[Exhibit 4.7]
Interest Rate Swap Agreement
(Group I and Group II)
[1992 ISDA MASTER AGREEMENT (MULTICURRENCY - CROSS BORDER)]
Date: September 14, 2001
PARTY A
KEY BANK USA, NATIONAL ASSOCATION
By: /S/▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
PARTY B
KEYCORP STUDENT LOAN TRUST 2001-A
By: Bank One, National Association, not in its individual
capacity, but solely as Eligible Lender Trustee
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Officer
SCHEDULE
TO THE
ISDA MASTER AGREEMENT
(GROUP I COMMERCIAL PAPER RATE/LIBOR BASIS SPREAD)
DATED AS OF
SEPTEMBER 14, ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇, NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION ORGANIZED UNDER THE LAWS OF THE UNITED STATES
("PARTY A"), AND KEYCORP STUDENT LOAN TRUST 2001-A, A TRUST ORGANIZED UNDER THE
LAWS OF THE STATE OF DELAWARE ("PARTY B").
Part 1. Termination Provisions
In this Agreement:-
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:-
SECTION 5(A)(V) Not Applicable.
SECTION 5(A)(VI) Not Applicable.
SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
and in relation to Party B for the purpose of:-
SECTION 5(A)(V) Not Applicable.
SECTION 5(A)(VI) Not Applicable.
SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) "ADDITIONAL TERMINATION EVENT" will not apply to Party A and will apply,
with respect to Redemption Event only, to Party B. The occurrence of a
Redemption Event will constitute an Additional Termination Event in respect
of which Party B will be the sole Affected Party.
(d) The provisions of Section 5(a) and Section 5(b) will apply to Party A and
to Party B as follows:
The designation below of an Event of Default as being "Applicable" to a
specific party means that upon the occurrence and continuation of such an
Event of Default with respect to such party, the other party shall have the
right of a Non-defaulting Party to designate an Early Termination Date for
the Sole Transaction (as defined below) under Section 6 of this Agreement,
and conversely, the designation of an Event of Default as being "Not
Applicable" to a party means that upon the occurrence and continuation of
such an Event of Default with respect to such party, the other party shall
not have the right to designate an Early Termination Date for the Sole
Transaction with respect to such event under Section 6 of this Agreement.
SECTION 5(A) PARTY A PARTY B
(i) "Failure to Pay or Deliver" Applicable.
"Failure to Pay or Deliver" is Applicable to Party B; provided
that Party B has funds available to make payments in
accordance with the terms of the Indenture and the Trustee has
failed to make any such payments in violation of the terms of
the Indenture.
(ii) "Breach of Agreement" Applicable. Not Applicable.
(iii) "Credit Support Default" Applicable. Not Applicable.
(iv) "Misrepresentation" Applicable. Not Applicable.
(v) "Default under Specified
Transaction" Not Applicable. Not Applicable.
(vi) "Cross Default" Not Applicable. Not Applicable.
(vii) "Bankruptcy" Applicable. Applicable.
(viii)"Merger Without Assumption" Applicable. Not Applicable.
(ix) "Additional Event of Default" Not Applicable. Applicable
specified in Part 1(h)
(Acceleration of Group I Notes)
SECTION 5(B)
Neither party shall be entitled to designate an Early Termination Date as a
result of the occurrence and continuation of an event described in Section
5(b)(iii) (Tax Event Upon Merger).
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Except as provided in Appendix I (Redemption of Group I Notes), Market
Quotation will apply.
(ii) The Second Method will apply.
(f) "TERMINATION CURRENCY" means United States Dollars ("USD").
(g) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A or Party B.
(h) ADDITIONAL EVENT OF DEFAULT. Section 5(a) of this Agreement is hereby
amended by: (i) deleting the word "or" at the end of Section
5(a)(vii), (ii) deleting the period at the end of Section 5(a)(viii)
and adding "; or" at the end thereof and (iii) adding the following
language at the end of Section 5(a):
"(ix) ADDITIONAL EVENT OF DEFAULT. The principal of any class of Group I Notes
shall have been declared or become immediately due and payable in accordance
with the terms of the Indenture (an "Acceleration of Group I Notes") following
an "event of default" thereunder (it being understood that such event will
constitute an Event of Default solely with respect to Party B)."
PART 2. Tax Representations.
(a) PAYER TAX REPRESENTATIONS. For the purposes of Section 3(e), neither
Party A, nor Party B makes any representations.
(b) PAYEE TAX REPRESENTATIONS.
(i) For the purposes of Section 3(f), Party A makes the following
representations:
It is a national banking association duly organized and existing
under the laws of the United States. (ii) For the purposes of
Section 3(f), Party B makes the following representations:
It is a business trust duly organized and existing under the laws
of the State of Delaware.
PART 3. Agreement to Deliver Documents
(a) For the purpose of Section 4(a):
Tax forms, documents, or certificates to be delivered are: Party B and
Party A each agree to complete (accurately and in a manner reasonably
satisfactory to the other Party), execute, and deliver to such other Party a
United States Internal Revenue Service Form W-9, or any successor form, which
will certify that such Party is not subject to backup withholding (i) on a date
which is before the first Scheduled Payment Date under this Agreement (the "Form
W-9 Submission Date"), and thereafter prior to the end of the calendar year in
which the second anniversary of the Form W-9 Submission Date occurs, and
thereafter prior to the end of each successive three calendar year period, (ii)
promptly upon reasonable demand by a Party, and (iii) promptly upon learning
that any such form previously provided by a Party has become obsolete or
incorrect.
(b) Other documents to be delivered are:
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PARTY REQUIRED TO FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO COVERED BY SECTION
DELIVER BE DELIVERED 3(D) REPRESENTATION
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Party A and Evidence of authority of the party to enter Upon execution Yes
Party B into this Agreement and the Sole Transaction of this Agreement
(as defined in Part 5(a)) contemplated hereby and of
the signatory for such party to this Agreement and
the Confirmation of such Sole Transaction.
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Party A Copy of the most recent Call Report filed by Promptly Yes
Party A with the Office of the Comptroller of following
the Currency. reasonable
demand by Party B
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Part 4. Miscellaneous
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
Address for notices or communications to Party A:
Address: Key Bank USA, National Association
M.C. OH-01-27-0405
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Attention: Trading Desk - Manager, Interest Rate
Derivatives
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices or communications to Party B:
Address: KeyCorp Student Loan Trust 2001-A
c/o Bank One National Association
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Attention: Corporate Trust Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Administrator (as such term is defined in
Appendix A to the Sale and Servicing Agreement dated as of
September 1, 2001, among Key Consumer Receivables LLC, as
depositor, Key Bank USA, National Association, as administrator
and master servicer, KeyCorp Student Loan Trust 2001-A, as
issuer, and Bank One, National Association, as eligible lender
trustee (the "Sale and Servicing Agreement")) in the event that
Key Bank USA, National Association ceases to be the Administrator.
Address for notices or communications to the Securities
Insurer:
Address: MBIA Insurance Corporation
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Attention: Insured Portfolio Management-SF
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
Party A is not a Multibranch Party. Party B is not a
Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is the Administrator.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support
Document, each of which are incorporated by reference in, and
made part of, this Agreement and each Confirmation (unless
provided otherwise in a Confirmation) as if set forth in full
in this Agreement or such Confirmation: Not applicable.
(g) CREDIT SUPPORT PROVIDER. Credit Support Provider means, in relation
to Party A, not applicable. Credit Support Provider means in relation
to Party B, not applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law of the State of New York (without reference
to its choice of law doctrine).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) will not apply.
PART 5. Other Provisions.
SOLE TRANSACTION. Notwithstanding any other provision of this Agreement, this
Agreement shall govern only one Transaction (the "Sole Transaction"). A copy of
the form of Confirmation for the Sole Transaction is attached hereto as Exhibit
A.
ISOLATION OF SOLE TRANSACTION. Notwithstanding Section 6, any designation of an
Early Termination Date in respect of the Sole Transaction shall apply only to
the Sole Transaction.
ACCURACY OF SPECIFIED INFORMATION. Section 3(d) is hereby amended by adding in
the third line thereof after the word "respect" and before the period, the
phrase "or, in the case of audited or unaudited financial statements, a fair
presentation of the financial condition of the relevant person."
ADDITIONAL REPRESENTATIONS. The parties agree to amend Section 3 by adding new
Sections 3(g), (h), (i) and (j) as follows:
(g) ELIGIBLE CONTRACT PARTICIPANT. It is an "eligible contract participant" as
defined in Section 1a(12) of the Commodities Exchange Act, as amended.
(h) LINE OF BUSINESS. It has entered into this Agreement and the Sole
Transaction in conjunction with its line of business (including financial
intermediation services) or the financing of its business.
(i) NON-RELIANCE. In connection with the negotiation of, the entering into, and
the confirming of the execution of, this Agreement and the Sole Transaction: (i)
the other party is not acting as a fiduciary or financial or investment advisor
for it; (ii) it is acting as a principal and not as an agent or in any other
capacity, fiduciary or otherwise; (iii) it is not relying upon any
representations (whether written or oral) of the other party other than the
representations expressly set forth in this Agreement and (iv) it has consulted
with its own legal, regulatory, tax, business, investment, financial, and
accounting advisors to the extent it has deemed necessary, and it has made its
own investment, hedging and trading decisions based on its own judgment and upon
any advice from such advisors as it has deemed necessary and not upon any view
expressed by the other party.
(j) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of and
understanding (on its own behalf or through independent professional advice),
and understands and accepts, the terms, conditions and risks of this Agreement
and the Sole Transaction. It is also capable of assuming, and assumes, the risks
of the Sole Transaction.
FDI ACT REPRESENTATION. Party A represents to Party B as follows:
(i) The necessary action to authorize referred to in the
representation in Section 3(a)(ii) includes all authorizations
required under the U. S. Federal Deposit Insurance Act, as
amended and under any agreement, writ, decree, or order entered
into with its supervisory authorities.
(ii) At all times during the term of this Agreement, it will
continuously include and maintain as part of its official written
books and records this Agreement, this Schedule and all other
exhibits, supplements, and attachments hereto and documents
incorporated by reference herein, all Confirmations, and evidence
of all necessary authorizations.
(iii) This Agreement, the Confirmation of the Sole Transaction, and
any other documentation relating to this Agreement to which it is
a party or that it is required to deliver will be executed and
delivered by a duly appointed or elected and authorized officer
of it of the level of vice president or higher.
NO BANKRUPTCY PETITION. Prior to the date that is one year and one day after the
date upon which Party B is terminated in accordance with the terms of the
Amended and Restated Trust Agreement dated as of September 1, 2001, between Key
Consumer Receivables LLC, as depositor, and Bank One, National Association, as
eligible lender trustee (the "Eligible Lender Trustee"), Party A shall not
institute against, or join any other person in instituting against, Party B any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding,
or other proceedings under any federal or state bankruptcy or similar law.
OBLIGATIONS OF PARTY B. Party A agrees that all obligations, liabilities and
expenses of Party B, including, without limitation, any arising out of
representations or agreements contained herein, shall be paid from, and limited
to, the assets of Party B and that the Eligible Lender Trustee shall not be
required to spend or risk its own funds hereunder, nor shall the Trustee incur
any liability in its individual capacity.
NO SETOFF. Notwithstanding any other provision of this Agreement, in no event
shall either Party A or Party B have the right to setoff or net an amount due
from it under the Sole Transaction against an amount due from the other party
under any other Transaction, nor shall either Party A or Party B have the right
to setoff or net an amount due from it under any Transaction that is not the
Sole Transaction against an amount due from the other party under the Sole
Transaction. Notwithstanding any other provision of this Agreement, the amount
payable under Section 6(e) upon termination of the Sole Transaction shall be
determined without regard to any Transaction other than the Sole Transaction.
EARLY TERMINATION.
Section 6(b)(ii) is hereby amended by adding at the end of the first paragraph
the following:
", provided that the party seeking to make the transfer to avoid a Termination
Event shall deliver to Party B (in the case of transfers by Party A) or to Party
A (in the case of transfers by Party B) written confirmation from each Rating
Agency then rating any class of Group I Notes that such transfer will not result
in its then-current rating of each class of Group I Notes being withdrawn,
suspended or lowered." Notwithstanding anything to the contrary in this
Agreement, if the Early Termination Date of the Sole Transaction occurs or is
effectively designated, Party A and Party B agree as follows:
(i) The Calculation Agent shall calculate an amount that would be
payable to or by Party B under this Agreement in respect of such
Early Termination Date (such amount, including any Net Payment or
Net Receipt constituting any portion thereof, the "Termination
Payment").
(ii) To the extent that Party A is required to pay the Termination
Payment to Party B, Party A shall pay such amount in accordance
with the terms of this Agreement.
(iii) To the extent that Party B is required to pay the Termination
Payment to Party A where:
(A) Party B is the Defaulting Party (provided, however, that
to the extent that Party B is the Defaulting Party with respect
to an Event of Default specified in Section 5(a)(i) of this
Agreement (Failure to Pay or Deliver) this clause (A) shall apply
only with respect to the Net Payment (and not the remainder of
the Termination Payment)), Party B shall pay such amount in
accordance with Section 5.04(b)(X) or 5.04(c)(X), as applicable,
of the Indenture (as defined in the Sale and Servicing
Agreement), and Section 5.05(c)(X) of the Sale and Servicing
Agreement, as applicable.
(B) Party A is the Defaulting Party, the Early Termination
Date arises from a Termination Event (other than an Additional
Termination Event) or a Redemption Event, or Party B is the
Defaulting Party with respect to an Event of Default specified in
Section 5(a)(i) (exclusive of any Net Payment paid pursuant to
Clause (A)), Party B shall pay such Termination Payment in
accordance with this Agreement.
(C) Party B replaces Party A with a successor to Party A,
Party B and Party A agree to cause the successor to Party A to
pay the Termination Payment (or such lesser amount actually paid
by such successor) to Party A. Any amounts actually received by
Party A under this clause (C) shall reduce the amounts payable
pursuant to clauses (A) and (B); Party A shall pay to Party B any
excess of amounts actually received by Party A under this clause
(C) over the Termination Payment.
TRANSFER. Section 7 is hereby amended by:
(1) (i) adding the words "(and notice of the transferee to)" after
the word "of" on the third line thereof, and (ii) adding the
words "(subject to providing three Business Days prior written
notice of the transferee to the other party and to each Rating
Agency)" after the word "transfer" on the fourth and seventh line
thereof.
(2) adding at the end thereof:
"Any party making any such transfer shall deliver to the other party written
confirmation from each Rating Agency then rating any class of Group I Notes that
such transfer will not result in its then-current rating of each class of Group
I Notes being withdrawn, suspended or lowered." SWAP EXEMPTION.
(1) The parties agree that this Agreement and the Sole Transaction
are intended to constitute an "excluded swap transaction"
described in Section 2(g) of the Commodities Exchange Act; and
(2) Each party represents to the other that it is an "eligible
contract participant" as defined in Section 1a(12) of the
Commodities Exchange Act, as amended;
WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION.
AMENDMENTS. Section 9(b) of this Agreement is hereby amended by adding the
following after the word "system" in the last line thereof:
", provided however, that all such amendments, modifications or waivers
shall require the written affirmation of each Rating Agency then rating
any class of Group I Notes that such amendment, modification or waiver
shall not adversely affect its then-current rating of each class of
Group I Notes."
LIMITED RECOURSE TO PARTY B. Notwithstanding anything to the contrary contained
herein, all obligations of Party B shall be payable by Party B only on each
Distribution Date to the extent that funds are available under the Sale and
Servicing Agreement and, to the extent such funds are not available or are
insufficient for the payment thereof, shall not constitute a claim against the
Trust to the extent of such unavailability or insufficiency until such time as
the Trust has assets sufficient to pay such prior deficiency. This paragraph
shall survive the termination of this Agreement but in all cases shall expire
concurrently with the restriction specified in Part 5(f).
NO SUSPENSION OF PAYMENTS. Notwithstanding Section 2(a)(iii) of this Agreement,
Party A shall not suspend any payments due under Section 2(a)(iii) unless:
the principal of any class of Group I Notes shall have been accelerated in
accordance with the terms of the Indenture following an Event of Default
thereunder; or
an Early Termination Date for the Sole Transaction has occurred or effectively
been designated pursuant to the terms hereof.
REDEMPTION EVENT.
(i) A "Redemption Event" will occur upon the delivery by Party B (or its
designee) to Party A of a "Party B Response" (as defined in Appendix I)
accepting Party A's offer to terminate the Sole Transaction as provided in
Appendix I hereto. Such Party B Response shall be delivered on or before the
related Redemption Date (as defined in the Indenture) and shall certify that the
related Put Option Exercise Price or Minimum Purchase Price (as either is
defined in the Sale and Servicing Agreement), as the case may be, has been
deposited into the appropriate Trust Account (as defined in the Indenture). The
parties hereto acknowledge and agree that the Indenture Trustee (as defined in
the Indenture) may deliver such Party B Response on behalf of Party B. Party A
hereby agrees that upon receipt of such Party B Response from the Indenture
Trustee certifying that the related Put Option Exercise Price or Minimum
Purchase Price, as the case may be, has been deposited in the Collection
Account, Party A shall immediately designate the Redemption Date as an Early
Termination Date. Notwithstanding Section 6(d)(ii), the Payment Date in respect
of a Redemption Event shall be the Early Termination Date so designated. For
avoidance of doubt, no Redemption Event shall occur and no Early Termination
Date shall be effectively designated in respect thereof unless the related Put
Option Exercise Price or Minimum Purchase Price, as the case may be, shall have
been deposited into the applicable Trust Account(s) pursuant to the Indenture.
(ii) The parties hereto acknowledge and agree that Key Bank USA, National
Association, as Administrator under the Administration Agreement, may deliver on
behalf of Party B any "Party B Notices" required or permitted by Appendix I
hereto; provided, that in no event shall a Redemption Event occur upon delivery
of any such Party B Notice from the Administrator.
ADDITIONAL DEFINITIONS. Capitalized terms used in this Schedule shall have the
meaning set forth in the Confirmation, the Indenture or, if not therein, the
Sale and Servicing Agreement.
IN WITNESS WHEREOF, the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
KEY BANK USA, KEYCORP STUDENT LOAN
NATIONAL ASSOCIATION TRUST 2001-A
By Bank One, National Association,
not in its individual capacity, but
solely as Eligible Lender Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President Title: Authorized Officer
Date: September 14, 2001 Date: September 14, 2001
Appendix I
Redemption of Group I Notes.
1. As promptly as practicable, but in any event not later than two
Business Days after delivery by Party B (or Party B's designee) to Party A of a
notice of proposed redemption (the "Redemption") and request for a quotation of
Termination Payment (the "Party B Notice"), Party A will give notice by
telephone to Party B (which notice will be promptly confirmed in writing to
Party B)(the "Party A Response"):--
(i) offering to terminate the Sole Transaction upon such Redemption; and
(ii) stating in good faith and in reasonable detail the Termination Payment
(the "Redemption Payment") that will be payable by Party B to Party A or by
Party A to Party B on the proposed Redemption Date (as defined in the Indenture)
if the offer is accepted at the time of such offer (or through such later time,
if any, as may be expressed in the offer in the discretion of Party A) and the
Redemption is effected on the Redemption Date; provided, however, that, if such
offer is not accepted at such time, Party A will, promptly after requests
therefor by Party B, make new offers to effect the termination of the Sole
Transaction and will make such new offers in accordance with reasonable market
practice until 11:00 a.m. New York City time on the Business Day two Business
Days prior to the Redemption Date (the "Deadline"). Any such new offer will
contain the statements required by the preceding clauses (i) and (ii) and will
also be a Party A Response, except that:--
(x) only the Party A Response will determine the period during which new
offers are required to be accepted; and
(y) in the case of the Final Offer (as defined below), "Market Quotation" will
be substituted for "Loss" for purposes of determining the Redemption Payment.
The last such new offer is referred to herein as the "Final Offer." The Final
Offer will be identified as such in the relevant Party A Response. The Final
Offer will not be delivered earlier than the Business Day on which the Deadline
occurs. The Final Offer will be communicated by telephone to Party B (which
Final Offer will be promptly confirmed in writing to Party B).
2. Each Party A Response will describe the Redemption Payment, even if
the Redemption Payment remains the same and, except as described above with
respect to the Final Offer, each Redemption Payment will be determined using
"Loss" and "Second Method" and based on Party B as the sole Affected Party.
3. As promptly as practicable, but in any event not later than the end
of the period during which an offer may be accepted pursuant to the relevant
Party A Response, Party B, acting in good faith and in accordance with
reasonable derivatives market practice, will accept the offer expressed therein
by notice (the "Party B Response") to Party A. Such notice will be by telephone,
will be promptly confirmed in writing and will thereupon be effective, all in
accordance with usual derivatives markets transactions. If the offer is accepted
as aforesaid, the Redemption will be effective on the Redemption Date on the
terms expressed in the last relevant Party A Response as accepted by the Party B
Response (subject to the conditions set forth in Part 5(o) of this Agreement).
The Redemption Payment will be the amount described in the Party A Response
accepted by Party B.
4. Party B (or its designee) will have the right to make reasonable
request of Party A for indications of Redemption Payments based on proposed
Redemptions as contemplated by Paragraphs 1 through 3 above, and Party A will
supply such indications promptly and in good faith following any such request.
Except as provided in Paragraphs 1 through 3 above and Part 5(o) of this
Agreement, neither Party B nor its designee will be obligated to effect any such
Redemption.
September 14, 2001
Interest Rate (Group I Commercial Paper Rate/LIBOR Basis Spread) Swap
Documentation
KEYCORP STUDENT LOAN TRUST 2001-A
c/o Bank One, National Association
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
cc: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Services
From: KEY BANK USA, NATIONAL ASSOCIATION
The purpose of this communication is to set forth the terms and conditions of
the Interest Rate (Group I Commercial Paper Rate/LIBOR Basis Spread) Swap
Transaction (the "Transaction") between KEY BANK USA, NATIONAL ASSOCIATION
("Party A") and KEYCORP STUDENT LOAN TRUST 2001-A ("Party B") on the Trade Date
specified below. This communication will constitute a "Confirmation" as referred
to in the ISDA Master Agreement (Multicurrency - Cross Border) (Group I
Commercial Paper Rate/LIBOR Basis Spread) dated as of September 14, 2001,
entered into by the parties hereto (the "ISDA Master Agreement").
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps and Derivatives Association, Inc (the
"Definitions"), are incorporated herein.
This Confirmation supplements, forms part of and is subject to the ISDA Master
Agreement. All provisions contained in the ISDA Master Agreement will govern
this Confirmation, except as expressly modified below. In the event of any
inconsistency among or between the ISDA Master Agreement, the Definitions and
this Confirmation, this Confirmation will govern.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
to them (either directly or by incorporation) in the ISDA Master Agreement and
Appendix A of the Sale and Servicing Agreement (as of the Trade Date). The term
"Business Day" shall have the meaning ascribed thereto in Appendix A of the Sale
and Servicing Agreement.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Trade Date: September 14, 2001
Effective Date: September 1, 2001
Termination Date: The earlier of (i) the date on which the
outstanding principal amount of the Group I
Notes is reduced to zero and (ii) the
occurrence and continuation of an Event of
Default under the Indenture (as defined in
Appendix A of the Sale and Servicing
Agreement) resulting in a liquidation of the
Group I Student Loans.
Calculation Agent: The Administrator (as defined in Appendix A of
the Sale and Servicing Agreement).
Netting: On any Payment Date, the obligations of the
Parties shall be netted such that the Party
with the greater Floating Rate Payment
obligation shall pay to the other Party the
difference between the Floating Rate Payment
owed by it to the other Party and the Floating
Rate Payment owed to it by the other Party.
Collection Periods: With respect to the first Distribution Date,
the 3 Monthly Calculation Periods immediately
preceding the month in which such Distribution
Date occurs. With respect to any subsequent
Distribution Date, the 3 Monthly Calculation
Periods immediately preceding the month in
which the Distribution Date occurs.
Monthly Calculation
Periods: For each calendar month, the period beginning
on and including the first day of such month
and ending on and including the last day of
such month. For the avoidance of doubt, no
Business Day Convention shall apply to the
calculation of the number of days in a Monthly
Calculation Period.
Floating Rate Amounts Payable By Party A:
Party A
Floating Rate Payments: For each Collection Period, the sum of the
Party A Floating Rate Payments for each
Monthly Calculation Period. The Party A
Floating Rate Payment for any Monthly
Calculation Period shall be the product of:
(1) Three-Month LIBOR minus 0.15%
calculated in the same manner and on such
dates as such index is calculated for the
Group I LIBOR Indexed Securities for the
Interest Period that ends on the
Distribution Date to which such Collection
Period relates;
(2) the principal balance of the
Commercial Paper Rate Loans as determined
as of the first day of the Monthly
Calculation Period; and
(3) a fraction, the numerator of which is
the actual number of days in the Monthly
Calculation Period and the denominator of
which is 360.
In addition, on any Payment Date Party A shall
be obligated to pay any Group I Net Trust Swap
Receipt Carryover Shortfall Amount that exists
on such Payment Date.
Party A Floating Rate
Payment Dates: With respect to each Collection Period, the
Distribution Date to which such Collection
Period relates.
Floating Rate Amounts Payable by Party B:
Party B Floating Rate
Payments: For each Collection Period, the sum of the
Party B Floating Rate Payments for each
Monthly Calculation Period. The Party B
Floating Rate Payment for any Monthly
Calculation Period shall be the product of:
(1) the Commercial Paper Rate as
determined as of the first day of the
Monthly Calculation Period;
(2) the aggregate principal balance of
Commercial Paper Rate Loans as determined
as of the first day of the Monthly
Calculation Period; and
(3) a fraction, the numerator of which is
the actual number of days in the related
monthly period and the denominator of
which is 360.
In addition, on any Payment Date Party B shall
be obligated to pay any Group I Net Trust Swap
Payment Carryover Shortfall Amount that exists
on such Payment Date, but only to the extent
that funds are available and only in
accordance with the provisions of the Sale and
Servicing Agreement.
Party B Floating Rate
Payment Dates: With respect to each Collection Period, the
Distribution Date to which such Collection
Period relates.
Fixed Rate Payment:
Fixed Rate Payer: Party B
Fixed Rate Payment: Zero
Fixed Rate Payment Date: September 14, 2001
2. Account Details:
Payments to Party A:
KEYBANK NATIONAL ASSOCIATION
ABA 0410001039
AC 1553
ATTENTION: DERIVATIVE OPERATIONS
CREDIT TO KEYBANK USA
Payments to Party B:
KEYBANK NATIONAL ASSOCIATION
ABA 0410001039
AC 35-9951022490
Group I Collection Subaccount
3. OTHER TERMS:
If the rating of Party A is withdrawn, suspended or reduced below A3 by Moody's,
A- by Standard & Poor's or A- by Fitch (if rated by Fitch), Party A shall be
required, no later than the 30th day following such rating withdrawal,
suspension or downgrade, at Party A's expense, to either (i) obtain a substitute
swap counterparty that has a counterparty rating of at least A3 by Moody's, A-
by Standard & Poor's and A- by Fitch (if rated by Fitch) or (ii) enter into
arrangements reasonably satisfactory to the Indenture Trustee, including
collateral arrangements, guarantees or letters of credit, which arrangements in
the view of such Rating Agency will result in the elimination of the effect or
impact of such rating withdrawal, suspension or downgrade on the Noteholders.
Failure to comply with this obligation shall constitute an Additional
Termination Event with Party A as the Affected Party.
Each capitalized term used in this Confirmation and not defined in this
Confirmation or Appendix A of the Sale and Servicing Agreement or the
Definitions shall have the meaning assigned in the ISDA Master Agreement.
Please promptly confirm that the preceding correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours sincerely,
KEY BANK USA, NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Confirmed as of the date first written:
KEYCORP STUDENT LOAN TRUST 2001-A
By: Bank One, National Association
not in its individual capacity but
solely
as Eligible Lender Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Officer
SCHEDULE
to the
ISDA MASTER AGREEMENT
(GROUP II PRIME RATE/LIBOR BASIS SPREAD)
DATED as of
September 14, 2001
between
KEY BANK USA, NATIONAL ASSOCIATION,
a national banking association organized under the laws of the United States
("Party A"),
and
KEYCORP STUDENT LOAN TRUST 2001-A,
a trust organized under the laws of the State of Delaware
("Party B").
PART 1. TERMINATION PROVISIONS
In this Agreement:-
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:-
SECTION 5(A)(V) Not Applicable.
SECTION 5(A)(VI) Not Applicable.
SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
and in relation to Party B for the purpose of:-
SECTION 5(A)(V) Not Applicable.
SECTION 5(A)(VI) Not Applicable.
SECTION 5(A)(VII) Not Applicable.
SECTION 5(B)(IV) Not Applicable.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) "ADDITIONAL TERMINATION EVENT" will not apply to Party A and will apply,
with respect to Redemption Event only, to Party B. The occurrence of a
Redemption Event will constitute an Additional Termination Event in respect
of which Party B will be the sole Affected Party.
(d) The provisions of Section 5(a) and Section 5(b) will apply to Party A and
to Party B as follows:
The designation below of an Event of Default as being "Applicable" to a
specific party means that upon the occurrence and continuation of such
an Event of Default with respect to such party, the other party shall
have the right of a Non-defaulting Party to designate an Early
Termination Date for the Sole Transaction (as defined below) under
Section 6 of this Agreement, and conversely, the designation of an
Event of Default as being "Not Applicable" to a party means that upon
the occurrence and continuation of such an Event of Default with
respect to such party, the other party shall not have the right to
designate an Early Termination Date for the Sole Transaction with
respect to such event under Section 6 of this Agreement.
SECTION 5(a) PARTY A PARTY B
(i) "Failure to Pay or Deliver" Applicable.
"Failure to Pay or Deliver" is Applicable to Party B; provided
that Party B has funds available to make payments in
accordance with the terms of the Indenture and the Trustee has
failed to make any such payments in violation of the terms of
the Indenture.
(ii) "Breach of Agreement" Applicable. Not Applicable.
(iii) "Credit Support Default" Applicable. Not Applicable.
(iv) "Misrepresentation" Applicable. Not Applicable.
(v) "Default under Specified
Transaction" Not Applicable. Not Applicable.
(vi) "Cross Default" Not Applicable. Not Applicable.
(vii) "Bankruptcy" Applicable. Applicable.
(viii) "Merger Without Assumption" Applicable. Not Applicable.
(ix) "Additional Event of Default" Not Applicable. Applicable
specified in Part 1(h)
(Acceleration of Group II Notes)
SECTION 5(b)
Neither party shall be entitled to designate an Early Termination Date
as a result of the occurrence and continuation of an event described in
Section 5(b)(iii) (Tax Event Upon Merger).
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Except as provided in Appendix I (Redemption of Group II Notes),
MarketQuotation will apply.
(ii) The Second Method will apply.
(f) "TERMINATION CURRENCY" means United States Dollars ("USD").
(g) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not apply
to Party A or Party B.
(h) ADDITIONAL EVENT OF DEFAULT. Section 5(a) of this Agreement is hereby
amended by: (i) deleting the word "or" at the end of Section 5(a)(vii),
(ii) deleting the period at the end of Section 5(a)(viii) and adding "; or"
at the end thereof and (iii) adding the following language at the end of
Section 5(a):
"(ix) ADDITIONAL EVENT OF DEFAULT. The principal of any class of Group II
Notes shall have been declared or become immediately due and payable in
accordance with the terms of the Indenture (an "Acceleration of Group II
Notes") following an "event of default" thereunder (it being understood
that such event will constitute an Event of Default solely with respect to
Party B)."
PART 2. TAX REPRESENTATIONS.
(a) PAYER TAX REPRESENTATIONS. For the purposes of Section 3(e), neither
Party A, nor Party B makes any representations.
(b) PAYEE TAX REPRESENTATIONS.
(i) For the purposes of Section 3(f), Party A makes the following
representations:
It is a national banking association duly organized and existing under
the laws of the United States.
(ii) For the purposes of Section 3(f), Party B makes the following
representations:
It is a business trust duly organized and existing under the laws of
the State of Delaware.
PART 3. AGREEMENT TO DELIVER DOCUMENTS
(a) For the purpose of Section 4(a):
Tax forms, documents, or certificates to be delivered are:
Party B and Party A each agree to complete (accurately and in a manner
reasonably satisfactory to the other Party), execute, and deliver to
such other Party a United States Internal Revenue Service Form W-9, or
any successor form, which will certify that such Party is not subject
to backup withholding (i) on a date which is before the first
Scheduled Payment Date under this Agreement (the "Form W-9 Submission
Date"), and thereafter prior to the end of the calendar year in which
the second anniversary of the Form W-9 Submission Date occurs, and
thereafter prior to the end of each successive three calendar year
period, (ii) promptly upon reasonable demand by a Party, and (iii)
promptly upon learning that any such form previously provided by a
Party has become obsolete or incorrect.
(b) Other documents to be delivered are:
------------------------------------------------------------------------------------------------------------
PARTY REQUIRED FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO COVERED BY SECTION
TO DELIVER BE DELIVERED 3(D) REPRESENTATION
------------------------------------------------------------------------------------------------------------
Party A and Evidence of authority of the party to enter Upon execution Yes
Party B into this Agreement and the Sole Transaction of this Agreement
(as defined in Part 5(a)) contemplated hereby and
of the signatory for such party to this Agreement and
the Confirmation of such Sole Transaction.
------------------------------------------------------------------------------------------------------------
Party A Copy of the most recent Call Report filed by Promptly Yes
Party A with the Office of the Comptroller of following
the Currency. reasonable
demand by Party B
------------------------------------------------------------------------------------------------------------
PART 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):
Address for notices or communications to Party A:
Address: Key Bank USA, National Association
M.C. OH-01-27-0405
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Trading Desk - Manager, Interest Rate Derivatives
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices or communications to Party B:
Address: KeyCorp Student Loan Trust 2001-A
c/o Bank One National Association
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Administrator (as such term is defined in
Appendix A to the Sale and Servicing Agreement dated as of
September 1, 2001, among Key Consumer Receivables LLC, as
depositor, Key Bank USA, National Association, as administrator
and master servicer, KeyCorp Student Loan Trust 2001-A, as
issuer, and Bank One, National Association, as eligible lender
trustee (the "Sale and Servicing Agreement")) in the event that
Key Bank USA, National Association ceases to be the
Administrator.
Address for notices or communications to the Securities
Insurer:
Address: MBIA Insurance Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Insured Portfolio Management-SF
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) OFFICES. The provisions of Section 10(a) will apply to this
Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is the Administrator.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support
Document, each of which are incorporated by reference in, and
made part of, this Agreement and each Confirmation (unless
provided otherwise in a Confirmation) as if set forth in full
in this Agreement or such Confirmation: Not applicable.
(g) CREDIT SUPPORT PROVIDER. Credit Support Provider means, in
relation to Party A, not applicable. Credit Support Provider
means in relation to Party B, not applicable.
(h) GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the law of the State of New York
(without reference to its choice of law doctrine).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) will
not apply.
PART 5. OTHER PROVISIONS.
(a) SOLE TRANSACTION. Notwithstanding any other provision of this
Agreement, this Agreement shall govern only one Transaction
(the "Sole Transaction"). A copy of the form of Confirmation
for the Sole Transaction is attached hereto as Exhibit A.
(b) ISOLATION OF SOLE TRANSACTION. Notwithstanding Section 6,
any designation of an Early Termination Date in respect of the
Sole Transaction shall apply only to the Sole Transaction.
(c) ACCURACY OF SPECIFIED INFORMATION. Section 3(d) is hereby
amended by adding in the third line thereof after the word
"respect" and before the period, the phrase "or, in the case
of audited or unaudited financial statements, a fair
presentation of the financial condition of the relevant
person."
(d) ADDITIONAL REPRESENTATIONS. The parties agree to amend
Section 3 by adding new Sections 3(g), (h), (i) and (j) as
follows:
(g) ELIGIBLE CONTRACT PARTICIPANT. It is an "eligible
contract participant" as defined in Section 1a(12) of
the Commodities Exchange Act, as amended.
(h) LINE OF BUSINESS. It has entered into this Agreement
and the Sole Transaction in conjunction with its line
of business (including financial intermediation
services) or the financing of its business.
(i) NON-RELIANCE. In connection with the negotiation of,
the entering into, and the confirming of the execution
of, this Agreement and the Sole Transaction: (i) the
other party is not acting as a fiduciary or financial
or investment advisor for it; (ii) it is acting as a
principal and not as an agent or in any other capacity,
fiduciary or otherwise; (iii) it is not relying upon
any representations (whether written or oral) of the
other party other than the representations expressly
set forth in this Agreement and (iv) it has consulted
with its own legal, regulatory, tax, business,
investment, financial, and accounting advisors to the
extent it has deemed necessary, and it has made its own
investment, hedging and trading decisions based on its
own judgment and upon any advice from such advisors as
it has deemed necessary and not upon any view expressed
by the other party.
(j) ASSESSMENT AND UNDERSTANDING. It is capable of
assessing the merits of and understanding (on its own
behalf or through independent professional advice), and
understands and accepts, the terms, conditions and
risks of this Agreement and the Sole Transaction. It is
also capable of assuming, and assumes, the risks of the
Sole Transaction.
(e) FDI ACT REPRESENTATION. Party A represents to Party B as follows:
(i) The necessary action to authorize referred to in the
representation in Section 3(a)(ii) includes all
authorizations required under the U. S. Federal Deposit
Insurance Act, as amended and under any agreement,
writ, decree, or order entered into with its
supervisory authorities.
(ii) At all times during the term of this Agreement, it will
continuously include and maintain as part of its
official written books and records this Agreement, this
Schedule and all other exhibits, supplements, and
attachments hereto and documents incorporated by
reference herein, all Confirmations, and evidence of
all necessary authorizations.
(iii) This Agreement, the Confirmation of the Sole
Transaction, and any other documentation relating to
this Agreement to which it is a party or that it is
required to deliver will be executed and delivered by a
duly appointed or elected and authorized officer of it
of the level of vice president or higher.
(f) NO BANKRUPTCY PETITION. Prior to the date that is one year and
one day after the date upon which Party B is terminated in
accordance with the terms of the Amended and Restated Trust
Agreement dated as of September 1, 2001, between Key Consumer
Receivables LLC, as depositor, and Bank One, National
Association, as eligible lender trustee (the "Eligible Lender
Trustee"), Party A shall not institute against, or join any other
person in instituting against, Party B any bankruptcy,
reorganization, arrangement, insolvency or liquidation
proceeding, or other proceedings under any federal or state
bankruptcy or similar law.
(g) OBLIGATIONS OF PARTY B. Party A agrees that all obligations,
liabilities and expenses of Party B, including, without
limitation, any arising out of representations or agreements
contained herein, shall be paid from, and limited to, the assets
of Party B and that the Eligible Lender Trustee shall not be
required to spend or risk its own funds hereunder, nor shall the
Trustee incur any liability in its individual capacity.
(h) NO SETOFF. Notwithstanding any other provision of this Agreement,
in no event shall either Party A or Party B have the right to
setoff or net an amount due from it under the Sole Transaction
against an amount due from the other party under any other
Transaction, nor shall either Party A or Party B have the right
to setoff or net an amount due from it under any Transaction that
is not the Sole Transaction against an amount due from the other
party under the Sole Transaction. Notwithstanding any other
provision of this Agreement, the amount payable under Section
6(e) upon termination of the Sole Transaction shall be determined
without regard to any Transaction other than the Sole
Transaction.
(i) EARLY TERMINATION.
(1) Section 6(b)(ii) is hereby amended by adding at the end of
the first paragraph the following:
", provided that the party seeking to make the transfer to
avoid a Termination Event shall deliver to Party B (in the
case of transfers by Party A) or to Party A (in the case of
transfers by Party B) written confirmation from each Rating
Agency then rating any class of Group II Notes that such
transfer will not result in its then-current rating of each
class of Group II Notes being withdrawn, suspended or lowered
without regard to the Securities Guaranty Insurance Policy."
(2) Notwithstanding anything to the contrary in this Agreement, if
the Early Termination Date of the Sole Transaction occurs or is
effectively designated, Party A and Party B agree as follows:
(i) The Calculation Agent shall calculate an amount that would
be payable to or by Party B under this Agreement in respect
of such Early Termination Date (such amount, including any
Net Payment or Net Receipt constituting any portion thereof,
the "Termination Payment").
(ii) To the extent that Party A is required to pay the
Termination Payment to Party B, Party A shall pay such
amount in accordance with the terms of this Agreement.
(iii) To the extent that Party B is required to pay the
Termination Payment to Party A where:
(A) Party B is the Defaulting Party (provided, however,
that to the extent that Party B is the Defaulting Party with
respect to an Event of Default specified in Section 5(a)(i)
of this Agreement (Failure to Pay or Deliver) this clause
(A) shall apply only with respect to the Net Payment (and
not the remainder of the Termination Payment)), Party B
shall pay such amount in accordance with Section 5.04(b)(Y)
or 5.04(c)(Y) , as applicable, of the Indenture (as defined
in Appendix A of the Sale and Servicing Agreement), and
Section 5.05(c)(Y) of the Sale and Servicing Agreement, as
applicable.
(B) Party A is the Defaulting Party, the Early
Termination Date arises from a Termination Event (other than
an Additional Termination Event) or a Redemption Event, or
Party B is the Defaulting Party with respect to an Event of
Default specified in Section 5(a)(i) (exclusive of any Net
Payment paid pursuant to Clause (A)), Party B shall pay such
Termination Payment in accordance with this Agreement.
(C) Party B replaces Party A with a successor to Party
A, Party B and Party A agree to cause the successor to Party
A to pay the Termination Payment (or such lesser amount
actually paid by such successor) to Party A. Any amounts
actually received by Party A under this clause (C) shall
reduce the amounts payable pursuant to clauses (A) and (B);
Party A shall pay to Party B any excess of amounts actually
received by Party A under this clause (C) over the
Termination Payment.
(j) TRANSFER. Section 7 is hereby amended by:
(1) (i) adding the words "(and notice of the transferee
to)" after the word "of" on the third line thereof, and
(ii) adding the words "(subject to providing three
Business Days prior written notice of the transferee to
the other party, to the Securities Insurer and to each
Rating Agency)" after the word "transfer" on the fourth
and seventh line thereof.
(2) adding at the end thereof:
"Any party making any such transfer shall deliver to the
other party and the Securities Insurer written confirmation
from each Rating Agency then rating any class of Group II
Notes that such transfer will not result in its then-current
rating of each class of Group II Notes being withdrawn,
suspended or lowered without regard to the Securities
Guaranty Insurance Policy."
(k) SWAP EXEMPTION.
(1) The parties agree that this Agreement and the Sole
Transaction are intended to constitute an "excluded
swap transaction" described in Section 2(g) of the
Commodities Exchange Act; and
(2) Each party represents to the other that it is an
"eligible contract participant" as defined in Section
1a(12) of the Commodities Exchange Act, as amended;
(l) WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF THE PARTIES HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
TRANSACTION.
(m) AMENDMENTS. Section 9(b) of this Agreement is hereby amended by adding
the following after the word "system" in the last line thereof:
", provided however, that all such amendments, modifications or
waivers shall require (1) (as long as no Securities Insurer Default shall
have occurred and be continuing) the consent (which consent shall not be
unreasonably withheld) of the Securities Insurer and (2) the written
affirmation of each Rating Agency then rating any class of Group II Notes
that such amendment, modification or waiver shall not adversely affect its
then-current rating of each class of Group II Notes without regard to the
Securities Guaranty Insurance Policy."
(n) LIMITED RECOURSE TO PARTY B. Notwithstanding anything to the contrary
contained herein, all obligations of Party B shall be payable by Party B
only on each Distribution Date to the extent that funds are available under
the Sale and Servicing Agreement and, to the extent such funds are not
available or are insufficient for the payment thereof, shall not constitute
a claim against the Trust to the extent of such unavailability or
insufficiency until such time as the Trust has assets sufficient to pay
such prior deficiency. This paragraph shall survive the termination of this
Agreement but in all cases shall expire concurrently with the restriction
specified in Part 5(f).
(o) NO SUSPENSION OF PAYMENTS. Notwithstanding Section 2(a)(iii) of this
Agreement, Party A shall not suspend any payments due under Section
2(a)(iii) unless:
(1) the principal of any class of Group II Notes shall have been
accelerated in accordance with the terms of the Indenture following an
Event of Default thereunder;
(2) the Securities Insurer has elected not to cure a payment default by
Party B under the circumstances described in Part 1(d) of this Schedule
after the Securities Insurer has been given three Business Days notice by
Party A of such payment default and such default is continuing; or
(3) an Early Termination Date for the Sole Transaction has occurred or
effectively been designated pursuant to the terms hereof.
(p) REDEMPTION EVENT.
(i) A "Redemption Event" will occur upon the delivery by Party B (or its
designee) to Party A of a "Party B Response" (as defined in Appendix I)
accepting Party A's offer to terminate the Sole Transaction as provided in
Appendix I hereto; provided, however, that Party B shall not deliver its
Party B Response without the prior written consent (which consent shall not
be unreasonably withheld) of the Securities Insurer (for so long as no
Securities Insurer Default has occurred and is continuing). Such Party B
Response shall be delivered on or before the related Redemption Date (as
defined in the Indenture) and shall certify that the related Put Option
Exercise Price or Minimum Purchase Price (as either is defined in the Sale
and Servicing Agreement), as the case may be, has been deposited into the
appropriate Trust Account (as defined in the Indenture). The parties hereto
acknowledge and agree that the Indenture Trustee (as defined in the
Indenture) may deliver such Party B Response on behalf of Party B. Party A
hereby agrees that upon receipt of such Party B Response from the Indenture
Trustee certifying that the related Put Option Exercise Price or Minimum
Purchase Price, as the case may be, has been deposited in the Collection
Account, Party A shall immediately designate the Redemption Date as an
Early Termination Date. Notwithstanding Section 6(d)(ii), the Payment Date
in respect of a Redemption Event shall be the Early Termination Date so
designated. For avoidance of doubt, no Redemption Event shall occur and no
Early Termination Date shall be effectively designated in respect thereof
unless the related Put Option Exercise Price or Minimum Purchase Price, as
the case may be, shall have been deposited into the applicable Trust
Account(s) pursuant to the Indenture and, for so long as no Securities
Insurer Default has occurred and is continuing, the prior written consent
(which consent shall not be unreasonably withheld) of the Securities
Insurer has been obtained with respect to the delivery of Party B's
Response to Party A.
(ii) The parties hereto acknowledge and agree that Key Bank USA, National
Association, as Administrator under the Administration Agreement, may
deliver on behalf of Party B any "Party B Notices" required or permitted by
Appendix I hereto; provided, that in no event shall a Redemption Event
occur upon delivery of any such Party B Notice from the Administrator.
(q) ADDITIONAL DEFINITIONS. Capitalized terms used in this Schedule shall
have the meaning set forth in the Confirmation, the Indenture or, if not
therein, the Sale and Servicing Agreement.
(r) NOTE RELATED PROVISIONS. The parties acknowledge that this Agreement
is intended to relate to the Group II Notes, which are insured pursuant to
Note Guaranty Insurance Policy No. 36130 (the "Securities Guaranty
Insurance Policy") issued by MBIA Insurance Corporation ("MBIA") and as a
result, hereby further agree as follows (for so long as no Securities
Insurer Default has occurred and is continuing):
(i) APPLICATION OF TERMINATION EVENTS AND EVENTS OF DEFAULT.
Notwithstanding anything in this Agreement to the contrary, Party B
shall not be entitled to designate an Early Termination Date following
any Event of Default, Redemption Event or Termination Event without
the prior written consent (which consent shall not be unreasonably
withheld) of the Securities Insurer and must designate an Early
Termination Date at the Securities Insurer's direction if the
circumstances would permit Party B to then make such a designation.
(ii) CURE PERIOD. Notwithstanding Section 5(a)(i) of this Agreement,
an Event of Default in respect of Party B under Section 5(a)(i) shall
not occur unless there is a failure to pay or deliver with respect to
Party B under the circumstances described in Part 1(d) of this
Schedule by Party B and the Securities Insurer has not (after having
received notification of such a default from Party A) chosen to make
such performance on Party B's behalf within three Business Days of
such notice.
(iii) SECURITIES INSURER-DIRECTED TERMINATION FOLLOWING CURE. If an
Event of Default under Section 5(a)(i) of this Agreement occurs with
respect to Party B as the Defaulting Party under the circumstances
described in Part 1(d) hereof and the Securities Insurer has elected
to make a payment on Party B's behalf, then the parties agree that (A)
Party B's payment obligation SHALL NOT have been satisfied, (B) such
payment default shall be continuing with respect to Party B and shall
accrue interest due from Party B at the Late Interest Rate, (C) Party
A, upon receipt of such payment on Party B's behalf from the
Securities Insurer shall be deemed to have assigned its right to such
payment from Party B (including interest on such payment) to the
Securities Insurer, and (D) the Securities Insurer shall have the
right (but no obligation) to direct Party A to designate an Early
Termination Date against Party B with respect to Party B's payment
default.
(iv) DEDUCTION OR WITHHOLDING FOR TAX. Notwithstanding Section 14 of
this Agreement, in relation to any payment required to be made by
Party B, no Tax shall be an Indemnifiable Tax, and in relation to any
payment required to be made by Party A, each and every Tax shall be an
Indemnifiable Tax.
(v) REPRESENTATIONS AND AGREEMENTS. Each party agrees that each of
its representations and agreements in this Agreement is expressly made
to and for the benefit of the Securities Insurer.
(vi) THE SECURITIES INSURER. Party A and Party B hereby each
acknowledge and agree that the Securities Insurer shall be an express
third-party beneficiary (and not merely an incidental third-party
beneficiary) of this Agreement and the obligations of each such party
under this Agreement, as such, entitled to enforce this Agreement and
the terms of any Transaction hereunder against either Party A or Party
B on its own behalf and/or on behalf of the holders of the related
Group II Notes and otherwise shall be afforded all remedies available
hereunder or otherwise afforded by law against the parties hereto to
redress any damage or loss incurred by the Securities Insurer or the
Group II Notes including, but not limited to, fees (including
professional fees), costs and expenses incurred by the Securities
Insurer which are related to, or resulting from any breach by such
party of its obligations hereunder.
(vii) SECURITIES INSURER ROLE. Party A and Party B hereby each
acknowledge and agree that the Securities Insurer is not obligated to
cure any default by Party B under this Agreement, but that in
connection with the Securities Insurer's best judgment, the Securities
Insurer is expressly granted, in partial consideration for the
issuance of the Securities Guaranty Insurance Policy, the rights
specified in this Agreement, including, but not limited to, the right
to effect cures of payment defaults by Party B and the right to
receive certain notices.
(viii) NOTICES. A copy of each notice or other communication between
the parties with respect to this Agreement (including, without
limitation, Appendix I hereto) must be forwarded to the Securities
Insurer.
(ix) "REFERENCE MARKET MAKERS." The definition of "Reference
Market-makers" set forth in Section 12 of this Agreement shall be
amended in its entirety to read as follows:
"Reference Market-makers" means four (4) leading dealers in the
relevant swap market selected by the party determining a Market
Quotation in good faith (a) from among dealers of the highest
credit standing which satisfy all the criteria that such party
applies generally at the time in deciding whether to offer or to
make an extension of credit and (b) to the extent practicable,
from among dealers having an office in the same city. The rating
classification assigned to any outstanding long-term senior debt
securities issued by such dealers shall be at least (1) Aa or
higher as determined by ▇▇▇▇▇'▇ Investors Service Inc., (2) AA or
higher as determined by Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or (3) AA or higher
as determined by Fitch (if rated by Fitch), provided, however,
that, in any case, if Market Quotations cannot be determined by
four (4) such dealers, the party making the determination of the
Market Quotation may designate, with the consent (which consent
shall not be unreasonably withheld) of the other party and the
Insurer, one (1) or more leading dealers whose long-term senior
debt bears a lower investment grade rating.
IN WITNESS WHEREOF, the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this document.
KEY BANK USA, KEYCORP STUDENT LOAN
NATIONAL ASSOCIATION TRUST 2001-A
By Bank One, National Association,
not in its individual capacity, but
solely as Eligible Lender Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------- -----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President Title: Authorized Officer
Date: September 14, 2001 Date: September 14, 2001
APPENDIX I
REDEMPTION OF GROUP II NOTES.
1. As promptly as practicable, but in any event not later than two
Business Days after delivery by Party B (or Party B's designee, in either case
at the direction of, or with the consent (which consent shall not be
unreasonably withheld) of, the Securities Insurer, but only for so long as no
Securities Insurer Default has occurred and is continuing) to Party A of a
notice of proposed redemption (the "Redemption") and request for a quotation of
Termination Payment (the "Party B Notice"), Party A will give notice by
telephone to Party B (which notice will be promptly confirmed in writing to
Party B)(the "Party A Response"):--
(i) offering to terminate the Sole Transaction upon such Redemption;
and
(ii) stating in good faith and in reasonable detail the Termination
Payment (the "Redemption Payment") that will be payable by Party B to Party A or
by Party A to Party B on the proposed Redemption Date (as defined in the
Indenture) if the offer is accepted at the time of such offer (or through such
later time, if any, as may be expressed in the offer in the discretion of Party
A) and the Redemption is effected on the Redemption Date; provided, however,
that, if such offer is not accepted at such time, Party A will, promptly after
requests therefor by Party B (at the direction of, or with the consent (which
consent shall not be unreasonably withheld) of, the Securities Insurer), make
new offers to effect the termination of the Sole Transaction and will make such
new offers in accordance with reasonable market practice until 11:00 a.m. New
York City time on the Business Day two Business Days prior to the Redemption
Date (the "Deadline"). Any such new offer will contain the statements required
by the preceding clauses (i) and (ii) and will also be a Party A Response,
except that:--
(x) only the Party A Response will determine the period during which
new offers are required to be accepted; and
(y) in the case of the Final Offer (as defined below), "Market
Quotation" will be substituted for "Loss" for purposes of determining the
Redemption Payment.
The last such new offer is referred to herein as the "Final Offer."
The Final Offer will be identified as such in the relevant Party A Response. The
Final Offer will not be delivered earlier than the Business Day on which the
Deadline occurs. The Final Offer will be communicated by telephone to Party B
(which Final Offer will be promptly confirmed in writing to Party B).
2. Each Party A Response will describe the Redemption Payment, even if
the Redemption Payment remains the same and, except as described above with
respect to the Final Offer, each Redemption Payment will be determined using
"Loss" and "Second Method" and based on Party B as the sole Affected Party.
3. As promptly as practicable, but in any event not later than the end
of the period during which an offer may be accepted pursuant to the relevant
Party A Response, Party B (with the consent (which consent shall not be
unreasonably withheld) of, or at the direction of, the Securities Insurer, but
only for so long as no Securities Insurer Default has occurred and is
continuing), acting in good faith and in accordance with reasonable derivatives
market practice, will accept the offer expressed therein by notice (the "Party B
Response") to Party A. Such notice will be by telephone, will be promptly
confirmed in writing and will thereupon be effective, all in accordance with
usual derivatives markets transactions. If the offer is accepted as aforesaid,
the Redemption will be effective on the Redemption Date on the terms expressed
in the last relevant Party A Response as accepted by the Party B Response
(subject to the conditions set forth in Part 5(o) of this Agreement). The
Redemption Payment will be the amount described in the Party A Response accepted
by Party B.
4. Party B (or its designee) will have the right to make reasonable
request of Party A for indications of Redemption Payments based on proposed
Redemptions as contemplated by Paragraphs 1 through 3 above, and Party A will
supply such indications promptly and in good faith following any such request.
Except as provided in Paragraphs 1 through 3 above and Part 5(o) of this
Agreement, neither Party B nor its designee will be obligated to effect any such
Redemption.
September 14, 2001
Interest Rate (Group II Prime Rate/LIBOR Basis Spread) Swap Documentation
KEYCORP STUDENT LOAN TRUST 2001-A
c/o Bank One, National Association
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
cc: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Services
From: KEY BANK USA, NATIONAL ASSOCIATION
The purpose of this communication is to set forth the terms and
conditions of the Interest Rate (Group II Prime Rate/LIBOR Basis Spread) Swap
Transaction (the "Transaction") between KEY BANK USA, NATIONAL ASSOCIATION
("Party A") and KEYCORP STUDENT LOAN TRUST 2001-A ("Party B") on the Trade Date
specified below. This communication will constitute a "Confirmation" as referred
to in the ISDA Master Agreement (Multicurrency - Cross Border) (Group II Prime
Rate/LIBOR Basis Spread) dated as of September 14, 2001, entered into by the
parties hereto (the "ISDA Master Agreement").
The definitions and provisions contained in the 2000 ISDA Definitions
as published by the International Swaps and Derivatives Association, Inc. (the
"Definitions"), are incorporated herein.
This Confirmation supplements, forms part of and is subject to the
ISDA Master Agreement. All provisions contained in the ISDA Master Agreement
will govern this Confirmation, except as expressly modified below. In the event
of any inconsistency among or between the ISDA Master Agreement, the Definitions
and this Confirmation, this Confirmation will govern.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them (either directly or by incorporation) in the ISDA Master
Agreement and Appendix A of the Sale and Servicing Agreement (as of the Trade
Date). The term "Business Day" shall have the meaning ascribed thereto in
Appendix A of the Sale and Servicing Agreement.
1. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Trade Date: September 14, 2001
Effective Date: September 1, 2001
Termination Date: The earlier of (i) the date on which the
outstanding principal amount of the Group II
Notes is reduced to zero and all amounts then
owing to the Securities Insurer have been paid
and (ii) the occurrence and continuation of an
Event of Default under the Indenture (as
defined in Appendix A of the Sale and
Servicing Agreement) resulting in a
liquidation of the Group II Student Loans.
Calculation Agent: The Administrator (as defined in Appendix A of
the Sale and Servicing Agreement).
Netting: On any Payment Date, the obligations of the
Parties shall be netted such that the Party
with the greater Floating Rate Payment
obligation shall pay to the other Party the
difference between the Floating Rate Payment
owed by it to the other Party and the Floating
Rate Payment owed to it by the other Party.
Collection Periods: With respect to the first Distribution Date,
the 3 Monthly Calculation Periods immediately
preceding the month in which such Distribution
Date occurs. With respect to any subsequent
Distribution Date, the 3 Monthly Calculation
Periods immediately preceding the month in
which the Distribution Date occurs.
Monthly Calculation Periods: For each calendar month, the period beginning
on and including the first day of such month
and ending on and including the last day of
such month. For the avoidance of doubt, no
Business Day Convention shall apply to the
calculation of the number of days in a Monthly
Calculation Period.
Floating Rate Amounts Payable By Party A:
Party A
Floating Rate Payments: For each Collection Period, the sum of the
Party A Floating Rate Payments for each
Monthly Calculation Period. The Party A
Floating Rate Payment for any Monthly
Calculation Period shall be the product of:
(1) Three-Month LIBOR plus 2.60%
calculated in the same manner and on such
dates as such index is calculated for the
Group II LIBOR Indexed Securities for the
Interest Period that ends on the
Distribution Date to which such Collection
Period relates;
(2) the principal balance of the Prime
Rate Loans as determined as of the first
day of the Monthly Calculation Period; and
(3) a fraction, the numerator of which is
the actual number of days in the Monthly
Calculation Period and the denominator of
which is 360.
In addition, on any Payment Date Party A shall
be obligated to pay any Group II Net Trust
Swap Receipt Carryover Shortfall Amount that
exists on such Payment Date.
Party A Floating Rate
Payment Dates: With respect to each Collection Period, the
Distribution Date to which such Collection
Period relates.
Floating Rate Amounts Payable by Party B:
Party B Floating Rate
Payments: For each Collection Period, the sum of the
Party B Floating Rate Payments for each
Monthly Calculation Period. The Party B
Floating Rate Payment for any Monthly
Calculation Period shall be the product of:
(1) the Prime Rate as determined as of the
first day of the Monthly Calculation
Period;
(2) the aggregate principal balance of
Prime Rate Loans as determined as of the
first day of the Monthly Calculation
Period; and
(3) a fraction, the numerator of which is
the actual number of days in the related
monthly period and the denominator of
which is 360.
In addition, on any Payment Date Party B shall
be obligated to pay any Group II Net Trust
Swap Payment Carryover Shortfall Amount that
exists on such Payment Date, but only to the
extent that funds are available and only in
accordance with the provisions of the Sale and
Servicing Agreement.
Party B Floating Rate
Payment Dates: With respect to each Collection Period, the
Distribution Date to which such Collection
Period relates.
Fixed Rate Payment:
Fixed Rate Payer: Party B
Fixed Rate Payment: Zero
Fixed Rate Payment Date: September 14, 2001
2. Account Details:
Payments to Party A:
KEYBANK NATIONAL ASSOCIATION
ABA 0410001039
AC 1553
ATTENTION: DERIVATIVE OPERATIONS
CREDIT TO KEYBANK USA
Payments to Party B:
KEYBANK NATIONAL ASSOCIATION
ABA 0410001039
AC 35-9951032499
Group II Collection Subaccount
3. OTHER TERMS:
If the rating of Party A is withdrawn, suspended or reduced below A3 by Moody's,
A- by Standard & Poor's or A- by Fitch (if rated by Fitch), Party A shall be
required, no later than the 30th day following such rating withdrawal,
suspension or downgrade, at Party A's expense, to either (i) obtain a substitute
swap counterparty acceptable to the Securities Insurer that has a counterparty
rating of at least A3 by Moody's, A- by Standard & Poor's and A- by Fitch (if
rated by Fitch) or (ii) enter into arrangements reasonably satisfactory to the
Indenture Trustee and the Securities Insurer, including collateral arrangements,
guarantees or letters of credit, which arrangements in the view of such Rating
Agency will result in the elimination of the effect or impact of such rating
withdrawal, suspension or downgrade on the Noteholders and the Securities
Insurer without regard to the Securities Guaranty Insurance Policy. Failure to
comply with this obligation shall constitute an Additional Termination Event
with Party A as the Affected Party.
Each capitalized term used in this Confirmation and not defined in this
Confirmation or Appendix A of the Sale and Servicing Agreement or the
Definitions shall have the meaning assigned in the ISDA Master Agreement.
Please promptly confirm that the preceding correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours sincerely,
KEY BANK USA, NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
Confirmed as of the date first written:
KEYCORP STUDENT LOAN TRUST 2001-A
By: Bank One, National Association
not in its individual capacity but
solely as Eligible Lender Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Authorized Officer