1
Exhibit 4.4
TRANSFER AND SERVICING AGREEMENT
among
PNC STUDENT LOAN TRUST I
as Issuer,
PNC BANK, NATIONAL ASSOCIATION
as Transferor, Master Servicer and Administrator
and
THE FIRST NATIONAL BANK OF CHICAGO
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of June __, 1997
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TABLE OF CONTENTS
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ARTICLE I
Definitions and Usage
ARTICLE II
Conveyance of Financed Student Loans
SECTION 2.1 Conveyance of Initial Financed
Student Loans.........................................................
SECTION 2.2 Conveyance of Exchanged Student Loans......................................
SECTION 2.3 Conveyance of Certain Financed Student
Loans by the Eligible Lender Trustee
to or upon Order of the Transferor....................................
SECTION 2.4 Security Agreement.........................................................
ARTICLE III
The Financed Student Loans
SECTION 3.1 Representations and Warranties of
Transferor with Respect to the Financed
Student Loans.........................................................
SECTION 3.2 Repurchase upon Breach;
Reimbursement.........................................................
SECTION 3.3 Custody of Financed Student Loan
Files.................................................................
SECTION 3.4 Duties of Master Servicer as Custodian.....................................
SECTION 3.5 Instructions; Authority to Act.............................................
SECTION 3.6 Custodian's Indemnification................................................
SECTION 3.7 Effective Period and Termination...........................................
SECTION 3.8 Appointment of Subcustodian................................................
ARTICLE IV
Administration and Servicing of Financed Student Loans
SECTION 4.1 Duties of Master Servicer..................................................
SECTION 4.2 Collection of Financed Student Loan
Payments..............................................................
SECTION 4.3 Realization upon Financed Student
Loans.................................................................
SECTION 4.4 No Impairment..............................................................
SECTION 4.5 Purchase of Financed Student Loans;
Reimbursement.........................................................
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SECTION 4.6 Servicing Fee; ............................................................
SECTION 4.7 Administrator's Certificate................................................
SECTION 4.8 Annual Statement as to Compliance;
Notice of Default.....................................................
SECTION 4.9 Annual Independent Certified Public
Accountants' Report...................................................
SECTION 4.10 Access to Certain Documentation and
Information Regarding Financed
Student Loans.........................................................
SECTION 4.11 Master Servicer and Administrator
Expenses................................................................
SECTION 4.12 Appointment of Servicer....................................................
SECTION 4.13 Subservicing Agreements ...................
SECTION 4.14 Incentive Programs ........................................................
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.1 Establishment of Trust Accounts............................................
SECTION 5.2 Collections................................................................
SECTION 5.3 Application of Collections.................................................
SECTION 5.4 Additional Deposits........................................................
SECTION 5.5 Distributions..............................................................
SECTION 5.6 Reserve Account............................................................
SECTION 5.7 Statements to Certificateholders
and Noteholders.......................................................
SECTION 5.8 Expense Account............................................................
SECTION 5.9 Note Distribution Account and Certificate
Distribution Account..................................................
SECTION 5.10 Monthly Advances...........................................................
SECTION 5.11 Certificate Interest.......................................................
ARTICLE VI
The Transferor and the Master Servicer
SECTION 6.1 Representations of Transferor and Master Service...........................
SECTION 6.2 Existence..................................................................
SECTION 6.3 Liability and Indemnities..................................................
SECTION 6.4 [Reserved].................................................................
SECTION 6.5 Merger or Consolidation of, or Assumption
of the Obligations of, the Transferor, the
Administrator or the Master Servicer..................................
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SECTION 6.6 Limitation on Liability of Transferor,
Master Servicer and Others............................................
SECTION 6.7 Transferor May Own Certificates or
Notes.................................................................
SECTION 6.8 Master Servicer Not to Resign..............................................
ARTICLE VII
The Administrator
SECTION 7.1 Representations of the Administrator.......................................
SECTION 7.2 Liability and Indemnities..................................................
SECTION 7.3 Administrator Not to Resign................................................
ARTICLE VIII
Default
SECTION 8.1 Master Servicer Default; Administrator
Default...............................................................
SECTION 8.2 Appointment of Successor...................................................
SECTION 8.3 Notification to Noteholders and
Certificateholders....................................................
SECTION 8.4 Waiver of Past Defaults....................................................
ARTICLE IX
Termination
SECTION 9.1 Termination................................................................
ARTICLE X
[Reserved]
ARTICLE XI
Miscellaneous
SECTION 11.1 Amendment..................................................................
SECTION 11.2 Protection of Interests in Trust...........................................
SECTION 11.3 Notices....................................................................
SECTION 11.4 Assignment.................................................................
SECTION 11.5 Limitations on Rights of Others............................................
SECTION 11.6 Severability...............................................................
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SECTION 11.7 Separate Counterparts......................................................
SECTION 11.8 Headings...................................................................
SECTION 11.9 Governing Law..............................................................
SECTION 11.10 Assignment to Indenture Trustee............................................
SECTION 11.11 Nonpetition Covenants......................................................
SECTION 11.12 Limitation of Liability of Eligible
Lender Trustee and Indenture
Trustee...............................................................
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Financed Student Loans
SCHEDULE B Location of Financed Student Loan Files
SCHEDULE C Scheduled Principal Balance Table
EXHIBIT A Form of Report to Noteholders
EXHIBIT B Form of Report to Certificateholders
EXHIBIT C Form of Administrator's Certificate
EXHIBIT D Form of Assignment of Initial Financed
Student Loans
EXHIBIT E Transfer Agreement
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TRANSFER AND SERVICING AGREEMENT (the "Agreement") dated as
of June __, 1997, among PNC STUDENT LOAN TRUST I, a Delaware business trust
(the "Issuer"), PNC Bank, National Association, a national banking association
(the "Transferor," the "Master Servicer" or the "Administrator" in such
respective capacities) and, THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association, solely as eligible lender trustee and not in its
individual capacity (the "Eligible Lender Trustee").
WHEREAS the Issuer desires to acquire student loans
originated or acquired by the Transferor in the ordinary course of business;
WHEREAS the Eligible Lender Trustee is willing to hold legal
title to, and serve as eligible lender trustee with respect to, such student
loans on behalf of the Issuer; and
WHEREAS the Master Servicer and the Administrator are willing
to service such student loans and undertake certain administrative functions
with respect thereto; and
WHEREAS the Issuer is authorizing on the date hereof for
issuance its Series 1997-2 Notes; and
WHEREAS the parties hereto are entering into this Transfer
and Servicing Agreement in connection with such Series 1997-2 Notes.
NOW THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree, intending to be
legally bound hereby, as follows:
ARTICLE I
Definitions and Usage
Capitalized terms used but not defined herein are defined in
Appendix A hereto, which also contains rules as to usage and construction that
shall be applicable herein.
ARTICLE II
Conveyance of Financed Student Loans
SECTION 2.1. Conveyance of Initial Financed Student Loans.
(a) In consideration of the Issuer's delivery to or
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upon the order of the Transferor on the Closing Date of $________, the
Transferor agrees to, and the Transferor does hereby, as evidenced by a duly
executed written assignment in the form of Exhibit D, contribute, transfer,
assign, set over and otherwise convey to the Eligible Lender Trustee on behalf
of the Issuer, without recourse (subject to the obligations herein):
(i) all right, title and interest in and to the Financed
Student Loans listed on Schedule A to this Agreement (the "Initial
Financed Student Loans") and all obligations of the Obligors
thereunder, including all moneys paid thereunder(other than Interest
Subsidy Payments and Special Allowance Payments payable through the
Cut-off Date), and all written communications received by the
Transferor with respect thereto and still retained by Transferor in
accordance with its retention policies (including borrower
correspondence, notices of death, disability or bankruptcy and
requests for deferrals or forbearance), after the Cut-off Date;
(ii) all right, title and interest in all funds on deposit from
time to time in the Trust Accounts and in all investments and proceeds
thereof (including all income thereon); and
(iii) the proceeds of any and all of the foregoing.
(b) On the Closing Date, the Transferor shall have delivered
(A) to the Rating Agencies an Opinion of Counsel with respect to the transfer
of the Initial Financed Student Loans and (B) to the Eligible Lender Trustee
and the Indenture Trustee the Opinion of Counsel required by Section
11.2(i)(1).
SECTION 2.2. Conveyance of Exchanged Student Loans. (a)
Subject to the conditions set forth in paragraph (b) below, in consideration of
the Eligible Lender Trustee's conveyance on the related Exchange Date to or
upon the order of the Transferor of Financed Student Loans pursuant to Section
2.3(d), the Transferor shall contribute, transfer, assign, set over and
otherwise convey to the Eligible Lender Trustee on behalf of the Issuer,
without recourse (subject to the obligations herein), all right, title and
interest in and to each Exchanged Student Loan, and all obligations of the
Obligors thereunder, including all moneys paid thereunder (other than Interest
Subsidy Payments and Special Allowance Payments payable through the related
Subsequent Cut-off Date), and all written communications received by the
Transferor with respect thereto and still retained by the Transferor in
accordance with its retention policies (including borrower correspondence,
notices of death, disability or bankruptcy and requests for deferrals or
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forbearances), on and after the related Subsequent Cut-off Date, and the
proceeds of any and all of the foregoing.
(b) The Transferor shall transfer to the Issuer the Exchanged
Student Loans for a given Exchange Date and the other property and rights
related thereto described in paragraph (a) above only upon the satisfaction of
each of the following conditions on or prior to such Exchange Date:
(i) the Transferor shall have delivered to the Eligible
Lender Trustee and the Indenture Trustee a duly executed written
assignment (including an acceptance by the Eligible Lender Trustee and
the Indenture Trustee) in substantially the form of Exhibit E (each, a
"Transfer Agreement"), which shall include supplements to Schedule A,
listing such Exchanged Student Loans;
(ii) the Transferor shall have delivered, at least two days'
prior to such Exchange Date, notice of such transfer to the Eligible
Lender Trustee, the Indenture Trustee and the Rating Agencies,
including a listing of the aggregate principal balance of such
Exchanged Student Loans;
(iii) the Transferor shall, to the extent required by Section
2.3(d), have deposited in the Collection Account all collections
received in respect of the Exchanged Student Loans on and after each
applicable Subsequent Cut-off Date and all required Exchange
Adjustments;
(iv) as of such Exchange Date, the Transferor was not
insolvent nor will it have been made insolvent by such exchange nor is
it aware of any pending insolvency;
(v) such exchange will not result in a material adverse
Federal or state tax consequence to the Issuer relating to its tax
classification or the Noteholders, considered as a whole, relating to
a change in the characterization of the Notes;
(vi) no Event of Default shall have occurred and be
continuing as of such Exchange Date and no Master Servicer Default or
Administrator Default shall have occurred and be continuing as of such
Exchange Date;
(vii) the Exchange Period shall not have terminated;
(viii) the Transferor shall have delivered to the Indenture
Trustee and the Eligible Lender Trustee an Officers' Certificate
confirming the satisfaction of each condition precedent specified in
this paragraph (b);
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(ix) the Transferor shall have taken any action required to
maintain the first perfected ownership interest of the Issuer in the
Trust Estate and the first perfected security interest of the
Indenture Trustee in the Financed Student Loans; and
(x) no selection procedures believed by the Transferor to be
adverse to the interests of the Certificateholders or the Noteholders
shall have been utilized in selecting the Exchanged Student Loans;
provided, however, that the Transferor shall not incur any liability as a
result of transferring Exchanged Student Loans on any Exchange Date at a time
when the condition set forth in clause (v) was not satisfied, if at the time of
such transfer the Authorized Officer of the Transferor bearing responsibility
for tax matters was not aware of any fact that would reasonably suggest that
such condition would not be satisfied as of such date.
Upon the satisfaction of the conditions set forth in this
Section 2.2(b), the Eligible Lender Trustee shall execute and deliver to the
Transferor an Assignment, substantially in the form of Annex B to the Transfer
Agreement.
SECTION 2.3. Conveyance of Certain Financed Student Loans by
the Eligible Lender Trustee to or upon Order of the Transferor. (a) Upon
receipt of written notice (or telephonic or facsimile notice promptly followed
by written notice) from the Transferor (or from the Master Servicer on behalf
of the Transferor) by the Eligible Lender Trustee and the Indenture Trustee,
the Eligible Lender Trustee will convey to the Transferor the Financed Student
Loans identified in such notice, which are to be repaid with proceeds of the
consolidation loans to be made by or on behalf of the Transferor.
Simultaneously with each such conveyance by the Eligible Lender Trustee and the
making by the Transferor of each such consolidation loan, the Transferor shall
deposit into the Collection Account an amount equal to the aggregate Purchase
Amount of such Financed Student Loans, as payment for such conveyance.
(b) Upon receipt of written notice (or telephonic or
facsimile notice promptly followed by written notice) from the Transferor (or
from the Master Servicer on behalf of the Transferor) by the Eligible Lender
Trustee and the Indenture Trustee, that a Financed Student Loan that is a
Serial Loan is to be conveyed to the holder of one or more student loans to
which such Financed Student Loan is serial, the Eligible Lender Trustee shall
convey to the order of the Transferor or the Transferor's designee the Financed
Student Loan(s) identified in such notice. Simultaneously with each such
conveyance by the
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Eligible Lender Trustee, the Transferor shall deposit, or cause the transferee
of such Financed Student Loan(s) to deposit, into the Collection Account an
amount equal to the aggregate Purchase Amount of such Financed Student Loan(s)
in consideration for such conveyance.
(c) Upon receipt of written notice (or telephonic or
facsimile notice followed by written notice) from the Master Servicer by the
Eligible Lender Trustee and the Indenture Trustee, the Eligible Lender Trustee
will convey to the Master Servicer the Financed Student Loans identified in
such notice, which are to be transferred to a Guarantor in consideration of a
related Guarantee Payment. Within one Business Day of its receipt of the
related Guarantee Payment, the Master Servicer shall deposit, or cause to be
deposited, into the Collection Account an amount equal to such Guarantee
Payment, as payment of such conveyance.
(d) (i) Notwithstanding anything else contained in this
Section 2.3 to the contrary, during the Exchange Period, subject to the
conditions set forth in Section 2.2(b), in lieu of depositing into the
Collection Account the Purchase Amount of a Financed Student Loan pursuant to
Section 2.3(a), the Transferor may, at its option, transfer to the Eligible
Lender Trustee on behalf of the Trust, as an Exchanged Student Loan, the
consolidation loan being made by the Transferor relating to the Financed
Student Loan for which it is being exchanged. Any Financed Student Loan being
so transferred to the Transferor shall be deemed transferred prior to the
origination of the related consolidation loan.
(ii) Additionally, during the Exchange Period, subject to the
conditions set forth in Section 2.2(b), in lieu of depositing into the
Collection Account the Purchase Amount of a Financed Student Loan pursuant to
Section 2.3(b), the Transferor may, at its option, transfer to the Eligible
Lender Trustee on behalf of the Trust, as an Exchanged Student Loan, one or
more Serial Loans owned by the Transferor; provided that each such Exchanged
Student Loan satisfies the following criteria: (A) the Exchanged Student Loan
was originated under the same load program as the Financed Student Loan for
which it is being exchanged and entitles the holder thereof to receive interest
based on the same interest rate index as the Financed Student Loan for which it
is being exchanged, (B) the Exchanged Student Loan will not, at any level of
such interest rate index, have an interest rate that is less than the Financed
Student Loan for which it is being exchanged and (C) the average principal
balance per borrower of the Exchanged Serial Loans being transferred into the
Trust on each Exchange Date and the existing Financed Student Loans to which
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they are serial is within 10% (plus or minus) of the average principal balance
per borrower of the Financed Student Loans being transferred to the Transferor
on such Exchange Date and the existing Federal Loans owned by the Transferor to
which they are serial to a Financed Student Loan owned by the Trust.
(e) If on any Exchange Date the aggregate outstanding
principal balance as of the related Subsequent Cut-off Date of all the
Exchanged Student Loans being exchanged on such Exchange Date is less than that
of all the Financed Student Loans for which they are being exchanged plus any
Issuer Consolidation Payments being made on such Exchange Date, an amount equal
to such difference (the "Exchange Adjustment") shall be deposited by the
Transferor into the Collection Account on the related Exchange Date.
(f) If on any Exchange Date the aggregate outstanding
principal balance as of the related subsequent Cut-off Date of all the
Exchanged Student Loans that are Consolidation Loans being exchanged on such
Exchange Date is greater than that of all the Financed Student Loans for which
they are being exchanged, upon written request of the Transferor an amount up
to the amount of such excess (the "Issuer Consolidation Payments") shall be
remitted by the Indenture Trustee to the Transferor from Consolidation
Prepayments and deposit in the Collection Account.
SECTION 2.4. Security Agreement. Although it is the intent of
the parties to this Agreement that the conveyance of the Transferor's right,
title and interest in and to the Financed Student Loans pursuant to this
Agreement shall constitute a contribution and transfer and not a loan, in the
event that such conveyance is deemed to be a loan, it is the intent of the
parties to this Agreement that the Transferor shall be deemed to have granted
to the Eligible Lender Trustee, on behalf of the Issuer, a first priority
perfected security interest in all of the Transferor's right, title and
interest in, to and under the Financed Student Loans and the proceeds thereof,
and that this Agreement shall constitute a security agreement under applicable
law.
ARTICLE III
The Financed Student Loans
SECTION 3.1. Representations and Warranties of Transferor
with Respect to the Financed Student Loans. The Transferor hereby makes the
following representations and warranties as to the Financed Student Loans on
which the Issuer
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is deemed to have relied in acquiring (through the Eligible Lender Trustee)
such Financed Student Loans. Such representations and warranties speak as of
the Closing Date, in the case of the Initial Financed Student Loans, and as of
the applicable Exchange Dates in the case of the Exchanged Student Loans, but
shall survive the contribution, transfer and assignment of such Financed
Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Financed Student Loans. Each Financed
Student Loan (A) was originated in the United States of America, its
territories, its possessions or other areas subject to its
jurisdiction to an eligible borrower under applicable law and
agreements and was fully and properly executed by the parties thereto,
(B) was originated or acquired by the Transferor in the ordinary
course of its business, and (C) provides or, when the payment schedule
with respect thereto is determined, will provide for payments on a
periodic basis that fully amortize the principal amount of such
Financed Student Loan by its maturity and yields interest at the rate
applicable thereto (except as otherwise provided in Section 4.14), as
such maturity may be modified in accordance with any applicable
deferral or forbearance periods granted in accordance with applicable
laws and restrictions, including those of the Higher Education Act or
any Guarantee Agreement. Each Financed Student Loan that is a ▇▇▇▇▇▇▇▇
Loan qualifies the holder thereof to receive Interest Subsidy Payments
and Special Allowance Payments from the Department. Each Financed
Student Loan that is a Consolidation Loan qualifies the holder thereof
to receive Interest Subsidy Payments and Special Allowance Payments
from the Department to the extent applicable. Each Financed Student
Loan that is a PLUS Loan, a SLS Loan or an Unsubsidized ▇▇▇▇▇▇▇▇ Loan
qualifies the holder thereof to receive Special Allowance Payments
from the Department to the extent applicable. Each Financed Student
Loan qualifies the holder thereof to receive Guarantee Payments from
the applicable Guarantor in accordance with the applicable Guarantee
Agreement.
(ii) Schedule of Financed Student Loans. The information
concerning the Financed Student Loans set forth in Schedule A to this
Agreement and Schedule A of the related Transfer Agreement is true and
correct in all material respects as of the close of business on the
Cut-off Date (with respect to Schedule A to this Agreement) or each
applicable Subsequent Cut-off Date, as applicable, and no selection
procedures believed to be adverse to the
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Noteholders or the Certificateholders were utilized in selecting the
Financed Student Loans. The computer tape or electronic data
transmission regarding the Initial Financed Student Loans is true and
correct in all material respects as of the Cut-off Date and each
computer tape or electronic data transmission regarding the Subsequent
Student Loans will be true and current in all material respects as of
the related Subsequent Cut-off Date.
(iii) Compliance with Law. Each Financed Student Loan
complied at the time it was originated or made and at the execution of
this Agreement or the applicable Transfer Agreement, as the case may
be, complies, and the Transferor and its agents, with respect to each
such Financed Student Loan, have at all times complied, in all
material respects with all requirements of applicable Federal, State
and local laws and regulations thereunder, including the Higher
Education Act, the Equal Credit Opportunity Act, the Federal Reserve
Board's Regulation B and other applicable consumer credit laws and
equal credit opportunity laws.
(iv) Binding Obligation. Each Financed Student Loan
represents the genuine, legal, valid and binding payment obligation in
writing of the related borrower, enforceable by or on behalf of the
holder thereof against such borrower in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance and similar laws relating to creditors' rights
generally and subject to general principles of equity and no Financed
Student Loan has been satisfied, subordinated or rescinded.
(v) No Defenses. No right of rescission, setoff, counterclaim
or defense has been asserted or, to the Transferor's knowledge,
threatened with respect to any Financed Student Loan.
(vi) No Default. No Initial Financed Student Loan has a
payment that is more than 90 days overdue as of the Cut-off Date, and
no Subsequent Student Loan will have a payment that is more than 90
days overdue as of its related Subsequent Cut-off Date, and, except as
permitted in this paragraph, no default, breach, violation or event
permitting acceleration under the terms of any Financed Student Loan
has occurred; and, except for payment defaults continuing for a period
of not more than 90 days, no continuing condition that with notice or
the lapse of time or both would constitute a default, breach,
violation or event permitting acceleration under the terms of any
Financed Student Loan has arisen; and the Transferor has not waived
and shall
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not waive any of the foregoing other than as permitted by the Basic
Documents.
(vii) Title. It is the intention of the Transferor that the
transfer and assignment herein contemplated constitutes a contribution
of the Financed Student Loans from the Transferor to the Eligible
Lender Trustee on behalf of the Issuer and the beneficial interest in
and title to such Financed Student Loans shall not be part of the
debtor's estate in the event of the appointment of a receiver with
respect to the Transferor. No Financed Student Loan has been
transferred, assigned or pledged by the Transferor to any Person other
than the Eligible Lender Trustee on behalf of the Issuer or any such
assignment or pledge has been released. Immediately prior to the
transfer and assignment herein contemplated, the Transferor had good
title to each Financed Student Loan, free and clear of all Liens and,
immediately upon the transfer thereof, the Eligible Lender Trustee on
behalf of the Issuer shall have good title to each such Financed
Student Loan, free and clear of all Liens, and the transfer to the
Indenture Trustee, shall have been perfected under the UCC. No
Financed Student Loan was subject to a third party's right of first
refusal and the transfer of the Financed Student Loans as contemplated
hereby will not violate in any material respect the terms of any
Subservicing Agreement or any other material agreement or arrangement
to which the Master Servicer is a party.
(viii) Lawful Assignment. No Financed Student Loan has been
originated in, or is subject to the laws of, any jurisdiction under
which the contribution, transfer and assignment of such Financed
Student Loan under this Agreement or any Transfer Agreement is
unlawful, void or voidable.
(ix) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give the Issuer a first perfected
security interest in the Financed Student Loans (if, despite the
express intention of the parties hereto, the transfer of the Financed
Student Loans is deemed a loan), and to give the Indenture Trustee a
first perfected security interest therein, shall have been made.
(x) One Original. There is only one original executed copy of
each promissory note evidencing a Financed Student Loan.
(xi) Principal Balance. The aggregate principal balance of
the Initial Financed Student Loans as of the
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Cut-off Date is $___________. Additionally, as of the Cut-off Date,
the accrued interest on the Initial Financed Student Loans other than
with respect to Interest Subsidy Payments and Special Allowance
Payments is $_________.
(xii) [Reserved]
(xiii) Interest Accruing. Each Financed Student Loan is
accruing interest (whether or not such interest is being paid
currently, by the Obligor or by the Department, or is being
capitalized), except as otherwise expressly permitted by the Basic
Documents.
SECTION 3.2. Repurchase upon Breach; Reimbursement. The Transferor,
the Master Servicer or the Eligible Lender Trustee, as the case may be, shall
inform the other parties to this Agreement and the Indenture Trustee promptly,
in writing, upon the discovery of any breach of the representations and
warranties made pursuant to Section 3.1. Unless any such breach shall have been
cured within 90 days following the discovery thereof by the Transferor or
receipt by the Transferor of written notice from the Eligible Lender Trustee or
the Master Servicer of such breach, the Financed Student Loan in which the
interests of the Noteholders or the Certificateholders are materially and
adversely affected by any such breach shall be retransferred, reassigned,
resetover and otherwise reconveyed to the Transferor (a "repurchase") as of the
first day succeeding the end of such 90-day period that is the last day of a
Collection Period; provided that it is understood that any such breach that
does not adversely affect any Guarantor's obligation to guarantee payment of
such Financed Student Loan to the Eligible Lender Trustee will not be
considered to have a material adverse effect for this purpose. In consideration
of and simultaneously with the repurchase of the Financed Student Loan, the
Transferor shall remit the Purchase Amount, in the manner specified in Section
5.4, and the Issuer shall execute such assignments and other documents
reasonably requested by the Transferor in order to effect such transfer. Upon
any such transfer of a Financed Student Loan, legal title to, and beneficial
ownership and control of, the related Financed Student Loan File will
thereafter belong to the Transferor. In addition, if any such breach does not
trigger such a repurchase obligation but does result in the refusal by a
Guarantor to guarantee the applicable portion of the accrued interest, or the
loss of (including any obligation of the Issuer to repay to the Department)
certain Interest Subsidy Payments and Special Allowance Payments, with respect
to a Financed Student Loan, then, unless such breach, if curable, is cured
within 90 days following the discovery thereof by the Transferor or receipt by
the Transferor of written notice from the Eligible Lender
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Trustee, the Transferor shall, at its option, either repurchase such
Financed Student Loan at the applicable Purchase Amount or reimburse the Issuer
by remitting an amount equal to the sum of all amounts that would have been
payable if not for such breach in the manner specified in Section 5.4 not later
than the last day of the Collection Period in which such 90th day occurs. The
sole remedy of the Issuer, the Eligible Lender Trustee, the Indenture Trustee,
the Noteholders or the Certificateholders with respect to a breach of
representations and warranties pursuant to Section 3.1 and the agreement
contained in this Section 3.2 shall be to require the Transferor to repurchase
Financed Student Loans or to reimburse the Issuer as provided above pursuant to
this Section 3.2, subject to the conditions contained herein. The Eligible
Lender Trustee shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the repurchase of any Financed
Student Loan or the reimbursement for any interest penalty pursuant to this
Section 3.2.
SECTION 3.3. Custody of Financed Student Loan Files. To assure uniform
quality in servicing the Financed Student Loans and to reduce administrative
costs, the Issuer hereby revocably appoints the Master Servicer as custodian of
the following documents or instruments which are hereby constructively
delivered to the Indenture Trustee, as pledgee of the Issuer (or, in the case
of the Exchanged Student Loans, will as of the applicable Exchange Date be
constructively delivered to the Indenture Trustee, as pledgee of the Issuer)
with respect to each Financed Student Loan (such documents are referred to
collectively as the "Financed Student Loan File").
(a) the original fully executed copy of the note evidencing
the Financed Student Loan (which may be included in the application) unless
such note is in the custody of a Guarantor;
(b) the original loan application fully executed by the
related borrower (which may be included in the note evidencing a Financed
Student Loan); and
(c) any and all other documents and computerized records that
any of the Master Servicer, the Administrator or the Transferor shall keep on
file, in accordance with its customary procedures, relating to such Financed
Student Loan or any Obligor with respect thereto.
Notwithstanding the foregoing, each Subcustodian appointed
pursuant to Section 3.8 who enters into a Subservicing Agreement may act as a
custodian of the Related Financed Student Loan Files.
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SECTION 3.4. Duties of Master Servicer as Custodian. (a) Safekeeping.
The Master Servicer, as custodian, shall hold or cause one or more
Subcustodians appointed pursuant to Section 3.8, to (i) hold the Financed
Student Loan Files for the benefit of the Issuer, and (ii) maintain such
accurate and complete accounts, records and computer systems pertaining to each
Financed Student Loan File as shall enable the Issuer to comply with this
Agreement and the other Basic Documents. In performing its duties as custodian,
the Master Servicer shall act with reasonable care and shall ensure that it
complies in all material respects with all applicable Federal and State laws,
including the Higher Education Act, with respect thereto. The Master Servicer
shall conduct, or cause to be conducted, periodic audits of the Financed
Student Loan Files held by it under this Agreement and of the related accounts,
records and computer systems, in such a manner as shall enable the Issuer or
the Indenture Trustee to verify the accuracy of the Master Servicer's record
keeping. The Master Servicer shall promptly report to the Issuer and the
Indenture Trustee any failure on its part to hold the Financed Student Loan
Files and maintain its accounts, records and computer systems as herein
provided and promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or any periodic
review by the Issuer, the Eligible Lender Trustee or the Indenture Trustee of
the Financed Student Loan Files.
(b) Maintenance of and Access to Records. The Master Servicer
shall cause each Subcustodian to maintain the Related Financed Student Loan
Files at the office specified opposite such Subcustodian's name in Schedule B
or shall cause the Financed Student Loan Files to be maintained at such other
offices as shall be specified by written notice to the Issuer and the Indenture
Trustee not later than 60 days after any change in location. Upon reasonable
prior notice, the Master Servicer shall make available, or cause each
Subcustodian to make available, to the Issuer and the Indenture Trustee or
their respective duly authorized representatives, attorneys or auditors (i) a
list of locations of the Financed Student Loan Files and (ii) the related
accounts, records and computer systems at the locations identified in the list
provided pursuant to clause (i) of this Section 3.4(b) and at such times during
normal business hours as the Issuer or the Indenture Trustee shall instruct.
SECTION 3.5. Instructions; Authority to Act. The Master Servicer shall
be deemed to have received proper instructions with respect to the Financed
Student Loan Files upon its receipt of written instructions signed by a
Responsible Officer of the Indenture Trustee.
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SECTION 3.6. Custodian's Indemnification. (a) The Master Servicer
shall pay from its own funds for any loss, liability or expense, including
reasonable attorneys' fees, that may be imposed on, incurred by or asserted
against the Issuer, the Eligible Lender Trustee or the Indenture Trustee or any
of their officers, directors, employees and agents to the extent such loss,
liability or expense results from the Master Servicer's failure to perform its
duties as specified in this Article III where the final determination that any
such improper act or omission by the Master Servicer or any Subcustodian
resulted in such loss, liability or expense is established by a court of law,
by an arbitrator or by way of settlement agreed to by the Master Servicer;
provided, however, that the Master Servicer shall not be liable to the Eligible
Lender Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith or negligence of the Eligible Lender Trustee and the
Master Servicer shall not be liable to the Indenture Trustee for any portion of
any such amount resulting from the willful misfeasance, bad faith or negligence
of the Indenture Trustee. This provision shall not be construed to limit the
Master Servicer's or any other party's rights, obligations, liabilities, claims
or defenses which arise as a matter of law or pursuant to any other provision
of this Agreement; provided, however, the Master Servicer shall not be liable
for any such costs, expenses, losses, claims, damages and liabilities imposed
upon such Person to the extent that they arise out of or result from such
Person's negligence, willful malfeasance or bad faith or a breach of the
representations and warranties of such Person in this Agreement.
Notwithstanding anything to the contrary contained in this Article III, in no
event shall the Master Servicer be liable under any theory of tort, contract,
strict liability or other legal or equitable theory for any lost profits or
exemplary, punitive, special, incidental, indirect or consequential damages,
each of which is hereby excluded by agreement of the parties regardless of
whether or not the Master Servicer has been advised of the possibility of such
damages.
(b) Promptly after receipt by an indemnified party under this
Section 3.6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying
party under this Section 3.6, notify the indemnifying party of the commencement
thereof, but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under Section 3.6, except to the extent the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the
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commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party; provided, however,
that if the defendants in any such action include both the indemnified party
and the indemnifying party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to
it and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of the
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 3.6 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In no event shall the indemnifying party be liable for
fees and expenses for more than one counsel separate from their own counsel for
all indemnified parties in connection with any one action or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. An indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
The indemnified party will not, without the prior written
consent of the indemnifying party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit
or proceeding in which indemnification may be sought hereunder.
SECTION 3.7. Effective Period and Termination. The Master Servicer's
appointment as custodian of the Financed Student Loans being conveyed hereunder
shall become effective as of the Closing Date and shall continue in full force
and effect for so long as the Master Servicer shall remain the Master Servicer
hereunder. If the Master Servicer or any successor Master Servicer shall resign
as Master Servicer in accordance with the provisions of this Agreement or if
all the rights and
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obligations of the Master Servicer or any such successor Master Servicer shall
have been terminated under Section 8.1 of this Agreement, the appointment of
the Master Servicer or such successor Master Servicer as custodian shall be
terminated simultaneously with the effectiveness of such termination. As soon
as practicable on or after any termination of such appointment (and in any
event within (i) 10 Business Days, with respect to that portion of the Financed
Student Loan Files consisting of electronic records and information, and (ii)
30 Business Days, with respect to the remaining portion of the Financed Student
Loan Files), the Master Servicer shall deliver, to the extent in its
possession, the Financed Student Loan Files to the Indenture Trustee or the
Indenture Trustee's agent at such place or places as the Indenture Trustee may
reasonably designate.
SECTION 3.8. (a) Appointment of Subcustodian. (a) The Master Servicer
may at any time appoint one or more Servicers to act as a subcustodian (each a
"Subcustodian") of the Financed Student Loan Files of the Financed Student
Loans being serviced by such Servicer (the "Related Financed Student Loan
Files") to perform all or any portion of its obligations as custodian
hereunder; provided, however, that the Master Servicer shall remain obligated
and be liable to the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Certificateholders and the Noteholders for the custodial services
with respect to the Financed Student Loan Files in accordance with the
provisions hereof without diminution of such obligation and liability by virtue
of the appointment of such Subcustodian and to the same extent and under the
same terms and conditions as if the Master Servicer alone were performing the
custodial services. The fees and expenses of the Subcustodian shall be as
agreed between the Master Servicer and its Subcustodian from time to time and
none of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders shall have any responsibility therefor.
(b) The appointment of a Subcustodian by the Master Servicer shall
become effective as of the date specified in the related Subservicing Agreement
and shall continue in full force and effect with respect to each such
Subcustodian and its Related Financed Student Loan Files for so long as such
Subcustodian is a Servicer of the Financed Student Loans relating to such
Financed Student Loan Files. As soon as practicable following the occurrence of
an event of default that is continuing under a Subservicing Agreement, the
Master Servicer shall cause each applicable Subcustodian to deliver the
Financed Student Loan Files held by it as directed by the Master Servicer.
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ARTICLE IV
Administration and Servicing of Financed Student Loans
SECTION 4.1. Duties of Master Servicer. The Master Servicer, for the
benefit of the Issuer (to the extent provided herein), shall manage, service,
administer and make collections on the Financed Student Loans with reasonable
care. Without limiting the generality of the foregoing or of any other
provision set forth in this Agreement and notwithstanding any other provision
to the contrary set forth herein, the Master Servicer shall manage, service,
administer and make collections with respect to the Financed Student Loans
(other than collection of any Interest Subsidy Payments and Special Allowance
Payments, which the Eligible Lender Trustee will perform on behalf of the
Trust) in accordance in all material respects with all applicable Federal and
State laws, including all applicable standards, guidelines and requirements of
the Higher Education Act and any Guarantee Agreement, the failure to comply
with which would adversely affect the eligibility of one or more of the
Financed Student Loans for Interest Subsidy Payments, Special Allowance
Payments or Guarantee Payments or would have a material adverse effect on the
Certificateholders or the Noteholders.
The Master Servicer's duties shall include collection and
posting of all payments, responding to inquiries of borrowers on such Financed
Student Loans, monitoring borrowers' status, making required disclosures to
borrowers, investigating delinquencies, sending bills or payment coupons to
borrowers and otherwise establishing repayment terms, reporting tax information
to borrowers, if applicable, accounting for collections and furnishing monthly
and annual statements with respect thereto to the Administrator. Subject to the
provisions of Section 4.2, the Master Servicer shall follow customary
standards, policies and procedures in performing its duties as Master Servicer.
Without limiting the generality of the foregoing, the Master Servicer is
authorized and empowered to execute and deliver, on behalf of itself, the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders or any of them, instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to such Financed Student Loans;
provided, however, that the Master Servicer agrees that it will not (a) permit
any rescission or cancellation of a Financed Student Loan except as ordered by
a court of competent jurisdiction or governmental authority or as otherwise
consented to in writing by the Eligible Lender Trustee and the Indenture
Trustee or (b) except as otherwise provide in Section 4.14, reschedule, revise,
defer
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or otherwise compromise with respect to payments due on any Financed Student
Loan except pursuant to any applicable deferral or forbearance periods or
otherwise in accordance with all applicable standards, guidelines and
requirements with respect to the servicing of the Financed Student Loans
(notwithstanding the foregoing, the Master Servicer may, in its sole
discretion, without having to obtain the consent or approval of any other
party, waive amounts owing under a Financed Student Loan up to and including
$50.00); provided further, however, that the Master Servicer shall not agree to
any decrease of the interest rate on, or the principal amount payable with
respect to, any Financed Student Loan except as otherwise permitted in
accordance with applicable standards, guidelines and requirements of the Higher
Education Act, any Guarantee Agreement. The Master Servicer also shall be
responsible for advising the Eligible Lender Trustee and the Indenture Trustee
of any action required to be taken to maintain each such Guarantee Agreement.
The Eligible Lender Trustee on behalf of the Issuer hereby grants a power of
attorney and all necessary authorization to the Master Servicer to sign
endorsements of the notes relating to the Financed Student Loans on behalf of
the Eligible Lender Trustee in connection with conveyances pursuant to Section
2.3 hereof and to maintain any and all collection procedures with respect to
the Financed Student Loans, including filing, pursuing and recovering claims
against the Guarantors for Guarantee Payments and taking any steps to enforce
such Financed Student Loan such as commencing a legal proceeding to enforce a
Financed Student Loan in the name of the Issuer, the Eligible Lender Trustee,
the Indenture Trustee, the Certificateholders or the Noteholders. The Eligible
Lender Trustee or the Indenture Trustee shall upon the written request of the
Master Servicer or the Administrator furnish the Master Servicer or the
Administrator with any other powers of attorney and other documents reasonably
necessary or appropriate to enable the Master Servicer or the Administrator to
carry out its servicing and administrative duties hereunder.
SECTION 4.2. Collection of Financed Student Loan Payments. (a) The
Master Servicer shall make reasonable efforts (including all efforts that may
be specified under the Higher Education Act or any Guarantee Agreement) to
collect all payments called for under the terms and provisions of the Financed
Student Loans as and when the same shall become due. The Master Servicer may in
its discretion waive any late payment charge or any other fees in addition to
any fee or waiver permitted under Section 4.1 that may be collected in the
ordinary course of servicing a Financed Student Loan.
(b) The Master Servicer shall make reasonable efforts to
claim, pursue and collect all Guarantee Payments from the
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Guarantors pursuant to the Guarantee Agreements with respect to any of the
Financed Student Loans as and when the same shall become due and payable, shall
comply in all material respects with all applicable laws and agreements with
respect to claiming, pursuing and collecting such payments. In connection
therewith, the Master Servicer is hereby authorized and empowered to convey to
any Guarantor the note and the related Financed Student Loan File representing
any Financed Student Loan in connection with submitting a claim to such
Guarantor for a Guarantee Payment in accordance with the terms of the
applicable Guarantee Agreement whereupon the Lien of the Indenture Trustee
relating to such Financed Student Loan shall be released without any further
action of any kind.
(c) The Eligible Lender Trustee shall, with the assistance of
the Master Servicer and on behalf of the Issuer, make reasonable efforts to
claim, pursue and collect all Interest Subsidy Payments and Special Allowance
Payments from the Department with respect to any of the Financed Student Loans
as and when the same shall become due and payable, shall comply in all material
respects with all applicable laws and agreements with respect to claiming,
pursuing and collecting such payments. All amounts so collected by the Eligible
Lender Trustee shall constitute Available Funds for the applicable Collection
Period or Collection Periods and shall be deposited into the Collection Account
in accordance with Section 5.4. In connection therewith, the Master Servicer
shall prepare and file with the Department on a timely basis all claims, forms
and other documents and filings necessary or appropriate in connection with the
claiming of Interest Subsidy Payments and Special Allowance Payments on behalf
of the Eligible Lender Trustee and shall otherwise assist the Eligible Lender
Trustee in pursuing and collecting such Interest Subsidy Payments and Special
Allowance Payments from the Department. The Eligible Lender Trustee shall, upon
the written request of the Master Servicer, furnish the Master Servicer with
any power of attorney and other documents reasonably necessary or appropriate
to enable the Master Servicer to prepare and file such claims, forms and other
documents and filings.
(d) The Eligible Lender Trustee may permit trusts, other than
the Trust, established by the Transferor to securitize student loans to use the
Department lender identification number applicable to the Trust. In such event,
the Eligible Lender Trustee may claim and collect Interest Subsidy Payments and
Special Allowance Payments with respect to Financed Student Loans in the Trust
and student loans in such other trusts using such common lender identification
number. Notwithstanding anything herein or in the Basic Documents to the
contrary, any amounts assessed against payments (including, but
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not limited to, Interest Subsidy Payments and Special Allowance Payments) due
from the Department or any Guarantor to any such other trust using such common
lender identification number as a result of amounts (including, but not limited
to, consolidation fees) owing to the Department or any Guarantor from the Trust
will be deemed for all purposes hereof and of the Basic Documents (including
for purposes of determining amounts paid by the Department or any Guarantor
with respect to the student loans in the Trust and such other trust) to have
been assessed against the Trust and shall be deducted by the Eligible Lender
Trustee or the Master Servicer and paid to such other trust from any
collections made by them which would otherwise have been payable to the
Collection Account for the Trust. If so specified in the servicing agreement
applicable to any such other trust, any amounts assessed against payments due
from the Department or any Guarantor to the Trust as a result of amounts owing
to the Department or any Guarantor to the Trust from such other trust using
such common lender identification number will be deemed to have been assessed
against such other trust and will be deducted by the Eligible Lender Trustee or
the Master Servicer from any collections made by them which would otherwise be
payable to the collection account for such other trust and paid to the Trust.
SECTION 4.3. Realization upon Financed Student Loans. For the benefit
of the Issuer, the Master Servicer shall use reasonable efforts consistent with
customary servicing practices and procedures and including all efforts that may
be specified under the Higher Education Act or any Guarantee Agreement in its
servicing of any delinquent Financed Student Loans.
SECTION 4.4. No Impairment. The Master Servicer shall not impair in
any material respect the rights of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders in the Financed
Student Loans or in any Guaranty Agreement.
SECTION 4.5. Purchase of Financed Student Loans; Reimbursement. The
Master Servicer or the Eligible Lender Trustee, as the case maybe, shall inform
the other parties to this Agreement and the Indenture Trustee promptly, in
writing, upon the discovery of any breach of an obligation under Section 4.1,
4.2, 4.3 or 4.4 hereof. Unless any such breach shall have been cured within 90
days following the discovery thereof by the Master Servicer or receipt by the
Master Servicer of written notice from the Eligible Lender Trustee or the
Master Servicer of such breach (or, at the Master Servicer's election, the last
day of the first month following such discovery or notice), the Master Servicer
shall purchase any Financed Student Loan in which the interests of the
Noteholders and the
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Certificateholders are materially and adversely affected by such breach as of
the first day succeeding the end of such 90-day period that is the last day of
a Collection Period; provided that it is understood that any such breach that
does not adversely affect any Guarantor's obligation to guarantee payment of
such Financed Student Loan to the Eligible Lender Trustee will not be
considered to have a material adverse effect for this purpose. In consideration
of and simultaneously with the purchase of any such Financed Student Loan
pursuant to either of the two preceding sentences, the Master Servicer shall
remit the Purchase Amount in the manner specified in Section 5.4, and the
Issuer shall execute such assignments and other documents reasonably requested
by the Master Servicer in order to effect such transfer. In addition, if any
such breach by the Master Servicer does not trigger such a purchase obligation
but does result in the refusal by a Guarantor to guarantee the applicable
portion of the accrued interest, or the loss of (including any obligation of
the Issuer to repay to the Department) certain Interest Subsidy Payments and
Special Allowance Payments, with respect to a Financed Student Loan, then,
unless such breach, if curable, is cured within 90 days of discovery or notice,
the Master Servicer shall, at its option, either purchase such Financed Student
Loan at the applicable Purchase Amount or reimburse the Issuer by remitting an
amount equal to the sum of all amounts that would have been payable if not for
such breach in the manner specified in Section 5.4. The sole remedy of the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders with respect to a breach pursuant to
Section 4.1, 4.2, 4.3 or 4.4 and the agreement contained in this Section 4.5
shall be to require the Master Servicer to purchase Financed Student Loans or
to reimburse the Issuer as provided above pursuant to this Section 4.5, subject
to the conditions contained herein. The Eligible Lender Trustee shall have no
duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the purchase of any Financed Student Loan or the
reimbursement for any interest penalty pursuant to this Section 4.5.
SECTION 4.6. Servicing Fee. For its services hereunder, the Master
Servicer shall be entitled to receive the Servicing Fee in the manner set forth
in Section 5.5.
SECTION 4.7. Administrator's Certificate. (a) On each Determination
Date, the Administrator will advise the Indenture Trustee and the Eligible
Lender Trustee in writing of the applicable Noteholders' Interest Distribution
Amount and Certificateholders' Interest Distribution Amounts. Additionally, on
each Determination Date the Administrator will advise the Indenture Trustee and
the Eligible Lender Trustee in writing of the applicable Noteholders' Principal
Distribution
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Amount (or, after all the Notes have been paid in full, the Certificateholder's
Principal Distribution Amount). Further, on each Determination Date, the
Administrator will advise the Indenture Trustee and the Eligible Lender Trustee
in writing of the estimated Transaction Fees (separately and in the aggregate)
for the three succeeding Collection Periods.
(b) On each Determination Date, the Administrator also shall
deliver to the Eligible Lender Trustee, the Indenture Trustee and the
Transferor (if the Transferor is not also the Administrator), an
Administrator's Certificate containing all information necessary to make the
distributions pursuant to Sections 5.5 and 5.6, if applicable, for the upcoming
Distribution Date. Financed Student Loans to be repurchased by the Transferor
(whether pursuant to Section 2.3 or 3.2), purchased by the Master Servicer or
acquired by any Guarantor shall be identified by the Administrator by type of
loan and borrower social security number with respect to such Financed Student
Loan (as specified in Schedule A).
(c) On or before the 15th day of each month, the
Administrator shall deliver to the Eligible Lender Trustee, the Indenture
Trustee and the Transferor (if the Transferor is not also the Administrator), a
report setting forth by component the Available Funds for the immediately
preceding Collection Period.
SECTION 4.8. Annual Statement as to Compliance; Notice of Default. (a)
Each of the Master Servicer and the Administrator shall deliver to the
Transferor, the Eligible Lender Trustee and the Indenture Trustee, on or before
April 30 of each year beginning April 30, 1998, an Officer's Certificate of the
Master Servicer or the Administrator, as the case may be, dated as of December
31 of the preceding year, stating that (i) a review of the activities of the
Master Servicer or the Administrator, as the case may be, during the preceding
12-month period (or, in the case of the first such certificate, during the
period from the Closing Date to December 31, 1997) and of its performance under
this Agreement has been made under such officers' supervision and (ii) to the
best of such officers' knowledge, based on such review, the Master Servicer or
the Administrator, as the case may be, has fulfilled in all material respects
all its obligations under this Agreement and the Administration Agreement,
respectively, throughout such year or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. The Eligible Lender Trustee shall
send a copy of each such Officers' Certificate and each report referred to in
Section 4.9 to the Rating Agencies. A copy of each such Officers' Certificate
and each report referred to in Section 4.9 may be obtained by any Noteholder or
Note
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Owner by a request in writing to the Eligible Lender Trustee addressed to its
Corporate Trust Office, together with evidence satisfactory to the Eligible
Lender Trustee that such Person is a Noteholder. Pursuant to the Indenture,
upon the telephone request of the Eligible Lender Trustee, the Indenture
Trustee will promptly furnish the Eligible Lender Trustee a list of Noteholders
as of the date specified by the Eligible Lender Trustee.
(b) The Master Servicer shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Transferor and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, written notice in an Officer's Certificate of
the Master Servicer of any event which with the giving of notice or lapse of
time, or both, would become a Master Servicer Default under Section 8.1(a).
(c) The Administrator shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the Master Servicer and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, written notice in an Officer's Certificate of
the Administrator of any event which with the giving of notice or lapse of
time, or both, would become an Administrator Default under Section 8.1(b)(1),
(2) or (3).
SECTION 4.9. Annual Independent Certified Public Accountants' Report
or Reports. Each of the Master Servicer and the Administrator shall cause Ernst
& Young LLP, or any other nationally recognized firm of independent certified
public accountants, to deliver to the Transferor, which may also render its
services to the Master Servicer and the Administrator, the Eligible Lender
Trustee, the Indenture Trustee on or before April 30 of each year beginning
April 30, 1998 one or more, a reports addressed to the Master Servicer and to
the Transferor, the Eligible Lender Trustee and the Indenture Trustee, to the
effect that such accountants have relied upon the assertions by the Master
Servicer's and Administrator's management about the Master Servicer's and
Administrator's compliance with Sections 3.3, 3.4, 4.1, 4.2, 4.3, 4.4, 4.6,
4.7, 5.2, 5.5, 5.6, 5.7, and 5.8 of the Transfer and Servicing Agreement and
Sections 1(B), 1(D), 1(G), 1(U), 2 and 3 of the Administration Agreement during
the preceding calendar year (or, in the case of the first such reports, during
the period from the Closing Date to December 31, 1997) and in any such
accountant's opinion, such assertions are fairly stated in all material
respects, except for (i) such exceptions as any such firm shall believe to be
immaterial and (ii) such other exceptions as shall be set forth in such
report(s). In the event any such firm requires the Indenture
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Trustee or the Eligible Lender Trustee to agree to the procedures performed by
such firm, the Master Servicer shall direct the Indenture Trustee in writing to
so agree; it being understood and agreed that the Indenture Trustee or the
Eligible Lender Trustee, as applicable, will deliver such letter of agreement
in conclusive reliance upon the direction of the Master Servicer, and the
Indenture Trustee and the Eligible Lender Trustee make no independent inquiry
or investigation as to and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
Such report(s) will also indicate that the firm is
independent of the Master Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
SECTION 4.10. Access to Certain Documentation and Information
Regarding Financed Student Loans. Upon reasonable prior notice, the Master
Servicer shall, or shall cause each Servicer to, provide access to the Financed
Student Loan Files and the related accounts, records and computer systems
maintained by the Master Servicer or such Servicer, as the case may be, to (i)
the Eligible Lender Trustee and (ii) the Indenture Trustee and their respective
duly authorized representatives, attorneys or auditors. Access shall be
afforded without charge (except that the reasonable cost of photocopying shall
be borne by the party requesting copies), but only upon reasonable request and
during the normal business hours at the respective offices of the applicable
Servicer. Nothing in this Section shall affect the obligation of the Master
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors and the failure of the Master Servicer to provide access
to information as a result of such obligation shall not constitute a breach of
this Section.
SECTION 4.11. Master Servicer and Administrator Expenses. The Master
Servicer and the Administrator shall be severally required to pay all expenses
incurred by them in connection with their respective activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Master Servicer or the Administrator, as the case may be, and expenses
incurred in connection with distributions and reports to the Administrator, the
Noteholders and the Eligible Lender Trustee, as the case may be.
SECTION 4.12. Appointment of Servicer. (a) The Master Servicer may at
any time appoint a Servicer to perform all or any portion of its obligations as
Master Servicer hereunder; provided, however, that the Rating Agency Condition
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shall have been satisfied in connection therewith; provided further, that the
Master Servicer shall remain obligated and be liable to the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Certificateholders and the
Noteholders for the servicing and administering of the Financed Student Loans
in accordance with the provisions hereof without diminution of such obligation
and liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Master Servicer alone
were servicing and administering the Financed Student Loans. The fees and
expenses of each Servicer shall be as agreed between the Master Servicer and
such Servicer from time to time and none of the Issuer, the Eligible Lender
Trustee, the Indenture Trustee, the Certificateholders and the Noteholders
shall have any responsibility therefor. Notwithstanding the foregoing, AFSA,
USA Group, and PHEAA shall be deemed approved Servicers for all purposes
hereunder.
(b) The Master Servicer may at any time appoint one or more
of its Affiliates to perform all or any portion of its obligations hereunder;
provided, however, that the Master Servicer shall remain obligated and liable
to the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders for the servicing and administering of
the Financed Student Loans in accordance with the provisions hereof without
diminution of such obligation and liability by virtue of the appointment of
such Affiliate and to the same extent and under the same terms and conditions
as if the Master Servicer alone were servicing and administering the Financed
Student Loans. The fees and expenses of each such Affiliate shall be as
agreed between the Master Servicer and such Affiliate from time to time and
none of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders and the Noteholders shall have any responsibility therefor.
SECTION 4.13. Subservicing Agreements. (a) The Master Servicer hereby
represents and warrants that: (i) as of the Closing Date it has entered into
Subservicing agreements with AFSA, USA Group and PHEAA (each a "Subservicing
Agreement"); (ii) each such Subservicing Agreement requires the Servicer
thereunder to service the Financed Student Loans subject thereto in accordance
in all material respects with all applicable Federal and state laws, including
all applicable standards, guidelines and requirements of the Higher
Education Act.
SECTION 4.14. Incentive Programs. The Servicer shall be permitted to
reduce the applicable interest rate on a PP Loan by 2%, if the Obligor related
to such PP Loan makes the first 48 consecutive monthly payments of such PP Loan
on or prior to the applicable due dates of such PP Loan.
ARTICLE V
Distributions; Reserve Account;
Statements to Certificateholders and Noteholders
SECTION 5.1. Establishment of Trust Accounts. (a) The Indenture
Trustee, for the benefit of the Noteholders, shall establish and maintain in
the name of the Indenture Trustee each of the Collection Account, the Note
Distribution Account, the Reserve Account, the Expense Account and the Monthly
Advance Account. The Eligible Lender Trustee, for the benefit of the
Certificateholders, shall establish and maintain in the name of the Eligible
Lender Trustee the Certificate Distribution Account
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and the Certificate Monthly Advance Account. The foregoing accounts are
referred to collectively as the "Trust Accounts." Each such Trust Account shall
be an Eligible Deposit Account and, except for the Certificate Distribution
Account and the Certificate Monthly Advance Account, shall be entitled as
follows: "[Name of Account] for the benefit of PNC Student Loan Trust I and
Bankers Trust Company, as Indenture Trustee, as their interests may appear."
The Certificate Distribution Account and the Certificate Monthly Advance
Account shall be entitled as follows: "PNC Student Loan Trust I Certificate
Distribution Account" and PNC Student Loan Trust I Certificate Monthly Advance
Account," respectively.
(b) Funds on deposit in the Trust Accounts shall be invested
by the Indenture Trustee and, in the case of the Certificate Distribution
Account and the Certificate Monthly Advance Account, the Eligible Lender
Trustee in Eligible Investments pursuant to written instructions from the
Administrator, on behalf of the Issuer; provided, however, it is understood and
agreed that the Indenture Trustee and the Eligible Lender Trustee shall not be
liable for any loss arising from such investment in Eligible Investments. All
such Eligible Investments shall be held by the Indenture Trustee and the
Eligible Lender Trustee for the benefit of the Issuer; provided that on the
Business Day preceding each Distribution Date all interest and other investment
income (net of losses and investment expenses) on funds on deposit therein
shall be deposited into the Collection Account and shall be deemed to
constitute a portion of the Available Funds for the related Distribution Date.
Funds on deposit in the Trust Accounts shall be invested in Eligible
Investments that will mature so that such funds will be available at the close
of business on the Business Day preceding the day on which funds in the
applicable Trust Account may be required to be withdrawn; provided, however,
that funds on deposit in such Trust Accounts may be invested in Eligible
Investments of the Indenture Trustee or of the Eligible Lender Trustee in the
case of the Certificate Distribution Account and Certificate Monthly Advance
Account which may mature so that such funds will be available on the following
Business Day. Funds deposited in a Trust Account on a Business Day which
immediately precedes a Distribution Date upon the maturity of any Eligible
Investments are not required to be invested overnight unless otherwise directed
by telephone or facsimile and confirmed within 24 hours in writing by the
Administrator.
(c) (i) The Indenture Trustee (or the Eligible Lender Trustee
with respect to the Certificate Distribution Account and the Certificate
Monthly Advance Account) shall possess all right, title and interest in all
funds on
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deposit from time to time in the Trust Accounts and in all proceeds thereof
(including all income thereon) and all such funds, investments, proceeds and
income shall be part of the Trust Estate. Subject to the Administrator's power
to give instructions pursuant to paragraph (b) above and paragraph (c)(iii)
below, the Trust Accounts shall be under the sole dominion and control of the
Indenture Trustee (or the Eligible Lender Trustee with respect to the
Certificate Distribution Account and the Certificate Monthly Advance Account)
for the benefit of the Noteholders and Certificateholders. If, at any time, any
of the Trust Accounts ceases to be an Eligible Deposit Account, the
Administrator, on behalf of the Issuer, agrees that it shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which the
Rating Agencies may consent) establish a new Trust Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
Trust Account. In connection with the foregoing, the Administrator, on behalf
of the Issuer, agrees that, in the event that any of the Trust Accounts are not
accounts with the Indenture Trustee (or the Eligible Lender Trustee with
respect to the Certificate Distribution Account and the Certificate Monthly
Advance Account), the Administrator shall notify the Indenture Trustee and the
Eligible Lender Trustee in writing promptly upon any of such Trust Accounts
ceasing to be an Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the
Indenture Trustee agrees (or, with respect to the Certificate
Distribution Account and the Certificate Monthly Advance Account, the
Eligible Lender Trustee agrees), by its acceptance thereof, that:
(A) any Trust Account Property that is held in
deposit accounts shall be held solely in Eligible Deposit
Accounts, subject to the last sentence of Section 5.1(c)(i);
and, subject to Section 5.1(b), each such Eligible Deposit
Account shall be subject to the exclusive custody and control
of the Indenture Trustee (or the Eligible Lender Trustee with
respect to the Certificate Distribution Account and the
Certificate Monthly Advance Account), and the Indenture
Trustee (or the Eligible Lender Trustee with respect to the
Certificate Distribution Account and the Certificate Monthly
Advance Account) shall have sole signature authority with
respect thereto;
(B) any Trust Account Property that constitutes
Physical Property shall be Delivered to the Indenture
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Trustee in accordance with paragraph (a) of the definition of
"Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a financial
intermediary (as such term is defined in Article 8 of the
UCC) acting solely for the Indenture Trustee;
(C) any Trust Account Property that is a book-entry
security held through the Federal Reserve System pursuant to
Federal book-entry regulation shall be Delivered in
accordance with paragraph (b) of the definition of "Delivery"
and shall be maintained by the Indenture Trustee, pending
maturity or disposition, through continued book-entry
registration of such Trust Account Property as described in
such paragraph; and
(D) any Trust Account Property that is an
"uncertificated security" under Article VIII of the UCC and
that is not governed by clause (C) above shall be Delivered
to the Indenture Trustee in accordance with paragraph (c) of
the definition of "Delivery" and shall be maintained by the
Indenture Trustee, pending maturity or disposition, through
continued registration of the Indenture Trustee's (or its
nominee's) ownership of such security.
(iii) The Administrator shall have the power, revocable for
cause or upon the occurrence and during the continuance of an
Administrator Default by the Indenture Trustee or by the Eligible
Lender Trustee with the consent of the Indenture Trustee, to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts (or the Eligible Lender Trustee with respect to the
Certificate Distribution Account and the Certificate Monthly Advance
Account) for the purpose of permitting the Master Servicer, the
Administrator or the Eligible Lender Trustee to carry out its
respective duties hereunder or under the Trust Agreement or permitting
the Indenture Trustee to carry out its duties under the Indenture.
SECTION 5.2. Collections. The Master Servicer shall remit to the
Collection Account all payments by or on behalf of the Obligors with respect to
the Financed Student Loans for which it, rather than a Servicer, is acting as
Primary Servicer (other than Purchased Student Loans), (i) within two Business
Days after it has received an aggregate of $30,000 during any Collection Period
and (ii) on the last Business Day of each Collection Period, all other
collections received during such Collection Period. The Master Servicer shall
cause each other
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Servicer to remit to the Collection Account, no less frequently
than weekly, all payments by or on behalf of the Obligors with respect to the
Financed Student Loans for which it is acting as Primary Servicer. For purposes
of this Article V, the phrase "payments by or on behalf of obligors" shall mean
payments made with respect to the Financed Student Loans by or on behalf of
borrowers thereof and the Guarantors.
SECTION 5.3. Application of Collections. With respect to each Financed
Student Loan, all collections (including all Guarantee Payments) with respect
thereto shall be applied in accordance with regulations of the Department and
the applicable Guarantor.
SECTION 5.4. Additional Deposits. Within two Business Days after
receipt thereof, the Eligible Lender Trustee (or the Master Servicer on its
behalf) shall deposit in the Collection Account the aggregate amount of
Interest Subsidy Payments and Special Allowance Payments received by it with
respect to the Financed Student Loans, and the Transferor shall deposit in the
Collection Account any amount owed pursuant to Section 3.2 no later than the
last day of the Collection Period during which any such amount is owed. The
Master Servicer shall deposit or cause to be deposited in the Collection
Account the aggregate Purchase Amount with respect to Purchased Student Loans
and all other amounts to be paid by the Master Servicer under Section 4.5 when
such amounts are due, and the Transferor shall deposit or cause to be deposited
therein the aggregate Purchase Amount with respect to Purchased Student Loans
and all other amounts to be paid by the Transferor under Sections 3.2 or 9.1
when such amounts are due. The Transferor, the Master Servicer and the
Administrator also shall deposit in the Collection Account all amounts required
to be deposited therein pursuant to, and within the time periods provided by,
Section 2.3. Notwithstanding the foregoing, the Master Servicer shall deposit,
or cause to be deposited, directly into the Reserve Account any payments of or
with respect to principal relating to a Financed Student Loan for which any
payment on account of a Realized Loss was previously distributed (but only up
to the amount of such Realized Loss), and shall deposit, or cause to be
deposited, directly into the Collection Account any payments of or with respect
to interest relating to a Financed Student Loan for which any payment on
account of a Realized Loss was previously distributed.
The Master Servicer also shall, in its sole discretion,
deposit into the Monthly Advance Account the amount of any Monthly Advances
determined to be made by the Master Servicer pursuant to Section 5.10 no later
than the Determination Date relating to the Distribution Date when such
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amounts are to be applied as a payment of interest. On each Distribution Date,
the Indenture Trustee will transfer from the Monthly Advance Account to the
Eligible Lender Trustee, by wire transfer no later than 11:00 a.m. New York
time, for deposit into the Certificate Monthly Advance Account the portion of
the Monthly Advance, if any, for such Distribution Date allocable to the
Certificates. Pursuant to Section 5.10, if after making a Monthly Advance the
Master Servicer receives the Guarantee Payment, Special Allowance Payment or
Interest Subsidy Payment for which such Monthly Advance was made, the Master
Servicer shall be reimbursed immediately from such Guarantee Payment, Special
Allowance Payment or Interest Subsidy Payment, as the case may be, on deposit
in the Collection Account up to the amount of the related Monthly Advance or,
if such Guarantee Payment, Special Allowance Payment or Interest Subsidy
Payment is not received, the Master Servicer may reimburse itself from any
funds on deposit in the Collection Account up to the amount of the related
Monthly Advance.
SECTION 5.5. Distributions. (a) On each Quarterly Distribution Date,
pursuant to the Administrator's written instructions, the Indenture Trustee
will transfer the Available Funds on deposit in the Collection Account for the
three Collection Periods immediately preceding the month of such Quarterly
Distribution Date (or (x) with respect to the first Quarterly Distribution
Date, from the Closing Date through and Quarterly including the Collection
Period immediately preceding such Distribution Date and (y) with respect to (i)
(y) below with respect to the Monthly Consolidation Fee and with respect to
(ii) and (iii) below, in the case of the Class A-1 Notes the Indenture Trustee
will transfer the requested amount from the Available Funds on deposit in the
Collection Accounts for the Collection Period immediately preceding the month
of each distribution Date for the Class A-1 Notes) and in the case of the
Monthly Consolidation Fee each Distribution Date on each date which would have
been a Distribution Date if the Class A-1 Notes were outstanding, in each case
in the following manner and in the following order of priority:
(i) first, to the Expense Account, an amount up to the sum of
(x) aggregate estimated Transaction Fees for the three immediately succeeding
Collection Periods and all overdue Transaction Fees from prior Collection
Periods (plus (or minus) the difference (or excess) of the actual Transaction
Fees for the three immediately preceding Collection Periods and the Transaction
Fees deposited into the Expense Account on the preceding Distribution Date) and
(y) the Monthly Consolidation Fee immediately preceding Collection Period;
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(ii) second, to the Note Distribution Account, an amount up
to the sum of the aggregate Noteholders' Interest Distribution Amount and the
Trust Swap Payment for such Distribution Date;
(iii) third, to the Note Distribution Account, an amount up
to the Noteholders' Principal Distribution Amount for such Distribution Date;
(iv) fourth, to the Eligible Lender Trustee, for deposit into
the Certificate Distribution Account, an amount up to the Certificateholders'
Interest Distribution Amount for such Distribution Date; and
(v) fifth, if the Outstanding Amount of the Notes has been
paid in full, to the Eligible Lender Trustee, for deposit into the Certificate
Distribution Account, an amount up to the Certificateholders' Principal
Distribution Amount for such Distribution Date.
(b) [Reserved]
(c) On each Quarterly Distribution Date or in the case of (i)
below on each Distribution Date, the Indenture Trustee, pursuant to information
contained in the Administrator's Certificate delivered in accordance with
Section 4.7, will distribute from the Expense Account (in addition to any
amounts transferred from the Reserve Account pursuant to Section 5.6) the
following amounts in the following order of priority: (i)to the Deferment, the
Monthly Consolidation Fee for the immediately preceding Collection Period, (ii)
to the Master Servicer, the estimated Servicing Fee for the three immediately
succeeding Collection Periods and all overdue Servicing Fees, (iii) to the
Administrator, the estimated Administration Fee for the three immediately
succeeding Collection Periods and all overdue Administration Fees (iv) to the
Indenture Trustee, the estimated Indenture Trustee Fee for the three
immediately succeeding Collection Periods and all overdue Indenture Trustee
Fees, and (v) to the Eligible Lender Trustee, the estimated Eligible Lender
Trustee Fee for the three immediately succeeding Collection Periods and all
overdue Eligible Lender Trustee Fees.
(d) On each Distribution Date, the Indenture Trustee will
distribute to the Noteholders as of the related Record Date and the Swap
Counterparty all amounts transferred to the Note Distribution Account pursuant
to Section 5.5(a) (in addition to any amounts transferred from the Reserve
Account, any amounts deposited into the Monthly Advance Account pursuant to
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Section 5.4 and any Parity Percentage Payments transferred from the Collection
Account pursuant to Section 5.5(e)) in the following order of priority:
On each Distribution Date, following the transfer to the Note
Distribution Account described in the second preceding paragraph, the Indenture
Trustee will distribute to the Noteholders as of the related Record Date and
each Swap Counterparty the amounts transferred to the Note Distribution Account
as set forth above (in addition to any amounts transferred from the Reserve
Account and the Monthly Advance Account and any Parity Percentage Payments
transferred from the Collection Account, each as described below) in the
following order of priority:
(i) first, to each Class of Class A Noteholders and each Swap
Counterparty, the Class A Noteholders' Interest Distribution Amount and the
Trust Swap Payment, respectively (pro rata based upon the portion thereof
allocable to each such Class and each such Swap Counterparty);
(ii) second, to the Class B Noteholders, the Class B Noteholders'
Interest Distribution Amount;
(iii) third, to the Class A-1 Noteholders, the Noteholders' Principal
Distribution Amount until the Outstanding Amount of the Class A-1 Notes has
been paid in full;
(iv) fourth, to the Fixed Rate Notes, the Noteholders' Principal
Distribution Amount in the following order:
(A) after the Outstanding Amount of the Class A-1 Notes has
been reduced to zero, commencing with (but no earlier than) the
Distribution Date occurring in October, 1998, to the Class A-2
Noteholders, the remaining Noteholders' Principal Distribution Amount
until the Outstanding Amount of the Class A-2 Notes equals the
percentage of the original Outstanding Amount for such Class that
issued forth for such Class for such Distribution Date on the
Scheduled Principal Balance Table;
(B) after the Outstanding Amount of the Class A-2 Notes has
been reduced to zero, commencing with (but not earlier than) the
Distribution Date occurring in
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October 1999, to the Class A-3 Noteholders, the remaining Noteholders'
Principal Distribution Amount until the Outstanding Amount of the
Class A-3 Notes equals the percentage of the original Outstanding
Amount for such Class that issued forth for such Distribution Date on
the Scheduled Principal Balance Table;
(C) after the Outstanding Amount of the Class A-3 Notes has
been reduced to zero, commencing with (but not earlier than) the
Distribution Date occurring in October 2000, to the Class A-4
Noteholders, the remaining Noteholders' Principal Distribution Amount
until the Outstanding Amount of the Class A-3 Notes equals the
percentage of the original Outstanding Amount for such Class that
issued forth for such Distribution Date on the Scheduled Principal
Balance Table;
(D) after the Outstanding Amount of the Class A-4 Notes has
been reduced to zero, commencing with (but not earlier than) the
Distribution Date occurring in October 2001, to the Class A-5
Noteholders, the remaining Noteholders' Principal Distribution Amount
until the Outstanding Amount of the Class A-5 Notes equals the
percentage of the original Outstanding Amount for such Class that
issued forth for such Distribution Date on the Scheduled Principal
Balance Table;
(E) after the Outstanding Amount of the Class A-5 Notes has
been reduced to zero, commencing with (but not earlier than) the
Distribution Date occurring in October 2002, to the Class A-6
Noteholders, the remaining Noteholders' Principal Distribution Amount
until the Outstanding Amount of the Class A-6 Notes equals the
percentage of the original Outstanding Amount for such Class that
issued forth for such Distribution Date on the Scheduled Principal
Balance Table; and
(F) after the Outstanding Amount of the Class A-6 Notes has
been reduced to zero, commencing with (but not earlier than) the
Distribution Date occurring in October 2003, to the Class A-7
Noteholders, the remaining Noteholders' Principal Distribution Amount
until the Outstanding Amount of the Class A-7 Notes equals the
percentage of the original Outstanding Amount for such Class that
issued forth for such Distribution Date on the Scheduled Principal
Balance Table;
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(v) fifth, after the Outstanding Amount of each Class of Fixed Rate
Notes equals the percentage of the original Outstanding Amount for the
respective Class that is set forth for such Distribution Date on the Scheduled
Principal Balance Table (and on and after each Quarterly Distribution Date
after the Outstanding Amount of the Class A-7 Notes has been paid in full) to
the Class A-8 Noteholders, the remaining Noteholders' Principal Distribution
Amount until the Outstanding Amount of the Class A-8 Notes has been paid in
full;
(vi) sixth, after the Outstanding Amount of the Class A-8 Notes has
been paid in full and after the Outstanding Amount of each Class of Fixed Rate
Notes equals the percentage of the original Outstanding Amount for the
respective Class that is set forth for such Distribution Date on the Scheduled
Principal Balance Table, to the Class A-9 Noteholders, the remaining
Noteholders' Principal Distribution Amount until the Outstanding Amount of the
Class A-9 Notes has been paid in full; and
(vii) seventh, after the Outstanding Amount of the Class A-9 Notes has
been paid in full, to the Class B Noteholders, the remaining Noteholders'
Principal Distribution Amount until the Outstanding Amount of the Class B Notes
has been paid in full. On each Distribution Date, the Eligible Lender Trustee
will distribute to the Certificateholders as of the related Record Date all
amounts transferred to the Certificate Distribution Account pursuant to Section
5.5(a) (in addition to any amounts transferred from the Reserve Account and any
amount deposited into the Certificate Monthly Advance Account pursuant to
Section 5.4) in the following order of priority; (i) first, to the
Certificateholders, the Certificateholders' Interest Distribution Amount and
(ii) second, to the Certificateholders, the Certificateholders' Principal
Distribution Amount. The priority of distributions set forth in this Section
5.5(d) shall be subject to the provisions of Section 5.5(f).
(e) On each Distribution Date, after making any and all
required transfers to the Expense Account, the Note Distribution Account and,
if applicable, the Certificate Distribution Account pursuant to Section 5.5(a),
the Indenture Trustee will transfer any amounts remaining in the Collection
Account (other than amounts representing payments received during the month in
which such Distribution Date occurs) in the following order of priority: (i) to
the Reserve Account, the amount, if any, necessary to increase the balance
thereof to the
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Specified Reserved Account Balance, (ii) to the Note Distribution Account, the
Parity Percentage Payment, if any, for such Distribution Date, (iii) to the
Note Distribution Account, the amount of any outstanding Noteholders' Interest
Carryover and (iv) to the Transferor, any amounts remaining on deposit in the
Collection Account other than amounts representing payments received on or with
respect to the Financed Student Loans during the month of such Distribution
Date (amounts transferred to the Transferor pursuant to this clause (iv) shall
be transferred by the Indenture Trustee to the account specified by the
Transferor).
(f) Notwithstanding the foregoing, if (x) on any Distribution
Date following all distributions to be made on such Distribution Date, the
Outstanding Amount of the Class A Notes would exceed ____% of the sum of the
Pool Balance at the end of the immediately preceding Collection Period plus the
balance of the Reserve Account on such Distribution Date following such
distributions, or (y) an Event of Default has occurred with respect to payment
of the Notes, distributions pursuant to Section 5.5(d) shall be made in the
following priority:
(i) first, to each Class of Class A Noteholders and the Swap
Counterparty, the Noteholders' Interest Distribution Amount applicable to each
such Class and the Trust Swap Payment, respectively, pro rata based upon the
portion thereof allocable to each such Class and the Swap Counterparty;
(ii) second, in the case of clause (x) above, (a) to the Class A-1
Noteholders, the Noteholders' Principal Distribution Amount until the
outstanding principal amount of the Class A-1 Notes has been paid in full and
then (b) to the Class A Noteholders, in the order and priority set forth above
in clauses third through twelfth, inclusive, and in the case of clause (y)
above, to each Class of Class A Noteholders, the Noteholders' Principal
Distribution Amount applicable to such Distribution Date, pro rata based upon
the outstanding principal amount of each Class of Class A Notes until the
outstanding principal amount of each Class of Class A Notes has been paid in
full;
(iii) third, to the Class B Noteholders, the Noteholders' interest
Distribution Amount applicable to the Class B Notes;
(iv) fourth, after the outstanding principal amount of each of the
Class A Notes has been paid in full, to the class B Noteholders, the
Noteholders' Principal Distribution Amount until the outstanding principal
amount of the Class B Notes has been paid in full;
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(v) fifth, to the Class A-1 Noteholders, the Class A-9 Noteholders and
the Class A-10 Noteholders, the Noteholders' Interest Carryover applicable to
the respective Class of Class A Notes, pro rata based upon the portion thereof
allocable to each such Class;
(vi) sixth, to the Class B Noteholders, the Noteholders' Interest
Carryover applicable to the Class B Notes;
(vii) seventh, to the Certificateholders, the Certificateholders'
Interest Distribution Amount; and
(viii) eighth, to the Certificateholders, the Certificateholders'
Principal Distribution Amount.
All distributions made to the Noteholders of a Class or the
Certificateholders on each Distribution Date shall be made on a pro rata basis
among the Noteholders of such Class and Certificateholders of record as of the
related Record Date based upon the Outstanding Amount of such Class (or, with
respect to payments of principal on such Class of Notes, the applicable
Principal Factor with respect to such Class) or percentage interest of
Certificates so owned.
SECTION 5.6. Reserve Account. (a) On the Closing Date, the Transferor
shall deposit the Reserve Account Initial Deposit into the Reserve Account.
(b) If the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits or withdrawals therefrom
on such Distribution Date) is greater than the then applicable Specified
Reserve Account Balance, the Administrator shall instruct the Indenture Trustee
in writing (A) to deposit into the Note Distribution Account, an amount equal
to the amount described in Section 5.5(e)(iii) for such Distribution Date (to
the extent not otherwise paid to the Note Distribution Account on such
Distribution Date), (B) to deposit into the Note Distribution Account any
amounts required to be paid by the Transferor or the Master Servicer pursuant
to Section 3.2 or 4.5 as a result of breaches of representations and warranties
made in Section 3.1, 4.1, 4.2, 4.3 or 4.4 to the extent the Transferor or the
Master Servicer has not made such payments within the required time period, and
(C) to distribute the remaining amount of such excess to the Transferor.
Amounts properly distributed pursuant to this paragraph (b) shall be
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deemed released from the Trust Estate and the security interest therein granted
to the Indenture Trustee, and the Transferor shall in no event thereafter be
required to refund any such distributed amounts.
(c) Following the payment in full of the aggregate Outstanding Amount
of the Notes and of all other amounts owing or to be distributed hereunder or
under the Indenture or the Trust Agreement to Noteholders, Certificateholders,
the Master Servicer or the Administrator and the termination of the Trust, any
amount remaining on deposit in the Reserve Account shall be distributed to the
Transferor. The Transferor shall in no event be required to refund any amounts
properly distributed pursuant to this Section 5.6(c).
(d) (i) In the event that on any Distribution Date, any
amounts to be distributed as calculated pursuant to Section
5.5(c)(i)-(iv) exceed the amount on deposit in the Expense Account
available for such purposes, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account the lesser of
such excess and the amount on deposit in the Reserve Account (after
giving effect to each withdrawal in the order specified in Section
5.5(c)(i)-(iv)) and deposit such withdrawn amount in the Expense
Account for distribution as provided in Section 5.5.
(ii) In the event that the Sum of the Noteholders' Distribution
Amount and the Trust Swap Payment for a Distribution Date exceeds the
amount in the Note Distribution Account for such Distribution Date
available for such purposes, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account an amount equal
to the lesser of such excess, and the amount on deposit in the Reserve
Account, (after giving effect to paragraph (d)(i) above), and deposit
such withdrawn amount in the Note Distribution Account for
distribution as provided in Section 5.5.
(iii) In the event that the Certificateholders' Distribution
Amount for a Distribution Date exceeds the amount for such
Distribution Date available for such purposes, the Administrator shall
instruct the Indenture Trustee on such Distribution Date to withdraw
from the Reserve Account an amount equal to the lesser of such excess,
and the amount on deposit in the Reserve Account (after giving effect
to paragraphs (d)(i) through (d)(ii) above), and to deposit such
withdrawn amount in the Certificate Distribution Account for
distribution as provided in Section 5.5.
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SECTION 5.7. Statements to Certificateholders and Noteholders. On each
Determination Date preceding a Distribution Date, the Master Servicer or the
Administrator shall provide to the Indenture Trustee with a copy to the Rating
Agencies (for the Indenture Trustee to forward on such succeeding Distribution
Date to each Noteholder of the applicable Class of record and to the Eligible
Lender Trustee for the Eligible Lender Trustee to forward on such succeeding
Distribution Date to each Certificateholder (if such Certificateholder is not
the Transferor) of record, a statement substantially in the form of Exhibits A
and B, respectively, setting forth at least the following information with
respect to such Distribution Date or the preceding Collection Period or
Collection Periods, to the extent applicable:
(i) the Principal Factor for each Class of Notes;
(ii) the amount of the distribution allocable to principal on
each Class of Notes;
(iii) the amount of the distribution allocable to interest on
each Class of Notes and on the Certificates, together with the
interest rates applicable with respect thereto (indicating, in the
case of the Notes, whether such interest rates are based on LIBOR Rate
or One-Month LIBOR, or on the Net Loan Rate, with respect to each
Class of Notes, and specifying what each such interest rate would have
been if it had been calculated using the alternate basis);
(iv) the amount of the distribution, if any, allocable to any
Noteholders' Interest Carryover together with the outstanding amount,
if any, thereof after giving effect to any such distribution;
(v) the Pool Balance as of the close of business on the last
day of the preceding Collection Period;
(vi) the aggregate outstanding principal amount of each Class
of Notes as of such Distribution Date, after giving effect to payments
allocated to principal reported under clause (ii) above;
(vii) the amount of the Servicing Fee, the Administration
Fee, the Indenture Trustee Fee and the Eligible Lender Trustee Fee to
be allocated on the upcoming Distribution Date;
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(viii) the amount of the aggregate Realized Losses, if any,
for each Collection Period since the last Distribution Date and the
aggregate amount, if any, received (stated separately for interest and
principal) received during such Collection Periods relating to
Financed Student Loans for which a Realized Loss was previously
allocated;
(ix) the amount of the distribution attributable to amounts
in the Reserve Account, the amount of any other withdrawals from the
Reserve Account for such Distribution Date, the balance of the Reserve
Account on such Distribution Date, after giving effect to changes
therein on such Distribution Date, the then applicable Parity
Percentage and the amount of the distribution, if any, attributable to
Parity Percentage Payments;
(x) the aggregate amount, if any, paid for Financed Student
Loans purchased from the Trust during each preceding Collection Period
since the last Distribution Date (or since the Closing Date in the
case of the first Distribution Date);
(xi) during the Exchange period only, the aggregate Issue
Consolidation Payments and Exchange Adjustments, stated separately,
for each preceding Collection Period since the last Distribution Date
(or since the Closing Date in the case of the first Distribution
Date); and
(xii) the number and principal amount of Financed Student
Loans, as of the end of each preceding Collection Period since the
last Distribution Date (or since the Closing Date in the case of the
first Distribution Date), that are (i) 30 to 60 days delinquent, (ii)
61 to 90 days delinquent, (iii) 91 to 120 days delinquent, (iv) more
than 120 days delinquent and (v) for which claims have been filed with
the appropriate Guarantor and which are awaiting payment.
5.8. Expense Account. The Administrator shall instruct the Indenture
Trustee to deposit funds into, and withdraw funds from, the Expense Account as
set forth in Sections 5.5 and 5.6. Any funds remaining in the Expense Account
upon termination of the Trust shall be distributed to the Master Servicer as
additional servicing compensation.
5.9. Note Distribution Account and Certificate Distribution Account.
The Administrator shall instruct the Indenture Trustee and the Eligible Lender
Trustee to deposit funds into, and withdraw funds from, the Note Distribution
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Account and the Certificate Distribution Account, as applicable, as set forth
in Sections 5.5, 5.6 and 5.10.
5.10. Monthly Advances. If the Master Servicer has applied for a
Guarantee Payment from a Guarantor or an Interest Subsidy Payment or a Special
Allowance Payment from the Department, and the Master Servicer has not received
the related payment prior to the end of the Collection Period immediately
preceding the Distribution Date on which such amount would be required to be
distributed as a payment of interest, the Master Servicer may, no later than
the Determination Date relating to such Distribution Date, in its sole
discretion, deposit into the Monthly Advance Account an amount up to the amount
of such payments applied for but not received (such deposits by the Master
Servicer are referred to herein as "Monthly Advances"). Such Monthly Advances
are recoverable by the Master Servicer (i) first, from the Guarantee Payment,
Interest Subsidy Payment or Special Allowance Payment, as the case may be, for
which such Monthly Advance was made and (ii) second, from collections received
generally on or with respect to the Financed Student Loans. The Master Servicer
shall have no obligation, legal or otherwise, to make any Monthly Advance, and
the making of or decision to make a particular Monthly Advance shall not create
any obligation on the Master Servicer, legal or otherwise, to make any future
Monthly Advances.
5.11. Certificate Interest. During the initial Interest Period, the
Certificates shall bear interest at the Certificate Initial Rate. Thereafter,
the Certificates shall bear interest during each applicable Interest Period at
the Certificate Rate.
During each Interest Period, interest at the Certificate Rate shall
accrue daily and shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days.
The Master Servicer shall calculate One-Month LIBOR on each Rate
Determination Date and shall notify the Eligible Lender Trustee and the
Indenture Trustee of One-Month LIBOR. The Master Servicer also shall calculate
the T-▇▇▇▇ Rate pursuant to the provisions of the Terms Supplement and shall
notify the Eligible Lender Trustee and the Indenture Trustee of the T-▇▇▇▇
Rate. The determination by the Master Servicer of One-Month LIBOR and the
T-▇▇▇▇ Rate shall (in the absence of manifest error) be final and binding upon
all parties.
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ARTICLE VI
The Transferor and the Master Servicer
SECTION 6.1. Representations of Transferor and Master Servicer. The
Transferor and Master Servicer make the following representations with respect
to the Transferor and the Master Servicer, respectively, on which the Issuer is
deemed to have relied in acquiring (through the Eligible Lender Trustee) the
Financed Student Loans being conveyed pursuant to this Agreement. The
representations speak as of the Closing Date, in the case of the Initial
Financed Student Loans, and as of the applicable Exchange Date, in the case of
the Exchanged Student Loans, but shall survive the contribution, transfer and
assignment of the Financed Student Loans to the Eligible Lender Trustee on
behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant
to the Indenture.
(a) Organization and Good Standing. Each of the Transferor and the
Master Servicer is duly organized and validly existing as a national banking
association with the power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted, except for such power and authority the absence of which
would not have a material adverse effect on the Master Servicer or Transferor,
as the case may be, or their ability to consummate the transaction contemplated
by the Basic Documents and the Transferor had at all relevant times, and has,
the power, authority and legal right to originate, acquire and own the Financed
Student Loans and the Master Servicer had at all relevant times, and has the
power, authority and legal right to service the Financed Student Loans.
(b) Due Qualification. The Master Servicer is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership and lease of property or the conduct of
its business (including the servicing of the Financed Student Loans for which
it acts as Primary Servicer as required by this Agreement) shall require such
qualifications except for such licenses and approvals the absence of which
would not have a material adverse effect on the Master Servicer or its ability
to consummate the transactions contemplated by the Basic Documents.
(c) Power and Authority. Each of the Transferor and the Master
Servicer has the requisite corporate power and authority to execute and deliver
this Agreement and to carry out its terms; the Transferor has requisite
corporate power and authority to transfer and assign the property to be
contributed and assigned to and deposited with the Issuer (or with the Eligible
Lender Trustee on behalf of the Issuer) and the Transferor has duly authorized
such transfer and assignment to the
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Issuer (or to the Eligible Lender Trustee on behalf of the Issuer) by all
necessary corporate action on Transferor's part; and the execution, delivery
and performance of this Agreement have been duly authorized by the Transferor
and the Master Servicer by all necessary corporate action on their respective
parts.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Transferor and the Master Servicer, enforceable
against the Transferor and the Master Servicer in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance and similar laws relating to creditors' rights generally or the
rights of creditors of banks the deposit accounts of which are insured by the
FDIC and subject to general principles of equity.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not violate, result
in any breach of any of the terms and provisions of, nor constitute (with or
without notice or lapse of time or both) a default under, the charter or
by-laws of the Transferor or the Master Servicer, or any material indenture,
agreement or other material instrument to which the Transferor or the Master
Servicer is a party or by which it shall be bound; nor result in the creation
or imposition of any Lien upon any of its properties pursuant to the terms of
any such material indenture, agreement or other material instrument (other than
pursuant to the Basic Documents); nor violate any material law or, to the
knowledge of either the Transferor or the Master Servicer, any material order,
rule or regulation applicable to it of any court or of any Federal or State
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Transferor or the Master Servicer or its
properties.
(f) No Proceedings. There are no proceedings or investigations pending
against the Transferor or the Master Servicer or, to its best knowledge,
threatened against the Transferor or the Master Servicer, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over it or its properties: (i) asserting the invalidity of
this Agreement, the Indenture or any of the other Basic Documents, the Notes or
the Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by either the Transferor or the
Master
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Servicer of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates or (iv) seeking to affect adversely the Federal or State income
tax attributes of the Issuer, the Notes or the Certificates.
(g) All Consents. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by either the Transferor or the Master Servicer in
connection with the execution and delivery by either the Transferor or the
Master Servicer of this Agreement and the performance by either the Transferor
or the Master Servicer of the transactions expressly contemplated by this
Agreement, have been duly obtained, effected or given and are in full force and
effect, except such as may be required by the blue sky laws of any jurisdiction
in connection with the sale and distribution of the Notes and the Certificates
for which no representation or warranty is being given.
(h) No Amendmentor Waiver. Except as provided in Section 4.14, no
provision of a Financed Student Loan has been waived, altered or modified in
any respect, except pursuant to a document, instrument or writing included in
the Financed Student Loan File, and no such amendment, waiver, alteration or
modification causes such Financed Student Loan not to conform in any material
respect to the other warranties contained in this Section or those of the
Transferor contained in Section 3.1.
(i) Location of Financed Student Loan Files. The Financed Student Loan
Files are kept in accordance with Section 3.4(b).
SECTION 6.2. Existence. Except as permitted by Section 6.5, during the
term of this Agreement, each of the Transferor and the Master Servicer will
keep in full force and effect its existence, rights and franchises as a
national banking association under the laws of the jurisdiction of its
organization.
SECTION 6.3. Liability and Indemnities. (a) Each of the Transferor and
the Master Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Transferor and the Master
Servicer, as the case may be, under this Agreement.
(b) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee and the Indenture Trustee and their
officers, directors, employees and
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agents from and against any taxes that may at any time be asserted against any
such Person with respect to the transactions contemplated herein (except (i)
taxes arising out of fees paid to the Eligible Lender Trustee or the Indenture
Trustee, (ii) arising out of the transfer of the Financed Student Loans to the
Eligible Lender Trustee, (iii) taxes arising out of the issuance and sale of
the Certificates and the Notes, (iv) taxes arising out of the ownership of the
Financed Student Loans (including, without limitation, income taxes), and (v)
taxes arising out of distributions on the Ceterficates and the Notes) and costs
and expenses in defending against the same.
(c) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, and the Noteholders
and the officers, directors, employees and agents of the Issuer, the Eligible
Lender Trustee and the Indenture Trustee from and against any and all costs,
expenses, losses, claims, damages and liabilities arising out of, or imposed
upon such Person through, (i) the Transferor's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this Agreement
and (ii) the Transferor's or the Issuer's violation of Federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificates; provided, however, the Transferor shall not be liable for any
such costs, expenses, losses, claims, damages and liabilities imposed upon such
Person to the extent that they arise out of or result from such Person's
negligence, willful malfeasance or bad faith or a breach of the representations
and warranties of such Person in this Agreement. Notwithstanding anything to
the contrary contained in this Agreement, in no event shall the Transferor be
liable under any theory of tort, contract, strict liability or other legal or
equitable theory for any lost profits or exemplary, punitive, special,
incidental, indirect or consequential damages, each of which is hereby excluded
by agreement of the parties regardless of whether or not the Transferor has
been advised of the possibility of such damages.
(d) The Transferor shall indemnify, defend and hold harmless the
Eligible Lender Trustee and its officers, directors, employees and agents from
and against, all costs, expenses, losses, claims, damages, obligations and
liabilities arising out of, incurred in connection with or relating to the
Trust Agreement, the other Basic Documents, the Trust Estate,
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the acceptance or performance of the trusts and duties set forth herein and in
the Trust Agreement or the action or the inaction of the Eligible Lender
Trustee hereunder and under the Trust Agreement, except to the extent that such
cost, expense, loss, claim, damage, obligation or liability: (i) shall be due
to the willful misfeasance, bad faith or negligence of the Eligible Lender
Trustee, (ii) shall arise from any breach by the Eligible Lender Trustee of its
covenants under any of the Basic Documents; or (iii) shall arise from the
breach by the Eligible Lender Trustee of any of its representations or
warranties set forth in Section 7.3 of the Trust Agreement. Notwithstanding
anything to the contrary contained in this Agreement, in no event shall the
Transferor be liable under any theory of tort, contract, strict liability or
other legal or equitable theory for any lost profits or exemplary, punitive,
special, incidental, indirect or consequential damages, each of which is hereby
excluded by agreement of the parties regardless of whether or not the
Transferor has been advised of the possibility of such damages.
(e) The Transferor shall pay any and all taxes levied or assessed upon
all or any part of the Trust Estate (other than those taxes expressly excluded
from the Transferor's responsibilities pursuant to the parenthetical in
paragraph (b) above).
(f) Pursuant to Section 6.7 of the Indenture, and subject to the
limitations therein, the Transferor shall pay reasonable compensation to the
Indenture Trustee and shall reimburse the Indenture Trustee for all reasonable
expenses, disbursements and advances, and indemnify, defend and hold harmless
the Indenture Trustee and its officers, directors, employees and agents from
and against all costs, expenses, losses, claims, damages and liabilities, to
the extent and in the manner provided in the Indenture. Notwithstanding
anything to the contrary contained in this Agreement, in no event shall the
Transferor be liable under any theory of tort, contract, strict liability or
other legal or equitable theory for any lost profits or exemplary, punitive,
special, incidental, indirect or consequential damages, each of which is hereby
excluded by agreement of the parties regardless of whether or not the
Transferor has been advised of the possibility of such damages.
(g) The Master Servicer shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Certificateholders, and the Noteholders and the officers, directors, employees
and agents of the Issuer, the Eligible Lender Trustee and the Indenture Trustee
from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or imposed upon such Person through,
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the Master Servicer's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, where the final determination
that any such loss, liability or expense arose out of, or was imposed upon any
such Person through, any such negligence, willful misfeasance or bad faith on
the part of the Master Servicer is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Master Servicer; provided,
however, the Master Servicer shall not be liable for any such costs, expenses,
losses, claims, damages and liabilities imposed upon such Person to the extent
that they arise out of or result from such Person's negligence, willful
malfeasance or bad faith or a breach of the representations and warranties of
such Person in this Agreement. Notwithstanding the foregoing, if the Master
Servicer is rendered unable, in whole or in part, by a force outside the
control of the Master Servicer (including acts of God, acts of war, severe
weather, communications failures or failures to receive electronic data or
labor disputes or strikes, fires, earthquakes and other disasters) to satisfy
its obligations under this Agreement, the Master Servicer shall not be deemed
to have breached any such obligation upon delivery of written notice of such
event to the other parties hereto, for so long as the Master Servicer remains
unable to perform such obligation as a result of such event. Notwithstanding
anything to the contrary contained in this Agreement, in no event shall the
Master Servicer be liable under any theory of tort, contract, strict liability
or other legal or equitable theory for any lost profits or exemplary, punitive,
special, incidental, indirect or consequential damages, each of which is hereby
excluded by agreement of the parties regardless of whether or not the Master
Servicer has been advised of the possibility of such damages.
(h) Indemnification under this Section shall survive the resignation
or removal of the Eligible Lender Trustee or the Indenture Trustee and the
termination of this Agreement or the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Transferor or the Master Servicer, as the case
may be, shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter shall collect
any of such amounts from others, such Person shall promptly repay such amounts
to the Transferor or the Master Servicer, as the case may be without interest.
(i) Promptly after receipt by an indemnified party under this Section
6.3 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 6.3, notify the indemnifying party of the commencement
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thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under Section 6.3., except to the extent the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of the
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 6.3 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In no event shall the indemnifying party be liable for
fees and expenses for more than one counsel separate from their own counsel for
all indemnified parties in connection with any one action or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. An indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
The indemnified party will not, without the prior written consent of
the indemnifying party, settle, compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in which indemnification may be sought hereunder.
SECTION 6.4. [Reserved]
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SECTION 6.5. Merger or Consolidation of, or Assumption of the
Obligations of, the Transferor, the Administrator or the Master Servicer. Any
Person (a) into which the Transferor, the Administrator or the Master Servicer,
as the case may be, may be merged or consolidated, (b) which may result from
any merger or consolidation to which the Transferor, the Administrator or the
Master Servicer, as the case may be, shall be a party or (c) which may succeed
to the properties and assets of the Transferor, the Administrator or the Master
Servicer, as the case may be, substantially as a whole, shall be the successor
to the Transferor, the Administrator or the Master Servicer, as the case may
be, without the execution or filing of any document or any further act by any
of the parties to this Agreement or the Administration Agreement; provided,
however, that each of the Transferor, the Administrator and the Master Servicer
hereby covenants that it will not consummate any of the foregoing transactions
except upon satisfaction of the following: (i) the surviving Transferor,
Administrator or Master Servicer, as the case may be, if other than PNC Bank,
National Association or a PNC Subsidiary or PNC Bank Corp., executes an
agreement of assumption to perform every obligation of the Transferor, the
Administrator or the Master Servicer, as the case may be, under this Agreement
and the Administration Agreement, (ii) immediately after giving effect to such
transaction, no Master Servicer Default (in the case of the Master Servicer) or
no Administrator Default (in the case of the Administrator) shall have occurred
and be continuing, (iii) the Transferor, the Administrator or the Master
Servicer, as the case may be, if other than PNC Bank National Association or a
PNC Subsidiary or PNC Bank Corp. shall have delivered to the Eligible Lender
Trustee and the Indenture Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with, (iv) such transaction will not result in a material
adverse Federal or state tax consequence to the Issuer relating to its tax
classification, or to the Noteholders, considered as a whole, relating to a
change in the characterization of the Notes and (v) unless "PNC Bank, National
Association" is the surviving entity or name, the Transferor, the Administrator
or the Master Servicer, as the case may be, shall have delivered to the
Eligible Lender Trustee and the Indenture Trustee an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and Indenture Trustee, respectively, in the Financed Student
Loans, or (B) stating that, in the opinion of such counsel, no
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such action shall be necessary to preserve and protect such interests. Nothing
in this Agreement or any other Basic Document shall be deemed to restrict or
prohibit, and no consent of Noteholders or Certificateholders, supplemental
agreement, Officer's Certificate (except to the extent provided in clause (12)
below of this Section 6.5) or Opinion of Counsel (except to the extent provided
in clause (v) above of this Section 6.5) shall be required in the case of, the
merger of a PNC Subsidiary with and into a PNC Subsidiary or PNC Bank Corp., the
consolidation of a PNC Subsidiary and a PNC Subsidiary or PNC Bank Corp., or
the sale or other disposition of all or substantially all of the assets of a
PNC Subsidiary to another PNC Subsidiary or PNC Bank Corp., if, in any such
case in which the surviving, resulting or acquiring entity is not PNC Bank
Corp., PNC Bank Corp. would own, directly or indirectly, at least eighty
percent (80%) of the voting securities of the PNC Subsidiary surviving such
merger, resulting from such consolidation or acquiring such assets. For the
purpose of this Section 6.5, "PNC Subsidiary" means each of (1) PNC Bank,
National Association, (2) PNC Bank, Ohio, National Association, (3) PNC Bank,
Kentucky, Inc., (4) PNC Bank, Indiana, Inc., (5) PNC Bank, Delaware, (6) PNC
National Bank of Delaware, (7) PNC National Bank, (8) PNC Mortgage Bank, N.A.,
(9) PNC Bank, New England, (10) PNC Bank FSB, (11) any other banking
subsidiaries of PNC Bank Corp. the consolidated assets of which constitute
twenty percent (20%) or more of the consolidated assets of PNC Bank Corp. and
its consolidated subsidiaries, (12) any other banking subsidiary of PNC Bank
Corp. designated as a PNC Subsidiary pursuant to a Board Resolution and set
forth in an Officer's Certificate delivered to the Eligible Lender Trustee and
the Indenture Trustee, and (13) any subsidiary of PNC Bank Corp. that owns,
directly or indirectly any voting securities, or options, warrants or rights to
subscribe for or purchase voting securities of any PNC Subsidiary under clauses
(1) through (12), and in the case of each of clauses (1) through (13) their
respected successors (whether by consolidation, merger, conversion, transfer of
substantially all their assets and business or otherwise) so long as any
successor is a banking subsidiary (in the case of clauses 1 through 12)) or a
subsidiary (in the case of clause (13)) of PNC Bank Corp. References to PNC
Bank Corp. include any name change. "Board Resolution" means a copy of a
resolution certified by the Secretary or any Assistant Secretary of PNC Bank
Corp. to have been duly adopted by the Board of Directors of PNC Bank Corp., or
such committee of the Board of Directors or officers of PNC Bank Corp. to which
authority to act on behalf of the Board of Directors has been delegated, and to
be in full force and effect on the date of such certification, and delivered to
the Eligible Lender Trustee and the Indenture Trustee.
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SECTION 6.6. Limitation on Liability of Transferor, Master Servicer
and Others. (a) The Transferor, the Master Servicer and any director or officer
or employee or agent of either may rely in good faith on the advice of counsel
or on any document of any kind, prima facie properly executed and submitted by
any Person respecting any matters arising hereunder.
(b) Neither the Transferor, the Master Servicer nor any of its
directors, officers, employees or agents shall be under any liability to the
Issuer, the Noteholders, the Certificateholders, or the Swap Counterparty the
Indenture Trustee or the Eligible Lender Trustee except as provided under this
Agreement or the Administration Agreement for any action taken or for
refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect
the Transferor or Master Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of their respective duties under this Agreement
or the Administration Agreement.
Except as provided in this Agreement, the Transferor and the Master
Servicer shall not be under any obligation to appear in, prosecute or defend
any legal action that shall not be incidental to its duties in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Transferor or the Master Servicer may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the other Basic Documents and the rights and
duties of the parties to this Agreement and the other Basic Documents and the
interests of the Certificateholders under this Agreement or the Administration
Agreement and the Noteholders under the Indenture.
SECTION 6.7. Transferor May Own Certificate or Notes. The Transferor
and any Affiliate thereof may in its individual or any other capacity become
the owner or pledgee of Certificates or Notes with the same rights as it would
have if it were not the Transferor or an Affiliate thereof, except as expressly
provided herein or in any other Basic Document.
SECTION 6.8. Master Servicer Not to Resign. Subject to the provisions
of Section 6.5, PNC Bank, National Association shall not resign from the
obligations and duties imposed on it as Master Servicer under this Agreement
except upon determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law or
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shall violate any final order of a court or administrative agency with
jurisdiction over it or its properties. Notice of any such determination
permitting resignation shall be communicated to the Eligible Lender Trustee and
the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion
of Counsel to such effect delivered to the Eligible Lender Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Master Servicer shall have assumed the responsibilities and obligations of PNC
Bank, National Association in accordance with Section 8.2.
ARTICLE VII
The Administrator
SECTION 7.1. Representations of the Administrator. The Administrator
makes the following representations on which the Issuer is deemed to have
relied in acquiring (through the Eligible Lender Trustee) the Financed Student
Loans being conveyed pursuant to this Agreement. The representations speak as
of the Closing Date, in the case of the Initial Financed Student Loans, and as
of the applicable Exchange Date, in the case of the Exchanged Student Loans,
but shall survive the contribution, transfer and assignment of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Administrator is duly
organized and validly existing as a national banking association with the power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted except
for such power and authority the absence of which would not have a material
adverse effect on the Administrator or its ability to consummate the
transactions contemplated by the Basic Documents, and had at all relevant
times, and has, the power, authority and legal right, to administer the
Financed Student Loans.
(b) Power and Authority of the Administrator. The Administrator has
the requisite corporate power and authority to execute and deliver this
Agreement and the Administration Agreement and to carry out their respective
terms; and the execution, delivery and performance of this Agreement and the
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Administration Agreement have been duly authorized by the Administrator by all
necessary corporate action on its part.
(c) Binding Obligation. This Agreement and the Administration
Agreement each constitutes a legal, valid and binding obligation of the
Administrator, enforceable against the Administrator in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance and similar laws relating to creditors' rights generally or the
rights of creditors of banks the deposit accounts of which are insured by the
FDIC or and subject to general principles of equity.
(d) No Violation. The consummation of the transactions contemplated by
this Agreement and the Administration Agreement and the fulfillment of the
terms hereof or thereof do not violate, result in any breach of any of the
terms and provisions of, nor constitute (with or without notice of lapse of
time or both) a default under, the articles of incorporation or by-laws of the
Administrator, or any material indenture, agreement or other instrument to
which the Administrator is a party or by which it shall be bound; nor result in
the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such material indenture, agreement or other material
instrument (other than pursuant to the Basic Documents); nor violate any
material law or, to the knowledge of the Administrator, any material order,
rule or regulation applicable to it of any court or of any Federal or State
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Administrator or its properties.
(e) No Proceedings. There are no proceedings or investigations pending
against the Administrator or, to its best knowledge, threatened against the
Administrator, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over it or its
properties: (i) asserting the invalidity of this Agreement or the
Administration Agreement, (ii) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or the Administration Agreement
or (iii) seeking any determination or ruling that could reasonably be expected
to have a material and adverse effect on the performance by the Administrator
of its obligations under, or the validity or enforceability of, this Agreement
or the Administration Agreement.
(f) All Consents. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body,
administrative agency or other
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government instrumentality required to be obtained, effected or
given by the Administrator in its capacity as the Administrator in connection
with the execution and delivery by the Administrator of this Agreement or the
Administration Agreement and the performance by the Administrator in its
capacity as the Administrator of the transactions contemplated by this
Agreement or the Administration Agreement, have been duly obtained, effected or
given and are in full force and effect.
SECTION 7.2. Liability and Indemnities. (a) The Administrator shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Administrator under this Agreement or the
Administration Agreement.
The Administrator and any of its directors, officers, employees or
agents may rely in good faith on the advice of counsel or on any document of
any kind, prima facie properly executed and submitted by any Person.
Except as provided in this Agreement or the Administration Agreement,
the Administrator shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its duties to
administer the Financed Student Loans and the Trust in accordance with this
Agreement and the Administration Agreement, and that in its opinion may involve
it in any expense or liability; provided, however, that the Administrator may
undertake any reasonable action that it may deem necessary or desirable in
respect of this Agreement and the other Basic Documents and the rights and
duties of the parties to this Agreement and the other Basic Documents and the
interests of the Certificateholders under this Agreement and the Noteholders
under the Indenture.
(b) The Administrator shall indemnify, defend and hold harmless from
its funds, the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Master Servicer, the Noteholders and the Certificateholders and the officers,
directors, employees and agents of the Issuer, the Eligible Lender Trustee,
Indenture Trustee, the Noteholders and the Certificateholders from and against
any and all costs, expenses, losses, claims, damages and liabilities arising
out of, or imposed upon such Person through, the Administrator's willful
misfeasance, bad faith or negligence in the performance of its duties under
this Agreement or the Administration Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement or the
Administration Agreement, where the final determination that any such loss,
liability or expense arose out of, or was imposed upon any such Person through,
any such negligence, willful misfeasance or bad faith on the part of
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the Administrator is established by a court of law, by an arbitrator or by way
of settlement agreed to by the Administrator. Notwithstanding the foregoing, if
the Administrator is rendered unable, in whole or in part, by a force outside
the control of the Administrator (including acts of God, acts of war, severe
weather, communications failures or failures to receive electronic data or
labor disputes or strikes, fires, earthquakes and other disasters) to satisfy
its obligations under this Agreement, the Administrator shall not be deemed to
have breached any such obligation upon delivery of written notice of such event
to the other parties hereto, for so long as the Administrator remains unable to
perform such obligation as a result of such event; provided, however, the
Administrator shall not be liable for any such costs, expenses, losses, claims,
damages and liabilities imposed upon such Person to the extent that they arise
out of or result from such Person's negligence, willful malfeasance or bad
faith or a breach of the representations and warranties of such Person in this
Agreement or the Administration Agreement. Notwithstanding anything to the
contrary contained in this Agreement or the Administration Agreement, in no
event shall the Administrator be liable under any theory of tort, contract,
strict liability or other legal or equitable theory for any lost profits or
exemplary, punitive, special, incidental, indirect or consequential damages,
each of which is hereby excluded by agreement of the parties regardless of
whether or not the Administrator has been advised of the possibility of such
damages.
(c) Indemnification under this Section shall survive the resignation
or removal of the Eligible Lender Trustee or the Indenture Trustee and the
termination of this Agreement or the Indenture or the Trust Agreement, as
applicable, and shall include reasonable fees and expenses of counsel and
expenses of litigation. If the Administrator shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others,
such Person shall promptly repay such amounts to the Administrator without
interest.
(d) Promptly after receipt by an indemnified party under this Section
7.2 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7.2, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under Section 7.2., except to the extent the indemnifying party is materially
prejudiced by such failure. In case any such action is brought against any
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indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnifying party or parties
shall have the right to select separate counsel to assert such legal defenses
and to otherwise participate in the defense of such action on behalf of the
indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section 7.2 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. In no event shall the indemnifying party be liable for
fees and expenses for more than one counsel separate from their own counsel for
all indemnified parties in connection with any one action or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances. An indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
The indemnified party may not, without the prior written consent of
the indemnifying party, settle, compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in which indemnification may be sought hereunder.
SECTION 7.3. Administrator Not to Resign. Subject to the provisions of
Section 6.5, PNC Bank, National Association shall not resign from the
obligations and duties imposed on it as Administrator under this Agreement
except upon determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law or shall violate
any final order of a court or administrative agency with
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jurisdiction over it or its properties. Notice of any such determination
permitting resignation shall be communicated to the Eligible Lender Trustee and
the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion
of Counsel to such effect delivered to the Eligible Lender Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Administrator shall have assumed the responsibilities and obligations of PNC
Bank, National Association in accordance with Section 8.2.
ARTICLE VIII
Default
SECTION 8.1. Master Servicer Default; Administrator Default. (a) If
any one of the following events (a "Master Servicer Default") shall occur and
be continuing:
(1) any failure by the Master Servicer (i) to deliver to the
Indenture Trustee for deposit in any of the Trust Accounts any payment
required by the Basic Documents or (ii) in the event that daily
deposits into the Collection Account are not required, to deliver to
the Administrator or the Eligible Lender Trustee any payment required
by the Basic Documents, which failure in case of either clause (i) or
(ii) continues unremedied for three Business Days after written notice
of such failure is received by the Master Servicer from the Eligible
Lender Trustee, the Indenture Trustee or the Administrator or after
discovery of such failure by an officer of the Master Servicer; or
(2) any failure by the Master Servicer duly to observe or to
perform in any material respect any other covenants or agreements of
the Master Servicer set forth in this Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect the
rights of Noteholders and Certificateholders and (ii) continues
unremedied for a period of 60 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given (A) to the Master Servicer by the Indenture Trustee, the
Eligible Lender Trustee, or the Administrator or (B) to the Master
Servicer and to the Indenture Trustee and the Eligible Lender Trustee
by the Noteholders, representing not less than 25% of the Outstanding
Amount of the Notes or
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(3) an Insolvency Event occurs with respect to the Master
Servicer; or
(4) any limitation, suspension or termination by the
Department of the Master Servicer's eligibility to service Student
Loans which materially and adversely affects the Master Servicer's
ability to service the Financed Student Loans;
then, and in each and every case, so long as the Master Servicer Default shall
not have been remedied, the Indenture Trustee or the Noteholders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Master Servicer (and to the Indenture Trustee and
the Eligible Lender Trustee if given by the Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 6.3
hereof) of the Master Servicer under this Agreement. On or after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer under this Agreement, whether with respect to the Notes, the
Certificates or the Financed Student Loans or otherwise, shall, without further
action, pass to and be vested in the Indenture Trustee or such successor Master
Servicer as may be appointed under Section 8.2, and, without limitation, the
Indenture Trustee and the Eligible Lender Trustee are hereby authorized and
empowered to execute and deliver, for the benefit of the predecessor Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Financed Student Loans and related
documents, or otherwise. The predecessor Master Servicer shall cooperate with
the successor Master Servicer, the Indenture Trustee and the Eligible Lender
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Master Servicer under this Agreement, including the transfer to the
successor Master Servicer for administration by it of all cash amounts that
shall at the time be held by the predecessor Master Servicer for deposit, or
shall thereafter be received by it with respect to a Financed Student Loan. All
reasonable costs and expenses (including attorneys' fees) incurred in
connection with transferring the Financed Student Loan Files from a current
Master Servicer to the successor Master Servicer and amending this Agreement
and any other Basic Documents to reflect such succession as Master Servicer
pursuant to this Section shall be paid by the predecessor Master Servicer upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Master Servicer
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Default, the Eligible Lender Trustee shall give notice thereof to the
Rating Agencies.
Notwithstanding the termination of the Master Servicer and the
engagement of a successor Master Servicer, each Servicer shall continue to
serve in its capacity as Servicer or subservicer, unless it is in breach of the
related Servicing or Subservicing Agreement.
(b) Administrat or Default. If any one of the following events (an
"Administrator Default") shall occur and be continuing:
(1) any failure by the Administrator to direct the Indenture
Trustee or the Eligible Lender Trustee, as applicable, to make any
required distributions from any of the Trust Accounts, which failure
continues unremedied for three Business Days after written notice of
such failure is received by the Administrator from the Indenture
Trustee or the Eligible Lender Trustee or after discovery of such
failure by an officer of the Administrator; or
(2) any failure by the Administrator duly to observe or to
perform in any material respect any other covenants or agreements of
the Administrator set forth in this Agreement, the Administration
Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of Noteholders and (ii)
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied,
shall have been given (A) to the Administrator by the Indenture
Trustee or the Eligible Lender Trustee or (B) to the Administrator and
to the Indenture Trustee and the Eligible Lender Trustee by the
Noteholders representing not less than 25% of the Outstanding Amount
of the Notes;
(3) an Insolvency Event occurs with respect to the
Administrator;
then, and in each and every case, so long as the Administrator Default shall
not have been remedied, the Indenture Trustee or the Noteholders evidencing not
less than 25% of the Outstanding Amount of the Notes, by notice then given in
writing to the Administrator (and to the Indenture Trustee and the Eligible
Lender Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Sections 6.3 and 7.2
hereof) of the Administrator under this Agreement and the Administration
Agreement. On or after the receipt by the Administrator of such written notice,
all authority and power of the Administrator under this Agreement
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and the Administration Agreement, whether with respect to the Notes, the
Certificates or the Financed Student Loans or otherwise, shall, without further
action, pass to and be vested in the Indenture Trustee or such successor
Administrator as may be appointed under Section 8.2; and, without limitation,
the Indenture Trustee and the Eligible Lender Trustee are hereby authorized and
empowered to execute and deliver, for the benefit of the predecessor
Administrator, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary
or appropriate to effect the purposes of such notice of termination. The
predecessor Administrator shall cooperate with the successor Administrator, the
Indenture Trustee and the Eligible Lender Trustee in effecting the termination
of the responsibilities and rights of the predecessor Administrator under this
Agreement and the Administration Agreement. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with amending this Agreement
and the Administration Agreement to reflect such succession as Administrator
pursuant to this Section shall be paid by the predecessor Administrator upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Administrator Default, the Eligible
Lender Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.2. Appointment of Successor. (a) Upon receipt by the Master
Servicer or the Administrator, as the case may be, of notice of termination
pursuant to Section 8.1, or the resignation by the Master Servicer or the
Administrator, as the case may be, in accordance with the terms of this
Agreement, the predecessor Master Servicer or the Administrator, as the case
may be, shall continue to perform its functions as Master Servicer or
Administrator, as the case may be, under this Agreement and the Administration
Agreement, as the case may be, in the case of termination, only until the date
specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the later of (x) the date 120 days from the delivery to the
Eligible Lender Trustee and the Indenture Trustee of written notice of such
resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Master
Servicer or Administrator, as the case may be, shall become unable to act as
Master Servicer or Administrator, as the case may be, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
termination hereunder of the Master Servicer or the Administrator, as the case
may be,
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the Issuer shall appoint a successor Master Servicer or Administrator, as the
case may be, acceptable to the Indenture Trustee, and the successor Master
Servicer or Administrator, as the case may be, shall accept its appointment by
a written assumption in form acceptable to the Indenture Trustee. In the event
that a successor Master Servicer or Administrator, as the case may be, has not
been appointed at the time when the predecessor Master Servicer or
Administrator, as the case may be, has ceased to act as Master Servicer or
Administrator, as the case may be, in accordance with this Section, the
Indenture Trustee without further action shall automatically be appointed the
successor Master Servicer or Administrator, as the case may be, and the
Indenture Trustee shall be entitled to the Master Servicing Fee or the
Administration Fee, as the case may be in accordance with the provisions of the
Basic Documents. Notwithstanding the above, the Indenture Trustee shall, if it
shall be unwilling or legally unable so to act, appoint or petition a court of
competent jurisdiction to appoint, any established institution whose regular
business shall include the servicing of student loans, as the successor to the
Master Servicer or Administrator, as the case may be, under this Agreement;
provided, however, that such right to appoint or to petition for the
appointment of any such successor servicer shall in no event relieve the
Indenture Trustee from any obligations otherwise imposed on it under the Basic
Documents until such successor has in fact assumed such appointment.
(b) Upon appointment, the successor Master Servicer or Administrator,
as the case may be (including the Indenture Trustee acting as successor Master
Servicer or Administrator as the case may be), shall be the successor in all
respects to the predecessor Master Servicer or Administrator, as the case may
be, and shall be subject to all the responsibilities, duties and liabilities
arising thereafter relating thereto placed on the predecessor Master Servicer
or Administrator, as the case may be, and shall be entitled to an amount agreed
to by such successor Master Servicer or Administrator as the case may be, in
accordance with the provisions of the Basic Documents (which shall not exceed
the Master Servicing Fee or Administration Fee, as the case may be, unless such
compensation arrangements will not result in a downgrading of the Notes by any
Rating Agency) and all the rights granted to the predecessor Master Servicer or
Administrator, as the case may be, by the terms and provisions of this
Agreement.
(c) Neither the Master Servicer nor the Administrator may resign
unless it is prohibited from serving as such by law as evidenced by an Opinion
of Counsel to such effect delivered to the Indenture Trustee and the Eligible
Lender Trustee. Notwithstanding the foregoing or anything to the contrary
herein or in the other Basic Documents, the Indenture Trustee, to the
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extent it is acting as successor Master Servicer or Administrator, as the case
may be, pursuant hereto shall be entitled to resign to the extent a qualified
successor Master Servicer or Administrator, as the case may be, has been
appointed and has assumed all the obligations of the Master Servicer or
Administrator, as the case may be, in accordance with the terms of this
Agreement and the other Basic Documents.
(d) Any successor Master Servicer shall assume all the obligations and
responsibilities of the Master Servicer under each Subservicing Agreement with
a Servicer and shall only be able to modify or terminate such Subservicing
Agreements pursuant to the provisions thereof.
SECTION 8.3. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Master Servicer or
Administrator, as the case may be, pursuant to this Article VIII, the Eligible
Lender Trustee shall give prompt written notice thereof to Certificateholders
and the Indenture Trustee shall give prompt written notice thereof to
Noteholders and the Rating Agencies (which, in the case of any such appointment
of a successor, shall consist of prior written notice thereof to the Rating
Agencies).
SECTION 8.4. Waiver of Past Defaults. The Noteholders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes may, on behalf of
all Noteholders and Certificateholders, waive in writing any default by the
Master Servicer or Administrator, as the case may be, in the performance of its
obligations hereunder and any consequences thereof, except a default in making
any required deposits to or payments from any of the Trust Accounts (or giving
instructions regarding the same) in accordance with this Agreement. Upon any
such waiver of a past default, such default shall cease to exist, and any
Master Servicer Default or Administrator Default, as the case may be, arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE IX
Termination
SECTION 9.1. Termination. (a) Optional Purchase of All Financed
Student Loans. As of the last day of any Collection Period immediately
preceding a Distribution Date as of which the then outstanding Pool Balance is
5% or less of
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the Initial Pool Balance and the Outstanding Amount of the Fixed Rate Notes has
been reduced to zero, the Transferor shall have the option to purchase the
Indenture Trust Estate, other than the Trust Accounts; provided, however, that
unless Moody's agrees otherwise, the Transferor may not effect any such
purchase as long as the rating of its unsecured long-term debt obligations is
less than Baa3 by Moody's, unless the Eligible Lender Trustee and the Indenture
Trustee shall have received an Opinion of Counsel to the effect that such
purchase would not constitute a fraudulent conveyance. To exercise such option,
the Transferor shall deposit pursuant to Section 5.4 in the Collection Account
an amount equal to the aggregate Purchase Amount for the Financed Student Loans
and the related rights with respect thereto, plus the appraised value of any
such other property held by the Trust, such value to be determined by an
appraiser mutually agreed upon by the Transferor, the Eligible Lender Trustee
and the Indenture Trustee, and shall succeed to all interests in and to the
Trust; provided, however, that the Transferor may not effect such purchase if
the aggregate Purchase Amount to be so deposited in the Collection Account does
not equal or exceed an amount equal to the sum of (x) the unpaid principal
balance of the Notes plus accrued and unpaid interest thereon at the related
Class Interest Rate to the last day of the Collection Period during which such
purchase occurs and (y) the unpaid Transaction Fees, if any.
(b) Auction of Financial Student Loans. Any Financed Student Loans
remaining in the Trust as of the end of the Collection Period immediately
preceding the 2007 Distribution Date will be offered for sale by the Indenture
Trustee. The Transferor, its affiliates and unrelated third parties may offer
bids to purchase such Financed Student Loans on such Distribution Date. If at
least two bids are received, the Indenture Trustee will accept the highest bid
equal to or in excess of the greater of (x) the aggregate Purchase Amounts of
such Financed Student Loans as of the end of the Collection Period immediately
preceding such Distribution Date or (y) an amount that would be sufficient to
(i) reduce the outstanding principal amount of the Notes on such Distribution
Date to zero and (ii) pay to the Noteholders the Noteholders' Interest
Distribution Amount payable on such Distribution Date and pay to the Swap
Counterparty any Trust Swap Payments payable on such Distribution Date, if any
(the "Minimum Purchase Price"). If at least two bids are not received or the
highest bid is not equal to or in excess of the Minimum Purchase Price, the
Indenture Trustee will not consummate such sale. The proceeds of any such sale
will be used to redeem any outstanding Notes on such Distribution Date. The
proceeds of any sale will be applied in the order of the property set forth in
5.04(b) of the Indenture. If the sale is not consummated in accordance with the
foregoing,
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the Indenture Trustee may, but shall not be under any obligation to, solicit
bids to purchase the Financed Student Loans on future Distribution Dates upon
terms similar to those described above.
(c) Insolvency of Transferor. Upon any sale of the assets of the Trust
pursuant to Section 9.2 of the Trust Agreement, the Master Servicer shall
instruct the Indenture Trustee to deposit the net proceeds from such sale after
all payments and reserves therefrom (including the expenses of such sale) have
been made (the "Insolvency Proceeds") in the Collection Account. On the
applicable Distribution Date, or, if such proceeds are not so deposited on a
Distribution Date, on the first Distribution Date following the date on which
the Insolvency Proceeds are deposited in the Collection Account, the Master
Servicer shall instruct the Indenture Trustee to make the following
distributions (after the application on such Distribution Date of the amount of
Available Funds and amounts on deposit in the Reserve Account pursuant to
Sections 5.5 (other than pursuant to Section 5.5(a)(ii)) and 5.6) from the
Insolvency Proceeds and any funds remaining on deposit in the Reserve Account
(including the proceeds of any sale of investments therein as described in the
following sentence):
(i) to the Indenture Trustee and the Eligible Lender Trustee,
any unpaid Indenture Trustee Fees and any unpaid Eligible Lender
Trustee Fees, respectively, and other amounts owed the Indenture
Trustee or the Eligible Lender Trustee hereunder or under any other
Basic Document and not otherwise paid on such Distribution Date;
(ii) to the Class A Noteholders, pro rata, any portion of the
Noteholders' Interest Distribution Amount applicable to the Class A
Noteholders, not otherwise distributed to the Class A Noteholders on
such Distribution Date;
(iii) to the Class A Noteholders, pro rata the outstanding
principal amount of the Class A Notes (after giving effect to the
reduction in the outstanding principal amount of the Class A Notes to
result from the distributions to Class A Noteholders on such
Distribution Date and on prior Distribution Dates);
(iv) to the Class B Noteholders, any portion of the
Noteholders' Interest Distribution Amount applicable to the Class B
Noteholders not otherwise distributed to the Class B Noteholders on
such Distribution Date;
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(v) to the Class B Noteholders, the outstanding principal
amount of the Class B Notes (after giving effect to the reduction in
the outstanding principal amount of the Notes to result from the
distributions to Noteholders on such Distribution Date and on prior
Distribution Dates);
(vi) to the Master Servicer, any unpaid Servicing Fee and
other amounts owed to the Master Servicer hereunder or under any other
Basic Document and not otherwise paid on such Distribution Date;
(vii) to the Class A Noteholders, any portion of the
Noteholders' Interest Carryover applicable to the Class A Noteholders
not otherwise distributed to the Class A Noteholders on such
Distribution Date;
(viii) to the Class B Noteholders, any portion of the
Noteholders' Interest Carryover applicable to the Class B Noteholders
not otherwise distributed to the Class B Noteholders on such
Distribution Date;
(ix) to the Certificateholders, any portion of the
Certificateholders' Interest Distribution amount not otherwise
distributed to the Certificateholders on such Certificate Distribution
Date;
(x) to the Certificateholders, the Certificate Balance (after
giving effect to the reduction in the Certificate Balance to result
from the distributions to Certificateholders on such Certificate
Distribution Date);
Any investments on deposit in the Reserve Account which will not mature on or
before the Distribution Date when needed shall be sold by the Indenture Trustee
at such time as will result in the Indenture Trustee receiving the proceeds
from such sale not later than the Business Day preceding such Distribution
Date. Any Insolvency Proceeds remaining after the deposits described above
shall be paid to the Transferor.
(d) Notice. As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to the
Master Servicer, the Eligible Lender Trustee and the Indenture Trustee as soon
as practicable after the Administrator has received notice thereof.
(e) Succession. Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the
Notes, the Certificateholders will succeed to the rights of the Noteholders
hereunder other than Section 5.6(b) and the Eligible Lender Trustee will
succeed
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to the rights of, and assume the obligations of, the Indenture Trustee pursuant
to this Agreement and any other Basic Documents.
ARTICLE X
[Reserved]
ARTICLE XI
Miscellaneous
SECTION 11.1. Amendment. (a) This Agreement may be amended by the
Transferor, the Master Servicer and the Eligible Lender Trustee, with the prior
consent of the Indenture Trustee (which consent shall not be unreasonably
withheld) to cure any ambiguity, to correct or supplement any provisions in
this Agreement or for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions in this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel delivered to the Eligible Lender Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of
any Noteholder.
(b) This Agreement may also be amended from time to time by the
Transferor, the Master Servicer and the Eligible Lender Trustee, with the prior
consent of the Indenture Trustee, the consent of the Noteholders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes, for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments with
respect to Financed Student Loans or distributions that shall be required to be
made for the benefit of the Noteholders or the Certificateholders or the Swap
Counter Party or (b) reduce the aforesaid percentage of the Outstanding Amount
of the Notes and the Certificate Balance, the Noteholders, the
Certificateholders or the Swap Counterparty of which are required to consent to
any such amendment, without the consent of all outstanding Noteholders and
Certificateholders.
(c) Promptly after the execution of any amendment pursuant to clause
(b) above, the Eligible Lender Trustee shall
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furnish written notification of the substance of such amendment or consent to
each Certificateholder and the Indenture Trustee.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall be entitled to receive
and rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and the Opinion of
Counsel referred to in Section 11.2(i)(1). The Eligible Lender Trustee and the
Indenture Trustee may, but shall not be obligated to, enter into any such
amendment which affects the Eligible Lender Trustee's or the Indenture
Trustee's, as applicable, own rights, duties or immunities under this Agreement
or otherwise.
SECTION 11.2. Protection of Interests in Trust. (a) The Transferor
shall execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places as
may be required by law fully to preserve, maintain, and protect the interest of
the Issuer, the Eligible Lender Trustee and the Indenture Trustee in the
Financed Student Loans and in the proceeds thereof. The Transferor shall
deliver (or cause to be delivered) to the Eligible Lender Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither the Transferor nor the Master Servicer shall change its
name, identity or corporate structure in any manner that would, could or might
make any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of ' 9-402(7) of
the UCC, unless it shall have given the Eligible Lender Trustee and the
Indenture Trustee at least five days' prior written notice thereof and shall
have promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Transferor and the Master Servicer shall have an
obligation to give the Eligible Lender Trustee and the Indenture Trustee at
least 30 days' prior written notice of any relocation of its principal
executive office if, as a result of such relocation, the applicable provisions
of the UCC would require the filing of any amendment of any previously filed
financing or continuation statement or of any new financing
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statement and shall promptly file any such amendment. The Master Servicer shall
at all times maintain each office from which it shall service Financed Student
Loans, and its principal executive office, within the United States of America.
(d) The Master Servicer shall maintain, or cause the Servicers to
maintain, accounts and records as to each Financed Student Loan for which it is
the Primary Servicer (or provide access to such accounts and records being
serviced by a Servicer) accurately and in sufficient detail to permit (i) the
reader thereof to know at any time the status of such Financed Student Loan,
including payments and recoveries made and payments owing (and the nature of
each) and (ii) reconciliation between payments or recoveries on (or with
respect to) each Financed Student Loan and the amounts from time to time
deposited in the Collection Account in respect of such Financed Student Loan.
(e) The Master Servicer shall cause each Subcustodian to maintain its
computer systems so that, from and after the time of transfer under this
Agreement of the Financed Student Loans, each Subcustodian's master computer
records (including any backup archives) that refer to a Financed Student Loan
shall indicate clearly the interest of the Issuer and the Indenture Trustee in
such Financed Student Loan and that such Financed Student Loan has been
assigned by the Transferor to the Issuer and has been pledged to the Indenture
Trustee. Indication of the Issuer's and the Indenture Trustee's interest in a
Financed Student Loan shall be deleted from or modified on the applicable
Subcustodian's computer systems when, and only when, the related Financed
Student Loan shall have been paid in full or repurchased.
(f) If at any time the Transferor shall propose to contribute, grant a
security interest in, or otherwise transfer any interest in Financed Student
Loans to any prospective purchaser, lender or other transferee, the Master
Servicer shall give notice to such prospective purchaser, lender or other
transferee that such Financed Student Loan has been assigned to the Issuer and
has been pledged to the Indenture Trustee.
(g) Upon reasonable notice, the Master Servicer shall permit the
Indenture Trustee and its agents once each calendar year (unless there is a
Servicer Default, in which case at any time) during normal business hours to
inspect, audit and make copies of and abstracts from the Master Servicer's
records regarding any Financed Student Loan.
(h) Upon request at any time the Eligible Lender Trustee or the
Indenture Trustee shall have reasonable grounds
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to believe that such request would be necessary in connection with its
performance of its duties under the Basic Documents, the Master Servicer shall
furnish to the Eligible Lender Trustee or to the Indenture Trustee, within
twenty Business Days, a list of all Financed Student Loans (by borrower social
security number, type of loan and date of issuance) then held as part of the
Trust, and a comparison of such list to the list of the Initial Financed
Student Loans set forth in Schedule A as of the Closing Date, and, for each
Financed Student Loan that has been added to or removed from the pool of loans
held by the Eligible Lender Trustee on behalf of the Issuer, information as to
the date as of which and circumstances under which each such Financed Student
Loan was so added or removed.
(i) The Transferor shall deliver to the Eligible Lender Trustee and
the Indenture Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment thereto an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Eligible Lender Trustee and the Indenture Trustee in the Financed
Student Loans, and reciting the details of such filings or referring
to prior Opinions of Counsel in which such details are given, or (B)
stating that, in the opinion of such counsel, no such action shall be
necessary to preserve and protect such interest; and
(2) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Cut-off Date, an Opinion of Counsel, dated as of a
date during such 120-day period, either (A) stating that, in the
opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and
the Indenture Trustee in the Financed Student Loans, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and
protect such interest; provided that a single Opinion of Counsel may
be delivered in satisfaction of the foregoing requirement and that of
Section 3.6 of the Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify (as of the date of such opinion and
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given all applicable laws as in effect on such date) any action necessary to be
taken in the following year to preserve and protect such interest.
(j) The Administrator shall file all reports with respect to the Notes
and the Certificates as may be required by the Commission or state securities
authorities.
SECTION 11.3. Notices. All demands, notices and communications upon or
to the Transferor, the Master Servicer, the Administrator, the Eligible Lender
Trustee or the Indenture Trustee under this Agreement shall be in writing,
personally delivered or mailed by certified mail or overnight courier, return
receipt requested or overnight courier (or in the form of telex or facsimile
notice, followed by written notice delivered as aforesaid) and shall be deemed
to have been duly given upon receipt (a) in the case of the Transferor, the
Master Servicer or Administrator, two copies, one to PNC Bank, National
Association, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to PNC Bank,
National Association, One PNC Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.; Senior Vice President and General
Counsel; facsimile (▇▇▇) ▇▇▇-▇▇▇▇ (b) in the case of the Issuer or the Eligible
Lender Trustee, at the Corporate Trust Office of the Eligible Lender Trustee,
(c) in the case of the Indenture Trustee, at its Corporate Trust Office; (d) in
the case of Moody's, to ▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Structured Finance Department / Student Loans
(telephone: (▇▇▇) ▇▇▇ ▇▇▇▇; facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇), and (e) in the case of
Standard & Poor's, to Standard & Poor's Ratings Service, ▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇▇
▇▇▇▇▇), ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Asset Backed Surveillance
Department (telephone: (▇▇▇) ▇▇▇ ▇▇▇▇; facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇) or, as to
each of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 11.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 4.12 and in Section 6.5 and as
provided in the provisions of this Agreement concerning the resignation of the
Master Servicer, this Agreement may not be assigned by the Transferor or the
Master Servicer. This Agreement may only be assigned by the Eligible Lender
Trustee to its permitted successor pursuant to the Trust Agreement.
SECTION 11.5. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Transferor, the Master Servicer,
the Issuer and the Eligible
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Lender Trustee and for the benefit of the Certificateholders, the Indenture
Trustee and the Noteholders as third party beneficiaries, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Estate or
under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.6. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.7. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.8. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.9. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
SECTION 11.10. Assignment to Indenture Trustee. The Transferor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of
the Noteholders of a security interest in all right, title and interest of the
Issuer in, to and under the Financed Student Loans and/or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 11.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Master Servicer, the Administrator and the
Transferor shall not, prior to the date that is one year after the termination
of this Agreement, with respect to the Issuer acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing
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or sustaining a case against the Issuer under any Federal or state bankruptcy,
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.
SECTION 11.12. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee. (a) Notwithstanding ee anything contained herein to the
contrary, this Agreement has been signed by The First National Bank of Chicago
not in its individual capacity but solely in its capacity as Eligible Lender
Trustee of the Issuer and in no event shall The First National Bank of Chicago
in its individual capacity or as beneficial owner of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto as to all of which recourse shall be had
solely to the assets of the Issuer.
Notwithstanding any provision in this Agreement or the Basic
Documents, nothing in such Agreement and Basic Documents shall be construed to
limit the Eligible Lender Trustee's responsibility to the U.S. Secretary of
Education or a Guarantor in its capacity as Eligible Lender Trustee for any
violations of statutory or regulatory requirements that may occur with respect
to loans held in the Trust, pursuant to 34 CFR 682.203(b) or any successor
provision thereto.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall Bankers Trust
Company have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first
above written.
PNC STUDENT LOAN TRUST I
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
on behalf of the Trust
By:
----------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
Transferor, Master Servicer and
Administrator
By:
----------------------------------
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
BANKERS TRUST COMPANY, not
in its individual capacity
but solely as Indenture Trustee
By:
---------------------------
Name:
Title:
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[DRAFT 6/13/97]
APPENDIX A
TO THE
TRANSFER AND SERVICING AGREEMENT
DEFINITIONS AND USAGE
Usage
The following rules of construction and usage shall be applicable to
any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant thereto unless otherwise defined therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof", "herein", "hereunder" and words of similar
import when used in an instrument refer to such instrument as a whole and not
to any particular provision or subdivision thereof; references in an instrument
to "Article", "Section" or another subdivision or to an attachment are, unless
the context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument; and the term "including" means "including
without limitation".
(d) The definitions contained in this Appendix are equally applicable
to both the singular and plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
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(e) Any agreement, instrument or statute defined or referred to below
or in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
Definitions
"Act" has the meaning specified in Section 11.3(a) of the Indenture.
"Administration Agreement" means the Administration Agreement dated as
of March 27, 1997, among the Issuer, the Indenture Trustee and the
Administrator, as amended from time to time.
"Administration Fee" has the meaning specified in Section 3 of the
Administration Agreement.
"Administrator" means PNC Bank, National Association, in its capacity
as administrator of the Issuer and the Financed Student Loans, or any successor
as Administrator under the Transfer and Servicing Agreement.
"Administrator Default" has the meaning specified in Section 8.1(b) of
the Transfer and Servicing Agreement.
"Administrator's Certificate" means an Officer's Certificate of the
Administrator delivered pursuant to Section 4.7(b) of the Transfer and
Servicing Agreement, substantially in the form of Exhibit C thereto.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
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"AFSA" means the AFSA Data Corporation.
"Authenticating Agent" means the Person appointed by the Indenture
Trustee at the request of the Issuer as Authenticating Agent for the Notes
pursuant to Section 2.3(8) of the Indenture, and any successor Authenticating
Agent for the Notes.
"Authorized Officer" means (i) with respect to the Issuer,
any officer of the Eligible Lender Trustee who is authorized to act for the
Eligible Lender Trustee in matters relating to the Issuer pursuant to the Basic
Documents and who is identified on the list of Authorized Officers delivered by
the Eligible Lender Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter), (ii)
with respect to the Administrator, any officer of the Administrator who is
authorized to act for the Administrator in matters relating to itself or to the
Issuer and to be acted upon by the Administrator pursuant to the Basic
Documents and who is identified on the list of Authorized Officers delivered by
the Administrator to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter), (iii) with
respect to the Transferor, any officer of the Transferor who is authorized to
act for the Transferor in matters relating to or to be acted upon by the
Transferor pursuant to the Basic Documents and who is identified on the list of
Authorized Officers delivered by the Transferor to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter) and (iv) with respect to a Servicer, any officer of such Servicer
who is authorized to act for such Servicer in matters relating to or to be
acted upon by such Servicer pursuant to the Basic Documents and who is
identified on the list of Authorized Officers delivered by such Servicer to the
Indenture Trustee, on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Available Funds" means, with respect to any Collection Period, the
excess of (A) the sum, without duplication, of the following amounts with
respect to such Collection Period: (i) all collections received by the Master
Servicer or any Servicer on the Financed Student Loans (including any Guarantee
Payments received with respect to the Financed Student Loans) during such
Collection Period; (ii) any payments, including without limitation Interest
Subsidy Payments and Special Allowance Payments, received by the Eligible
Lender Trustee during such Collection Period with respect to Financed Student
Loans; (iii) all proceeds from any sales of Financed Student Loans by the
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Trust during such Collection Period; (iv) any payments of or with respect to
interest received by the Master Servicer or a Servicer during such Collection
Period with respect to a Financed Student Loan for which a Realized Loss was
previously allocated; (v) the aggregate Purchase Amounts received for those
Financed Students Loans purchased by the Transferor or purchased by the Master
Servicer under an obligation which arose during the related Collection Period;
(vi) the aggregate amounts, if any, received from the Transferor or the Master
Servicer, as the case may be, as reimbursement of non-guaranteed interest
amounts, lost Interest Subsidy Payments and Special Allowance Payments, with
respect to the Financed Student Loans pursuant to Section 3.2 or Section 4.5,
respectively, of the Transfer and Servicing Agreement (vii) all Exchange
Adjustments, if any, received from the Transferor during such Collection Period
and (viii) Investments Earnings for such Collection Period over (B) the Issuer
Consolidated Payments for such Collection period; provided, however, that
Available Funds will exclude all payments and proceeds of any Financed Student
Loans the Purchase Amount of which has been included in Available Funds for a
prior Collection Period, which payments and proceeds shall be paid to the
Transferor, and amounts used to reimburse the Master Servicer for Monthly
Advances pursuant to Section 5.4 of the Transfer and Servicing Agreement. For
any Distribution Date the term Available Funds also includes any Counterparty
Swap Payments received with respect to such Distribution Date.
"Basic Documents" means the Trust Agreement, the Master Indenture, the
Terms Supplement, the Transfer and Servicing Agreement, the Administration
Agreement, the Note Depository Agreement, the Guarantee Agreements, the
Underwriting Agreement and other documents and certificates delivered in
connection with any thereof and all amendments and supplements thereto.
"Benefit Plan" means any employee benefit plan, retirement
arrangement, individual retirement account or ▇▇▇▇▇ Plan subject to either
Title I of ERISA or Section 4975 of the Code, or any entity (including an
insurance company general account) whose underlying assets include plan assets
by reason of a plan's investment in the entity.
"Book-Entry Note" means a beneficial interest in the Notes, ownership
and transfers of which shall be through book entries by a Securities Depository
as described in Section 2.14 of the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which national banking associations or banking
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institutions or trust companies in New York are authorized or obligated by law,
regulation or executive order to remain closed.
"Certificate" means a certificate evidencing the beneficial interest
of a Certificateholder in the Trust, substantially in the form of Exhibit A to
the Trust Agreement.
"Certificate Balance" equals, initially, the Initial Certificate
Balance and, thereafter, equals the Initial Certificate Balance reduced by all
amounts previously distributed to Certificateholders as principal. In
determining whether the Certificateholders which hold Certificates representing
the requisite Certificate Balance have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
other Basic Document, the Certificate Balance shall not include the principal
balance of Certificates owned by the Transferor or any Affiliate of the
Transferor.
"Certificate Distribution Account" means the account designated as
such, established and maintained pursuant to Section 5.1 of the Transfer and
Servicing Agreement.
"Certificate Monthly Advance Account" means the account designated as
such, established and maintained pursuant to Section 5.1 of the Transfer and
Servicing Agreement.
"Certificate Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 3.10 of the Trust Agreement, which shall
initially be the Eligible Lender Trustee.
"Certificate Initial Rate" means 7.1875% per annum.
"Certificate Rate" means One-Month LIBOR plus 1.50%.
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.
"Certificateholder" means a Person in whose name a Certificate is
registered in the Certificate Register.
"Certificateholders' Distribution Amount" means, with respect to any
Distribution Date, the Certificateholders' Interest Distribution Amount for
such Distribution Date plus, for each Distribution Date on and after the Notes
have been paid in full, the Certificateholders' Principal Distribution Amount
for such Distribution Date.
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"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Distribution Date, the excess, if any, of (i) the sum of the related
Certificateholders' Interest Distribution Amount on the preceding Distribution
Date and any outstanding Certificateholders' Interest Carryover Shortfall on
such preceding Distribution Date over (ii) the amount of interest actually
distributed to such Certificateholders on such preceding Distribution Date,
plus interest on the amount of such excess interest due to such
Certificateholders, to the extent permitted by law, at the related Certificate
Rate from such preceding Distribution Date to the current Distribution Date.
"Certificateholders' Interest Distribution Amount" means, with respect
to any Certificate Distribution Date, the sum of (i) the amount of interest
accrued at the Certificate Rate for the related Interest Period on the
outstanding Certificate Balance on the immediately preceding Distribution Date,
after giving effect to all distributions of principal to Certificateholders on
such Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date) and (ii) the Certificateholders' Interest Carryover Shortfall for
such Distribution Date.
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Distribution Date on or after which the Notes have been paid in
full, the excess, if any, of (i) the sum of the Certificateholders' Principal
Distribution Amount on such Distribution Date and any outstanding
Certificateholders' Principal Carryover Shortfall for the preceding
Distribution Date over (ii) the amount of principal actually distributed to the
Certificateholders on such Distribution Date.
"Certificateholders' Principal Distribution Amount" means, on
each Distribution Date on and after the date when the principal balance of each
Class of Notes has been paid in full, the sum of (a) the Principal Distribution
Amount for the three Collection Periods preceding such Distribution Date and
(b) the Certificateholders' Principal Carryover Shortfall as of the close of
the preceding Distribution Date; provided, however, that the
Certificateholders' Principal Distribution Amount will in no event exceed the
outstanding principal balance of the Certificates. Further, on the first
Distribution Date occurring on or after the Distribution Date on which the
principal balance of the last Outstanding Class of Notes is paid in full, the
Certificateholders' Principal Distribution Amount also will include the excess,
if any, of the amount of principal available to be distributed on such
Distribution Date over the amount of principal paid on the Notes on such date.
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"Class" means any class of Notes.
"Class A Notes" means the Class A-1, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes, Class A-5 Notes, Class A-6 Notes, Class A-7 Notes, Class A-8
Notes and the Class A-9 Notes.
"Class A-1 Notes" means Notes of the Issuer designated as "PNC Student
Loan Trust I, Series 1997-2, Senior Treasury Rate Class A-1 Asset Backed
Notes."
"Class A-1 Noteholder" means any Noteholder of the Class A-1 Notes.
"Class A-2 Notes" means Notes of the Issuer designated as "PNC Student
Loan Trust I, Series 1997-2, Senior Treasury Rate Class A-2 Asset Backed
Notes."
"Class A-2 Noteholder" means any Noteholder of the Class A-2 Notes.
"Class A-3 Notes" means Notes of the Issuer designated as "PNC Student
Loan Trust I, Series 1997-2, Senior Fixed Rate Class A-3 Asset Backed Notes.
"Class A-3 Noteholder" means any Noteholder of the Class A-3 Notes.
"Class A-4 Notes" means Notes of the Issuer designated as "PNC"
Student Loan Trust I, Series 1997-2, Senior Treasury Rate Class A-4 Asset
Backed Notes.
"Class A-4 Noteholder" means any Noteholder of the Class A-4 Notes.
"Class A-5 Notes" means Notes of the Issuer designated as "PNC"
Student Loan Trust I, Series 1997-2, Senior Fixed Rate Class A-5 Asset Backed
Notes.
"Class A-5 Noteholder" means any Noteholder of the Class A-5 Notes.
"Class A-6 Notes" means Notes of the Issuer designated as "PNC"
Student Loan Trust I, Series 1997-2, Senior Fixed Rate Class A-6 Asset Backed
Notes.
"Class A-6 Noteholder" means any Noteholder of the Class A-6 Notes.
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"Class A-7 Notes" means Notes of the Issuer designated as "PNC"
Student Loan Trust I, Series 1997-2, Senior Fixed Rate Class A-7 Asset Backed
Notes.
"Class A-7 Noteholder" means any Noteholder of the Class A-7 Notes.
"Class A-8 Notes" means Notes of the Issuer designated as "PNC"
Student Loan Trust I, Series 1997-2, Senior LIBOR Rate Class A-8 Asset Backed
Notes.
"Class A-8 Noteholder" means any Noteholder of the Class A-8 Notes.
"Class A-9 Notes" means Notes of the Issuer designated as "PNC"
Student Loan Trust I, Series 1997-2, Senior LIBOR Rate Class A-9 Asset Backed
Notes.
"Class A-9 Noteholder" means any Noteholder of the Class A-9 Notes.
"Class B Notes" means Notes of the Issuer designated as "PNC Student
Loan Trust I, Series 1997-2, Subordinate LIBOR Rate Class B Asset Backed
Notes."
"Class B Noteholder" means any Noteholder of the Class B Notes.
"Class Initial Rate" means, with respect to any Class of Notes, the
rate identified as such in the Terms Supplement.
"Class Interest Rate" means, with respect to any Class of Notes, the
interest rate determined as set forth in the Terms Supplement.
"Closing Date" means June __, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the Transfer and Servicing Agreement.
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"Collection Period" means, initially, the period beginning June __,
1997 and ending on June 30, 1997, inclusive, and thereafter, the Collection
Period means the calendar month immediately following the end of the previous
Collection Period.
"Commission" means the Securities and Exchange Commission.
"Consolidation Loan" means a Financed Student Loan designated as such,
made by the Transferor to an eligible borrower that represents the refinancing
of student loans to such borrower and his or her spouse in accordance with the
applicable terms and provisions of the Higher Education Act.
"Consolidation Prepayments" means, on any Exchange Date, the amount of
principal then on deposit in the Collection Account representing payments
received [from parties other than the Transferor] as a result of Financial
Student Loans being repaid with the proceeds of consolidation loans (provided,
however, if an Exchange Date occurs during the month of a Distribution Date,
Consolidation Prepayments shall not include amounts received during the month
of such Distribution Date).
"Corporate Trust Office" means (i) with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which
office on the Closing Date is located at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ Attention: Corporate Trust and Agency Group, Structured Finance Group
(telephone: (212) ▇▇▇- ▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders, the Certificateholder and the Transferor, or the principal
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Noteholders and the Transferor)
and (ii) with respect to the Eligible Lender Trustee, the principal corporate
trust office of the Eligible Lender Trustee located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: [▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
telephone: (▇▇▇) ▇▇▇-▇▇▇▇; facsimile (▇▇▇) ▇▇▇-▇▇▇▇;] or at such other address
as the Eligible Lender Trustee may designate by notice to the
Certificateholders and the Transferor, or the principal corporate trust office
of any successor Eligible Lender Trustee (the address of which the successor
Eligible Lender Trustee will notify the Certificateholders and the Transferor).
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"Counterparty Swap Payment" means, as to the Swap Agreement, with
respect to any Quarterly Distribution Date, the excess, if any, of (i) the
aggregate of the amounts accrued during the three Interest Periods immediately
preceding such Quarterly Distribution Date (or, in the case of the first
Quarterly Distribution Date, since the Closing Date) on each portion of the
Notional Amount of the Swap Agreement corresponding to the amount set forth on
the Scheduled Principal Balance Table for each Class of Fixed Rate Notes at a
fixed rate equal to the Class Interest Rate for each such Class (calculated on
the basis of a year consisting of 12 months of 30 days each) over (ii) the
amount payable under the Swap Agreement on such Quarterly Distribution Date by
the Trust to the Swap Counterparty.
"Cut-off Date" means, the close of business on June 6, 1997.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Deferral Phase" means the period during which the related borrower is
in school and for certain authorized periods as described in the Higher
Education Act.
"Definitive Notes" has the meaning specified in Section 2.14 of the
Indenture.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Indenture Trustee or its nominee or custodian by physical delivery
to the Indenture Trustee or its nominee or custodian endorsed to, or
registered in the name of, the Indenture Trustee or its nominee or
custodian or endorsed in blank, and, with respect to a certificated
security (as defined in Section 8-102 of the UCC) transfer thereof (i)
by delivery of such certificated security endorsed to, or registered
in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank to a financial intermediary (as defined in Section
8-313) of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated
securities as belonging to the Indenture Trustee or its nominee or
custodian and the sending by such
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financial intermediary of a confirmation of the purchase of such
certificated security by the Indenture Trustee or its nominee or
custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(3) of the UCC) and the making by such
clearing corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the
appropriate securities account of a financial intermediary by the
amount of such certificated security, the identification by the
clearing corporation of the certificated securities for the sole and
exclusive account of the financial intermediary, the maintenance of
such certificated securities by such clearing corporation or a
"custodian bank" (as defined in Section 8-102(4) of the UCC) or the
nominee of either subject to the clearing corporation's exclusive
control, the sending of a confirmation by the financial intermediary
of the purchase by the Indenture Trustee or its nominee or custodian
of such securities and the making by such financial intermediary of
entries on its books and records identifying such certificated
securities as belonging to the Indenture Trustee or its nominee or
custodian (all of the foregoing, "Physical Property"), and, in any
event, any such Physical Property in registered form shall be in the
name of the Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property to the Indenture Trustee or its nominee or
custodian, consistent with changes in applicable law or regulations or
the interpretation thereof;
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the Federal
National Mortgage Association that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations, the following procedures, all in accordance with
applicable law, including applicable Federal regulations and Articles
8 and 9 of the UCC: book-entry registration of such Trust Account
Property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary which is also a
"depository" pursuant to applicable Federal regulations and issuance
by such financial intermediary of a deposit advice or other written
confirmation of such book-entry registration to the Indenture Trustee
or its nominee or custodian of the purchase by the Indenture Trustee
or its nominee or custodian of such book-entry securities; the making
by such financial intermediary of entries in its
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books and records identifying such book-entry security held through
the Federal Reserve System pursuant to Federal book-entry regulations
as belonging to the Indenture Trustee or its nominee or custodian and
indicating that such custodian holds such Trust Account Property
solely as agent for the Indenture Trustee or its nominee or custodian;
and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Trust
Account Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof; and
(c) with respect to any item of Trust Account Property that
is an uncertificated security under Article 8 of the UCC and that is
not governed by clause (b) above, registration on the books and
records of the issuer thereof in the name of the financial
intermediary, the sending of a confirmation by the financial
intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such
financial intermediary of entries on its books and records identifying
such uncertificated certificates as belonging to the Indenture Trustee
or its nominee or custodian.
"Department" means the United States Department of Education, an
agency of the Federal government.
"Depositor" means PNC Bank, National Association in its capacity as
Depositor under the Trust Agreement.
"Determination Date" means, with respect to any Distribution Date, the
fifth Business Day preceding such Distribution Date.
"Distribution" means, with respect to any Financed Student Loan, the
amount of the monthly remittance payable to the holder of such Financed Student
Loan in accordance with its terms.
"Distribution Date" means the 25th day of each January, April, July
and October, or in the case of the A-1 Notes monthly on the 25th day of each
month or if any such day is not a Business Day, the next succeeding Business
Day.
"DLP Loans" means ▇▇▇▇▇▇▇▇ Loans and Unsubsidized ▇▇▇▇▇▇▇▇ Loans
guaranteed by PHEAA and made by the Transferor to Pennsylvania residents
attending Pennsylvania institutions which are part of the DLP Program.
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"Eligible Deposit Account" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the States (or any domestic branch of a
foreign bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such depository
institution have a credit rating from each Rating Agency in one of its generic
rating categories which signifies investment grade.
"Eligible Institution" means an entity which is an institution whose
deposits are insured by the FDIC and the unsecured and uncollateralized
long-term debt obligations of which shall be rated "A" or better by Standard &
Poor's and A2 or better by Moody's, or one of the two highest short-term
ratings by Standard & Poor's and the highest short term rating by Moody's, and
which is either (i) a federal savings association duly organized, validly
existing and in good standing under the federal banking laws, (ii) an
institution duly organized, validly existing and in good standing under the
applicable banking laws of any state, (iii) a national banking association duly
organized, validly existing and in good standing under the federal banking
laws, or (iv) a principal subsidiary of a bank holding company.
"Eligible Investments" As used herein, Eligible Investments shall
include the following:
(1) Cash (insured at all times by the Federal Deposit Insurance
Corporation);
(2) Direct obligations of (including obligations issued or held in
book entry form on the books of) the Department of the Treasury
of the United States of America;
(3) obligations of any of the following federal agencies which
obligations represent the full faith and credit of the United
States of America, including:
- Export-Import Bank
- Farm Credit System Financial Assistance Corporation
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- Farmers Home Administration
- General Services Administration
- U.S. Maritime Administration
- Small Business Administration
- Government National Mortgage Association (GNMA)
- U.S. Department of Housing & Urban Development (PHA's)
- Federal Housing Administration;
(4) senior debt obligations rated "AAA" by Standard & Poor's and
"Aaa" by Moody's issued by the Federal National Mortgage
Association or the Federal Home Loan Mortgage Corporation
(5) U.S. dollar denominated deposit accounts, federal funds and
banker's acceptances with domestic commercial banks which have a
rating on their short term certificates of deposit on the date
of purchase of "A-1" or "A-1+" by Standard & Poor's and "P-1" by
Moody's and maturing no more than 360 days after the date of
purchase (ratings on holding companies not being considered the
rating of the bank);
(6) commercial paper which is rated at the time of purchase in the
single highest classification, "A-1+" by Standard & Poor's and
"P-1" by Moody's and which matures not more than 270 days after
the date of purchase;
(7) Investments in money market funds (including, but not limited
to, money market mutual funds) rated "AAAm" or "AAAm-G" or
better by Standard & Poor's;
(8) Pre-refunded Municipal Obligations defined as follows: Any bonds
or other obligations of any state of the United States of
America or of any agency, instrumentality or local governmental
unit of any such state which are not callable at the option of
the obligor prior to maturity or as to which irrevocable
instructions have been given by the obligor to call on the date
specified in the notice; and
(A) which are rated, based on an irrevocable escrow account
or fund (the "escrow"), in the highest rating category of
Standard & Poor's and Moody's or any successors thereto; or
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(B) (i) which are fully secured as to principal and interest
and redemption premium, if any, by an escrow consisting only
of cash or obligations described in paragraph (2) above,
which escrow may be applied only to the payment of such
principal of and interest and redemption premium, if any, on
such bonds or other obligations on the maturity date or dates
thereof or the specified redemption date or dates pursuant to
such irrevocable instructions, as appropriate, and (ii) which
escrow is sufficient, as verified by a nationally recognized
independent certified public accountant, to pay principal of
and interest and redemption premium, if any, on the bonds or
other obligations described in this paragraph on the maturity
date or dates specified in the irrevocable instructions
referred to above, as appropriate;
(9) investment agreements acceptable to the Rating Agencies, written
confirmation of which shall be furnished to the Indenture
Trustee prior to any such investment; and
(10) other forms of investments acceptable to the Rating Agencies,
written confirmation of which shall be furnished to the
Indenture Trustee prior to any such investment.
Notwithstanding anything in this Agreement or the Basic Documents to
the contrary, for so long as the Transferor is a Certificateholder, all
investments of the Trust shall be made in investments permissible for a
national bank.
The value of the above investments shall be determined as follows:
a) as to investments the bid and asked prices of which are
published on a regular basis in The Wall Street Journal (or, if
not there, then in The New York Times): the average of the bid
and asked prices for such investments so published on or most
recently prior to such time of determination;
b) as to investments the bid and asked prices of which are not
published on a regular basis in The Wall Street Journal or The
New York Times: the average bid price at such time of
determination for such investments by any
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two nationally recognized government securities dealers
(selected by the Indenture Trustee in its absolute discretion)
at the time making a market in such investments or the bid price
published by a nationally recognized pricing service;
c) as to certificates of deposit and bankers acceptances: the face
amount thereof, plus accrued interest; and
d) as to any investment not specified above: the value thereof
established by prior agreement between the Issuer, the
Administrator and the Indenture Trustee.
"Eligible Lender Trustee" means The First National Bank of Chicago not
in its individual capacity but solely as Eligible Lender Trustee under the
Trust Agreement.
"Eligible Lender Trustee Fee" has the meaning specified in Section 8.1
of the Trust Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning specified in Section 5.1 of the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Adjustment" has the meaning set forth in Section 2.3(e) of
the Transfer and Servicing Agreement.
"Exchange Date" means the date specified as such in the related
Transfer Agreement.
"Exchange Period" means the period commencing on the Closing Date and
ending on [June 30, 2002].
"Exchanged Student Loan" means any Financed Student Loan transferred
to the Eligible Lender Trustee on behalf of the Issuer during the Exchange
Period pursuant to Section 2.2 of the Transfer and Servicing Agreement.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Executive Vice President, any Senior Vice President, any Vice President,
the
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Secretary, the Controller or the Treasurer of such corporation; and with
respect to any partnership, any general partner thereof.
"Expense Account" means the account designated as such pursuant to
Section 5.1 of the Transfer and Servicing Agreement.
"Expenses" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of
any kind and nature whatsoever which may at any time be imposed on, incurred
by, or asserted against the Eligible Lender Trustee or any of its officers,
directors or agents in any way relating to or arising out of the Trust
Agreement, the other Basic Documents, the Trust Estate, the administration of
the Trust Estate or the action or inaction of the Eligible Lender Trustee under
the Trust Agreement or the other Basic Documents.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Funds Rate" means, for any date of determination, the Federal
funds (effective) rate as published on page 118 of the Dow ▇▇▇▇▇ Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable rates or prices) on the immediately preceding
Business Day. If no such rate is published on such page on such day, "Federal
Funds Rate" shall mean for any date of determination, the Federal funds
(effective) rate as published by the Federal Reserve Board in the most recent
edition of Federal Reserve Statistical Release No. H.15 (519) that is available
on the Business Day immediately preceding such date.
"Federal Loan" means a Financed Student Loan which is a PLUS Loan, SLS
Loan, Consolidation Loan, ▇▇▇▇▇▇▇▇ Loan or Unsubsidized ▇▇▇▇▇▇▇▇ Loan.
"FHLMC" means Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of
the Emergency Home Finance Act of 1970, as amended, or any successor thereto.
"Final Maturity Date" means, with respect to any Note, the date on
which the entire unpaid principal amount of such Note becomes due and payable
as provided in the Terms Supplement.
"Financed Student Loan" means the Federal Loans set forth in Schedule
A to the Transfer and Servicing Agreement and any Transfer Agreement, as
amended from time to time by the
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Issuer to accurately reflect the Financed Student Loans then subject to the
Lien of the Indenture. The Schedule of Financed Student Loans may be in the
form of microfiche or other form of electronic media.
"Financed Student Loan Files" means the documents specified in Section
3.3 of the Transfer and Servicing Agreement.
"Fitch" means Fitch Investors Service, LP.
"Fixed Rate Notes" means the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes and the Class A-7
Notes.
"FNMA" means Federal National Mortgage Association, a federally
chartered and privately owned corporation organized and existing under the
Federal National Mortgage Association Charter Act, or any successor thereto.
"Grace Period" means certain grace periods authorized by the Higher
Education Act during which the related borrower's scheduled payments are
deferred.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇ upon and a
security interest in and right of set-off against, deposit, set over and
confirm pursuant to the Indenture. A Grant of the Trust Estate or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Trust Estate and all other
moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Great Lakes" means Great Lakes Higher Education Corporation.
"Guarantee Agreements" means each agreement entered into between the
Eligible Lender Trustee and a Guarantor pursuant to which such Guarantor
guarantees payments on Financed Student Loans.
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"Guarantee Payment" means any payment made by a Guaranty Agency
pursuant to a Guarantee Agreement in respect of a Financed Student Loan.
"Guarantor" means each Guaranty Agency that enters into a Guarantee
Agreement with the Eligible Lender Trustee pursuant to which such Guaranty
Agency guarantees payments on Financed Student Loans. "Guarantor" includes the
Department when it performs as a successor to an insolvent or defunct Guarantor
for purposes of making Guarantee Payments.
"Guaranty Agency" means any agency which has an agreement with the
Department of Education to be a guarantor of Federal Loans.
"Higher Education Act" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations thereunder.
"Indenture" means the Master Indenture and the Terms Supplement, each
as amended or supplemented from time to time.
"Indenture Trust Estate" means all money, instruments, rights and
other property that are, from time to time, subject or intended to be subject
to the Lien and security interest of the Indenture for the benefit of the
Noteholders (including all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.
"Indenture Trustee" means Bankers Trust Company, not in its individual
capacity but solely as Indenture Trustee under the Indenture.
"Indenture Trustee Fee" has the meaning specified in Section 6.7 of
the Master Indenture, as may be amended pursuant to any amendment to the Terms
Supplement.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor
upon the Notes, the Transferor and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the
Transferor or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Transferor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
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"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Master Indenture, made by an Independent appraiser or other expert appointed by
an Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" and that the signer is Independent
within the meaning thereof.
"Individual Note" means a Note of an initial principal amount equal to
$50,000. A Note of an original principal amount in excess thereof shall be
deemed to be a number of Individual Notes equal to the quotient obtained by
dividing such initial principal amount by $50,000.
"Initial Financed Student Loans" has the meaning specified in Section
2.1 of the Transfer and Servicing Agreement.
"Initial Certificate Balance" means $1,000, representing the
Certificate Balance as of the Closing Date
"Initial Period" means the period commencing on the Closing Date and
continuing through and including June __, 1997.
"Initial Pool Balance" means $__________________ representing the Pool
Balance as of the Cut-off Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable Federal or State bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
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for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, or the
failure by such Person generally to pay its debts as such debts become due, or
the taking of action by such Person in furtherance of any of the foregoing.
"Institution of Higher Education" means an institution of higher
education as defined under the Higher Education Act (20 U.S.C.A. ss. 1085(b)).
"Interest Period" has the meaning set forth in the Terms Supplement.
"Interest Subsidy Payments" means payments, designated as such,
consisting of interest subsidies by the Department in respect of the Financed
Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"Investment Earnings" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on or
prior to such Distribution Date pursuant to Section 5.1(b) of the Transfer and
Servicing Agreement.
"Issuer" means PNC Student Loan Trust I.
"Issuer Consolidation Payments" has the meaning set forth in Section
2.3(f) of the Transfer and Servicing Agreement.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"LIBOR Determination Date" means, with respect to any Class of Notes
or the Certificates for which One-Month LIBOR is being determined other than
for the Initial Period, the applicable Rate Determination Date, which must be a
Business Day and London Banking Day.
"LIBOR Rate" means, with respect to the LIBOR Rate Notes or the
Certificates, the related Class Interest Rate or Certificate Rate, as the case
may be, that results from a determination based on One-Month LIBOR and is
determined as described in the Terms Supplement, the Transfer and Servicing
Agreement or the Trust Agreement, as the case may be.
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"LIBOR Rate Notes" means the Class A-1 Notes, the Class A-8 Notes, the
Class A-9 Notes and the Class B Notes.
** "LIBOR Rate Determination Date" has the meaning set forth in the
Terms Supplement.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any,
which attach to the respective Financed Student Loan by operation of law as a
result of any act or omission by the related Obligor.
"London Banking Day" means any Business Day on which dealings in
deposits in United States dollars are transacted in the London interbank
market.
"Majority Certificateholder" means the holders of more than 50% of the
Certificate Balance of the Certificates without regard to the Certificates held
by the Depositor.
"Master Indenture" means the Indenture dated as of March 27, 1997
between the Issuer and the Indenture Trustee, as amended or supplemented from
time to time.
"Master Servicer" means PNC Bank, National Association, and its
permitted successors and assigns, as Master Servicer of the Financed Student
Loans under the Transfer and Servicing Agreement.
"Master Servicer Default" means an event specified in Section 8.1(a)
of the related Transfer and Servicing Agreement or Supplemental Transfer and
Servicing Agreement.
"Minimum Purchase Price" has the meaning set forth in the Transfer and
Servicing Agreement.
"Monthly Advance" means the amount, if any, advanced by the Master
Servicer pursuant to Section 5.10 of the Transfer and Servicing Agreement with
respect to Guarantee Payments or Interest Subsidy Payments applied for but not
received as of the end of the Collection Period immediately preceding the date
such Monthly Advance is made.
"Monthly Advance Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Transfer and
Servicing Agreement.
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"Monthly Consolidation Fee" means for any Distribution Date (including
any date that would have been a Distribution Date if the Class A-1 Notes were
outstanding), the Outstanding Amount of the Consolidation Loans at the
beginning of the immediately proceeding Collection Period multiplied by the
product of one-twelfth times 1.05%.
"Moody's" means Moody's Investor's Service, Inc.
"Net Loan Rate" shall have the meaning set forth in the Terms
Supplement.
"Notes" means the notes issued by the Issuer pursuant to the Master
Indenture and the Terms Supplement.
"Note Depository Agreement" means the agreement dated as of the
Closing Date relating to the Notes among the Issuer, the Indenture Trustee, the
Administrator and the Depository Trust Company, as the initial Securities
Depository.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.1 of the Transfer and
Servicing Agreement.
"Note Owner" means, with respect to a Book Entry Note, the Person who
is the owner of such Book Entry Note, as reflected on the books of the
Securities Depository, or on the books of a Person maintaining an account with
such Securities Depository (directly as Securities Depository Participant or as
an indirect participant, in each case in accordance with the rules of such
Securities Depository).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.6 of the Indenture.
"Noteholder" means the Person in whose name a Note is registered in
the Note Register.
"Noteholders' Distribution Amount" means, as to any Class of Notes,
with respect to any Distribution Date, the sum of the related Noteholders'
Interest Distribution Amount and the Noteholders' Principal Distribution Amount
for such Distribution Date.
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"Noteholders' Interest Carryover" has the meaning set forth in the
Terms Supplement.
"Noteholders' Interest Carryover Shortfall" means, as to any Class of
Notes, with respect to any Distribution Date, the excess of (i) the sum of the
related Noteholders' Interest Distribution Amount on the preceding Distribution
Date and any Noteholders' Interest Carryover Shortfall on such preceding
Distribution Date over (ii) the amount of interest actually allocated to such
Noteholders on such preceding Distribution Date, plus interest on the amount of
such excess interest due to such Noteholders, to the extent permitted by law,
at the related Class Interest Rate from such preceding Note Distribution Date
to the current Distribution Date.
"Noteholders' Interest Distribution Amount" means, as to any Class of
Notes, with respect to any Distribution Date, the sum of (i) the amount of
interest accrued at the respective Class Interest Rate for each related
Interest Period since the last Distribution Date (or in the case of the first
Distribution Date, the Closing Date) on the outstanding principal balance of
such Class of Notes on the immediately preceding Distribution Date relating to
such Notes after giving effect to all principal distributions to holders of
Notes of such Class on such date (or, in the case of the first Distribution
Date, the Closing Date) and (ii) the Noteholders' Interest Carryover Shortfall
for such Class for such Distribution Date; provided, however, that the
Noteholders' Interest Distribution Amount will not include any Noteholders'
Interest Carryover.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Distribution Date, the excess of (i) the sum of the Noteholders' Principal
Distribution Amount on such Distribution Date and any outstanding Noteholders'
Principal Carryover Shortfall for the preceding Distribution Date over (ii) the
amount of principal actually allocated to the Noteholders on such Distribution
Date.
"Noteholders' Principal Distribution Amount" means, as to the Class of
Notes entitled to receive payments of principal on each applicable Distribution
Date, the sum of (i) the Principal Distribution Amount for the three Collection
Periods immediately preceding the month of such Distribution Date (or in the
case of the first Distribution Date, for each Collection Period commencing with
the Closing Date through and including the Collection Period immediately
preceding the month of such Distribution Date), (ii) any Parity Percentage
Payments to be made on such Distribution Date and (iii) the Noteholders'
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Principal Carryover Shortfall as of the close of the preceding Distribution
Date; provided, however, that the Noteholders' Principal Distribution Amount
allocable to a Class of Notes will not exceed the Outstanding Amount of such
Class of Notes. In addition, with respect to each Class of Notes, on the
related Final Maturity Date the Noteholders' Principal Distribution Amount will
include the amount required to reduce the Outstanding Amount of such Notes to
zero.
"Notional Amount" means as to the Swap Agreement, with respect to any
Quarterly Distribution Date, the sum of the amounts set forth on the Scheduled
Principal Balance Table for each Class of Fixed Rate Notes as of the preceding
Quarterly Distribution Date after giving effect to all principal distributions
to holders of Notes of such Classes.
"Obligor" on a Financed Student Loan means the borrower or
co-borrowers of such Financed Student Loan and any other Person who owes
payments in respect of such Financed Student Loan, including (i) the Guaranty
Agency thereof and (ii) with respect to any Interest Subsidy Payment or Special
Allowance Payment, if any, thereon, the Department.
"Officer's Certificate" means (i) in the case of the Issuer, a
certificate signed by an Authorized Officer of the Issuer, under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1 of the Indenture, and delivered to the Indenture
Trustee, (ii) in the case of the Transferor, the Master Servicer or the
Administrator, a certificate signed by an Authorized Officer of the Transferor,
the Master Servicer or the Administrator, as appropriate and (iii) in the case
of the Servicer, a certificate signed by an Authorized Officer of the Servicer.
"One-Month LIBOR" means the London interbank offered rate for deposits
in U.S. dollars having a maturity of one month commencing on the related LIBOR
Determination Date (the "Index Maturity") which appears on Telerate Page 3750
as of 11:00 a.m., London time, on such LIBOR Determination Date. If such rate
does not appear on Telerate Page 3750, the rate for that day will be determined
on the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are
offered at approximately 11:00 a.m., London time, on such LIBOR Determination
Date to prime banks in the London interbank market by the Reference Banks. The
Master Servicer will request the principal London office of each of such
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate for that day will be the arithmetic mean of
the quotations. If fewer than two quotations are provided, the rate for that
day
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will be the arithmetic mean of the rates quoted by major banks in New York
City, selected by the Master Servicer, at approximately 11:00 a.m., New York
City time, on such LIBOR Determination Date for loans in U.S. dollars to
leading European banks having the Index Maturity and in a principal amount
equal to an amount of not less than U.S. $1,000,000; provided that if the banks
selected as aforesaid are not quoting as mentioned in this sentence, One-Month
LIBOR in effect for the applicable Interest Period will be One-Month LIBOR in
effect for the previous Interest Period.
"Opinion of Counsel" means (i) with respect to the Issuer, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Master Indenture, be employees of or counsel to the Issuer or Administrator
or any of their Affiliates and who shall be reasonably satisfactory to the
Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee as Indenture Trustee, shall comply with any applicable
requirements of Section 11.1 of the Master Indenture, and shall be in form and
substance reasonably satisfactory to the Indenture Trustee and (ii) with
respect to the Transferor, the Administrator or the Master Servicer, one or
more written opinions of counsel who may be an employee of or counsel to the
Transferor, the Administrator or the Master Servicer, which counsel shall be
reasonably acceptable to the Indenture Trustee and the Eligible Lender Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in
the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Noteholders thereof
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes which
have been authenticated and delivered pursuant to the Indenture unless
proof satisfactory to the Indenture Trustee is presented that any such
Notes are held by a bona fide purchaser;
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provided that in determining whether the Noteholders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Transferor or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Indenture Trustee either actually knows
to be so owned or has received written notice thereof shall be do disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Transferor or
any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all
Notes, or Class of Notes or Certificates as applicable, Outstanding at the date
of determination.
"Parity Percentage" means, as of any date of determination, the
fraction expressed as a percentage, the numerator of which is the sum of (i)
the then Pool Balance and (ii) all amounts on deposit in the Collection Account
and the Reserve Account and the denominator of which is the sum of the
aggregate Outstanding Amount of the Notes and the Certificates, accrued and
unpaid interest thereon plus accrued and unpaid Transaction Fees.
"Parity Percentage Payment" means, with respect to any Distribution
Date, the amount, if any, to be transferred from the Collection Account to the
Note Distribution Account pursuant to Section 5.5(e) of the Transfer and
Servicing Agreement, up to the amount necessary for the Parity Percentage to
equal 102.5% after giving effect to all distributions to be made on such
Distribution Date.
"Participant" means a Securities Depository Participant.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of the Master Indenture and is authorized by the Issuer to make the
payments to and distributions from the Collection Account and payments of
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principal of and interest and any other amounts owing on the Notes on behalf of
the Issuer.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PHEAA" means the Pennsylvania Higher Education Assistance Agency.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pledged Account or Fund" means the Collection Account, the Reserve
Account, the Note Distribution Account and the Certificate Distribution
Account.
"PLUS Loan" means a Financed Student Loan made pursuant to the
provisions of the PLUS program established under Section 428B of the Higher
Education Act (or predecessor provisions).
"Pool Balance" means, at any time, the aggregate principal balance of
the Financed Student Loans at the end of the preceding Collection Period
(including accrued interest thereon for such Collection Period to the extent
such interest will be capitalized), after giving effect to the following,
without duplication: (i) all payments in respect of principal received by the
Trust during such Collection Period from or on behalf of borrowers and
Guarantors and, with respect to certain payments on certain Financed Student
Loans, the Department, (ii) the principal portion of all Purchase Amounts
received by the Trust for such Collection Period and (iii) any Exchanged
Student Loans acquired by the Trust and any Financed Student Loans conveyed by
the Trust during such Collection Period, in each case pursuant to Sections 2.2
and 2.3(e).
"PP Loans" means all ▇▇▇▇▇▇▇▇ Loans and Unsubsidized ▇▇▇▇▇▇▇▇ Loans
(other than DLP Loans) with a first disbursement made by the Transferor on or
after July 1, 1996.
"PP Program" means the PNC Bank Preferred Payment Program.
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and,
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for the purpose of this definition, any Note authenticated and delivered under
Section 2.7 of the Master Indenture and in lieu of a mutilated, lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the mutilated,
lost, destroyed or stolen Note.
"Primary Servicer" means, with respect to any Financed Student Loan,
the entity responsible for the primary servicing of such Financed Student Loan
on a day to day basis, it being understood that where a subservicer appointed
in accordance with the terms of the Transfer and Servicing Agreement has
responsibility for servicing a Financed Student Loan, such subservicer and not
the Master Servicer shall be the Primary Servicer with respect such Financed
Student Loan.
"Principal Factor" means, as of any Distribution Date for each Class
of Notes, a seven-digit decimal figure equal to the Outstanding Amount of such
Class of Notes (after giving effect to any payments of principal made on such
Distribution Date) divided by the original Outstanding Amount of such Class.
The Principal Factor will be 1.0000000 for each Class of Notes as of the
Closing Date; thereafter, the Principal Factor for each Class of Notes will
decline to reflect reductions in the outstanding principal balance of such
Class.
"Principal Distribution Amount" means, with respect to any Collection
Period, the excess of (A) the sum, without duplication, of the following
amounts: (i) that portion of all collections received by the Master Servicer or
any Servicer on the Financed Student Loans that is allocable to principal
(including the portion of any Guarantee Payments received that is allocable to
principal of the Financed Student Loans); (ii) the portion of the proceeds
allocable to principal from the sale of Financed Student Loans by the Trust
during such Collection Period; (iii) all Realized Losses incurred during such
Collection Period; (iv) to the extent attributable to principal, the Purchase
Amount received with respect to each Financed Student Loan repurchased by the
Transferor or purchased by the Master Servicer under an obligation which arose
during the related Collection Period; and (v) the Exchange Adjustments, if any,
received from the Transferor during such Collection Period over (B) the Issuer
Consolidation Payments for such Collection Period; provided, however, that the
Principal Distribution Amount will exclude all payments and proceeds of any
Financed Student Loans the Purchase Amount of which has been included in
Available Funds for a prior Collection Period.
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"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Amount" means, as to any Financed Student Loan on any date
of determination, the amount required to prepay in full the outstanding
principal balance of such Financed Student Loan as of the last day of the most
recently completed Collection Period, including all accrued but unpaid interest
thereon (including interest to be capitalized) through the last day of the
Collection Period in which such Financed Student Loan is being purchased .
"Purchased Student Loan" means a Financed Student Loan purchased
pursuant to Section 4.5 of the Transfer and Servicing Agreement or repurchased
pursuant to Section 3.2 of the Transfer and Servicing Agreement or Supplemental
Transfer and Servicing Agreement.
"Qualified Letter of Credit" means a letter of credit delivered or to
be delivered to the Indenture Trustee in lieu of a deposit of cash or Eligible
Investments in the Reserve Account for such Class or Series, which letter of
credit shall
(a) be irrevocable and name the Indenture Trustee, in its capacity as
such, as the sole beneficiary thereof;
(b) be issued by a bank whose credit standing is acceptable to each of
the rating agencies which are rating or have rated the Notes of such
Series;
(c) provide that if at any time the then current credit standing of
the issuing bank is such that the continued reliance on such letter of
credit for the purpose or purposes for which it was originally
delivered to the Indenture Trustee would result in a downgrading of
any rating of the Notes of such Class or Series, the Indenture Trustee
may either draw under such letter of credit any amount up to and
including the entire amount then remaining available for drawing
thereunder or terminate such letter of credit;
(d) be transferable to any successor trustee hereunder with respect to
such Class or Series; and
(e) meet such other standards as may be specified in the Terms
Supplement.
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"Qualified Institutional Buyer" has the meaning ascribed to such term
in Rule 144A under the Securities Act.
"Quarterly Distribution Date" means, the 25th day of each January,
April, July, and October or if such day is not a Business Day, the next
succeeding Business Day.
"Rate Determination Date" means for the LIBOR Rate and the
Certificates, the date which is both two Business Days and two London Business
Days preceding the related Rate Adjustment Date.
"Rating Agency" means ▇▇▇▇▇'▇, Standard & Poor's and Fitch. If no such
organization or successor is any longer in existence, "Rating Agency" shall be
a nationally recognized statistical rating organization or other comparable
Person designated by the Transferor, notice of which designation shall be given
to the Indenture Trustee, the Eligible Lender Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof and that each
of the Rating Agencies shall have notified the Transferor, the Master Servicer,
the Eligible Lender Trustee and the Indenture Trustee in writing that such
action will not result in and of itself in a reduction or withdrawal of the
then current ratings of each Class of Notes.
"Realized Loss" means, for each Financed Student Loan submitted to a
Guarantor for a Guarantee Payment, the excess, if any, of (i) the unpaid
principal balance of such Financed Student Loan on the date it was first
submitted to a Guarantor for a Guarantee Payment over (ii) all amounts received
on or with respect to principal on such Financed Student Loan (including
amounts received pursuant to Sections 3.2 and 4.5 of the Transfer and Servicing
Agreement) up through the earlier to occur of (A) the date a related Guarantee
Payment is made or (B) the last day of the Collection Period occurring 12
months after the date the claim for such Guarantee Payment is first denied.
"Record Date" means, with respect to a Distribution Date, the close of
business on the second Business Day preceding such Distribution Date.
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"Reference Bank" means a leading bank (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not
controlling, controlled by or under common control with the Administrator or
the Transferor and (iii) having an established place of business in London.
"Related Financed Student Loan File" has the meaning specified in
Section 3.8(a) of the Transfer and Servicing Agreement.
"Repayment Phase" means the period during which the related borrower
is required to make payments of principal and interest on the related Financed
Student Loan.
"Requisite Amount" means, with respect to any Series for which a
Reserve Account is required to be maintained, an amount specified in or
determined pursuant to the Terms Supplement.
"Reserve Account" means the account designated as such, established
and maintained pursuant to Section 5.1 of the related Transfer and Servicing
Agreement.
"Reserve Account Initial Deposit" means, $____________.
"Responsible Officer" means, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee with
direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee, including any Managing
Director, Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary, or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Schedule of Financed Student Loans" means the listing of the Financed
Student Loans set forth in Schedule A to the Transfer and Servicing Agreement
and to the Indenture (which Schedules may be in the form of microfiche), as
from time to time amended or supplemented. Such Schedule shall list the
Financed Student Loans being conveyed pursuant to the Transfer and Servicing
Agreement and any Transfer Agreement. The Schedule relating to the Indenture
shall be a master list of all Financed Student Loans then subject to the Lien
of the Indenture.
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"Scheduled Principal Balance Table" means the Scheduled Principal
Balance Table set forth on Schedule C to the Transfer and Servicing Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Depository" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Securities Depository Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Securities Depository effects book-entry transfers and pledges of securities
deposited with the Securities Depository.
"Senior Notes" means the Notes designated as ranking senior for each
series of notes.
"Senior Noteholder" means the holder of Senior Notes."
"Serial Loan" means a Financed Student Loan that is serial to a
student loan owned by a third party.
"Series" means a separate Series of Notes issued pursuant to the
Master Indenture, which Series may, as provided in the Terms Supplement, be
divided into two or more Classes.
"Series 1997-2 Notes" means the Notes designated as the Issuer's
Asset-Backed Notes, Series 1997-2, issued pursuant to the terms of the Master
Indenture and the Terms Supplement and having an original principal amount
equal to $1,030,000,000.
"Servicer" means AFSA, USA Group, Great Lakes, PHEAA or, subject to
satisfying the Rating Agency Condition, another entity appointed by the Master
Servicer to service the Financed Student Loans, in its capacity as servicer of
the Financed Student Loans.
"Servicer's Report" means any report of the Master Servicer delivered
pursuant to Section 4.8(a) of the Transfer and Servicing Agreement,
substantially in the form acceptable to the Administrator.
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"Servicing Fee" means a quarterly fee in an amount equal to the
greater of (i) the Unit Amount for the related Distribution Date and (ii) 1/4
of 1.00% of the average Pool Balance as of the last day of each of the three
Collection Periods immediately preceding such Distribution Date.
"SLS Loan" means a Financed Student Loan designated as such that is
made under the Supplemental Loans for Students Program pursuant to the Higher
Education Act.
"Special Allowance Payments" means payments, designated as such,
consisting of effective interest subsidies by the Department in respect of the
Financed Student Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"Specified Reserve Account Balance" means, $___________
"▇▇▇▇▇▇▇▇ Loan" means a Financed Student Loan designated as such that
is made under ss. 428 of the Higher Education Act (excluding Unsubsidized
▇▇▇▇▇▇▇▇ Loans).
"Standard & Poor's" means Standard & Poor's Rating Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors and assigns.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
or the District of Columbia.
"Subcustodian" has the meaning specified in Section 3.8 of the
Transfer and Servicing Agreement.
"Subsequent Cut-off Date" means the day as to which principal and
interest accruing with respect to an Exchanged Student Loan are transferred to
the Eligible Lender Trustee on behalf of the Issuer pursuant to Section 2.2 of
the Transfer and Servicing Agreement.
"Subservicing Agreement" has the meaning specified in Section 4.13 of
the Transfer and Servicing Agreement.
"Subordinated Notes" means the notes designated as subordinate to any
class of Senior Notes.
"Subordinated Noteholder" means any Noteholder of Subordinated Notes.
"Successor Administrator" has the meaning specified in Section 3.7(e)
of the Indenture.
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"Successor Master Servicer" has the meaning specified in Section
3.7(e) of the Indenture.
"Swap Agreements" means the Interest Rate Swap Agreement dated as of
June ___, 1997, between the Issuer and [ ] and the Interest Rate Swap Agreement
dated as of June ___, 1997 between the Issuer and [ ].
"Swap Counterparty" means __________________________.
"Telerate Page 3750" means the display page so designated on the Dow
▇▇▇▇▇ Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"Terms Supplement" means, the Second Terms Supplement to the Indenture
dated as of June __, 1997 between the Issuer and The Indenture Trustee.
"Transaction Fees" means, collectively, the Servicing Fee, the
Administration Fee, Indenture Trustee Fee and the Eligible Lender Trustee Fee.
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"Transfer Agreement" has the meaning set forth in Section 2.2(b) of
the Transfer and Servicing Agreement.
"Transfer and Servicing Agreement" means the Transfer and Servicing
Agreement dated as of June __, 1997, among the Issuer, the Transferor, the
Administrator, the Eligible Lender Trustee and the Master Servicer, as amended
from time to time.
"Transferor" means PNC Bank, National Association.
"Treasury Regulations" means regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document
or instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" means the Issuer, established pursuant to the Trust Agreement.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit, if
any, and all proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section 5.1 of the
Transfer and Servicing Agreement.
"Trust Agreement" means the Trust Agreement dated as of March 27,
1997, between the Depositor and the Eligible Lender Trustee, as amended and
supplemented from time to time.
"Trust Certificate" means a Certificate.
"Trust Certificateholder" means a person in whose name a Trust
Certificate is registered in the Certificate Register.
"Trust Estate" means all right, title and interest of the Trust (or
the Eligible Lender Trustee on behalf of the Trust) in and to the property and
rights assigned to the Trust pursuant to Article II of the Transfer and
Servicing Agreement, all funds on deposit from time to time in the Trust
Accounts and all other property of the Trust from time to time, including any
rights of the Eligible Lender Trustee and the Trust pursuant to the Transfer
and Servicing Agreement and the Administration Agreement.
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"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"Trust Swap Payment" means, as to the Swap Agreement, with respect to
any Quarterly Distribution Date, the excess, of (i) the amount accrued on the
Notional Amount of the Swap Agreement during the Quarterly Distribution Date,
since the Closing Date) at the Variable Swap Rate over (ii) the amount payable
under the Swap Agreement on such Quarterly Distribution Date by the Swap
Counterparty to the Trust.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from
time to time.
"Unit Amount" means, for any Distribution Date, an amount equal to the
average number of loan accounts in the Trust Estate as of the last day of each
of the three Collection Periods immediately preceding such Distribution Date
(or in the case of the first Distribution Date, as of the last day of each
Collection preceding such Distribution Date Period commencing with the Closing
Date).
"Unsubsidized ▇▇▇▇▇▇▇▇ Loan" means a Financed Student Loan designated
as such that is made under ss. 428H of the Higher Education Act.
"USA Group" means USA Group Loan Services, Inc.
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SCHEDULE A
TO THE
TRANSFER AND SERVICING AGREEMENT
Schedule of Financed Student Loans
[To be supplied by the Transferor at Closing.]
1
115
SCHEDULE B
TO THE
TRANSFER AND SERVICING AGREEMENT
Location of Financed Student Loan Files
Name of subcustodian Location of Related Financed Student Loan Files
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EXHIBIT A
TO THE
TRANSFER AND SERVICING AGREEMENT
Form of Noteholders' Statement
pursuant to Section 5.7(a) of
Transfer and Servicing
Agreement (capitalized terms used
herein are defined in Appendix A thereto)
Distribution Date:_____________________
(i) Principal Factor:
(a) Class A-1: _________
(b) Class A-2: _________
(c) Class B: _________
(ii) Amount of principal being paid or distributed:
(a) Class A-1 Notes: $_________
(b) Class A-2 Notes: $_________
(c) Class B Notes: $_________
(d) Certificates: $_________
(iii) (a) Amount of interest being paid or distributed:
(1) Class A-1 Notes: $____ (based on the [T-▇▇▇▇ Rate] [Net Loan Rate])
(2) Class A-2 Notes: $____ (based on the [T-▇▇▇▇ Rate] [Net Loan Rate])
(3) Class B Notes: $____ (based on [One-Month LIBOR] [the Net Loan Rate])
(4) Certificates: $____ (based on One-Month LIBOR)
(b) Applicable Interest Rate:
(1) Class A-1: _______%
(2) Class A-2: _______%
(3) Classs B: _______%
(4) Certificates _______%
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(iv) Amount of distribution allocable to any Noteholders' Interest
Carryover: (a) Class A-1: $____________
(b) Class A-2: $____________ (c) Class B: $____________
(v) Pool Balance at end of preceding Collection Period:________
(vi) After giving effect to distributions on this Distribution Date:
(a) outstanding principal amount of Class A-1 Notes: $___________
(b) outstanding principal amount of Class A-2 Notes: $___________
(c) outstanding principal amount of Class B Notes: $___________
(d) Certificate Balance: $_____________________
(vii) Amount of Servicing Fee, Administration Fee, Indenture Trustee Fee and
Eligible Lender Trustee Fee to be allocated for the upcoming
Distribution Date:
($_________)
(viii) (a) Aggregate amount of Realized Losses (if any) for each
Collection Period since the last Distribution Date (or since the
Closing Date in the case of the first Ditribution Date):______________
(ix) (a) Amount of distribution attributable to
amounts in the Reserve Account: $_____________
(b) Amount of other withdrawls from the
Reserve Account: $_____________
(c) Reserve Account balance $_____________
(d) Parity percentage _____%
(e) Amount of Parity Percentage Payments $_____________
(x) The aggregate Purchase Amount paid for Financed Student Loans
purchased from the Trust during each preceding Collection Period since
the last Distribution Date (or since the Closing Date in the case of
the first Ditribution Date): _____________
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(xi) During the Exchange Period only, the aggregate Issuer
Consolidation Payments and Exchange Adjustments, stated separately, for
each preceding Collection Period since the last Distribution Date (or
since the Closing Date in the case of the first Distribution Date):
$-------------- $--------------
(xii) (a) Amount of Financed Student Loans:
(1) that are 30 to 60 days delinquent: $_______________
(2) that are 61 to 90 days delinquent: $_______________
(3) that are 91 to 120 days delinquent: $_______________
(4) that more than 120 days delinquent: $_______________
(5) for which claims have been filed
with the appropriate Guarantor
and which are awaiting payment: $_______________
(b) Amount of recoveries
(i) principal $________
(ii) interest $________
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EXHIBIT B
TO THE
TRANSFER AND SERVICING AGREEMENT
Form of Certificateholders' Statement pursuant to Section 5.7(a) of Transfer
and Servicing Agreement (capitalized terms used herein are defined in Appendix
A thereto)
Certificateholders' Distribution Date:__________________
(i) Principal Factor:
(a) Class A-1: _________
(b) Class A-2: _________
(c) Class B: _________
(ii) Amount of principal being paid or distributed:
(a) Class A-1 Notes: $_________
(b) Class A-2 Notes: $_________
(c) Class B Notes: $_________
(d) Certificates: $_________
(iii) (a) Amount of interest being paid or distributed:
(1) Class A-1 Notes: $____ (based on the [T-▇▇▇▇ Rate] [Net Loan Rate])
(2) Class A-2 Notes: $____ (based on the [T-▇▇▇▇ Rate] [Net Loan Rate])
(3) Class B Notes: $____ (based on [One-Month LIBOR] [the Net Loan Rate])
(4) Certificates: $____ (based on One-Month LIBOR)
(b) Applicable Interest Rate:
(1) Class A-1: _______%
(2) Class A-2: _______%
(3) Classs B: _______%
(4) Certificates _______%
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(iv) Pool Balance at end of preceding Collection Period:________
(v) After giving effect to distributions on this Distribution Date:
(a) outstanding principal amount of Class A-1 Notes: $___________
(b) outstanding principal amount of Class A-2 Notes: $___________
(c) outstanding principal amount of Class B Notes: $___________
(d) Certificate Balance: $_____________________
(vii) Amount of Servicing Fee, Administration Fee, Indenture Trustee Fee and
Eligible Lender Trustee Fee for related Collection Period (each stated
separately): ($_________)
(viii) (a) Aggregate amount of Realized Losses (if any) for each related
Collection Period:______________
(ix) (a) Amount of distribution attributable to
amounts in the Reserve Account: $_____________
(b) Amount of other withdrawls from the
Reserve Account: $_____________
(c) Reserve Account balance $ _______________
(d) Parity percentage _____%
(e) Amount of Parity Percentage Payments $_____________
(x) The aggregate Purchase Amount paid for Financed Student Loans purchased
from the Trust during each related Collection Period: _____________
(xi) During the Exchange Period only, the aggregate Issuer
Consolidation Payments and Exchange Adjustments, stated separately, for
each preceding Collection Period since the last Distribution Date (or
since the Closing Date in the case of the first Distribution Date):
$---------------
$---------------
(xii) (a) Amount of Financed Student Loans:
(1) that are 30 to 60 days delinquent: $_______________
(2) that are 61 to 90 days delinquent: $_______________
(3) that are 91 to 120 days delinquent: $_______________
(4) that more than 120 days delinquent: $_______________
(5) for which claims have been filed
with the appropriate Guarantor
and which are awaiting payment: $_______________
(b) Amount of recoveries
(i) principal $________
(ii) interest $________
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EXHIBIT C
TO THE
TRANSFER AND SERVICING AGREEMENT
Form of Administrator's Certificate
[To be provided by the Administrator pursuant to
Section 4.7 of the Transfer and
Servicing Agreement]
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EXHIBIT D
TO THE
TRANSFER AND SERVICING AGREEMENT
ASSIGNMENT FOR
FINANCED STUDENT LOANS
For value received, in accordance with the Transfer and
Servicing Agreement (the "Transfer and Servicing Agreement") dated as of June
__, 1997, among the undersigned, as transferor (the "Transferor"), as master
servicer (the "Master Servicer") and as administrator (the "Administrator"),
PNC Student Loan Trust I (the "Trust"), and The First National Bank of Chicago,
not in its individual capacity but solely as Eligible Lender Trustee (the
"Eligible Lender Trustee"), the undersigned does hereby contribute, assign,
transfer and otherwise convey unto the Eligible Lender Trustee on behalf of the
Trust, without recourse (subject to the obligations set forth in the Transfer
and Servicing Agreement), all right, title and interest of the undersigned in
and to (i) the Financed Student Loans and all obligations of the Obligors
thereunder, including all monies paid or payable thereunder (other than
Interest Subsidy Payments and Special Allowance Payments through the Cut-off
Date) after the Cut-off Date, including the right to enforce such Loans in the
same manner and to the same extent as the Transferor would have the power to do
but for the execution and delivery of the Transfer and Servicing Agreement,
(ii) all funds on deposit from time to time in the Trust Accounts and in all
investments and proceeds thereof (including all income thereon) and (iii) the
proceeds of any and all of the foregoing. The foregoing contribution,
assignment, transfer and conveyance does not constitute and is not intended to
result in any assumption by the Eligible Lender Trustee or the Trust of any
obligation of the Transferor to the borrowers of Initial Financed Student Loans
or any other person in connection with the Financed Student Loans or any
agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Transfer and Servicing Agreement and is to be governed by the
Transfer and Servicing Agreement.
Capitalized terms used but not defined herein shall have the
meaning assigned to them in Appendix A to the Transfer and Servicing Agreement,
which also contains rules as to usage that shall be applicable herein.
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IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of June __, 1997.
PNC BANK, NATIONAL ASSOCIATION,
as Transferor
By: _________________________________
Name:
Title:
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EXHIBIT E
TO THE
TRANSFER AND SERVICING AGREEMENT
TRANSFER AGREEMENT
TRANSFER AGREEMENT No. ____ OF EXCHANGED STUDENT LOANS dated as of _________,
____, among PNC STUDENT LOAN TRUST I, a Delaware business trust (the "Issuer"),
PNC BANK, NATIONAL ASSOCIATION, a national banking association, as transferor
(the "Transferor"), and THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, not in its individual capacity but solely as Eligible Lender
Trustee of the Issuer (the "Eligible Lender Trustee").
W I T N E S S E T H:
WHEREAS the Issuer, the Transferor, the Eligible Lender
Trustee, the Administrator and the Master Servicer (as defined in the Appendix
A to the Transfer and Servicing Agreement) are parties to the Transfer and
Servicing Agreement dated as of June __, 1997 (as amended or supplemented, the
"Transfer and Servicing Agreement");
WHEREAS pursuant to the Transfer and Servicing Agreement, the
Transferor wishes to convey the Exchanged Student Loans referred to in Section
2 hereof (the "Exchanged Student Loans") to the Eligible Lender Trustee on
behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are
willing to accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree, intending to
be legally bound hereby, as follows:
1. Definitions and Usage. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed to them in
Appendix A to the Transfer and Servicing Agreement, which also contains rules
of construction and usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"Exchange Date" means, with respect to the Exchanged Student
Loans, ______________.
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"Subsequent Cut-Off Date" means, with respect to each
Exchanged Student Loan, the date specified as such on Schedule A
hereto.
2. Schedule of Exchanged Student Loans. Attached hereto as
Schedule A is a supplement to Schedule A to the Transfer and Servicing
Agreement listing the Exchanged Student Loans to be conveyed on the Exchange
Date to the Eligible Lender Trustee on behalf of the Issuer pursuant to this
Agreement. Attached hereto as Schedule B is a list of Financed Student Loans
to be conveyed on the Exchange Date to the Transferor by the Eligible Lender
Trustee on behalf of the Issuer in exchange for the Exchanged Student Loans.
3. Conveyance of Exchanged Student Loans. In consideration of
the Issuer's delivery to or upon the order of the Transferor of the Financed
Student Loans listed on Schedule B attached hereto, the Transferor does hereby
contribute, transfer, assign, set over and otherwise convey, without recourse
(subject to the obligations set forth in the Transfer and Servicing Agreement),
to the Eligible Lender Trustee on behalf of the Issuer:
(a) all right, title and interest in and to each Exchanged
Student Loan, and all obligations of the Obligors thereunder,
including all moneys paid thereunder (other than Interest Subsidy
Payments and Special Allowance Payments payable through the related
Subsequent Cut-Off Date), and all written communications received by
the Transferor with respect thereto and still retained by the
Transferor in accordance with its retention policies (including
borrower correspondence, notices of death, disability or bankruptcy
and requests for deferrals or forbearances), on and after the related
Subsequent Cut-Off Date; and
(b) the proceeds of any and all of the foregoing.
4. Representations and Warranties of the Transferor. The
Transferor hereby represents and warrants to the Issuer as of the date of this
Agreement and as of the Exchange Date that:
(a) Organization and Good Standing. The Transferor is duly
organized and validly existing as a national banking association with
the power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted, except for such power and authority the absence
of which would not have a material adverse effect on the Transferor or
its ability to consummate the transactions contemplated by this
Agreement and the Transferor had at all relevant times, and has, the
power, authority and legal right to originate, acquire and own the
Exchanged Student Loans.
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(b) Power and Authority. The Transferor has the requisite
corporate power and authority to execute and deliver this Agreement
and to carry out its terms; the Transferor has requisite corporate
power and authority to transfer and assign the property to be
contributed and assigned to and deposited with the Issuer (or with the
Eligible Lender Trustee on behalf of the Issuer) and the Transferor
has duly authorized such transfer and assignment to the Issuer (or to
the Eligible Lender Trustee on behalf of the Issuer) by all necessary
corporate action on the Transferor's part; and the execution, delivery
and performance of this Agreement have been duly authorized by the
Transferor by all necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal,
valid and binding obligation of the Transferor enforceable against the
Transferor in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance and
similar laws relating to creditors' rights generally or the rights of
creditors of banks the deposit accounts of which are insured by the
FDIC and subject to general principles of equity.
(d) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not violate, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time
or both) a default under, the charter or by-laws of the Transferor, or
any material indenture, agreement or other material instrument to
which the Transferor is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such material indenture,
agreement or other material instrument (other than pursuant to the
Basic Documents); nor violate any material law or, to the knowledge of
the Transferor, any material order, rule or regulation applicable to
it of any court or of any Federal or State regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Transferor or its properties.
(e) No Proceedings. There are no proceedings or
investigations pending against the Transferor or, to its best
knowledge, threatened against the Transferor, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over it or its properties: (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the
performance by the Transferor of its obligations under, or the
validity or enforceability of, this Agreement or (iv) seeking to
affect adversely the Federal or State income tax attributes of the
Issuer, the Notes or the Certificates.
(f) All Consents. All authorizations, consents, orders or
approvals of or registrations or declarations with any court,
regulatory body, administrative
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agency or other government instrumentality required to be obtained,
effected or given by the Transferor in connection with the execution
and delivery by the Transferor of this Agreement and the performance
by the Transferor of the transactions contemplated by this Agreement
have been duly obtained, effected or given and are in full force and
effect.
(g) Principal Balances. (i) The aggregate principal balance
of the Consolidation Loans and Serial Loans that are Exchanged Student
Loans listed on Schedule A attached hereto and conveyed to the
Eligible Lender Trustee on behalf of the Issuer pursuant to this
Agreement as of their respective Subsequent Cut-Off Dates is
$___________ and $___________, respectively; (ii) the aggregate
principal balance of the Financed Student Loans that are Consolidation
Loans and Serial Loans listed on Schedule B attached hereto and to be
conveyed to the Transferor pursuant to Section 2.3(d) of the Transfer
and Servicing Agreement is $_______ and $________, respectively; (iii)
the Consolidation Prepayments on deposit in the Collection Account is
$_________; (iv) the Issuer Consolidation Payments for the Exchange
Date is $__________; and (v) the Exchange Adjustment for the Exchange
Date is $_________.
5. Conditions Precedent. The obligation of the Issuer to
acquire the Exchanged Student Loans hereunder is subject to the satisfaction,
on or prior to the Exchange Date, of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by the Transferor in Section 4 of
this Agreement and in Section 3.1 of the Transfer and Servicing
Agreement shall be true and correct in all material respects as of the
date of this Agreement and as of the Exchange Date.
(b) Transfer and Servicing Agreement Conditions. Each of the
conditions set forth in Section 2.2(b) of the Transfer and Servicing
Agreement shall have been satisfied.
(c) Delivery of Assignment. The Transferor shall have
delivered an Assignment substantially in the form of Annex A hereto.
Upon the satisfaction of the conditions set forth in this
Section 5, the Eligible Lender Trustee shall have executed and delivered to the
Transferor an Assignment, substantially in the form of Annex B hereto.
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6. Ratification of Agreement. As supplemented by this
Agreement, the Transfer and Servicing Agreement is in all respects ratified and
confirmed and the Transfer and Servicing Agreement as so supplemented by this
Agreement shall be read, taken and construed as one and the same instrument.
7. Counterparts. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which together shall constitute but one and the same
instrument.
8. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
9. Headings. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective duly authorized
officers as of the day and the year first above written.
PNC STUDENT LOAN TRUST I by THE FIRST
NATIONAL BANK OF CHICAGO, not in its
individual capacity but solely as Eligible
Lender Trustee
By
---------------------------------------
Name:
Title:
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THE FIRST NATIONAL BANK OF CHICAGO, not in
its individual capacity but solely as
Eligible Lender Trustee
By
---------------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION,
Transferor
By
---------------------------------------
Name:
Title:
Acknowledged and accepted as
of the date first above written:
BANKERS TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By
---------------------------------------
Name:
Title:
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ANNEX A
TO THE TRANSFER AGREEMENT
ASSIGNMENT
For value received, in accordance with the Transfer and Servicing
Agreement (the "Transfer and Servicing Agreement") dated as of June __, 1997,
among the undersigned, as transferor (the "Transferor"), as master servicer and
as administrator, PNC Student Loan Trust I (the "Trust"), The First National
Bank of Chicago, not in its individual capacity but solely as Eligible Lender
Trustee (the "Eligible Lender Trustee"), and the Transfer Agreement No. dated
as of , (the "Transfer Agreement") among the Transferor, the Trust and the
Eligible Lender Trustee, the undersigned does hereby contribute, assign,
transfer and otherwise convey unto the Eligible Lender Trustee on behalf of the
Trust, without recourse (subject to the obligations set forth in the Transfer
and Servicing Agreement), all right, title and interest of the undersigned in
and to (i) the Exchanged Student Loans and all obligations of the Obligors
thereunder, including all moneys paid or payable thereunder (other than
Interest Subsidy Payments and Special Allowance Payments through the related
Subsequent Cut-Off Date) after the related Subsequent Cut-Off Date and (ii) the
proceeds of any and all of the foregoing. The foregoing contribution,
assignment, transfer and conveyance does not constitute and is not intended to
result in any assumption by the Eligible Lender Trustee or the Trust of any
obligation of the Transferor to the borrowers of such Exchanged Student Loans
or any other person in connection with the Exchanged Student Loans or any
agreement or instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Exchanged Student Loan described
in Schedule A to the Transfer Agreement in favor of the Eligible Lender Trustee
on behalf of the Trust, without recourse (subject to the obligations set forth
in the Transfer and Servicing Agreement) against the undersigned. This
endorsement may be effected by attaching a facsimile hereof to each or any of
such promissory notes.
This Assignment is made pursuant to and upon the
representations, warranties and agreements on the part of the undersigned
contained in the Transfer and Servicing Agreement and the Transfer Agreement
and is to be governed by the Transfer and Servicing Agreement and the Transfer
Agreement.
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Capitalized terms used but not defined herein shall have the
meaning assigned to them in the Transfer Agreement or in Appendix A to the
Transfer and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of , .
PNC BANK, NATIONAL ASSOCIATION,
as Transferor
By
--------------------------------
Name:
Title:
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ANNEX B
TO THE TRANSFER AGREEMENT
ASSIGNMENT
For value received, in accordance with the Transfer and Servicing
Agreement (the "Transfer and Servicing Agreement") dated as of June __, 1997,
among the undersigned, (the "Trust"), as master servicer and as administrator
(the "Transferor"), and The First National Bank of Chicago, not in its
individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender
Trustee"), and the Transfer Agreement No. dated as of , (the "Transfer
Agreement") among the Transferor, the Trust and the Eligible Lender Trustee,
the undersigned does hereby contribute, assign, transfer and otherwise convey
unto the Trust, without recourse (subject to the obligations set forth in the
Transfer and Servicing Agreement), all right, title and interest of the
undersigned in and to (i) the Financed Student Loans set forth on Schedule B to
the Transfer Agreement and all obligations of the Obligors thereunder,
including all moneys paid or payable thereunder (other than Interest Subsidy
Payments and Special Allowance Payments through the related Subsequent Cut-off
Date) after the related Subsequent Cut-off Date and (ii) the proceeds of any
and all of the foregoing. The foregoing contribution, assignment, transfer and
conveyance does not constitute and is not intended to result in any assumption
by the Transferor of any obligation of the Eligible Lender Trustee or the Trust
to the borrowers of such Financed Student Loans or any other person in
connection with such Financed Student Loans or any agreement or instrument
relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Financed Student Loan described
in Schedule B to the Transfer Agreement in favor of the Transferor, without
recourse, against the undersigned. This endorsement may be effected by
attaching a facsimile hereof to each or any of such promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Transfer and Servicing Agreement and the Transfer Agreement and is to be
governed by the Transfer and Servicing Agreement and the Transfer Agreement.
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Capitalized terms used but not defined herein shall have the
meaning assigned to them in the Transfer Agreement or in Appendix A to the
Transfer and Servicing Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
Assignment to be duly executed as of , .
------------------ ----------
PNC STUNDENT LOAN TRUST I
By: THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual capacity
but soley as Eligible Lender Trustee
on behalf of the Trust
By
---------------------------------------
Name:
Title:
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SCHEDULE A
TO THE TRANSFER AGREEMENT NO. ______
[List of Exchanged Student Loans and
their related Subsequent Cut-Off Dates]
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SCHEDULE B
TO THE
TRANSFER AGREEMENT NO. ____
[List of Financed Student Loans
to be Conveyed to the Transferor]
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