION 11.12. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE, INDENTURE TRUSTEE AND DELAWARE TRUSTEE. (a) Notwithstanding anything contained herein to the contrary, the Transfer and Servicing Agreement has been signed by _______________________________ not in its individual capacity but solely in its capacity as Eligible Lender Trustee of the Issuer and in no event shall _______________________________ in its individual capacity or as beneficial owner of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto as to all of which recourse shall be had solely to the assets of the Issuer. Notwithstanding any provision in the Transfer and Servicing Agreement or the Basic Documents, nothing in such Agreement and Basic Documents shall be construed to limit the Eligible Lender Trustee's responsibility to (i) the U.S. 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 Issuer, 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 Issuer pursuant to the HEAL Act. (b) Notwithstanding anything contained herein to the contrary, the Transfer and Servicing Agreement has been accepted by _____________________ not in its individual capacity but solely as Indenture Trustee and in no event shall _____________________ have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. (c) In no event shall the Delaware Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. EXHIBIT A TO THE STANDARD TERMS TO TRANSFER AND SERVICING AGREEMENT DEFINITIONS AND USAGE Usage The following rules of construction and usage shall be applicable to any instrument that is governed by this Exhibit: (a) All terms defined in this Exhibit shall have the defined meanings when used in any instrument governed hereby and in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. (b) As used herein, in any instrument governed hereby and in any certificate or other document made or delivered pursuant thereto, accounting terms not defined in this Exhibit or in any such instrument, certificate or other document, and accounting terms partly defined in this Exhibit or in any such instrument, certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles as in effect on the date of such instrument. To the extent that the definitions of accounting terms in this Exhibit or in any such instrument, certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Exhibit or in any such instrument, certificate or other document shall control. (c) The words "hereof", "herein", "hereunder" and words of similar import when used in an instrument refer to such instrument as a whole and not to any particular provision or subdivision thereof; references in an instrument to "Article," "Section" or another subdivision or to an attachment are, unless the context otherwise requires, to an article, section or subdivision of or an attachment to such instrument; and the term "including" means "including without limitation." (d) The definitions contained in this Exhibit are equally applicable to both the singular and plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. (e) Any agreement, instrument or statute defined or referred to below or in any agreement or instrument that is governed by this Exhibit means such agreement or instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns. Definitions "Act" has the meaning specified in Section 10.3(a) of the Indenture. "Accrual Notes" means any Class of Notes on which all or a portion of the interest thereon accrues and is capitalized and not payable until a date certain or until one or more other Classes are paid in full. "Accrual Period" means the period of time during which interest accrues but is not payable with respect to a Class of Accrual Notes. "Additional Financed Student Loans" means additional Financed Student Loans conveyed by the Depositor to an Issuer during a Pre-Funding Period in accordance with Section 2.3 of the Standard Terms to Transfer and Servicing Agreement. "Adjustment Payment" means an amount equal to the difference between the aggregate principal balance of any Subsequent Financed Student Loans that are being exchanged into the related Issuer, plus accrued and unpaid interest thereon and the aggregate principal balance of the Financed Student Loans they are replacing, plus accrued and unpaid interest thereon. "Administration Fee" means the fee payable to the Administrator as set forth in the Transfer and Servicing Agreement. "Administrator" means Crestar Bank, in its capacity as administrator of the Issuer and the Financed Student Loans, or any successor as Administrator under the Transfer and Servicing Agreement. "Administrator Default" has the meaning specified in Section 10.1(b) of the Standard Terms to Transfer and Servicing Agreement. "Administrator's Certificate" means an Officer's Certificate of the Administrator delivered pursuant to Section 5.7 of the Standard Terms to Transfer and Servicing Agreement, substantially in the form of Exhibit D thereto and as the Administrator and the Indenture Trustee may agree. "Advance" means the amount, if any, advanced by the Master Servicer pursuant to Section 6.9 of the Standard Terms to Transfer and Servicing Agreement with respect to Guarantee Payments, Interest Subsidy Payments, Special Allowance Payments, Insurance Payments or Private Loan Program Payments applied for but not received as of the end of the Collection Period immediately preceding the date such Advance is made. "Advance Account" means the account designated as such, established and maintained pursuant to Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Affiliate" means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Auction Agent" means the party, if any, identified as such in the Transfer and Servicing Agreement. "Auction Period" means, with respect to each Auction Rate Note, the Interest Accrual Period applicable to such Note during which time the applicable Class Interest Rate is determined pursuant to the related Indenture. "Auction Period Adjustment" means, with respect to any Auction Rate Notes, the ability of the Administrator to change the length of one or more Auction Periods to conform with the then current market practice or to accommodate other economic or financial partners that may affect or be relevant to the length of the Auction Period of any Class Interest Rate. "Auction Procedures" shall mean the auction procedures that will be used in determining the interest rates on the Auction Rate Notes, as set forth in the applicable Indenture. "Auction Rate Notes" means any Class of Notes bearing interest at an Auction Rate. "Authenticating Agent" means the Person appointed by the Indenture Trustee at the request of the Issuer as Authenticating Agent for the Notes pursuant to the Indenture, and any successor Authenticating Agent for the Notes. "Authorized Officer" means (i) with respect to the Issuer, any officer of the Eligible Lender Trustee who is authorized to act for the Eligible Lender Trustee in matters relating to the Issuer pursuant to the Basic Documents and who is identified on the list of Authorized Officers delivered by the Eligible Lender Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter), (ii) with respect to the Administrator, any officer of the Administrator who is authorized to act for the Administrator in matters relating to itself or to the Issuer and to be acted upon by the Administrator pursuant to the Basic Documents and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter), (iii) with respect to the Depositor, any officer of the Depositor who is authorized to act for the Depositor in matters relating to or to be acted upon by the Depositor pursuant to the Basic Documents and who is identified on the list of Authorized Officers delivered by the Depositor to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and (iv) with respect to a Servicer, any officer of such Servicer who is authorized to act for such Servicer in matters relating to or to be acted upon by such Servicer pursuant to the Basic Documents and who is identified on the list of Authorized officers delivered by such Servicer to the Indenture Trustee, or the Closing Date (as such list may be modified or supplemented from time to time thereafter). "Available Funds" means the sum, without duplication, of the following amounts with respect to any Collection Period: (i) all collections received by the Master Servicer or any Servicer on the Financed Student Loans (including any Guarantee Payments (including any payments received from any guarantor under any Private Loan Program) and Insurance Payments received with respect to the Financed Student Loans) during such Collection Period; (ii) any payments, including without limitation Interest Subsidy Payments and Special Allowance Payments, received by the Eligible Lender Trustee during such Collection Period with respect to Financed Student Loans; (iii) all proceeds from any sales of Financed Student Loans by the Issuer during such Collection Period; (iv) any payments of or with respect to interest received by the Master Servicer or a Servicer during such Collection Period with respect to a Financed Student Loan for which a Realized Loss was previously allocated; (v) the aggregate Purchase Amounts received for those Financed Students Loans purchased by the Depositor or the Master Servicer during the related Collection Period; (vi) the aggregate amounts, if any, received from the Depositor or the Master Servicer as reimbursement of non-guaranteed or uninsured interest amounts (which shall not include, with respect to Financed FFELP Loans, the portion of such interest amounts (i.e., 2%) for which the Guarantee Agency did not have an obligation to make a Guarantee Payment), or lost Interest Subsidy Payments and Special Allowance Payments, with respect to the Financed Student Loans pursuant to Sections 3.2 or 4.5, respectively, of the Transfer and Servicing Agreement (vii) net Adjustment Payments, if any, during such Collection Period and (viii) Investments Earnings for such Collection Period; provided, however, that Available Funds will exclude all payments and proceeds of any Financed Student Loans the Purchase Amount of which has been included in Available Funds for a prior Collection Period, which payments and proceeds shall be paid to the Depositor, and amounts used to reimburse the Master Servicer for Advances. "Basic Documents" means with respect to a Series, the Trust Agreement, the Sales Agreement, the Master Indenture, the Terms Supplement, the Transfer and Servicing Agreement, the Note Depository Agreement, the Guarantee Agreements, the HEAL Insurance Contract, the agreements with any Private Loan Program, the Underwriting Agreement and other documents and certificates delivered in connection with any thereof and all amendments and supplements thereto. "Benefit Plan" means any employee benefit plan, retirement arrangement, individual retirement account or Keogh Plan subject to either Title I of ERISA or Section 4975 of the Code, or any entity (including an insurance company general account) whose underlying assets include plan assets by reason of a plan's investment in the entity. "Book-Entry Note" means a beneficial interest in the Notes, ownership and transfers of which shall be through book entries by a Securities Depository as described in Section 2.14 of the Master Indenture. "Business Day" means any day other than a Saturday, a Sunday or a day on which national banking associations or banking institutions or trust companies in New York, Ohio, Pennsylvania or Virginia are authorized or obligated by law, regulation or executive order to remain closed. "Carryover Interest" means the difference between the interest that would accrue on any Class of Notes or Certificates at the Formula Rate and the interest that accrues at the Net Loan Rate, together with interest thereon at the Formula Rate from the Payment Date or Quarterly Payment Date on which it is due until paid. "Certificate" means the certificated equity in an Issuer, substantially in the form of Exhibit B to the Trust Agreement for such Issuer. "Certificate Distribution Account" means the account designated as such, established and maintained pursuant to Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Certificate Paying Agent" means any paying agent or co-paying agent appointed pursuant to Section 3.10 of the Trust Agreement of an Issuer, which shall initially be the Eligible Lender Trustee. "Certificate Register" and "Certificate Registrar" means the register mentioned and the registrar appointed pursuant to Section 3.4 of the Trust Agreement of an Issuer. "Certificateholder" means a Person in whose name a Certificate is registered in the Certificate Register. "Certificateholders' Distribution Amount" means, with respect to the Certificates of any Issuer on any Quarterly Payment Date, the Available Amount for such Quarterly Payment Date remaining after making all payments due on the Notes and all deposits to any reserve funds on such Quarterly Payment Date, as more fully set forth in the Transfer and Servicing Agreement. "Class" means any class of Notes of a Series. "Class Interest Amount" means the interest payable on any Class of Notes of a Series on any Payment Date. "Class Interest Rate" means, with respect to any Class of Notes of a Series, the interest rate determined as set forth in the Terms Supplement for such Series. "Closing Date" means, with respect to any Series, the date specified as such in the Transfer and Servicing Agreement of such Series. "Code" means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder. "Collection Account" means the account designated as such, established and maintained pursuant to Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Collection Period" means each calendar month. "Commission" means the United States Securities and Exchange Commission. "Consolidation Loan" means a FFELP Loan designated as such, made by the Depositor to an eligible borrower that represents the refinancing of student loans to such borrower and his or her spouse in accordance with the applicable terms and provisions of the Higher Education Act. "Consolidation Loan Fees" means, as to any Collection Period, an amount equal to the per annum rate identified in the Transfer and Servicing Agreement of the outstanding principal balances of and accrued interest on the Consolidation Loans owned by the Issuer as of the last day of such Collection Period. "Consolidation Prepayments" means, on any Transfer Date, the amount of principal then on deposit in the Collection Account representing payments received as a result of Financed Student Loans being repaid with the proceeds of Consolidation Loans or HEAL Consolidation Loans (provided, however, if a Transfer Date occurs during the month of a Payment Date, Consolidation Prepayments shall not include amounts received during the month of such Payment Date). "Corporate Trust Office" means (i) with respect to the Indenture Trustee, the principal office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office on the Closing Date is located at Four Albany Street, New York, New York 10006 Attention: Corporate Trust and Agency Group, Structured Finance Group (telephone: (212) 250-6652; facsimile: (212) 250-6439) or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders, the Certificateholder and the Depositor, or the principal corporate trust office of any successor Indenture Trustee (the address of which the successor Indenture Trustee will notify the Noteholders and the Depositor) and (ii) with respect to the Eligible Lender Trustee, the principal corporate trust office of the Eligible Lender Trustee located at 425 Walnut Street, Cincinnati, Ohio 45201, Attention: Brian Gardner, telephone: (513) 632-4622; facsimile (513) 632-5511; or at such other address as the Eligible Lender Trustee may designate by notice to the Certificateholders and the Depositor, or the principal corporate trust office of any successor Eligible Lender Trustee (the address of which the successor Eligible Lender Trustee will notify the Certificateholders and the Depositor). "Counterparty" means any Person who from time to time is a party to a Swap Agreement with an Issuer, as identified in the Terms Supplement for a Series. "Counterparty Swap Payment" means, with respect to any Series with a Swap Agreement, the amount determined as set forth in the Terms Supplement for such Series. "Crestar Subsidiary" has the meaning specified in Sections 7.5, 8.5 and 9.4 of the Transfer and Servicing Agreement. "Cut-off Date" means the date specified as such in the related Transfer and Servicing Agreement. "Default" means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. "Deferment Period" means certain deferment periods authorized by the Higher Education Act and the HEAL Act during which the related borrower's scheduled payments are deferred. "Deferral Phase" means the period during which the related borrower is in school and for certain authorized periods as described in the Higher Education Act. "Definitive Notes" has the meaning specified in Section 2.15 of the Master Indenture. "Delaware Trustee" means the Person designated as such in the Transfer and Servicing Agreement, not in its individual capacity but solely as the Delaware Trustee under the Trust Agreement, and its successors and assigns in such capacity. "Delaware Trustee Fee" means, with respect to any Series, the fee payable to the Delaware Trustee. "Delivery" when used with respect to Trust Account Property means: (a) with respect to bankers' acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute "instruments" within the meaning of Section 9-105(l) (i) of the UCC and are susceptible of physical delivery, transfer thereof to the Indenture Trustee or its nominee or custodian by physical delivery to the Indenture Trustee or its nominee or custodian endorsed to, or registered in the name of, the Indenture Trustee or its nominee or custodian or endorsed in blank, and, with respect to a certificated security (as defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of such certificated security endorsed to, or registered in the name of, the Indenture Trustee or its nominee or custodian or endorsed in blank to a financial intermediary (as defined in Section 8-313) of the UCC) and the making by such financial intermediary of entries on its books and records identifying such certificated securities as belonging to the Indenture Trustee or its nominee or custodian and the sending by such financial intermediary of a confirmation of the purchase of such certificated security by the Indenture Trustee or its nominee or custodian, or (ii) by delivery thereof to a "clearing corporation" (as defined in Section 8-102(3) of the UCC) and the making by such clearing corporation of appropriate entries on its books reducing the appropriate securities account of the Depositor and increasing the appropriate securities account of a financial intermediary by the amount of such certificated security, the identification by the clearing corporation of the certificated securities for the sole and exclusive account of the financial intermediary, the maintenance of such certificated securities by such clearing corporation or a "custodian bank" (as defined in Section 8-102(4) of the UCC) or the nominee of either subject to the clearing corporation's exclusive control, the sending of a confirmation by the financial intermediary of the purchase by the Indenture Trustee or its nominee or custodian of such securities and the making by such financial intermediary of entries on its books and records identifying such certificated securities as belonging to the Indenture Trustee or its nominee or custodian (all of the foregoing, "Physical Property"), and, in any event, any such Physical Property in registered form shall be in the name of the Indenture Trustee or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Trust Account Property to the Indenture Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; (b) with respect to any securities issued by the U.S. Treasury, the Federal Home Loan Mortgage Corporation or by the Federal National Mortgage Association that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable federal regulations and Articles 8 and 9 of the UCC: book-entry registration of such Trust Account Property to an appropriate book-entry account maintained with a Federal Reserve Bank by a financial intermediary which is also a "depository" pursuant to applicable federal regulations and issuance by such financial intermediary of a deposit advice or other written confirmation of such book-entry registration to the Indenture Trustee or its nominee or custodian of the purchase by the Indenture Trustee or its nominee or custodian of such book-entry securities; the making by such financial intermediary of entries in its books and records identifying such book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations as belonging to the Indenture Trustee or its nominee or custodian and indicating that such custodian holds such Trust Account Property solely as agent for the Indenture Trustee or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect complete transfer of ownership of any such Trust Account Property to the Indenture Trustee or its nominee or custodian, consistent with changes in applicable law or regulations or the interpretation thereof; and (c) with respect to any item of Trust Account Property that is an uncertificated security under Article 8 of the UCC and that is not governed by clause (b) above, registration on the books and records of the issuer thereof in the name of the financial intermediary, the sending of a confirmation by the financial intermediary of the purchase by the Indenture Trustee or its nominee or custodian of such uncertificated security, the making by such financial intermediary of entries on its books and records identifying such uncertificated certificates as belonging to the Indenture Trustee or its nominee or custodian. "Department of Education" means the United States Department of Education. "Department of HHS" means the United States Department of Health and Human Services. "Depositor" means Crestar Securitization, LLC, a limited liability company organized under Virginia Law. "Depository" means DTC or its successor. "Depository Participant" means a broker, dealer, bank, other financial institution or other Person for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the Depository. "Directing Notes" means those Notes specified in the Indenture for a Series that are entitled to direct the actions of the Trustee under certain circumstances. "DTC" means the Depository Trust Company. "Effective Interest Rate" means, with respect to any Financed Student Loan, the interest rate on such Loan after giving effect to all applicable Interest Subsidy Payments, Special Allowance Payments, rebate fees on Consolidation Loans and reductions pursuant to borrower incentives. For this purpose, the Special Allowance Payment rate will be computed based upon the average of the bond-equivalent rates of 91-day T-Bills auctioned during that portion of the current calendar quarter that ends on the date as of which the Effective Interest Rate is determined. "Eligible Deposit Account" means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the States (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from each Rating Agency in one of its generic rating categories which signifies investment grade. An Eligible Deposit Account may not be evidenced by a certificate of deposit, passbook or other instrument. "Eligible Institution" means an entity which is an institution whose deposits are insured by the FDIC and the unsecured and uncollateralized long-term debt obligations of which shall be rated "AA-" or better by Standard & Poor's, "A2" or better by Moody's and, if rated by Fitch, "AA-" or better by Fitch or the highest short-term rating by Standard & Poor's, the highest short term rating by Moody's, and, if rated by Fitch, the highest short term rating by Fitch which is either (i) a federal savings association duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking association duly organized, validly existing and in good standing under the federal banking laws, or (iv) a principal subsidiary of a bank holding company. "Eligible Investments" As used herein, Eligible Investments shall include the following: (1) Cash (insured at all times by the Federal Deposit Insurance Corporation); (2) Direct obligations of (including obligations issued or held in book entry form on the books of) the Department of the Treasury of the United States of America; (3) obligations of any of the following federal agencies which obligations represent the full faith and credit of the United States of America, including: - Export-Import Bank - Farm Credit System Financial Assistance Corporation - Farmers Home Administration - General Services Administration - U.S. Maritime Administration - Small Business Administration - Government National Mortgage Association (GNMA) - U.S. Department of Housing & Urban Development (PHA's) - Federal Housing Administration; (4) senior debt obligations rated "AAA" by Standard & Poor's, "Aaa" by Moody's and, if rated by Fitch, "AAA" by Fitch issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; (5) U.S. dollar denominated deposit accounts, federal funds and banker's acceptances with domestic commercial banks which have a rating on their short term certificates of deposit on the date of purchase of "A-1+" by Standard & Poor's, "P-1" by Moody's and, if rated by Fitch, "F-1+" by Fitch and maturing no more than 360 days after the date of purchase (ratings on holding companies not being considered the rating of the bank); (6) commercial paper which is rated at the time of purchase in the single highest classification, "A-1+" by Standard & Poor's, "P-1" by Moody's and, if rated by Fitch, "F-1+" by Fitch, and which matures not more than 270 days after the date of purchase; (7) Investments in money market funds (including, but not limited to, money market mutual funds) rated "AAAm" or "AAAm-G" or better by Standard & Poor's and, if rated by Fitch, "AAA" by Fitch; (8) investment agreements acceptable to the Rating Agencies, written confirmation of which shall be furnished to the Indenture Trustee prior to any such investment; and (9) other forms of investments acceptable to the Rating Agencies, written confirmation of which shall be furnished to the Indenture Trustee prior to any such investment. Notwithstanding anything in the Transfer and Servicing Agreement or the Basic Documents to the contrary, for so long as the Depositor is a Certificateholder, all investments of an Issuer shall be made in investments permissible for a national bank. The value of the above investments shall be determined as follows: a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal (or, if not there, then in The New York Times): the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The New York Times: the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers (selected by the Administrator in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; c) as to certificates of deposit and bankers acceptances: the face amount thereof, plus accrued interest; and d) as to any investment not specified above: the value thereof established by prior agreement between the Issuer and the Administrator. "Eligible Lender Trustee" means the Person named as such in the Transfer and Servicing Agreement, not in its individual capacity but solely as Eligible Lender Trustee under the Trust Agreement, and its successors and assigns in such capacity. "Eligible Lender Trustee Fee" means, with respect to any Series, the fee payable to the Eligible Lender Trustee. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Event of Default" has the meaning specified in Section 5.1 of the Master Indenture. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Executive Officer" means, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, any Senior Vice President, any Vice President, the Secretary, the Controller or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof. "Expense Account" means the account designated as such pursuant to Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Expenses" means any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever which may at any time be imposed on, incurred by, or asserted against the Eligible Lender Trustee or any of its officers, directors or agents in any way relating to or arising out of the Trust Agreement, the other Basic Documents, the Trust Estate, the administration of the Trust Estate or the action or inaction of the Eligible Lender Trustee under the Trust Agreement or the other Basic Documents. "FDIC" means the Federal Deposit Insurance Corporation. "FFELP Loan" means a student loan which is a PLUS Loan, SLS Loan, Consolidation Loan, Stafford Loan or Unsubsidized Stafford Loan. "FHLMC" means Federal Home Loan Mortgage Corporation, a corporate instrumentality of the United States created and existing under Title III of the Emergency Home Finance Act of 1970, as amended, or any successor thereto. "Financed FFELP Loan" means a Financed Student Loan that also is a FFELP Loan. "Financed HEAL Loan" means a Financed Student Loan that also is a HEAL Loan. "Financed Private Loan" means a Financed Student Loan that also is a Private Loan. "Financed Student Loan" means the Financed FFELP Loans, Financed HEAL Loans and Financed Private Loans, as applicable, with respect to a Series of Notes, as set forth in the applicable Schedules with respect thereto. "Financed Student Loan Files" means the loan application and note evidencing a Financed Student Loan, and all other documents and computer records relating to such Financed Student Loan that are customarily kept on file by a servicer of student loans. "Fitch" means Fitch IBCA, Inc., and its successors and assigns. "FNMA" means Federal National Mortgage Association, a federally chartered and privately owned corporation organized and existing under the Federal National Mortgage Association Charter Act, or any successor thereto. "Formula Rate" means, with respect to any Class of Notes of a Series, the interest rate determined as set forth in the Terms Supplement for such Series. "Grace Period" means certain grace periods authorized by the Higher Education Act and the HEAL Act during which the related borrower's scheduled payments are deferred. "Grant" means mortgage, pledge, hypothecate, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create, and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to the Indenture. A Grant of the Trust Estate or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the Granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Trust Estate and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto. "Guarantee Agreements" means each agreement entered into between the Eligible Lender Trustee and a Guarantee Agency pursuant to which such Guarantee Agency guarantees payments on Financed FFELP Loans. "Guarantee Agency" means any agency which has an agreement with the Department of Education of Education to be a guarantor of FFELP Loans, and, with respect to any Series, those agencies identified in the related Transfer and Servicing Agreement. "Guarantee Payment" means any payment made by a Guarantee Agency pursuant to a Guarantee Agreement in respect of a Financed FFELP Loan. "HEAL Act" means Title VII,ss.ss.701-720 of the Public Health Services Act, as amended, 42 U.S.C.ss.ss.292-292p, together with any rules and regulations promulgated thereunder by the Department of HHS. "HEAL Consolidation Loan" means a HEAL Loan that is designated as such that is made under the HEAL Act. "HEAL Insurance Contract" means the HEAL Insurance Contract entered into between the Eligible Lender Trustee and the Department of HHS pursuant to which the Department of HHS insures payments on Financed HEAL Loans. "Higher Education Act" means Title IV, Part B of the Higher Education Act of 1965, as amended, together with any rules and regulations promulgated thereunder by the Department of Education or the Guarantee Agencies. "Indemnifiable Expenses" means any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever which may at any time be imposed on, incurred by, or asserted against a Person (or any of its officers, directors, employees or agents) who is entitled to be indemnified. "Indenture Trust Estate" means all money, instruments, rights and other property that are, from time to time, subject or intended to be subject to the Lien and security interest of the Indenture for the benefit of the Notes of a Series (including all property and interests Granted to the Indenture Trustee), including all proceeds thereof. "Indenture Trustee" means the Person designated as such in an Indenture, not in its individual capacity but solely as Indenture Trustee under the Indenture, and its successors and assigns in such capacity. "Indenture Trustee Fee" means, with respect to any Series, the fee payable to the Indenture Trustee. "Independent" means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Issuer, any other obligor upon the Notes, the Transferor, the Master Servicer, the Depositor and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Depositor or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuer, any such other obligor, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. "Independent Certificate" means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 10.1 of the Master Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of "Independent" and that the signer is Independent within the meaning thereof. "Individual Note" means a Note of an initial principal amount equal to $50,000. A Note of an original principal amount in excess thereof shall be deemed to be a number of Individual Notes equal to the quotient obtained by dividing such initial principal amount by $50,000, without regard to fractions. "Initial Financed Student Loans" means those Financed Student Loans initially conveyed to an Issuer on the Closing Date pursuant to the related Transfer and Servicing Agreement. "Initial Pool Balance" means, with respect to any Series, the Pool Balance as of the Cut-off Date, as set forth in the Transfer and Servicing Agreement for such Series. "Insolvency Event" means, with respect to a specified Person, (a) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or State bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person's affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing. "Interest Determination Date" means, with respect to any Series, the date determined as provided in the Transfer and Servicing Agreement with respect to such Series. "Insurance Payment" means any payment made by the Department of HHS pursuant to the HEAL Insurance Contract in respect of a Financed HEAL Loan. "Interest Accrual Period" means, with respect to any Class of Notes of a Series, the period set forth in the Transfer and Servicing Agreement for such Series. "Interest Payment Period" means, with respect to any Class of Notes of a Series, the period set forth in the Transfer and Servicing Agreement for such Series. "Interest Subsidy Payments" means payments, designated as such, consisting of interest subsidies by the Department of Education in respect of the Financed Student Loans to the Eligible Lender Trustee on behalf of an Issuer in accordance with the Higher Education Act. "Investment Earnings" means, with respect to any Distribution Date, the investment earnings (net of losses and investment expenses) on amounts on deposit in the Trust Accounts to be deposited into the Collection Account on or prior to such Payment Date pursuant to Section 6.1(b) of the Standard Terms to Transfer and Servicing Agreement. "Issuer" means the Person identified as such in the Transfer and Servicing Agreement. "Issuer Order" and "Issuer Request" means a written order or request signed in the name of the Issuer by any one of its Authorized Officers and delivered to the Indenture Trustee. "Legal Final Maturity" means with respect to any Note of a Series, the date on which the entire unpaid principal amount of such Note becomes due and payable as provided in the Terms Supplement for such Series. "LIBOR" means, the London Interbank Offered Rate that the most creditworthy international banks dealing in Eurodollar charge each other for large loans. "LIBOR Rate Notes" means any Class of Notes the Class Interest Rate of which is based upon LIBOR. "Lien" means a security interest, lien, charge, pledge, equity or encumbrance of any kind, other than tax liens and any other liens, if any, which attach to the respective Financed Student Loan by operation of law as a result of any act or omission by the related Obligor or obligations under Subservicing Agreements in effect as of the Closing Date. "London Banking Day" means any business day on which dealings in deposits in United States dollars are transacted in the London interbank market. "Majority Certificateholder" means the holders of more than 50% of the Percentage Interests of the Certificates. "Margin" has the meaning set forth in the Terms Supplement. "Master Indenture" means the Indenture with respect to a Series between the Issuer and Indenture Trustee, as amended or supplemented from time to time. "Master Servicer" means Crestar Bank, and its permitted successors and assigns, as Master Servicer of the Financed Student Loans. "Master Servicer Default" means an event specified in Section 10.1(a) of the Standard Terms to Transfer and Servicing Agreement. "Moody's" means Moody's Investors Service, Inc. "Net Loan Rate" for any Interest Accrual Period will equal the weighted average Effective Interest Rate as of the last day of the Collection Period immediately preceding such Interest Accrual Period less the applicable Operating Expense Percentage. "Notional Amount" means, with respect to any Series with a Swap Agreement, the amount determined as set forth in the Terms Supplement for such Series. "Note Depository Agreement" means the agreement dated as of the Closing Date relating to a Series of Notes among the Issuer, the Indenture Trustee, the Administrator and DTC, as the initial Depository. "Note Owner" means, with respect to a Book Entry Note, the Person who is the owner of such Book Entry Note, as reflected on the books of the Securities Depository, or on the books of a Person maintaining an account with such Securities Depository (directly as Securities Depository Participant or as an indirect participant, in each case in accordance with the rules of such Securities Depository). "Note Payment Account" means the account designated as such, established and maintained pursuant to Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Note Register" and "Note Registrar" have the respective meanings specified in Section 2.6 of the Master Indenture. "Noteholder" means the Person in whose name a Note is registered in the Note Register. "Notes" means the notes of any Series, as set forth in the Transfer and Servicing Agreement for such Series. "Obligor" on a Financed Student Loan means the borrower or co-borrowers of such Financed Student Loan and any other Person who owes payments in respect of such Financed Student Loan, including (i) the Guaranty Agency thereof with respect to a Financed FFELP Loan and the Department of HHS with respect to a Financed HEAL Loan, and (ii) with respect to any Interest Subsidy Payment or Special Allowance Payment, if any, thereon, the Department of Education. "Officer's Certificate" means (i) in the case of the Issuer, a certificate signed by an Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1 of the Indenture, and delivered to the Indenture Trustee, (ii) in the case of the Depositor, the Master Servicer or the Administrator, a certificate signed by an Authorized Officer of the Depositor, the Master Servicer or the Administrator, as appropriate and (iii) in the case of the Servicer, a certificate signed by an Authorized Officer of the Servicer. "One-Month LIBOR" means the rate of interest per annum equal to the London interbank offered rate for deposits in U.S. dollars having a maturity of one month commencing on the related Interest Determination Date (the "Index Maturity") which appears on Telerate Page 5 as of 11:00 a.m., London time, on such Rate Determination Date. If such rate does not appear on Telerate Page 5, the rate for that day will be determined on the basis of the Reuters Screen LIBOR Page. If such rate does not appear on Telerate Page 5 or the Reuters Screen LIBOR Page, the rate for that day will be determined on the basis of the rates at which deposits in U.S. dollars, having the Index Maturity and in a principal amount of not less than U.S. $1,000,000, are offered at approximately 11:00 a.m., London time, on such Rate Determination Date to prime banks in the London interbank market by the Reference Banks. The Master Servicer will request the principal London office of each of such Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, One-Month LIBOR for that day will be the arithmetic mean (rounded upwards, if necessary, to the nearest .01%) of the quotations. If fewer than two quotations are provided, One-Month LIBOR for that day will be the arithmetic mean (rounded upwards, if necessary, to the nearest .01%) of the rates quoted by three major banks in New York City, selected by the Master Servicer, or by the Trustee, as applicable, at approximately 11:00 a.m., New York City time, on such Rate Determination Date for loans in U.S. dollars to leading European banks having the Index Maturity and in a principal amount equal to an amount of not less than U.S. $1,000,000; provided, however, that if the banks selected as aforesaid are not quoting as mentioned in this sentence, One-Month LIBOR in effect for the applicable Interest Accrual Period will be One-Month LIBOR in effect for the previous Interest Accrual Period. "Opinion of Counsel" means (i) with respect to the Issuer, one or more written opinions of counsel who may, except as otherwise expressly provided in the Master Indenture, be employees of or counsel to the Issuer or Administrator or any of their Affiliates and who shall be reasonably satisfactory to the Indenture Trustee, and which opinion or opinions shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply with any applicable requirements of Section 10.1 of the Master Indenture, and shall be in form and substance reasonably satisfactory to the Indenture Trustee and (ii) with respect to the Depositor, the Administrator or the Master Servicer, one or more written opinions of counsel who may be an employee of or counsel to the Depositor, the Administrator or the Master Servicer, which counsel shall be reasonably acceptable to the Indenture Trustee and the Eligible Lender Trustee. "Outstanding" means, as of the date of determination, all Notes of a Series theretofore authenticated and delivered under the Indenture except: (i) Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation; (ii) Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Noteholders thereof (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given or irrevocably provided for pursuant to the Indenture); and (iii) Notes in exchange for or in lieu of other Notes which have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; provided that in determining whether the Noteholders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any other Basic Document, Notes owned by the Transferor, the Depositor or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Responsible Officer of the Indenture Trustee either actually knows to be so owned or has received written notice thereof shall be do disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Depositor or any Affiliate of any of the foregoing Persons. "Outstanding Amount" means the aggregate principal amount of all Notes, or Class of Notes of a Series, as applicable, Outstanding at the date of determination. "Parity Payment" means, the accelerated principal amount required to be paid on any Class of Notes on any Payment Date or Quarterly Payment Date until the Parity Percentage for such Series equals the Parity Percentage specified in the Terms Supplement relating thereto. "Parity Percentage" means, for any Payment Date or Quarterly Payment Date with respect to a Series, the percentage determined by dividing (i) the applicable Pool Balance as of the end of the preceding Collection Period, plus accrued interest thereon, accrued Interest Subsidy Payments and Special Allowance Payments as of the end of such Collection Period, and all amounts (including any accrued interest thereon) in the Collection Account (or to be deposited therein on account of payments on the Financed Student Loans that have reduced the Pool Balance as of the end of such Collection Period) and the Reserve Account as of the end of such Collection Period (adjusted for payments made on such Payment Date or Quarterly Payment Date), and by (ii) the sum of the aggregate Outstanding Amount of the Notes (after payments thereon on such Payment Date or Quarterly Payment Date), accrued interest thereon and unpaid Transaction Fees and Consolidation Loan Fees. "Participant" means a Securities Depository Participant. "Paying Agent" means the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.12 of the Master Indenture and is authorized by the Issuer to make the payments to and distributions from the Collection Account and payments of principal of and interest and any other amounts owing on the Notes on behalf of the Issuer. "Payment Date" means, with respect to any Series of Notes, those dates specified in the Transfer and Servicing Agreement for such Series. "Payment Determination Date" means, with respect to any Payment Date, the third Business Day immediately preceding such Payment Date. "Percentage Interest" means the undivided fractional interest in an Issuer evidenced by a Certificate. "Person" means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization or government or any agency or political subdivision thereof. "Physical Property" has the meaning assigned to such term in the definition of "Delivery" above. "PLUS Loan" means a FFELP Loan made pursuant to the provisions of the PLUS program established under Section 428B of the Higher Education Act (or predecessor provisions). "Pool Balance" means, at the end of a Collection Period, the aggregate principal balance of the Financed Student Loans at the end of such Collection Period (including accrued interest thereon to the extent such interest was capitalized as of the end of such Collection Period), after giving effect to the following, without duplication: (i) all payments in respect of principal received by the Issuer during such Collection Period from or on behalf of borrowers and Guarantee Agencies (including any guarantors of Private Loans), and, with respect to certain payments on certain Financed Student Loans, the Department of Education and the Department of HHS, (ii) the principal portion of all Purchase Amounts received by the Issuer for such Collection Period and (iii) any Subsequent Financed Student Loans conveyed to the Issuer and any Financed Student Loans conveyed by the Issuer in exchange for such Subsequent Financed Student Loan during such Collection Period and any Additional Financed Student Loans, in each case pursuant to Sections 2.2 and 2.3 of the Transfer and Servicing Agreement. "Predecessor Note" means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.7 of the Master Indenture and in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note. "Pre-Funding Account" means the account, if any, designated as such, established and maintained pursuant to Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Pre-Funding Period" means any period specified in the Transfer and Servicing Agreement during which the related Issuer can acquire Additional Financed Student Loans using funds on deposit in the related Pre-Funding Account. "Primary Servicer" means, with respect to any Financed Student Loan, the entity responsible for the primary servicing of such Financed Student Loan on a day to day basis, it being understood that where a subservicer appointed in accordance with the terms of the Transfer and Servicing Agreement has responsibility for servicing a Financed Student Loan, such subservicer and not the Master Servicer shall be the Primary Servicer with respect such Financed Student Loan. "Principal Factor" means, as of any Payment Date for each Class of Notes, a seven-digit decimal figure equal to the Outstanding Amount of such Class of Notes (after giving effect to any payments of principal made on such Payment Date) divided by the original Outstanding Amount of such Class. The Principal Factor will be 1.0000000 for each Class of Notes as of the Closing Date; thereafter, the Principal Factor for each Class of Notes will decline to reflect reductions in the Outstanding Amount of such Class. "Principal Payment Amount" means, with respect to a Series of Notes, the amount determined as set forth in the Transfer and Servicing Agreement for such Series. "Private Loans" means loans that are originated under Private Loan Programs. "Private Loan Programs" mean one or more of the Private Loan Programs that are identified in the Transfer and Servicing Agreement with respect to a Series of Notes. "Proceeding" means any suit in equity, action at law or other judicial or administrative proceeding. "Program Operating Expense Percentage" means, with respect to any Series, the percentage set forth in the Terms Supplement for such Series. "Purchase Amount" means, as to any Financed Student Loan on any date of determination, the amount required to prepay in full the outstanding principal balance of such Financed Student Loan as of the last day of the most recently completed Collection Period, including all accrued but unpaid interest thereon (including interest to be capitalized) through the last day of the Collection Period in which such Financed Student Loan is being purchased. "Purchased Student Loan" means a Financed Student Loan purchased pursuant to Section 5.5 of the Transfer and Servicing Agreement or repurchased pursuant to Section 3.2 of the Transfer and Servicing Agreement. "Qualified Institutional Buyer" has the meaning ascribed to such term in Rule 144A under the Securities Act. "Qualified Letter of Credit" means a letter of credit delivered or to be delivered to the Indenture Trustee in lieu of a deposit of cash or Eligible Investments in the Reserve Account for the Notes of a Series, or any Class thereof, which letter of credit shall (a) be irrevocable and name the Indenture Trustee, in its capacity as such, as the sole beneficiary thereof; (b) be issued by a bank whose credit standing is acceptable to each of the Rating Agencies; (c) provide that if at any time the then current credit standing of the issuing bank is such that the continued reliance on such letter of credit for the purpose or purposes for which it was originally delivered to the Indenture Trustee would result in a downgrading of any rating of such Class Notes, the Indenture Trustee may either draw under such letter of credit any amount up to and including the entire amount then remaining available for drawing thereunder or terminate such letter of credit; (d) be transferable to any successor Indenture Trustee with respect to such Class; and (e) meet such other standards as may be specified in the Terms Supplement for such Series. "Quarterly Payment Date" means those Payment Dates designated as such in the Transfer and Servicing Agreement for a Series. "Rating Agency" means a nationally recognized statistical rating organization identified in the Transfer and Servicing Agreement for a Series that has been requested by the Depositor to provide a credit rating with respect to one or more Classes of a Series of Notes as of the Closing Date for such Series. If no such organization or successor is any longer in existence, "Rating Agency" shall be a nationally recognized statistical rating organization or other comparable Person designated by the Depositor, notice of which designation shall be given to the Indenture Trustee, the Eligible Lender Trustee and the Servicer. "Rating Agency Condition" means, with respect to any action relating to a Series of Notes, that each Rating Agency shall have been given 10 days prior notice thereof and that each Rating Agency shall have notified the Depositor, the Master Servicer, the Eligible Lender Trustee and the Indenture Trustee in writing that such action will not result in and of itself in a reduction or withdrawal of the then current ratings of each Class of Notes of such Series. "Realized Loss" means, for each Financed Student Loan submitted to a Guarantee Agency for a Guarantee Payment, the Department of HHS for an Insurance Payment or a Private Loan Program, the excess, if any, of (i) the unpaid principal balance of such Financed Student Loan on the date it was first submitted to a Guarantee Agency for a Guarantee Payment, the Department of HHS for an Insurance Payment or a Private Loan Program over (ii) all amounts received on or with respect to principal on such Financed Student Loan (including amounts received pursuant to Section 3.2 and 5.5 of the Transfer and Servicing Agreement) up through the earlier to occur of (A) the date a related Guarantee Payment, Insurance Payment or Private Loan Program payment is made or (B) the last day of the Collection Period occurring 12 months after the date the claim for such Guarantee Payment, Insurance Payment or a Private Loan Program is first denied. "Record Date" means, with respect to a Payment Date, the close of business on the second Business Day (in New York) preceding such Payment Date. "Reference Banks" means four leading banks, selected by the Master Servicer, or by the Trustee, as applicable, (i) engaged in transactions in Eurodollar deposits in the international Eurocurrency market, (ii) not an Affiliate of the Master Servicer, the Administrator or the Depositor and (iii) and having an established place of business in London. "Related Financed Student Loan File" has the meaning specified in Section 4.6(a) of the Standard Terms to Transfer and Servicing Agreement. "Repayment Phase" means the period during which the related borrower is required to make payments of principal and interest on the related Financed Student Loan. "Reserve Account" means the account designated as such, established and maintained pursuant to Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Reserve Account Initial Deposit" means, with respect to any Series, the amount, if any, set forth as such in the Transfer and Servicing Agreement for such Series. "Responsible Officer" means, with respect to the Indenture Trustee, any officer within the Corporate Trust Office of the Indenture Trustee with direct responsibility for the administration of the Indenture and the other Basic Documents on behalf of the Indenture Trustee, including any Managing Director, Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer's knowledge of and familiarity with the particular subject. "Reuters Screen LIBOR Page" will be the display designated as page "LIBOR" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBOR page for the purposes of displaying London interbank offered rates of major banks). "Schedule of Financed Student Loans" means the master listing of the Financed Student Loans set forth in Schedule A to the Transfer and Servicing Agreement and Schedule A to each Transfer Agreement, in each case as from time to time amended or supplemented to reflect the Financed Student Loans then subject to the Lien of the Indenture. The Schedule of Financed Student Loans may be in the form of microfiche or in the form of electronic media. "Securities Act" means the Securities Act of 1933, as amended. "Senior Notes" means, with respect to any Series of Notes, any Notes designated as such in the Terms Supplement for such Series. "Serial Loan" means a Student Loan that is owned by a third party that is serial to a Financed Student Loan. "Series" means each issuance of Notes pursuant to a separate Transfer and Servicing Agreement and Terms Supplement "Servicer" means those entities designated as such in the related Transfer and Servicing Agreement or, subject to satisfying the Rating Agency Condition, another entity appointed by the Master Servicer to service the Financed Student Loans, in its capacity as servicer of the Financed Student Loans. "Servicer's Report" means any report of the Master Servicer delivered pursuant to Section 4.8(a) of the Transfer and Servicing Agreement, substantially in the form acceptable to the Administrator. "Servicing Fee" means, with respect to any Series, the amount set forth in the related Transfer and Servicing Agreement. "SLS Loan" means a FFELP Loan designated as such that is made under the Supplemental Loans for Students Program pursuant to the Higher Education Act. "Special Allowance Payments" means payments, designated as such, by the Department of Education in respect of the Financed FFELP Loans to the Eligible Lender Trustee on behalf of an Issuer in accordance with the Higher Education Act. "Specified Reserve Account Balance" means, with respect to any Series with a Reserve Account, the amount set forth in the Transfer and Servicing Agreement for such Series. "Stafford Loan" means a student loan designated as such that is made under ss. 428 of the Higher Education Act (excluding Unsubsidized Stafford Loans). "Standard & Poor's" means Standard & Poor's Rating Services, a division of The McGraw-Hill Companies, Inc., and its successors and assigns. "Subcustodian" has the meaning specified in Section 4.6 of the Standard Terms to Transfer and Servicing Agreement. "Subordinated Notes" means, with respect to any Series of Notes, any Notes designated as such in the Terms Supplement for such Series. "Subsequent Cut-off Date" means the day as to which principal and interest accruing with respect to an Subsequent Financed Student Loan are transferred to the Eligible Lender Trustee on behalf of the Issuer, as specified in the related Transfer and Servicing Agreement. "Subsequent Finance Period" means the period commencing on the Closing Date and ending for a Series on the date specified in the related Transfer and Servicing Agreement. "Subsequent Financed Student Loan" means any FFELP Loan or HEAL Loan transferred to the Eligible Lender Trustee on behalf of the Issuer during the Subsequent Finance Period pursuant to Section 2.2 of the Transfer and Servicing Agreement. "Subsequent Financing Purchase Price" means, as to any Subsequent Financed Student Loan, the principal amount of such Subsequent Financed Student Loan as of the Subsequent Cut-off Date for such loan and all accrued and unpaid interest on (including interest to be capitalized) such Subsequent Financed Student Loan (other than Interest Subsidy Payments and Special Allowance Payments payable through the Subsequent Cut-Off Date) through the Subsequent Cut-off Date for such loan. "Subservicing Agreement" has the meaning specified in the Transfer and Servicing Agreement for a Series. "Swap Agreement" means with respect to any Series, the agreement, if any, defined as such in the Terms Supplement for such Series. "Swap Termination Payments" means termination payments, if any, owed by an Issuer under a Swap Agreement. "T-Bill Rate" means the average of the bond equivalent rates of the 91-day Treasury bills auctioned during the calendar quarter immediately preceding any date of determination. "T-Bill Rate Notes" means any Class of Notes the Class Interest Rate of which is based upon the T-bill Rate. "Telerate Page 5" means the display page so designated on the Dow Jones Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). "Terms Supplement" means, the Terms Supplement to the Indenture with respect to the issuance of a Series of Notes. "TP Loans" means all Stafford Loans, Unsubsidized Stafford Loans and PLUS Loans with a first disbursement made by the Transferor on or after November l, 1996. "TP Program" means the Crestar Bank Top Performer Program and any similar program with respect to which a Rating Agency Condition is satisfied. "Transaction Fees" means, collectively, the Servicing Fee, the Administration Fee, the Indenture Trustee Fee, the Delaware Trustee Fee and the Eligible Lender Trustee Fee. "Transfer Agreement" means the agreement in substantially the form of Exhibit F to the Standard Terms to Transfer and Servicing Agreement. "Transfer Date" means the date identified as such in a Transfer Agreement. "Transferor" means Crestar Bank, a Virginia banking corporation. "Treasury Regulations" means regulations, including proposed or temporary regulations, promulgated under the Code. References in any document or instrument to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. "Trust Account Property" means the Trust Accounts, all amounts and investments held from time to time in any Trust Account (whether in the form of deposit accounts, Physical Property, book-entry securities, uncertificated securities or otherwise), including the Reserve Account Initial Deposit, if any, and all proceeds of the foregoing. "Trust Accounts" has the meaning specified in Section 6.1 of the Standard Terms to Transfer and Servicing Agreement. "Trust Agreement" means the Trust Agreement organizing among the Depositor, the Eligible Lender Trustee and the Delaware Trustee, as amended and supplemented from time to time. "Trust Estate" means all right, title and interest of an Issuer (or the Eligible Lender Trustee on behalf of such Issuer) in and to (i) the property and rights assigned to such Issuer pursuant to Article II of the Transfer and Servicing Agreement and each Transfer Agreement, (ii) all funds on deposit from time to time in the Trust Accounts and (iii) all other property of such Issuer from time to time, including any rights of the Eligible Lender Trustee and such Issuer pursuant to the Transfer and Servicing Agreement and the other Basic Documents. "Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise specifically provided. "Trust Swap Payment" means, with respect to any Series with a Swap Agreement, the amount determined as set forth in the Terms Supplement for such Series. "UCC" means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time. "Unsubsidized Stafford Loan" means a FFELP Loan designated as such that is made under ss. 428H of the Higher Education Act. "VELA Service Errors" has the meaning assigned to such term in the letter to the Transferor, dated March 7, 1996, from the Department of Education. EXHIBIT B TO THE TRANSFER AND SERVICING AGREEMENT PAYMENT STATEMENT SERIES:___________________________ PAYMENT DATE:_____________________
(i) Principal Factor for each Class of Notes (a) Class A-1 Notes: _________________ (b) Class A-2 Notes: _________________ (c) Class B Notes: _________________ (ii) Amount of principal being paid or distributed: (a) Class A-1 Notes: $_______________ (b) Class A-2 Notes: $_______________ (c) Class B Notes: $_______________ (d) Certificates: $_______________ (iii) (a) Amount of interest being paid or distributed: (1) Class A-1 Notes: $_______________ (2) Class A-2 Notes: $_______________ (3) Class B Notes: $_______________ (4) Certificates: $_______________ (b) Applicable Interest Rate: (1) Class A-1 Notes: ______% (based on [Formula Rate] [Net Loan Rate]) (2) Class A-2 Notes: ______% (based on [Formula Rate] [Net Loan Rate]) (3) Class B Notes: ______% (based on [Formula Rate] [Net Loan Rate]) (4) Certificates: [______%] (based on [One-Month LIBOR] [Net Loan Rate]) (iv) Amount of distribution allocable to any Carryover Interest: (a) Class A-1 Notes: $____________ (b) Class A-2 Notes: $____________ (c) Class B Notes: $____________ (v) Pool Balance at end of preceding Collection Period: $____________ (vi) After giving effect to payments on this Payment Date: (a) Outstanding Amount of Class A-1 Notes: $____________ (b) Outstanding Amount of Class A-2 Notes: $____________ (c) Outstanding Amount of Class B Notes: $____________ (d) Certificate Balance: $____________
(vii) Amount of : (a) Servicing Fee: $____________ (b) Administration Fee: $____________ (c) Indenture Trustee Fee: $____________ (d) Delaware Trustee Fee: $____________ (e) Eligible Lender Trustee Fee: $____________ Subtotal $________________ (viii) Aggregate amountof Realized Losses (if any) for the Collection Period immediately preceding the Payment Date: _____________ (ix) (a) Amount of distribution attributable to amounts in the Reserve Account $____________ (b) Amount of other withdrawals from the Reserve Account $____________ (c) Reserve Account Balance $____________ (d) Parity Percentage $____________ (e) Amount of Parity Payments $____________ (x) The aggregate Purchase Amount paid for Financed Student Loans purchased from the Issuer during the immediately preceding Collection Period: $____________ (xi) During the Subsequent Finance Period only, the aggregate Adjustment Payments, stated separately, for the immediately preceding Collection Period: $____________ (xii) Amount of Financed Student Loans: (a) that are 31 to 60 days delinquent: $____________ (b) that are 61 to 90 days delinquent: $____________ (c) that are 91 to 120 days delinquent: $____________ (d) that are 120 days delinquent: $____________ (e) for which claims have been filed with the appropriate Guarantee Agency, the Department of HHS or Private Loan Program and which are awaiting payment $____________ [Appropriate modifications to be made if other Classes of Notes are issued.]
EXHIBIT C TO THE TRANSFER AND SERVICING AGREEMENT Form of Administrator's Certificate [To be provided by the Administrator pursuant to Section 5.7 of the Transfer and Servicing Agreement] EXHIBIT D TO THE TRANSFER AND SERVICING AGREEMENT ASSIGNMENT FOR FINANCED STUDENT LOANS For value received, in accordance with the Transfer and Servicing Agreement (the "Transfer and Servicing Agreement") dated as of ___________, _____, among Crestar Securitization, LLC, as Depositor (the "Depositor"), Crestar Bank, as master servicer (the "Master Servicer") and as administrator (the "Administrator"), Crestar Student Loan Trust 199_-_ (the "Issuer"), and _______________________________, not in its individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), the Depositor and the Eligible Lender Trustee on its behalf, through the Eligible Lender Trustee, does hereby contribute, assign, transfer and otherwise convey unto the Eligible Lender Trustee on behalf of the Issuer, without recourse (subject to the obligations set forth in the Transfer and Servicing Agreement), all right, title and interest of the undersigned in and to (i) the Financed FFELP Loans, the Financed HEAL Loans and the Financed Private Loans set forth on Schedule A to the Transfer and Servicing Agreement and all obligations of the Obligors thereunder, including all monies paid or payable thereunder (other than Interest Subsidy Payments and Special Allowance Payments to the Cut-off Date) on or after the Cut-off Date, including the right to enforce such FFELP Loans and HEAL Loans in the same manner and to the same extent as the Depositor would have the power to do but for the execution and delivery of the Transfer and Servicing Agreement, (ii) all funds on deposit from time to time in the Trust Accounts and in all investments and proceeds thereof (including all income thereon) and (iii) the proceeds of any and all of the foregoing. The foregoing contribution, assignment, transfer and conveyance does not constitute and is not intended to result in any assumption by the Eligible Lender Trustee or the Issuer of any obligation of the Depositor to the borrowers of Initial Financed Student Loans or any other person in connection with the Financed Student Loans or any agreement or instrument relating to any of them, except to the extent required by the Higher Education Act or the HEAL Act, as the case may be. This Assignment is made pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Transfer and Servicing Agreement and is to be governed by the Transfer and Servicing Agreement. Capitalized terms used but not defined herein shall have the meaning assigned to them in Exhibit A to the Transfer and Servicing Agreement, which also contains rules as to usage that shall be applicable herein. IN WITNESS WHEREOF, the undersigned have caused this Assignment to be duly executed as of [_______,] 19__. CRESTAR SECURITIZATION, LLC By: CRESTAR SP CORPORATION, its Manager By:_______________________________________ Name: Title: ------------------------------------------------- not in its individual capacity, but solely as Eligible Lender Trustee on behalf of the Depositor By:_______________________________________ Name: Title: EXHIBIT E TO THE TRANSFER AND SERVICING AGREEMENT TRANSFER AGREEMENT TRANSFER AGREEMENT, dated as of __________, _____, among CRESTAR STUDENT LOAN TRUST ____-_, a Delaware business trust (the "Issuer"), CRESTAR SECURITIZATION, LLC, a Virginia limited liability Company, as Depositor (the "Depositor"), and ________________________________, a national banking association, not in its individual capacity but solely as Eligible Lender Trustee of the Depositor and the Issuer (the "Eligible Lender Trustee"). WITNESSETH: WHEREAS, the Issuer, the Depositor, the Eligible Lender Trustee, the Administrator and the Master Servicer are parties to the Transfer and Servicing Agreement dated as of ________ 1, _____ (as amended or supplemented, the "Transfer and Servicing Agreement"); WHEREAS, in accordance with the Transfer and Servicing Agreement, the Depositor desires to cause the Eligible Lender Trustee on behalf of the Depositor to convey the [Financed FFELP Loans, Financed HEAL Loans and Financed Private Loans] referred to in Section 2 hereof (the "Subsequent Financed Student Loans") to the Eligible Lender Trustee on behalf of the Issuer; and WHEREAS, the Eligible Lender Trustee and the Issuer are willing to accept such conveyance subject to the terms and conditions hereof. NOW, THEREFORE, the parties hereto hereby agree, intending to be legally bound hereby, as follows: 1. Definitions and Usage. Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to them in Exhibit A to the Transfer and Servicing Agreement, which also contains rules of construction and usage that shall be applicable herein. In addition, the following terms have the following meanings: "Subsequent Cut-Off Date" means, with respect to each Subsequent Financed Student Loan, the date specified as such on Schedule A hereto. "Subsequent Finance Period" means [_______]. "Transfer Date" means ____________. 2. Schedule of Subsequent Financed Student Loans. Attached hereto as Schedule A is a Schedule listing the Subsequent Financed Student Loans to be conveyed on the Transfer Date to the Eligible Lender Trustee on behalf of the Issuer pursuant to the Transfer and Servicing Agreement. [Attached hereto as Schedule B is a list of Financed Student Loans conveyed to the Eligible Lender Trustee on behalf of the Depositor by the Eligible Lender Trustee on behalf of the Issuer in exchange for the Subsequent Financed Student Loans conveyed. Such Schedules shall be deemed to modify the Schedule of Financed Student Loans attached as Schedule A to the Transfer and Servicing Agreement to (i) add the Subsequent Financed Student Loans and (ii) delete the Financed Student Loans.] 3. Conveyance of Subsequent Financed Student Loans. (a) The Depositor and Eligible Lender Trustee on behalf of the Depositor does hereby contribute, transfer, assign, set over and otherwise convey, without recourse (subject to the obligations set forth in the Transfer and Servicing Agreement), to the Eligible Lender Trustee on behalf of the Issuer: (i) all right, title and interest in and to each Subsequent Financed Student Loan, and all obligations of the Obligors thereunder, including all moneys paid thereunder (other than Interest Subsidy Payments and Special Allowance Payments payable through the Subsequent Cut-Off Date), and all written communications received by the Depositor with respect thereto and still retained by the Depositor in accordance with its retention policies (including borrower correspondence, notices of death, disability or bankruptcy and requests for deferments or forbearances), on and after the Subsequent Cut-Off Date; and (ii) the proceeds of any and all of the foregoing. (b) In consideration therefor, the Issuer shall: (i) pay the Subsequent Financing Purchase Price to the Depositor; or (ii) cause the Eligible Lender Trustee to transfer, assign, set over and otherwise convey, without recourse, to convey to the Eligible Lender Trustee on behalf of the Depositor the Financed Student Loans listed on Schedule B. 4. Representations and Warranties of the Depositor. The Depositor hereby makes the representations and warranties contained in Sections 3.1 and 7.1 of the Transfer and Servicing Agreement to the Issuer as of the date of the Transfer and Servicing Agreement and as of the Transfer Date. In addition, the Depositor represents and warrants to the Issuer that: (a) Principal Balances. (i) The aggregate principal balance of the Consolidation Loans, the HEAL Consolidation Loans, the Serial Loans and the other Student Loans that are listed on Schedule A attached hereto and conveyed to the Eligible Lender Trustee on behalf of the Issuer pursuant to the Transfer and Servicing Agreement as of the Subsequent Cut-Off Date is $________, $________, $_______ and $________, respectively; (ii) the aggregate principal balance of the Financed Student Loans listed on Schedule B attached hereto is $_______; (iii) the Consolidation Prepayments on deposit in the Collection Account are $________; and (iv) the Adjustment Payment for the Transfer Date is $________, which amount shall be payable [by] [to] the Depositor. 5. Conditions Precedent. The obligation of the Issuer to acquire the Subsequent Financed Student Loans hereunder is subject to the satisfaction, on or prior to the Transfer Date, of the following conditions precedent: (a) Representations and Warranties. Each of the representations and warranties made by the Depositor with respect to itself and the Subsequent Financed Student Loans shall be true and correct in all material respects as of the date of the Transfer Agreement and as of the Transfer Date. (b) Transfer and Servicing Agreement Conditions. Each of the conditions set forth in Section 2.1(c) of the Standard Terms to Transfer and Servicing Agreement shall have been satisfied, and the Issuer shall have received a certificate of an Authorized Officer of the Depositor to that effect substantially in the form of Annex C hereto. (c) Delivery of Assignment. The Depositor shall have delivered an Assignment substantially in the form of Annex A hereto. Upon the satisfaction of the conditions set forth in this Section 5, the Eligible Lender Trustee shall have executed and delivered to the Depositor an Assignment, substantially in the form of Annex B hereto, with respect to any Financed Student Loans to be conveyed to the Depositor pursuant to Section 2.2 of the Standard Terms to Transfer and Servicing Agreement, and direct the Indenture Trustee to transfer to the Depositor the Subsequent Financing Purchase Price in immediately available funds to an account designated in writing by the Depositor to the Indenture Trustee. 6. Counterparts. This Transfer Agreement may be executed in separate counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument. 7. Governing Law. This Transfer Agreement shall be construed in accordance with the laws of the State of New York, 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. 8. Headings. The section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Transfer Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Transfer Agreement to be duly executed and delivered by their respective duly authorized officers as of the day and the year first above written. CRESTAR SECURITIZATION, LLC By: CRESTAR SP CORPORATION, its Manager By: _______________________________________ Name: Title: ------------------------------------------------- not in its individual capacity, but solely as Eligible Lender Trustee on behalf of the Depositor By:______________________________________________ Name: Title: CRESTAR STUDENT LOAN TRUST 199_-_ By:_______________________________, not in its individual capacity but solely as Eligible Lender Trustee on behalf of the Issuer By:________________________________________ Name: Title: Acknowledged and accepted as of the date first above written: - ---------------------, not in its individual capacity but solely as Indenture Trustee By ______________________________________ Name: Title: ANNEX A TO THE TRANSFER AGREEMENT ASSIGNMENT For value received, in accordance with the Transfer and Servicing Agreement (the "Transfer and Servicing Agreement") dated as of _____________, ___, among Crestar Securitization, LLC, as Depositor (the "Depositor"), Crestar Bank, as master servicer and as administrator, Crestar Student Loan Trust 199_-_ (the "Issuer"), _______________________________, not in its individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), and the Transfer Agreement dated as of _____________, ___, (the "Transfer Agreement") among the Depositor, the Issuer and the Eligible Lender Trustee, the Depositor and the Eligible Lender Trustee on its behalf hereby contribute, assign, transfer and otherwise convey unto the Eligible Lender Trustee on behalf of the Issuer, without recourse (subject to the obligations set forth in the Transfer and Servicing Agreement), all right, title and interest of the undersigned in and to (i) the Subsequent Financed Student Loans and all obligations of the Obligors thereunder, including all moneys paid or payable thereunder (other than Interest Subsidy Payments and Special Allowance Payments through the related Subsequent Cut-Off Date) after the related Subsequent Cut-Off Date and (ii) the proceeds of any and all of the foregoing. The foregoing contribution, assignment, transfer and conveyance does not constitute and is not intended to result in any assumption by the Eligible Lender Trustee or the Issuer of any obligation of the Depositor to the borrowers of such Subsequent Financed Student Loans or any other person in connection with the Subsequent Financed Student Loans or any agreement or instrument relating to any of them, except to the extent required by the Higher Education Act or the HEAL Act, as the case may be. In addition, the undersigned, by execution of this instrument, hereby endorses the promissory notes evidencing each Subsequent Financed Student Loan described in Schedule A to the Transfer Agreement in favor of the Eligible Lender Trustee on behalf of the Issuer, without recourse (subject to the obligations set forth in the Transfer and Servicing Agreement) against the undersigned. This endorsement may be effected by attaching a facsimile hereof to each or any of such promissory notes. This Assignment is made pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Transfer and Servicing Agreement and the Transfer Agreement and is to be governed by the Transfer and Servicing Agreement and the Transfer Agreement. Capitalized terms used but not defined herein shall have the meaning assigned to them in the Transfer Agreement or in Exhibit A to the Transfer and Servicing Agreement. IN WITNESS WHEREOF, the undersigned have caused this Assignment to be duly executed as of _____. CRESTAR SECURITIZATION, LLC By: CRESTAR SP CORPORATION, its manager By: _______________________________________ Name: Title: ------------------------------------------------- not in its individual capacity, but solely as Eligible Lender Trustee on behalf of the Depositor By: ________________________________________ Name: Title: ANNEX B TO THE TRANSFER AGREEMENT ASSIGNMENT For value received, in accordance with the Transfer and Servicing Agreement (the "Transfer and Servicing Agreement") dated as of ____________, ____, among Crestar Student Loan Trust _____, (the "Issuer"), Crestar Bank as Master Servicer and as Administrator, Crestar Securitization, LLC (the "Depositor"), and _______________________________, not in its individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), and the Transfer Agreement dated as of ____________, ____ (the "Transfer Agreement") among the Depositor, the Issuer and the Eligible Lender Trustee, the Issuer and the Eligible Lender Trustee on its behalf hereby contribute, assign, transfer and otherwise convey unto the Depositor and the Eligible Lender Trustee on its behalf, without recourse (subject to the obligations set forth in the Transfer and Servicing Agreement), all right, title and interest of the undersigned in and to (i) the Financed Student Loans set forth on Schedule B to the Transfer Agreement and all obligations of the Obligors thereunder, including all moneys paid or payable thereunder (other than Interest Subsidy Payments and Special Allowance Payments through the related Subsequent Cut-off Date) after the related Subsequent Cut-off Date and (ii) the proceeds of any and all of the foregoing. The foregoing contribution, assignment, transfer and conveyance does not constitute and is not intended to result in any assumption by the Depositor of any obligation of the Eligible Lender Trustee or the Issuer to the borrowers of such Financed Student Loans or any other person in connection with such Financed Student Loans or any agreement or instrument relating to any of them, except to the extent required by the Higher Education Act or the HEAL Act, as the case may be. In addition, the undersigned, by execution of this instrument, hereby endorses the promissory notes evidencing each Financed Student Loan described in Schedule B to the Transfer Agreement in favor of the Depositor, without recourse, against the undersigned. This endorsement may be effected by attaching a facsimile hereof to each or any of such promissory notes. This Assignment is made pursuant to and upon the representations, warranties and agreements on the part of the undersigned contained in the Transfer and Servicing Agreement and the Transfer Agreement and is to be governed by the Transfer and Servicing Agreement and the Transfer Agreement. Capitalized terms used but not defined herein shall have the meaning assigned to them in the Transfer Agreement or in Exhibit A to the Transfer and Servicing Agreement. IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed as of ______. CRESTAR STUDENT LOAN TRUST _____-_ By: STAR BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Eligible Lender Trustee on behalf of the Issuer By: ________________________________________ Name: Title: ANNEX C TO THE TRANSFER AGREEMENT OFFICER'S CERTIFICATE REQUIRED BY SECTION 2.1(c)(viii) OF THE STANDARD TERMS TO TRANSFER AND SERVICING AGREEMENT The undersigned, _____________________, a _____________ of Crestar SP Corporation, the Manager of Crestar Securitization, LLC, a Virginia limited liability company (the "Depositor"), hereby certifies for and on behalf of the Depositor as follows: 1. This Certificate is given pursuant to Section 2.1(c)(viii) of the Standard Terms to Transfer and Servicing Agreement (the "Transfer and Servicing Agreement"), dated as of __________, ____, among the Depositor, Crestar Student Loan Trust 199_-_ (the "Issuer"), and _______________________________, not in its individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), and the Transfer Agreement dated as of ____________, ____ (the "Transfer Agreement") among the Depositor, the Issuer and the Eligible Lender Trustee, in connection with the transfer of certain Subsequent Financed Student Loans on the date hereof; 2. Any words or phrases capitalized in this Certificate but not defined herein shall have the meaning assigned thereto in the Transfer and Servicing Agreement; 3. The undersigned is an Authorized Officer of the Depositor; and 4. With respect to the transfer on the date hereof of Subsequent Financed Student Loans and the other property and rights related thereto as described in Section 2.1 or 2.2 of the Standard Terms to Transfer and Servicing Agreement, each of the conditions precedent set forth in Section 2.1(c) of the Transfer and Servicing Agreement has been satisfied on or prior to the date hereof. IN WITNESS WHEREOF, the undersigned, being duly authorized, has caused this certificate to be executed and delivered as of this ____ day of _____________,________. CRESTAR SECURITIZATION, LLC By: CRESTAR SP CORPORATION, its Manager By: _________________________________ Name: Its: SCHEDULE A TO THE TRANSFER AGREEMENT NO. ____ [List of Subsequent Financed Student Loans] SCHEDULE B TO THE TRANSFER AGREEMENT NO. ___ [List of Financed Student Loans to be Conveyed to the Depositor] EX-5 8 EXHIBIT 5.1 Exhibit 5.1 Hunton & Williams 951 East Byrd Street Riverfront Plaza, East Richmond, VA 23219 FILE NO.: 33411.027002 DIRECT DIAL: 804/788-8200 June 26, 1998 Crestar Securitization, LLC 919 East Main Street Richmond, Virginia 23219 Gentlemen: We have acted as counsel to Crestar Securitization, LLC, a Virginia limited liability company (the "Company"), in connection with the Company's registration statement on Form S-3 (the "Registration Statement") filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to the proposed sale of Student Loan Asset Backed Notes (the "Notes"). In this capacity, we have examined the Registration Statement, the Company's Articles of Organization and Operating Agreement, and such other materials as we have deemed necessary to the issuance of this opinion. Capitalized terms used but not defined herein shall have the definitions assigned to such terms in the Registration Statement. On the basis of the foregoing, we are of the opinion that: 1. The Company has been duly organized and is validly existing as a limited liability company under the laws of the Commonwealth of Virginia. 2. Each trust agreement, indenture and transfer and servicing agreement, the forms of which are included as exhibits to the Registration Statement (each, an "Agreement"), has been duly authorized by the Company, and when duly executed and delivered by the parties thereto, will constitute valid, legal and binding agreements of the Company, enforceable against the Company in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights Crestar Securitization, LLC June 26, 1998 Page 2 generally and to general principles of equity, regardless of whether enforcement is sought in a proceeding in equity or at law. 3. The Notes have been duly authorized by the Company, and when the Notes have been duly issued, executed and authenticated in accordance with the provisions of the related Indenture and delivered to and paid for by the purchasers thereof, the Notes will be legally and validly issued, and the holders of the Notes will be entitled to the benefits provided by the Indenture pursuant to which such Notes were issued. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated thereunder by the Securities and Exchange Commission. Very truly yours, /s/ Hunton & Williams EX-8 9 EXHIBIT 8.1 Exhibit 8.1 Hunton & Williams 951 East Byrd Street Riverfront Plaza, East Richmond, VA 23219 June 26, 1998 Crestar Bank 6802 Paragon Place, 3rd Floor Richmond, Virginia 23230-9428 Crestar Securitization, LLC Ladies and Gentlemen: We have acted as special tax counsel to Crestar Securitization, LLC, a Virginia limited liability company (the "Depositor"), in connection with the preparation of a Registration Statement on Form S-3 (No. 333-51725) (the "Registration Statement"), which was filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act"), for the registration under the Act of Student Loan Asset Backed Notes (the "Notes"). As set forth in the Registration Statement, each series of Notes (a "Series") will be issued under and pursuant to an indenture (the "Indenture") between a trust established by the Depositor (the "Trust") and an indenture trustee to be named therein (the "Indenture Trustee"). The Trust will be established pursuant to a deposit trust agreement (the "Trust Agreement") among the Depositor, an eligible lender trustee to be named therein (the "Eligible Lender Trustee"), and a Delaware trustee to be named therein (the "Delaware Trustee"). We have examined the prospectus and form of prospectus supplement related thereto contained in the Registration Statement. In addition, we have reviewed (i) the form of the Trust Agreement; (ii) the form of the Indenture, including the forms of Notes attached as exhibits thereto; (iii) the form of the Transfer and Servicing Agreement, including the Standard Terms thereto, among the Depositor, the Eligible Lender Trustee, the Trust to be named therein, and a master servicer and administrator to be named therein (the "Transfer and Servicing Agreement"); (iv) the form of the Sales Agreement among Crestar Bank, as transferor (the "Transferor"), the Depositor and the Eligible Lender Trustee (the "Sales Agreement," and, together with the Trust Crestar Bank June 26, 1998 Page 2 Agreement, the Indenture, and the Transfer and Servicing Agreement, the "Agreements"); and (v) such other documents as we have deemed necessary or appropriate as a basis for the opinion set forth below. In arriving at the opinions expressed below, we have assumed that each Agreement will be duly authorized by all necessary corporate action on the part of the parties thereto for such Series of Notes and will be duly executed and delivered by the parties thereto substantially in the applicable form filed or incorporated by reference as an exhibit to the Registration Statement, that each Series of Notes will be duly executed and delivered in substantially the forms set forth in the related Agreement filed or incorporated by reference as an exhibit to the Registration Statement, that Notes will be sold as described in the Registration Statement, and that the parties to the transactions involving the issuance of Notes comply (without waiver) with all of the provisions of the related Agreements and the other documents prepared and executed in connection with such transactions. Based on the foregoing, we are of the opinion that the legal conclusions contained in the Registration Statement under the caption "Federal Income Tax Consequences" are correct in all material respects, and the discussion thereunder does not omit any material provision with respect to the matters covered. You should be aware that this opinion represents our conclusions as to the application of existing law to a transaction as described above. There can be no assurance that contrary positions will not be taken by the Internal Revenue Service or that the law will not change. In addition, this opinion is based on the facts and circumstances set forth in the Registration Statement and in the other documents reviewed by us. Our opinion as to the matters set forth herein could change with respect to a particular Series of Notes as a result of changes in facts or circumstances, changes in the terms of the documents reviewed by us, or changes in the law subsequent to the date hereof. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. We also consent to the references to Hunton & Williams under the caption "Federal Income Tax Consequences" in the Registration Statement. In giving this consent, we do not admit that we are in the category of persons whose consent is required by Section 7 of the Act or the rules and regulations promulgated thereunder by the Securities and Exchange Commission. No opinion has been sought and none has been given concerning the tax treatment of the issuance and sale of the Notes under the laws of Virginia or any other state. Very truly yours, /s/ HUNTON & WILLIAMS -----END PRIVACY-ENHANCED MESSAGE-----