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EXHIBIT 4.1
EXECUTION COPY
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INDENTURE
between
KEYCORP STUDENT LOAN TRUST 1999-A,
as Issuer
and
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
Dated as of January 1, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions and Usage
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SECTION 1.01. Definitions and Usage...................................................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.......................................2
ARTICLE II
The Notes
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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..............................................6
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...................................................................8
SECTION 2.10. Book-Entry Notes........................................................................9
SECTION 2.11. Notices to Clearing Agency..............................................................9
SECTION 2.12. Definitive Notes........................................................................9
ARTICLE III
Covenants
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SECTION 3.01. Payment to Noteholders.................................................................10
SECTION 3.02. Maintenance of Office or Agency........................................................10
SECTION 3.03. Money for Payments To Be Held in Trust.................................................11
SECTION 3.04. Existence..............................................................................12
SECTION 3.05. Protection of Indenture Trust Estate...................................................12
SECTION 3.06. Opinions as to Indenture Trust Estate..................................................13
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SECTION 3.07. Performance of Obligations; Servicing of Financed Student Loans........................13
SECTION 3.08. Negative Covenants.....................................................................16
SECTION 3.09. Annual Statement as to Compliance......................................................17
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms....................................17
SECTION 3.11. Successor or Transferee................................................................19
SECTION 3.12. No Other Business......................................................................19
SECTION 3.13. No Borrowing...........................................................................19
SECTION 3.14. Obligations of Servicer and Administrator..............................................19
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities......................................19
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...........................................................20
ARTICLE IV
Satisfaction and Discharge
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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......................................................22
ARTICLE V
Remedies
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SECTION 5.01. Events of Default......................................................................23
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.....................................24
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..............25
SECTION 5.04. Remedies; Priorities...................................................................27
SECTION 5.05. Optional Preservation of the Financed Student Loans....................................29
SECTION 5.06. Limitation of Suits....................................................................29
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal and Interest..................30
SECTION 5.08. Restoration of Rights and Remedies.....................................................30
SECTION 5.09. Rights and Remedies Cumulative.........................................................30
SECTION 5.10. Delay or Omission Not a Waiver.........................................................31
SECTION 5.11. Control by Noteholders.................................................................31
SECTION 5.12. Waiver of Past Defaults................................................................31
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SECTION 5.13. Undertaking for Costs..................................................................32
SECTION 5.14. Waiver of Stay or Extension Laws.......................................................32
SECTION 5.15. Action on Notes........................................................................32
SECTION 5.16. Performance and Enforcement of Certain Obligations.....................................32
ARTICLE VI
The Indenture Trustee
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SECTION 6.01. Duties of Indenture Trustee............................................................33
SECTION 6.02. Rights of Indenture Trustee............................................................35
SECTION 6.03. Individual Rights of Indenture Trustee.................................................36
SECTION 6.04. Indenture Trustee's Disclaimer.........................................................36
SECTION 6.05. Notice of Defaults.....................................................................36
SECTION 6.06. Reports by Indenture Trustee to Noteholders............................................36
SECTION 6.07. Compensation and Indemnity.............................................................36
SECTION 6.08. Replacement of Indenture Trustee.......................................................37
SECTION 6.09. Successor Indenture Trustee by Merger..................................................38
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee..........................................39
SECTION 6.11. Eligibility; Disqualification..........................................................40
SECTION 6.12. Preferential Collection of Claims Against Issuer.......................................40
ARTICLE VII
Noteholders' Lists and Reports
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SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses of Noteholders.................40
SECTION 7.02. Preservation of Information; Communications to Noteholders.............................40
SECTION 7.03. Reports by Issuer......................................................................41
ARTICLE VIII
Accounts, Disbursements and Releases
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SECTION 8.01. Collection of Money....................................................................42
SECTION 8.02. Trust Accounts.........................................................................42
SECTION 8.03. General Provisions Regarding Accounts..................................................43
SECTION 8.04. Release of Indenture Trust Estate......................................................44
SECTION 8.05. Opinion of Counsel.....................................................................44
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ARTICLE IX
Supplemental Indentures
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SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.................................45
SECTION 9.02. Supplemental Indentures with Consent of Noteholders....................................46
SECTION 9.03. Execution of Supplemental Indentures...................................................47
SECTION 9.04. Effect of Supplemental Indenture.......................................................48
SECTION 9.05. Conformity with Trust Indenture Act....................................................48
SECTION 9.06. Reference in Notes to Supplemental Indentures..........................................48
ARTICLE X
Redemption of Notes
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SECTION 10.01. Redemption.............................................................................48
SECTION 10.02. Form of Redemption Notice..............................................................49
SECTION 10.03. Notes Payable on Redemption Date.......................................................49
ARTICLE XI
Miscellaneous
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SECTION 11.01. Compliance Certificates and Opinions, etc..............................................50
SECTION 11.02. Form of Documents Delivered to Indenture Trustee.......................................52
SECTION 11.03. Acts of Noteholders....................................................................53
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies........................53
SECTION 11.05. Notices to Noteholders; Waiver.........................................................54
SECTION 11.06. Alternate Payment and Notice Provisions................................................54
SECTION 11.07. Conflict with Trust Indenture Act......................................................55
SECTION 11.08. Effect of Headings and Table of Contents...............................................55
SECTION 11.09. Successors and Assigns.................................................................55
SECTION 11.10. Separability...........................................................................55
SECTION 11.11. Benefits of Indenture..................................................................55
SECTION 11.12. Legal Holidays.........................................................................55
SECTION 11.13. Governing Law..........................................................................55
SECTION 11.14. Counterparts...........................................................................56
SECTION 11.15. Recording of Indenture.................................................................56
SECTION 11.16. Trust Obligations......................................................................56
SECTION 11.17. No Petition............................................................................56
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SECTION 11.18. Inspection.............................................................................57
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Initial Financed Student Loans
SCHEDULE B Schedule of Subsequent Pool 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 B Form of Note Depository Agreement
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INDENTURE dated as of January 1, 1999,
between KEYCORP STUDENT LOAN TRUST 1999-A, 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"), the Issuer's
Class A-2 Asset Backed Notes (the "Class A-2 Notes", and together with the Class
A-1 Notes, the "Notes):
GRANTING CLAUSE
The Issuer (and, with respect to the Financed Student Loans,
the Eligible Lender Trustee) 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 a Servicer to purchase,
Financed Student Loans from the Issuer under circumstances described
therein and including the Assigned Rights, and the Supplemental Sale
and Servicing Agreement;
(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; and
(e) 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
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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.
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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 and the Class A-2
Notes, together with the Indenture Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibits A-1 and A-2,
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 and the Class A-2 Notes set forth in Exhibits A-1
and A-2 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
$260,000,000, with respect to the Class A-1 Notes and $570,400,000 with respect
to the Class A-2 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.
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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
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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 Note(s).
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.
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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), if any, on such Note and for all
other
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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 and the
Class A-2 Notes shall accrue interest as provided in the forms of the Class A-1
Note and the Class A-2 Note set forth in Exhibits A-1 and A-2 respectively, and
such interest shall be payable on each Distribution Date as specified therein,
subject to Section 3.01. Any installment of interest (and any Noteholders'
Interest Index Carryover) 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 and the Class A-2 Note set forth in Exhibits A-1 and A-2, respectively.
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 holders of the Notes representing not less than a majority of the
Outstanding Amount of the 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 the 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 for
such 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
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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 for each
Distribution Date (including all unpaid Noteholders' Interest Index Carryover
for such Notes for prior Distribution Dates and interest accrued thereon at the
applicable Note Interest Rate for each applicable Interest Period) shall be
payable to each class of such Notes, pro rata based on the amount of
Noteholders' Interest Index Carryover then owing on each class of such Notes, on
each Distribution Date solely to the extent of funds required and available to
be distributed to the holders of the Notes by the Indenture Trustee pursuant to
Section 5.05(c)(ix) 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 Sections 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.
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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
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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 Servicer Default
or an Administrator Default, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the 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, then the Indenture Trustee will
cause the Clearing Agency to notify all Note Owners, through the Clearing
Agency, of the occurrence of any such event and of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by
the 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 holders of the 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 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 and to
the holders of the Class A-2 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
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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.
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
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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:
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(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; 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
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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, the Supplemental 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 each 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 holders of at least a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a
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 Servicer Default shall arise
from the failure of a Servicer to perform any of its duties or obligations under
the Sale and Servicing Agreement or the Supplemental 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, the Supplemental 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 a Servicer of such 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
servicer (the "Successor Servicer"), or a successor administrator (the
"Successor Administrator"), and such Successor 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 Servicer or
Administrator has not been appointed and accepted its appointment at the time
when a Servicer or Administrator, as the case may be, ceases to act as Servicer
or Administrator, as the case may be, the Indenture Trustee without further
action shall
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automatically be appointed a Successor Servicer or Administrator, as the case
may be. The Indenture Trustee may resign as a 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 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 Servicer, or otherwise 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 servicer or a
new administrator as a Successor Servicer or Administrator under the Sale and
Servicing Agreement. Any Successor 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 servicing agreement or an
administration agreement with the Issuer having substantially the same
provisions as the provisions of the Sale and Servicing Agreement and the
Supplemental Sale and Servicing Agreement applicable to the predecessor Servicer
or the provisions of the Sale and Servicing Agreement, the Supplemental 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 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 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 a 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 a 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 a Servicer or the
Administrator, as the case may be, under the Sale and Servicing Agreement, the
Indenture Trustee shall be entitled to appoint as 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 such
Servicer or the Administrator in accordance with the terms hereof.
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(f) Upon any termination of a 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 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 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 holders of at least a
majority in Outstanding Amount of the 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 any Servicer, the Administrator, the Seller, the
Issuer or the Eligible Lender Trustee under the Sale and Servicing Agreement and
the Supplemental 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
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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 1999), 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;
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(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
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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-A 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-A 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 Servicer and Administrator. The
Issuer shall cause each 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
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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 any 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 Servicers, 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 Supplemental Sale and
Servicing Agreement, a Servicer of its obligations under the Sale and Servicing
Agreement or the Supplemental Sale and Servicing Agreement or the Administrator
of its obligations under the Sale and Servicing Agreement, the Supplemental 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
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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 or the Class A-2 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
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to the Class A-1 Final Maturity Date or the Class A-2 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 March 2009 Distribution Date will be offered for sale
by the Indenture Trustee. KeyCorp, its affiliates (other than the Seller),
PHEAA, ▇▇▇▇ and unrelated third parties may offer bids to purchase such Financed
Student Loans on such Distribution Date; provided, however, that KeyCorp and its
affiliates may not bid more than an amount determined by KeyCorp in good faith
to be equal to the fair market value of such Financed Student Loans as of the
end of the Collection Period immediately preceding such Distribution Date. If at
least two bids are received, the Indenture Trustee will solicit and resolicit
new bids from all participating bidders until only one bid remains or the
remaining bidders decline to resubmit bids. The Indenture Trustee shall accept
the highest of such remaining bids if it is equal to or in excess of the Minimum
Purchase Amount as of the end of the Collection Period immediately preceding
such Distribution Date. If at least two bids are not received or the highest bid
after the resolicitation
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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). 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.
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) on any Note when the same becomes due and
payable, and such default shall continue for a period of five days; or
(ii) default in the payment of the principal of any Note when
the same becomes due and payable; 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
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(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 holders of the Notes representing
not less than a majority of the Outstanding Amount of the 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 holders of the Notes representing a majority of the Outstanding
Amount of the 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
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(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 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 of any Note when the same becomes due and
payable, 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 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 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
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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 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
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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
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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 rights of
PHEAA to submit a first offer therefor in accordance with paragraph 8 of the
Supplemental Sale and Servicing Agreement.
(b) If the Indenture Trustee collects any money or property
pursuant to this Article V, it shall pay out the money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.07;
SECOND: to the Servicers for due and unpaid Servicing Fees;
THIRD: to the holders of the Notes for amounts due and unpaid
on the Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for
interest;
FOURTH: to the holders of the Notes for amounts due and unpaid
on the Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for
principal;
FIFTH: to the Issuer for distribution of principal and
interest due and unpaid to the holders of the Certificates;
SIXTH: [Reserved];
SEVENTH: to the Servicers, for any unpaid Excess Servicing
Fees;
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EIGHTH: to the holders of the Notes for any unpaid
Noteholders' Interest Index Carryover, ratably, without preference or
priority of any kind, according to the amount of Noteholders' Interest
Index Carryover attributable to each Note;
NINTH: to the Issuer for distribution to the holders of the
Certificates for any unpaid Certificateholders' Interest Index
Carryover; and
TENTH: 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.
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
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 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;
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(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 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 holders of the
Notes, each representing less than a majority of the Outstanding Amount of the
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.
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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 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 (i) 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 holders of not less than a majority of the Outstanding Amount
of the 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.
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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 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
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Servicers, as applicable, of each of their obligations to the Issuer under or in
connection with the Sale and Servicing Agreement and the Supplemental 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
Supplemental 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 a Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller, the Administrator
or the Servicers of each of their obligations under the Sale and Servicing
Agreement and the Supplemental 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 Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Seller, the
Administrator or any Servicer under or in connection with the Sale and Servicing
Agreement and the Supplemental 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 Servicers 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 Supplemental 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
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expressed therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this Indenture;
provided, however, that the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own 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.
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(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 Agreement or
the other Basic Documents, nothing in this Agreement or the other Basic
Documents shall be construed to limit the legal responsibility of the 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 their
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 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.
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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 Section 313(a) if required by said section. The Indenture
Trustee shall also comply with TIA Section 313(b). A copy of each such report
required pursuant to TIA Sections 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.
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The Issuer shall cause the Administrator to indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder and under the other Basic Documents. Without
limiting the generality of the foregoing, it is expressly understood that the
foregoing indemnity, subject to the last sentence of this paragraph, shall apply
to any loss, liability or expense incurred by the Indenture Trustee under
Section 12(A) of the Supplemental Sale and Servicing Agreement. 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 holders of a majority in
Outstanding Amount of the 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.
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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 holders of a majority in Outstanding Amount
of the 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
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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
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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 Section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and it shall have a long term debt rating of Baa3 or better by Moody's. The
Indenture Trustee shall comply with TIA Section 310(b), including the optional
provision permitted by the second sentence of TIA Section 310(b)(9); provided,
however, that there shall be excluded from the operation of TIA Section
310(b)(1) any indenture or indentures under which other securities of the Issuer
are outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. 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
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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
Section 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 Section 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 Section 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 Section 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.
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(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 5.05 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)):
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(i) the Noteholders' Interest Distribution Amount, 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 the Notes, the
amounts so received shall be applied to the payment of such interest on
the Notes on a pro rata basis;
(ii) the 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; and
(iii) the Noteholders' Interest Index Carryover, 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 then outstanding, the
amounts so received shall be applied to the payment of such
Noteholders' Interest Index Carryover on a pro rata basis.
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
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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
Sections 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.
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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.
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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 holders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such holders of the 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 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 collections
on, or the proceeds of the sale of, the Indenture Trust Estate to
payment of principal of or interest (including any 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;
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(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
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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, 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.
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(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,
and then the Class A-2 Notes will be redeemed in part to the extent of any
remaining funds, in each case on a pro rata basis, 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 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 Servicers, 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
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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
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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
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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 April 1, 1999, 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
any Servicer, the Seller, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of such
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.
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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-A, in care of The First National Bank
of Chicago, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Administration; with a copy to the
Administrator, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, Attention: KeyCorp Education Resources, KeyCorp Student Loan
Trust 1999-A, or at any other address previously furnished in writing
to the Indenture Trustee by the Issuer or the Administrator. The
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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
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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 Sections 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
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provisions, and the obligations, rights and remedies of the parties hereunder
shall be determined in accordance with such laws.
SECTION 11.14. 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, any 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, any 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, any 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, any 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.
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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.
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STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and
for said county and state, on this day personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said KEYCORP STUDENT LOAN TRUST 1999-A, a New York trust, and that such person
executed the same as the act of said trust for the purpose and consideration
therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 9th day of
February, 1999.
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
November 24, ▇▇▇▇
-▇▇-
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and
for said county and state, on this day personally appeared __________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said BANKERS TRUST COMPANY, a New York banking corporation, and that such person
executed the same as the act of said corporation for the purpose and
consideration therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 9th day of
February, 1999.
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
November 24, 1999
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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-A,
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee,
By: _____________________________________
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Indenture Trustee,
By: _____________________________________
Name:
Title:
Acknowledged and accepted as to
the Granting Clause as of the
day and year first above written:
THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual
capacity but solely as
Eligible Lender Trustee,
By: _____________________________
Name:
Title:
-▇▇-
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and
for said county and state, on this day personally appeared ___________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said FIRST NATIONAL BANK OF CHICAGO, a national banking association, and that
such person executed the same as the act of said association for the purpose and
consideration therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 9th day of
February, 1999.
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
November 24, 1999
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APPENDIX A
DEFINITIONS AND USAGE
Usage
The following rules of construction and usage shall be
applicable to any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any instrument governed hereby and in
any certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of
similar import when used in an instrument refer to such instrument as a whole
and not to any particular provision or subdivision thereof; references in an
instrument to "Article," "Section" or another subdivision or to an attachment
are, unless the context otherwise requires, to an article, section or
subdivision of or an attachment to such instrument; and the term "including"
means "including without limitation."
(d) The definitions contained in this Appendix are equally
applicable to both the singular and plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
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(e) Any agreement, instrument or statute defined or referred
to below or in any agreement or instrument that is governed by this Appendix
means such agreement or instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
Definitions
"Act" has the meaning specified in Section 11.03(a) of the
Indenture.
"Additional Student Loans" means the Subsequent Pool Student
Loans, the Other Subsequent Student Loans, Guarantee Fee Advances and the
fundings of accrued interest to be capitalized.
"Administration Agreement" means the Administration Agreement
dated as of January 1, 1999, among the Issuer, the Indenture Trustee and the
Administrator.
"Administration Fee" has the meaning specified in Section 3 of
the Administration Agreement.
"Administrator" means Key Bank USA, National Association, a
national banking association, in its capacity as administrator of the Issuer and
the Financed Student Loans.
"Administrator Default" has the meaning specified in Section
8.01(b) of the Sale and Servicing Agreement.
"Administrator's Certificate" means an Officers' Certificate
of the Administrator delivered pursuant to Section 4.08(c) of the Sale and
Servicing Agreement, substantially in the form of Exhibit C thereto.
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of
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this definition, "control" when used with respect to any specified Person means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Applicable Note Margin" means with respect to the Class A-1 Notes,
0.14% and with respect to the Class A-2 Notes, 0.33%.
"ASA" means the Massachusetts Higher Education Assistance
Corporation now doing business as American Student Assistance Corporation, a
Massachusetts non-profit corporation.
"Assigned Agreements" means the following agreements, as the
same may be amended and restated from time to time, (i) the Deposit Agreement
dated as of January 28, 1992, between ▇▇▇▇ and the Seller (as successor to
Ameritrust Company National Association), (ii) the Security Agreement dated as
of January 28, 1992, between ▇▇▇▇ and the Seller (as successor to Ameritrust
Company National Association), (iii) the Letter Agreement dated as of January
28, 1992, between LSAS and the Seller (as successor to Ameritrust Company
National Association), (iv) the Trust Agreement dated as of July 14, 1992 and
restated as of July 1, 1994, among the Seller, LSAS and First Bank (N.A.),
Milwaukee, Wisconsin, as trustee, (v) the LAL/BEL Guarantee Agreements dated as
of January 28, 1992 and December 21, 1992, between the Seller and ▇▇▇▇, and (vi)
the Private Guarantee Agreement dated as of March 23, 1995, among the Seller,
▇▇▇▇, Society National Bank, Indiana and Wilmington Trust Company, (vii) the
Consolidated Deposit Agreement and Consolidated Security Agreement each dated
November 1, 1995 between ▇▇▇▇ and Society National Bank, (viii) Alternative DEAL
Surety Bond Numbers 1994-A, 1994-B, 1995-A and 1996-A, dated February 23, 1994,
October 4, 1994, July 1, 1995 and July 1, 1996, respectively, issued by HICA to
KeyBank of Maine, Society National Bank, Society National Bank and Seller,
respectively; and (ix) the Pledged Collateral Account Control Agreement dated as
of January 1, 1999, among ▇▇▇▇, Seller and McDonald Investments Inc., A KeyCorp
Company, to the extent necessary to permit the Trust to realize its rights and
benefits under the assignment of the agreements referred to in clauses (i)
through (x) above.
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"Assigned Rights" has the meaning specified in Section 2.01 of
the Sale and Servicing Agreement.
"Auction Purchase Amount" with respect to the Financed Student
Loans means the aggregate unpaid principal balance owed by the applicable
borrowers thereon plus accrued interest thereon to the date of purchase less the
amount on deposit in the Reserve Account as of such date.
"Authorized Officer" means (i) with respect to the Issuer, any
officer of the Eligible Lender Trustee who is authorized to act for the Eligible
Lender Trustee in matters relating to the Issuer pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the
Eligible Lender Trustee to the Indenture Trustee on the Closing Date (as such
list may be modified or supplemented from time to time thereafter), (ii) with
respect to the Administrator, any officer of the Administrator or any of its
Affiliates who is authorized to act for the Administrator in matters relating to
itself or to the Issuer and to be acted upon by the Administrator pursuant to
the Basic Documents and who is identified on the list of Authorized Officers
delivered by the Administrator to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter), (iii)
with respect to the Seller, any officer of the Seller or any of its Affiliates
who is authorized to act for the Seller in matters relating to or to be acted
upon by the Seller pursuant to the Basic Documents and who is identified on the
list of Authorized Officers delivered by the Seller to the Indenture Trustee on
the Closing Date (as such list may be modified or supplemented from time to time
thereafter) and (iv) with respect to the Servicer, any officer of the Servicer
who is authorized to act for the Servicer in matters relating to or to be acted
upon by the Servicer pursuant to the Basic Documents and who is identified on
the list of Authorized Officers delivered by the Servicer to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Available Funds" means, with respect to a Distribution Date
or any Monthly Servicing Payment Date, the sum of the following amounts received
with respect to the then elapsed portion of the related Collection Period to the
extent not previously distributed:
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(i) all collections received by the Servicers on the Financed
Student Loans (including any Guarantee Payments received with respect
to such Financed Student Loans), but net of (x), any Federal
Origination Fee and Federal Consolidation Loan Rebate payable to the
Department on Federal Consolidation Loans disbursed after October 1,
1993, and (y) any collections in respect of principal on the Financed
Student Loans applied by the Trust to repurchase guaranteed loans from
the Guarantors in accordance with the Guarantee Agreements;
(ii) any Interest Subsidy Payments and Special Allowance
Payments received by the Eligible Lender Trustee during the then
elapsed portion of such Collection Period with respect to the Financed
Federal Loans;
(iii) all Liquidation Proceeds and all recoveries in respect
of Liquidated Student Loans which were written off in prior Collection
Periods or prior months of such Collection Period;
(iv) the aggregate Purchase Amounts received for those
Financed Student Loans repurchased by the Seller or purchased by a
Servicer under an obligation which arose during the elapsed portion of
such Collection Period;
(v) the aggregate amounts, if any, received from the Seller or
a Servicer, as the case may be, as reimbursement of non-guaranteed
interest amounts, or, lost Interest Subsidy Payments and Special
Allowance Payments, with respect to the Financed Federal Student Loans
pursuant to Section 3.02 or 4.06, respectively of the Sale and
Servicing Agreement;
(vi) amounts deposited by the Seller into the Collection
Account in connection with the making of Consolidation Loans pursuant
to Section 2.03 of the Sale and Servicing Agreement;
(vii) with respect to the initial Distribution Date, the
amount deposited in the Collection Account on the Closing Date pursuant
to Section 5.01(a)(i) of the Sale and Servicing Agreement;
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(viii) Investment Earnings for such Distribution Date;
(ix) amounts withdrawn from the Reserve Account in excess of
the Specified Reserve Account Balance and deposited into the Collection
Account;
(x) amounts withdrawn from the Escrow Account and deposited
into the Collection Account; and
(xi) with respect to the Distribution Date on or immediately
after the end of the Funding Period, the amount transferred from the
Pre-Funding Account to the Collection Account.
provided, however, that Available Funds will exclude all payments and
proceeds (including Liquidation Proceeds) of any Financed Student
Loans, the Purchase Amount of which has been included in Available
Funds for a prior Distribution Date; provided, further, that if on any
Distribution Date there would not be sufficient funds, after
application of Available Funds and amounts available from the Reserve
Account and the Pre-Funding Account (1) to pay any of the items
specified in clauses (i) through (iii) of Section 5.05(c) of the Sale
and Servicing Agreement for such Distribution Date and (2) if the
principal balance of the Notes (after giving effect to any
distributions thereon on such Distribution Date) is less than or equal
to the Note Collateralization Amount, to pay the Certificateholders'
Interest Distribution Amount for such Distribution Date, then Available
Funds for such Distribution Date will include, in addition to the
Available Funds amounts on deposit in the Collection Account on the
Determination Date relating to such Distribution Date which would have
constituted Available Funds for the Distribution Date succeeding such
Distribution Date up to the amount necessary to pay, in the case of
clause (1) above such items and in the case of clause (2) above such
Certificateholders' Interest Distribution Amount, and the Available
Funds for such succeeding Distribution Date will be adjusted
accordingly.
"Basic Documents" means the Trust Agreement, the Indenture,
the Sale and Servicing Agreement, the Supplemental Sale and Servicing Agreement,
the Administration Agreement, the Certificate Depository Agreement, the Note
Depository Agreement,
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the Guarantee Agreements and other documents and certificates delivered in
connection with any thereof.
"Bar Exam Loan" means a Bar Examination Loan made by the
Seller to an eligible borrower pursuant to the Programs.
"Benefit Plan" has the meaning specified in Section 3.04 of
the Trust Agreement.
"Book-Entry Certificate" means a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.11 of the Trust
Agreement.
"Book-Entry Note" means a beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10 of the Indenture.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions or trust companies in New York, New York
or Cleveland, Ohio, are authorized or obligated by law, regulation or executive
order to remain closed.
"Certificate" means a Floating Rate Asset Backed Certificate
issued pursuant to the Trust Agreement, substantially in the Form of Exhibit A
thereto.
"Certificate Balance" means as of the Closing Date the Initial
Certificate Balance for the Certificates and, thereafter, the Initial
Certificate Balance for the Certificates, reduced by all amounts allocable to
principal previously distributed to the holders of the Certificates.
"Certificate Depository Agreement" means the agreement dated
as of the Closing Date among the Trust, the Eligible Lender Trustee, the
Administrator and The Depository Trust Company, as the initial Clearing Agency,
substantially in the form of Exhibit B to the Trust Agreement.
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"Certificate Owner" means, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency, or on the books
of a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Certificate Paying Agent" means any paying agent or co-paying
agent appointed pursuant to Section 3.09 of the Trust Agreement, which shall
initially be the Eligible Lender Trustee.
"Certificate Rate" means, with respect to any Interest Period,
the interest rate per annum equal to the lesser of (i) the sum of (x) in the
case of any Certificates that are T-▇▇▇▇ Indexed Securities, the weighted
average of the T-▇▇▇▇ Rates within such Interest Period and in the case of any
Certificates that are LIBOR Indexed Securities, Three-Month LIBOR for such
Interest Period plus (y) 0.75% and (ii) the Student Loan Rate for such Interest
Period. The interest rate per annum for any Certificates that are T-▇▇▇▇ Indexed
Securities will be computed on the basis of the actual number of days elapsed in
such Interest Period over a period of 365 days (or 366 in a leap year) and in
the case of any Certificates that are LIBOR Indexed Securities will be computed
on the basis of the actual number of days elapsed in the related Interest Period
divided by 360.
"Certificate Register" and "Certificate Registrar" means the
register mentioned and the registrar appointed pursuant to Section 3.04 of the
Trust Agreement.
"Certificate Underwriting Agreement" means the Certificate
Underwriting Agreement dated as of February 3, 1999 between the Seller and the
Underwriters.
"Certificateholder" means a Person in whose name a Certificate
is registered in the Certificate Register.
"Certificateholders' Available Interest Distribution Amount"
means for the Certificates on any Distribution Date, an amount equal to (x) the
sum of (1) Available Funds for such Distribution Date, (2) the amount, if any,
withdrawn from the Pre-Funding Account pursuant to Section 5.08(d) of the Sale
and
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Servicing Agreement on such Distribution Date, and (3) the amounts withdrawn
from the Reserve Account pursuant to Section 5.06(b)(vi) of the Sale and
Servicing Agreement on such Distribution Date minus (y) the amount required to
be distributed pursuant to clauses (i) through (iii) of Section 5.05(c) of the
Sale and Servicing Agreement, including any Noteholders' Priority Principal
Distribution Amount actually distributed.
"Certificateholders' Available Principal Distribution Amount"
means on the Final Maturity Date for the Certificates, an amount equal to (x)
the sum of (1) the Available Funds for such Distribution Date, and (2) the
amounts withdrawn from the Reserve Account pursuant to Section 5.06(b)(ix) of
the Sale and Servicing Agreement minus (y) the amounts required to be
distributed pursuant to clauses (i) through (vii) of Section 5.05(c) of the Sale
and Servicing Agreement.
"Certificateholders' Distribution Amount" means, with respect
to any Distribution Date, the Certificateholders' Interest Distribution Amount
for such Distribution Date plus, for each Distribution Date on and after which
the Notes have been paid in full, the Certificateholders' Principal Distribution
Amount for such Distribution Date.
"Certificateholders' Interest Carryover Shortfall" means, with
respect to any Distribution Date, the excess of (i) the Certificateholders'
Interest Distribution Amount on the preceding Distribution Date over (ii) the
amount of interest actually distributed to the holders of the Certificates on
such preceding Distribution Date, plus interest on the amount of such excess
interest due to the holders of the Certificates, to the extent permitted by law,
at the Certificate Rate from such preceding Distribution Date to the current
Distribution Date.
"Certificateholders' Interest Distribution Amount" means, with
respect to any Distribution Date, the sum of (i) the amount of interest accrued
at the Certificate Rate for the related Interest Period on the outstanding
Certificate Balance on the immediately preceding Distribution Date, after giving
effect to all distributions of principal to holders of the Certificates on such
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date) and (ii) the Certificateholders' Interest Carryover Shortfall for
such Distribution Date; provided,
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however, that the Certificateholders' Interest Distribution Amount will not
include any Certificateholders' Interest Index Carryover.
"Certificateholders' Interest Index Carryover" means, with
respect to any Distribution Date as to which the Certificate Rate for such
Distribution Date is based on the Student Loan Rate, the amount equal to the
excess, if any, of (a) the amount of interest on the Certificates that would
have accrued in respect of the related Interest Period had interest been
calculated based on the T-▇▇▇▇ Rate, if such Certificates are T-▇▇▇▇ Indexed
Securities and/or Three-Month LIBOR if such Certificates are LIBOR Indexed
Securities over (b) the amount of interest on such Certificates actually accrued
in respect of such Interest Period based on the Student Loan Rate, together with
the unpaid portion of any such excess from prior Distribution Dates (and
interest accrued thereon, to the extent permitted by law, calculated based on
the T-▇▇▇▇ Rate in the case of T-▇▇▇▇ Indexed Securities or Three-Month LIBOR,
in the case of LIBOR Indexed Securities); provided, however, that, on the Final
Maturity Date, the Certificateholders' Interest Index Carryover will be equal to
the lesser of (i) the Certificateholders' Interest Index Carryover on such date
determined as described above and (ii) the amount of funds, if any, required and
available to be distributed to the holders of the Certificates on such date
pursuant to Sections 5.05(c)(x) of the Sale and Servicing Agreement.
"Certificateholders' Percentage" means, a fraction, expressed
as a percentage, the numerator of which is the principal balance of the
Certificates issued on the Closing Date and the denominator of which is the sum
of the principal amount of the Notes issued on the Closing Date and the
principal balance of the Certificates issued on the Closing Date.
"Certificateholders' Principal Distribution Amount" means, on
each Distribution Date on and after which the principal balance of the Notes has
been paid in full, the Principal Distribution Amount for such Distribution Date
(or, in the case of the Distribution Date on which the principal balance of the
Notes is paid in full, any remaining Principal Distribution Amount not otherwise
distributed to the holders of such Notes on such Distribution Date); provided,
however, that the Certificateholders' Principal Distribution Amount for the
Certificates will in no event exceed the Certificate Balance for the
Certificates. In addition, on the Final Maturity Date for the
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Certificates, the principal required to be distributed to the holders of the
Certificates will include the amount required to reduce the outstanding
principal balance of the Certificates to zero.
"Class A-1 Note" means a Floating Rate Class A-1 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit A-1
thereto.
"Class A-2 Note" means a Floating Rate Class A-2 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit A-2
thereto.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means February 9, 1999.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause
of the Indenture.
"Collection Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement.
"Collection Period" means, with respect to the first
Distribution Date, the period beginning on the Cutoff Date and ending on May 31,
1999 and with respect to each subsequent Distribution Date, the Collection
Period means the three calendar months immediately following the end of the
previous Collection Period.
"Commission" means the Securities and Exchange Commission.
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"Consolidation Loans" means Federal Consolidation Loans and
Private Consolidation Loans, collectively.
"Corporate Trust Office" means (i) with respect to the
Indenture Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the Closing Date is located at Four ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trust and Agency Group, Structured Finance Team (telephone:
(▇▇▇) ▇▇▇-▇▇▇▇; facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Seller, or the principal corporate trust office of any successor
Indenture Trustee (the address of which the successor Indenture Trustee will
notify the Noteholders and the Seller) and (ii) with respect to the Eligible
Lender Trustee, the principal corporate trust office of the Eligible Lender
Trustee located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Administration (telephone: (▇▇▇) ▇▇▇-▇▇▇▇;
facsimile: (▇▇▇) ▇▇▇-▇▇▇▇); or at such other address as the Eligible Lender
Trustee may designate by notice to the Certificateholders and the Seller, or the
principal corporate trust office of any successor Eligible Lender Trustee (the
address of which the successor Eligible Lender Trustee will notify the
Certificateholders and the Seller).
"Cumulative ▇▇▇▇ Claims Ratio" means, with respect to any
Distribution Date, the fraction, expressed as a percentage, the numerator of
which is equal to the aggregate dollar amount of claims filed against ▇▇▇▇ under
its Guarantee Agreement from the Closing Date through and including the last day
of the Collection Period preceding such Distribution Date and the denominator of
which is equal to the dollar amount of the Financed Private Loans guaranteed by
▇▇▇▇ as of the Closing Date.
"Cutoff Date" means January 1, 1999.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Event of Default.
"Definitive Certificates" has the meaning specified in Section
3.11 of the Trust Agreement.
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"Definitive Notes" has the meaning specified in Section 2.10
of the Indenture.
"Delivery" or "Deliver" when used with respect to Trust
Account Property means the following and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer
of ownership of any such Collateral to the Indenture Trustee, free and clear of
any adverse claims, consistent with changes in applicable law or regulations or
the interpretation thereof:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute instruments and
are susceptible of physical delivery ("Physical Property"):
(i) transfer of possession thereof to the Indenture Trustee
endorsed to, or registered in the name of, the Indenture Trustee, or
its nominee or endorsed in blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the Indenture Trustee;
or
(ii) delivery thereof in registered form to the Indenture
Trustee and
(A) the certificate is endorsed to the Indenture
Trustee or in blank by effective endorsement; or
(B) the certificate is registered in the name of the
Indenture Trustee, upon original issue or registration of transfer by
the issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the
Indenture Trustee; or
(ii) the issuer has agreed that it will comply with
instructions originated by the Indenture Trustee, without further
consent by the registered owner;
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(d) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the
book-entry security to the securities account (as defined in 31 CFR
Part 357) of a participant (as defined in 31 CFR Part 357) which is
also a securities intermediary; and
(ii) the participant indicates by book entry that the
book-entry security has been credited to the Indenture Trustee's
securities account, as applicable;
(e) with respect to a security entitlement:
(i) the Indenture Trustee, becomes the entitlement holder; or
(ii) the securities intermediary has agreed that it will
comply with entitlement orders originated by the Indenture Trustee;
(f) without further consent by the entitlement holder for the purpose
of clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Indenture Trustee, acquires possession
thereof;
(B) another person (other than a securities
intermediary) either acquires possession thereof on behalf of
the Indenture Trustee or, having previously acquired
possession thereof, acknowledges that it holds for the
Indenture Trustee; or
(C) a securities intermediary acting on behalf of the
Indenture Trustee acquires possession of thereof, only if the
certificate is in registered form and has been specially
endorsed to the Indenture Trustee by an effective endorsement;
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(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture Trustee as the
registered owner, upon original issue or registration of
transfer; or
(B) another person (other than a securities
intermediary) either becomes the registered owner thereof on
behalf of the Indenture Trustee, or, having previously become
the registered owner, acknowledges that it holds for the
Indenture Trustee;
(g) for purposes of this definition, except as otherwise indicated, the
following terms shall have the meaning assigned to each such term in the UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture Trustee
shall make appropriate notations on its records, and shall cause same to be made
of the records of its nominees, indicating that securities are held in trust
pursuant to and as provided in this Agreement.
"Department" means the United States Department of Education,
an agency of the Federal government.
"Depositor" means the Seller in its capacity as Depositor
under the Trust Agreement.
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"Depository" has the meaning specified in Section 2.04 of the
Indenture.
"Determination Date" means, with respect to any Monthly
Servicing Payment Date or Distribution Date, as the case may be, the third
Business Day preceding such Monthly Servicing Payment Date or Distribution Date.
"Distribution Date" means, with respect to each Collection
Period, the twenty-seventh day of each March, June, September and December or,
if such day is not a Business Day, the immediately following Business Day,
commencing on June 28, 1999.
"DTC" means the Depository Trust Company, a New York
Corporation.
"ECMC" means Educational Credit Management Corporation.
"EFS" means EFS Services, Inc., an Indiana corporation.
"EFS Fee Schedule" means the fee schedule setting forth the
Servicing Fee and Excess Servicing Fee of EFS.
"Eligible Deposit Account" means either (a) a segregated
account with an Eligible Institution or (b) a segregated trust account with the
corporate trust department of a depository institution organized under the laws
of the United States of America or any one of the States (or any domestic branch
of a foreign bank), having corporate trust powers and acting as trustee for
funds deposited in such account, so long as any of the securities of such
depository institution have a credit rating from at least two nationally
recognized Rating Agencies in one of their respective generic rating categories
which signifies investment grade.
"Eligible Institution" means a depository institution (which
may be the Seller (or any Affiliate of the Seller), the Eligible Lender Trustee
(or any Affiliate of the Eligible Lender Trustee) or the Indenture Trustee)
organized under the laws of the United States of America or any one of the
States (or any domestic branch of a foreign bank), (a) which has (i) a
short-term senior unsecured debt rating of P-1 or better by ▇▇▇▇▇'▇, or any
other long-term, short-term or certificate of deposit rating acceptable to the
Rating Agencies and (ii) if rated by Fitch (A)
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a long term senior unsecured debt rating of AAA by Fitch and (B) short-term
senior of F-1+ by Fitch and (b) whose deposits are insured by the FDIC. If so
qualified, the Seller, any Affiliate of the Seller, the Eligible Lender Trustee,
or any Affiliate of the Eligible Lender Trustee or Indenture Trustee may be
considered an Eligible Institution.
"Eligible Investments" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as
to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit
of any depository institution or trust company incorporated under the
laws of the United States of America or any State (or any domestic
branch of a foreign bank) and subject to supervision and examination by
Federal or state banking or depository institution authorities
(including depository receipts issued by any such institution or trust
company as custodian with respect to any obligation referred to in
clause (a) above or portion of such obligation for the benefit of the
holders of such depository receipts); provided, however, that at the
time of the investment or contractual commitment to invest therein
(which shall be deemed to be made again each time funds are reinvested
following each Distribution Date, as the case may be), the commercial
paper or other short-term senior unsecured debt obligations (other than
such obligations the rating of which is based on the credit of a Person
other than such depository institution or trust company) thereof shall
have a credit rating from ▇▇▇▇▇'▇ in the highest investment category
granted thereby and, if rated by Fitch, in the highest investment
category granted by Fitch;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from ▇▇▇▇▇'▇ in the
highest investment category granted thereby and, if rated by Fitch, in
the highest investment category granted by Fitch;
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(d) investments in money market funds (including funds for
which the Indenture Trustee or the Eligible Lender Trustee or any of
their respective Affiliates or any of Seller's Affiliates is an
investment manager or advisor) having a rating from ▇▇▇▇▇'▇ of Aaa and
if rated by Fitch from Fitch of AAA;
(e) bankers' acceptances issued by any depository institution
or trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with (i) a depository institution
or trust company (acting as principal) described in clause (b) above;
and
(g) any other investment permitted by each of the Rating
Agencies as set forth in writing delivered to the Indenture Trustee.
"Eligible Lender Trustee" means The First National Bank of
Chicago, a national banking association, not in its individual capacity but
solely as eligible lender trustee under the Trust Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Escrow Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement.
"Event of Default" has the meaning specified in Section 5.01
of the Indenture.
"Excess Servicing Fee" has the meaning specified in the EFS
Fee Schedule and the PHEAA Fee Schedule, respectively.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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"Executive Officer" means, with respect to any corporation,
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, any Executive Vice President, any Senior Vice President, any Vice
President, the Secretary or the Treasurer of such corporation; and with respect
to any partnership, any general partner thereof.
"Expected Interest Collections" means, with respect to any
Collection Period, the sum of (i) the amount of interest accrued, net of amounts
required by the Higher Education Act to be paid to the Department or to be
repaid to borrowers, with respect to the Financed Student Loans for such
Collection Period (whether or not such interest is actually paid), (ii) all
Interest Subsidy Payments and Special Allowance Payments expected to be received
by the Eligible Lender Trustee for such Collection Period (whether or not
actually received) with respect to the Financed Student Loans and (iii)
Investment Earnings for such Collection Period.
"Expenses" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Eligible Lender Trustee or any of its officers, directors
or agents in any way relating to or arising out of the Trust Agreement, the
other Basic Documents, the Trust Estate, the administration of the Trust Estate
or the action or inaction of the Eligible Lender Trustee under the Trust
Agreement or the other Basic Documents.
"FDIC" means the Federal Deposit Insurance Corporation.
"Federal Consolidation Loan" means a loan made by the Seller
to an eligible borrower that represents the refinancing of Financed Federal
Loans of such borrower in accordance with the applicable terms and conditions of
the Program and the Higher Education Act.
"Federal Consolidation Loan Rebate" means the monthly fee
payable to the Department by the holder of Federal Consolidation Loans made (x)
on or after October 1, 1993 equal to 1.05% per annum and (y) on or after October
1, 1998 but before
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February 1, 1999 equal to .62% per annum, in each case on the outstanding
balance of such Federal Consolidation Loan.
"Federal Guarantor" means PHEAA, ASA, ECMC and NSLP.
"Federal Origination Fee" means the origination fee payable to
the Department by the lender with respect to any Financed Federal Loan
(including Federal Consolidation Loans) made on or after October 1, 1993, equal
to 0.50% of the initial principal balance of such loan.
"52 Week T-▇▇▇▇ Rate" means, on any date of determination, the
bond equivalent rate of 52-week Treasury bills auctioned at the final auction
held prior to the preceding June 1.
"Final Maturity Date" means (i) for the Class A-1 Notes, the
December 2006 Distribution Date, (ii) for the Class A-2 Notes the December 2029
Distribution Date and (iii) for the Certificates, the December 2035 Distribution
Date.
"Final Subsequent Transfer Date" means the last Transfer Date
on which Subsequent Pool Student Loans are transferred to the Trust but no later
than the Special Determination Date.
"Financed Federal Loans" means those Financed Student Loans
that are guaranteed as to the payment of principal and interest by PHEAA, ASA,
ECMC or NSLP and are reinsured by the Department and are listed on Schedule A to
the Sale and Servicing Agreement, as such Schedule may be supplemented from time
to time.
"Financed Private Loans" means those Financed Student Loans
that are guaranteed as to the payment of principal and interest by ▇▇▇▇ or HICA
and are not reinsured by the Department or any other governmental entity and are
listed on Schedule A to the Sale and Servicing Agreement, as such Schedule may
be supplemented from time to time.
"Financed Student Loan" means any law school, medical school,
dental school, graduate business school or other graduate school student loan
listed on Schedule A of the Sale and
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Servicing Agreement as such Schedule may be supplemented from time to time.
"Financed Student Loan Files" means the documents specified in
Section 3.03 of the Sale and Servicing Agreement.
"Fitch" means Fitch IBCA, Inc.
"Funding Period" means the period beginning on the Closing
Date and ending on the first to occur of (a) the date on which an Event of
Default, a Servicer Default or an Administrator Default occurs, (b) the date on
which an Insolvency Event occurs with respect to the Seller, (c) the first date
on which the amounts on deposit in each Pre-Funding Account is zero, and (d) the
close of business on the last day of the Collection Period preceding the March
2001 Distribution Date.
"Graduate Loan Programs" means the loan programs, under which
the Seller made Student Loans to students enrolled in or recently graduated from
approved or accredited law schools, medical schools, dental schools, graduate
business schools or other graduate level certificate or degree programs.
"Grant" means mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and ▇▇▇▇▇ ▇ ▇▇▇▇
upon and a security interest in and right of set-off against, deposit, set over
and confirm pursuant to the Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the Granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the Granting party or otherwise and generally
to do and receive anything that the Granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Guarantee Agreements" means (i) in the case of PHEAA, the
National Guaranty Agreement and the Lender Participation Agreement for
Consolidation Loans, in each case dated as of June 13, 1998, between PHEAA and
the Eligible Lender Trustee on behalf
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of the Issuer, (ii) in the case of ASA, the Holder Guarantee Agreement dated as
of July 13, 1998, between ASA and the Eligible Lender Trustee on behalf of the
Issuer, (iii) in the case of ECMC, the Holder Agreement for Payment on Guarantee
dated as of January 1, 1999, between ECMC and the Eligible Lender Trustee on
behalf of the Issuer, (iv) in the case of NSLP, the Lender Agreement for
Guaranteed Educational Loans With Federal Reinsurance and the Lender Agreement
for Guarantee of Federal Consolidation Loans with Federal Reinsurance, each
dated as of July 13, 1998 between NSLP and the Eligible Lender Trustee on behalf
of the Issuer, (v) in the case of ▇▇▇▇, the Guarantee Agreement dated as of July
13, 1998, among ▇▇▇▇, the Seller and the Eligible Lender Trustee on behalf of
the Issuer and (vi) in the case of HICA, the Endorsement to Alternative Dental
Educational Assistance Loan Surety Bond Numbers 1994-A, 1994-B, 1995-A and
1996-A dated as of July 13, 1998 and executed by HICA, relative to such Surety
Bonds which were assigned by the Seller to the Eligible Lender Trustee on behalf
of the Issuer.
"Guarantee Fee Advance" means a loan made by the Seller to a
borrower of a Financed Private Loan, at the borrower's option, at the time such
borrower commences repayment of such Financed Private Loan to finance the cost
of the fee imposed with respect to such loan at such time.
"Guarantee Payment" means any payment made by a Guarantor
pursuant to a Guarantee Agreement in respect of a Financed Student Loan.
"Guarantors" means PHEAA, ASA, ECMC, NSLP, ▇▇▇▇ and HICA.
"HICA" means HEMAR Insurance Company of America, a South
Dakota corporation.
"Higher Education Act" means the Higher Education Act of 1965,
as amended, together with any rules, regulations and interpretations thereunder.
"Indenture" means the Indenture dated as of January 1, 1999,
between the Issuer and the Indenture Trustee.
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"Indenture Trustee" means Bankers Trust Company, a New York
banking corporation, not in its individual capacity but solely as Indenture
Trustee under the Indenture.
"Indenture Trust Estate" means all money, instruments, rights
and other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders (including
all property and interests granted to the Indenture Trustee), including all
proceeds thereof.
"Independent" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Issuer, any other
obligor upon the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"Index Maturity" shall have the meaning set forth in the
definition of "Three-Month LIBOR".
"Initial Certificate Balance" means $34,600,000.
"Initial Financed Student Loans" has the meaning specified in
Section 2.01 of the Sale and Servicing Agreement.
"Initial Pool Balance" means, the sum of the Pool Balance as
of the Cutoff Date, which is $767,111,823.09, plus as
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of each Subsequent Cutoff Date the principal balance of each Subsequent Pool
Student Loan sold to the Eligible Lender Trustee on behalf of the Issuer on each
Transfer Date during the Funding Period (but no later than the Special
Determination Date).
"Insolvency Event" means, with respect to a specified Person,
(a) the filing of a decree or order for relief by a court having jurisdiction in
the premises in respect of such Person or any substantial part of its property
in an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or (b) the commencement by such Person of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by such Person to the entry of an order for
relief in an involuntary case under any such law, or the consent by such Person
to the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Interest Collections" shall have the meaning specified in
Section 5.03 of the Sale and Servicing Agreement.
"Interest Period" means, with respect to a Distribution Date,
the period from and including the Closing Date or the most recent Distribution
Date on which interest on the Notes or the Certificates, as the case may be, has
been distributed to but excluding the current Distribution Date. In the case of
any LIBOR Indexed Securities and the initial Interest Period, interest will
accrue for the period from the Closing Date to but excluding March 29, 1999
(computed on the basis of the actual number of days elapsed in a year of 360
days) based on Three Month LIBOR as determined on the initial LIBOR
Determination Date and interest will accrue for the period from March 29, 1999
to but excluding June 28, 1999 (computed on the basis of the actual
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number of days elapsed in a year of 360 days) based on Three Month LIBOR as
determined on the LIBOR Determination Date in March 1999.
"Interest Subsidy Payments" means payments, designated as
such, consisting of interest subsidies by the Department in respect of the
Financed Federal Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"Investment Earnings" means, with respect to any Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts to be deposited into the Collection Account on
or prior to such Distribution Date pursuant to Section 5.01(b) of the Sale and
Servicing Agreement.
"Issuer" means KeyCorp Student Loan Trust 1999-A (formerly
named KeyCorp Student Loan Trust 1998-A) until a successor replaces it and,
thereafter, means the successor.
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"Law Loan" means a Law School Loan made by the Seller to an
eligible borrower pursuant to the Programs.
"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 each 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 March 29, 1999 and as determined on the
second Business Day prior to March 29, 1999 for the period from March 29, 1999
to but excluding June 28, 1999. 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.
"LIBOR Indexed Securities" means the Class A-1 Notes, the
Class A-2 Notes and the Certificates.
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"Lien" means a security interest, lien, charge, pledge, equity
or encumbrance of any kind, other than tax liens and any other liens, if any,
which attach to the respective Financed Student Loan by operation of law as a
result of any act or omission by the related Obligor.
"Liquidated Student Loan" means any defaulted Financed Student
Loan liquidated by the Servicer which services such Financed Student Loan (which
shall not include any Financed Student Loan on which Guarantee Payments are
received) or which such Servicer has, after using all reasonable efforts to
realize upon such Financed Student Loan, determined to charge off.
"Liquidation Proceeds" means, with respect to any Liquidated
Student Loan, the moneys collected in respect thereof from whatever source,
other than Recoveries, net of the sum of any amounts expended by the Servicer
which serviced such Liquidated Student Loan in connection with such liquidation
and any amounts required by law to be remitted to the borrower on such
Liquidated Student Loan.
"Lock-In Period" means the period of days preceding any
Distribution Date during which the Note Interest Rates or Certificate Rates, as
applicable, in effect on the first day of such period shall remain in effect
until the end of the Interest Period related to such Distribution Date.
"Maximum ▇▇▇▇ Payments Amount" means an amount equal to 19% of
the Initial Pool Balance.
"Minimum Purchase Amount" means the greatest of (i) the
Auction Purchase Amount, (ii) the fair market value of the Financed Student
Loans as of the end of the Collection Period immediately preceding such
Distribution Date, and (iii) the aggregate unpaid principal amount of the Notes
and unpaid principal balance of the Certificates plus, in each case, accrued and
unpaid interest thereon on the related Distribution Date and any amount to be
paid pursuant to Section 5.04(b) FIRST and SECOND of the Indenture.
"Monthly Servicing Payment Date" means the twenty-seventh day
of each calendar month, or, if such day is not a Business Day, the immediately
following Business Day, commencing on March 1, 1999.
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"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"91-Day Treasury Bills" means direct obligations of the United
States with a maturity of thirteen weeks.
"Net Government Receivable" means, with respect to any
Distribution Date, the sum of the amount of Interest Subsidy Payments and
Special Allowance Payments due from the Department less the amount owed to the
Department for Federal Origination Fee and Federal Consolidation Loan Rebate as
of the end of the related Collection Period.
"Note Collateralization Amount" means, with respect to any
Distribution Date, the sum of (i) the Pool Balance as of the end of the related
Collection Period, (ii) the Pre-Funded Amount as of the end of the related
Collection Period, (iii) the amount on deposit in the Reserve Account after
giving effect to distributions on such Distribution Date, and (iv) the Net
Government Receivable.
"Note Depository Agreement" means the agreement dated as of
the Closing Date relating to the Notes, substantially in the form of Exhibit B
to the Indenture, among the Issuer, the Indenture Trustee, the Administrator and
The Depository Trust Company, as the initial Clearing Agency.
"Note Interest Rate" means, with respect to any Interest
Period, (w) in the case of any Class of Notes, the interest rate per annum equal
to the lesser of (i) the sum of (x) in the case of any class of Notes that are
T-▇▇▇▇ Indexed Securities, the weighted average of the T-▇▇▇▇ Rates within such
Interest Period and in the case of any class of Notes that are LIBOR Indexed
Securities, Three-Month LIBOR plus (y) the Applicable Note Margin and (ii) the
Student Loan Rate for such Interest Period. The interest rate per annum for any
class of Notes that are T-▇▇▇▇ Indexed Securities will be computed on the basis
of the actual number of days elapsed in such Interest Period over a period of
365 days (or 366 in a leap year) and in the case of any class of Notes that are
LIBOR Indexed Securities, will be computed on the basis of the actual number of
days elapsed in the related Interest Period divided by 360. In the case of any
LIBOR Indexed Securities and the initial Interest Period, the Note Interest Rate
will equal the interest rate per
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annum equal to the lesser of (i) the weighted average of (x) Three-Month LIBOR
for the period from the Closing Date to but excluding March 29, 1999 (computed
on the basis of the actual number of days elapsed in such period divided by 360)
as determined on the initial LIBOR Determination Date and (y) Three-Month LIBOR
for the period from March 29, 1999 to but excluding June 28, 1999 (computed on
the basis of the actual number of days elapsed in such period divided by 360) as
determined on the LIBOR Determination Date in March 1999, in each case plus the
Applicable Note Margin and (ii) the Student Loan Rate for the initial Interest
Period.
"Note Owner" means, with respect to a Book-Entry Note, the
Person who is the owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Register" and "Note Registrar" have the respective
meanings specified in Section 2.04 of the Indenture.
"Note Underwriting Agreement" means the Note Underwriting
Agreement dated as of February 3, 1999 between the Seller and the Underwriters.
"Noteholder" means the Person in whose name a Note is
registered in the Note Register.
"Noteholders' Available Interest Distribution Amount" means on
any Distribution Date, an amount equal to (x) the sum of (1) Available Funds for
such Distribution Date, (2) the amounts withdrawn from the Pre-Funding Account
pursuant to Section 5.08(d) of the Sale and Servicing Agreement on such
Distribution Date, and (3) the amounts withdrawn from the Reserve Account
pursuant to Section 5.06(b)(v) of the Sale and Servicing Agreement on such
Distribution Date minus (y) the amount required to be distributed pursuant to
clauses (i) and (ii) of Section 5.05(c) of the Sale and Servicing Agreement,
including any Noteholders' Priority Principal Distribution Amount actually
distributed.
"Noteholders' Available Principal Distribution Amount" means
on the Final Maturity Date for each class of Notes, an
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amount equal to (x) the sum of (1) the Available Funds for such Distribution
Date and (2) the amount, if any, withdrawn from the Reserve Account pursuant to
Sections 5.06(b)(vii) or (viii) of the Sale and Servicing Agreement minus (y)
the amounts required to be distributed pursuant to clauses (i) through (v) of
Section 5.05(c) of the Sale and Servicing Agreement, including the Noteholders'
Priority Principal Distribution Amount for such class of Notes actually
distributed.
"Noteholders' Distribution Amount" means, with respect to any
Distribution Date, the sum of the Noteholders' Interest Distribution Amount and
the Noteholders' Principal Distribution Amount for such Distribution Date.
"Noteholders' Interest Carryover Shortfall" means, with
respect to any Distribution Date, the excess of (i) the sum of the Noteholders'
Interest Distribution Amount on the preceding Distribution Date over (ii) the
amount of interest actually distributed to the holders of the Notes on such
preceding Distribution Date, plus interest on the amount of such excess interest
due to the holders of the Notes, to the extent permitted by law, at the weighted
average of the Note Interest Rates for the Notes from such preceding
Distribution Date to the current Distribution Date.
"Noteholders' Interest Distribution Amount" means, with
respect to any Distribution Date, the sum of (i) the aggregate amount of
interest accrued at the applicable Note Interest Rate for the related Interest
Period on the outstanding principal balance of each class of Notes on the
immediately preceding Distribution Date after giving effect to all principal
distributions to Noteholders of such class on such date (or, in the case of the
first Distribution Date, on the Closing Date) and (ii) the Noteholders' Interest
Carryover Shortfall for such Distribution Date; provided, that the Noteholders'
Interest Distribution Amount will not include any Noteholders' Interest Index
Carryover.
"Noteholders' Interest Index Carryover" means, with respect to
any Distribution Date as to which the Note Interest Rate for the Notes for such
Distribution Date is based on the Student Loan Rate, the amount equal to the
excess, if any, of (a) the amount of interest on such Notes that would have
accrued in respect of the related Interest Period had interest been
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calculated based on the T-▇▇▇▇ Rate, if such Notes are T-▇▇▇▇ Indexed Securities
or Three-Month LIBOR if such Notes are LIBOR Indexed Securities, over (b) the
amount of interest on such Notes actually accrued in respect of such Interest
Period based on the Student Loan Rate, together with the unpaid portion of any
such excess from prior Distribution Dates (and interest accrued thereon, to the
extent permitted by law, at the applicable rate calculated based on the T-▇▇▇▇
Rate, in the case of T-▇▇▇▇ Indexed Securities or Three-Month LIBOR, in the case
of LIBOR Indexed Securities); provided, however, that on the Final Maturity Date
for such Notes, the Noteholders' Interest Index Carryover for such Notes will be
equal to the lesser of (i) the Noteholders' Interest Index Carryover on such
date determined as described above and (ii) the amount of funds, if any,
required and available to be distributed to the holders for such Notes on such
date pursuant to Sections 5.05(c)(x) and 5.06(e) of the Sale and Servicing
Agreement.
"Noteholders' Percentage" means a fraction, expressed as a
percentage, the numerator of which is the principal amount of the Notes issued
on the Closing Date and the denominator of which is the sum of the principal
amount of the Notes issued on the Closing Date and the principal balance of the
Certificates issued on the Closing Date.
"Noteholders' Principal Distribution Amount" means, with
respect to any Distribution Date, the Principal Distribution Amount for such
Notes for such Distribution Date; provided, however, that the Noteholders'
Principal Distribution Amount for the Notes will not exceed the outstanding
principal balance of the Notes. In addition, (i) on the Final Maturity Date for
each related class of Notes, the principal required to be distributed to such
class of Notes will include the amount required to reduce the outstanding
principal balance of such class of Notes to zero, and (ii) on the related
Distribution Date following a sale of the Financed Student Loans pursuant to
Section 9.01(a) or (c) of the Sale and Servicing Agreement, the principal
required to be distributed to the holders of Class A-2 Notes will include the
amount required to reduce the outstanding principal balance of the Class A-2
Notes to zero. In the event that the outstanding balance of the Notes is in
excess of the Note Collateralization Amount, the Noteholders' Principal
Distribution Amount will be reduced by the amount of any Noteholders' Priority
Principal Distribution Amount.
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"Noteholders' Priority Principal Distribution Amount" means,
with respect to any Distribution Date, the excess of (i) the aggregate
outstanding principal balance of the Notes (after giving effect to any
distributions on such Distribution Date) over (ii) the Note Collateralization
Amount.
"Notes" means the Class A-1 Notes and Class A-2 Notes.
"Obligor" on a Financed Student Loan means the borrower or
co-borrowers of such Financed Student Loan and any other Person who owes
payments in respect of such Financed Student Loan, including the Guarantor
thereof and, with respect to any Interest Subsidy Payment or Special Allowance
Payment, if any, thereon, the Department.
"Officers' Certificate" means (i) in the case of the Issuer, a
certificate signed by any two Authorized Officers of the Eligible Lender
Trustee, under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 11.01 of the Indenture, and delivered to the
Indenture Trustee, (ii) in the case of the Seller or the Administrator, a
certificate signed by any two Authorized Officers of the Seller or the
Administrator, as appropriate and (iii) in the case of the Servicer, a
certificate signed by any two Authorized Officers of the Servicer.
"Opinion of Counsel" means (i) with respect to the Issuer, one
or more written opinions of counsel who may, except as otherwise expressly
provided in the Indenture, be employees of or counsel to the Issuer and who
shall be satisfactory to the Indenture Trustee, and which opinion or opinions
shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply
with any applicable requirements of Section 11.01 of the Indenture, and shall be
in form and substance satisfactory to the Indenture Trustee and (ii) with
respect to the Seller, the Administrator or a Servicer, one or more written
opinions of counsel who may be an employee of or counsel to the Seller, the
Administrator or such Servicer, which counsel shall be acceptable to the
Indenture Trustee, the Eligible Lender Trustee or the Rating Agencies, as
applicable.
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"Other Additional Pre-Funded Amount" means, with respect to
any Distribution Date, the amount on deposit in the Other Additional Pre-Funding
Subaccount.
"Other Additional Pre-Funding Subaccount" has the meaning set
forth in Section 5.08 of the Sale and Servicing Agreement.
"Other Subsequent Student Loans" means the Serial Loans
(including Consolidation Loans but not including Subsequent Pool Student Loans),
Guarantee Fees Advances and the funding of accrued interest to be capitalized
made by the Seller to an eligible borrower who has one or more existing loans
under the Programs that are Financed Student Loans and are transferred or to be
transferred to the Eligible Lender Trustee on behalf of the Issuer during the
Funding Period pursuant to Section 2.02 of the Sale and Servicing Agreement,
each of which shall be identified on Schedule A, to the related Transfer
Agreement which Schedule A may be in the form of microfiche or computer tape.
"Outstanding" means, as of the date of determination, all
Notes theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
ADVANCE \L 7.20 (ii) Notes or portions thereof the payment for
which money in the necessary amount has been theretofore deposited with
the Indenture Trustee or any Paying Agent in trust for the Noteholders
thereof (provided, however, that if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to the
Indenture); and
ADVANCE \L 14.40 (iii) Notes in exchange for or in lieu of
other Notes which have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser;
provided that in determining whether the Noteholders of the
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requisite Outstanding Amount of the Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder
or under any other Basic Document, Notes owned by the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to
be so owned or has received written notice thereof shall be so
disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction
of the Indenture Trustee the pledgee's right so to act with respect to
such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, the Seller or any Affiliate of any of the foregoing
Persons.
"Outstanding Amount" means the aggregate principal amount of
all Notes Outstanding at the date of determination.
"Paying Agent" means the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make the
payments to and distributions from the Collection Account and payments of
principal of and interest and any other amounts owing on the Notes on behalf of
the Issuer.
"Person" means any individual, corporation, estate,
partnership, joint venture, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"PHEAA" means the Pennsylvania Higher Education Assistance
Agency, an agency of the Commonwealth of Pennsylvania.
"PHEAA Fee Schedule" means the fee schedule setting forth the
Servicing Fee and Excess Servicing Fee of PHEAA.
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"Physical Property" has the meaning assigned to such term in
the definition of "Delivery" above.
"Pool Balance" means, at any time, the aggregate principal
balance of the Financed Student Loans at the end of the preceding Collection
Period (including accrued interest thereon for such Collection Period to the
extent such interest will be capitalized upon commencement of repayment), after
giving effect to the following without duplication: (i) all payments received by
the Trust related to the Financed Student Loans during such Collection Period
from or on behalf of borrowers, Guarantors and the Department, (ii) all Purchase
Amounts received by the Trust related to the Financed Student Loans for such
Collection Period from the Seller or the Servicers, (iii) all Additional
Fundings made from the Escrow Account and the Pre-Funding Account with respect
to such Collection Period and (iv) all losses realized on Financed Student Loans
liquidated during such Collection Period.
"Pool Factor" means as of the close of business on a
Distribution Date (i) for the Class A-1 Notes, a seven-digit decimal figure
equal to the outstanding principal balance of the Class A-1 Notes divided by the
original outstanding principal balance of the Class A-1 Notes, (ii) for the
Class A-2 Notes, a seven-digit decimal figure equal to the outstanding principal
balance of the Class A-2 Notes divided by the original outstanding principal
balance of the Class A-2 Notes and (iii) for the Certificates, a seven-digit
decimal figure equal to the Certificate Balance of the Certificates divided by
the Initial Certificate Balance of the Certificates. The Pool Factor for each
class of Securities will be 1.0000000 as of the Closing Date; thereafter, the
Pool Factor for each class of Securities will decrease to reflect reductions in
the outstanding principal balance of such classes of Securities.
"Predecessor Note" means, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 of the Indenture and in lieu
of a mutilated, lost, destroyed or
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stolen Note shall be deemed to evidence the same debt as the mutilated, lost,
destroyed or stolen Note.
"Pre-Funded Amount" means, with respect to any Distribution
Date, the amount on deposit in the Pre-Funding Account.
"Pre-Funding Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement (including, unless otherwise expressly stated, the Subsequent Pool
Pre-Funding Subaccount and the Other Additional Pre-Funding Subaccount).
"Principal Distribution Amount" means, with respect to any
Distribution Date, the amount by which the sum of the outstanding principal
balance of the Notes and the Certificates exceeds the Specified Collateral
Balance for such Distribution Date.
"Private Consolidation Guarantee Fee" means, with respect to
each Private Consolidation Loan, a fee charged to the borrower to discharge the
underlying Financed Private Loans and included in the original principal amount
of such Private Consolidation Loan.
"Private Consolidation Loan" means a loan made by the Seller
to an eligible borrower that represents the refinancing of Private Financed
Loans of such borrower in accordance with the terms of the Programs.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Programs" means the Graduate Loan Programs, as in effect from
time to time.
"Purchase Amount" means, as of the close of business on the
last day of a Collection Period, 102.85% of the amount required to prepay in
full the respective Financed Student Loan, if it is an Initial Financed Student
Loan, 102.85% of the amount required to prepay in full the respective Financed
Student Loan, if it is a Subsequent Pool Student Loan and 100% of the amount
required to prepay in
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full the respective Financed Student Loan if it is an Other Subsequent Student
Loan, in each case under the terms thereof including all accrued interest
thereon and any lost Interest Subsidy Payments and Special Allowance Payments
with respect thereto.
"Purchased Student Loan" means a Financed Student Loan
purchased as of the close of business on the last day of a Collection Period by
a Servicer pursuant to Section 4.06 of the Sale and Servicing Agreement or
repurchased by the Seller pursuant to Section 3.02 of the Sale and Servicing
Agreement.
"Rating Agency" means each of ▇▇▇▇▇'▇ and Fitch. If any such
organization or successor is no longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable Person
designated by the Seller, notice of which designation shall be given to the
Indenture Trustee, the Eligible Lender Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action,
that each Rating Agency shall have been given 10 days' prior notice thereof (or
such shorter period as shall be acceptable to the Rating Agencies) and that
neither of the Rating Agencies shall have notified the Seller, the Servicers,
the Eligible Lender Trustee and the Indenture Trustee in writing that such
action will in and of itself result in a reduction or withdrawal of the then
current rating of the Notes or the Certificates.
"Realized Losses" means the excess of the aggregate principal
balance of any Liquidated Student Loan plus accrued but unpaid interest thereon
over Liquidation Proceeds to the extent allocable to principal.
"Record Date" means, with respect to a Distribution Date or
Redemption Date, the close of business on the twenty-sixth day of the calendar
month in which such Distribution Date or Redemption Date occurs.
"Recoveries" means, with respect to any Liquidated Student
Loan, moneys collected in respect thereof, from whatever source, during any
Collection Period following the
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Collection Period in which such Financed Student Loan became a Liquidated
Student Loan, net of the sum of any amounts expended by the Servicer for the
account of any Obligor and any amounts required by law to be remitted to the
Obligor.
"Redemption Date" means (a) in the case of a redemption of
Notes pursuant to Section 10.01(a) of the Indenture, the Distribution Date on
which the Funding Period ends (or the Distribution Date on or immediately
following the last day of the Funding Period, if the Funding Period does not end
on a Distribution Date) or (b) in the case of a payment to Noteholders pursuant
to Section 10.01(b) of the Indenture, the Distribution Date specified by the
Administrator or the Issuer pursuant to Section 10.01(b) of the Indenture.
"Redemption Price" means [(a) in the case of a redemption of
the Notes pursuant to Section 10.01(a) of the Indenture, an amount equal to the
unpaid principal amount of the Notes, plus accrued and unpaid interest thereon
at the applicable Note Interest Rate to but excluding the Redemption Date and
the amount of the Noteholders' Interest Index Carryover with respect thereto, or
(b) in the case of a payment made to Noteholders pursuant to Section 10.01(b) of
the Indenture, the amount to be so paid, but not in excess of the amount
specified in clause (a) above.]
"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.
"Reserve Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement.
"Reserve Account Initial Deposit" means $2,595,000.
"Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
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Secretary, or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers,
with direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of January 1, 1999 among the Issuer, the Seller, the
Administrator, the Eligible Lender Trustee and the Servicers.
"Schedules of Financed Student Loans" means the listing of the
Financed Student Loans set forth in Schedules A and B to the Sale and Servicing
Agreement and to the Indenture (which Schedules may be in the form of
microfiche), as amended or supplemented on each Transfer Date to reflect the
sale to the Eligible Lender Trustee on behalf of the Trust of the Additional
Student Loans.
"Securities" means the Class A-1 Notes, Class A-2 Notes and
the Certificates.
"Seller" means Key Bank USA, National Association, a national
banking association.
"Seller Optional Deposit" has the meaning specified in Section
5.09 of the Sale and Servicing Agreement.
"Serial Loans" means additional student loans, including
Consolidation Loans, which are made under the Programs to a borrower who is also
a borrower under at least one Initial Financed Student Loan or Subsequent Pool
Student Loan.
"Servicer" means PHEAA, in its capacity as servicer of the
Financed Student Loans it services or EFS, as servicer of the Financed Student
Loans it services, as applicable.
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"Servicer Default" means an event specified in Section 8.01(a)
of the Sale and Servicing Agreement.
"Servicer's Report" means any report of a Servicer delivered
pursuant to Section 4.08(a) or (b) of the Sale and Servicing Agreement,
substantially in the form acceptable to the Administrator.
"Servicing Fee" has the meaning specified in the EFS Fee
Schedule and the PHEAA Fee Schedule, respectively.
"SLS Loan" means a Financed Federal Loan designated as such
that is made under the Federal Supplemental Loans for Students Program pursuant
to the Higher Education Act.
"Special Allowance Payments" means payments, designated as
such, consisting of effective interest subsidies by the Department in respect of
the Financed Federal Loans to the Eligible Lender Trustee on behalf of the Trust
in accordance with the Higher Education Act.
"Special Determination Date" means March 1, 1999.
"Specified Collateral Balance" means, with respect to any
Distribution Date, the sum of (a) the Pool Balance as of the last day of the
related Collection Period plus (b) the Pre-Funded Amount, as of the last day of
the related Collection Period for such Distribution Date. In the event that the
Financed Student Loans are not sold pursuant to Section 9.01(c) of the Sale and
Servicing Agreement with respect to any Distribution Date occurring on or after
the March 2009 Distribution Date, the Specified Collateral Balance will be zero.
Following a ▇▇▇▇ Trigger Event, the Specified Collateral Balance will equal
zero.
"Specified Reserve Account Balance" means with respect to any
Distribution Date an amount equal to the greater of (i) 0.30% of the aggregate
outstanding principal amount of the Notes and the Certificate Balance on such
Distribution Date before giving effect to any distributions on such Distribution
Date and (ii) $1,297,500; provided, however, that in no event will such balance
exceed the sum of the outstanding principal amount of the Notes and the
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outstanding principal balance of the Certificates.
"▇▇▇▇▇▇▇▇ Loan" means a Financed Federal Loan designated as
such that is made under the Federal ▇▇▇▇▇▇▇▇ Loan Program in accordance with the
Higher Education Act.
"State" means any one of the ▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ or the District of Columbia.
"Statistical Cutoff Date" means January 1, 1999.
"Student Loan Rate" means for any class of Securities for any
Interest Period a rate equal to 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 Servicing Fees and
the Administration Fee payable on the related Distribution Date and any
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.
"Subsequent Cutoff Date" means the day specified in the
related Transfer Agreement as of which principal and interest accruing with
respect to an Additional Student Loan is to be transferred to the Eligible
Lender Trustee on behalf of the Issuer pursuant to Section 2.02 of the Sale and
Servicing Agreement.
"Subsequent Pool Pre-Funded Amount" means, with respect to any
Distribution Date, the amount on deposit in the Subsequent Pool Pre-Funding
Subaccount.
"Subsequent Pool Pre-Funding Subaccount" has the meaning set
forth in Section 5.08 of the Sale and Servicing Agreement.
"Subsequent Pool Student Loans" means any law school, medical
school, dental school, graduate business school and other graduate school
student loans listed on the
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Schedule of Subsequent Pool Student Loans on the Closing Date as set forth in
Schedule B to the Sale and Servicing Agreement (which Schedules may be in the
form of microfiche), which student loans the Seller intends to transfer to the
Eligible Lender Trustee on behalf of the Issuer pursuant to Section 2.02 of the
Sale and Servicing Agreement, each of which shall be identified on Schedule A to
the related Transfer Agreement.
"Successor Administrator" has the meaning specified in Section
3.07(e) of the Indenture.
"Successor Servicer" has the meaning specified in Section
3.07(e) of the Indenture.
"Supplemental Sale and Servicing Agreement" means the
Supplemental Sale and Servicing Agreement dated as of January 1, 1999, among the
Seller, the Administrator, the Trust, the Eligible Lender Trustee, the Indenture
Trustee and the Servicers.
"T-▇▇▇▇ Indexed Securities" means none.
"T-▇▇▇▇ Rate" means, on any day, the weighted average per
annum discount rate (expressed on a bond equivalent basis and applied on a daily
basis) for 91-day Treasury Bills sold at the most recent 91-day Treasury ▇▇▇▇
auction prior to such date as reported by the U.S. Treasury Department. In the
event that the results of the auctions of 91-day Treasury Bills cease to be
published or reported as provided above, or that no such auction is held in a
particular week, then the "T-▇▇▇▇ Rate" in effect as a result of the last such
publication or report shall remain in effect until such time, if any, as the
results of auctions of 91-day Treasury Bills shall again be so published or
reported or such an auction is held, as the case may be. The T-▇▇▇▇ Rate shall
be subject to a Lock-In Period of six Business Days.
"Telerate Page 3750 XE "Telerate Page 3750"" means the
display page so designated on the Dow ▇▇▇▇▇ Telerate Service (or such other page
as may replace that page on that service for the purpose of displaying
comparable rates or prices).
-41-
109
"▇▇▇▇" means The Education Resources Institute, Inc., a
Massachusetts non-profit corporation.
A "▇▇▇▇ Trigger Event" shall occur when (i) the Cumulative
▇▇▇▇ Claims Ratio exceeds 20% and (ii) a claim has been made under the ▇▇▇▇
Guarantee Agreement and ▇▇▇▇ has failed to fully satisfy such claim.
Notwithstanding the foregoing, no ▇▇▇▇ Trigger Event will be deemed to occur if
each Rating Agency rating the Securities waives the ▇▇▇▇ Trigger Event.
"Three-Month LIBOR XE "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
XE "Index Maturity"") which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, on such LIBOR Determination Date. If such rate does not appear on
Telerate Page 3750, the rate for that day will be determined on the basis of the
rates at which deposits in U.S. dollars, having the Index Maturity and in a
principal amount of not less than U.S. $1,000,000, are offered at approximately
11:00 a.m., London time, on such LIBOR Determination Date to prime banks in the
London interbank market by the Reference Banks. The 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 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.
"TIA" means the Trust Indenture Act of 1939, as amended.
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"Transfer Agreement" has the meaning specified in Section
2.02(b) of the Sale and Servicing Agreement.
"Transfer Date" means the Closing Date, the fifteenth day (or,
if such day is not a Business Day, the next succeeding Business Day) of any
month or any other date designated by the Seller as a date on which Additional
Student Loans will be conveyed to the Eligible Lender Trustee on behalf of the
Trust pursuant to Section 2.02 of the Sale and Servicing Agreement.
"Transferred Balance" has the meaning assigned to such term in
Sections 5.05(d) and 5.08 of the Sale and Servicing Agreement.
"Treasury Regulations" means regulations, including proposed
or temporary regulations, promulgated under the Code. References in any document
or instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" means the Issuer, established pursuant to the Trust
Agreement.
"Trust Account Property" means the Trust Accounts, all amounts
and investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit and the
Pre-Funded Amount and all proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section 5.01 of
the Sale and Servicing Agreement.
"Trust Agreement" means the Amended and Restated Trust
Agreement dated as of January 1, 1999, between the Depositor and the Eligible
Lender Trustee.
"Trust Certificate" means a Certificate.
"Trust Estate" means all right, title and interest of the
Trust (or the Eligible Lender Trustee on behalf of
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the Trust) in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Trust Accounts and all other property of the Trust from time to
time, including any rights of the Eligible Lender Trustee and the Trust pursuant
to the Sale and Servicing Agreement, the Supplemental Sale and Servicing
Agreement and the Administration Agreement.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939 as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
"Underwriters" shall mean Credit Suisse First Boston
Corporation and McDonald Investments Inc., A Keycorp Company.
"Underwriting Agreement" shall mean the Note Underwriting
Agreement or the Certificate Underwriting Agreement, as applicable.
-44-
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SCHEDULE A
TO THE INDENTURE
Schedule of Initial Financed Student Loans
Delivered to Indenture Trustee.
A-1
113
SCHEDULE B
TO THE INDENTURE
Schedule of Subsequent Pool Student Loans
Delivered to Indenture Trustee.
B-1
114
SCHEDULE C
TO THE INDENTURE
Location of Financed Student Loan Files - PHEAA
Documents relating to the Financed Student Loans (including original notes) are
stored at PHEAA's facility at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
Location of Financed Student Loan Files - EFS
Documents relating to the Financed Student Loans (including original notes)
which are serviced by EFS are stored at EFS's facility at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
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115
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. R -
KEYCORP STUDENT LOAN TRUST 1999-A
FLOATING RATE CLASS A-1 ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-A, 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 December 2006 Distribution Date (the "Final Maturity Date").
--------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
A-1-1
116
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.
A-1-2
117
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-A
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee under
the Trust Agreement,
By: ____________________________________
Authorized Signatory
Date: _______________, 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: _______________, 1999
A-1-3
118
[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 January 1, 1999 between KeyCorp
Student Loan Trust 1999-A 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, with the Class A-1 Notes, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Distribution
Date to the extent set forth in the Sale and Servicing Agreement and the
Indenture. "Distribution Date" means the twenty-seventh day of each March, June,
September and December, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing June 28, 1999.
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 holders of the
Notes representing not less than a majority of the Outstanding Amount of the
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.
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 0.14% 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 0.33% and (ii) the
Student Loan Rate for such Interest Period.
A-1-4
119
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 Servicing Fees and
the Administration Fee payable on the related Distribution Date and any
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 as of 11:00 a.m., London
time, on such LIBOR Determination Date. If such rate does not appear on Telerate
Page 3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the Index Maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the Reference Banks. The 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
A-1-5
120
excluding March 29, 1999 and as determined on the second Business Day prior to
March 29, 1999 for the period from March 29, 1999 to but excluding June 28,
1999. 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 that may exist on
any Distribution Date attributable to each class of Notes shall be payable to
the holders of such classes of Notes on a pro rata basis, based on the amount of
Noteholders' Interest Index Carryover then owing on each class of 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.
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
A-1-6
121
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.
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
A-1-7
122
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, The First National Bank of Chicago 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
A-1-8
123
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.
A-1-9
124
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.
▇-▇-▇▇
▇▇▇
▇▇▇▇▇▇▇ ▇-▇
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. R -
KEYCORP STUDENT LOAN TRUST 1999-A
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-A, 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 December
2029 Distribution Date (the "Final Maturity Date").
----------------
(1) Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
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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.
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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-A
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee under
the Trust Agreement,
By: ____________________________________
Authorized Signatory
Date: _______________, 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: _______________, 1999
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[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 January 1, 1999 between KeyCorp
Student Loan Trust 1999-A 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, with the Class A-2 Notes, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Distribution
Date to the extent set forth in the Sale and Servicing Agreement and the
Indenture. "Distribution Date" means the twenty-seventh day of each March, June,
September and December, or, if any such date is not a Business Day, the next
succeeding Business Day, commencing June 28, 1999.
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 holders of the
Notes representing not less than a majority of the Outstanding Amount of the
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.
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 0.14% 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 0.33% and (ii) the
Student Loan Rate for such Interest Period.
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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 Servicing Fees and
the Administration Fee payable on the related Distribution Date and any
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 as of 11:00 a.m., London
time, on such LIBOR Determination Date. If such rate does not appear on Telerate
Page 3750, the rate for that day will be determined on the basis of the rates at
which deposits in U.S. dollars, having the Index Maturity and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the Reference Banks. The 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 March 29, 1999 and as determined on the
second Business Day prior to March 29, 1999 for the period from March 29, 1999
to but excluding June 28, 1999. For
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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 that may exist on
any Distribution Date attributable to each class of Notes shall be payable to
the holders of such classes of Notes on a pro rata basis, based on the amount of
Noteholders' Interest Index Carryover then owing on each class of 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.
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.
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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.
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
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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, The First National Bank of Chicago 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.
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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.
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