exv4w8



 






EXHIBIT 4.8













TRUST AGREEMENT




between




CONSOLIDATION LOAN FUNDING II, LLC,

as Depositor




and




THE BANK OF NEW YORK (DELAWARE),

as Delaware Trustee




Higher Education Funding I,




Dated as of January 1, 2004













 









 














Table of Contents




	 	 	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 	 	 
	 
	 	ARTICLE I	 	 	 	 
	 
	 	DEFINITIONS AND USAGE

	 	 	 	 
	 
	 	ARTICLE II	 	 	 	 
	 
	 	ORGANIZATION

	 	 	 	 
	Section 2.01.
	 	Name	 	 	2	 
	Section 2.02.
	 	Office	 	 	3	 
	Section 2.03.
	 	Purposes and Powers	 	 	3	 
	Section 2.04.
	 	Appointment of Delaware Trustee	 	 	4	 
	Section 2.05.
	 	Initial Capital Contribution of Trust Estate	 	 	4	 
	Section 2.06.
	 	Declaration of Trust	 	 	4	 
	Section 2.07.
	 	Liability of the Certificateholders	 	 	4	 
	Section 2.08.
	 	Title to Trust Property	 	 	5	 
	Section 2.09.
	 	Representations and Warranties of the Depositor	 	 	5	 
	Section 2.10.
	 	Federal Income Tax Allocations	 	 	6	 
	Section 2.11.
	 	The Indenture	 	 	6	 
	Section 2.12.
	 	Covenants Regarding Operations	 	 	6	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE III	 	 	 	 
	 
	 	TRUST CERTIFICATES AND TRANSFER OF INTERESTS

	 	 	 	 
	Section 3.01.
	 	Initial Beneficial Ownership	 	 	9	 
	Section 3.02.
	 	The Trust Certificates	 	 	9	 
	Section 3.03.
	 	Authentication of Trust Certificate	 	 	10	 
	Section 3.04.
	 	Registration of Transfer and Exchange of Trust Certificates	 	 	10	 
	Section 3.05.
	 	Mutilated, Destroyed, Lost or Stolen Trust Certificates	 	 	11	 
	Section 3.06.
	 	Persons Deemed Owners	 	 	11	 
	Section 3.07.
	 	Access to List of Certificateholders’ Names and Addresses	 	 	11	 
	Section 3.08.
	 	Maintenance of Office or Agency	 	 	12	 
	Section 3.09.
	 	Appointment of Certificate Paying Agent	 	 	12	 
	Section 3.10.
	 	Restrictions on Transfer	 	 	12	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IV	 	 	 	 
	 
	 	ACTIONS BY DELAWARE TRUSTEE

	 	 	 	 
	Section 4.01.
	 	Prior Notice to Certificateholders with Respect to Certain Matters	 	 	14	 
	Section 4.02.
	 	Action by the Certificateholders with Respect to Certain Matters	 	 	16	 
	Section 4.03.
	 	Action by the Certificateholders with Respect to Bankruptcy	 	 	16	 
	Section 4.04.
	 	Restrictions on Certificateholders’ Power	 	 	16	 
	Section 4.05.
	 	Majority Control	 	 	16	 






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	 	 	 	 	Page
	 
	 	 	 	 	 	 
	 
	 	ARTICLE V	 	 	 	 
	 
	 	APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

	 	 	 	 
	Section 5.01.
	 	Application of Trust Funds	 	 	16	 
	Section 5.02.
	 	Method of Payment	 	 	17	 
	Section 5.03.
	 	No Segregation of Moneys; No Interest	 	 	17	 
	Section 5.04.
	 	Accounting and Reports to the Holders, Certificateholder, the Internal Revenue Service and Others	 	 	17	 
	Section 5.05.
	 	Signature on Returns; Tax Matters Partner	 	 	18	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VI	 	 	 	 
	 
	 	AUTHORITY AND DUTIES OF DELAWARE TRUSTEE

	 	 	 	 
	Section 6.01.
	 	General Authority	 	 	18	 
	Section 6.02.
	 	General Duties	 	 	19	 
	Section 6.03.
	 	Action Upon Instruction	 	 	19	 
	Section 6.04.
	 	No Duties Except as Specified in this Trust Agreement, any other Basic Document or in Instructions	 	 	20	 
	Section 6.05.
	 	No Action Except Under Specified Documents or Instructions	 	 	21	 
	Section 6.06.
	 	Restrictions	 	 	21	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VII	 	 	 	 
	 
	 	CONCERNING THE DELAWARE TRUSTEE

	 	 	 	 
	Section 7.01.
	 	Acceptance of Trusts and Duties	 	 	22	 
	Section 7.02.
	 	Furnishing of Documents	 	 	23	 
	Section 7.03.
	 	Representations and Warranties	 	 	23	 
	Section 7.04.
	 	Reliance; Advice of Counsel	 	 	23	 
	Section 7.05.
	 	Not Acting in Individual Capacity	 	 	24	 
	Section 7.06.
	 	Delaware Trustee not Liable for Trust Certificates or Financed Student Loans	 	 	24	 
	Section 7.07.
	 	Delaware Trustee May Own Trust Certificates and Notes	 	 	25	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE VIII	 	 	 	 
	 
	 	COMPENSATION OF DELAWARE TRUSTEE

	 	 	 	 
	Section 8.01.
	 	Delaware Trustee’s Fees and Expenses	 	 	25	 
	Section 8.02.
	 	Indemnification	 	 	25	 
	Section 8.03.
	 	Certificateholders To Assume Liability	 	 	26	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE IX	 	 	 	 
	 
	 	TERMINATION OF TRUST AGREEMENT

	 	 	 	 
	Section 9.01.
	 	Termination of Trust Agreement	 	 	26	 
	Section 9.02.
	 	Failure to Surrender Certificates Upon Termination	 	 	27	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE X	 	 	 	 
	 
	 	SUCCESSOR DELAWARE TRUSTEES AND ADDITIONAL DELAWARE TRUSTEES

	 	 	 	 






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	 	 	 	 	Page
	 
	Section 10.01.
	 	Eligibility Requirements for Delaware Trustee	 	 	27	 
	Section 10.02.
	 	Resignation or Removal of Delaware Trustee	 	 	28	 
	Section 10.03.
	 	Successor Delaware Trustee	 	 	28	 
	Section 10.04.
	 	Merger or Consolidation of Delaware Trustee	 	 	29	 
	Section 10.05.
	 	Appointment of Co-Delaware Trustee or Separate Delaware Trustee	 	 	29	 
	 
	 	 	 	 	 	 
	 
	 	ARTICLE XI	 	 	 	 
	 
	 	MISCELLANEOUS

	 	 	 	 
	Section 11.01.
	 	Supplements and Amendments	 	 	30	 
	Section 11.02.
	 	No Legal Title to Trust Estate in Certificateholders	 	 	31	 
	Section 11.03.
	 	Limitations on Rights of Others	 	 	31	 
	Section 11.04.
	 	Notices	 	 	32	 
	Section 11.05.
	 	Severability	 	 	32	 
	Section 11.06.
	 	Separate Counterparts	 	 	32	 
	Section 11.07.
	 	Successors And Assigns	 	 	32	 
	Section 11.08.
	 	No Petition	 	 	32	 
	Section 11.09.
	 	No Recourse	 	 	33	 
	Section 11.10.
	 	Headings	 	 	33	 
	Section 11.11.
	 	Governing Law	 	 	33	 






	 	 	 
	EXHIBIT A

	 	FORM OF TRUST CERTIFICATE
	EXHIBIT B

	 	FORM OF PURCHASER’S REPRESENTATION AND WARRANTY LETTER
	EXHIBIT C

	 	FORM OF CERTIFICATE OF TRUST






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TRUST AGREEMENT




     TRUST AGREEMENT dated as of January 1, 2004 (this “Trust Agreement”), between THE BANK OF NEW
YORK (DELAWARE), a Delaware banking corporation, acting hereunder not in its individual capacity
but solely as Delaware trustee (the “Delaware Trustee”) and CONSOLIDATION LOAN FUNDING II, LLC, a
Delaware limited liability company (the “Depositor”).



     The Depositor and the Delaware Trustee hereby agree as follows:



ARTICLE I




DEFINITIONS AND USAGE




     For purposes of this Trust Agreement, the following terms shall have the meanings set forth
below. Capitalized terms used but not defined herein are defined in the Indenture, which also
contains rules as to construction and usage that shall be applicable herein.



     “Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls,
is controlled by or is under common control with such Person, and the terms “controls,” “controlled
by,” and “under common control with” mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of such Person, whether through the
ability to exercise voting power, by contract or otherwise.



     “Basic Documents” means this Trust Agreement, any Custodian Agreement, the Indenture, any
Supplemental Indenture, any Notes (as defined in the Indenture), any Administration Agreement, any
Auction Agency Agreement, any other administration agreement, any Servicing Agreement, any Student
Loan Purchase Agreement, any Student Loan Repurchase Agreement, any Eligible Lender Trust
Agreement, any Guaranty Agreement, any Letter of Representations and any Note Purchase Agreement.



     “Bankruptcy Action” means (i) commencing any case, proceeding or other action or filing a
petition under any existing or future bankruptcy, insolvency or similar law seeking (A) to
adjudicate the Trust a bankrupt or insolvent, (B) to have an order for relief entered with respect
to the Trust, or (C) reorganization, arrangement, adjustment, wind-up, liquidation, dissolution,
composition or other relief with respect to the Trust or its debts, (ii) consenting to the
institution of bankruptcy or insolvency proceedings against the Trust, (iii) seeking or consenting
to the appointment of a receiver, custodian, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of its property, (iv) except as required by
law, admitting its inability to pay its debts generally as they become due, (v) failing generally
to pay the debts of the Trust as such debts become due within the meaning of the Federal Bankruptcy
Code, as determined by a relevant bankruptcy court, (vi) making a general assignment by the Trust
for the benefit of creditors, or (vii) authorizing, taking any action in furtherance of, consenting
to or acquiescing in any of the foregoing or any similar action or other proceedings under any
United States Federal or state bankruptcy or insolvency or similar law on behalf of, or with
respect to, the Trust, or in connection with any obligations relating to the Trust Certificates,
the Notes, this Trust Agreement or any of the other Basic Documents.



 









 





     “Certificateholder” means a holder of a Trust Certificate.



     “Certificate Paying Agent” means the paying agent for the Trust Certificates appointed
pursuant to Section 3.09 hereof.



     “Certificate Registrar” means the registrar for the Trust Certificates appointed pursuant to
Section 3.04 hereof.



     “Corporate Trust Office” means the office of the Delaware Trustee pursuant to Section 2.02
hereof.



     “Delaware Statutory Trust Act” shall have the meaning set forth in Section 2.01 hereof.



     “Distribution Date” shall have the meaning set forth in Section 5.01 hereof.



     “First Supplemental Indenture” means the First Supplemental Indenture of Trust, dated as of
January 1, 2004, between the Trust and Indenture Trustee.



     “Indenture” means the Indenture of Trust, dated as of January 1, 2004, between the Trust and
the Indenture Trustee, as amended and supplement pursuant to the terms thereof.



     “Indenture Trustee” means The Bank of New York, as trustee under the Indenture, and any
successor thereto.



     “Note Purchase Agreement” means a Note Purchase Agreement among the Trust, as seller, and UBS
PaineWebber Inc., as purchaser, certain other parties thereto.



     “Percentage Interest” means, with respect to a Trust Certificate, the percentage beneficial
ownership interest in the Trust represented by such Trust Certificate, as noted thereon, provided
that the sum of the Percentage Interests evidenced by all Trust Certificates issued by the Trust
and outstanding at any given time shall not exceed 100%.



     “Secretary of State” shall have the meaning set forth in Section 2.01 hereof.



     “Treasury Regulations” mean the regulations promulgated by the Internal Revenue Service with
respect to the provisions of the Internal Revenue Code of 1986, as amended.



     “Trust Certificate” means the Trust Certificate evidencing the beneficial ownership interest
in the Trust, substantially in the form of Exhibit A hereto.



ARTICLE II




ORGANIZATION




     Section 2.01. Name. The trust created hereby (the “Trust”) shall be known as “Higher
Education Funding I,” in which name the Delaware 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 on
behalf of the Trust. The Trust shall constitute a statutory trust within the meaning of



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Section 3801(a) of the Delaware Statutory Trust Act, 12 Del. C. § 3801 et seq. (the “Delaware
Statutory Trust Act”) for which the Delaware Trustee is authorized to file a certificate of trust
with the Secretary of State of the State of Delaware (the “Secretary of State”) pursuant to Section
3810(a) of the Delaware Statutory Trust Act in substantially the form of Exhibit C hereto.



     Section 2.02. Office. The office of the Trust shall be in care of the Delaware Trustee at 502
White Clay Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust Administration
(the “Corporate Trust Office”) or at such other address as the Delaware Trustee may designate by
written notice to each Certificateholder and the Depositor.



     Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in the following
activities:




     (a) to issue, from time to time, the Notes pursuant to the Indenture and a supplement
thereto, and the Trust Certificate pursuant to this Trust Agreement and to sell the Notes in
one or more transactions;




     (b) to deposit and apply the proceeds of the sale of the Notes, to (i) in the case of
the Series 2004-1 Notes, as specified in Section 15 of the First Supplemental Indenture and
(ii) in the case of any Notes issued pursuant to any other Supplemental Indenture, as
specified therein;




     (c) to assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant
to the Indenture and to hold, manage and distribute to the Certificateholders pursuant to
the terms of this Trust Agreement any portion of the Trust Estate released from the lien of,
and remitted to the Trust pursuant to, the Indenture;




     (d) to acquire Student Loans;




     (e) to enter into and perform its obligations under the Basic Documents to which it is
to be a party;




     (f) 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




     (g) subject to compliance with the Basic Documents, to engage in such other activities
as may be required in connection with conservation of the Trust Estate.



     The Trust shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Trust Agreement or the other Basic
Documents. In no event shall the Delaware Trustee or any other Person have any power to (i) vary
the investment of the Certificateholders in the Trust Certificates or to substitute new investments
or reinvest so as to enable the Trust to take advantage of variations in the market to improve the
investment of the Certificateholders in the Trust Certificates; or (ii) agree to any change in the
terms of a Financed Student Loan that would be a “significant modification” within the meaning of §
1.1001-3 of the Treasury Regulations (or any successor regulation),



3









 





unless an opinion of nationally recognized tax counsel, obtained at the sole expense of the
party requesting an action otherwise prohibited by clause (i) or (ii) of this sentence and
delivered to the Delaware Trustee, states that such action would (A) not cause the Trust
Certificates to be treated other than as set forth in Section 2.06 hereof for federal and relevant
state tax purposes; (B) not cause the Notes to be treated other than as debt of the Trust for
federal and relevant state purposes; and (C) not otherwise cause additional federal or relevant
state tax to be imposed upon the Certificateholders, the Holders of the Notes, the Delaware Trustee
or the Trust. In furtherance of such purpose, the Certificateholders hereby authorize the Delaware
Trustee to complete, sign and timely file any documents, returns, forms or reports as may be
required by federal or relevant state or local taxing authorities affirming such treatment of the
Trust and as shall be presented to the Trustee in final form for execution.



     Section 2.04. Appointment of Delaware Trustee. The Depositor hereby appoints the Delaware
Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and
duties set forth herein and in the Delaware Statutory Trust Act.



     Section 2.05. Initial Capital Contribution of Trust Estate. The Depositor hereby sells,
assigns, transfers, conveys and sets over to the Delaware Trustee, as of the date hereof, the sum
of $1.00. The Delaware Trustee hereby acknowledges receipt in trust from the Depositor, as of the
date hereof, of the foregoing contribution, which shall constitute the initial Trust Estate and
shall be deposited in the Acquisition Fund. The Depositor shall pay the organizational expenses of
the Trust as they may arise or shall, upon the request of the Delaware Trustee, promptly reimburse
the Delaware Trustee for any such expenses paid by the Delaware Trustee.



     Section 2.06. Declaration of Trust. The Delaware 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 statutory trust
under the Delaware Statutory Trust Act and that this Trust Agreement constitute the governing
instrument of such trust. Subject to Section 2.08 hereof, it is the intention of the parties
hereto that, solely for purposes of federal income taxes, state and local income and franchise
taxes, and any other taxes imposed on, measured by or based upon gross or net income, (i) if there
is only one Certificateholder, the Trust shall be treated as a disregarded entity separate from its
owner pursuant to § 301.7701-2(c)(2) of the Treasury Regulations, (ii) if there is more than one
Certificateholder, the Trust shall be treated as a partnership, (iii) the Notes shall be treated as
debt of the partnership and (iv) the provisions of this Trust Agreement shall be construed in
accordance with such intent. The parties hereto agree to take no action inconsistent with such
treatment, unless required otherwise by applicable law. Effective as of the date hereof, the
Delaware Trustee shall have all rights, powers and duties set forth herein and in the Delaware
Statutory Trust Act with respect to accomplishing the purposes of the Trust.



     Section 2.07. Liability of the Certificateholders. The Certificateholders shall not have any
personal liability for any liability or obligation of the Trust, except as provided in Article VIII
hereof. The Certificateholders shall be entitled to the same limitation on personal liability
extended to stockholders of corporations organized for profit under the Delaware General
Corporation Law.



4









 





     Section 2.08. Title to Trust Property.




     (a) Legal title to all the Trust Estate shall be vested at all times in the Trust as a
separate legal entity except where applicable law in any jurisdiction requires title to any
part of the Trust Estate to be vested in a trustee or trustees, in which case title shall be
deemed to be vested in the Eligible Lender Trustee, a co-trustee and/or a separate trustee,
as the case may be pursuant to the Eligible Lender Trust Agreement; 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 for the benefit of the Certificateholders pursuant to the
Eligible Lender Trust Agreement, subject to the obligations of the Trust under the Basic
Documents.




     (b) The Certificateholders shall not have legal title to any part of the Trust Estate.
No transfer by operation of law or otherwise of any interest of any Certificateholder shall
operate to terminate this Trust Agreement or the trust hereunder or entitle any transferee
to an accounting or to the transfer to it of any part of the Trust Estate.



     Section 2.09. Representations and Warranties of the Depositor. The Depositor hereby
represents and warrants to the Delaware Trustee solely as to itself that:




     (a) The Depositor is duly organized and validly existing as a limited liability company
in good standing under the laws of the State of Delaware, with power and authority to own
its properties and to conduct its business as such properties are currently owned and such
business is presently conducted.




     (b) The Depositor has the power and authority to execute and deliver this Trust
Agreement and to carry out its terms; the Depositor has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the Trust (or with the
Eligible Lender Trustee on behalf of the Trust) and the Depositor has duly authorized such
sale and assignment and deposit to the Trust (or to the Eligible Lender Trustee on behalf of
the Trust) by all necessary action; and the execution, delivery and performance of this
Trust Agreement has been duly authorized by the Depositor by all necessary action.




     (c) This Trust Agreement has been duly executed and delivered by the Depositor and
constitutes a legal, valid and binding obligation of the Depositor enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors’ rights and subject to general principles of equity.




     (d) The consummation of the transactions contemplated by this Trust Agreement and the
fulfillment of the terms hereof do not conflict with, result in any breach of any of the
terms and provisions of, or constitute (with or without notice or lapse of time or both) a
default under, the limited liability company agreement of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon



5









 





any of its properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or, to the
Depositor’s knowledge, any order, rule or regulation applicable to the Depositor of any
court or of any Federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its properties.



     Section 2.10. Federal Income Tax Allocations. Net income of the Trust for any Interest Period
as determined for Federal income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof) shall be allocated to the Certificateholders, pro rata based
upon their Percentage Interests.



     Section 2.11. The Indenture. The Depositor, each Certificateholder and the Delaware Trustee
hereby acknowledge that, when executed and delivered, the Indenture shall create a lien on the
Trust Estate, subject to the limitations set forth in the Indenture.



     Section 2.12. Covenants Regarding Operations. Notwithstanding anything to the contrary
herein, or any power conferred on the Delaware Trustee pursuant to this Trust Agreement or the
Delaware Statutory Trust Act, so long as the Indenture has not terminated in accordance with its
terms:




     (a) The Trust shall not engage in any business or activity other than in connection
with or relating to the activities permitted herein.




     (b) The Trust shall not consolidate or merge with or into any other entity or convey or
transfer its properties and assets substantially as an entirety to any entity, or pledge its
assets to any other entity, except as may be permitted pursuant to the Basic Documents.




     (c) The Trust shall not form, or cause to be formed, any subsidiaries.




     (d) To the fullest extent permitted by law, the Trust shall not dissolve or liquidate,
in whole or in part.




     (e) The Trust shall not be, become or hold itself out as being liable for the debts of
any other Person, or hold out its credit as being available to satisfy the obligation of any
other Person, the Trust and the Certificateholders will not act as agents for each other and
the Trust will not act as the agent of any Person in control of a Certificateholder.




     (f) The Trust shall act solely in its Trust name and through its duly authorized
officers or agents in the conduct of its business, prepare all Trust correspondence in the
Trust name, hold itself out as a separate entity from any other Person, conduct its business
so as not to mislead others as to the identity of the entity with which they are concerned,
correct any known misunderstanding regarding its separate identity.




     (g) The Trust shall maintain trust records, accounts, books of account and bank
accounts separate from those of any other person not commingle its trust records, accounts,
books of account or bank accounts with the organizational or other records,



6









 





accounts and books of account of any other corporation or entity and such records,
accounts and books of account shall reflect the separate existence of the Trust. The books
of the Trust may be kept (subject to any provision contained in any applicable statutes)
inside or outside the State of Delaware at such place or places as may be designated from
time to time by the Trust.




     (h) The Trust shall take such actions as may be necessary to authorize all of its
actions as may be required by law.




     (i) This Trust Agreement Section and Sections 2.03, 4.03 and 11.08 hereof shall not be
amended, altered, changed or repealed, except as may be permitted pursuant to the Basic
Documents.




     (j) The Trust shall (i) conduct its business in an office separate from that of the
Certificateholders and their respective Affiliates,, (ii) maintain stationery, invoices and
checks separate from any other person, (iii) pay all of its taxes, expenses and liabilities
only from its own funds, (iv) strictly comply with all organizational and statutory
formalities to maintain its separate existence, (v) pay the salaries of its own employees
and maintain a sufficient number of employees in light of its contemplated business
operations, (vi) maintain an arm’s length relationship with the Certificateholders and their
respective Affiliates and (vii) maintain separate financial statements from any other
Person. The Trust shall not (A) pledge any property or assets of the Trust (except pursuant
to the Basic Documents), lend or advance any moneys to any other person (other than trade
receivables in connection with the ordinary course of the activities of the Trust), (B)
except for investments in Investment Securities made pursuant to the Indenture, not make an
investment in or for the benefit of, or own or purchase any stock, obligations or securities
of or any interest in, or make any capital contribution to, any other Person, (C) make any
capital expenditures, (D) to the fullest extent permitted by law, take any Bankruptcy
Action, or (E) guarantee (directly or indirectly), endorse, acquire, assume or otherwise
become contingently liable (directly or indirectly) for, or pay from its funds, the
obligations or liabilities of any other Person.




     (k) The Trust shall allocate fairly and reasonably with any other Person expenses that
are shared with such Person including, without limitation, any overhead, rent, or other
compensation paid for shared or leased office space.




     (l) The Trust (i) has maintained and shall maintain its valid existence, rights and
franchises in good standing as a statutory trust under the laws of the State of Delaware 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
Trust Agreement and the Basic Documents; (ii) has observed and shall observe all procedures
required by this Trust Agreement and the laws of the State of Delaware; and (iii) has
otherwise complied and shall otherwise comply with the provisions of this Trust Agreement
and the Delaware Statutory Trust Act.




     (m) Financial and operational services, including, without limitation, maintenance of
the books and records of the Trust and preparation of the financial



7









 





statements shall be performed on behalf of the Trust by independent contractors. The
entity performing such services or incurring expenses in connection with such services for
the Trust shall receive compensation for such services rendered or expenses incurred in an
amount equal to the fair value of such services and expenses. To the extent that the Trust
leases premises from any Certificateholder or Affiliates of any Certificateholder, the Trust
shall pay appropriate compensation or rental. The Trust shall be directly responsible for
the costs of its own outside legal, auditing and other similar services. The amounts
deposited with the Trust and the cash flow expected to be received by the Trust under the
Indenture is expected to be sufficient to meet the fees and costs of the Delaware Trustee
and the Administrator for the Trust and the reasonably anticipated expenses and liabilities
of the Trust.




     (n) The annual financial statements of the Trust shall disclose the effects of these
transactions in accordance with generally accepted accounting principles. The consolidated
financial statements which consolidate the assets and earnings of any Certificateholder with
those of the Trust shall not state that the assets of the Trust shall be available to
creditors of a Certificateholder. The financial statements (if any) of the Trust shall not
state that the assets of the Trust are or will be available to pay creditors of any
Certificateholder or any other Affiliate of a Certificateholder.




     (o) Except for the Delaware Trustee’s standard practice regarding maintenance of funds
and assets, the funds and other assets of the Trust will not be commingled with those of any
other Person and will be maintained as identifiable assets held in its name.




     (p) The Trust shall not enter into any contract or agreement with any of its
Certificateholders or their respective Affiliates except on terms that are intrinsically
fair, commercially reasonable, and substantially similar to those that would be available on
an arms-length basis with third parties, and transact all business with its
Certificateholders and their respective Affiliates pursuant to enforceable agreements with
pricing and material terms established at the inception that will not be amendable except
with written consent of each of the parties to the agreement (provided that as of the date
of this Agreement, the Basic Documents shall be deemed to be agreements which meet, and
which create relationships that meet, the requirements of this clause).




     (q) The Trust shall maintain adequate capital for the normal obligations reasonably
foreseeable for the size and character of the activities of the Trust and in light of its
proposed operations and liabilities (provided that this clause shall not be deemed a
commitment by any Certificateholder to deposit additional amounts into the Trust).




     (r) None of the Trust, any Certificateholder or any Person on behalf of the Trust
shall, and none of them shall have the authority to, enter into any agreements, written or
otherwise, pursuant to which any Certificateholder or any of its Affiliates agrees to extend
credit, make loans or make payment or contributions to or for or assume, guaranty or
otherwise be obligated for the payment of obligations or performance of the Trust or hold
itself out as being liable for the debts of the Trust, or hold out its credit as being
available to satisfy the obligations of the Trust (other than the obligations of the



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Certificateholder to indemnify the Delaware Trustee under this Trust Agreement);
provided, however, that any Certificateholder may make any deposit to the Trust that such
Certificateholder determines to be in the Certificateholder’s best interest.




     (s) The Trust shall properly account for any transactions entered into between the
Trust and the Certificateholders and their respective Affiliates in its books and financial
records.




     (t) The Trust shall not knowingly perform any act that would subject (A) any
Certificateholder to liabilities of the Trust in any jurisdiction or (B) the Trust to
taxation as a corporation under relevant provisions of the Code.




     (u) The Trust shall not be maintained or used to abuse creditors or to perpetuate
fraud, injury or injustice to creditors of a Certificateholder or its Affiliates.




     (v) Except pursuant to the Basic Documents and trade payables incurred in the ordinary
course of the activities of the Trust, the Trust shall not incur any debt, secured or
unsecured, direct or contingent (including, without limitation, guaranteeing any
obligation).




     (w) To the fullest extent permitted by applicable law and except as otherwise expressly
provided elsewhere in this Trust Agreement, not take or refrain from taking any act which
would make it impossible to carry on the activities of the Trust set forth in Section 2.03
hereof.



ARTICLE III




TRUST CERTIFICATES AND TRANSFER OF INTERESTS




     Section 3.01. Initial Beneficial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 hereof and until the issuance of the Trust
Certificates, the Depositor shall be the sole beneficial owner of the Trust.



     Section 3.02. The Trust Certificates. The Trust Certificates shall be issued as physical
fully registered certificates in minimum Percentage Interests of 10%, substantially in the form of
Exhibit A hereto and shall be executed on behalf of the Trust by manual or facsimile signature of
an authorized officer of the Delaware Trustee, upon the order of the Depositor to the Delaware
Trustee. Such Trust Certificates shall represent the entire undivided beneficial ownership
interest in the Trust Estate, subject to the debt represented by the Notes. Trust Certificates
bearing the manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be valid and
binding obligations of the Trust, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such Trust Certificates or
did not hold such offices at the date of authentication and delivery of such Trust Certificates.
Upon issuance, the Trust Certificates shall be deemed fully-paid and, to the extent permitted by
applicable law, non-assessable.



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     Section 3.03. Authentication of Trust Certificate. Concurrently with the initial contribution
of the Depositor to the Trust pursuant to Section 2.05 hereof, the Delaware Trustee shall cause a
Trust Certificate, in an aggregate Percentage Interest of 100%, to be executed on behalf of the
Trust, authenticated and delivered to or upon the written order of the Depositor, signed by its
manager, president or any vice president, without further action by the Depositor. No Trust
Certificate shall entitle its holder to any benefit under this Trust Agreement, or shall be valid
for any purpose, unless there shall appear on such Trust Certificate a certificate of
authentication substantially in the form set forth in Exhibit A hereto executed by the Delaware
Trustee by manual signature; such authentication shall constitute conclusive evidence that such
Trust Certificate shall have been duly authenticated and delivered hereunder. All Trust
Certificates shall be dated the date of their authentication. No further Trust Certificates shall
be issued except pursuant to Section 3.04 or 3.05 hereof.



     Section 3.04. Registration of Transfer and Exchange of Trust Certificates. The Certificate
Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section
3.08 hereof, a Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Delaware Trustee shall provide for the registration of the Trust Certificates and of
transfers and exchanges of the Trust Certificates as herein provided. The Delaware Trustee shall
be the initial Certificate Registrar.



     Upon surrender for registration of transfer of any Trust Certificate at the office or agency
maintained pursuant to Section 3.08 hereof, the Delaware Trustee shall execute, authenticate and
deliver, in the name of the designated transferee or transferees, one or more new Trust
Certificates in authorized denominations of a like Percentage Interest dated the date of
authentication by the Delaware Trustee or any authenticating agent. At the option of a
Certificateholder, Trust Certificates may be exchanged for other Trust Certificates of authorized
denominations of a like Percentage Interest upon surrender of the Trust Certificates to be
exchanged at the office or agency maintained pursuant to Section 3.08 hereof.



     Every Trust Certificate presented or surrendered for registration of transfer or exchange
shall be accompanied by a written instrument of transfer in form satisfactory to the Delaware
Trustee and the Certificate Registrar duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Trust Certificate surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the Delaware Trustee in accordance with its
customary practice.



     No service charge shall be made for any registration of transfer or exchange of the Trust
Certificates, but the Delaware Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in connection with any
transfer or exchange of Trust Certificates.



     The Trust Certificates and any beneficial interest in such Trust Certificates may not be
acquired by or with the assets of (a) 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 Code; or (b) entities (including insurance
company general accounts) whose underlying assets include plan assets by reason of the investment
by any such plans, arrangements or accounts in such entities (a “Benefit Plan



10









 





Investor”). Each transferee of a Trust Certificate shall be required to represent
substantially in the form of the Representation Letter attached hereto as Exhibit B (i) that it is
not a Benefit Plan Investor and is not acquiring such Trust Certificate with the assets of a
Benefit Plan Investor; and (ii) that if such Trust Certificate is subsequently deemed to be a plan
asset, it will dispose of such Trust Certificate. Each Trust Certificate shall bear a legend
referring to the restrictions contained in this paragraph.



     Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates. If (a) any mutilated
Trust Certificate shall be surrendered to the Certificate Registrar, or if the Certificate
Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate, and (b) there shall be delivered to the Certificate Registrar and the Delaware Trustee
such security or indemnity as may be required by them to save each of them harmless, then in the
absence of notice that such Trust Certificate shall have been acquired by a bona fide purchaser,
the Delaware Trustee on behalf of the Trust shall execute and the Delaware Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Certificate, a new Trust Certificate of like Percentage Interest. In connection with
the issuance of any new Trust Certificate under this Section, the Delaware Trustee and the
Certificate Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate Trust Certificate
issued pursuant to this Section shall constitute conclusive evidence of ownership in the Trust, as
if originally issued, whether or not the lost, stolen or destroyed Trust Certificate shall be found
at any time.



     Section 3.06. Persons Deemed Owners. Prior to due presentation of a Trust Certificate for
registration of transfer, the Delaware Trustee or the Certificate Registrar and any agent of any
thereof may treat the Person in whose name any Trust Certificate shall be registered in the
Certificate Register as the owner of such Trust Certificate for the purpose of receiving
distributions pursuant to Section 5.01 hereof and for all other purposes whatsoever, and neither
the Delaware Trustee, the Certificate Registrar nor any agent of any thereof shall be bound by any
notice to the contrary.



     Section 3.07. Access to List of Certificateholders’ Names and Addresses. The Delaware Trustee
shall furnish or cause to be furnished to the Depositor, within 15 days after receipt by the
Delaware Trustee of a request therefore 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 aggregate Percentage Interests apply in writing to the Delaware
Trustee, and such application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Trust Agreement or under the Trust
Certificates and such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Delaware 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 Delaware Trustee
will promptly notify the Depositor by providing a copy of such application and a copy of the list
of Certificateholders produced in response thereto. Each Certificateholder, by receiving and
holding a Trust Certificate, shall be deemed to have agreed not to hold any of the Depositor, the
Certificate Registrar or the Delaware Trustee accountable or



11









 





liable by reason of disclosure of its name and address, regardless of the source form which
such information was derived.



     Section 3.08. Maintenance of Office or Agency. The Delaware Trustee shall maintain, either
with itself or with an affiliate, in Wilmington, Delaware, an office or offices or agency or
agencies where Trust Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Delaware Trustee in respect of the Trust Certificates and
the other Basic Documents may be served. The Delaware Trustee initially designates its Corporate
Trust Office as the location for such purposes. The Delaware Trustee shall give prompt written
notice to the Depositor and to the holders of the Trust Certificates of any change in the location
of the Certificate Register or any such office or agency.



     Section 3.09. Appointment of Certificate Paying Agent. The Certificate Paying Agent shall
make distributions to the Certificateholders from the amounts received from the Indenture Trustee
for such purpose pursuant to the Indenture and shall report the amounts of such distributions to
the Delaware 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 Delaware Trustee may revoke such power and remove the Certificate Paying Agent if the Delaware
Trustee determines in its sole discretion that the Certificate Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect. The Certificate Paying
Agent shall initially be the Delaware Trustee, and any co-paying agent chosen by the Delaware
Trustee, and acceptable to the Indenture Trustee (which consent shall not be unreasonably
withheld). The Delaware Trustee shall be permitted to resign as Certificate Paying Agent upon 30
days’ written notice to the Issuer Administrator. In the event that the Delaware Trustee shall no
longer be the Certificate Paying Agent, the Delaware Trustee shall, with the written consent of the
Depositor, appoint a successor to act as Certificate Paying Agent (which shall be a bank or trust
company). The Delaware Trustee shall cause such successor Certificate Paying Agent or any
additional Certificate Paying Agent appointed by the Delaware Trustee to execute and deliver to the
Delaware Trustee an instrument in which such successor Certificate Paying Agent or additional
Certificate Paying Agent shall agree with the Delaware 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 until such sums shall be paid to such Certificateholders. The Certificate
Paying Agent shall return all unclaimed funds to the Delaware Trustee and upon removal of a
Certificate Paying Agent such Certificate Paying Agent shall also return all funds in its
possession to the Delaware Trustee. The provisions of Sections 7.01, 7.03, 7.04, 7.05 and 8.01
hereof shall apply to the Delaware Trustee also in its role as Certificate Paying Agent, for so
long as the Delaware Trustee shall act as Certificate Paying Agent and, to the extent applicable,
to any other paying agent appointed hereunder. Any reference in this Trust Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context requires otherwise.



     Section 3.10. Restrictions on Transfer.




     (a) The Trust Certificates may not be offered or sold except to institutional
“accredited investors” (as defined in Rule 501(a)(1)-(3) or (7) under the Securities Act)



12









 





who are U.S. Persons (as defined in Section 7701(a)(30) of the Code) in reliance on an
exemption from the registration requirements of the Securities Act.




     The Trust Certificates have not been registered or qualified under the Securities Act,
or any state securities law. No transfer, sale, pledge or other disposition of any Trust
Certificate shall be made unless such disposition is made pursuant to an effective
registration statement under the Securities Act and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does not require
such registration or qualification. In the event that a transfer is to be made in reliance
upon an exemption from the Securities Act, the Delaware Trustee may require, in order to
assure compliance with the Securities Act, that the Certificateholder’s prospective
transferee certify to the Delaware Trustee in writing the facts surrounding such
disposition. Unless the Delaware 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 Delaware 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 Delaware Trustee or of the Trust.




     (b) Each Trust Certificate will bear a legend substantially to the following effect:



“THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(a)(1)-(3) or (7) UNDER THE SECURITIES 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 SECURITIES ACT.



THIS TRUST 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
THE INVESTMENT BY SUCH PLANS, ARRANGEMENTS OR ACCOUNTS IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE



13









 








MEANING OF SECTION 7701(a)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.



THIS TRUST CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR ANY INTEREST IN
CONSOLIDATION LOAN FUNDING II, LLC OR THE BANK OF NEW YORK (DELAWARE).



THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.”




     (c) No purported transfer of a Trust Certificate or any interest therein shall be valid
if immediately thereafter there would be more than 100 beneficial owners of Trust
Certificates, taking into account the provisions of Treasury Regulation 1.7701-1(h). Any
transfer which would violate the restrictions of this Section 3.01(c) shall be void ab
initio.



ARTICLE IV




ACTIONS BY DELAWARE TRUSTEE




     Section 4.01. Prior Notice to Certificateholders with Respect to Certain Matters. With
respect to the following matters, the Delaware Trustee shall not take action unless at least 30
days before the taking of such action, the Delaware Trustee shall have notified the
Certificateholders in writing of the proposed action and the Certificateholders shall not have
notified the Delaware Trustee in writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:




     (a) the initiation of any material claim or lawsuit by the Trust (except claims or
lawsuits brought in connection with the collection of the Financed Student Loans) and the
compromise of any material action, claim or lawsuit brought by or against the Trust (except
with respect to the aforementioned claims or lawsuits for collection of Financed Student
Loans);




     (b) the amendment of the Indenture by a Supplemental Indenture in circumstances where
the consent of any Holder is required;




     (c) the amendment of the Indenture by a Supplemental Indenture in circumstances where
the consent of any Holder is not required and such amendment materially adversely affects
the interest of the Certificateholders;




     (d) the amendment, change or modification of the Eligible Lender Trust Agreement, the
Administration Agreement, any other administration agreement or any Servicing Agreement,
except to cure any ambiguity or to amend or supplement any provision in a manner or add any
provision that would not materially adversely affect the interests of the
Certificateholders;




     (e) the appointment pursuant to the Indenture of a successor Note Registrar, Paying
Agent or Indenture Trustee or pursuant to this Trust Agreement of a successor



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Certificate Registrar, 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 Trust Agreement, as applicable;




     (f) the consent to the calling or waiver of any default of any Basic Document;




     (g) the consent to the assignment by the Eligible Lender Trustee, the Indenture
Trustee, the Depositor, the Issuer Administrator, any other administrator or any Servicer of
their respective obligations under any Basic Document;




     (h) except as provided in Article IX hereof, the dissolution, termination or
liquidation of the Trust, in whole or in part;




     (i) the merger or consolidation of the Trust with or into any other entity, or the
conveyance or transfer of all or substantially all of the Trust’s assets to any other
entity;




     (j) the causing of the Trust to incur, assume or guaranty any indebtedness other than
the Notes or as set forth in this Trust Agreement or the Basic Documents;




     (k) doing any act that conflicts with any other Basic Document;




     (l) doing any act which would make it impossible to carry on the ordinary business of
the Trust;




     (m) confessing a judgment against the Trust;




     (n) possessing Trust assets, or assigning the Trust’s right to property, for other than
a Trust purpose;




     (o) changing the Trust’s purpose and powers from those set forth in this Trust
Agreement; or




     (p) causing the Trust to lend any funds to any entity, unless permitted in this Trust
Agreement or the Basic Documents.



     In addition, the Trust shall not commingle its assets with those of the Depositor and shall
maintain its financial and accounting books and records separate from those of any other entity.
Except as expressly set forth herein, the Trust shall pay its indebtedness, operating expenses and
liabilities from its own funds, and the Trust shall not pay the indebtedness, operating expenses
and liabilities of any other Person. The Trust shall maintain appropriate minutes or other records
of all appropriate actions and shall maintain its office separate from the offices of the Depositor
and any of its affiliates. This Trust Agreement shall be the only agreement among the parties
hereto with respect to the creation, operation and termination of the Trust. For accounting
purposes, the Trust shall be treated as an entity separate and distinct from the Depositor. The
pricing and other material terms of all transactions and agreements to which the Trust is a party
shall be intrinsically fair to all parties thereto.



15









 





     Section 4.02. Action by the Certificateholders with Respect to Certain Matters. The Delaware
Trustee shall not have the power, except upon the direction of each Certificateholder, to (a)
remove or replace the Eligible Lender Trustee, any Servicer, the Issuer Administrator or any other
administrator or (b) except as expressly provided in the Basic Documents, sell the Financed Student
Loans after the termination of the Indenture. The Delaware Trustee shall take the actions referred
to in the preceding sentence only upon written instructions signed by the Certificateholders.



     Section 4.03. Action by the Certificateholders with Respect to Bankruptcy. The Delaware
Trustee shall not follow any direction of any Certificateholder to take any Bankruptcy Action. The
consent of the Delaware Trustee shall be required prior to the commencement by the Trust of any
Bankruptcy Action. The Delaware Trustee shall not be required to consent to the commencement by
the Trust of any Bankruptcy Action unless it has received a written certification from each
Certificateholder to the effect that the Certificateholder reasonably believes that the Trust is
then insolvent.



     Section 4.04. Restrictions on Certificateholders’ Power. The Certificateholders shall not
direct the Delaware 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 Delaware Trustee under this Trust Agreement
or any of the other Basic Documents or would be contrary to Section 2.03 hereof nor shall the
Delaware Trustee be permitted to follow any such direction, if given.



     Section 4.05. Majority Control. Except as expressly provided herein, any action that may be
taken by the Certificateholders under this Trust Agreement may be taken by the Certificateholders
of Trust Certificates evidencing not less than a majority of the Percentage Interests. Except as
expressly provided herein, any written notice of the Certificateholders delivered pursuant to this
Trust Agreement shall be effective if signed by Certificateholders of the Trust Certificates
evidencing not less than a majority of the aggregate Percentage Interests at the time of the
delivery of such notice.



ARTICLE V




APPLICATION OF TRUST FUNDS; CERTAIN DUTIES




     Section 5.01. Application of Trust Funds.




     (a) On each date that the Delaware Trustee, on behalf of the Trust, receives any funds
from the Surplus Fund (a “Distribution Date”), the Delaware Trustee shall first pay to
itself from such funds the Delaware Trustee’s fees, expenses, indemnities and other amounts
not otherwise paid or reimbursed to the Delaware Trustee pursuant to the Indenture or
otherwise as to which the Delaware Trustee is entitled to be paid or reimbursed hereunder,
and second distribute the remaining amount to the Certificateholders on such Distribution
Date, pro rata based upon their Percentage Interests. All such funds to be distributed to
the Delaware Trustee shall be wired in accordance with wiring instructions provided to the
Indenture Trustee by the Delaware Trustee.



16









 






     (b) In the event that any withholding tax is imposed on the Trust’s payment (or
allocations of income) to a Certificateholder, such tax shall reduce the amount otherwise
distributable to the Certificateholder in accordance with this Section. The Delaware
Trustee is hereby authorized and directed to retain from amounts otherwise distributable to
such Certificateholders sufficient funds for the payment of any tax that is legally owed by
the Trust (but such authorization shall not prevent the Delaware 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 Delaware
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 (b). In the event
that a Certificateholder wishes to apply for a refund of any such withholding tax, the
Delaware Trustee shall reasonably cooperate with such Certificateholder in making such claim
so long as such Certificateholder agrees to reimburse the Delaware Trustee for any
out-of-pocket expenses incurred.



     Section 5.02. Method of Payment. Subject to Section 9.01(c) hereof, distributions required to
be made to Certificateholders on any Distribution Date shall be made to each Certificateholder of
record on the preceding Record Date by wire transfer, in immediately available funds, to the
account of such Certificateholder at a bank or other entity having appropriate facilities therefor,
if such Certificateholder shall have provided to the Certificate Registrar appropriate written
instructions signed by two authorized officers, if any, at least five Business Days prior to such
Distribution Date, which may be standing instructions. Notwithstanding the foregoing, the final
distribution in respect of any Trust Certificate will be payable only upon presentation and
surrender of such Trust Certificate at the Corporate Trust Office of the Delaware Trustee or such
other location specified in writing to the Certificateholder thereof.



     Section 5.03. No Segregation of Moneys; No Interest. Subject to Section 5.01 hereof, moneys
received by the Delaware Trustee hereunder need not be segregated in any manner except to the
extent required by law, Section 2.12 hereof, or any Basic Document and may be deposited under such
general conditions as may be prescribed by law, and the Delaware Trustee shall not be liable for
any interest thereon.



     Section 5.04. Accounting and Reports to the Holders, Certificateholder, the Internal Revenue
Service and Others. The Delaware Trustee shall deliver to the Certificateholders (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 to
enable the Certificateholder to prepare its Federal and state income tax returns. Consistent with
the Trust’s characterization for Federal income tax purposes, so long as there is only one
Certificateholder, as a disregarded entity, no Federal income tax return shall be filed on behalf
of the Trust unless either (a) the Trust, the Indenture Trustee, the Delaware Trustee, the
Depositor and, if different, the Certificateholder receive an opinion of counsel based on a change
in applicable law occurring after the date hereof that the Code requires such a filing; (b) the



17









 





Internal Revenue Service shall determine that the Trust is required to file such a return; or
(c) there should be more than one Certificateholder. In the event that the Trust is required to
file tax returns, the Delaware Trustee shall elect under Section 1278 of the Code to include in
income currently any market discount that accrues with respect to the Financed Student Loans. The
Delaware Trustee shall, if there is more than one Certificateholder or if it is otherwise required
to file a return in accordance with the immediately preceding sentence, prepare or cause to be
prepared any tax returns required to be filed by the Trust consistent with maintaining its
characterization, for Federal income tax purposes, as set forth in Section 2.06 hereof 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 such characterization. The
Delaware Trustee shall remit such returns to Certificateholders at least five days before such
returns are due to be filed. The Certificateholders, or any other such party required by law,
shall promptly sign such returns and deliver such returns after signature to the Delaware Trustee
and such returns shall be filed by, or at the direction of, the Delaware Trustee with the
appropriate tax authorities. In no event shall the Certificateholders be liable for any
liabilities, costs or expenses of the Trust arising out of the application of any tax law,
including federal, state, foreign or local income or excise taxes or any other tax imposed on or
measured by income (or any interest, penalty or addition with respect thereto or arising from a
failure to comply therewith), except for any such liability, cost or expense attributable to the
Certificateholder’s breach of its obligations under this Trust Agreement.



     Section 5.05. Signature on Returns; Tax Matters Partner. The Delaware Trustee shall sign on
behalf of the Trust the tax returns of the Trust, unless applicable law requires a
Certificateholder to sign such documents, in which case such documents shall be signed by such
Certificateholder.



ARTICLE VI




AUTHORITY AND DUTIES OF DELAWARE TRUSTEE




     Section 6.01. General Authority. The Delaware Trustee is authorized and directed to execute
and deliver the Basic Documents to which the Trust is to be a party and each certificate or other
document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to
be a party, in each case, in such form as the Depositor shall approve as evidenced conclusively by
the Delaware Trustee’s execution thereof, and, on behalf of the Trust, to direct the Indenture
Trustee to authenticate and deliver any Notes issued pursuant to a Supplemental Indenture. The
Delaware Trustee is also authorized and directed on behalf of the Trust (a) to originate or acquire
the Financed Student Loans and to transfer legal title to the Financed Student Loans to the
Eligible Lender Trustee in accordance with the Eligible Lender Trust Agreement, (b) to follow the
direction of and cooperate with any Servicer or subservicer to the extent necessary to enable such
Servicer or subservicer to fulfill its obligations under the related Servicing Agreement or
Subservicing Agreement and (c) to cooperate with the Issuer Administrator and any other
administrator in submitting, pursuing and collecting any claims to and with the Department with
respect to any Interest Subsidy Payments and Special Allowance Payments relating to the Financed
Student Loans.



18









 





     In addition to the foregoing, the Delaware Trustee is authorized, but shall not be obligated,
to take all actions required of the Trust pursuant to the Basic Documents. The Delaware Trustee is
further authorized from time to time to take such action as the Issuer Administrator or any other
administrator directs or instructs with respect to the Basic Documents and is directed to take such
action to the extent that the Issuer Administrator or such other administrator is expressly
required pursuant to the Basic Documents to cause the Delaware Trustee to act.



     Section 6.02. General Duties. It shall be the duty of the Delaware Trustee to discharge (or
cause to be discharged) all its responsibilities pursuant to the terms of this Trust Agreement and
to administer the Trust in the interest of the Certificateholders, subject to and in accordance
with the provisions of this Trust Agreement and the other Basic Documents. Without limiting the
foregoing, the Delaware Trustee shall on behalf of the Trust file and prove any claim or claims
that may exist on behalf of the Trust against the Depositor in connection with any claims paying
procedure as part of an insolvency or a receivership proceeding involving the Depositor.
Notwithstanding the foregoing, the Delaware Trustee shall be deemed to have discharged its duties
and responsibilities hereunder and under the other Basic Documents to the extent the Issuer
Administrator or any other administrator has agreed in the Administration Agreement or the related
administration agreement, as applicable, to perform any act or to discharge any duty of the
Delaware Trustee hereunder or under any other Basic Document, and the Delaware Trustee shall not be
held liable for the default or failure of the Issuer Administrator or any other administrator to
carry out its obligations under the Administration Agreement or related administration agreement,
as applicable. The Delaware Trustee shall have no obligation to administer, service or collect the
Financed Student Loans or to maintain, monitor or otherwise supervise the administration, servicing
or collection of the Financed Student Loans.



     Section 6.03. Action Upon Instruction.




     (a) Subject to Article IV and Sections 2.12 and 7.01 hereof and in accordance with the
terms of the Basic Documents, the Certificateholders may by written instruction direct the
Delaware Trustee in the management of the Trust. Such direction may be exercised at any
time by written instruction of the Certificateholders pursuant to this Trust Agreement.




     (b) The Delaware Trustee shall not be required to take any action hereunder or under
any other Basic Document if the Delaware Trustee shall have reasonably determined, or shall
have been advised by counsel, that such action is likely to result in liability on the part
of the Delaware Trustee or is contrary to the terms hereof or of any other Basic Document or
is otherwise contrary to law.




     (c) Whenever the Delaware Trustee is unable to determine the appropriate course of
action between alternative courses of action permitted or required by the terms of this
Trust Agreement or under any other Basic Document, the Delaware Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be adopted, and to
the extent the Delaware Trustee acts in good faith in accordance with any written
instruction of the Certificateholders received, the Delaware Trustee shall not be liable on



19









 





account of such action to any Person. If the Delaware Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter period of time
as reasonably may be specified in such notice or may be necessary under the circumstances)
it may, but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Trust Agreement or the other Basic Documents, as it shall deem to be
in the best interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.




     (d) In the event that the Delaware Trustee is unsure as to the application of any
provision of this Trust Agreement or any other Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any other
applicable provision, or in the event that this Trust Agreement permits any determination by
the Delaware Trustee or is silent or is incomplete as to the course of action that the
Delaware Trustee is required to take with respect to a particular set of facts, the Delaware
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 Delaware Trustee
acts or refrains from acting in good faith in accordance with any such instruction received,
the Delaware Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Delaware Trustee shall not have received appropriate instruction within 10
days of such notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action, not inconsistent with this Trust Agreement or
the other Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or inaction.



     Section 6.04. No Duties Except as Specified in this Trust Agreement, any other Basic Document
or in Instructions.




     (a) The Delaware 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 Delaware Trustee is a party,
except as expressly provided by the terms of this Trust Agreement, or in any document or
written instruction received by the Delaware Trustee pursuant to Section 6.03 hereof; and no
implied duties or obligations shall be read into this Trust Agreement or any other Basic
Document against the Delaware Trustee. The Delaware Trustee shall have no responsibility for
filing any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any Commission filing for the Trust or to record this Trust
Agreement or any other Basic Document. The Delaware 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 it
in its individual capacity that are not related to the ownership or the administration of
the Trust Estate.



20









 






     (b) The duties and responsibilities of the Delaware Trustee shall be as provided by
this Trust Agreement. No provision of this Trust Agreement shall require the Delaware
Trustee to expand or risk its own funds or otherwise incur any 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 for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to it. The
Delaware Trustee shall not be liable for its acts or omissions hereunder except as a result
of gross negligence or willful misconduct. To the extent that, at law or in equity, the
Delaware Trustee has duties (including fiduciary duties) and liabilities relating thereto to
the Trust or to the Certificateholders, the Delaware Trustee shall not be liable to the
Trust or to any Certificateholder for the Delaware Trustee’s good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to the extent
that they restrict the duties and liabilities of the Delaware Trustee otherwise existing at
law or in equity, are agreed by the Depositor and the Certificateholders to replace such
other duties and liabilities of the Delaware Trustee.



     Section 6.05. No Action Except Under Specified Documents or Instructions. The Delaware
Trustee shall not manage, control, use, sell, service, dispose of or otherwise deal with any part
of the Trust Estate except (a) in accordance with the powers granted to and the authority conferred
upon the Delaware Trustee pursuant to this Trust Agreement, (b) in accordance with this Trust
Agreement and (c) in accordance with any document or instruction delivered to the Delaware Trustee
pursuant to Section 6.03 hereof.



     Section 6.06. Restrictions.




     (a) The Delaware Trustee shall not take any action (i) that is inconsistent with the
purposes of the Trust set forth in Section 2.03 hereof or (ii) that, to the actual knowledge
of the Delaware Trustee, would result in the Trust’s becoming taxable as a corporation for
Federal income tax purposes. The Certificateholders shall not direct the Delaware Trustee
to take action that would violate the provisions of this Section.




     (b) The Delaware Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or dissimilar
to the business of the Trust, and the Trust and the Certificateholders shall have no rights
by virtue of this Trust Agreement in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper. The Delaware Trustee shall
not be obligated to present any particular investment or other opportunity to the Trust even
if such opportunity is of a character that, if presented to the Trust, could be taken by the
Trust, and the Delaware Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. The Delaware Trustee may engage in or be interested in any
financial or other transaction with the Depositor or any Affiliate of the Depositor, or may
act as depository, trustee or agent for securities or other obligations of the Depositor or
its Affiliates.



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ARTICLE VII




CONCERNING THE DELAWARE TRUSTEE




     Section 7.01. Acceptance of Trusts and Duties. The Delaware Trustee accepts the appointment
as trustee of the Trust hereby created and agrees to perform its duties hereunder with respect to
such appointment but only upon the terms of this Trust Agreement. The Delaware Trustee also agrees
to disburse all moneys actually received by it constituting part of the Trust Estate upon the terms
of this Trust Agreement and the other Basic Documents. The Delaware Trustee shall not be
answerable or accountable hereunder or under any other Basic Document under any circumstances,
except (i) for its own willful misconduct or gross negligence or (ii) in the case of the inaccuracy
of any representation or warranty contained in Section 7.03 hereof expressly made by the Delaware
Trustee. In particular, but not by way of limitation (and subject to the exceptions set forth in
the preceding sentence):




     (a) the Delaware Trustee shall not be liable for any error of judgment made by a
responsible officer of the Delaware Trustee;




     (b) the Delaware 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 Depositor,
the Issuer Administrator, any other administrator or the Certificateholder;




     (c) no provision of this Trust Agreement or any other Basic Document shall require the
Delaware 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 Delaware 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 Delaware Trustee be liable for indebtedness
evidenced by or arising under any of the Basic Documents, including the principal of and
interest on the Notes;




     (e) the Delaware Trustee shall not be responsible for or in respect of the validity or
sufficiency of this Trust Agreement or for the due execution hereof by the Depositor or for
the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate
or for or in respect of the validity or sufficiency of the Basic Documents, other than the
certificate of authentication on the Trust Certificates, and the Delaware Trustee shall in
no event assume or incur any liability, duty, or obligation to any Holder or to any
Certificateholder, other than as expressly provided for herein and in the other Basic
Documents;




     (f) the Delaware Trustee shall not be liable for the action or inaction, default or
misconduct of the Eligible Lender Trustee, the Issuer Administrator, any other
administrator, any seller, the Indenture Trustee or any Servicer under any of the other
Basic Documents or otherwise and the Delaware Trustee shall have no obligation or liability
to perform the obligations of the Trust under this Trust Agreement or the other



22









 





Basic Documents that are required to be performed by the Issuer Administrator under the
Administration Agreement or any other administrator under the related administration
agreement, the Indenture Trustee under the Indenture or any Servicer under any Servicing
Agreement; and




     (g) the Delaware Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Trust Agreement, or to institute, conduct or defend any
litigation under this Trust Agreement or to institute, conduct or defend any litigation
under this Trust Agreement or otherwise or in relation to this Trust Agreement or any other
Basic Document, at the request, order or direction of any Certificateholders, unless the
Certificateholders have offered to the Delaware Trustee security or indemnity satisfactory
to it against the costs, expenses and liabilities that may be incurred by the Delaware
Trustee therein or thereby. The right of the Delaware Trustee to perform any discretionary
act enumerated in this Trust Agreement or in any other Basic Document shall not be construed
as a duty, and the Delaware Trustee shall not be answerable for other than its gross
negligence or willful misconduct in the performance of any such act.



     Section 7.02. Furnishing of Documents. The Delaware 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 Delaware Trustee under the Basic Documents.



     Section 7.03. Representations and Warranties. The Delaware Trustee hereby represents and
warrants to the Depositor, for the benefit of the Certificateholders, that:




     (a) It is a bank and trust company duly organized and validly existing in good standing
under the laws of the State of Delaware. It has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Trust Agreement.




     (b) It has taken all corporate action necessary to authorize the execution and delivery
by it of this Trust Agreement, and this Trust Agreement will be executed and delivered by
one of its officers who is duly authorized to execute and deliver this Trust Agreement on
its behalf.




     (c) Neither the execution nor the delivery by it of this Trust Agreement, nor the
consummation by it of the transactions contemplated hereby nor compliance by it with any of
the terms or provisions hereof will contravene any Delaware 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 bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.



     Section 7.04. Reliance; Advice of Counsel.




     (a) The Delaware Trustee shall incur no liability to anyone in acting upon any
signature, instrument, direction, notice, resolution, request, consent, order, certificate,
report, opinion, bond, or other document or paper believed by it to be genuine and believed
by it to be signed by the proper party or parties. The Delaware Trustee may



23









 





accept a certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any fact or
matter the method of the determination of which is not specifically prescribed herein, the
Delaware 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 Delaware 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 Trust Agreement or the other Basic Documents, the
Delaware Trustee (i) may act directly or through its agents or attorneys pursuant to
agreements entered into with any of them, and the Delaware 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 Delaware Trustee with reasonable care, and (ii) may consult with
counsel, accountants and other skilled Persons to be selected with reasonable care and
employed by it. The Delaware Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and not contrary to this Trust Agreement or any
other Basic Document.



     Section 7.05. Not Acting in Individual Capacity. Except as provided in this Article, in
accepting the duties hereby created, The Bank of New York (Delaware) acts solely as Delaware
Trustee hereunder and not in its individual capacity and, subject to Section 6.04(c) hereof, all
Persons having any claim against the Delaware Trustee by reason of the transactions contemplated by
this Trust Agreement or any other Basic Document shall look only to the Trust Estate for payment or
satisfaction thereof.



     Section 7.06. Delaware Trustee not Liable for Trust Certificates or Financed Student Loans.
The recitals contained herein and in the Trust Certificates (other than the signature and
countersignature of the Delaware Trustee on the Trust Certificates) shall be taken as the
statements of the Depositor and the Delaware Trustee assumes no responsibility for the correctness
thereof. The Delaware Trustee makes no representations as to the validity or sufficiency of this
Trust Agreement, the Trust Certificates or any other Basic Document (other than the signature and
countersignature of the Delaware Trustee on the Trust Certificate) or the Notes, or of any Financed
Student Loan or related documents. Subject to Section 6.04(c) hereof, the Delaware Trustee shall
at no time have any responsibility for or with respect to the legality, validity, enforceability
and eligibility for Guarantee payments, federal reinsurance, Interest Subsidy Payments or Special
Allowance Payments, as applicable, in respect of any Financed Student Loan, or for or with respect
to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to
the Certificateholders under this Trust Agreement or the Holders under the Indenture, including the
existence and contents of any computer or other record of any Financed Student Loan; the validity
of the assignment of any Financed Student Loan to the Delaware Trustee on behalf of the Trust; the
completeness of any Financed Student Loan; the performance or enforcement (except as expressly set
forth in any Basic Document) of any Financed Student Loan; the compliance by the Depositor, the
Eligible Lender Trustee, any Servicer, the Issuer Administrator or any other administrator with any
warranty or representation



24









 





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 Eligible Lender Trustee, the Issuer
Administrator, any other administrator, the Indenture Trustee or any Servicer or any subservicer
taken in the name of the Delaware Trustee.



     Section 7.07. Delaware Trustee May Own Trust Certificates and Notes. The Delaware Trustee in
its individual or any other capacity may become the owner or pledgee of Trust Certificates or Notes
and may deal with the Depositor, the Issuer Administrator, any other administrator, the Indenture
Trustee or any Servicer in transactions with the same rights as it would have if it were not
Delaware Trustee.



ARTICLE VIII




COMPENSATION OF DELAWARE TRUSTEE




     Section 8.01. Delaware Trustee’s Fees and Expenses. Pursuant to Section 5.01(a) hereof, (i)
the Delaware Trustee shall receive from the Trust as compensation (which shall not be limited by
any provision of law in regard to the compensation of a trustee of an express trust) for its
services hereunder such fees as may heretofore and from time to time hereafter be agreed upon in a
separate fee agreement between the Depositor and the Delaware Trustee and (ii) the Delaware Trustee
shall be entitled to be reimbursed by the Trust pursuant to Section 5.01(a) hereof for its other
reasonable expenses hereunder, to the extent provided in such separate agreement and including,
without limitation, the reasonable compensation, expenses and disbursements of such agents,
representatives, accountants, experts and counsel as the Delaware Trustee may employ in connection
with the exercise and performance of its rights and duties under this Trust Agreement, the Basic
Documents or any other agreement contemplated by any of the foregoing, whether or not the
transactions contemplated hereby and thereby are consummated.



     Section 8.02. Indemnification. The Trust agrees, to the fullest extent permitted by
applicable law, to assume liability for, and hereby indemnifies and holds harmless the Delaware
Trustee, its officers, directors and employees from and against any and all liabilities,
obligations, losses, damages, taxes, claims, actions, suits, costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever which may be
imposed on, incurred by or asserted at any time against the Delaware Trustee, its officers,
directors and employees in any way relating to or arising out of the Trust Estate, any of the
properties included therein, the acceptance, termination or administration of the Trust Estate or
the Trust or any action or inaction of the Delaware Trustee or the Trust hereunder or under the
Basic Documents or any other agreement contemplated by any of the foregoing or any certificate of a
Certificateholder, except only that the Trust shall not be required so to assume liability for any
matters in any way relating to or arising out of the gross negligence or willful misconduct of the
Delaware Trustee, its officers, directors or employees, and provided that the Trust and the
Delaware Trustee agree that such assumption of liability for liabilities, obligations, losses,
damages, taxes, claims, actions, such costs expenses or disbursements of any kind shall be direct
and primary and not that of a guarantor. If any item assumed by the Trust under this Section 8.02
is also subject to indemnification by another party to any of the documents specifically referenced
herein, the Delaware Trustee shall first make demand on such party for



25









 





indemnification of any such item but shall not be obligated to exhaust its remedies
thereunder. The indemnities contained in this Section 8.02 shall survive the resignation or
removal of the Delaware Trustee and shall survive the termination of the Trust and this Trust
Agreement. Such indemnification and reimbursement shall be paid solely pursuant to Section 5.01(a)
hereof.



     Section 8.03. Certificateholders To Assume Liability. To the extent not paid by the Trust
pursuant to Section 5.01(a) hereof and to the fullest extent permitted by applicable law, the
Certificateholders, pro rata based on their respective Percentage Interests, shall pay or cause to
be paid (or reimburse the Delaware Trustee for) (a) all reasonable fees and expenses of the
Delaware Trustee required to be paid or reimbursed under Section 8.01 hereof and (b) all amounts
required to be paid pursuant to Section 8.02 hereof. The liabilities and indemnities contained in
this Section 8.03 are for the benefit of the Delaware Trustee, in its individual capacity, and its
officers, directors and employees, and shall not be construed as imposing any liabilities on any
Certificateholder or any affiliate thereof for any expense or liability of the Trust to third
parties. Neither the Certificateholders nor the Issuer Administrator shall have liabilities for
the expenses and liabilities of the Trust (except as otherwise provided in this Trust Agreement
with respect to the Delaware Trustee, in its individual capacity) and all such expenses and
liabilities shall be payable solely from the Trust Estate.



ARTICLE IX




TERMINATION OF TRUST AGREEMENT




     Section 9.01. Termination of Trust Agreement.




     (a) This Trust Agreement (other than Article VIII hereof) shall terminate and the Trust
shall dissolve and terminate and be of no further force or effect upon the final
distribution by the Indenture Trustee and the Delaware Trustee of all moneys or other
property or proceeds of the Trust Estate in accordance with the terms of the Indenture and
Article V hereof, respectively. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder shall not (i) operate to terminate this Trust Agreement
or the Trust, nor (ii) entitle such Certificateholder’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 (iii) otherwise affect the
rights, obligations and liabilities of the parties hereto.




     (b) Except as provided in Section 9.01(a) hereof, neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.




     (c) Notice of any termination of the Trust, specifying the Distribution Date upon which
the Certificateholders shall surrender their Trust Certificates to the Certificate Paying
Agent for payment of the final distribution and cancellation, shall be given promptly by the
Delaware Trustee by letter to the Certificateholders mailed within five Business Days of
receipt of notice of such termination given pursuant to the Indenture, stating (i) the
Distribution Date upon which final payment of the Trust Certificate shall be made upon
presentation and surrender of the Trust Certificate at the office of the Certificate Paying
Agent therein designated, (ii) the amount of any such



26









 





final payment and (iii) that payments are being made only upon presentation and
surrender of the Trust Certificate at the office of the Certificate Paying Agent therein
specified. The Delaware Trustee shall give such notice to the Certificate Registrar (if
other than the Delaware Trustee) and the Certificate Paying Agent at the time such notice is
given to the Certificateholders. Upon presentation and surrender of the Trust Certificates,
the Certificate Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Distribution Date pursuant to Section 5.01 hereof. Upon termination
of this Trust Agreement and the dissolution of the trust, the Delaware Trustee shall file a
certificate of cancellation with the Secretary of State.



     Section 9.02. Failure to Surrender Certificates Upon Termination. In the event that all of
the Certificateholders shall not surrender their Trust Certificates for cancellation within six
months after the date specified in the above-mentioned written notice, the Delaware Trustee shall
give a second written notice to the remaining Certificateholders to surrender their Trust
Certificates for cancellation and receive the final distribution with respect thereto. If within
one year after the second notice the Trust Certificates shall not have been surrendered for
cancellation, the Delaware Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Trust Agreement. Any funds remaining in the Trust after exhaustion of such
remedies and no later than five years after the first such notice shall be distributed by the

Delaware Trustee to the Depositor.



ARTICLE X




SUCCESSOR DELAWARE TRUSTEES AND ADDITIONAL DELAWARE TRUSTEES




     Section 10.01. Eligibility Requirements for Delaware Trustee. The Delaware Trustee shall at
all times be a corporation or association (a) meeting the requirements of Section 3807(a) of the
Delaware Statutory Trust Act; (b) being subject to supervision or examination by Federal or state
authorities; (c) having (or having a parent which has) a rating of at least investment grade by the
Rating Agencies; and (d) that (i) is independent and is not a stockholder or other securityholder
(whether direct, indirect or beneficial), customer or supplier of the Trust or any of its
affiliates; (ii) is not a director, officer, employee, affiliate, member, manager or associate of
the Trust or any of its affiliates (other than in its capacity as the Delaware Trustee for the
Trust); (iii) is not related to any Person referred to in clauses (i) or (ii) above; (iv) is not a
trustee, conservator or receiver for the Trust or any of its affiliates (other than in its capacity
as Delaware Trustee for the Trust); and (v) in the ordinary course of its business, acts as a
trustee for other special purpose business and statutory trusts similar to the Trust and is
otherwise independent from the Trust and its affiliates (except as provided above); provided that
affiliates as used in this clause (d) does not include the interests of the Delaware Trustee and
its affiliates in each other. If the Delaware Trustee shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and surplus of the Delaware
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 Delaware Trustee shall cease to be
eligible in accordance with the provisions



27









 





of this Section, the Delaware Trustee shall resign immediately in the manner and with the
effect specified in Section 10.02 hereof.



     Section 10.02. Resignation or Removal of Delaware Trustee. The Delaware Trustee may at any
time resign and be discharged from its appointment as trustee of the Trust hereby created by giving
written notice thereof to the Issuer Administrator. Upon receiving such notice of resignation, the
Issuer Administrator shall promptly appoint a successor Delaware Trustee meeting the eligibility
requirements of Section 10.01 hereof by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Delaware Trustee, and one copy to the successor
Delaware Trustee. If no successor Delaware Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the resigning Delaware
Trustee petition any court of competent jurisdiction for the appointment of a successor Delaware
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 Delaware Trustee from any obligations
otherwise imposed on it under this Trust Agreement until such successor has in fact assumed such
appointment.



     If at any time the Delaware Trustee shall cease to be eligible in accordance with the
provisions of Section 10.01 hereof and shall fail to resign after written request therefor by the
Issuer Administrator, or if at any time a Bankruptcy Action with respect to the Delaware Trustee
shall have occurred and be continuing, then the Issuer Administrator may remove the Delaware
Trustee. If the Issuer Administrator shall remove the Delaware Trustee, under the authority of the
immediately preceding sentence, the Issuer Administrator shall promptly appoint a successor
Delaware Trustee, by written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Delaware Trustee, so removed and one copy to the successor Delaware
Trustee, and shall remit payment of all fees owed to the outgoing Delaware Trustee.



     Any resignation or removal of the Delaware Trustee and appointment of a successor Delaware
Trustee pursuant to any of the provisions of this Section shall not become effective until
acceptance of appointment by the successor Delaware Trustee pursuant to Section 10.03 hereof and
payment of all fees and expenses owed to the outgoing Delaware Trustee.



     The Delaware Trustee agrees to provide all reasonable cooperation and assistance to the
Depositor in the event of appointment of a successor Delaware Trustee.



     Section 10.03. Successor Delaware Trustee. Any successor Delaware Trustee appointed pursuant
to Section 10.02 hereof shall execute, acknowledge and deliver to the Issuer Administrator and to
its predecessor Delaware Trustee an instrument accepting such appointment under this Trust
Agreement, and thereupon the resignation or removal of the predecessor Delaware Trustee shall
become effective and such successor Delaware 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 Trust Agreement, with like effect as if originally named as Delaware Trustee. The
predecessor Delaware Trustee shall upon payment of its fees, expenses and indemnities deliver to
the successor Delaware Trustee all documents, statements, moneys and properties held by it under
this Trust Agreement; and the Issuer Administrator and the predecessor Delaware Trustee shall
execute and deliver such instruments and do such other



28









 





things as may reasonably be required for fully and certainly vesting and confirming in the
successor Delaware Trustee all such rights, powers, duties and obligations.



     No successor Delaware Trustee shall accept appointment as provided in this Section unless at
the time of such acceptance such successor Delaware Trustee shall be eligible pursuant to Section
10.01 hereof.



     Upon acceptance of appointment by a successor Delaware Trustee pursuant to this Section, the
Issuer Administrator shall mail notice of the succession of such Delaware Trustee to all
Certificateholders, the Indenture Trustee and the Holders. If the Issuer Administrator shall fail
to mail such notice within 10 days after acceptance of appointment by the successor Delaware
Trustee, the successor Delaware Trustee shall cause such notice to be mailed at the expense of the
Issuer Administrator.



     Any successor Delaware Trustee appointed hereunder shall promptly file an amendment to the
Certificate of Trust identifying its name and principal place of business in the State of Delaware.



     Section 10.04. Merger or Consolidation of Delaware Trustee. Any corporation into which the
Delaware 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 Delaware Trustee
shall be a party, or any corporation succeeding to all or substantially all the corporate trust
business of the Delaware 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 Delaware Trustee hereunder; provided that such corporation
shall be eligible pursuant to Section 10.01 hereof.



     Section 10.05. Appointment of Co-Delaware Trustee or Separate Delaware Trustee.
Notwithstanding any other provisions of this Trust Agreement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the Trust may at the time
be located, the Issuer Administrator and the Delaware Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons approved by the
Delaware Trustee, meeting the eligibility requirements of Section 10.01 hereof, to act as
co-trustee, jointly with the Delaware 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 Issuer Administrator and the Delaware Trustee may
consider necessary or desirable. If the Issuer Administrator shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the Delaware Trustee
acting alone shall have the power to make such appointment. No co-trustee or separate trustee
under this Trust Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to clauses (d) through (e) of Section 10.01 hereof and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.03
hereof.



     Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and
act subject to the following provisions and conditions:



29









 






     (a) all rights, powers, duties, and obligations conferred or imposed upon the Delaware
Trustee shall be conferred upon and exercised or performed by the Delaware 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 Delaware 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 Delaware 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 Delaware Trustee;




     (b) no trustee under this Trust Agreement shall be personally liable by reason of any
act or omission of any other trustee under this Trust Agreement; and




     (c) the Issuer Administrator and the Delaware 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 Delaware Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively as if given to
each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this
Trust Agreement and the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Delaware Trustee or separately, as may be
provided therein, subject to all the provisions of this Trust Agreement, specifically including
every provision of this Trust Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Delaware Trustee. Each such instrument shall be filed with the
Delaware Trustee and a copy thereof given to the Issuer Administrator.



     Any separate trustee or co-trustee may at any time appoint the Delaware 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 Trust Agreement on its behalf and in its name. If any
separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised by the Delaware
Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.



ARTICLE XI




MISCELLANEOUS




     Section 11.01. Supplements and Amendments. This Trust Agreement may be amended by the
Depositor and the Delaware Trustee without the consent of any of the Holders or the
Certificateholders, to cure any ambiguity, to correct or supplement any provisions in this Trust
Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Trust Agreement or modifying in any manner the rights of the Holders
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 Holder or
Certificateholder.



30









 





     This Trust Agreement may also be amended from time to time by the Depositor and the Delaware
Trustee (a) with the consent of the Holders of Notes evidencing not less than a majority of the
aggregate outstanding principal balance of the Notes and (b) with the consent of the
Certificateholders of Certificates evidencing not less than a majority of the aggregate Percentage
Interests, for the purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Trust Agreement or of modifying in any manner the rights of the Holders
or the Certificateholders; 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 on
Financed Student Loans or distributions that shall be required to be made for the benefit of the
Holders or the Certificateholders or (ii) reduce the aforesaid percentage of the aggregate
outstanding amount of the Notes and the Percentage Interest of Certificates required to consent to
any such amendment, without the consent of all the outstanding Holders and Certificateholders.



     Promptly after the execution of any such amendment or consent, the Delaware Trustee shall
furnish written notification of the substance of such amendment or consent to each
Certificateholder and the Indenture Trustee.



     It shall not be necessary for the consent of the Certificateholders or the Holders, as the
case may be, 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 Trust 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
Delaware Trustee may prescribe.



     Prior to the execution of any amendment to this Trust Agreement, the Delaware Trustee shall be
entitled to receive and rely upon an opinion of counsel stating that the execution of such
amendment is authorized or permitted by this Trust Agreement and that all conditions precedent
thereto have been met. The Delaware Trustee may, but shall not be obligated to, enter into any
such amendment which affects the Delaware Trustee’s own rights, duties or immunities under this
Trust Agreement or otherwise.



     Section 11.02. 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 hereof. 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 Trust Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Estate.



     Section 11.03. Limitations on Rights of Others. The provisions of this Trust Agreement are
solely for the benefit of the Delaware Trustee, the Depositor, each Servicer, the
Certificateholders, the Issuer Administrator, any other administrator and, to the extent expressly
provided herein, the Indenture Trustee and the Holders, and nothing in this Trust Agreement,
whether express or implied, shall be construed to give to any other Person any legal or equitable



31









 





right, remedy or claim in the Trust Estate or under or in respect of this Trust Agreement or
any covenants, conditions or provisions contained herein.



     Section 11.04. Notices.




     (a) Unless otherwise expressly specified or permitted by the terms hereof, all notices
shall be in writing and shall be deemed given upon receipt by the intended recipient or
three Business Days after mailing if mailed by certified mail, postage prepaid (except that
notice to the Delaware Trustee shall be deemed given only upon actual receipt by the
Delaware Trustee), if to the Delaware Trustee, addressed to its Corporate Trust Office, 502
White Clay Center, Route 273, Newark, Delaware 19711 and if to the Depositor, addressed to
Consolidation Loan Funding II, LLC, 9477 Waples Street, Suite 100, San Diego, California
92121, Attention: Ryan Katz or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.




     (b) Any notice required or permitted to be given to a Certificateholder shall be given
by first-class mail, postage prepaid, at the address of such Certificateholder as shown in
the Certificate Register. Any notice so mailed within the time prescribed in this Trust
Agreement shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.



     Section 11.05. Severability. Any provision of this Trust Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.



     Section 11.06. Separate Counterparts. This Trust Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same instrument.



     Section 11.07. Successors And Assigns. All covenants and agreements contained herein shall be
binding upon, and inure to the benefit of, the Depositor and its successors, the 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 11.08. No Petition. To the fullest extent permitted by applicable law and
notwithstanding any other provision to the contrary of this Trust Agreement or any other agreement,
document or instrument executed by the Trust and notwithstanding any prior termination of this
Trust Agreement:




     (a) the Depositor will not, prior to the date which is one year and one day after the
termination of the Indenture, take any Bankruptcy Action; and



32









 






     (b) the Delaware Trustee (not in its individual capacity but solely as Delaware
Trustee), by entering into this Trust Agreement, the Certificateholders, by accepting a
Trust Certificate, and the Indenture Trustee and each Holder by accepting the benefits of
this Trust Agreement, hereby covenant and agree that they will not, prior to the date which
is one year and one day after the termination of the Indenture, take any Bankruptcy Action.



     Section 11.09. No Recourse. Each Certificateholder by accepting a Trust Certificate
acknowledges that such Certificateholder’s Trust Certificates represent beneficial interests in the
Trust only and does not represent interests in or obligations of the Depositor, any Servicer, the
Issuer Administrator, any other administrator, any Servicer, 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 or contemplated in this Trust Agreement, the Trust Certificates or the
other Basic Documents.



     Section 11.10. Headings. The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or provisions hereof.



     Section 11.11. Governing Law. This Trust 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.



33









 





     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.



	 	 	 	 	 
	 	 	THE BANK OF NEW YORK (DELAWARE), in its

individual capacity and as Delaware Trustee,
	 
	 	 	 	 
	

	 	By:	 	/s/ Patrick Burns
	

	 		 	

	

	 	Name:	 	Patrick Burns
	

	 	 	 	

	

	 	Title:	 	Senior Vice President
	

	 	 	 	

	 
	 	 	 	 
	 	 	CONSOLIDATION LOAN
FUNDING II, LLC, as Depositor,
	 
	 	 	 	 
	 	 	By: CLF II  MANAGEMENT CORP., as Manager
	 
	 	 	 	 
	

	 	By:	 	 /s/ Ryan D. Katz
	

	 	 	 	

	

	 	 	 	Ryan D. Katz, President






34









 






EXHIBIT A




[FORM OF TRUST CERTIFICATE]




     THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS TRUST
CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1) TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(a)(1)-(3) or (7) UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT, OR (2) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT.



     THIS TRUST 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 THE INVESTMENT BY SUCH PLANS,
ARRANGEMENTS OR ACCOUNTS IN SUCH ENTITIES. FURTHER, THIS TRUST CERTIFICATE MAY BE TRANSFERRED ONLY
TO A UNITED STATES PERSON WITHIN THE MEANING OF SECTION 7701(a)(30) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.



     THIS TRUST CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR AN INTEREST IN
CONSOLIDATION LOAN FUNDING II, LLC OR THE BANK OF NEW YORK (DELAWARE).



     THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.



     TRANSFER OF THIS TRUST CERTIFICATE IS SUBJECT TO FURTHER RESTRICTIONS AS SET FORTH IN SECTION
3.10 OF THE TRUST AGREEMENT.



			
	 
NUMBER 1-[     ]
	 	 
PERCENTAGE INTEREST: [     ]%






Higher Education Funding I




     TRUST CERTIFICATE evidencing a fractional undivided beneficial interest in the Trust, as
defined below. (This Trust Certificate does not represent an interest in or obligation of the



A-1









 





     Depositor (as defined below) or the Delaware Trustee (as defined below) or any of their
respective affiliates, except to the extent described below.)



     THIS CERTIFIES THAT                      is the registered owner of a nonassessable, fully-paid,
___% fractional undivided beneficial interest in the Higher Education Funding I (the “Trust”), a
statutory trust formed under the laws of the State of Delaware by Consolidation Loan Funding II,
LLC, a Delaware limited liability company (the “Depositor”). The Trust was created pursuant to a
Trust Agreement, dated as of January 1, 2004 (the “Trust Agreement”), between the Depositor and The
Bank of New York (Delaware), a Delaware banking corporation, not in its individual capacity but
solely as Delaware Trustee on behalf of the Trust (the “Delaware Trustee”). To the extent not
otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in
Indenture; which also contains rules as to usage that shall be applicable herein.



     This Certificate is one of the duly authorized Certificates designated as “Higher Education
Funding I Trust Certificates” (herein called the “Certificates” or the “Trust Certificates”) issued
under the Trust Agreement. This Trust Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the holder of this Trust
Certificate by virtue of the acceptance hereof assents and by which such holder is bound. The
property of the Trust includes a pool of student loans (the “Financed Student Loans”), all moneys
paid thereunder, certain bank accounts and the proceeds thereof and certain other rights under the
Trust Agreement and the Servicing Agreements and all proceeds of the foregoing. The rights of the
holders of the Trust Certificates to the assets of the Trust are subordinated to the rights of the
holders of the Notes, as set forth in the Basic Documents.



     It is the intent of the Depositor, the Servicers, the Issuer Administrator and the
Certificateholders that, solely for purposes of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed on, measured by or based upon gross or net income, (i)
if there is only one Certificateholder, the Trust shall be treated as a disregarded entity separate
from its owner pursuant to § 301.7701-2(c)(2) of the Treasury Regulations, (ii) if there is more
than one Certificateholders, the Trust shall be treated as a partnership, (iii) the Notes be
treated as debt of the partnership and (iv) the provisions of the Trust Agreement shall be
construed in accordance with such intent. The Certificateholders by acceptance of a Trust
Certificate, agree to treat, and to take no action inconsistent with such treatment for such tax
purposes.



     Each Certificateholder by its acceptance of a Trust Certificate covenants and agrees that such
Certificateholder will not, prior to the date which is one year and one day after the termination
of the Indenture, institute against the Trust, or join in any institution against the Trust of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation proceedings, or
other proceedings under any United States Federal or state bankruptcy or similar law in connection
with any obligations relating to the Trust Certificates, the Notes, the Trust Agreement or any of
the other Basic Documents.



     The Trust Certificate does not represent an obligation of, or an interest in, the Depositor,
the Indenture Trustee, any Servicer, the Issuer Administrator, any other administrator, the
Eligible Lender Trustee, the Delaware Trustee or any affiliates of any of them, and no recourse



A-2









 





may be had against such parties or their assets, except as may be expressly set forth or
contemplated herein, in the Trust Agreement or in the other Basic Documents. In addition, this
Trust Certificate is not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections with respect to the Financed Student Loans, all as more
specifically set forth in the Indenture. A copy of each of the Indenture 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 the Certificateholder upon request.



     The Delaware Trustee, the Certificate Registrar and any agent of the Delaware Trustee or the
Certificate Registrar may treat the person in whose name this Trust Certificate is registered as
the owner hereof for all purposes, and none of the Delaware Trustee or the Certificate Registrar or
any such agent shall be affected by any notice to the contrary.



     Each purchaser of this Trust Certificate shall be required, prior to purchasing a Trust
Certificate, to execute the Purchaser’s Representation and Warranty Letter in the form attached to
the Trust Agreement as Exhibit B.



     This Trust Certificate shall be construed in accordance with the laws of the State of
Delaware, without reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such laws.



     Unless the certificate of authentication hereon shall have been executed by an authorized
officer of the Delaware Trustee or its authenticating agent, by manual signature, this Trust
Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement or the
Indenture or be valid for any purpose.



     IN WITNESS WHEREOF, the Delaware Trustee on behalf of the Trust and not in its individual
capacity has caused this Trust Certificate to be duly executed as of the date set forth below.



	 	 	 	 	 	 	 
	 	 	HIGHER EDUCATION FUNDING I
	 
	 	 	 	 	 	 
	

	 	By:
	 	THE BANK OF NEW YORK (DELAWARE),
	 	 
	

	 	 	 	  not in its individual capacity but solely as
	 	 
	

	 	 	 	  Delaware Trustee.	 	 
	 	 	By:                                                                      
	 	 	Name:                                                                 
	 	 	Title:                                                                   





     Date:           ,       2004



A-3









 





TRUSTEE’S CERTIFICATE OF AUTHENTICATION




     This is the Trust Certificate referred to in the within-mentioned Trust Agreement.



	 	 	 	 	 	 	 
	

	 	By:
	 	THE BANK OF NEW YORK (DELAWARE),
	 	 
	

	 	 	 	  not in its individual capacity but solely as
	 	 
	

	 	 	 	  Delaware Trustee.	 	 
	 	 	By:                                                                      
	 	 	Name:                                                                 
	 	 	Title:                                                                   





     Date:           ,       2004



A-4









 





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 Trust Certificate, and all rights thereunder, hereby irrevocably constituting and appointing



                                                                                                                                                                                                                  
Attorney to transfer said Trust Certificate on the books of the Certificate Registrar, with full power of substitution in the premises.



Dated:




	 	 	 
	

	 	                                                                                               *
	

	 	Signature Guaranteed:
	 
	 	 
	

	 	                                                                                               *






* NOTICE: The signature to this assignment must correspond with the name as it appears upon the
face of the within Trust Certificate in every particular, without alteration, enlargement or any
change whatever.




A-5









 








EXHIBIT B




[FORM OF PURCHASER’S REPRESENTATION AND WARRANTY LETTER]




The Bank of New York (Delaware), as Certificate Registrar

502 White Clay Center, Route 273

Newark, Delaware 19711

Attention: Corporate Trust Administration



     Re: Higher Education Funding I Trust Certificates



Ladies and Gentlemen:




     In connection with our proposed purchase of the Higher Education Funding I Trust Certificate
(the “Trust Certificate”) issued under the Trust Agreement, dated as of January 1, 2004 (the
“Agreement”), between Consolidation Loan Funding II, LLC, as depositor (the “Depositor”) and The
Bank of New York (Delaware), 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) or (7) under
the Securities Act of 1933, as amended (the “Securities Act”) and is acquiring the Trust
Certificates for its own institutional account or for the account of an institutional accredited
investor.



     2. It is not (a) 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 (the “Code”), or
(b) an entity (including an insurance company general account) whose underlying assets include plan
assets by reason of the investment by such plans, arrangements or accounts 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 Trust Certificates. It
understands the full nature and risks of an investment in the Trust Certificates and based upon its
present and projected net income and net worth, it believes that it can bear the economic risk of
an immediate or future loss of its entire investment in the Trust Certificates.



     5. It understands that the Trust Certificates will be offered in a transaction not involving
any public offering within the meaning of the Securities Act, and that, if in the future it decides
to resell, pledge or otherwise transfer any Trust Certificates, such Trust Certificates may be
resold, pledged or transferred only (a) to a person who the seller reasonably believes is an
institutional “accredited investor” as defined in Rule 501(a)(1)-(3) or (7) 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.



B-1









 





     6. It understands that the Trust Certificate will bear a legend substantially to the following
effect:



“THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”) OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS
TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS AND (1) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(a)(1)-(3) or (7) UNDER THE SECURITIES 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 SECURITIES ACT.



THIS TRUST 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
THE INVESTMENT BY SUCH PLANS, ARRANGEMENTS OR ACCOUNTS IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE MEANING OF
SECTION 7701(a)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.



THE TRUST CERTIFICATE DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR ANY INTEREST IN
CONSOLIDATION LOAN FUNDING II, LLC OR THE BANK OF NEW YORK (DELAWARE).



THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.



     7. It is acquiring the Trust 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 Trust 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 Trust Certificate, any interest in any Trust Certificate or any other



B-2









 





similar security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of any Trust Certificate, any interest in any Trust Certificate or any other similar
security from, or otherwise approached or negotiated with respect to any Trust Certificate, any
interest in any Trust 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 Trust 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 Trust 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







B-3









 








EXHIBIT C




CERTIFICATE OF TRUST



OF



Higher Education Funding I




     This Certificate of Trust of Higher Education Funding I (the “Trust”) is being duly executed
and filed by The Bank of New York (Delaware), as trustee, to form a statutory trust under the
Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.) (the “Act”).



     1. Name: The name of the statutory trust formed hereby is Higher Education Funding I.



     2. Delaware Trustee: The name and business address of the trustee of the Trust in the State
of Delaware is The Bank of New York (Delaware), 502 White Clay Center, Route 273, Newark, Delaware
19711, Attention: Corporate Trust Administration.



     3. Effective Date: This Certificate of Trust shall be effective upon its filing with the
Secretary of State of the State of Delaware.



     IN WITNESS WHEREOF, the undersigned has executed this Certificate of Trust in accordance with
Section 3811(a) of the Act.



	 	 	 
	

	 	THE BANK OF NEW YORK (DELAWARE), not in its

individual capacity but solely as trustee.
	 
	 	 
	

	 	By:                                                                      
	

	 	Name:                                                                 
	

	 	Title:                                                                   







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