EXECUTION COPY
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INDENTURE
between
KEYCORP STUDENT LOAN TRUST 1999-B,
as Issuer
and
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
Dated as of September 1, 1999
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1.01. Definitions and Usage.........................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.............2
ARTICLE II
THE NOTES
SECTION 2.01. Form..........................................................3
SECTION 2.02. Execution, Authentication and Delivery........................3
SECTION 2.03. Temporary Notes...............................................4
SECTION 2.04. Registration; Registration of Transfer and Exchange...........4
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes....................5
SECTION 2.06. Persons Deemed Owner..........................................6
SECTION 2.07. Payment of Principal and Interest; Defaulted
Interest; Noteholders' Interest Index Carryover...............7
SECTION 2.08. Cancellation...................................................8
SECTION 2.09. Release of Collateral..........................................9
SECTION 2.10. Book-Entry Notes...............................................9
SECTION 2.11. Notices to Clearing Agency....................................10
SECTION 2.12. Definitive Notes..............................................10
ARTICLE III
COVENANTS
SECTION 3.01. Payment to Noteholders.......................................11
SECTION 3.02. Maintenance of Office or Agency..............................11
SECTION 3.03. Money for Payments To Be Held in Trust.......................11
SECTION 3.04. Existence....................................................13
SECTION 3.05. Protection of Indenture Trust Estate.........................13
SECTION 3.06. Opinions as to Indenture Trust Estate........................14
SECTION 3.07. Performance of Obligations; Master Servicing of Financed
Student Loans................................................14
SECTION 3.08. Negative Covenants...........................................17
SECTION 3.09. Annual Statement as to Compliance............................17
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms..........18
SECTION 3.11. Successor or Transferee......................................19
SECTION 3.12. No Other Business............................................19
SECTION 3.13. No Borrowing.................................................20
SECTION 3.14. Obligations of Master Servicer and Administrator.............20
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities............20
SECTION 3.16. Capital Expenditures.........................................20
SECTION 3.17. Restricted Payments..........................................20
SECTION 3.18. Notice of Events of Default..................................20
SECTION 3.19. Further Instruments and Acts.................................21
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture.......................21
SECTION 4.02. Application of Trust Money....................................22
SECTION 4.03. Repayment of Moneys Held by Paying Agent......................22
SECTION 4.04. Auction of Financed Student Loans.............................23
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default.............................................23
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment............25
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee..........................................25
SECTION 5.04. Remedies; Priorities..........................................28
SECTION 5.05. Optional Preservation of the Financed Student Loans...........32
SECTION 5.06. Limitation of Suits...........................................32
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest..................33
SECTION 5.08. Restoration of Rights and Remedies............................33
SECTION 5.09. Rights and Remedies Cumulative................................34
SECTION 5.10. Delay or Omission Not a Waiver................................34
SECTION 5.11. Control by Noteholders........................................34
SECTION 5.12. Waiver of Past Defaults.......................................35
SECTION 5.13. Undertaking for Costs.........................................35
SECTION 5.14. Waiver of Stay or Extension Laws..............................35
SECTION 5.15. Action on Notes...............................................36
SECTION 5.16. Performance and Enforcement of Certain Obligations............36
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee...................................37
SECTION 6.02. Rights of Indenture Trustee...................................38
SECTION 6.03. Individual Rights of Indenture Trustee........................39
SECTION 6.04. Indenture Trustee's Disclaimer................................39
SECTION 6.05. Notice of Defaults............................................39
SECTION 6.06. Reports by Indenture Trustee to Noteholders...................39
SECTION 6.07. Compensation and Indemnity....................................40
SECTION 6.08. Replacement of Indenture Trustee..............................40
SECTION 6.09. Successor Indenture Trustee by Merger.........................41
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.................42
SECTION 6.11. Eligibility; Disqualification.................................43
SECTION 6.12. Preferential Collection of Claims Against Issuer..............43
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders......................................43
SECTION 7.02. Preservation of Information; Communications to Noteholders....44
SECTION 7.03. Reports by Issuer.............................................44
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money...........................................45
SECTION 8.02. Trust Accounts................................................45
SECTION 8.03. General Provisions Regarding Accounts.........................47
SECTION 8.04. Release of Indenture Trust Estate.............................47
SECTION 8.05. Opinion of Counsel............................................48
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders........48
SECTION 9.02. Supplemental Indentures with Consent of Noteholders...........49
SECTION 9.03. Execution of Supplemental Indentures..........................51
SECTION 9.04. Effect of Supplemental Indenture..............................51
SECTION 9.05. Conformity with Trust Indenture Act...........................51
SECTION 9.06. Reference in Notes to Supplemental Indentures.................51
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption....................................................52
SECTION 10.02. Form of Redemption Notice.....................................53
SECTION 10.03. Notes Payable on Redemption Date..............................53
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc.....................54
SECTION 11.02. Form of Documents Delivered to Indenture Trustee..............56
SECTION 11.03. Acts of Noteholders...........................................56
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies...............................................57
SECTION 11.05. Notices to Noteholders; Waiver................................58
SECTION 11.06. Alternate Payment and Notice Provisions.......................58
SECTION 11.07. Conflict with Trust Indenture Act.............................58
SECTION 11.08. Effect of Headings and Table of Contents......................59
SECTION 11.09. Successors and Assigns........................................59
SECTION 11.10. Separability..................................................59
SECTION 11.11. Benefits of Indenture.........................................59
SECTION 11.12. Legal Holidays................................................59
SECTION 11.13. Governing Law.................................................59
SECTION 11.14. Counterparts..................................................59
SECTION 11.15. Recording of Indenture........................................60
SECTION 11.16. Trust Obligations.............................................60
SECTION 11.17. No Petition...................................................60
SECTION 11.18. Inspection....................................................60
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Initial Financed Student Loans
SCHEDULE B Schedule of Additional Student Loans
SCHEDULE C Location of Financed Student Loan Files
EXHIBIT A-1 Form of Class A-1 Note
EXHIBIT A-2 Form of Class A-2 Note
EXHIBIT A-3 Form of Class M Note
EXHIBIT B Form of Note Depository Agreement
INDENTURE dated as of September 1, 1999, between
KEYCORP STUDENT LOAN TRUST 1999-B, a New York trust
(the "Issuer"), and BANKERS TRUST COMPANY, a New York
banking corporation, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Floating Rate
Class A-1 Asset Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2
Asset Backed Notes (the "Class A-2 Notes" and together with the Class A-1 Notes,
the "Class A Notes"), and the Floating Rate Class M Asset Backed Notes (the
"Class M Notes", and together with the Class A Notes, the "Notes"):
GRANTING CLAUSE
The Issuer (and, with respect to the Financed Student Loans, the
Eligible Lender Trustee on behalf of the Issuer) hereby Grants to the Indenture
Trustee at the Closing Date, as trustee for the benefit of the holders of the
Notes, all the Issuer's right, title and interest in and to the following:
(a) the Financed Student Loans, and all obligations of the Obligors
thereunder including all moneys paid thereunder on or after the Cutoff Date
(or, in the case of Additional Student Loans, on or after the related
Subsequent Cutoff Date);
(b) the Sale and Servicing Agreement, including the right of the
Issuer to cause the Seller to repurchase or the Master Servicer to
purchase, Financed Student Loans from the Issuer under circumstances
described therein and including the Assigned Rights;
(c) each Guarantee Agreement, including the right of the Issuer to
cause the related Guarantor to make Guarantee Payments in respect of the
Financed Student Loans;
(d) all funds on deposit from time to time in the Trust Accounts,
including the Reserve Account Initial Deposit and the Pre-Funded Amount;
(e) the Cap Agreement and all payments made by the Cap Provider
thereunder in respect of the Class A-1 Cap Payment, Class A-2 Cap Payment
and Class M Cap Payment; and
(f) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the holders
of the Notes, acknowledges such Grant, accepts the trusts under this Indenture
in accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the holders of the Notes may be adequately and effectively
protected.
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1.01. DEFINITIONS AND USAGE. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
defined herein are defined in Appendix A hereto, which also contains rules as to
usage that shall be applicable herein.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a holder of the Notes.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
ARTICLE II
THE NOTES
SECTION 2.01. FORM. The Class A-1 Notes, Class A-2 Notes and the Class
M Notes, together with the Indenture Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibits ▇-▇, ▇-▇ and A-3,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Class A-1 Notes, the Class A-2 Notes and the Class M Notes set forth in
Exhibits ▇-▇, ▇-▇ and A-3 are part of the terms of this Indenture.
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Notes for original issue in an aggregate principal amount of $280,000,000, with
respect to the Class A-1 Notes , $625,000,000, with respect to the Class A-2
Notes, and $30,000,000 with respect to the Class M Notes, except as provided in
Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. TEMPORARY NOTES. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the holder of the
Notes. Upon surrender for cancellation of any one or more temporary Notes, the
Issuer shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the holders of the Notes and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the holder of the Notes shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations and a like
aggregate principal amount.
At the option of the holder of the Notes, Notes may be exchanged for
other Notes in any authorized denominations, a like class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, if the requirements
of Section 8-401(1) of the UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the holder of the Notes shall obtain
from the Indenture Trustee, the Notes which the holder of the Notes making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
The Issuer initially appoints The Depository Trust Company ("DTC") to
act as depositary (the "Depositary") with respect to the each Class of the
Notes.
The Issuer initially appoints the Indenture Trustee to act as
custodian with respect to the Notes.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by the
holder of the Notes thereof or such holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.
No service charge shall be made to a holder of the Notes for any
registration of transfer or exchange of Notes, but the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.06 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within 15 days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. If, after the delivery of such replacement Note
or payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu of which
such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the holder of the Notes thereof of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of, interest (and any
Noteholders' Interest Index Carryover and payments made under the Cap Agreement
with respect to such Class of Notes), if any, on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and neither the
Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST;
NOTEHOLDERS' INTEREST INDEX CARRYOVER. (a) The Class A-1 Notes, the Class A-2
Notes and Class M Notes shall accrue interest as provided in the forms of the
Class A-1 Note, the Class A-2 Note and the Class M Note set forth in Exhibits
▇-▇, ▇-▇ and A-3 respectively, and such interest shall be payable on each
Distribution Date as specified therein, subject to Section 3.01; provided,
however, that on any Distribution Date on which a Class M Interest Subordination
Event exists, the amount of interest due and payable on the Class M Notes on
such Distribution Date will be reduced by the amount of such interest applied to
the Noteholders' Priority Principal Distribution Amount on such Distribution
Date and the amount so deferred will be payable, together with interest thereon,
on the first Distribution Date on which a Class M Interest Subordination Event
no longer exists. Any installment of interest (and any Noteholders' Interest
Index Carryover with respect to each Class of Notes) or principal, if any,
payable on any Note which is punctually paid or duly provided for by the Issuer
on the applicable Distribution Date shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered on the Record Date by
check mailed first-class, postage prepaid to such Person's address as it appears
on the Note Register on such Record Date, except that, unless Definitive Notes
have been issued pursuant to Section 2.12, with respect to Notes registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payment will be made by wire transfer in
immediately available funds to the account designated by such nominee and except
for the final installment of principal payable with respect to such Note on a
Distribution Date or on the applicable Note Final Maturity Date which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Distribution Date as provided in the form of the Class A-1 Note, the Class
A-2 Note and the Class M Note set forth in Exhibits ▇-▇, ▇-▇ ▇▇▇ ▇-▇,
respectively, to the extent the amount of funds required and available to be
distributed in respect of principal on such Class of Notes pursuant to the Sale
and Servicing Agreement; PROVIDED, HOWEVER, the entire unpaid principal amount
of each Class of Notes shall be due and payable on its Final Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing, if the Indenture Trustee or
the Controlling Noteholders representing not less than a majority of the
Outstanding Amount of the Controlling Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02. All
principal payments on each Class of Notes shall be made pro rata to the holders
of such Class of Notes entitled thereto. The Indenture Trustee shall notify the
Person in whose name a Note is registered at the close of business on the Record
Date preceding the Distribution Date on which the Issuer expects that the final
installment of principal of and interest (and any Noteholders' Interest Index
Carryover with respect to such Class of Notes) on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
the holders of the Notes as provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are holders of the
Notes on a subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Issuer shall fix or cause to be
fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each holder of the
Notes a notice that states the special record date, the payment date and the
amount of defaulted interest to be paid.
(d) The Noteholders' Interest Index Carryover with respect to the
Class A Notes for each Distribution Date (including all unpaid Noteholders'
Interest Index Carryover for such Class A Notes for prior Distribution Dates and
interest accrued thereon at the applicable Note Interest Rate for each
applicable Interest Period) shall be payable to the Class A Notes, pro rata
based on the amount of Noteholders' Interest Index Carryover then owing on each
such Class A Notes, on each Distribution Date solely to the extent of funds
required and available (including any Class A Cap Funds) to be distributed to
the holders of the Class A Notes by the Indenture Trustee pursuant to Section
5.05(c)(x) or 5.06(e) of the Sale and Servicing Agreement. The Noteholders'
Interest Index Carryover with respect to the Class M Notes for each Distribution
Date (including all unpaid Noteholders' Interest Index Carryover for such Class
M Notes for prior Distribution Dates and interest accrued thereon at the
applicable Note Interest Rate for each applicable Interest Period) shall be
payable to the Class M Notes, on each Distribution Date solely to the extent of
funds required and available (including any Class M Cap Funds) to be distributed
to the holders of such Class of Notes by the Indenture Trustee pursuant to
Section 5.05(c)(xi) or 5.06(e) of the Sale and Servicing Agreement. Any
Noteholders' Interest Index Carryover payable on any Distribution Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the applicable Record Date by check mailed first-class postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date, except that, unless Definitive Notes have been issued pursuant to
Section 2.12, with respect to the Notes registered on the Record Date in the
name of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment will be made by wire transfer in immediately available funds to
the account designated by such nominee. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.03.
SECTION 2.08. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time, unless the Issuer shall direct by an Issuer Order that
they be returned to it and so long as such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
SECTION 2.09. RELEASE OF COLLATERAL. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officers' Certificate of the Issuer, an Opinion of Counsel and Independent
Certificates in accordance with TIA ss. 314(c) and 314(d)(l) or an Opinion of
Counsel in lieu of such Independent Certificates to the effect that the TIA does
not require any such Independent Certificates.
SECTION 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note (as
defined below) representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.12:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee may deal with the
Clearing Agency for all purposes (including the payment of principal of and
interest and other amounts on the Notes) as the authorized representative
of the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreements.
Unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest and other amounts on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of the holders of the Notes
evidencing a specified percentage of the Outstanding Amount of the Notes,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from Note
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
SECTION 2.11. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the holders of the Notes is required under this Indenture,
unless and until Definitive Notes shall have been issued to Note Owners pursuant
to Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to the holders of the Notes to the
Clearing Agency.
SECTION 2.12. DEFINITIVE NOTES. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, a Master Servicer Default or an
Administrator Default, Note Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of such Class of Notes advise the
Clearing Agency (which shall then notify the Indenture Trustee) in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Note Owners of such Class of Notes, then the
Indenture Trustee will cause the Clearing Agency to notify all Note Owners of
such Class of Notes, through the Clearing Agency, of the occurrence of any such
event and of the availability of Definitive Notes to such Note Owners requesting
the same. Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
holders of the Definitive Notes as the Noteholders for such Class of Notes.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT TO NOTEHOLDERS. The Issuer will duly and
punctually pay the principal of (subject to the parenthetical in the following
sentence), interest, if any, on and any unpaid Noteholders' Interest Index
Carryover (but only to the extent provided in Sections 2.07(d) and 8.02(c)) with
respect to each Class of Notes in accordance with the terms of such Notes and
this Indenture. Without limiting the foregoing, subject to Section 8.02(c), the
Issuer will cause to be distributed to the holders of the Class A-1 Notes, to
the holders of the Class A-2 Notes and to the holders of the Class M Notes that
portion of the amounts on deposit in the Trust Accounts on a Distribution Date
(other than any Eligible Investments deposited therein that will mature on the
Business Day preceding a subsequent Distribution Date), to which the holders of
the Notes are entitled to receive pursuant to the Sale and Servicing Agreement.
Amounts properly withheld under the Code by any Person from a payment to any
holder of the Notes of interest (including any Noteholders' Interest Index
Carryover) and/or principal shall be considered as having been paid by the
Issuer to such holder of the Notes for all purposes of this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange. The
Issuer hereby initially appoints the Indenture Trustee to serve as its agent for
the foregoing purposes. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders may be made or served at the Corporate Trust Office,
and the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders in respect of the Notes.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts distributed from the Collection
Account or any other Trust Account pursuant to Section 8.02(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so distributed from the Collection Account for payments of Notes shall
be paid over to the Issuer except as provided in this Section. The Indenture
Trustee is hereby appointed as the initial "Paying Agent" hereunder and the
Indenture Trustee hereby accepts such appointment.
On or before the Business Day next preceding each Distribution Date
and Redemption Date, the Issuer shall distribute or cause to be distributed to
the Indenture Trustee (or any other Paying Agent) an aggregate sum sufficient to
pay the amounts then becoming due under the Notes and/or Certificates, such sum
to be held in trust for the benefit of the Persons entitled thereto and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Notes) in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the holder of the Notes thereof
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to the holders of the Notes whose Notes have been called but have
not been surrendered for redemption or whose right to or interest in moneys due
and payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
holder of the Notes).
SECTION 3.04. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a trust under the laws of the State of New
York (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.05. PROTECTION OF INDENTURE TRUST ESTATE. The Issuer will
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate and the
rights of the Indenture Trustee and the holders of the Notes in such
Indenture Trust Estate against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
SECTION 3.06. OPINIONS AS TO INDENTURE TRUST ESTATE. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and security
interest of this Indenture and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning in 2000,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
financing statements and continuation statements that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until April 30 in the following calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; MASTER SERVICING OF FINANCED
STUDENT LOANS. (a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Indenture Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture, the Sale and
Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officers' Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Master Servicer and the Administrator to assist
the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all its obligations
and agreements contained in this Indenture, the other Basic Documents and in the
instruments and agreements included in the Indenture Trust Estate, including
filing or causing to be filed all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture and the Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic Document or
any provision thereof without the consent of the Indenture Trustee or the
Controlling Noteholders of at least a majority of the Outstanding Amount of the
Controlling Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Master
Servicer Default or an Administrator Default under the Sale and Servicing
Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof, and shall specify in such notice the action, if any, the
Issuer is taking with respect to such default. If a Master Servicer Default
shall arise from the failure of the Master Servicer to perform any of its duties
or obligations under the Sale and Servicing Agreement, or an Administrator
Default shall arise from the failure of the Administrator to perform any of its
duties or obligations under the Sale and Servicing Agreement or the
Administration Agreement, as the case may be, with respect to the Financed
Student Loans, the Issuer shall take all reasonable steps available to it to
enforce its rights under the Basic Documents in respect of such failure.
(e) As promptly as possible after the giving of notice of termination
to the Master Servicer of the Master Servicer's rights and powers, or to the
Administrator of the Administrator's rights and powers, pursuant to Section 8.01
of the Sale and Servicing Agreement, the Issuer shall appoint a successor master
servicer (the "Successor Master Servicer"), or a successor administrator (the
"Successor Administrator"), and such Successor Master Servicer or Administrator,
as the case may be, shall accept its appointment by a written assumption in a
form acceptable to the Indenture Trustee. In the event that a Successor Master
Servicer or Administrator has not been appointed and accepted its appointment at
the time when the Master Servicer or Administrator, as the case may be, ceases
to act as Master Servicer or Administrator, as the case may be, the Indenture
Trustee without further action shall automatically be appointed a Successor
Master Servicer or Administrator, as the case may be. The Indenture Trustee may
resign as the Master Servicer or the Administrator by giving written notice of
such resignation to the Issuer and in such event will be released from such
duties and obligations, such release not to be effective until the date a new
master servicer or a new administrator enters into an agreement with the Issuer
as provided below; PROVIDED, HOWEVER, that nothing herein shall require or
permit the Indenture Trustee to act as Master Servicer, or otherwise master
service Financed Student Loans, in violation of the Higher Education Act. Upon
delivery of any such notice to the Issuer, the Issuer shall obtain a new master
servicer or a new administrator as a Successor Master Servicer or Administrator
under the Sale and Servicing Agreement. Any Successor Master Servicer or
Administrator, as the case may be, other than the Indenture Trustee shall (i) be
an established institution (A) that satisfies any requirements of the Higher
Education Act applicable to servicers and (B) whose regular business includes
the servicing or administration of student loans and (ii) enter into a master
servicing agreement or an administration agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the predecessor Master Servicer or the provisions of the
Sale and Servicing Agreement and the Administration Agreement applicable to the
Administrator. If within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such a new master servicer or
administrator, as the case may be, the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint, a Successor Master
Servicer or Administrator; PROVIDED, HOWEVER, that such right to appoint or to
petition for the appointment of any such successor 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. In
connection with any such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Sale and
Servicing Agreement, and in accordance with Section 8.02 of the Sale and
Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing or administration of the Financed Student Loans
(such agreement to be in form and substance satisfactory to the Indenture
Trustee). If the Indenture Trustee shall succeed as provided herein to the
Master Servicer's duties with respect to Financed Student Loans or the
Administrator's duties with respect to the Issuer and the Financed Student
Loans, as the case may be, it shall do so in its individual capacity and not in
its capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Master Servicer or the Administrator, as the case may be, and
the servicing or administration of the Financed Student Loans. In case the
Indenture Trustee shall become successor to the Master Servicer or the
Administrator, as the case may be, under the Sale and Servicing Agreement, the
Indenture Trustee shall be entitled to appoint as Master Servicer or as
Administrator, as the case may be, any one of its affiliates or agents, provided
that such appointment shall not affect or alter in any way the liability of the
Indenture Trustee as a successor for the performance of the duties and
obligations of the Master Servicer or the Administrator in accordance with the
terms hereof.
(f) Upon any termination of the Master Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, or any termination of the
Administrator's rights and powers pursuant to the Sale and Servicing Agreement,
as the case may be, the Issuer shall promptly notify the Indenture Trustee. As
soon as a Successor Master Servicer or a Successor Administrator is appointed,
the Issuer shall notify the Indenture Trustee of such appointment, specifying in
such notice the name and address of such Successor Master Servicer or such
Successor Administrator.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Controlling Noteholders of
at least a majority in Outstanding Amount of the Controlling Notes, amend,
modify, waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of any
Collateral or the Basic Documents, except to the extent otherwise provided
therein, or waive timely performance or observance by the Master Servicer, the
Administrator, the Seller, the Issuer or the Eligible Lender Trustee under the
Sale and Servicing Agreement; PROVIDED, HOWEVER, that no such amendment shall
(i) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, distributions that are required to be made for the benefit of the
holders of the Notes, or (ii) reduce the aforesaid percentage of the Notes which
are required to consent to any such amendment, without the consent of the
holders of all the Outstanding Notes. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
holders of the Notes, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.08. NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or any other Basic
Document, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the
Indenture Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest (including any Noteholders' Interest Index Carryover) payable in
respect of, the Notes (other than amounts properly withheld from such
payments under the Code or applicable state law) or assert any claim
against any present or former holder of the Notes by reason of the payment
of the taxes levied or assessed upon any part of the Indenture Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Indenture Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than tax
liens and other liens that arise by operation of law, in each case arising
solely as a result of an action or omission of the related Obligor, and
other than as expressly permitted by the Basic Documents) or (C) permit the
lien of this Indenture not to constitute a valid first priority (other than
with respect to any such tax or other lien) security interest in the
Indenture Trust Estate.
SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year 2000), an Officers'
Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officers and the nature and status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of, interest on and any Noteholders'
Interest Index Carryover, if any, with respect to all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Pennsylvania
state tax consequence to the Issuer, any holder of the Notes or any holder
of the Certificates;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of, interest on and
Noteholders' Interest Index Carryover, if any, with respect to all Notes
and the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agrees by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of holders of the Notes, (D)
unless otherwise provided in such supplemental indenture, expressly agrees
to indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture and
the Notes and (E) expressly agrees by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Pennsylvania
state tax consequence to the Issuer, any holder of the Notes or any holder
of the Certificates;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), KeyCorp Student Loan Trust 1999-B will
be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery by the Issuer of written notice to the Indenture Trustee
stating that KeyCorp Student Loan Trust 1999-B is to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Financed Student Loans and making Additional Fundings in the manner contemplated
by this Indenture and the other Basic Documents and activities incidental
thereto.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. OBLIGATIONS OF MASTER SERVICER AND ADMINISTRATOR. The
Issuer shall cause the Master Servicer to comply with Sections 4.08(a), 4.09,
4.10 and 4.11 of the Sale and Servicing Agreement and the Administrator to
comply with Sections 4.08(b) and (c), 4.09, 4.10 and 5.07 thereof.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Eligible Lender Trustee or any owner of a beneficial interest in
the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Master Servicer or the Administrator,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; PROVIDED, HOWEVER, that the Issuer may make, or
cause to be made, distributions to the Master Servicer, the Eligible Lender
Trustee, the Indenture Trustee, the holders of the Certificates, the holders of
the Notes, the Administrator and the Seller as contemplated by, and to the
extent funds are available for such purpose under, the Sale and Servicing
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the other Basic Documents.
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Seller of its obligations
under the Sale and Servicing Agreement, or the Master Servicer of its
obligations under the Sale and Servicing Agreement or the Administrator of its
obligations under the Sale and Servicing Agreement or the Administration
Agreement. In addition, the Issuer shall deliver to the Indenture Trustee,
within five days after the occurrence thereof, written notice in the form of an
Officers' Certificate of the Issuer of any event which with the giving of notice
and the lapse of time would become an Event of Default under Section 5.01(iii),
its status and what action the Issuer is taking or proposes to take with respect
thereto.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of holders of the Notes to receive
payments of principal thereof and interest (including any Noteholders' Interest
Index Carryover) thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and
3.13, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.07 and
the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights
of holders of the Notes as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when:
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.05 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.03)
have been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Class A-1
Final Maturity Date, the Class A-2 Final Maturity Date or
the Class M Final Maturity Date, as the case may be,
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee
for the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior to
the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to the Class A-1 Final Maturity Date, the Class
A-2 Final Maturity Date or the Class M Final Maturity Date, as the
case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officers' Certificate of the Issuer, an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 11.01(a) and, subject to
Section 11.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest (including any Noteholders' Interest Index Carryover); but such moneys
need not be segregated from other funds except to the extent required herein or
in the Sale and Servicing Agreement or required by law.
SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
SECTION 4.04. AUCTION OF FINANCED STUDENT LOANS. Any Financed Student
Loans remaining in the Trust as of the end of the Collection Period immediately
preceding the November 2009 Distribution Date will be offered for sale in the
aggregate by the Indenture Trustee as either a single pool (a "Single Pool
Sale") or in two separate pools (a "Two Pool Sale") as determined by the
Administrator in its sole discretion; provided, however, that if a Coordination
Agreement requires the offering of the Access Loans to PHEAA, ▇▇▇▇ and/or LAI,
the Administrator shall instruct the Indenture Trustee, in accordance with
Section 10.06(a) of the Sale and Servicing Agreement, to offer for sale the
Financed Student Loans that are Access Loans as a single pool as part of a Two
Pool Sale. KeyCorp, 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, with respect to a Single Pool Sale, the Indenture Trustee
will solicit and resolicit bids from all participating bidders until only one
bid remains for such Financed Student Loans or the remaining bidders decline to
resubmit bids and, with respect to a Two Pool Sale, if at least two bids are
received for either pool of Financed Student Loans, the Indenture Trustee will
solicit and resolicit bids from all participating bidders until only one bid
remains with respect to each pool of Financed Student Loans, or the remaining
bidders decline to resubmit bids. The Indenture Trustee shall, with respect to a
Single Pool Sale, accept the highest of such remaining bids from a single bidder
if it is equal to or in excess of the Minimum Purchase Amount, and with respect
to a Two Pool Sale, accept the highest of such remaining bids for each pool of
Financed Student Loans, if the sum of the such two bids is equal to or in excess
of the Minimum Purchase Amount. If (i) at least two bids are not received with
respect to a Single Pool Sale (or at least two bids for each pool of Financed
Student Loans with respect to a Two Pool Sale), or (ii) the highest bid (with
respect to a Single Pool Sale) or the combination of the highest two bids (with
respect to a Two Pool Sale), as the case may be, after the resolicitation
process is completed is not equal to or in excess of the Minimum Purchase
Amount, the Indenture Trustee will not consummate such sale. In connection with
the determination of the Minimum Purchase Amount, the Indenture Trustee may
consult, and, at the direction of the Seller, shall consult, with a financial
advisor (which may be the Administrator) to determine if the fair market value
of the Financed Student Loans has been offered. The proceeds of any such sale
will be applied in the order of priority set forth in Section 5.04(b) of this
Indenture. If the sale is not consummated in accordance with the foregoing, the
Indenture Trustee may, but shall not be under any obligation to, solicit bids to
purchase the Financed Student Loans on future Distribution Dates upon terms
similar to those described above.. In addition, notwithstanding anything herein
to the contrary, the Indenture Trustee's rights hereunder to sell the Financed
Student Loans shall be subject to the provisions of Section 10.06 of the Sale
and Servicing Agreement.
ARTICLE V
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest (including, subject to the
limitations of Sections 2.07(d) and 8.02(c), any Noteholders' Interest
Index Carryover but excluding any interest on the Class M Notes paid as
part of the Noteholders' Priority Principal Distribution Amount on any
Distribution Date on which a Class M Interest Subordination Event exists,
on any Note when the same becomes due and payable, and such default shall
continue for a period of five days (so long as the Class A Notes are
outstanding, each holder of any Class M Note or the Note Owner of any such
Class M Note, by such holder's acceptance of such Class M Note or
beneficial interest therein, as the case may be, shall be deemed to have
consented to the delay in payment of interest on such Class M Note and to
have waived its right to institute suit for enforcement of any such
payment); or
(ii) default in the payment of the principal of any Note when the same
becomes due and payable to the extent funds exist therefor or at maturity
thereof; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a notice of Default hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Indenture Trust Estate in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Indenture Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Indenture Trust Estate, or
the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Controlling Noteholders representing not less than
a majority of the Outstanding Amount of the Controlling Notes may declare all
the Notes to be immediately due and payable, by a notice in writing to the
Issuer (and to the Indenture Trustee if given by holders of the Notes), and upon
any such declaration the unpaid principal amount of such Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Controlling Noteholders representing a majority of the Outstanding Amount of the
Controlling Notes, by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. (a) The Issuer covenants that if (i) default is made in the
payment of any interest (including, subject to the limitations of Sections
2.07(d) and 8.02(c), any unpaid Noteholders' Interest Index Carryover) on any
Note when the same becomes due and payable, and such default continues for a
period of five days, or (ii) default is made in the payment of the principal of
or any installment of the principal on its Final Maturity Date or of any Note
when the same becomes due and payable in accordance with Section 2.07(b), the
Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of
the holders of the Notes, the whole amount then due and payable on such Notes
for principal and interest (and any unpaid Noteholders' Interest Index
Carryover) with interest upon the overdue principal, and, to the extent payment
at such rate of interest shall be legally enforceable, upon overdue installments
of interest (and any unpaid Noteholders' Interest Index Carryover) at the rate
specified in Section 2.07 and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the holders of the
Notes, by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Indenture Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest (including any unpaid Noteholders' Interest Index
Carryover) owing and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor Indenture
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence or bad faith) and of the holders of the
Notes allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the holders of the Notes and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the holders of the Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such holders of the Notes to
make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such holders of the
Notes, to pay to the Indenture Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any holder of the Notes any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any holder of the
Notes thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any holder of the Notes in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the holders of the Notes, and it shall not be necessary to
make any holder of the Notes a party to any such Proceedings.
SECTION 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other
obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Indenture Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the holders of the Notes; and
(iv) sell the Indenture Trust Estate or any portion thereof or rights
or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.01(i) or (ii), unless (i) the holders
of all outstanding Notes consent to such sale, (ii) the proceeds of such sale
are sufficient to pay in full the principal of and the accrued interest on the
outstanding Notes at the date of such sale or (iii) the Indenture Trustee
determines that the collections on the Financed Student Loans would not be
sufficient on an ongoing basis to make all payments on the Notes as such
payments would have become due if such obligations had not been declared due and
payable, and the Indenture Trustee obtains the consent of the holders of 66 2/3%
of the aggregate principal amount of the Notes then outstanding; provided,
further, that the Indenture Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, other than an Event of Default
described in Section 5.01(i) or (ii) unless (i) the proceeds of the sale or
liquidation of the Trust Estate distributable to the holders of the Certificates
are sufficient to pay to the holders of the Certificates the outstanding
principal balance of the Certificates plus accrued and unpaid return thereon or
(ii) after receipt of notice from the Eligible Lender Trustee that the proceeds
of such sale or liquidation distributable to the holders of the Certificates
would not be sufficient to pay to the holders of the Certificates the
outstanding principal balance of the Certificates plus accrued and unpaid return
thereon, the holders of the Certificates of at least a majority of the
outstanding principal balance of the Certificates consent thereto. In addition,
notwithstanding anything herein to the contrary, the Indenture Trustee's rights
hereunder to sell the Financed Student Loans shall be subject to the provisions
of Section 10.06 of the Sale and Servicing Agreement.
(b) If the Indenture Trustee collects any money or property under this
Article V following the occurrence and during the continuation of an Event of
Default with respect to Sections 5.01(i), 5.01(ii), 5.01(iv) or 5.01(v) above or
following the acceleration of the Notes pursuant to Section 5.02, it shall pay
out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: pro rata to the Master Servicer for due and unpaid Master
Servicing Fees and to the Administrator for due and unpaid Administration
Fees;
THIRD: to the holders of the Class A Notes for amounts due and unpaid
on the Class A Notes for interest (other than any Noteholders' Interest
Index Carryover), ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class A Notes for interest;
FOURTH: to the holders of the Class A Notes for amounts due and unpaid
on the Class A Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class A Notes
for principal;
FIFTH: to the holders of the Class M Notes for amounts due and unpaid
on the Class M Notes for interest (other than any Noteholders' Interest
Index Carryover);
SIXTH: to the holders of the Class M Notes for amounts due and unpaid
on the Class M Notes for principal;
SEVENTH: to the Issuer for distribution of principal and interest due
and unpaid to the holders of the Certificates;
EIGHTH: to the holders of the Class A Notes for any unpaid
Noteholders' Interest Index Carryover with respect to the Class A Notes,
ratably, without preference or priority of any kind, according to the
amount of Noteholders' Interest Index Carryover attributable to each such
Class A Note;
NINTH: to the holders of the Class M Notes for any unpaid Noteholders'
Interest Index Carryover with respect to the Class M Notes;
TENTH: to the Issuer for distribution to the holders of the
Certificates for any unpaid Certificateholders' Interest Index Carryover;
ELEVENTH: to the Cap Provider all previously unreimbursed Class A-1
Cap Payments, Class A-2 Cap Payments, Class M Cap Payments and Certificate
Cap Payments; and
TWELFTH: to the Issuer, for distribution in accordance with the terms
of the Sale and Servicing Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to the holders of the Notes pursuant to this Section. At least 15 days
before such record date, the Issuer shall mail to each holder of the Notes and
the Indenture Trustee a notice that states the record date, the payment date and
the amount to be paid.
(c) If the Indenture Trustee collects any money or property under this
Article V following the occurrence and during the continuation of an Event of
Default, other than with respect to Events of Default under Sections 5.01(i),
5.01(ii), 5.01(iv) or 5.01(v) above or following the acceleration of the Notes
pursuant to Section 5.02, it shall pay out the money or property in the
following order:
(i) to the Indenture Trustee for amounts due under Section 6.07 of
this Indenture;
(ii) to the Seller, any amounts on deposit in the Collection Account
which consist of Guarantee Payments made by ▇▇▇▇ in excess of the Maximum
▇▇▇▇ Payments Amount;
(iii) pro rata, from the amount of Available Funds remaining after the
application of clauses (i) and (ii), (x) to the Master Servicer, the Master
Servicing Fee due with respect to the preceding calendar month and all
unpaid Master Servicing Fees from prior months, and (y) to the
Administrator, the Administration Fee and all unpaid Administration Fees
from prior Collection Periods;
(iv) to the holders of the Class A Notes, from the amount of Available
Funds remaining after the application of clauses (i), (ii) and (iii), the
Noteholders' Interest Distribution Amount for the Class A-1 Notes and Class
A-2 Notes pursuant to Section 8.02(c) of this Indenture;
(v) to the holders of the Class M Notes, from the amount of Available
Funds remaining after the application of clauses (i) through (iv), the
Noteholders' Interest Distribution Amount for the Class M Notes pursuant to
Section 8.02(c) of this Indenture;
(vi) to the Issuer, from the amount of Available Funds remaining after
the application of clauses (i) through (v), the amount of the
Certificateholders' Interest Distribution Amount;
(vii) to the Reserve Account from the amount of Available Funds
remaining after the application of clauses (i) through (vi), an amount, up
to the amount, if any, necessary to reinstate the balance of the Reserve
Account up to the Specified Reserve Account Balance;
(viii) to the holders of the Notes, from the amount of Available Funds
remaining after the application of clauses (i) through (vii), the
Noteholders' Principal Distribution Amount to be allocated pursuant to
Section 8.02(c)(iii) of this Indenture;
(ix) on the Distribution Date on which the last outstanding Class of
Notes is paid in full, to the Issuer, from the amount of Available Funds
remaining after the application of clauses (i) through (viii), the amount
of the Certificateholders' Principal Distribution Amount;
(x) to the holders of the Class A Notes on a pro rata basis, based on
the amount of Noteholders' Interest Index Carryover owing on each class of
Class A Notes, from (1) the amount of Available Funds remaining after the
application of clauses (i) through (ix) and (2) the Class A Cap Funds, if
any, the aggregate unpaid amount of Noteholders' Interest Index Carryover,
if any, with respect to the Class A Notes;
(xi) to the holders of the Class M Notes, from (1) the amount of
Available Funds remaining after application of clauses (i) through (x), and
(2) the Class M Cap Funds, if any, the aggregate amount of Noteholders'
Interest Index Carryover, if any, with respect to the Class M Notes;
(xii) to the Issuer, from (1) the amount of Available Funds remaining
after the application of clauses (i) through (xi) and (2) the Certificate
Cap Funds, the aggregate unpaid amount of the Certificateholders' Interest
Index Carryover, if any;
(xiii) to the Cap Provider, an amount sufficient to reimburse the Cap
Provider for all previous Class A-1 Cap Payments, Class A-2 Cap Payments,
Class M Cap Payments and Certificate Cap Payments made by the Cap Provider
under the Cap Agreement and not previously reimbursed pursuant to this
clause (xiii); and
(xiv) to or upon the order of the Seller, the amount of Available
Funds remaining after the application of clauses (i) through (xiii).
Notwithstanding anything to the contrary contained in this Section
5.04(c), (1) on the second consecutive Distribution Date that the outstanding
principal balance of the Notes (after giving effect to any amounts to be
distributed to the holders of the Notes pursuant to Section 5.04(c) (viii)
above) is in excess of the Note Collateralization Amount, the holders of the
Notes shall receive the Noteholders' Priority Principal Distribution Amount in
the order of priority specified in Section 8.02(c) of this Indenture prior to
any distribution to the Issuer of the amount equal to of the Certificateholders'
Interest Distribution Amount on such Distribution Date pursuant to Section
5.04(c) (vi) above or (2) on the second consecutive Distribution Date that the
outstanding principal balance of the Class A Notes (after giving effect to any
amounts to be distributed to the holders of the Class A Notes pursuant to
Section 5.04(c)(vii) above) is in excess of the Note Collateralization Amount,
the holders of the Class A Notes shall receive the Noteholders' Priority
Principal Distribution Amount in the order of priority specified in Section
8.02(c) of this Indenture prior to any payment to the holders of the Class M
Notes of the Noteholders' Interest Distribution Amount for the Class M Notes on
such Distribution Date pursuant to Section 5.04(c)(v) above. In the event that
any Class of Notes receives a payment in respect of the Noteholders' Priority
Distribution Amount, the Administrator, on behalf of the Trust, shall give
notice to each Rating Agency of such payment.
The Indenture Trustee may fix a record date and payment date for any
payment to the holders of the Notes pursuant to this Section. At least 15 days
before such record date, the Issuer shall mail to each holder of the Notes and
the Indenture Trustee a notice that states the record date, the payment date and
the amount to be paid.
(d) If the Indenture Trustee, in compliance with Section 5.04(a), (b)
or (c) is deemed to have a conflict of interest under the TIA and is required to
resign as Indenture Trustee hereunder, the Indenture Trustee, pursuant to
Section 6.10, may appoint one or more indenture trustees to act separately
hereunder for each Class of Notes (in the case of the Class A Notes, such
indenture trustee shall act for all Class A Notes as if they comprised a single
Class). In the event separate indenture trustees are appointed for one or more
Classes of Notes:
(i) so long as any amounts remain unpaid with respect to the Class A
Notes, only the Indenture Trustee for the Class A Noteholders shall be
entitled to waive any Event of Default, Master Servicer Default or
Administrator Default or exercise any remedies under this Indenture; and
(ii) after the Class A Notes have been paid in full, the Indenture
Trustee for the Class M Noteholders shall be entitled to waive any Event of
Default, Master Servicer Default or Administrator Default or exercise any
remedies under this Indenture.
SECTION 5.05. OPTIONAL PRESERVATION OF THE FINANCED STUDENT LOANS. If
the Notes have been declared to be due and payable under Section 5.02 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the holders of the Notes that there be at all times
sufficient funds for the payment of principal of and interest (including any
unpaid Noteholders' Interest Index Carryover) on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Indenture Trust Estate. In determining whether to
maintain possession of the Indenture Trust Estate, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Indenture Trust Estate for such
purpose.
SECTION 5.06. LIMITATION OF SUITS. No holder of the Notes shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such holder of the Notes has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the holders of not less than 25% of the Outstanding Amount of the
Notes in the aggregate have made written request to the Indenture Trustee
to institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such holder of the Notes have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceeding; and
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the holders of a
majority of the Outstanding Amount of the Controlling Notes;
it being understood and intended that no one or more holders of the Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holders of the Notes or to obtain or to seek to obtain priority or
preference over any other holders of the Notes or to enforce any right under
this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Controlling
Noteholders, each representing less than a majority of the Outstanding Amount of
the Controlling Notes, the Indenture Trustee in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, any holder
of the Notes shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such holder of the Notes.
SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any holder of the Notes has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such holder of the Notes, then and in every such case the Issuer,
the Indenture Trustee and the holders of the Notes shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the holders of the Notes shall continue as though no such
Proceeding had been instituted.
SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the holders of
the Notes is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any holder of the Notes to exercise any right or remedy
accruing upon any Default shall impair any such right or remedy or constitute a
waiver of any such Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee or to the holders of
the Notes may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the holders of the Notes, as the case
may be.
SECTION 5.11. CONTROL BY NOTEHOLDERS. The holders of a majority of the
Outstanding Amount of the Controlling Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; PROVIDED that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Indenture Trust Estate shall
be by the holders of not less than 100% of the Outstanding Amount of the
Notes;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Indenture Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
holders of less than 100% of the Outstanding Amount of the Notes to sell or
liquidate the Indenture Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
PROVIDED, HOWEVER, that, subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any holders of the Notes not
consenting to such action.
SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the time a judgment or
decree for payment of money due has been obtained as described in Section 5.02,
the Controlling Noteholders of not less than a majority of the Outstanding
Amount of the Controlling Notes may waive any past Default and its consequences
except a Default (a) in payment when due of principal of or interest (including,
subject to the limitations of Sections 2.07(d) and 8.02(c), any Noteholders'
Interest Index Carryover) on any of the Notes or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of each
holder of the Notes. In the case of any such waiver, the Issuer, the Indenture
Trustee and the holders of the Notes shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each holder of the Notes by such Noteholder's acceptance of any Note
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any holder of the Notes, or group
of holders of the Notes, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any holder of
the Notes for the enforcement of the payment of principal of or interest
(including any unpaid Noteholders' Interest Index Carryover) on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the holders of the Notes shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the
Indenture Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance with
Section 5.04(b).
SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller, the Administrator and the Master Servicer, as applicable, of each
of their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement (and with respect to the Administrator only, the
Administration Agreement) in accordance with the terms thereof, and to exercise
any and all rights, remedies, powers and privileges lawfully available to the
Issuer under or in connection with the Sale and Servicing Agreement (and the
Administration Agreement) to the extent and in the manner directed by the
Indenture Trustee, including the transmission of notices of default on the part
of the Seller, the Administrator or the Master Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, the Administrator or the Master Servicer of
each of their obligations under the Sale and Servicing Agreement (and the
Administration Agreement).
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone (confirmed in writing promptly thereafter)) of the holders of
66-2/3% of the Outstanding Amount of the Controlling Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Seller, the Administrator or the Master Servicer under or in connection with the
Sale and Servicing Agreement (and the Administration Agreement), including the
right or power to take any action to compel or secure performance or observance
by the Seller, the Administrator or the Master Servicer of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement
(and the Administration Agreement) and any right of the Issuer to take such
action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to a Responsible Officer of the Indenture Trustee and
conforming to the requirements of this Indenture; PROVIDED, HOWEVER, that
the Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.01.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity satisfactory to it against any loss,
liability or expense is not reasonably assured to it.
(h) Except as expressly provided in the Basic Documents, the Indenture
Trustee shall have no obligation to administer, service or collect the Financed
Student Loans or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Financed Student Loans.
(i) In the event that the Indenture Trustee is the Paying Agent or the
Note Registrar, the rights and protections afforded to the Indenture Trustee
pursuant to this Indenture shall also be afforded to the Indenture Trustee in
its capacity as Paying Agent or Note Registrar.
(j) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.01.
(k) Notwithstanding any other provision in this Indenture or the other
Basic Documents, nothing in this Indenture or the other Basic Documents shall be
construed to limit the legal responsibility of the Indenture Trustee to the U.S.
Secretary of Education or a Guarantor for any violations of statutory or
regulatory requirements that may occur with respect to loans held by the
Indenture Trustee pursuant to, or to otherwise comply with its obligations
under, the Higher Education Act or implementing regulations, it being expressly
understood that the Indenture Trustee has no obligation or duty pursuant to this
Section except in the event of Foreclosure or pursuant to Section 8.02 of the
Sale and Servicing Agreement as a successor Master Servicer.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Indenture Trustee need not investigate any
fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officers' Certificate of the Issuer or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) In the event that the Person acting as Indenture Trustee is also
acting as securities intermediary all the rights, powers, immunities and
indemnities afforded to the Indenture Trustee under the Basic Documents shall
also be afforded to the securities intermediary.
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is either actually known or written notice of the existence
thereof has been delivered to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each holder of the Notes notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest (including any Noteholders' Interest Index
Carryover) on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice if and
so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of holders of the Notes.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS. The
Indenture Trustee shall deliver to each holder of the Notes (and to each Person
who was a holder of the Notes at any time during the applicable calendar year)
such information as may be required to enable such holder to prepare its Federal
and state income tax returns. Within 60 days after each December 31 beginning
with the December 31 following the date of this Indenture, the Indenture Trustee
shall mail to each holder of the Notes a brief report as of such December 31
that complies with TIA ss. 313(a) if required by said section. The Indenture
Trustee shall also comply with TIA ss. 313(b). A copy of each such report
required pursuant to TIA ▇▇.▇▇. 313(a) or (b) shall, at the time of such
transmission to holders of the Notes, be filed by the Indenture Trustee with the
Commission and with each securities exchange, if any, upon which the Notes are
listed, provided that the Issuer has previously notified the Indenture Trustee
of such listing.
SECTION 6.07. COMPENSATION AND INDEMNITY. The Issuer shall cause the
Administrator to pay to the Indenture Trustee reasonable compensation for its
services in accordance with a separate agreement between the Administrator and
the Indenture Trustee and shall cause the Administrator to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it as provided in such separate agreement. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall cause the Administrator to indemnify the Indenture
Trustee against any and all loss, liability or expense (including attorneys'
fees and expenses) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder and under the other Basic
Documents. The Indenture Trustee shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Administrator shall not relieve the
Issuer or the Administrator of its obligations hereunder and under the other
Basic Documents. The Issuer shall cause the Administrator to defend the claim
and the Administrator shall not be liable for the legal fees and expenses of the
Indenture Trustee after it has assumed such defense; PROVIDED, HOWEVER, that, in
the event that there may be a conflict between the positions of the Indenture
Trustee and the Administrator in conducting the defense of such claim, the
Indenture Trustee shall be entitled to separate counsel the fees and expenses of
which shall be paid by the Administrator on behalf of the Issuer. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture or the earlier
resignation or removal of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of a Default specified in Section 5.01(iv)
or (v) with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable Federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Controlling Noteholders
of a majority in Outstanding Amount of the Controlling Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture Trustee;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to the holders of the
Notes. The retiring Indenture Trustee shall promptly transfer all property held
by it as Indenture Trustee to the successor Indenture Trustee upon payment of
all monies due and owing to the retiring Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Controlling Noteholders of a majority in
Outstanding Amount of the Controlling Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any holder
of the Notes may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Indenture Trust Estate, and to vest
in such Person or Persons, in such capacity and for the benefit of the holders
of the Notes, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to holders of the Notes of the appointment of any co-trustee or separate
trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long term debt rating of Baa3 or better by Moody's. The Indenture Trustee
shall comply with TIA ss. 310(b), including the optional provision permitted by
the second sentence of TIA ss. 310(b)(9); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES
OF NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the holders of the Notes as of such Record Date, (b) at such other times as
the Indenture Trustee may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; PROVIDED,
HOWEVER, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the holders of the Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of the holders of the Notes received
by the Indenture Trustee in its capacity as Note Registrar. The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.
(b) Holders of the Notes may communicate pursuant to TIA ss. 312(b)
with other holders of the Notes with respect to their rights under this
Indenture or under the Notes. Upon receipt by the Indenture Trustee of any
request by a holder of the Notes to receive a copy of the current list of
holders of the Notes (whether or not made pursuant to TIA ss. 312(b)), the
Indenture Trustee shall promptly notify the Administrator thereof by providing
to the Administrator a copy of such request and a copy of the list of holders of
the Notes produced in response thereto.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
(d) The Indenture Trustee shall furnish to the holders of the Notes
promptly upon receipt of a written request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other instruments furnished to the Indenture Trustee under the Basic Documents.
SECTION 7.03. REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
(ii) file with the Indenture Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the Commission
such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all holders of the Notes described in TIA ss.
313(c)) such summaries of any information, documents and reports required
to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it on behalf of the holders of
the Notes pursuant to the Sale and Servicing Agreement as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Indenture Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
SECTION 8.02. TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Administrator to establish and maintain, in the name of
the Indenture Trustee, for the benefit of the holders of the Notes and the
holders of the Certificates, the Trust Accounts as provided in Section 5.01 of
the Sale and Servicing Agreement.
(b) On or before the Business Day preceding each Distribution Date,
all Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 5.02 of the Sale and
Servicing Agreement. On or before each Distribution Date, the Noteholders'
Distribution Amount and any Noteholders' Interest Index Carryover, if any, with
respect to the preceding Collection Period will be distributed from the
Collection Account and any other Trust Account to the Indenture Trustee (or any
other Paying Agent) on behalf of the holders of the Notes as provided in
Sections 5.04(c), 5.05 and 5.06 of the Sale and Servicing Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee (or any other Paying Agent) shall distribute all amounts received by it
on behalf of the holders of the Notes pursuant to paragraph (b) above to the
holders of the Notes to the extent of amounts due and unpaid on the Notes for
principal, interest and any Noteholders' Interest Index Carryover in the
following amounts and in the following order of priority (except as otherwise
provided in Section 5.04(b) and 5.04(c)):
(i) the Noteholders' Interest Distribution Amount with respect to the
Class A-1 and Class A-2 Notes, to the holders of the Class A-1 Notes and
the holders of the Class A-2 Notes in an amount equal to the accrued and
unpaid interest on the Notes; provided that if there are not sufficient
funds received to pay the entire amount of accrued and unpaid interest then
due on such Notes, the amounts so received shall be applied to the payment
of such interest on the Notes on a pro rata basis;
(ii) with respect to any Distribution Date on which the Class A Notes
are entitled to receive the Noteholders' Priority Distribution Amount, the
applicable Noteholders' Priority Distribution Amount to the holders of the
Class A-1 Notes until the Outstanding Amount of the Class A-1 Notes is
reduced to zero, then to the holders of the Class A-2 Notes until the
Outstanding Amount of the Class A-2 Notes is reduced to zero;
(iii) the Noteholders' Interest Distribution Amount with respect to
the Class M Notes, to the holders of the Class M Notes in an amount equal
to the accrued and unpaid interest on the Class M Notes;
(iv) the applicable Noteholders' Principal Distribution Amount, to the
holders of the Class A-1 Notes until the Outstanding Amount of the Class
A-1 Notes is reduced to zero, and then to the holders of the Class A-2
Notes until the Outstanding Amount of the Class A-2 Notes is reduced to
zero;
(v) the applicable Noteholders' Principal Distribution Amount, to the
holders of the Class M Notes until the Outstanding Amount of the Class M
Notes is reduced to zero; and
(vi) the applicable Noteholders' Interest Index Carryover with respect
to the Class A Notes, if any, to the holders of the Class A-1 Notes and the
holders of the Class A-2 Notes; provided that if insufficient funds are
received to pay the entire Noteholders' Interest Index Carryover with
respect to the Class A Notes then outstanding, the amounts so received
shall be applied to the payment of such Noteholders' Interest Index
Carryover on a pro rata basis.
(vii) the applicable Noteholders' Interest Index Carryover with
respect to the Class M Notes, if any, to the holders of the Class M Notes.
SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no
Default shall have occurred and be continuing, all or a portion of the funds in
the Trust Accounts shall be invested in Eligible Investments and reinvested by
the Indenture Trustee upon Issuer Order, subject to the provisions of Section
5.01(b) of the Sale and Servicing Agreement. All income or other gain from
investments of moneys deposited in the Trust Accounts shall be deposited by the
Indenture Trustee in the Collection Account, and any loss resulting from such
investments shall be charged to such Trust Account. The Issuer will not direct
the Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred
and be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.02, or, if such Notes shall have
been declared due and payable following an Event of Default, amounts collected
or receivable from the Indenture Trust Estate are being applied in accordance
with Section 5.05 as if there had not been such a declaration; then the
Indenture Trustee shall, to the fullest extent practicable, invest and reinvest
funds in the Trust Accounts in one or more Eligible Investments.
SECTION 8.04. RELEASE OF INDENTURE TRUST ESTATE. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid, release any remaining portion of the Indenture Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officers' Certificate of the Issuer, an Opinion of
Counsel and (if required by TIA) Independent Certificates in accordance with TIA
▇▇.▇▇. 314(c) and 314(d)(1) and meeting the applicable requirements of
Section 11.01.
(c) Each holder of the Notes, by the acceptance of a Note,
acknowledges that from time to time during the Funding Period the Indenture
Trustee shall release the lien of this Indenture on those Financed Federal Loans
to be sold to the Seller and as to which the Seller will simultaneously deposit
the aggregate Purchase Amounts thereof into the Escrow Account in accordance
with, and subject to the terms and conditions of, Section 2.03 of the Sale and
Servicing Agreement, and each holder of the Notes consents to such release.
SECTION 8.05. OPINION OF COUNSEL. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.04(c), as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the holders of the
Notes in contravention of the provisions of this Indenture; PROVIDED, HOWEVER,
that such Opinion of Counsel shall not be required to express an opinion as to
the fair value of the Indenture Trust Estate. Counsel rendering any such opinion
may rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of any holders of the Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action shall
not materially adversely affect the interests of the holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the holders of the Notes but with
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any holder of the Notes.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Controlling
Noteholders of not less than a majority of the Outstanding Amount of the
Controlling Notes, by Act of such holders of the Controlling Notes delivered to
the Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without
the consent of the holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest (including any unpaid Noteholders' Interest Index Carryover) on
any Note, or reduce the principal amount thereof, the interest rate thereon
or the Redemption Price with respect thereto, change the provisions of this
Indenture relating to the application of payments received from the Cap
Provider with respect to the Cap Agreement, collections on, or the proceeds
of the sale of, the Indenture Trust Estate to payment of principal of or
interest (including any unpaid Noteholders' Interest Index Carryover) on
the Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the holders of the Notes of which is required for any such
supplemental indenture, or the consent of the holders of the Notes of which
is required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided for
in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Indenture Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the holder of each Outstanding
Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest
(including any Noteholders' Interest Index Carryover) or principal due on
any Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
holders of the Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Indenture
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive any holder of any Note of the security provided by the
lien of this Indenture.
It shall not be necessary for any Act of holders of the Notes under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the holders of the Notes to which such amendment or supplemental
indenture relates a notice prepared by the Issuer setting forth in general terms
the substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. REDEMPTION. (a) (i) In the event that on the Special
Determination Date the Subsequent Pool Pre-Funded Amount, after giving effect to
the purchase of any Subsequent Pool Student Loans on such date is greater than
$10,000,000, each Class of Notes will be redeemed in part, on a pro rata basis
based upon the initial principal amount of each such Class, in an aggregate
principal amount equal to the Noteholders' Percentage of such Subsequent Pool
Pre-Funded Amount on the following Distribution Date. In the event that on the
Special Determination Date the Subsequent Pool Pre-Funded Amount, after giving
effect to the purchase of any Subsequent Pool Student Loans on such date, is
greater than zero but less than or equal to $10,000,000, the Class A-1 Notes
will be redeemed in an amount equal to such Subsequent Pool Pre-Funded Amount.
(ii) In the event that on the Distribution Date on which the Funding
Period ends (or on the Distribution Date immediately following the last day of
the Funding Period, if the Funding Period does not end on a Distribution Date)
any amount remains on deposit in the Pre-Funding Account after giving effect to
the making of all Additional Fundings during the Funding Period, including any
such Additional Fundings on such Redemption Date, the Class A-1 Notes will be
redeemed until the principal amount thereof is reduced to zero, then the Class
A-2 Notes will be redeemed in part to the extent of any remaining funds until
the principal amount thereof is reduced to zero, and then the Class M Notes will
be redeemed in part to the extent of any remaining funds until the principal
amount thereof is reduced to zero, in each case on a pro rata basis within each
Class, in an aggregate principal amount equal to the amount then on deposit in
the Pre-Funding Account.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.02 of the Trust Agreement, that portion of the amounts on deposit in
the Trust Accounts to be distributed to the holders of the Notes shall be paid
to the holders of the Notes up to the Outstanding Amount of the Notes and all
accrued and unpaid interest thereon and any accrued and unpaid Noteholders'
Interest Index Carryover with respect thereto (but only to the extent provided
by Sections 2.07(d) and 8.02(c)). If amounts are to be paid to holders of the
Notes pursuant to this Section 10.01(b), the Master Servicer, the Administrator
or the Issuer shall, to the extent practicable, furnish notice of such event to
the Indenture Trustee not later than 25 days prior to the Redemption Date
whereupon all such amounts shall be payable on the Redemption Date.
SECTION 10.02. FORM OF REDEMPTION NOTICE. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each holder of the Notes, as of the close of
business on the Record Date preceding the applicable Redemption Date, at such
Noteholder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
SECTION 10.03. NOTES PAYABLE ON REDEMPTION DATE. The Notes or portions
thereof to be redeemed shall on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officers' Certificate of the Issuer stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii) Other than any property released as contemplated by clause (v)
below, whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee
an Officers' Certificate of the Issuer certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days
of such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property as
contemplated by clause (v) below, or securities released from the lien of
this Indenture since the commencement of the then-current calendar year, as
set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but
such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.09 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of Financed Student Loans as and to the extent permitted or
required by the Basic Documents, (B) make cash payments out of the Trust
Accounts as and to the extent permitted or required by the Basic Documents
and (C) convey to the Seller, in order to allow the Seller to make
Consolidation Loans, those specified Financed Student Loans as and to the
extent permitted or required by and in accordance with Section 8.04(c)
hereof and Section 2.03 of the Sale and Servicing Agreement, so long as the
Issuer shall deliver to the Indenture Trustee every six months, commencing
March 1, 2000 an Officers' Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A), (B) or (C) above that
occurred during the immediately preceding six calendar months were in the
ordinary course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Master Servicer, the Seller, the Issuer or the Administrator, stating that
the information with respect to such factual matters is in the possession of the
Master Servicer, the Seller, the Issuer or the Administrator, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.03. ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by holders of the Notes may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such holders of the Notes in person or by agents duly appointed in writing;
and except as herein otherwise expressly provided such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the holders of the
Notes signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the holder of any Notes shall bind the holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of holders of the Notes or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of holders of the Notes is to be made
upon, given or furnished to or filed with:
(a) the Indenture Trustee by any holder of the Notes or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Indenture Trustee at its Corporate Trust
Office, or
(b) the Issuer by the Indenture Trustee or by any holder of the Notes
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: KeyCorp Student
Loan Trust 1999-B, in care of Bank One, National Association, ▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust
Administration; with a copy to the Administrator, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: KeyCorp Education
Resources, KeyCorp Student Loan Trust 1999-B, or at any other address
previously furnished in writing to the Indenture Trustee by the Issuer or
the Administrator. The Issuer shall promptly transmit any notice received
by it from the holders of the Notes to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Eligible Lender Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: ▇▇▇▇▇'▇ Investors Service, Inc., ABS
Monitoring Department, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; (ii) in the
case of Standard & Poor's, at the following address: Standard & Poor's Rating
Services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of Asset Backed
Surveillance Department; and (iii) Fitch IBCA, Inc., Municipal Structured
Finance Group, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇; or as to each
of the foregoing, at such other address as shall be designated by written notice
to the other parties.
SECTION 11.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to holders of the Notes of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each holder of the Notes affected by
such event, at his address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to holders of the Notes is given
by mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular holder of the Notes shall affect the sufficiency of
such notice with respect to other holders of the Notes, and any notice that is
mailed in the manner herein provided shall conclusively be presumed to have been
duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by holders of the Notes shall be filed with the
Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to holders of the Notes when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of
giving such notice as shall be satisfactory to the Indenture Trustee shall be
deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default.
SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any holder of the Notes
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such holder of the Notes, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer will
furnish to the Indenture Trustee a copy of each such agreement and the Indenture
Trustee will cause payments to be made and notices to be given in accordance
with such agreements.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA ▇▇.▇▇. 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind the successors, co-trustees and agents (excluding any
legal representatives or accountants) of the Indenture Trustee.
SECTION 11.10. SEPARABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the holders of the Notes, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Indenture Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE 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 11.14. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the holders of the Notes or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
SECTION 11.16. TRUST OBLIGATIONS. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Seller, the
Administrator, the Master Servicer, the Eligible Lender Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Administrator, the Master Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity or (ii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Seller, the Administrator,
the Master Servicer, the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, any holder or owner of a beneficial interest in the Issuer,
the Eligible Lender Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Administrator, the Master Servicer, the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Eligible Lender Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the
Eligible Lender Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each holder of the Notes, by accepting a Note, hereby
covenant and agree that they will not at any time institute against the Seller
or the Issuer, or join in any institution against the Seller or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency, receivership or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the other Basic Documents.
SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information obtained from such examination or inspection except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
KEYCORP STUDENT LOAN TRUST 1999-B,
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Assistant Treasurer
Acknowledged and accepted as to
the Granting Clause as of the
day and year first above written:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual
capacity but solely as
Eligible Lender Trustee,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of September in the year 1999, before me, the
undersigned, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a Vice President of BANK
ONE, NATIONAL ASSOCIATION, as Eligible Lender Trustee of KEYCORP STUDENT LOAN
TRUST 1999-B, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of September,
1999.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
April 4, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, )
) ss.:
COUNTY OF NEW YORK, )
On the 30th day of September in the year 1999, before me, the
undersigned, personally appeared ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇, an Assistant Treasurer of
BANKERS TRUST COMPANY, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of September,
1999.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
April 4, ▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, )
) ss.:
COUNTY OF NEW YORK, )
On the 30th day of September in the year 1999, before me, the
undersigned, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, a Vice President of BANK
ONE, NATIONAL ASSOCIATION, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of September,
1999.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
April 4, ▇▇▇▇
▇▇▇▇▇▇▇▇ A
[See Appendix A to the Sale and Servicing Agreement]
SCHEDULE A
TO THE INDENTURE
PART I
SCHEDULE OF INITIAL POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee.
PART II
SCHEDULE OF INITIAL POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
SCHEDULE B
TO THE INDENTURE
PART I
SCHEDULE OF SUBSEQUENT POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee
PART II
SCHEDULE OF SUBSEQUENT POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
PART III
SCHEDULE OF OTHER SUBSEQUENT STUDENT LOANS
To be included on Schedule A to each related Transfer Agreement.
SCHEDULE C
TO THE INDENTURE
LOCATION OF FINANCED STUDENT LOAN FILES - PHEAA
Documents relating to the Financed Student Loans being sub-serviced by PHEAA on
behalf of the Master Servicer pursuant to the PHEAA Sub-Servicing Agreement
(including original notes) are stored at PHEAA's facility at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
LOCATION OF FINANCED STUDENT LOAN FILES - GREAT LAKES
Documents relating to the Financed Student Loans being sub-serviced by Great
Lakes on behalf of the Master Servicer pursuant to the Great Lakes Sub-Servicing
Agreement(including original notes) are stored at Great Lakes' facilities at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and, on behalf of Great
Lakes, at the offices of Datakeep Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
EXHIBIT A-1
TO THE INDENTURE
[FORM OF CLASS A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 1/
No.
KEYCORP STUDENT LOAN TRUST 1999-B
FLOATING RATE CLASS A-1 ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-B, a trust organized and existing
under the laws of the State of New York (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the August 2007 Distribution Date
(the "Final Maturity Date").
---------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Note at the rate per annum equal
to the Note Interest Rate (as defined on the reverse hereof) for the Class A-1
Notes, on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date). Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 1999-B
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement,
By:
--------------------------------
Authorized Signatory
Date: September 30, 1999
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By:
---------------------------
Authorized Signatory
Date: September 30, 1999
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-1 Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Class A-1 Notes are subject to all
terms of the Indenture. Capitalized but undefined terms shall have the meanings
set forth in the Indenture dated as of September 1, 1999 between KeyCorp Student
Loan Trust 1999-B and Bankers Trust Company as Trustee including Appendix A to
the Indenture.
The Class A-1 Notes and the Issuer's Floating Rate Class A-2 Asset
Backed Notes (the "Class A-2 Notes" and together with the Class A-1 Notes, the
"Class A Notes") are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture. The rights of the
Issuer's Floating Rate Class M Asset Backed Notes (the "Class M Notes" and
together with the Class A Notes, the "Notes") are and will be subordinated to
the rights of the Class A Notes as provided in the Indenture.
Principal of the Notes will be payable on each Distribution Date to
the extent funds are available therefor set forth in the Sale and Servicing
Agreement and the Indenture. "Distribution Date" means the twenty-fifth day of
each February, May, August and November, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing February 25, 2000.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Controlling Noteholders
representing not less than a majority of the Outstanding Amount of the
Controlling Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Notes of the same class shall be made pro rata to the holders of
such Notes entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of each Class of Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Note Interest Rate for
such Class of Notes; provided, however, that on any Distribution Date on which a
Class M Interest Subordination Event exists, the amount of interest due and
payable on the Class M Notes on such Distribution Date will be reduced by the
amount of such interest applied to the Noteholders' Priority Principal
Distribution Amount on such Distribution Date and the amount so deferred will be
payable, together with interest thereon, on the first Distribution Date on which
a Class M Interest Subordination Event no longer exists.
The "Note Interest Rate" means, with respect to any Interest Period,
(x) in the case of the Class A-1 Notes, the interest rate per annum (computed on
the basis of the actual number of days elapsed in the related Interest Period
divided by 360) equal to the lesser of (i) Three-Month LIBOR plus 0.28% and (ii)
the Student Loan Rate for such Interest Period, (y) in the case of the Class A-2
Notes, the interest rate per annum (computed on the basis of the actual number
of days elapsed in the related Interest Period divided by 360) equal to the
lesser of (i) Three-Month LIBOR plus 0.43% and (ii) the Student Loan Rate for
such Interest Period, and (z) in the case of the Class M Notes, the interest
rate per annum (computed on the basis of the actual number of days elapsed in
the related Interest Period divided by 360) equal to the lesser of (i)
Three-Month LIBOR plus 0.70% and (ii) the Student Loan Rate for such Interest
Period.
The "Student Loan Rate" means for any Class of Securities for any
Interest Period will equal the product of (a) the quotient obtained by dividing
(i) 365 (or 366 in a leap year) by (ii) the actual number of days elapsed in
such Interest Period and (b) the percentage equivalent of a fraction, (i) the
numerator of which is equal to Expected Interest Collections for the Collection
Period relating to such Interest Period less the Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "Three-Month LIBOR" means the London
interbank offered rate for deposits in U.S. dollars having a maturity of three
months commencing on the related LIBOR Determination Date (the "Index Maturity")
which appears on Telerate Page 3750 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), 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
Administrator 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 will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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, Three-Month LIBOR in effect for the
applicable Interest Period will be Three-Month LIBOR in effect for the previous
Interest Period. For purposes of calculating Three-Month LIBOR, a Business Day
is any day on which banks in London and New York City are open for the
transaction of business. Interest due for any Interest Period will be determined
based on the actual number of days in such Interest Period over a 360 day year.
"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 and
(iii) having an established place of business in London.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding November 26, 1999 and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26, 1999 to
but excluding February 25, 2000. For purposes of this definition, a "Business
Day" is any day on which banks in London and New York City are open for the
transaction of business.
Any Noteholders' Interest Index Carryover with respect to the Class A
Notes that may exist on any Distribution Date attributable shall be payable to
the holders of the Class A Notes, on a pro rata basis based on the amount of
Noteholders' Interest Index Carryover then owing on the Class A Notes on that
Distribution Date and any succeeding Distribution Dates solely out of the funds
available and required to be applied thereto pursuant to the Sale and Servicing
Agreement. Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Class M Notes shall be payable to the
holders of the Class M Notes on that Distribution Date and any succeeding
Distribution Date solely out of the funds available and required to be applied
thereto pursuant to the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture, the Class A-1 Notes may be redeemed in
part, on a pro rata basis among all the holders of such Notes, on the
Distribution Date on which the Funding Period ends (or on the Distribution Date
immediately following the last day of the Funding Period, if the Funding Period
does not end on a Distribution Date) in the event that any amounts remain on
deposit in the Pre-Funding Account after giving effect to all Additional
Fundings, including any occurring on such Distribution Date.
As provided in the Indenture, if as of the Special Determination Date,
the Subsequent Pool Pre-Funded Amount is greater than $10,000,000, such amount
will be distributed on the first Distribution Date thereafter to redeem each
Class of Notes and prepay the Certificates on a pro rata basis, based on the
initial principal balance of each Class of Notes and the Initial Certificate
Balance; if such amount is $10,000,000 or less, it will be distributed on such
Distribution Date only to the holders of the Class A-1 Notes to redeem such
Class A-1 Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Eligible Lender Trustee
or the Indenture Trustee, except as any such Person may have expressly agreed
and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Seller, the Administrator, the
Master Servicer, the Noteholders and the Note Owners that, for purposes of
Federal and State income tax and any other tax measured in whole or in part by
income, this Note will qualify as indebtedness of the Issuer. The Noteholders
and the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of the Issuer.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Seller or the Issuer, or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Bankers Trust Company in its individual
capacity, Bank One, National Association, in its individual capacity, any owner
of a beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The holder of the Notes by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________
________________________________ */
Signature Guaranteed:
________________________________ */
------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-2
TO THE INDENTURE
[FORM OF CLASS A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 1/
No.
KEYCORP STUDENT LOAN TRUST 1999-B
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-B, a trust organized and existing
under the laws of the State of New York (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the August 2027 Distribution Date
(the "Final Maturity Date").
----------------------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Note at the rate per annum equal
to the Note Interest Rate (as defined on the reverse hereof) for the Class A-2
Notes, on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 1999-B
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement,
By:
--------------------------------
Authorized Signatory
Date: September 30, 1999
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By:
---------------------------------
Authorized Signatory
Date: September 30, 1999
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-2 Asset Backed Notes (herein called the
"Class A-2 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Class A-2 Notes are subject to all
terms of the Indenture. Capitalized but undefined terms shall have the meanings
set forth in the Indenture dated as of September 1, 1999 between KeyCorp Student
Loan Trust 1999-B and Bankers Trust Company as Trustee including Appendix A to
the Indenture.
The Class A-2 Notes and the Issuer's Floating Rate Class A-1 Asset
Backed Notes (the "Class A-1 Notes" and together with the Class A-2 Notes, the
"Class A Notes") are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture. The rights of the
Issuer's Floating Rate Class M Asset Backed Notes (the "Class M Notes" and
together with the Class A Notes, the "Notes") are and will be subordinated to
the rights of the Class A Notes as provided in the Indenture.
Principal of the Notes will be payable on each Distribution Date to
the extent funds are available therefor set forth in the Sale and Servicing
Agreement and the Indenture. "Distribution Date" means the twenty-fifth day of
each February, May, August and November, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing February 25, 2000.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Controlling Noteholders
representing not less than a majority of the Outstanding Amount of the
Controlling Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Notes of the same class shall be made pro rata to the holders of
such Notes entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of each Class of Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Note Interest Rate for
such Class of Notes; provided, however, that on any Distribution Date on which a
Class M Interest Subordination Event exists, the amount of interest due and
payable on the Class M Notes on such Distribution Date will be reduced by the
amount of such interest applied to the Noteholders' Priority Principal
Distribution Amount on such Distribution Date and the amount so deferred will be
payable, together with interest thereon, on the first Distribution Date on which
a Class M Interest Subordination Event no longer exists.
The "Note Interest Rate" means, with respect to any Interest Period,
(x) in the case of the Class A-1 Notes, the interest rate per annum (computed on
the basis of the actual number of days elapsed in the related Interest Period
divided by 360) equal to the lesser of (i) Three-Month LIBOR plus 0.28% and (ii)
the Student Loan Rate for such Interest Period, (y) in the case of the Class A-2
Notes, the interest rate per annum (computed on the basis of the actual number
of days elapsed in the related Interest Period divided by 360) equal to the
lesser of (i) Three Monthly LIBOR plus 0.43% and (ii) the Student Loan Rate for
such Interest Period, and (z) in the case of the Class M Notes, the interest
rate per annum (computed on the basis of the actual number of days elapsed in
the related Interest Period divided by 360) equal to the lesser of (i)
Three-Month LIBOR plus 0.70% and (ii) the Student Loan Rate for such Interest
Period.
The "Student Loan Rate" means for any Class of Securities for any
Interest Period will equal the product of (a) the quotient obtained by dividing
(i) 365 (or 366 in a leap year) by (ii) the actual number of days elapsed in
such Interest Period and (b) the percentage equivalent of a fraction, (i) the
numerator of which is equal to Expected Interest Collections for the Collection
Period relating to such Interest Period less the Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "Three-Month LIBOR" means the London
interbank offered rate for deposits in U.S. dollars having a maturity of three
months commencing on the related LIBOR Determination Date (the "Index Maturity")
which appears on Telerate Page 3750 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), 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
Administrator 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 will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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, Three-Month LIBOR in effect for the
applicable Interest Period will be Three-Month LIBOR in effect for the previous
Interest Period.
"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 and
(iii) having an established place of business in London.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding November 26, 1999 and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26 1999 to
but excluding February 25, 2000. For purposes of this definition, a "Business
Day" is any day on which Banks in London and New York City are open for the
transaction of business.
Any Noteholders' Interest Index Carryover with respect to the Class A
Notes that may exist on any Distribution Date attributable shall be payable to
the holders of the Class A Notes, on a pro rata basis based on the amount of
Noteholders' Interest Index Carryover then owing on the Class A Notes on that
Distribution Date and any succeeding Distribution Dates solely out of the funds
available and required to be applied thereto pursuant to the Sale and Servicing
Agreement. Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Class M Notes shall be payable to the
holders of the Class M Notes on that Distribution Date and any succeeding
Distribution Date solely out of the funds available and required to be applied
thereto pursuant to the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture, if as of the Special Determination Date,
the Subsequent Pool Pre-Funded Amount is greater than $10,000,000, such amount
will be distributed on the first Distribution Date thereafter to redeem each
Class of Notes and prepay the Certificates on a pro rata basis, based on the
initial principal balance of each Class of Notes and the Initial Certificate
Balance; if such amount is $10,000,000 or less, it will be distributed on such
Distribution Date only to the holders of the Class A-1 Notes to redeem such
Class A-1 Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Eligible Lender Trustee
or the Indenture Trustee, except as any such Person may have expressly agreed
and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Seller, the Administrator, the
Master Servicer, the Noteholders and the Note Owners that, for purposes of
Federal and State income tax and any other tax measured in whole or in part by
income, this Note will qualify as indebtedness of the Issuer. The Noteholders
and the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of the Issuer.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Seller or the Issuer, or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Bankers Trust Company in its individual
capacity, Bank One, National Association, in its individual capacity, any owner
of a beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The holder of the Notes by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
______________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________
__________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________
________________________________ */
Signature Guaranteed:
________________________________ */
------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-3
TO THE INDENTURE
[FORM OF CLASS M NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 1/
No.
KEYCORP STUDENT LOAN TRUST 1999-B
FLOATING RATE CLASS M ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-B, a trust organized and existing
under the laws of the State of New York (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the August 2029 Distribution Date
(the "Final Maturity Date").
--------------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Note at the rate per annum equal
to the Note Interest Rate (as defined on the reverse hereof) for the Class M
Notes, on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 1999-B
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement,
By:
-----------------------------------
Authorized Signatory
Date: September 30, 1999
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By:
--------------------------------
Authorized Signatory
Date: September 30, 1999
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class M Asset Backed Notes (herein called the
"Class M Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Class M Notes are subject to all terms
of the Indenture. Capitalized but undefined terms shall have the meanings set
forth in the Indenture dated as of September 1, 1999 between KeyCorp Student
Loan Trust 1999-B and Bankers Trust Company as Trustee including Appendix A to
the Indenture.
The Issuer's Floating Rate Class A-1 Asset Backed Notes (the "Class
A-1 Notes") and the Issuer's Floating Rate Class A-2 Asset Backed Notes (the
"Class A-2 Notes" and together with the Class A-1 Notes, the "Class A Notes")
are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture. The rights of the Class M Notes
(collectively, the Class M Notes and the Class A Notes are referred to as, the
"Notes") are and will be subordinated to the rights of the Class A Notes as
provided in the Indenture..
Principal of the Notes will be payable on each Distribution Date to
the extent funds are available therefor set forth in the Sale and Servicing
Agreement and the Indenture. "Distribution Date" means the twenty-fifth day of
each February, May, August and November, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing February 25, 2000.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Controlling Noteholders
representing not less than a majority of the Outstanding Amount of the
Controlling Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Notes of the same class shall be made pro rata to the holders of
such Notes entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of each Class of Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Note Interest Rate for
such Class of Notes; provided, however, that on any Distribution Date on which a
Class M Interest Subordination Event exists, the amount of interest due and
payable on the Class M Notes on such Distribution Date will be reduced by the
amount of such interest applied to the Noteholders' Priority Principal
Distribution Amount on such Distribution Date and the amount so deferred will be
payable, together with interest thereon, on the first Distribution Date on which
a Class M Interest Subordination Event no longer exists.
The "Note Interest Rate" means, with respect to any Interest Period,
(x) in the case of the Class A-1 Notes, the interest rate per annum (computed on
the basis of the actual number of days elapsed in the related Interest Period
divided by 360) equal to the lesser of (i) Three-Month LIBOR plus 0.28% and (ii)
the Student Loan Rate for such Interest Period, (y) in the case of the Class A-2
Notes, the interest rate per annum (computed on the basis of the actual number
of days elapsed in the related Interest Period divided by 360) equal to the
lesser of (i) Three-Month LIBOR plus 0.43% and (ii) the Student Loan Rate for
such Interest Period, and (z) in the case of the Class M Notes, the interest
rate per annum (computed on the basis of the actual number of days elapsed in
the related Interest Period divided by 360) equal to the lesser of (i)
Three-Month LIBOR plus 0.70% and (ii) the Student Loan Rate for such Interest
Period.
The "Student Loan Rate" means for any Class of Securities for any
Interest Period will equal the product of (a) the quotient obtained by dividing
(i) 365 (or 366 in a leap year) by (ii) the actual number of days elapsed in
such Interest Period and (b) the percentage equivalent of a fraction, (i) the
numerator of which is equal to Expected Interest Collections for the Collection
Period relating to such Interest Period less the Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "Three-Month LIBOR" means the London
interbank offered rate for deposits in U.S. dollars having a maturity of three
months commencing on the related LIBOR Determination Date (the "Index Maturity")
which appears on Telerate Page 3750 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), 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
Administrator 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 will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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, Three-Month LIBOR in effect for the
applicable Interest Period will be Three-Month LIBOR in effect for the previous
Interest Period.
"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 and
(iii) having an established place of business in London.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding November 26, 1999 and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26 1999 to
but excluding February 25, 2000. For purposes of this definition, a "Business
Day" is any day on which Banks in London and New York City are open for the
transaction of business.
Any Noteholders' Interest Index Carryover with respect to the Class A
Notes that may exist on any Distribution Date attributable shall be payable to
the holders of the Class A Notes, on a pro rata basis based on the amount of
Noteholders' Interest Index Carryover then owing on the Class A Notes on that
Distribution Date and any succeeding Distribution Dates solely out of the funds
available and required to be applied thereto pursuant to the Sale and Servicing
Agreement. Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Class M Notes shall be payable to the
holders of the Class M Notes on that Distribution Date and any succeeding
Distribution Date solely out of the funds available and required to be applied
thereto pursuant to the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture, if as of the Special Determination Date,
the Subsequent Pool Pre-Funded Amount is greater than $10,000,000, such amount
will be distributed on the first Distribution Date thereafter to redeem each
Class of Notes and prepay the Certificates on a pro rata basis, based on the
initial principal balance of each Class of Notes and the Initial Certificate
Balance; if such amount is $10,000,000 or less, it will be distributed on such
Distribution Date only to the holders of the Class A-1 Notes to redeem such
Class A-1 Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Eligible Lender Trustee
or the Indenture Trustee, except as any such Person may have expressly agreed
and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Seller, the Administrator, the
Master Servicer, the Noteholders and the Note Owners that, for purposes of
Federal and State income tax and any other tax measured in whole or in part by
income, this Note will qualify as indebtedness of the Issuer. The Noteholders
and the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of the Issuer.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Seller or the Issuer, or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Bankers Trust Company in its individual
capacity, Bank One, National Association, in its individual capacity, any owner
of a beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The holder of the Notes by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
DEFAULT IN THE PAYMENT OF INTEREST ON A CLASS M NOTE IS NOT AN EVENT
OF DEFAULT UNDER THE INDENTURE SO LONG AS ANY CLASS A NOTES ARE OUTSTANDING. BY
ACCEPTANCE OF THIS CLASS M NOTE OR ANY BENEFICIAL INTEREST HEREIN, YOU ARE
DEEMED TO HAVE CONSENTED TO THE DELAY IN PAYMENT OF INTEREST ON SUCH CLASS M
NOTE AND WAIVED YOUR RIGHTS TO INSTITUTE SUIT FOR ENFORCEMENT OF ANY SUCH
PAYMENT TO THE EXTENT DESCRIBED IN THE INDENTURE.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________
________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________
________________________________ */
Signature Guaranteed:
________________________________ */
------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such
other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.