SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported) September 30, 1999
Key Bank USA, National Association (as Seller, Master Servicer and
Administrator)under a Sale and Servicing Agreement dated as of
September 1, 1999 among Key Bank USA, National Association,
KeyCorp Student Loan Trust 1999-B, and Bank One, National
Association as eligible lender trustee, in connection with
the issuance of KeyCorp Student Loan Trust 1999-B Floating
Rate Asset Backed Notes and Floating Rate Asset Backed
Certificates.
Key Bank USA, National Association
(Exact name of Registrant as specified in its charter)
United States 333-80109 34-1804148
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
Key Tower, 127 Public Square, Cleveland, Ohio 44114
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number,
including area code: (216) 689-6300
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1.1 Note Underwriting Agreement, between Key Bank USA, National
Association and Credit Suisse First Boston Corporation, as
Representative of the several Underwriters, dated September 30,
1999.
1.2 Certificate Underwriting Agreement, between Key Bank USA, National
Association and Credit Suisse First Boston Corporation, as
Representative of the several Underwriters, dated September 30,
1999.
4.1 Indenture, between KeyCorp Student Loan Trust 1999-B (the "Trust")
and Bankers Trust Company (the "Indenture Trustee"), dated as of
September 1, 1999.
4.2 Amended and Restated Trust Agreement, between Key Bank USA,
National Association and Bank One, National Association (the
"Eligible Lender Trustee"), dated as of September 1, 1999.
4.3 Sale and Servicing Agreement, among Key Bank USA, National
Association (as Seller, Master Servicer, and Administrator) the
Trust, and the Eligible Lender Trustee, dated as of September 1,
1999.
99.1 Administration Agreement, among Key Bank USA, National
Association, the Trust and the Indenture Trustee, dated as of
September 1, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KEY BANK USA, NATIONAL ASSOCIATION
By: /s/ Donald Schilling
---------------------------------
Name: Donald Schilling
Title: Senior Vice President
Dated: October 12, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
1.1 Note Underwriting Agreement, between Key Bank USA, National
Association and Credit Suisse First Boston, as Representative of
the several Underwriters, dated September 30, 1999.
1.2 Certificate Underwriting Agreement, between Key Bank USA, National
Association and Credit Suisse First Boston, as Representative of
the several Underwriters, dated September 30, 1999.
4.1 Indenture, between KeyCorp Student Loan Trust 1999-B (the "Trust")
and Bankers Trust Company (the "Indenture Trustee"), dated as of
September 1, 1999.
4.2 Amended and Restated Trust Agreement, between Key Bank USA,
National Association and Bank One, National Association (the
"Eligible Lender Trustee"), dated as of September 1, 1999.
4.3 Sale and Servicing Agreement, among Key Bank USA National
Association (as Seller, Master Servicer, and Administrator), the
Trust, and the Eligible Lender Trustee, dated as of September 1,
1999.
99.1 Administration Agreement, among Key Bank USA, National
Association, the Trust and the Indenture Trustee, dated as of
September 1, 1999.
EXECUTION COPY
KEYCORP STUDENT LOAN TRUST 1999-B
$280,000,000
FLOATING RATE CLASS A-1 ASSET BACKED NOTES
$625,000,000
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
$30,000,000
FLOATING RATE CLASS M ASSET BACKED NOTES
KEY BANK USA, NATIONAL ASSOCIATION
(SELLER)
NOTE UNDERWRITING AGREEMENT
September 30, 1999
Credit Suisse First Boston Corporation
As Representative of the
several Underwriters
11 Madison Avenue
New York, N.Y. 10010
Dear Sirs:
1. INTRODUCTORY. Key Bank USA, National Association, a national
banking association ("KBUSA"), proposes to cause KeyCorp Student Loan Trust
1999-B (the "Trust") to issue and sell $280,000,000 principal amount of its
Floating Rate Class A-1 Asset Backed Notes (the "Class A-1 Notes"), $625,000,000
principal amount of its Floating Rate Class A-2 Asset Backed Notes, "), and
$30,000,000 principal amount of its Floating Rate Class M Asset Backed Notes
(the "Class M Notes" and together with the Class A-1 Notes and the Class A-2
Notes, the "Notes"), to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representative") are acting as
representative. The Trust was formed pursuant to the Trust Agreement, dated as
of September 1, 1999, as amended and restated by the Amended and Restated Trust
Agreement, dated as of September 1, 1999 (as further amended and supplemented
from time to time, collectively, the "Trust Agreement") between KBUSA, as
depositor and Bank One, National Association, as Eligible Lender Trustee (the
"Eligible Lender Trustee"). The assets of the Trust include, among other things,
two pools of graduate and undergraduate student loans (collectively, the
"Initial Financed Student Loans") and certain monies due thereunder on and after
September 1, 1999, with respect to certain of the Initial Financed Student
Loans, and September 27, 1999, with respect to certain other Initial Financed
Student Loans (collectively, the "Cutoff Date"). Such Initial Financed Student
Loans were sold to the Eligible Lender Trustee on behalf of the Trust by the
Seller pursuant to the Sale and Servicing Agreement, dated as of September 1,
1999 (as amended and supplemented from time to time, the "Sale and Servicing
Agreement"), among, the Trust, the Eligible Lender Trustee, KBUSA, as master
servicer (in such capacity, the "Master Servicer"), KBUSA, as seller (in such
capacity, the "Seller"), and KBUSA, as administrator (in such capacity, the
"Administrator"). The Master Servicer has also entered into two certain
sub-servicing agreements to have the Financed Student Loans sub-serviced with
each of Pennsylvania Higher Education Assistance Agency, an agency of the
Commonwealth of Pennsylvania ("PHEAA" and, in its capacity as a sub-servicer, a
"Sub-Servicer") and Great Lakes Educational Loan Services, Inc., a Wisconsin
corporation ("Great Lakes" or a "Sub-Servicer"). The Notes will be issued
pursuant to the Indenture to be dated as of September 1, 1999 (as amended and
supplemented from time to time, the "Indenture"), between the Trust and Bankers
Trust Company, a New York banking corporation (the "Indenture Trustee"). After
the Closing Date (as defined below), the Eligible Lender Trustee, acting on
behalf of the Trust, will acquire certain additional student loans, identified
in the Sale and Servicing Agreement on or prior to December 24, 1999 (the
"Subsequent Pool Student Loans") and on or prior to the end of the Funding
Period (the "Other Subsequent Student Loans"; and together with the Subsequent
Pool Student Loans and Initial Financed Student Loans, the "Financed Student
Loans") using amounts in certain accounts owned by the Trust which have been set
aside for such purpose. In addition, the Administrator will perform certain
administrative duties on behalf of the Trust pursuant to the Administration
Agreement, dated as of September 1, 1999 (as amended and supplemented from time
to time, the "Administration Agreement"), among the Indenture Trustee, the Trust
and the Administrator. The Trust will also be a party to that certain cap
agreement (the "Cap Agreement") between the Trust and KBUSA, as cap provider (in
such capacity, the "Cap Provider"), whereunder the Noteholders will be entitled,
subject to the limitations of the Cap Agreement, to receive payments from the
Cap Provider in the amount of any of any Noteholders' Interest Index Carryover
for such Class of Notes and the Cap Provider will receive reimbursement for such
payments on subsequent Distribution Dates, but only to the extent funds are
available therefor on a subordinated basis. The Sale and Servicing Agreement,
the Indenture, the Trust Agreement, the Administration Agreement and the Cap
Agreement are referred to herein as the "Basic Documents."
Simultaneously with the issuance and sale of the Notes as contemplated
herein, and pursuant to the Trust Agreement, the Trust will issue $65,000,000
principal amount of its Floating Rate Asset Backed Certificates (the
"Certificates"), representing a fractional undivided ownership interest in the
Trust, which will be sold pursuant to an underwriting agreement dated the date
hereof (the "Certificate Underwriting Agreement") between the Seller and the
Representative.
Capitalized terms used and not otherwise defined herein shall have the
meanings given them in Appendix A attached hereto.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. (a) The Seller
represents and warrants to and agrees with the several Underwriters that:
(i) A registration statement on Form S-3 (Registration No. 333-80109)
has been filed with the Securities and Exchange Commission (the
"Commission"), including a related preliminary base prospectus and a
preliminary prospectus supplement, for the registration under the Act of
the offering and sale of the Notes and the Certificates. The Seller may
have filed one or more amendments thereto, each of which amendments has
previously been furnished to the Representative. The Seller will next file
with the Commission (i) after effectiveness of such registration statement,
a final base prospectus and a final prospectus supplement relating to the
Notes in accordance with Rules 430A and 424(b)(1) or (4) under the
Securities Act of 1933, as amended (the "Act"), or (ii) a final base
prospectus and a final prospectus supplement relating to the Notes in
accordance with Rules 415 and 424(b)(2) or (5).
The Seller has included in such registration statement, as amended at
the Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in the
Prospectus with respect to the Notes and the offering thereof. As filed
such final prospectus supplement shall include all Rule 430A Information,
together with all other such required information, with respect to the
Notes and the offering thereof and, except to the extent that the
Representative shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to the Representative prior to
the Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other changes
(beyond that contained in the latest preliminary base prospectus and
preliminary prospectus supplement, if any, that have previously been
furnished to the Representative) as the Seller has advised the
Representative, prior to the Execution Time, will be included or made
therein. If the Registration Statement contains the undertaking specified
by Regulation S-K Item 512(a), the Registration Statement, at the Execution
Time, meets the requirements set forth in Rule 415(a)(1)(x).
For purposes of this Note Underwriting Agreement (this "Agreement"),
"Effective Time" means the date and time as of which such registration
statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission, and "Effective Date" means the date
of the Effective Time. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. Such
registration statement, as amended at the Effective Time, including all
information deemed to be a part of such registration statement as of the
Effective Time pursuant to Rule 430A(b) under the Act, and including the
exhibits thereto and any material incorporated by reference therein, is
hereinafter referred to as the "Registration Statement." "Base Prospectus"
shall mean any prospectus referred to above contained in the Registration
Statement at the Effective Date, including any Preliminary Prospectus
Supplement. "Preliminary Prospectus Supplement" shall mean the preliminary
prospectus supplement to the Base Prospectus which describes the Notes and
the offering thereof and is used prior to filing of the Prospectus.
"Prospectus" shall mean the prospectus supplement relating to the Notes
that is first filed pursuant to Rule 424(b) after the Execution Time,
together with the Base Prospectus or, if no filing pursuant to Rule 424(b)
is required, shall mean the prospectus supplement relating to the Notes,
including the Base Prospectus, included in the Registration Statement at
the Effective Date. "Rule 430A Information" means information with respect
to the Notes and the offering of the Notes permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 415," "Rule 424," "Rule 430A" and "Regulation S-K" refer to such
rules or regulations under the Act. Any reference herein to the
Registration Statement, a Preliminary Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, if any, pursuant to Item 12 of Form S-3
which were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the Effective Date of the Registration
Statement or the issue date of the Base Prospectus, such Preliminary
Prospectus Supplement or the Prospectus, as the case may be; and any
reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Base Prospectus, any Preliminary
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement, or the issue date of the Base
Prospectus, to any Preliminary Prospectus Supplement or the Prospectus, as
the case may be, deemed to be incorporated therein by reference.
(ii) As of the Closing Date (as defined below), KBUSA's
representations and warranties in the Basic Documents to which it is a
party and in the Guarantee Agreement to which TERI is a party will be true
and correct in all material respects.
(iii) This Agreement has been duly authorized, executed and delivered
by the Seller. The execution, delivery and performance of this Agreement
and the issuance and sale of the Notes and compliance with the terms and
provisions hereof will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any agreement or
instrument to which the Seller is a party or by which the Seller is bound
or to which any of the properties of the Seller is subject which could
reasonably be expected to have a material adverse effect on the
transactions contemplated herein. The Seller has full corporate power and
authority to cause the Trust to authorize, issue and sell the Notes, all as
contemplated by this Agreement.
(iv) Other than as contemplated by this Agreement or as disclosed in
the Prospectus, there is no broker, finder or other party that is entitled
to receive from the Seller or any of its subsidiaries any brokerage or
finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(v) All legal or governmental proceedings, contracts or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement have
been so described or filed as required.
(vi) The Seller's assignment and delivery of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Trust as of the
Closing Date will vest in the Eligible Lender Trustee on behalf of the
Trust all the Seller's right, title and interest therein, or will result in
a first priority perfected security interest therein, in either case
subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
(vii) The Trust's assignment of the Financed Student Loans to the
Indenture Trustee pursuant to the Indenture will vest in the Indenture
Trustee, for the benefit of the holders of the Notes, a first priority
perfected security interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(viii) The Seller is not, and after giving effect to the offering and
sale of the Notes, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(b) The Seller hereby agrees with the Underwriters that, for all
purposes of this Agreement, the only information furnished to the Seller by the
Underwriters through the Representative specifically for use in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, are the statements relating to stabilization on
the inside cover page of, and the statements under the caption "Underwriting"
in, the preliminary prospectus and the Prospectus.
3. PURCHASE, SALE AND DELIVERY OF THE NOTES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Seller agrees to cause the Trust to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Trust, at a purchase price of 99.81% of the principal
amount of the Class A-1 Notes, at a purchase price of 99.65% of the principal
amount of the Class A-2 Notes, and at a purchase price of 100% of the principal
amount of the Class M Notes the respective principal amounts of each class of
Notes set forth opposite the names of the Underwriters in Schedule I hereto. In
addition, the Seller agrees to cause the Underwriters to be paid an aggregate
structuring fee in connection with the structuring of the Notes and the
Certificates of $914,500.00.
The Seller will deliver the Notes to the Representative for the
respective accounts of the Underwriters, against payment of the purchase price
to or upon the order of the Seller by wire transfer or check in Federal (same
day) Funds, at the office of Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New
York, New York 10038, on September 29, 1999, or at such other time not later
than seven full business days thereafter as the Representative and the Seller
determine, such time being herein referred to as the "Closing Date." The Notes
to be so delivered will be initially represented by one or more Notes of each
class registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC"). The interests of beneficial owners of the Notes will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Notes will be available only under the limited circumstances
specified in the Indenture.
4. OFFERING BY THE UNDERWRITERS. It is understood that, after the
Registration Statement becomes effective, the several Underwriters propose to
offer the Notes for sale to the public (which may include selected dealers) as
set forth in the Prospectus.
5. COVENANTS OF THE SELLER. The Seller covenants and agrees with the
several Underwriters that:
(a) Prior to the termination of the offering of the Notes, the Seller
will not file any amendment of the Registration Statement or supplement to the
Prospectus unless the Seller has furnished the Representative a copy for its
review prior to filing and will not file any such proposed amendment or
supplement to which the Representative reasonably objects. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is otherwise
required under Rule 424(b), the Seller will file the Prospectus, properly
completed, and any supplement thereto, with the Commission pursuant to and in
accordance with the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representative of such
timely filing.
(b) The Seller will advise the Representative promptly of any proposal
to amend or supplement the registration statement as filed or the related
prospectus or the Registration Statement or the Prospectus and will not effect
such amendment or supplementation without the consent of the Representative
prior to the Closing Date, and thereafter will not effect any such amendment or
supplementation to which the Representative reasonably objects; the Seller will
also advise the Representative promptly of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information; and the Seller will also advise the
Representative promptly of the effectiveness of the Registration Statement (if
the Effective Time is subsequent to the execution of this Agreement) and of any
amendment or supplement to the Registration Statement or the Prospectus and of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threat of any proceeding for
that purpose and the Seller will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible the lifting of any issued
stop order.
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Prospectus to comply with the Act or the Exchange Act, the Seller promptly
will prepare and file, or cause to be prepared and filed, with the Commission an
amendment or supplement which will correct such statement or omission, or an
amendment or supplement which will effect such compliance. Neither the consent
of the Representative to, nor the delivery of the several Underwriters of, any
such amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6 hereof.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Seller will cause the Trust to make generally available
to the holders of the Notes an earnings statement of the Trust covering a period
of at least twelve months beginning after the Effective Date which will satisfy
the provisions of Section 11(a) of the Act and Rule 158 of the applicable Rules
and Regulations thereunder. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes the Effective Date, except
that, if such fourth fiscal quarter is the last quarter of the Trust's fiscal
year, "Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Seller will furnish to the Representative copies of the
Registration Statement (two of which will be signed and will include all
exhibits), each related preliminary prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Representative reasonably requests.
(f) The Seller will arrange for the qualification of the Notes for
sale under the laws of the States of New York, Florida, California, Hawaii, and
the District of Columbia, and will continue such qualifications in effect so
long as required for the distribution.
(g) For a period from the date of this Agreement until the retirement
of the Notes, or until such time as the several Underwriters shall cease to
maintain a secondary market in the Notes, whichever occurs first, the Seller
will deliver to the Representative the annual statements of compliance and the
annual independent certified public accountants' reports furnished to the
Indenture Trustee or the Eligible Lender Trustee pursuant to the Sale and
Servicing Agreement, as soon as such statements and reports are furnished to the
Indenture Trustee or the Eligible Lender Trustee.
(h) So long as any of the Notes is outstanding, the Seller will
furnish to the Representative (i) as soon as practicable after the end of the
fiscal year all documents required to be distributed to the holders of the Notes
or filed with the Commission on behalf of the Trust pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any order of the
Commission thereunder and (ii) from time to time, any other information
concerning the Seller as the Representative may reasonably request only insofar
as such information reasonably relates to the Registration Statement or the
transactions contemplated by the Basic Documents.
(i) On or before the Closing Date, the Seller shall mark its
accounting and other records, if any, relating to the Initial Financed Student
Loans and shall instruct the Master Servicer (which shall cause each
Sub-Servicer) to mark the computer records of the Master Servicer (or such
Sub-Servicer) relating to the Financed Student Loans to show the absolute
ownership by the Eligible Lender Trustee on behalf of the Trust of the Financed
Student Loans, and from and after the Closing Date the Seller shall not and
shall require that the Master Servicer (which shall ensure that any
Sub-Servicer) shall not take any action inconsistent with the ownership by the
Eligible Lender Trustee on behalf of the Trust of such Initial Financed Student
Loans, other than as permitted by the Sale and Servicing Agreement.
(j) To the extent, if any, that the rating provided with respect to
the Notes by the rating agency or agencies that initially rate the Notes is
conditional at the time of issuance of the Notes upon the furnishing of
documents or the taking of any other actions by the Seller agreed upon on or
prior to the Closing Date, the Seller shall furnish such documents and take any
such other actions. A copy of any such document shall be provided to the
Representative at the time it is delivered to the rating agencies.
(k) For the period beginning on the date of this Agreement and ending
90 days after the Closing Date, neither the Seller nor any trust originated,
directly or indirectly, by the Seller will, without the prior written consent of
the Representative, offer to sell or sell notes (other than the Notes)
collateralized by, or certificates (other than the Certificates) evidencing an
ownership interest in, student loans; PROVIDED, HOWEVER, that this shall not be
construed to prevent the sale of student loans by the Seller.
(l) The Seller will apply the net proceeds of the offering and the
sale of the Notes and the Certificates that it receives in the manner set forth
in the Prospectus under the caption "Use of Proceeds."
(m) The Seller will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the printing and filing of
the documents (including the Registration Statement and Prospectus) (ii) the
preparation, issuance and delivery of the Notes to the Representative, (iii) the
fees and disbursements of the Seller's counsel and accountants, (iv) the
qualification of the Notes under securities laws in accordance with the
provisions of Section 5(f), including filing fees and the fees and disbursements
of counsel for the Representative in connection therewith and in connection with
the preparation of any blue sky or legal investment survey, if any is requested,
(v) the printing and delivery to the Representative of copies of the
Registration Statement as originally filed and of each amendment thereto, (vi)
the printing and delivery to the Representative of copies of any blue sky or
legal investment survey prepared in connection with the Notes, (vii) any fees
charged by rating agencies for the rating of the Notes, (viii) the fees and
expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc. and (ix) the fees and expenses of
Thompson Hine & Flory LLP in its role as counsel to the Trust incurred as a
result of providing the opinions required by Section 6(h) hereof.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the several Underwriters to purchase and pay for the Notes will be subject to
the accuracy of the representations and warranties on the part of the Seller
herein, to the accuracy of the written statements of officers of the Seller made
pursuant to the provisions of this Section, to the performance by the Seller of
its obligations hereunder and to the following additional conditions precedent:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Effective Time shall have occurred not later than 6:00
p.m., New York City time, on the date of this Agreement or such later time or
date as shall have been consented to by the Representative.
(b) If the Effective Time is prior to the execution and delivery of
this Agreement, the Prospectus and any supplements thereto shall have been filed
with the Commission in accordance with the Rules and Regulations and Section
5(a) hereof. Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or the Representative, shall be contemplated by the Commission.
(c) The Representative shall have received a letter, dated on or prior
to the Closing Date of Ernst & Young LLP on behalf of the Seller confirming that
such accountants are independent public accountants within the meaning of the
Act and the applicable published Rules and Regulations thereunder, and
substantially in the form of the drafts to which the Representative has
previously agreed and otherwise in form and substance reasonably satisfactory to
the Representative and its counsel.
(d) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, KBUSA or KeyCorp which, in the judgment of the Representative,
materially impairs the investment quality of the Notes or makes it impractical
or inadvisable to market the Notes; (ii) any downgrading in the rating of any
debt securities of KBUSA or KeyCorp by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any debt securities of KBUSA or KeyCorp (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any suspension or
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange; (iv) any suspension
of trading of any securities of KBUSA or KeyCorp on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by Federal or New
York authorities; or (vi) any outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, if the effect of any such event specified in this clause (vi)
in the judgment of the Representative makes it impracticable or inadvisable to
proceed with the public offering or the delivery of the Notes on the terms and
in the manner contemplated in the Prospectus.
(e) The Representative shall have received an opinion of Forrest F.
Stanley, Esq., General Counsel of KBUSA, as counsel for KBUSA, as the Seller,
the Master Servicer, the Cap Provider and the Administrator, dated the Closing
Date, in the form attached hereto as Exhibit A, or as is otherwise satisfactory
in form and substance to the Representative and its counsel.
(f) The Representative shall have received an opinion of Thompson Hine
& Flory LLP, counsel to the Seller, dated the Closing Date, in the form attached
hereto as Exhibit B, or as is otherwise satisfactory in form and substance to
the Representative and its counsel.
(g) The Representative shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to the Seller, dated the Closing Date and satisfactory in
form and substance to the Representative and its counsel, to the effect that the
statements in the Prospectus under the headings "Summary of Terms--Income Tax
Consequences" and "Pennsylvania Income Tax Consequences--Pennsylvania Income and
Franchise Tax Consequences with Respect to the Notes" accurately describe the
material Pennsylvania tax consequences to holders of the Notes.
(h) The Representative shall have received an opinion addressed to the
several Underwriters of Thompson Hine & Flory LLP, in its capacity as Federal
tax and ERISA counsel for the Trust, to the effect that the statements in the
Prospectus under the headings "Summary of Terms--Tax Consequences" and "Federal
Tax Consequences for Trusts for which a Partnership Election is Made--Tax
Consequences to Holders of the Notes" accurately describe the material Federal
income tax consequences to holders of the Notes, and the statements in the
Prospectus under the headings "Summary of Terms--ERISA Considerations" and
"ERISA Considerations" to the extent that they constitute statements of matters
of law or legal conclusions with respect thereto, have been prepared or reviewed
by such counsel and accurately describe the material consequences to holders of
the Notes under ERISA. Thompson Hine & Flory LLP, in its capacity as special
counsel to the Trust, shall have delivered an opinion with respect to the
characterization of the transfer of the Initial Financed Student Loans.
(i) The Representative shall have received an opinion addressed to the
several Underwriters of Stroock & Stroock & Lavan LLP, in its capacity as
special counsel to the several Underwriters, dated the Closing Date, with
respect to the validity of the Notes and the Certificates and such other related
matters as the Representative shall reasonably require and the Seller shall have
furnished or caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(j) The Representative shall have received an opinion of Dean Blakey &
Moskowitz, special student loan counsel to the Representative and, in the case
of clause (iii) below, special student loan counsel to the Eligible Lender
Trustee, dated the Closing Date, satisfactory in form and substance to the
Representative, to the effect that:
(i) the agreements implementing the Program, (including the
Coordination Agreements) and the Relevant Documents (as defined in such
opinion), and the transactions contemplated by the Relevant Documents,
conform in all material respects to the applicable requirements of the
Higher Education Act, and that, upon the due authorization, execution and
delivery of the Relevant Documents and the consummation of such
transactions, the Financed Federal Loans, legal title to which will be held
by the Eligible Lender Trustee on behalf of the Trust, will qualify,
subject to compliance with all applicable origination and servicing
requirements, for all applicable federal assistance payments, including
federal reinsurance and federal interest subsidies and special allowance
payments;
(ii) such counsel has examined the Prospectus, and nothing has come to
such counsel's attention that would lead such counsel to believe that,
solely with respect to the Higher Education Act and the student loan
business, the Prospectus or any amendment or supplement thereto as of the
respective dates thereof or on the Closing Date contains an untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements therein not misleading; and
(iii) the Eligible Lender Trustee is an "eligible lender" as such term
is defined in Section 435(d) of the Higher Education Act for purposes of
holding legal title to the Financed Federal Loans.
(k) The Representative shall have received an opinion of counsel to
PHEAA, dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, to the effect that:
(i) PHEAA has been duly organized and is validly existing as an agency
of the Commonwealth of Pennsylvania in good standing under the laws thereof
with full power and authority (corporate and other) to own its properties
and conduct its business, as presently conducted by it, and to enter into
and perform its obligations under the PHEAA Sub-Servicing Agreement and the
Guarantee Agreement (and the agreements with the Department under Section
428 of the Higher Education Act to the extent relevant to PHEAA's
obligations under such Guarantee Agreement) to which it is a party, and had
at all relevant times, and now has, the power, authority and legal right to
service the Financed Student Loans it is servicing, to guarantee the
Financed Federal Loans covered by such Guarantee Agreement and to receive,
subject to compliance with all applicable conditions, restrictions and
limitations of the Higher Education Act, reinsurance payments from the
Department with respect to claims paid by it on such Financed Federal
Loans.
(ii) PHEAA is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render any Financed Student Loan or PHEAA's obligation under its Guarantee
Agreement unenforceable by or on behalf of the Trust.
(iii) Each of the PHEAA Sub-Servicing Agreement and the Guarantee
Agreement to which it is a party (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
PHEAA's obligations under such Guarantee Agreement) to which PHEAA is a
party has been duly authorized, executed and delivered by PHEAA and is the
legal, valid and binding obligation of PHEAA enforceable against PHEAA in
accordance with its terms, notwithstanding the existence of any doctrine of
sovereign immunity except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by PHEAA of the PHEAA Sub-
Servicing Agreement or the Guarantee Agreement to which it is a party, nor
the consummation by PHEAA of the transactions contemplated therein nor the
fulfillment of the terms thereof by PHEAA will conflict with, result in a
breach, violation or acceleration of, or constitute a default under, any
term or provision of the certificate of incorporation or by-laws of PHEAA
or of any indenture or other agreement or instrument to which PHEAA is a
party or by which PHEAA is bound, or result in a violation of or contravene
the terms of any statute, order or regulation applicable to PHEAA of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over PHEAA.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
PHEAA before or by any governmental authority that might materially and
adversely affect the performance by PHEAA of its obligations under, or the
validity or enforceability of, the PHEAA Sub-Servicing Agreement or the
Guarantee Agreement (or the agreements with the Department under Section
428 of the Higher Education Act to the extent relevant to PHEAA's
obligations under such Guarantee Agreement) to which it is a party.
(vi) Nothing has come to such counsel's attention that would lead such
counsel to believe that the representations and warranties of PHEAA
contained in the PHEAA Sub-Servicing Agreement are other than as stated
therein.
(l) The Representative shall have received an opinion of counsel to
Great Lakes, dated the Closing Date and satisfactory in form and substance to
the Representative and its counsel, to the effect that:
(i) Great Lakes has been duly organized and is validly existing as a
Wisconsin corporation in good standing under the laws thereof with full
power and authority (corporate and other) to own its properties and conduct
its business, as presently conducted by it, and to enter into and perform
its obligations under the Great Lakes Sub-Servicing Agreement, and had at
all relevant times, and now has, the power, authority and legal right to
service the Financed Student Loans it is servicing.
(ii) The Great Lakes Sub-Servicing Agreement has been duly authorized,
executed and delivered by Great Lakes and is the legal, valid and binding
obligation of Great Lakes enforceable against Great Lakes in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) Neither the execution and delivery by Great Lakes of the Great
Lakes Sub-Servicing Agreement, nor the consummation by Great Lakes of the
transactions contemplated therein nor the fulfillment of the terms thereof
by Great Lakes will conflict with, result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of
the certificate of incorporation or by-laws of Great Lakes or of any
indenture or other agreement or instrument to which Great Lakes is a party
or by which Great Lakes is bound, or result in a violation of or contravene
the terms of any statute, order or regulation applicable to Great Lakes of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over Great Lakes.
(iv) There are no actions, proceedings or investigations pending or,
to the best of such counsel's knowledge after due inquiry, threatened
against Great Lakes before or by any governmental authority that might
materially and adversely affect the performance by Great Lakes of its
obligations under, or the validity or enforceability of, the Great Lakes
Sub-Servicing Agreement.
(v) Nothing has come to such counsel's attention that would lead such
counsel to believe that the representations and warranties of Great Lakes
contained in the Great Lakes Sub-Servicing Agreement are other than as
stated therein.
(m) The Representative shall have received an opinion of counsel to
the Massachusetts Higher Education Assistance Corporation, now doing business as
American Student Assistance, a Massachusetts non-profit corporation ("ASA"),
dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, to the effect that:
(i) ASA has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the Commonwealth
of Massachusetts with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Guarantee Agreement
(and the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to ASA's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) ASA is duly qualified to do business and is in good standing, and
has obtained all necessary licenses and approvals in each jurisdiction in
which failure to qualify or to obtain such license or approval would render
ASA's obligation under its Guarantee Agreement to guarantee the Financed
Federal Loans covered thereby unenforceable by or on behalf of the Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
ASA's obligations under such Guarantee Agreement) to which ASA is a party
has been duly authorized, executed and delivered by ASA and is the legal,
valid and binding obligation of ASA enforceable against ASA in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by ASA of the Guarantee
Agreement to which it is a party, nor the consummation by ASA of the
transactions contemplated therein nor the fulfillment of the terms thereof
by ASA will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of ASA or of any indenture or other agreement
or instrument to which ASA is a party or by which ASA is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to ASA of any court, regulatory body, administrative
agency or governmental body having jurisdiction over ASA.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
ASA before or by any governmental authority that might materially and
adversely affect the performance by ASA of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to ASA's obligations under such Guarantee Agreement) to
which it is a party.
(n) The Representative shall have received an opinion of counsel to
the Nebraska Student Loan Program ("NSLP"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) NSLP has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nebraska with
full power and authority (corporate and other) to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Guarantee Agreement (and the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to NSLP's obligations under such Guarantee Agreement) to
which it is a party, and had at all relevant times, and now has, the power,
authority and legal right to guarantee the Financed Federal Loans covered
by such Guarantee Agreement and to receive, subject to compliance with all
applicable conditions, restrictions and limitations of the Higher Education
Act, reinsurance payments from the Department with respect to claims paid
by it on such Financed Federal Loans.
(ii) NSLP is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render NSLP's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
NSLP's obligations under such Guarantee Agreement) to which NSLP is a party
has been duly authorized, executed and delivered by NSLP and is the legal,
valid and binding obligation of NSLP enforceable against NSLP in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by NSLP of the Guarantee
Agreement to which it is a party, nor the consummation by NSLP of the
transactions contemplated therein nor the fulfillment of the terms thereof
by NSLP will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of NSLP or of any indenture or other agreement
or instrument to which NSLP is a party or by which NSLP is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to NSLP of any court, regulatory body, administrative
agency or governmental body having jurisdiction over NSLP.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
NSLP before or by any governmental authority that might materially and
adversely affect the performance by NSLP of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to NSLP's obligations under such Guarantee Agreement) to
which it is a party.
(o) The Representative shall have received an opinion of counsel to
the California Student Aid Commission ("CSAC"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) CSAC has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of
California with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to CSAC's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) CSAC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render CSAC's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
CSAC's obligations under such Guarantee Agreement) to which CSAC is a party
has been duly authorized, executed and delivered by CSAC and is the legal,
valid and binding obligation of CSAC enforceable against CSAC in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by CSAC of the Guarantee
Agreement to which it is a party, nor the consummation by CSAC of the
transactions contemplated therein nor the fulfillment of the terms thereof
by CSAC will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of CSAC or of any indenture or other agreement
or instrument to which CSAC is a party or by which CSAC is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to CSAC of any court, regulatory body, administrative
agency or governmental body having jurisdiction over CSAC.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
CSAC before or by any governmental authority that might materially and
adversely affect the performance by CSAC of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to CSAC's obligations under such Guarantee Agreement) to
which it is a party.
(p) The Representative shall have received an opinion of counsel to
the Educational Credit Management Corporation ("ECMC"), dated the Closing Date
and satisfactory in form and substance to the Representative and its counsel, to
the effect that:
(i) ECMC has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of
Minnesota with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to ECMC's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) ECMC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render ECMC's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
ECMC's obligations under such Guarantee Agreement) to which ECMC is a party
has been duly authorized, executed and delivered by ECMC and is the legal,
valid and binding obligation of ECMC enforceable against ECMC in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by ECMC of the Guarantee
Agreement to which it is a party, nor the consummation by ECMC of the
transactions contemplated therein nor the fulfillment of the terms thereof
by ECMC will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of ECMC or of any indenture or other agreement
or instrument to which ECMC is a party or by which ECMC is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to ECMC of any court, regulatory body, administrative
agency or governmental body having jurisdiction over ECMC.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
ECMC before or by any governmental authority that might materially and
adversely affect the performance by ECMC of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to ECMC's obligations under such Guarantee Agreement) to
which it is a party.
(q) The Representative shall have received an opinion of counsel to
the New York State Higher Education Services Corporation ("HESC"), dated the
Closing Date and satisfactory in form and substance to the Representative and
its counsel, to the effect that:
(i) HESC has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of New
York with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to HESC's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) HESC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render HESC's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
HESC's obligations under such Guarantee Agreement) to which HESC is a party
has been duly authorized, executed and delivered by HESC and is the legal,
valid and binding obligation of HESC enforceable against HESC in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by HESC of the Guarantee
Agreement to which it is a party, nor the consummation by HESC of the
transactions contemplated therein nor the fulfillment of the terms thereof
by HESC will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of HESC or of any indenture or other agreement
or instrument to which HESC is a party or by which HESC is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to HESC of any court, regulatory body, administrative
agency or governmental body having jurisdiction over HESC.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
HESC before or by any governmental authority that might materially and
adversely affect the performance by HESC of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to HESC's obligations under such Guarantee Agreement) to
which it is a party.
(r) The Representative shall have received an opinion of counsel to
the United Student Aid Funds, Inc. ("USAF"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) USAF has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of
Indiana with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to USAF's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) USAF is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render USAF's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
USAF's obligations under such Guarantee Agreement) to which USAF is a party
has been duly authorized, executed and delivered by USAF and is the legal,
valid and binding obligation of USAF enforceable against USAF in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by USAF of the Guarantee
Agreement to which it is a party, nor the consummation by USAF of the
transactions contemplated therein nor the fulfillment of the terms thereof
by USAF will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of USAF or of any indenture or other agreement
or instrument to which USAF is a party or by which USAF is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to USAF of any court, regulatory body, administrative
agency or governmental body having jurisdiction over USAF.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
USAF before or by any governmental authority that might materially and
adversely affect the performance by USAF of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to USAF's obligations under such Guarantee Agreement) to
which it is a party.
(s) The Representative shall have received an opinion of Kotin,
Crabtree & Strong, counsel to The Education Resources Institute, Inc., a
Massachusetts non-profit corporation ("TERI"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) TERI has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Massachusetts with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Guarantee Agreement to
which it is a party, and had at all relevant times, and now has, the power,
authority and legal right to guarantee the Financed Private Loans covered
by such Guarantee Agreement.
(ii) TERI is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render TERI's obligation under its Guarantee Agreement to guarantee the
Financed Private Loans unenforceable by or on behalf of the Trust.
(iii) The Guarantee Agreement to which TERI is a party has been duly
authorized, executed and delivered by TERI and is the legal, valid and
binding obligation of TERI enforceable against TERI in accordance with its
terms, except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by TERI of the Guarantee
Agreement to which it is a party, nor the consummation by TERI of the
transactions contemplated therein nor the fulfillment of the terms thereof
by TERI will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of TERI or of any indenture or other agreement
or instrument to which TERI is a party or by which TERI is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to TERI of any court, regulatory body, administrative
agency or governmental body having jurisdiction over TERI.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
TERI before or by any governmental authority that might materially and
adversely affect the performance by TERI of its obligations under, or the
validity or enforceability of, the Guarantee Agreement to which it is a
party.
(t) The Representative shall have received an opinion of counsel to
HEMAR Insurance Company of America, an indirect subsidiary of SLM Holding
Corporation ("HICA"), dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, to the effect that:
(i) HICA has been duly incorporated and is validly existing as a for
profit insurance corporation in good standing under the laws of the state
of South Dakota with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Surety Bonds and the
Endorsement described in the preliminary prospectus dated September 20,
1999 and the Prospectus dated September 30, 1999 and had at all relevant
times, and now has, the power, authority and legal right to insure the
Financed Private Loans covered by such Surety Bonds and the Endorsement
thereto. The Financed Private Loans are subject to the terms and conditions
of the Surety Bonds and the Endorsement under which they have been insured.
(ii) HICA is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render HICA's obligation under the Surety Bonds and the Endorsement thereto
to insure the Financed Private Loans unenforceable by or on behalf of the
Trust.
(iii) The Surety Bonds and the Endorsement thereto to which HICA is a
party have been duly authorized, executed and delivered by HICA and are the
legal, valid and binding obligations of HICA enforceable against HICA in
accordance with its terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
(y) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by HICA of the Surety Bonds
and the Endorsement thereto to which it is a party, nor the consummation by
HICA of the transactions contemplated therein nor the fulfillment of the
terms thereof by HICA will conflict with, result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of
the certificate of incorporation or by-laws of HICA or of any indenture or
other agreement or instrument to which HICA is a party or by which HICA is
bound, or result in a violation of or contravene the terms of any statute,
order or regulation applicable to HICA of any court, regulatory body,
administrative agency or governmental body having jurisdiction over HICA.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
HICA before or by any governmental authority that might materially and
adversely affect the performance by HICA of its obligations under, or the
validity or enforceability of, the Surety Bonds and the Endorsement thereto
to which it is a party.
(u) The Representative shall have received an opinion of Seward &
Kissel, counsel to the Indenture Trustee, dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) The Indenture Trustee is a New York banking corporation duly
incorporated or organized under the laws of New York.
(ii) The Indenture Trustee has the full corporate trust power to
accept the office of indenture trustee under the Indenture, the Sale and
Servicing Agreement and the Administration Agreement.
(iii) The execution and delivery of the Indenture, its acceptance of
the Sale and Servicing Agreement and the performance by the Indenture
Trustee of its obligations under the Indenture, the Sale and Servicing
Agreement and the Administration Agreement have been duly authorized by all
necessary action of the Indenture Trustee and each has been duly executed
and delivered by the Indenture Trustee.
(iv) The Indenture, the Sale and Servicing Agreement and the
Administration Agreement constitute valid and binding obligations of the
Indenture Trustee enforceable against the Indenture Trustee in accordance
with their terms under the laws of the State of New York and the Federal
law of the United States.
(v) The execution and delivery by the Indenture Trustee of the
Indenture and the Administration Agreement and the acceptance of the Sale
and Servicing Agreement do not require any consent, approval or
authorization of, or any registration or filing with, any New York or
United States Federal governmental authority, other than the qualification
of the Indenture Trustee under the Trust Indenture Act.
(vi) Each of the Notes has been duly authenticated by the Indenture
Trustee.
(vii) Neither the consummation by the Indenture Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture or the Administration Agreement nor the fulfillment of the terms
thereof by the Indenture Trustee will conflict with, result in the breach
or violation of, or constitute a default under any law or the charter,
by-laws or other organizational documents of the Indenture Trustee or the
terms of any indenture or other agreement or instrument known to such
counsel and to which the Indenture Trustee or any of its subsidiaries is a
party or is bound or any judgment, order or decree known to such counsel to
be applicable to the Indenture Trustee or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Indenture Trustee or any of its
subsidiaries.
(viii) There are no actions, suits or proceedings pending or, to the
best of such counsel's knowledge after due inquiry, threatened against the
Indenture Trustee (as indenture trustee under the Indenture or in its
individual capacity) before or by any governmental authority that might
materially and adversely affect the performance by the Indenture Trustee of
its obligations under, or the validity or enforceability of, the Indenture,
the Sale and Servicing Agreement or the Administration Agreement.
(ix) The execution, delivery and performance by the Indenture Trustee
of the Indenture and the Administration Agreement, and the acceptance of
the Sale and Servicing Agreement, will not subject any of the property or
assets of the Trust or any portion thereof, to any lien created by or
arising under the Indenture Trustee that are unrelated to the transactions
contemplated in such agreements.
(v) The Representative shall have received an opinion of counsel to
the Eligible Lender Trustee, dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, to the effect that:
(i) The Eligible Lender Trustee is a national banking association duly
incorporated or organized and validly existing under the laws of the United
States.
(ii) The Eligible Lender Trustee has the full corporate trust power to
accept the office of eligible lender trustee under the Trust Agreement and
to enter into and perform its obligations under the Trust Agreement, the
Sale and Servicing Agreement and, on behalf of the Trust, under the
Indenture, the Sale and Servicing Agreement, the Administration Agreement
and the Guarantee Agreements.
(iii) The execution and delivery of the Trust Agreement and the Sale
and Servicing Agreement and, on behalf of the Trust, of the Indenture, the
Sale and Servicing Agreement, the Administration Agreement and the
Guarantee Agreements, and the performance by the Eligible Lender Trustee of
its obligations under the Trust Agreement, the Indenture, the Sale and
Servicing Agreement, the Administration Agreement and the Guarantee
Agreements have been duly authorized by all necessary action of the
Eligible Lender Trustee and each has been duly executed and delivered by
the Eligible Lender Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement and the
Administration Agreement constitute valid and binding obligations of the
Eligible Lender Trustee enforceable against the Eligible Lender Trustee in
accordance with their terms.
(v) The execution and delivery by the Eligible Lender Trustee of the
Trust Agreement and the Sale and Servicing Agreement and, on behalf of the
Trust, of the Indenture, the Sale and Servicing Agreement, the
Administration Agreement and the Guarantee Agreements do not require any
consent, approval or authorization of, or any registration or filing with,
any applicable governmental authority.
(vi) Each of the Certificates has been duly executed and delivered by
the Eligible Lender Trustee, as eligible lender trustee and authenticating
agent. Each of the Notes has been duly executed and delivered by the
Eligible Lender Trustee, on behalf of the Trust.
(vii) Neither the consummation by the Eligible Lender Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture, the Trust Agreement or the Administration Agreement nor the
fulfillment of the terms thereof by the Eligible Lender Trustee will
conflict with, result in a breach or violation of, or constitute a default
under any law or the charter, by-laws or other organizational documents of
the Eligible Lender Trustee or the terms of any indenture or other
agreement or instrument known to such counsel and to which the Eligible
Lender Trustee or any of its subsidiaries is a party or is bound or any
judgment, order or decree known to such counsel to be applicable to the
Eligible Lender Trustee or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Eligible Lender Trustee or any of its subsidiaries.
(viii) There are no actions, suits or proceedings pending or, to the
best of such counsel's knowledge after due inquiry, threatened against the
Eligible Lender Trustee (as eligible lender trustee under the Trust
Agreement or in its individual capacity) before or by any governmental
authority that might materially and adversely affect the performance by the
Eligible Lender Trustee of its obligations under, or the validity or
enforceability of, the Trust Agreement or the Sale and Servicing Agreement.
(ix) The execution, delivery and performance by the Eligible Lender
Trustee of the Sale and Servicing Agreement, the Indenture, the Trust
Agreement, the Administration Agreement or any Guarantee Agreement will not
subject any of the property or assets of the Trust or any portion thereof,
to any lien created by or arising under the Eligible Lender Trustee that
are unrelated to the transactions contemplated in such agreements.
(w) The Representative shall have received an opinion of Pepper
Hamilton LLP, Delaware counsel to the Trust, dated the Closing Date, in form and
substance satisfactory to the Representative and its counsel.
(x) The Representative shall have received an opinion of Pepper
Hamilton LLP, counsel to Bank One Delaware Inc. in its capacity as Delaware
Trustee under the Trust Agreement, dated the Closing Date, in form and substance
satisfactory to the Representative and its counsel.
(y) The Representative shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the
principal financial officer or the principal accounting officer of KBUSA in
which such officers shall state that, to the best of their knowledge after
reasonable investigation, (i) the representations and warranties of KBUSA,
contained in each Basic Document to which it is a party, are true and correct in
all material respects, that KBUSA has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied under such agreements,
in whatever capacity it is a party to such agreements, at or prior to the
Closing Date, and that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission, and (ii) since June 30,
1999, except as may be disclosed in the Prospectus or in such certificate, no
material adverse change, or any development involving a prospective material
adverse change, in or affecting particularly the business or properties of the
Trust or KBUSA, as applicable, has occurred.
(z) The Representative shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the
principal financial officer or the principal accounting officer of each of the
Sub-Servicers in which such officers shall state that, to the best of their
knowledge after reasonable investigation, (i) the representations and warranties
of such Sub-Servicer contained in the related Subservicing Agreement are true
and correct in all material respects, and that such Sub-Servicer has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied under such agreements at or prior to the Closing Date, and (ii) since
June 30, 1999 except as may be disclosed in the Prospectus or in such
certificate, no material adverse change, or any development involving a
prospective material adverse change, in or affecting particularly the business
or properties of such Sub-Servicer.
(aa) The Representative shall have received evidence satisfactory to
it that, on or before the Closing Date, UCC-1 financing statements have been or
are being filed in the office of the Secretary of State of the States of Ohio,
Pennsylvania, Wisconsin, Delaware, New York and Illinois, as applicable,
reflecting the transfer of the interest of the Seller in the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Trust and the proceeds
thereof to the Trust and the grant of the security interest by the Trust in the
Financed Student Loans and the proceeds thereof to the Indenture Trustee.
(bb) Each Class of Notes has been given at least the following ratings
from Fitch IBCA, Inc. ("Fitch"), Moody's Investors Service, Inc. ("Moody's"),
and Standard & Poor's Ratings Services, a division of the McGraw-Hill Companies,
Inc. ("S&P" and each a "Rating Agency"), and no Rating Agency shall have placed
any class of Notes under surveillance or review with possible negative
implications:
CLASS OF NOTES FITCH Moody's S&P
Class A-1 AAA Aaa AAA
Class A-2 AAA Aaa AAA
Class M AA Aa3 AA
(cc) The issuance of the Notes and the Certificates shall not have
resulted in a reduction or withdrawal by any Rating Agency of the current rating
of any outstanding securities issued or originated by the Seller or any of its
affiliates.
(dd) On the Closing Date, $65,000,000 principal amount of the Asset
Backed Certificates shall have been issued and sold.
(ee) TERI shall have furnished to the Representative a certificate of
TERI, signed by the President or any Executive Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to TERI in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ff) PHEAA shall have furnished to the Representative a certificate of
PHEAA, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to PHEAA in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(gg) ASA shall have furnished to the Representative a certificate of
ASA, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to ASA in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(hh) Great Lakes shall have furnished to the Representative a
certificate of Great Lakes, signed by the President or any Executive Vice
President, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Prospectus (excluding any documents
incorporated by reference therein) and this Agreement and that, to the best of
his knowledge any information with respect to Great Lakes in the Prospectus, as
of its date, did not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(ii) NSLP shall have furnished to the Representative a certificate of
NSLP, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to NSLP in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(jj) CSAC shall have furnished to the Representative a certificate of
CSAC, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to CSAC in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(kk) ECMC shall have furnished to the Representative a certificate of
ECMC, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to ECMC in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ll) HESC shall have furnished to the Representative a certificate of
HESC, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to HESC in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(mm) USAF shall have furnished to the Representative a certificate of
USAF, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to USAF in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(nn) HICA shall have furnished to the Representative a certificate of
HICA, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to HICA in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(oo) Each of the Basic Documents shall have been executed and
delivered by the parties thereto. Each of the Sub-Servicers shall have executed
and delivered the related Sub-Servicing Agreement. Each of the Guarantors shall
have executed and delivered the related Guarantee Agreement.
The Seller will provide or cause to be provided to the Representative
such conformed copies of such of the foregoing opinions, certificates, letters
and documents as the Representative reasonably requests.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Seller will indemnify and
hold each Underwriter harmless against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
(x) the Registration Statement, the Preliminary Prospectus Supplement, the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (y) the Prospectus or any amendment or supplement thereto or any related
Preliminary Prospectus Supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; PROVIDED, HOWEVER, that the Seller will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the Seller
by any Underwriter through the Representative specifically for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Seller against any losses, claims, damages or liabilities
to which the Seller may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in (x) the Registration Statement, the
Preliminary Prospectus Supplement, the Prospectus or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (y) the Prospectus or any
amendment or supplement thereto or any related Preliminary Prospectus
Supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information relating to
such Underwriter furnished to the Seller by such Underwriter through the
Representative specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Seller in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by the indemnified party of the counsel appointed
by the indemnifying party, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In no event shall the
indemnifying party be liable for fees and expenses for more than one counsel
separate from their own counsel for all indemnified parties in connection with
any one action or related actions in the same jurisdiction arising out of the
same general allegations or circumstances unless any such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to or in
conflict with those available to the other indemnified parties and in the
judgment of such counsel it is advisable for such indemnified party to employ
separate counsel. An indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnifying party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Seller on the
one hand and the Underwriters on the other from the offering of the Notes or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Seller on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Seller on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Seller bear to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Seller or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (d) were
determined by PRO RATa allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first sentence
of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Notes underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, except as may be provided in any
agreement among the Underwriters relating to the offering of the Notes. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Underwriters
in this subsection (d) to contribute are several in proportion their respective
underwriting obligations and not joint.
(e) The obligations of the Seller under this Section shall be in
addition to any liability which the Seller may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller, to each officer of the Seller
who has signed the Registration Statement and to each person, if any, who
controls the Seller within the meaning of the Act.
8. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement or contained in certificates of officers of the
Seller submitted pursuant hereto shall remain operative and in full force and
effect, regardless of any investigation or statement as to the results thereof,
made by or on behalf of any Underwriter, the Seller or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Notes. If for any reason the purchase of
the Notes by the Underwriters is not consummated, the Seller shall remain
responsible for the expenses to be paid or reimbursed by the Seller pursuant to
Section 5 and the respective obligations of the Seller and the Underwriters
pursuant to Section 7 shall remain in effect. If for any reason the purchase of
the Notes by the Underwriters is not consummated (other than pursuant to Section
9), the Seller will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Notes.
9. FAILURE TO PURCHASE THE NOTES. If any Underwriter or Underwriters
default in their obligations to purchase its portion of the Notes hereunder and
the aggregate principal amount of the Notes that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount of the Notes, the Representative may make arrangements
satisfactory to the Seller for the purchase of such Notes by other persons,
including any of the Underwriters, but if no such arrangements are made by the
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Notes that
such defaulting Underwriters agreed but failed to purchase. If any Underwriter
or Underwriters so default and the aggregate principal amount of the Notes with
respect to such default or defaults exceeds 10% of the total principal amount of
the Notes and arrangements satisfactory to the Representative and the Seller for
the purchase of such Notes by other persons are not made within 36 hours after
such default, this Agreement will terminate without liability on the part of any
non-defaulting Underwriter or the Seller, except as provided in Section 7. As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter or Underwriters from liability for its default.
10. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative at 11 Madison Avenue, New York, NY 10010, Attention:
Joseph Fashano; if sent to the Seller, will be mailed, delivered or telegraphed
and confirmed to it at Key Bank USA, National Association, 800 Superior Avenue,
Cleveland, OH 44144, Attention: Senior Vice President, Education Lending;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter. Any such
notice will take effect at the time of receipt.
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligations hereunder.
12. REPRESENTATION OF UNDERWRITERS. The Representative shall act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representative will be binding upon all the
Underwriters.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. This Agreement will be governed by, and construed
in accordance with, the laws of the State of New York.
<PAGE>
If the foregoing is in accordance with the understanding of the
Representative of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Seller and the several Underwriters in accordance with its terms.
Very truly yours,
KEY BANK USA, NATIONAL
ASSOCIATION
By: /s/ Donald Schilling
----------------------------
Name: Donald Schilling
Title: Senior Vice President
The foregoing Note Underwriting
Agreement is hereby confirmed
and accepted as of the date
first written above.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Paul Vambutas
---------------------
Name: Paul Vambutas
Title: Vice President
Acting on behalf of itself and as
Representative of the several Underwriters.
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
CLASS A-1 Class A-2 CLASS M
<S> <C> <C> <C>
Credit Suisse First Boston Corporation $184,800,000.00 $412,500,000.00 $30,000,000.00
McDonald Investments Inc., a wholly owned subsidiary $ 95,200,000.00 $212,500,000.00 $ 0
of KeyCorp......................................
Total........................................... $280,000,000.00 $625,000,000.00 $30,000,000.00
</TABLE>
<PAGE>
APPENDIX A
[Form of Opinion of Counsel to Key Bank USA, National Association]
September 30, 1999
Credit Suisse First Boston Corporation Moody's Investor Service, Inc.
11 Madison Avenue 99 Church Street, 4th Floor
New York, New York 10010 New York, New York 10007
Bank One, National Association Fitch IBCA, Inc.
1 Bank One Plaza, Suite IL1-0126 One State Street Plaza
Chicago, Illinois 60670-0126 New York, New York 10004
Bankers Trust Company Standard & Poor's Ratings Group
Four Albany Street 26 Broadway, 15th Floor
New York, New York 10006 New York, New York 10004
Re: KEYCORP STUDENT LOAN TRUST 1999-B
Gentlemen:
I am the General Counsel of Key Bank USA, National Association (the
"Bank") and have acted as counsel to the Bank in connection with the issuance
and sale by the KeyCorp Student Loan Trust 1999-B (the "Trust") of (i) Floating
Rate Class A-1 Asset Backed Notes in the aggregate principal amount of
$280,000,000, Floating Rate Class A-2 Asset Backed Notes in the aggregate
principal amount of $625,000,000, and Floating Rate Class M Asset Backed Notes
in the aggregate principal amount of $30,000,000, pursuant to the Note
Underwriting Agreement dated September 30, 1999 between the Bank and Credit
Suisse First Boston Corporation (the "Note Underwriting Agreement") and (ii)
Floating Rate Asset Backed Certificates in the aggregate principal amount of
$65,000,000, pursuant to the Certificate Underwriting Agreement dated September
30, 1999 between the Bank and Credit Suisse First Boston Corporation (the
"Certificate Underwriting Agreement" and, together with the Note Underwriting
Agreement, the "Underwriting Agreements"). Except as otherwise indicated herein,
capitalized terms are defined as set forth in the Underwriting Agreements. As
used herein, "Principal Documents" shall mean, collectively, (a) the Sale and
Servicing Agreement, the Great Lakes Sub-Servicing Agreement, the PHEAA
Sub-Servicing Agreement, the Trust Agreement, the Cap Agreement and the
Administration Agreement, and (b) the Guarantee Agreement to which the Bank,
TERI, and the Eligible Lender Trustee are parties.
Based upon and subject to the limitations and qualifications set forth
below, I am of the opinion that:
(1) The Bank has been duly organized and is validly existing as a
national banking association in good standing under the laws of the United
States of America, with corporate power and authority to own its properties and
to conduct its business as now conducted by it and to enter into and perform its
obligations under the Underwriting Agreements and the Principal Documents, and
had, at all relevant times, and now has the corporate power and authority, and
legal right, to acquire, own, and sell the Initial Financed Student Loans.
(2) The Bank has duly authorized, executed, and delivered the written
order to the Eligible Lender Trustee to authenticate the Certificates. When the
Certificates have been duly executed, authenticated, and delivered in accordance
with the Trust Agreement and the Certificates have been delivered and paid for
pursuant to the Certificate Underwriting Agreement, the Certificates will be
validly issued and entitled to the benefits of the Trust Agreement, subject to
the General Qualifications (as defined in Appendix A).
(3) The Bank has duly authorized, executed, and delivered the written
order to the Eligible Lender Trustee to execute and deliver the Issuer Order to
the Indenture Trustee. When the Notes have been duly executed, delivered, and
authenticated in accordance with the Indenture and delivered and paid for
pursuant to the Note Underwriting Agreement, the Notes will be validly issued
and entitled to the benefits of the Indenture, subject to the General
Qualifications.
(4) The Bank has duly authorized, executed, and delivered the
Underwriting Agreements and the Principal Documents and such Principal Documents
are legal, valid, and binding obligations of the Bank, enforceable against the
Bank in accordance with their terms, subject to the General Qualifications.
(5) Neither the transfer of the Initial Financed Loans by the Bank to
the Eligible Lender Trustee on behalf of the Trust, nor the assignment by the
Bank of the Trust Estate to the Trust, nor the grant by the Trust of the
security interest in the Collateral to the Indenture Trustee pursuant to the
Indenture, nor the execution and delivery by the Bank of the Underwriting
Agreements and the Principal Documents, nor the consummation of the transactions
contemplated by the Underwriting Agreements or the Principal Documents nor the
performance by the Bank of its obligations thereunder will (i) violate the
Articles of Association and by-laws, as amended, of the Bank, (ii) breach, or
result in a default under or acceleration of, any existing obligation of the
Bank in any indenture, agreement, or instrument actually known to me, after a
reasonable investigation, which breach or default would reasonably be expected
to have a material adverse effect on the condition of the Bank, financial or
otherwise, or adversely effect the transactions contemplated by the Principal
Documents, (iii) violate or contravene the terms of any Court Order actually
known to me, or (iv) violate or contravene the terms of applicable provisions of
statutory law or regulation.
(6) There are no actions, proceedings or investigations pending
against the Bank or, to my actual knowledge, threatened against the Bank before
any court, administrative agency, or tribunal (i) asserting the invalidity of
the Trust or any of the Underwriting Agreements or Principal Documents, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
any of the Underwriting Agreements or the Principal Documents or the execution
and delivery thereof, or (iii) that could reasonably be expected to materially
and adversely affect the enforceability of the Underwriting Agreements or
Principal Documents against the Bank or the ability of the Bank to perform its
obligations thereunder.
(7) No consent, approval, authorization, or order of, or filing with,
any court or governmental agency or body is required of the Bank for the
consummation of the transactions contemplated in the Principal Documents, except
such consents, approvals, authorizations, or orders as have been obtained or
such filings as have been made.
(8) To my actual knowledge, there are no legal or governmental
proceedings pending or threatened against the Bank that are required to be
disclosed in the Registration Statement, other than those disclosed therein.
(9) To my actual knowledge, there are no contracts, indentures,
mortgages, loan agreements, notes, leases, or other instruments to which the
Bank is a party that are required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto.
For purposes of this opinion, I have assumed that (i) with respect to
the opinions expressed in paragraphs 4 and 5, the Bank holds the requisite title
and rights to the Financed Student Loans, (ii) the Underwriting Agreements and
the Principal Documents have been duly executed and delivered by all parties
thereto (other than the Bank) and are valid and binding upon and enforceable
against such parties, subject to the General Qualifications, (iii) there has
been no mutual mistake of fact or misunderstanding, fraud, duress, or undue
influence, (iv) all statutes, judicial and administrative decisions, and rules
and regulations constituting Federal law and the laws of the State of Ohio are
generally available to lawyers practicing in the State of Ohio and are in a
format that make legal research reasonably feasible, and (v) Court Orders and
agreements to which the Bank is a party or by which it or its properties are
bound would be enforced as written.
The opinions expressed herein are limited to matters of Federal law
and the laws of the State of Ohio, without giving effect to principles of
conflicts of laws. This Opinion Letter addresses only the specific legal issues
addressed herein and does not, by implication or otherwise, address any other
legal issues, including without limitation: federal securities and tax laws;
state securities, "blue-sky", or tax laws; the characterization of the transfer
of the Initial Financed Student Loans by the Bank to the Trust as a sale of such
Initial Financed Student Loans or a transfer of a security interest therein, or
the form, sufficiency or other legal requirements for such sale or transfer of a
security interest (including the attachment and perfection thereof); laws,
rules, and regulations of municipalities or other political subdivisions of the
State of Ohio; and federal and state laws (such as ERISA and RICO) that in my
reasonable judgment do not relate to the opinions expressed herein.
This opinion is rendered solely to the addressees hereof, for their
use in connection with the transactions contemplated by the Underwriting
Agreements and Principal Documents and may not be relied upon for any other
purpose or by any other person.
Very truly yours,
<PAGE>
APPENDIX A
This Appendix A is attached to, and shall be deemed a part of the
Opinion Letter of Forrest F. Stanley, General Counsel of Key Bank USA, National
Association, to Credit Suisse First Boston Corporation, et al., dated September
30, 1999 (the "Opinion Letter").
A. GENERAL QUALIFICATIONS. As used in the Opinion Letter, the term "General
Qualifications" shall mean and include, without limitation:
(1) the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium, and similar laws affecting the rights and remedies of
creditors generally, including, without limitation, (a) the Federal
Bankruptcy Code; (b) all other Federal and state bankruptcy,
insolvency, reorganization, receivership, moratorium, arrangement, and
assignment for the benefit of creditors laws that affect the rights
and remedies of creditors generally or that have reference to or
affect generally only creditors of specific types of debtors, and
state laws of like character affecting generally only creditors of
financial institutions; (c) state fraudulent transfer and conveyance
laws; (d) judicially developed doctrines relevant to any of the
foregoing laws, such as substantive consolidation of entities;
(2) the effect of general principles of equity, whether applied by a court
of law or equity, including, without limitation, principles: (a)
governing the availability of specific performance, injunctive relief,
or other equitable remedies, including those principles which may
place the award of such remedies, subject to certain guidelines, in
the discretion of the court to which application for such relief is
made; (b) affording equitable defenses against a party seeking
enforcement; (c) requiring good faith and fair dealing in the
performance and enforcement of a contract by the party seeking its
enforcement; (d) requiring reasonableness in the performance and
enforcement of an agreement by the party seeking enforcement of the
contract; (e) requiring consideration of the materiality of a breach
and the consequences of the breach to the party seeking enforcement;
(f) requiring consideration of the impracticability or impossibility
of performance at the time of attempted enforcement; (g) affording
defenses based upon the unconscionability of the enforcing party's
conduct after the parties have entered into the contract; and
(3) the effect of other generally applicable rules of law that: (a) limit
or affect the enforcement of provisions of a contract that purport to
require waiver of the obligations of good faith, fair dealing,
diligence and reasonableness; (b) provide that forum selection clauses
in contracts are not necessarily binding on the court(s) in the forum
selected; (c) limit the availability of a remedy under certain
circumstances where another remedy has been elected; (d) limit the
right of a creditor to use force or cause a breach of the peace in
enforcing rights; (e) relate to the sale or disposition of collateral
or the requirements of a commercially reasonable sale; (f) limit the
enforceability of provisions releasing, exculpating or exempting a
party from, or requiring indemnification of a party for, liability for
its own action or inaction, to the extent the action or inaction
involves gross negligence, recklessness, willful misconduct or
unlawful conduct; (g) may, where less than all of a contract may be
unenforceable, limit the enforceability of the balance of the contract
to circumstances in which the unenforceable portion is not an
essential party of the agreed exchange; (h) govern and afford judicial
discretion regarding the determination of damages and entitlement to
attorneys' fees and other costs; (i) may, in the absence of a waiver
or consent, discharge a guarantor to the extent that (a) action by a
creditor impairs the value of collateral securing guaranteed debt to
the detriment of the guarantor, or (b) guaranteed debt is materially
modified; (j) may permit a party who has materially failed to render
or offer performance required by the contract to cure that failure
unless (a) permitting a cure would unreasonably hinder the aggrieved
party from making substitute arrangements for performance, or (b) it
was important in the circumstances to the aggrieved party that
performance occur by the date stated in the contract.
B. ACTUAL KNOWLEDGE. The phrases "actually known to me," my "actual knowledge"
or similar phrases shall mean the conscious awareness of facts or other
information by me or by any lawyer in the KeyCorp Law Group in Cleveland,
Ohio.
C. COURT ORDERS. The term "Court Orders" shall mean judicial administrative
orders, writs, judgments, and decrees that name the Bank, are specifically
directed to the Bank or its property, and are issued by a court of
competent jurisdiction.
<PAGE>
EXHIBIT B
[Form of Opinion of Thompson Hine & Flory LLP]
September 30, 1999
Credit Suisse First Boston Corporation,
As Representative of the Underwriters
Eleven Madison Avenue
New York, New York 10010-3629
Re: KeyCorp Student Loan Trust 1999-B; Security Interests
Ladies and Gentlemen:
We have acted as counsel to Key Bank USA, National Association (the "Seller",
Key Bank USA, National Association, as master servicer (the "Master Servicer",
and KeyCorp Student Loan Trust 1999-B (the "Trust") in connection with the
negotiation, execution and delivery of the following:
1. the Indenture, dated as of September 1, 1999, by and between the
Trust and Bankers Trust Company, as Indenture Trustee (the
"Indenture Trustee")(the "Indenture");
2. the Trust Agreement, dated as of September 1, 1999 by and among
the Seller, Bank One, National Association, as Eligible Lender
Trustee (the "Eligible Lender Trustee") and Bank One Delaware,
Inc., as Delaware Co-Trustee (the ADelaware Co-Trustee) (the
"Trust Agreement");
3. the Sale and Servicing Agreement, dated as of September 1, 1999,
by and among the Trust, the Seller, the Eligible Lender Trustee
and Key Bank USA, National Association, as Administrator and
Master Servicer (the "Sale and Servicing Agreement");
4. the Subservicing Agreement, dated as of September 1, 1999, by and
between the Master Servicer and Great Lakes Higher Education Loan
Servicing Corporation ("Great Lakes")(the "Great Lakes
Subservicing Agreement");
5. the Subservicing Agreement, dated as of September 1, 1999, by and
between the Master Servicer and Pennsylvania Higher Education
Assistance Agency ("PHEAA")(the "PHEAA Subservicing Agreement");
6. the Administration Agreement, dated as of September 1, 1999, by
and among the Trust, Key Bank USA, National Association, as
Administrator, and the Indenture Trustee (the "Administration
Agreement");
7. the Underwriting Agreement, dated as of September 30, 1999, by
and between the Seller and Credit Suisse First Boston
Corporation, as the Representative of the Underwriters (the
"Underwriting Agreement");
8. the Certificate Underwriting Agreement, dated as of September 30,
1999, by and between the Seller and Credit Suisse First Boston
Corporation, as the Representative of the Underwriters (the
"Certificate Underwriting Agreement");
9. the ISDA Master Agreement and Schedule thereto, each dated as of
September 30, 1999, by and between Key Bank USA and the Trust
(the "Cap Agreement");
10. the Key Bank USA, National Association Registration Statement
dated August 17, 1999 (Registration No. 333-80109), as amended
(such registration statement as so amended being referred to
herein as the "Registration Statement"), including the final
prospectus which was a part thereof when the Registration
Statement was declared effective (the "Prospectus"); and
11. UCC-1 financing statements as listed on EXHIBIT A attached
hereto.
The documents described in numbers 1 through 10 above are collectively referred
to herein as the "Agreements." The documents described in number 11 above and
listed on EXHIBIT A are collectively referred to herein as the "Financing
Statements." This opinion is being delivered pursuant to Section 6(f) of the
Underwriting Agreement and Section 6(f) of the Certificate Underwriting
Agreement. Capitalized terms used herein but not defined herein shall have the
meanings assigned to such terms in the Sale and Servicing Agreement.
Pursuant to the Sale and Servicing Agreement, the Seller is selling to the Trust
(or, in the case of the Initial Financed Student Loans, to the Eligible Lender
Trustee on behalf of the Trust), without recourse, for the benefit of the
Noteholders and the Certificateholders, all of its rights, title and interest in
(i) the Financed Student Loans (other than the Additional Student Loans) (the
"Initial Financed Student Loans") and all obligations of the Obligors
thereunder, including all monies paid thereunder, and all written communications
received by the Seller with respect thereto (including borrower correspondence,
notices of death, disability or bankruptcy and requests for deferrals or
forbearances), on or after the Cutoff Date, or any Subsequent Cutoff Date, as
the case may be; (ii) the Assigned Agreements insofar as they relate to the
Financed Student Loans but not with respect to any other loans covered thereby
(the "Assigned Rights"); (iii) all funds on deposit from time to time in the
Trust Accounts (including all income thereon); and (iv) the proceeds of any and
all of the foregoing (the "Collateral"). Under the terms of the Indenture, the
Trust (and, with respect to the Financed Student Loans, the Eligible Lender
Trustee) will pledge to the Indenture Trustee for the benefit of the Noteholders
all of its right, title and interests in (i) the Financed Student Loans, and all
obligations of the Obligors thereunder, including all monies paid thereunder on
or after the Cutoff Date (or, in the case of Additional Student Loans, on or
after the related Subsequent Cutoff Date); (ii) the Sale and Servicing
Agreement, including the right of the Trust to cause the Seller to repurchase or
a Subservicer to purchase, Financed Student Loans from the Trust under
circumstances described therein and including the Assigned Rights; (iii) each
Guarantee Agreement, including the right of the Issuer to cause the related
Guarantor to make Guaranty Payments in respect of the Financed Student Loans ;
(iv) all funds on deposit from time to time in the Trust Accounts; and (v) 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 from
any of the foregoing.
Concurrently with the sale of the Financed Student Loans to the Eligible Lender
Trustee (on behalf of the Trust) and the pledge of the Financed Student Loans to
the Indenture Trustee, the Eligible Lender Trustee (on behalf of the Trust) will
deliver the Certificates and the Indenture Trustee will deliver the Notes to the
Trust. The Class A Notes are being sold in a public offering pursuant to the
Underwriting Agreement. The Class M Notes and $64,350,000 of the Certificates
are being sold to Key Bank, National Association in a private offering pursuant
to the Certificate Underwriting Agreement and the Underwriting Agreement. Seller
will retain $650,000 of the Certificates.
In rendering the opinion expressed below, we have examined and relied on each of
the documents listed above, as well as originals, or copies certified or
otherwise identified to our satisfaction, of such other documents, corporate
records, certificates of public officials and such other persons, instruments,
laws, statutes, ordinances, regulations and other matters and we have made
investigations of law, as we have deemed appropriate as a basis for the opinion
expressed below, including, but not limited to, Form UCC-11 searches purporting
to show all financing statements filed against the Seller in the jurisdictions
specified in Schedule 1 hereto and the Eligible Lender Trustee and the Trust in
the jurisdictions specified in Schedule 2 hereto as listed below (collectively,
the "Lien Searches"):
1. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of State of
Ohio through July 25, 1999 for financing statements filed against
Seller, the Trust or the Eligible Lender Trustee, under the Ohio UCC
and copies of all such financing statements;
2. certificates of the Recorder of Cuyahoga County, Ohio dated
September 14, 1999, as to its searches of its records through
September 13, 1999 for financing statements filed against Seller, the
Trust or the Eligible Lender Trustee, under the Ohio UCC and copies of
all such financing statements;
3. letter from the Docket Department of Thompson Hine & Flory LLP
dated September 13, 1999, as to filings and notices of state
government tax liens, attachment liens and judgment liens with respect
to Seller, the Trust or the Eligible Lender Trustee, on file in the
Cuyahoga County, Ohio Common Pleas Court;
4. letter from the Docket Department of Thompson Hine & Flory LLP
dated September 13, 1999, as to filings and notices of Federal
government tax liens with respect to the Seller, the Trust or the
Eligible Lender Trustee, on file in the Recorder's Office of Cuyahoga
County, Ohio;
5. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of the
Commonwealth of Pennsylvania through August 31, 1999 for financing
statements filed against Seller, the Trust or the Eligible Lender
Trustee, under the Pennsylvania UCC and copies of all such financing
statements;
6. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Prothonotary of Dauphin
County, Pennsylvania through September 2, 1999 for financing
statements filed against Seller, the Trust or the Eligible Lender
Trustee, under the Pennsylvania UCC and copies of all such financing
statements;
7. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of State of
Wisconsin through July 30, 1999 for financing statements filed against
Seller, the Trust or the Eligible Lender Trustee, under the Wisconsin
UCC and copies of all such financing statements;
8. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Register of Dane
County, Wisconsin through September 3, 1999 for financing statements
filed against Seller, the Trust or the Eligible Lender Trustee, under
the Wisconsin UCC and copies of all such financing statements;
9. certificate of the Recorder of Secretary of State of Delaware dated
September 28, 1999, as to its searches of its records through
September 21, 1999 for financing statements filed against the Trust,
under the Delaware UCC and copies of all such financing statements;
10. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of State of
Illinois through September 7, 1999 for financing statements filed
against the Trust or the Eligible Lender Trustee, under the Illinois
UCC and copies of all such financing statements;
11. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Recorder of Cook
County, Illinois through August 27, 1999 for financing statements
filed against the Trust or the Eligible Lender Trustee, under the
Illinois UCC and copies of all such financing statements;
12. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Department of State of
New York through September 3, 1999 for financing statements filed
against the Trust or the Eligible Lender Trustee, under the New York
UCC and copies of all such financing statements; and
13. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the City Register of New
York County, New York through August 19, 1999 for financing statements
filed against the Trust and the Eligible Lender Trustee, under the New
York UCC and copies of all such financing statements.
In rendering the opinions expressed below, we have relied, without independent
investigation, upon the Lien Searches. We have assumed that all such filings and
notices with respect to Seller have been properly filed and indexed in the
appropriate filing offices and that the Lien Searches accurately and completely
reflect all such filings and notices. Based upon certificates of Seller to the
following effect, we have assumed that no such filing or notice relating to
Seller has been made since the latest date specified in the relevant Lien
Searches.
We have not examined the Financed Student Loans and we have assumed the
conformity of the Financed Student Loans to the requirements of the Agreements.
The opinions expressed herein do not relate to or purport to cover the accuracy
of the descriptions of the Financed Student Loans in the Basic Documents or in
the financing statements filed in the offices described on Schedules 1 and 2
hereto. We have further assumed that each of the Financed Student Loans is in a
form required by the Higher Education Act and is an instrument which by its
terms does not preclude the grant of a security interest under the Agreements.
We have assumed that the promissory notes evidencing the Financed Student Loans
(the "Financed Student Loan Notes") are held and possessed by PHEAA and Great
Lakes, as applicable, pursuant to each of the PHEAA Subservicing Agreement and
the Great Lakes Subservicing Agreement, respectively. We have further assumed
that none of the Eligible Lender Trustee, the Indenture Trustee, PHEAA or Great
Lakes has received any other notice of bailment pursuant to Section 9-305 of the
Uniform Commercial Code with respect to the Financed Student Loan Notes, except
as contemplated by the Sale and Servicing Agreement, the PHEAA Subservicing
Agreement and the Great Lakes Subservicing Agreement.
In our examination in connection with this opinion, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures, the legal capacity of all natural persons and the conformity to
the originals of all documents submitted to us as copies. In making our
examination of the documents executed by the parties thereto, we have assumed
that such parties (other than the Seller and the Trust) had the power, corporate
or otherwise, to enter into and perform all of their respective obligations
thereunder and have also assumed the due authorization by all requisite action,
corporate or otherwise, and the due execution and delivery by such parties of
such documents and the validity and binding effect thereof. We have further
assumed that there is not and will not be any other agreement that modifies or
supplements the agreements expressed in the Agreements. We have assumed there
are no prohibitions in any of the Agreements or the Basic Documents to which the
Trust or the Eligible Lender Trustee is a party that restrict the ability of
either such entity to assign or pledge interests in the Collateral and the
Indenture Trustee under the Indenture.
In rendering this opinion, we have also assumed the following matters and have
considered and relied without independent investigation upon the representations
and covenants made by the Seller in the Agreements or in certain certificates,
as of the time of the respective transfer of the Financed Student Loans by the
Seller to the Eligible Lender Trustee (on behalf of the Trust), and the
subsequent pledge by the Eligible Lender Trustee (on behalf of the Trust) of the
Financed Student Loans to the Indenture Trustee, unless otherwise specified:
A. At no time relevant to our opinion were any of the Financed Student
Loans subject to (1) any lien of any government or any agency or
instrumentality thereof, including, without limitation, any Federal,
state or local tax lien (including, without limitation, liens under
Section 6323(c)(2) and (d) of the Internal Revenue Code of 1986, as
amended), (2) any lien arising under the Employment Retirement Income
Security Act of 1974, as amended, or (3) any lien arising by operation
of law (including, without limitation, any attachment or execution
lien) or other lien which does not require the filing of a financing
statement or other appropriate notice to take priority over other
security interests.
B. No Financed Student Loans will be subject to any interest that is
inconsistent with the transfer of the Financed Student Loans to the
Eligible Lender Trustee (on behalf of the Trust) or the pledge of the
Financed Student Loans to the Indenture Trustee.
C. The chief executive office of the Seller is located at Key Tower,
127 Public Square, Cleveland, Cuyahoga County, Ohio.
D. The chief executive office of the Trust is located at the chief
executive office of the Eligible Lender Trustee, 1 First National
Plaza, Chicago, Illinois 60670.
E. The chief executive office of the Eligible Lender Trustee is
located at 1 First National Plaza, Chicago, Illinois 60670.
F. None of the Seller, Trust or Eligible Lender Trustee has changed
its name, identity or corporate structure, or the location of its
chief executive office within the past four months.
G. There has been delivered to the Eligible Lender Trustee from the
Seller a Schedule of Financed Student Loans in accordance with the
terms of the Sale and Servicing Agreement.
H. The Financing Statements contain the correct name of the applicable
secured party and the current address of the secured party from which
information concerning the security interests may be obtained.
I. The Financing Statements will be filed with the appropriate filing
offices as listed on Exhibit A. We have further assumed that no other
financing statements relating to the Financed Student Loans will be
filed in the filing offices between the date hereof and the actual
date the Financing Statements are filed.
J. Value has been given (1) by the Eligible Lender Trustee (on behalf
of the Trust) to the Seller in connection with the transfer of the
Financed Student Loans by the Seller to the Trust and (2) by the
Indenture Trustee to the Eligible Lender Trustee (on behalf of the
Trust) in connection with the grant of the liens and security
interests by the Trust in favor of the Indenture Trustee.
K. At all times material to our opinion, all factual statements
contained in certificates delivered to us by the Seller, the Indenture
Trustee or the Eligible Lender Trustee were accurate and correct.
The Seller has delivered a certificate stating that, with respect to all
Financed Student Loans transferred to the Trust, it had good and marketable
title to the Financed Student Loans, free and clear of all liens at the time of
transfer and confirming the matters set forth in paragraphs C, F, and G above.
The Eligible Lender Trustee has delivered a certificate stating that it does not
have knowledge of any lien affecting the Financed Student Loans or the proceeds
thereof except as reflected in the Sale and Servicing Agreement and in favor of
the Indenture Trustee as set forth in the Indenture. The Indenture Trustee has
delivered a certificate stating that it does not have knowledge of any lien
affecting the Financed Student Loans or the proceeds thereof except as reflected
in the Sale and Servicing Agreement and the Indenture.
In addition, we have been advised that any Financed Student Loan Notes held or
possessed by PHEAA (which will be held or possessed at PHEAA's office located in
the Commonwealth of Pennsylvania) or Great Lakes (which will be held or
possessed at Great Lakes= office located in the State of Wisconsin) will not be
held or possessed within the State of Ohio. With your consent we are assuming
for the purposes of this opinion that the laws of Delaware, Pennsylvania and
Wisconsin regarding perfection of security interests in the Collateral are the
same as those of the State of Ohio. We have, however, reviewed the most recent
compilations available to us of the laws of the States of Delaware and Wisconsin
and the Commonwealth of Pennsylvania and based on such review have concluded
that UCC Section 9-304 as adopted in Ohio (Section 1309.23 of the Ohio Revised
Code) is substantially similar to UCC Section 9-304 as adopted in the State of
Delaware (6 Del. C. Section 9-304 (1998)), the State of Wisconsin (Wis. Stat.
Section 409.304 (1998)) and the Commonwealth of Pennsylvania (13 Pa. Cons. Stat.
Section 9304 (1998)).
We are admitted to the Bar of the State of Ohio (and, with respect to certain
lawyers in our firm, the Bar of the State of New York) and we express no opinion
herein as to the laws of any jurisdiction other than the laws of the United
States of America and the laws of the State of Ohio, and as to the opinions
expressed in paragraphs (3), (7) and (8), the laws of the State of New York.
For purposes of this opinion, the "Ohio UCC" means the Uniform Commercial Code
as in effect in the State of Ohio.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
(1) If the transfer by the Seller of the Financed Student Loans,
including all moneys paid by the Obligors thereunder, pursuant to the
terms of the Sale and Servicing Agreement is characterized as a sale
for purposes of applicable state commercial law, such transfer has
been effected by delivery of the written assignment in the form of
Exhibit E to the Sale and Servicing Agreement. If the transfer is so
characterized, the Eligible Lender Trustee on behalf of the Trust has
acquired all right, title and interest of the Seller in the Financed
Student Loans, including all moneys paid by the Obligors thereunder,
free and clear of any Liens, other than any Liens the priority of
which is determined under applicable law without regard to the filing
of record of a financing statement in the offices listed on Schedule 1
hereto or Liens the priority of which does require such a filing, but,
upon such filing, may relate back to a date prior to the date on which
the Eligible Lender Trustee on behalf of the Trust acquired the
Financed Student Loans.
(2) If the transfer by the Seller of the Financed Student Loans,
including all moneys paid by the Obligors thereunder, pursuant to the
terms of the Sale and Servicing Agreement is not characterized as a
sale for purposes of applicable state commercial law, the Sale and
Servicing Agreement creates a valid security interest in favor of the
Eligible Lender Trustee on behalf of the Trust in the Financed Student
Loans, including all moneys paid by the Obligors thereunder, that has
been duly perfected by (a) the filing of financing statements executed
by the Seller in the offices indicated in Schedule 1 hereto and (b)
the execution and delivery by PHEAA and Great Lakes of each of the
PHEAA Subservicing Agreement and the Great Lakes Subservicing
Agreement, respectively, and the taking of possession of the Financed
Student Loan Notes by PHEAA and Great Lakes. If the transfer is so
characterized, the filing of such financing statements and the
execution and delivery by PHEAA and Great Lakes of each of the PHEAA
Subservicing Agreement and the Great Lakes Subservicing Agreement,
respectively, have perfected a security interest in such Financed
Student Loans, including all moneys paid by the Obligors thereunder
and proceeds thereof which is prior to any other security interest
which must be perfected under Chapters 1301 through 1310 of the Ohio
UCC by filing appropriate financing statements or taking possession of
the collateral. No filings or other actions, other than the filing of
appropriate UCC continuation statements and the continued possession
of the Financed Student Loan Notes by the applicable Subservicer
pursuant to the Sale and Servicing Agreement, are necessary to
maintain the perfection and priority of such security interest. We
call your attention to the fact that, (X) unless continuous possession
of the Financed Student Loan Notes is retained by the applicable
Subservicer, perfection of the security interest in the Financed
Student Loans will be terminated and (Y) unless appropriate financing
statements are timely filed in the appropriate offices, perfection of
the security interest in the Financed Student Loans, including all
moneys paid by the Obligors thereunder, and in the other Collateral
will be terminated if the Seller hereafter changes its name, identity
or corporate structure so that the financing statements filed in the
offices indicated in Schedule 1 hereto become seriously misleading.
(3) The Indenture creates a valid security interest in the
interest of the Eligible Lender Trustee on behalf of the Trust in the
Financed Student Loans, including all moneys paid by the Obligors
thereunder on or after the Cutoff Date, or any Subsequent Cutoff Date,
as the case may be, in favor of the Indenture Trustee, as trustee for
the benefit of the Noteholders, that has been duly perfected by (a)
the filing of financing statements executed by the Eligible Lender
Trustee in the offices indicated in Schedule 2 hereto and (b) the
execution and delivery by PHEAA and Great Lakes of each of the PHEAA
Subservicing Agreement and the Great Lakes Subservicing Agreement,
respectively, and the taking of possession of the Financed Student
Loan Notes by PHEAA and Great Lakes. The filing of such financing
statements and the execution and delivery by PHEAA and Great Lakes of
each of the PHEAA Subservicing Agreement and the Great Lakes
Subservicing Agreement, respectively, have perfected a security
interest in the interest of the Eligible Lender Trustee on behalf of
the Trust in the Financed Student Loans, including all moneys paid by
the Obligors thereunder and proceeds thereof which is prior to any
other security interest which must be perfected under Chapters 1301
through 1310 of the Ohio UCC by filing appropriate financing
statements or taking possession of the collateral. No filings or other
actions, other than the filing of appropriate UCC continuation
statements and the continued possession of the Financed Student Loan
Notes by the applicable Subservicer on behalf of the Indenture Trustee
pursuant to the Sale and Servicing Agreement, are necessary to
maintain the perfection and priority of such security interest. We
call your attention to the fact that, (X) unless continuous possession
of the Financed Student Loan Notes is retained by the applicable
Subservicer on behalf of the Indenture Trustee, perfection of the
security interest in the Financed Student Loans will be terminated and
(Y) unless appropriate financing statements are timely filed in the
appropriate offices, perfection of the security interest in the
Financed Student Loans, including all moneys paid by the Obligors
thereunder, and in the other Collateral will be terminated if the
Trust hereafter changes its name, identity or corporate structure so
that the financing statements filed in the offices indicated on
Schedule 2 hereto become seriously misleading.
(4) The Seller is not, and will not as a result of the offer and
sale of the Notes and Certificates as contemplated in the Prospectus,
the Underwriting Agreement and the Certificate Underwriting Agreement
become an "investment company" as defined in the Investment Company
Act of 1940 ("Investment Company Act") or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act.
(5) The Trust Agreement need not be qualified under the Trust
Indenture Act of 1939, as amended, and the Trust is not required to
register under the Investment Company Act.
(6) The Indenture need not be qualified under the Trust Indenture
Act of 1939, as amended.
(7) The Trust has duly authorized the execution and delivery of
the Indenture, the Sale and Servicing Agreement, the Administration
Agreement and the Cap Agreement, and, when duly executed and delivered
by the Eligible Lender Trustee, such documents will be valid and
binding obligations of the Trust, enforceable against the Trust in
accordance with their respective terms, subject, as to the
enforceability thereof, to bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors= rights generally and by
the application of general principles of equity.
(8) The Seller has duly executed and delivered the Sale and
Servicing Agreement, the Trust Agreement, the Administration
Agreement, the Underwriting Agreement, the Certificate Underwriting
Agreement and the Cap Agreement, and, when duly executed and delivered
by the Seller, such documents will be valid and binding obligations of
the Seller, enforceable against the Seller in accordance with their
respective terms, subject, as to the enforceability thereof, to
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors= rights generally and by the application of
general principles of equity.
(9) The Master Servicer has duly executed and delivered the PHEAA
Subservicing Agreement and the Great Lakes Subservicing Agreement,
and, when duly executed and delivered by the Master Servicer, such
documents will be valid and binding obligations of the Master
Servicer, enforceable against the Seller in accordance with their
respective terms, subject, as to the enforceability thereof, to
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors= rights generally and by the application of
general principles of equity.
(10) The execution and delivery of the Control Agreement by the
parties thereto perfects the security interest of the Seller in the
securities accounts therein described, subject to the exceptions and
exclusions therein provided (the "Securities Accounts"). The Sale and
Servicing Agreement is effective to assign the Seller's security
interest in the Securities Accounts to the Trust, notwithstanding the
fact that the Trust is not a party to the Control Agreement. The
Indenture is effective to assign the Trust's security interest in the
Securities Accounts to the Indenture Trustee, notwithstanding the fact
that the Indenture Trustee is not a party to the Control Agreement.
Section 1309.21(B) of the Ohio UCC (UCC Section 9-302(2)) provides
that no filing under the Ohio UCC is required to continue the
perfected status of a security interest against creditors of and
transferees from the original debtor if a secured party assigns a
perfected security interest. As to the priority of the security
interest in the Securities Accounts transferred first by the Seller to
the Trust and then by the Trust to the Indenture Trustee, assuming, on
the basis of the representations and warranties contained in the
Control Agreement that no other control or similar agreement has been
entered into by the securities intermediary referred to in the Control
Agreement, while there is no case or statute on point, we are of the
opinion that an Ohio court addressing the issue would hold (a) the
assignment of the Seller's first priority perfected security interests
in the Securities Accounts to the Trust would continue such first
priority perfected security interests in favor of the Trust and (b)
the subsequent assignment of the Trust's first priority perfected
security interests in the Securities Accounts to the Indenture Trustee
would continue such first priority perfected security interests in
favor of the Indenture Trustee.
Our opinions with respect to the creation and perfection of the
security interests in the Collateral (and in the Securities Accounts described
in the Control Agreement) are subject to the following exceptions:
(a) the opinions expressed in paragraphs (2) and (3) with respect to
proceeds is subject to (i) the effect of limitations under Section 9-306 of the
UCC on the priority and perfection of a security interest in proceeds, (ii) the
rights of a person in possession of proceeds consisting of money or instruments
(as defined in Section 9-105(l)(I) of the UCC) and (iii) the rights of a
purchaser of negotiable instruments or chattel paper (as defined in Section
9-105(l)(I) of the UCC) to the extent provided in Section 9-308 and 9-309 of the
UCC;
(b) in the case of property which becomes collateral after the date
the Sale and Servicing Agreement and the Indenture are duly executed, delivered
and accepted, Section 552 of the United States Bankruptcy Code limits the extent
to which property acquired by a debtor after the commencement of a case under
the United States Bankruptcy Code may be subject to a security interest arising
from a security agreement entered into by the debtor before the commencement of
such case;
(c) in the case of any Collateral, the Trust's, the Eligible Lender
Trustee=s or the Indenture Trustee=s respective security interests will
terminate upon a disposition of such Collateral authorized by the Trust, the
Eligible Lender Trustee or the Indenture Trustee, as applicable;
(d) we express no opinion as to the perfection or priority of any
security interest in favor of the Trust, the Eligible Lender Trustee or the
Indenture Trustee in any property acquired by any debtor more than four months
after such debtor changes its name, identity or corporate structure so as to
make the then filed Financing Statements seriously misleading, unless
appropriate new financing statements or amendments are filed before the
expiration is such four month period.
Our opinions with respect to the security interests of the Trust, the
Eligible Lender Trustee and the Indenture Trustee in the Collateral are subject
to the following qualifications:
(i) we express no opinion with respect to the priority of the
respective security interests of the Trust, the Eligible Lender Trustee and the
Indenture Trustee in the Collateral against (a) a lien creditor who attached or
levied on the Collateral prior to the perfection of the security interest of the
Trust, the Eligible Lender Trustee or the Indenture Trustee, (b) a security
interest in Collateral perfected under the laws of another jurisdiction to the
extent the Collateral was located in such jurisdiction within four months prior
to the date of the perfection of the security interest of the Trust, the
Eligible Lender Trustee or the Indenture Trustee, as applicable, (c) a lien or
claim in Collateral arising by operation of law that does not require filing or
possession in order to take priority over a prior perfected security interest,
(d) a lien, claim or encumbrance in favor of the United States of America or any
State, or any agency or instrumentality of either of them, or any other
governmental entity (including without limitation federal tax liens, liens
arising under the Employee Retirement Income Security Act of 1974, as amended,
or claims given priority pursuant to 31 U.S.C. ' 3713), or (e) a security
interest in Collateral perfected without possession pursuant to Section
1309.23(D) or (E) of the Ohio UCC [UCC Sections 9-304(4) or (5)]; and
(ii) this opinion is limited to the matters set forth herein, and no
opinion is implied or may be inferred beyond the matters expressly stated.
A copy of this opinion may be delivered to Moody's Investors Service,
Inc., Fitch IBCA, Inc., Standard & Poor=s Rating Group, Bank One, National
Association, as Eligible Lender Trustee, Bank One Delaware, Inc., as Delaware
Co-Trustee and Bankers Trust Company, as Indenture Trustee, each of which may
rely upon this opinion as if it were addressed to them. This opinion is solely
for the benefit of the addressees hereof and the persons named in the
immediately preceding sentence and is not to be quoted or referred to in any
manner without our prior written consent.
Respectfully submitted,
<PAGE>
SCHEDULE 1
1. Recorder's Office of County of Cuyahoga, Ohio
2. Secretary of State of Ohio
<PAGE>
SCHEDULE 2
8. Recorder's Office of Cook County, Illinois
9. Secretary of State of Illinois
3. Recorder's Office of New York County, New York
10. Department of State of New York
11. Recorder's Office of New Castle County, Delaware
12. Secretary of State of Delaware
13. Prothonotary of Dauphin County, Pennsylvania
14. Secretary of the Commonwealth of Pennsylvania
15. Recorder's Office of Dane County, Wisconsin
16. Secretary of State of Wisconsin
17. Recorder's Office of County of Cuyahoga, Ohio
18. Secretary of State of Ohio
<PAGE>
EXHIBIT A
KEYCORP STUDENT LOAN TRUST 1999-B
UCC FINANCING STATEMENTS DATE
UCC-1 (Debtor: Key Bank USA) - Ohio Secretary of State [Submitted] 9/23/99
UCC-1 (Debtor: Key Bank USA) - Cuyahoga County, Ohio 9/23/99
Recorder's Office
UCC-1 (Debtor: Key Bank USA) - Delaware Secretary of State __/__/99
UCC-1 (Debtor: Key Bank USA) - New Castle County, Delaware __/__/99
Recorder's Office
UCC-1 (Debtor: Key Bank USA) - Secretary of the Commonwealth 9/24/99
of Pennsylvania
UCC-1 (Debtor: Key Bank USA) - Prothonotary of Dauphin County, 9/24/99
Pennsylvania
UCC-1 (Debtor: Key Bank USA) - Wisconsin Secretary of State 9/24/99
UCC-1 (Debtor: Key Bank USA) - Dane County, Wisconsin 9/24/99
Recorder's Office
UCC-1 (Debtor: Trust) - Ohio Secretary of State [Submitted] 9/23/99
UCC-1 (Debtor: Trust) - Cuyahoga County, Ohio Recorder's Office 9/23/99
UCC-1 (Debtor: Trust) - Delaware Secretary of State __/__/99
UCC-1 (Debtor: Trust) - New Castle County, Delaware Recorder's Office __/__/99
UCC-1 (Debtor: Trust) - Secretary of the Commonwealth 9/24/99
of Pennsylvania
UCC-1 (Debtor: Trust) - Prothonotary of Dauphin County, 9/24/99
Pennsylvania
<PAGE>
UCC FINANCING STATEMENTS DATE
UCC-1 (Debtor: Trust) - Wisconsin Secretary of State 9/24/99
UCC-1 (Debtor: Trust) - Dane County, Wisconsin Recorder's Office 9/24/99
UCC-1 (Debtor: Trust) - New York Secretary of State 9/24/99
UCC-1 (Debtor: Trust) - New York County __/__/99
UCC-1 (Debtor: Trust) - Illinois Secretary of State 9/24/99
UCC-1 (Debtor: Trust) - Cook County, Illinois Recorder's Office 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Ohio Secretary of
State [Submitted] 9/23/99
UCC-1 (Debtor: Eligible Lender Trustee) - Cuyahoga County, Ohio 9/23/99
Recorder's Office
UCC-1 (Debtor: Eligible Lender Trustee) - Delaware Secretary of State __/__/99
UCC-1 (Debtor: Eligible Lender Trustee) - New Castle County, Delaware __/__/99
Recorder's Office
UCC-1 (Debtor: Eligible Lender Trustee) - Secretary of the Commonwealth 9/24/99
of Pennsylvania
UCC-1 (Debtor: Eligible Lender Trustee) - Prothonotary of
Dauphin County, Pennsylvania 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Wisconsin Secretary of State 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Dane County, Wisconsin 9/24/99
Recorder's Office
UCC-1 (Debtor: Eligible Lender Trustee) - New York Secretary of State 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - New York County __/__/99
October 8, 1999UCC-1 (Debtor: Eligible Lender Trustee) - Illinois
Secretary of State 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Cook County, Illinois 9/24/99
Recorder's Office
<PAGE>
UCC FINANCING STATEMENTS DATE
<PAGE>
[Form of Opinion of Thompson Hine & Flory LLP]
September 30, 1999
Credit Suisse First Boston Corporation,
As Representative of the Underwriters
Park Avenue Plaza
Eleven Madison Avenue
New York, New York 10010-3629
Re: KeyCorp Student Loan Trust 1999-B; Prospectus Disclosure
Ladies and Gentlemen:
We have acted as counsel for Key Bank USA, National Association (the "Seller")
in connection with the issuance by the KeyCorp Student Loan Trust 1999-B of the
Floating Rate Asset Backed Notes in the aggregate principal amount of
$935,000,000 and the Floating Rate Asset Backed Certificates in the aggregate
principal amount of $65,000,000. This opinion letter is furnished to you
pursuant to Section 6(f) of the Underwriting Agreement (the "Underwriting
Agreement") dated September 30, 1999 between the Seller and Credit Suisse First
Boston Corporation, as Representative of the Underwriters ("Underwriters") and
Section 6(f) of the Certificate Underwriting Agreement ("Certificate
Underwriting Agreement") dated September 30, 1999 between the Seller and Credit
Suisse First Boston Corporation, as Representative of the Underwriters. Except
as otherwise indicated herein, capitalized terms used in this opinion letter are
defined as set forth in the Underwriting Agreement or the Certificate
Underwriting Agreement, as applicable.
In that capacity, we have participated in the preparation of (i) the Prospectus
dated September 20, 1999 (the "Base Prospectus") and (ii) the Prospectus
Supplement dated September 30, 1999 (the "Prospectus Supplement," and
collectively, the "Prospectus") and we have from time to time had discussions
with officers and employees of the Seller and your employees and counsel
concerning the information contained in the Prospectus.
Based on the foregoing, we are of the opinion that the statements contained in
the Base Prospectus under the headings "Student Loan Financing Business -
Insurance of Student Loans, Guarantors of Student Loans," "Description of the
Notes," "Description of the Certificates," "Description of the Transfer and
Servicing Agreements" and "Certain Legal Aspects of the Financed Student Loans,"
to the extent that they describe legal matters, present fair summaries of such
legal matters.
The statements contained in the Prospectus Supplement under the captions "The
Financed Student Loan Pool - Insurance of Student Loans; Guarantors of Student
Loans - GUARANTORS FOR THE FINANCED FEDERAL LOANS," "-GUARANTORS FOR THE
GUARANTEED PRIVATE LOANS," "Description of the Securities" and "Description of
the Transfer and Servicing Agreements," insofar as such statements purport to
summarize the provisions of the Guarantee Agreements, the Certificates, the
Notes, the Indenture, the Administration Agreement, the Sale and Servicing
Agreement and the Trust Agreement, present fair summaries of such provisions.
We have not independently verified and, except as described in the two
immediately preceding paragraphs, are not herein passing upon and do not assume
any responsibility for, the accuracy, completeness or fairness of the
information contained in the Prospectus. Based upon the participation and
discussions described above, however, no facts have come to our attention to
cause us to believe that the Prospectus (except for the financial statements,
financial schedules and other numerical, financial and statistical information
contained therein, and (other than any description of any agreements or
instruments referred to above) any information therein concerning ASA, CSAC,
HESC, HICA, NSLP, TERI, USAF or PHEAA in its capacity as Guarantor, but not in
its capacity as Servicer, as to all of which we express no view) as of its date
or the date hereof contains any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This opinion is furnished by us, as counsel for the Seller to you, solely for
your benefit as purchasers of the Notes and the Certificates and solely with
respect to the initial purchase of the Notes and the Certificates by you, upon
the understanding that we are not hereby assuming any professional
responsibility to any other person.
Very truly yours,
EXECUTION COPY
KEYCORP STUDENT LOAN TRUST 1999-B
$65,000,000
FLOATING RATE ASSET BACKED CERTIFICATES
KEY BANK USA, NATIONAL ASSOCIATION
(SELLER)
CERTIFICATE UNDERWRITING AGREEMENT
September 30, 1999
<PAGE>
Credit Suisse First Boston Corporation
As Representative of the
several Underwriters
11 Madison Avenue
New York, N.Y. 10010
Dear Sirs:
1. INTRODUCTORY. Key Bank USA, National Association, a national
banking association ("KBUSA"), proposes to cause KeyCorp Student Loan Trust
1999-B (the "Trust") to issue and sell $65,000,000 principal amount of its
Floating Rate Asset Backed Certificates (the "Certificates") to the underwriters
named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representative") are acting as representative. The Trust was formed, and the
Certificates issued, pursuant to the Trust Agreement, dated as of September 1,
1999, as amended and restated by the Amended and Restated Trust Agreement, dated
as of September 1, 1999 (as further amended and supplemented from time to time,
collectively, the "Trust Agreement") between KBUSA, as depositor and Bank One,
National Association, as Eligible Lender Trustee (the "Eligible Lender
Trustee"). The assets of the Trust include, among other things, two pools of
graduate and undergraduate student loans (collectively, the "Initial Financed
Student Loans") and certain monies due thereunder on and after September 1, 1999
with respect to certain of the Initial Financed Student Loans, and September 27,
1999, with respect to certain other Initial Financed Student Loans
(collectively, the "Cutoff Date"). Such Initial Financed Student Loans were sold
to the Eligible Lender Trustee on behalf of the Trust by the Seller pursuant to
the Sale and Servicing Agreement, dated as of September 1, 1999 (as amended and
supplemented from time to time, the "Sale and Servicing Agreement"), among, the
Trust, the Eligible Lender Trustee, KBUSA, as master servicer (in such capacity,
the "Master Servicer"), KBUSA, as seller (in such capacity, the "Seller"), and
KBUSA as administrator (in such capacity, the "Administrator"). The Master
Servicer has also entered into two certain sub-servicing agreements to have the
Financed Student Loans sub-serviced with each of Pennsylvania Higher Education
Assistance Agency, an agency of the Commonwealth of Pennsylvania ("PHEAA" and,
in its capacity as a sub-servicer, "Sub-Servicer") and Great Lakes Educational
Loan Services, Inc., a Wisconsin corporation ("Great Lakes" or a
"Sub-Servicer"). After the Closing Date (as defined below), the Eligible Lender
Trustee, acting on behalf of the Trust, will acquire certain additional student
loans identified in the Sale and Servicing Agreement on or prior to December 24,
1999 (the "Subsequent Pool Student Loans") and on or prior to the end of the
Funding Period (the "Other Subsequent Student Loans"; and together with the
Subsequent Pool Student Loans and Initial Financed Student Loans, the "Financed
Student Loans") using amounts in certain accounts owned by the Trust which have
been set aside for such purpose. In addition, the Administrator will perform
certain administrative duties on behalf of the Trust pursuant to the
Administration Agreement, dated as of September 1, 1999 (as amended and
supplemented from time to time, the "Administration Agreement"), among the
Indenture Trustee, the Trust and the Administrator. The Trust will also be a
party to that certain cap agreement (the "Cap Agreement") between the Trust and
KBUSA, as cap provider (in such capacity, the "Cap Provider"), whereunder the
Certificateholders will be entitled, subject to the limitations of the Cap
Agreement, to receive payments from the Cap Provider in the amount of any
Certificateholders' Interest Index Carryover for the Certificates and the Cap
Provider will receive reimbursement for such payments on subsequent Distribution
Dates, but only to the extent funds are available therefor on a subordinated
basis. The Sale and Servicing Agreement, the Indenture (as defined below), the
Trust Agreement, the Administration Agreement and the Cap Agreement are referred
to herein as the "Basic Documents."
Simultaneously with the issuance and sale of the Certificates as
contemplated herein, pursuant to the Indenture (the "Indenture"), dated as of
September 1, 1999, between the Trust and Bankers Trust Company, as indenture
trustee (the "Indenture Trustee"), the Trust will issue $280,000,000 principal
amount of its Floating Rate Class A-1 Asset Backed Notes (the "Class A-1
Notes"), $625,000,000 principal amount of its Floating Rate Class A-2 Asset
Backed Notes (the "Class A-2 Notes" and together with the Class A-1 Notes, the
"Class A Notes"), and $30,000,000 principal amount of its Floating Rate Class M
Asset Backed Notes (the "Class M Notes" and, with the Class A Notes, the
"Notes"). The Notes will be sold pursuant to an underwriting agreement dated the
date hereof (the "Note Underwriting Agreement") between the Seller and the
Representative.
Capitalized terms used and not otherwise defined herein shall have the
meanings given them in Appendix A attached hereto.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. (a) The Seller
represents and warrants to and agrees with the several Underwriters that:
(i) A registration statement on Form S-3 (Registration No. 333-80109)
has been filed with the Securities and Exchange Commission (the
"Commission"), including a related preliminary base prospectus and a
preliminary prospectus supplement, for the registration under the Act of
the offering and sale of the Notes and the Certificates. The Seller may
have filed one or more amendments thereto, each of which amendments has
previously been furnished to the Representative. The Seller will next file
with the Commission (i) after effectiveness of such registration statement,
a final base prospectus and a final prospectus supplement relating to the
Certificates in accordance with Rules 430A and 424(b)(1) or (4) under the
Securities Act of 1933, as amended (the "Act"), or (ii) a final base
prospectus and a final prospectus supplement relating to the Certificates
in accordance with Rules 415 and 424(b)(2) or (5).
The Seller has included in such registration statement, as amended at
the Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in the
Prospectus with respect to the Certificates and the offering thereof. As
filed such final prospectus supplement shall include all Rule 430A
Information, together with all other such required information, with
respect to the Certificates and the offering thereof and, except to the
extent that the Representative shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to the
Representative prior to the Execution Time or, to the extent not completed
at the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest
preliminary base prospectus and preliminary prospectus supplement, if any,
that have previously been furnished to the Representative) as the Seller
has advised the Representative, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains the
undertaking specified by Regulation S-K Item 512(a), the Registration
Statement, at the Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
For purposes of this Note Underwriting Agreement (this "Agreement"),
"Effective Time" means the date and time as of which such registration
statement, or the most recent post-effective amendment, thereto, if any,
was declared effective by the Commission, and "Effective Date" means the
date of the Effective Time. "Execution Time" shall mean the date and time
that this Agreement is executed and delivered by the parties hereto. Such
registration statement, as amended at the Effective Time, including all
information deemed to be a part of such registration statement as of the
Effective Time pursuant to Rule 430A(b) under the Act, and including the
exhibits thereto and any material incorporated by reference therein, is
hereinafter referred to as the "Registration Statement." "Base Prospectus"
shall mean any prospectus referred to above contained in the Registration
Statement at the Effective Date, including any Preliminary Prospectus
Supplement. "Preliminary Prospectus Supplement" shall mean the preliminary
prospectus supplement to the Base Prospectus which describes the
Certificates and the offering thereof and is used prior to filing of the
Prospectus. "Prospectus" shall mean the prospectus supplement relating to
the Certificates that is first filed pursuant to Rule 424(b) after the
Execution Time, together with the Base Prospectus or, if no filing pursuant
to Rule 424(b) is required, shall mean the prospectus supplement relating
to the Certificates, including the Base Prospectus, included in the
Registration Statement at the Effective Date. "Rule 430A Information" means
information with respect to the Certificates and the offering of the
Certificates permitted to be omitted from the Registration Statement when
it becomes effective pursuant to Rule 430A. "Rule 415," "Rule 424," "Rule
430A" and "Regulation S-K" refer to such rules or regulations under the
Act. Any reference herein to the Registration Statement, a Preliminary
Prospectus Supplement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein, if any, pursuant
to Item 12 of Form S-3 which were filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), on or before the Effective Date
of the Registration Statement or the issue date of the Base Prospectus,
such Preliminary Prospectus Supplement or the Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, the Base
Prospectus, any Preliminary Prospectus Supplement or the Prospectus shall
be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement, or the
issue date of the Base Prospectus, to any Preliminary Prospectus Supplement
or the Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(ii) As of the Closing Date (as defined below), KBUSA's
representations and warranties in the Basic Documents to which it is a
party and in the Guarantee Agreement to which TERI is a party will be true
and correct in all material respects.
(iii) This Agreement has been duly authorized, executed and delivered
by the Seller. The execution, delivery and performance of this Agreement
and the issuance and sale of the Certificates and compliance with the terms
and provisions hereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any agreement
or instrument to which the Seller is a party or by which the Seller is
bound or to which any of the properties of the Seller is subject which
could reasonably be expected to have a material adverse effect on the
transactions contemplated herein. The Seller has full corporate power and
authority to cause the Trust to authorize, issue and sell the Certificates,
all as contemplated by this Agreement.
(iv) Other than as contemplated by this Agreement or as disclosed in
the Prospectus, there is no broker, finder or other party that is entitled
to receive from the Seller or any of its subsidiaries any brokerage or
finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(v) All legal or governmental proceedings, contracts or documents of a
character required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement have
been so described or filed as required.
(vi) The Seller's assignment and delivery of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Trust as of the
Closing Date will vest in the Eligible Lender Trustee on behalf of the
Trust all the Seller's right, title and interest therein, or will result in
a first priority perfected security interest therein, in either case
subject to no prior lien, mortgage, security interest, pledge, adverse
claim, charge or other encumbrance.
(vii) The Trust's assignment of the Financed Student Loans to the
Indenture Trustee pursuant to the Indenture will vest in the Indenture
Trustee, for the benefit of the holders of the Notes, a first priority
perfected security interest therein, subject to no prior lien, mortgage,
security interest, pledge, adverse claim, charge or other encumbrance.
(viii) The Seller is not, and after giving effect to the offering and
sale of the Certificates, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(b) The Seller hereby agrees with the Underwriters that, for all
purposes of this Agreement, the only information furnished to the Seller by the
Underwriters through the Representative specifically for use in the Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, are the statements relating to stabilization on
the inside cover page of, and the statements under the caption "Underwriting"
in, the preliminary prospectus and the Prospectus.
3. PURCHASE, SALE AND DELIVERY OF THE CERTIFICATES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to cause the Trust
to sell to the Underwriters, and the Underwriters agree, severally and not
jointly, to purchase from the Trust, at a purchase price of 100% of the
principal amount of the Certificates the respective principal amounts of
Certificates set forth opposite the names of the Underwriters in Schedule I
hereto. In addition, the Seller agrees to cause the Underwriters to be paid an
aggregate structuring fee in connection with the structuring of the Notes and
the Certificates of $914,500.00.
The Seller will deliver the Certificates to the Representative for the
respective accounts of the Underwriters, against payment of the purchase price
to or upon the order of the Seller by wire transfer or check in Federal (same
day) Funds, at the office of Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New
York, New York 10038, on September 29, 1999, or at such other time not later
than seven full business days thereafter as the Representative and the Seller
determine, such time being herein referred to as the "Closing Date." The
Certificates to be so delivered will be initially represented by one or more
Certificates registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC"). The interests of beneficial owners of the Certificates
will be represented by book entries on the records of DTC and participating
members thereof. Definitive Certificates will be available only under the
limited circumstances specified in the Trust Agreement.
4. OFFERING BY THE UNDERWRITERS. It is understood that, after the
Registration Statement becomes effective, the several Underwriters propose to
offer the Certificates for sale to the public (which may include selected
dealers) as set forth in the Prospectus.
5. COVENANTS OF THE SELLER. The Seller covenants and agrees with the
several Underwriters that:
(a) Prior to the termination of the offering of the Certificates, the
Seller will not file any amendment of the Registration Statement or supplement
to the Prospectus unless the Seller has furnished the Representative a copy for
its review prior to filing and will not file any such proposed amendment or
supplement to which the Representative reasonably objects. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is otherwise
required under Rule 424(b), the Seller will file the Prospectus, properly
completed, and any supplement thereto, with the Commission pursuant to and in
accordance with the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representative of such
timely filing.
(b) The Seller will advise the Representative promptly of any proposal
to amend or supplement the registration statement as filed or the related
prospectus or the Registration Statement or the Prospectus and will not effect
such amendment or supplementation without the consent of the Representative
prior to the Closing Date, and thereafter will not effect any such amendment or
supplementation to which the Representative reasonably objects; the Seller will
also advise the Representative promptly of any request by the Commission for any
amendment of or supplement to the Registration Statement or the Prospectus or
for any additional information; and the Seller will also advise the
Representative promptly of the effectiveness of the Registration Statement (if
the Effective Time is subsequent to the execution of this Agreement) and of any
amendment or supplement to the Registration Statement or the Prospectus and of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threat of any proceeding for
that purpose and the Seller will use its best efforts to prevent the issuance of
any such stop order and to obtain as soon as possible the lifting of any issued
stop order.
(c) If, at any time when a prospectus relating to the Certificates is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would contain an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend or supplement
the Prospectus to comply with the Act or the Exchange Act, the Seller promptly
will prepare and file, or cause to be prepared and filed, with the Commission an
amendment or supplement which will correct such statement or omission, or an
amendment or supplement which will effect such compliance. Neither the consent
of the Representative to, nor the delivery of the several Underwriters of, any
such amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6 hereof.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Seller will cause the Trust to make generally available
to the holders of the Certificates an earnings statement of the Trust covering a
period of at least twelve months beginning after the Effective Date which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 of the
applicable Rules and Regulations thereunder. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes the Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the Trust's
fiscal year, "Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(e) The Seller will furnish to the Representative copies of the
Registration Statement (two of which will be signed and will include all
exhibits), each related preliminary prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Representative reasonably requests.
(f) The Seller will arrange for the qualification of the Certificates
for sale under the laws of the States of New York, Florida, California, Hawaii,
and the District of Columbia and will continue such qualifications in effect so
long as required for the distribution.
(g) For a period from the date of this Agreement until the retirement
of the Certificates, or until such time as the several Underwriters shall cease
to maintain a secondary market in the Certificates, whichever occurs first, the
Seller will deliver to the Representative the annual statements of compliance
and the annual independent certified public accountants' reports furnished to
the Indenture Trustee or the Eligible Lender Trustee pursuant to the Sale and
Servicing Agreement, as soon as such statements and reports are furnished to the
Indenture Trustee or the Eligible Lender Trustee.
(h) So long as any of the Certificates is outstanding, the Seller will
furnish to the Representative (i) as soon as practicable after the end of the
fiscal year all documents required to be distributed to the holders of the
Certificates or filed with the Commission on behalf of the Trust pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any order
of the Commission thereunder and (ii) from time to time, any other information
concerning the Seller as the Representative may reasonably request only insofar
as such information reasonably relates to the Registration Statement or the
transactions contemplated by the Basic Documents.
(i) On or before the Closing Date, the Seller shall mark its
accounting and other records, if any, relating to the Initial Financed Student
Loans and shall instruct the Master Servicer (which shall cause each
Sub-Servicer) to mark the computer records of the Master Servicer (or such
Sub-Servicer) relating to the Financed Student Loans to show the absolute
ownership by the Eligible Lender Trustee on behalf of the Trust of the Financed
Student Loans, and from and after the Closing Date the Seller shall not and
shall require that the Master Servicer (which shall ensure that any
Sub-Servicer) shall not take any action inconsistent with the ownership by the
Eligible Lender Trustee on behalf of the Trust of such Initial Financed Student
Loans, other than as permitted by the Sale and Servicing Agreement.
(j) To the extent, if any, that the rating provided with respect to
the Certificates by the rating agency or agencies that initially rate the
Certificates is conditional at the time of the issuance of the Certificates upon
the furnishing of documents or the taking of any other actions by the Seller
agreed upon on or prior to the Closing Date, the Seller shall furnish such
documents and take any such other actions. A copy of any such document shall be
provided to the Representative at the time it is delivered to the rating
agencies.
(k) For the period beginning on the date of this Agreement and ending
90 days after the Closing Date, neither the Seller nor any trust originated,
directly or indirectly, by the Seller will, without the prior written consent of
the Representative, offer to sell or sell notes (other than the Notes)
collateralized by, or certificates (other than the Certificates) evidencing an
ownership interest in, student loans; PROVIDED, HOWEVER, that this shall not be
construed to prevent the sale of student loans by the Seller.
(l) The Seller will apply the net proceeds of the offering and the
sale of the Certificates and the Notes that it receives in the manner set forth
in the Prospectus under the caption "Use of Proceeds."
(m) The Seller will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the printing and filing of
the documents (including the Registration Statement and Prospectus) (ii) the
preparation, issuance and delivery of the Certificates to the Representative,
(iii) the fees and disbursements of the Seller's counsel and accountants, (iv)
the qualification of the Certificates under securities laws in accordance with
the provisions of Section 5(f), including filing fees and the fees and
disbursements of counsel for the Representative in connection therewith and in
connection with the preparation of any blue sky or legal investment survey, if
any is requested, (v) the printing and delivery to the Representative of copies
of the Registration Statement as originally filed and of each amendment thereto,
(vi) the printing and delivery to the Representative of copies of any blue sky
or legal investment survey prepared in connection with the Certificates, (vii)
any fees charged by rating agencies for the rating of the Certificates, (viii)
the fees and expenses, if any, incurred with respect to any filing with the
National Association of Securities Dealers, Inc. and (ix) the fees and expenses
of Thompson Hine & Flory LLP in its role as counsel to the Trust incurred as a
result of providing the opinions required by Section 6(h) hereof.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the several Underwriters to purchase and pay for the Certificates will be
subject to the accuracy of the representations and warranties on the part of the
Seller herein, to the accuracy of the written statements of officers of the
Seller made pursuant to the provisions of this Section, to the performance by
the Seller of its obligations hereunder and to the following additional
conditions precedent:
(a) If the Effective Time is not prior to the execution and delivery
of this Agreement, the Effective Time shall have occurred not later than 6:00
p.m., New York City time, on the date of this Agreement or such later time or
date as shall have been consented to by the Representative.
(b) If the Effective Time is prior to the execution and delivery of
this Agreement, the Prospectus and any supplements thereto shall have been filed
with the Commission in accordance with the Rules and Regulations and Section
5(a) hereof. Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Seller or the Representative, shall be contemplated by the Commission.
(c) The Representative shall have received a letter, dated on or prior
to the Closing Date of Ernst & Young LLP on behalf of the Seller confirming that
such accountants are independent public accountants within the meaning of the
Act and the applicable published Rules and Regulations thereunder, and
substantially in the form of the drafts to which the Representative has
previously agreed and otherwise in form and substance reasonably satisfactory to
the Representative and its counsel.
(d) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Trust, KBUSA or KeyCorp which, in the judgment of the Representative,
materially impairs the investment quality of the Certificates or makes it
impractical or inadvisable to market the Certificates; (ii) any downgrading in
the rating of any debt securities of KBUSA or KeyCorp by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of KBUSA or
KeyCorp (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating); (iii)
any suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange;
(iv) any suspension of trading of any securities of KBUSA or KeyCorp on any
exchange or in the over-the-counter market; (v) any banking moratorium declared
by Federal or New York authorities; or (vi) any outbreak or escalation of
hostilities involving the United States or the declaration by the United States
of a national emergency or war, if the effect of any such event specified in
this clause (vi) in the judgment of the Representative makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Certificates on the terms and in the manner contemplated in the Prospectus.
(e) The Representative shall have received an opinion of Forrest F.
Stanley, Esq., General Counsel of KBUSA, as counsel for KBUSA, as the Seller,
the Master Servicer, the Cap Provider and the Administrator, dated the Closing
Date, in the form attached hereto as Exhibit A, or as is otherwise satisfactory
in form and substance to the Representative and its counsel.
(f) The Representative shall have received an opinion of Thompson Hine
& Flory LLP, counsel to the Seller, dated the Closing Date, in the form attached
hereto as Exhibit B, or as is otherwise satisfactory in form and substance to
the Representative and its counsel.
(g) The Representative shall have received an opinion of Kirkpatrick &
Lockhart LLP, counsel to the Seller, dated the Closing Date and satisfactory in
form and substance to the Representative and its counsel, to the effect that the
statements in the Prospectus under the headings "Summary of Terms--Income Tax
Consequences" and "Pennsylvania Income Tax Consequences--Pennsylvania Income and
Franchise Tax Consequences with Respect to the Certificates" accurately describe
the material Pennsylvania tax consequences to holders of the Certificates.
(h) The Representative shall have received an opinion addressed to the
several Underwriters of Thompson Hine & Flory LLP, in its capacity as Federal
tax and ERISA counsel for the Trust, to the effect that the statements in the
Prospectus under the headings "Summary of Terms--Tax Consequences" and "Federal
Tax Consequences for Trusts for which a Partnership Election is Made--Tax
Consequences to Holders of the Certificates" accurately describe the material
Federal income tax consequences to holders of the Certificates, and the
statements in the Prospectus under the headings "Summary of Terms--ERISA
Considerations" and "ERISA Considerations" to the extent that they constitute
statements of matters of law or legal conclusions with respect thereto, have
been prepared or reviewed by such counsel and accurately describe the material
consequences to holders of the Certificates under ERISA. Thompson Hine & Flory
LLP, in its capacity as special counsel to the Trust, shall have delivered an
opinion with respect to the characterization of the transfer of the Initial
Financed Student Loans.
(i) The Representative shall have received an opinion addressed to the
several Underwriters of Stroock & Stroock & Lavan LLP, in its capacity as
special counsel to the several Underwriters, dated the Closing Date, with
respect to the validity of the Certificates and the Notes and such other related
matters as the Representative shall reasonably require and the Seller shall have
furnished or caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(j) The Representative shall have received an opinion of Dean Blakey &
Moskowitz, special student loan counsel to the Representative and, in the case
of clause (iii) below, special student loan counsel to the Eligible Lender
Trustee, dated the Closing Date, satisfactory in form and substance to the
Representative, to the effect that:
(i) the agreements implementing the Program, (including the
Coordination Agreements) and the Relevant Documents (as defined in the
opinion), and the transactions contemplated by the Relevant Documents,
conform in all material respects to the applicable requirements of the
Higher Education Act, and that, upon the due authorization, execution and
delivery of the Relevant Documents and the consummation of such
transactions, the Financed Federal Loans, legal title to which will be held
by the Eligible Lender Trustee on behalf of the Trust, will qualify,
subject to compliance with all applicable origination and servicing
requirements, for all applicable federal assistance payments, including
federal reinsurance and federal interest subsidies and special allowance
payments;
(ii) such counsel has examined the Registration Statement and the
Prospectus, and nothing has come to such counsel's attention that would
lead such counsel to believe that, solely with respect to the Higher
Education Act and the student loan business, the Registration Statement or
the Prospectus or any amendment or supplement thereto as of the respective
dates thereof or on the Closing Date contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein not misleading; and
(iii) the Eligible Lender Trustee is an "eligible lender" as such term
is defined in Section 435(d) of the Higher Education Act for purposes of
holding legal title to the Financed Federal Loans.
(k) The Representative shall have received an opinion of counsel to
PHEAA, dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, to the effect that:
(i) PHEAA has been duly organized and is validly existing as an agency
of the Commonwealth of Pennsylvania in good standing under the laws thereof
with full power and authority (corporate and other) to own its properties
and conduct its business, as presently conducted by it, and to enter into
and perform its obligations under the PHEAA Sub-Servicing Agreement and the
Guarantee Agreement (and the agreements with the Department under Section
428 of the Higher Education Act to the extent relevant to PHEAA's
obligations under such Guarantee Agreement) to which it is a party, and had
at all relevant times, and now has, the power, authority and legal right to
service the Financed Student Loans it is servicing, to guarantee the
Financed Federal Loans covered by such Guarantee Agreement and to receive,
subject to compliance with all applicable conditions, restrictions and
limitations of the Higher Education Act, reinsurance payments from the
Department with respect to claims paid by it on such Financed Federal
Loans.
(ii) PHEAA is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render any Financed Student Loan or PHEAA's obligation under its Guarantee
Agreement unenforceable by or on behalf of the Trust.
(iii) Each of the PHEAA Sub-Servicing Agreement and the Guarantee
Agreement to which it is a party (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
PHEAA's obligations under such Guarantee Agreement) to which PHEAA is a
party has been duly authorized, executed and delivered by PHEAA and is the
legal, valid and binding obligation of PHEAA enforceable against PHEAA in
accordance with its terms, notwithstanding the existence of any doctrine of
sovereign immunity except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by PHEAA of the PHEAA Sub-
Servicing Agreement or the Guarantee Agreement to which it is a party, nor
the consummation by PHEAA of the transactions contemplated therein nor the
fulfillment of the terms thereof by PHEAA will conflict with, result in a
breach, violation or acceleration of, or constitute a default under, any
term or provision of the certificate of incorporation or by-laws of PHEAA
or of any indenture or other agreement or instrument to which PHEAA is a
party or by which PHEAA is bound, or result in a violation of or contravene
the terms of any statute, order or regulation applicable to PHEAA of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over PHEAA.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
PHEAA before or by any governmental authority that might materially and
adversely affect the performance by PHEAA of its obligations under, or the
validity or enforceability of, the PHEAA Sub-Servicing Agreement or the
Guarantee Agreement (or the agreements with the Department under Section
428 of the Higher Education Act to the extent relevant to PHEAA's
obligations under such Guarantee Agreement) to which it is a party.
(vi) Nothing has come to such counsel's attention that would lead such
counsel to believe that the representations and warranties of PHEAA
contained in the PHEAA Sub-Servicing Agreement are other than as stated
therein.
(l) The Representative shall have received an opinion of counsel to
Great Lakes, dated the Closing Date and satisfactory in form and substance to
the Representative and its counsel, to the effect that:
(i) Great Lakes has been duly organized and is validly existing as a
Wisconsin corporation in good standing under the laws thereof with full
power and authority (corporate and other) to own its properties and conduct
its business, as presently conducted by it, and to enter into and perform
its obligations under the Great Lakes Sub-Servicing Agreement, and had at
all relevant times, and now has, the power, authority and legal right to
service the Financed Student Loans it is servicing.
(ii) The Great Lakes Sub-Servicing Agreement has been duly authorized,
executed and delivered by Great Lakes and is the legal, valid and binding
obligation of Great Lakes enforceable against Great Lakes in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iii) Neither the execution and delivery by Great Lakes of the Great
Lakes Sub-Servicing Agreement, nor the consummation by Great Lakes of the
transactions contemplated therein nor the fulfillment of the terms thereof
by Great Lakes will conflict with, result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of
the certificate of incorporation or by-laws of Great Lakes or of any
indenture or other agreement or instrument to which Great Lakes is a party
or by which Great Lakes is bound, or result in a violation of or contravene
the terms of any statute, order or regulation applicable to Great Lakes of
any court, regulatory body, administrative agency or governmental body
having jurisdiction over Great Lakes.
(iv) There are no actions, proceedings or investigations pending or,
to the best of such counsel's knowledge after due inquiry, threatened
against Great Lakes before or by any governmental authority that might
materially and adversely affect the performance by Great Lakes of its
obligations under, or the validity or enforceability of, the Great Lakes
Sub-Servicing Agreement.
(v) Nothing has come to such counsel's attention that would lead such
counsel to believe that the representations and warranties of Great Lakes
contained in the Great Lakes Sub-Servicing Agreement are other than as
stated therein.
(m) The Representative shall have received an opinion of counsel to
the Massachusetts Higher Education Assistance Corporation, now doing business as
American Student Assistance, a Massachusetts non-profit corporation ("ASA"),
dated the Closing Date and satisfactory in form and substance to the
Representative and its counsel, to the effect that:
(i) ASA has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the Commonwealth
of Massachusetts with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Guarantee Agreement
(and the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to ASA's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) ASA is duly qualified to do business and is in good standing, and
has obtained all necessary licenses and approvals in each jurisdiction in
which failure to qualify or to obtain such license or approval would render
ASA's obligation under its Guarantee Agreement to guarantee the Financed
Federal Loans covered thereby unenforceable by or on behalf of the Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
ASA's obligations under such Guarantee Agreement) to which ASA is a party
has been duly authorized, executed and delivered by ASA and is the legal,
valid and binding obligation of ASA enforceable against ASA in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by ASA of the Guarantee
Agreement to which it is a party, nor the consummation by ASA of the
transactions contemplated therein nor the fulfillment of the terms thereof
by ASA will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of ASA or of any indenture or other agreement
or instrument to which ASA is a party or by which ASA is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to ASA of any court, regulatory body, administrative
agency or governmental body having jurisdiction over ASA.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
ASA before or by any governmental authority that might materially and
adversely affect the performance by ASA of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to ASA's obligations under such Guarantee Agreement) to
which it is a party.
(n) The Representative shall have received an opinion of counsel to
the Nebraska Student Loan Program ("NSLP"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) NSLP has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nebraska with
full power and authority (corporate and other) to own its properties and
conduct its business, as presently conducted by it, and to enter into and
perform its obligations under the Guarantee Agreement (and the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to NSLP's obligations under such Guarantee Agreement) to
which it is a party, and had at all relevant times, and now has, the power,
authority and legal right to guarantee the Financed Federal Loans covered
by such Guarantee Agreement and to receive, subject to compliance with all
applicable conditions, restrictions and limitations of the Higher Education
Act, reinsurance payments from the Department with respect to claims paid
by it on such Financed Federal Loans.
(ii) NSLP is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render NSLP's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
NSLP's obligations under such Guarantee Agreement) to which NSLP is a party
has been duly authorized, executed and delivered by NSLP and is the legal,
valid and binding obligation of NSLP enforceable against NSLP in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by NSLP of the Guarantee
Agreement to which it is a party, nor the consummation by NSLP of the
transactions contemplated therein nor the fulfillment of the terms thereof
by NSLP will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of NSLP or of any indenture or other agreement
or instrument to which NSLP is a party or by which NSLP is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to NSLP of any court, regulatory body, administrative
agency or governmental body having jurisdiction over NSLP.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
NSLP before or by any governmental authority that might materially and
adversely affect the performance by NSLP of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to NSLP's obligations under such Guarantee Agreement) to
which it is a party.
(o) The Representative shall have received an opinion of counsel to
the California Student Aid Commission ("CSAC"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) CSAC has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of
California with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to CSAC's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) CSAC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render CSAC's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
CSAC's obligations under such Guarantee Agreement) to which CSAC is a party
has been duly authorized, executed and delivered by CSAC and is the legal,
valid and binding obligation of CSAC enforceable against CSAC in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by CSAC of the Guarantee
Agreement to which it is a party, nor the consummation by CSAC of the
transactions contemplated therein nor the fulfillment of the terms thereof
by CSAC will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of CSAC or of any indenture or other agreement
or instrument to which CSAC is a party or by which CSAC is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to CSAC of any court, regulatory body, administrative
agency or governmental body having jurisdiction over CSAC.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
CSAC before or by any governmental authority that might materially and
adversely affect the performance by CSAC of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to CSAC's obligations under such Guarantee Agreement) to
which it is a party.
(p) The Representative shall have received an opinion of counsel to
the Educational Credit Management Corporation ("ECMC"), dated the Closing Date
and satisfactory in form and substance to the Representative and its counsel, to
the effect that:
(i) ECMC has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of
Minnesota with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to ECMC's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) ECMC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render ECMC's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
ECMC's obligations under such Guarantee Agreement) to which ECMC is a party
has been duly authorized, executed and delivered by ECMC and is the legal,
valid and binding obligation of ECMC enforceable against ECMC in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by ECMC of the Guarantee
Agreement to which it is a party, nor the consummation by ECMC of the
transactions contemplated therein nor the fulfillment of the terms thereof
by ECMC will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of ECMC or of any indenture or other agreement
or instrument to which ECMC is a party or by which ECMC is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to ECMC of any court, regulatory body, administrative
agency or governmental body having jurisdiction over ECMC.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
ECMC before or by any governmental authority that might materially and
adversely affect the performance by ECMC of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to ECMC's obligations under such Guarantee Agreement) to
which it is a party.
(q) The Representative shall have received an opinion of counsel to
the New York State Higher Education Services Corporation ("HESC"), dated the
Closing Date and satisfactory in form and substance to the Representative and
its counsel, to the effect that:
(i) HESC has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of New
York with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to HESC's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) HESC is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render HESC's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
HESC's obligations under such Guarantee Agreement) to which HESC is a party
has been duly authorized, executed and delivered by HESC and is the legal,
valid and binding obligation of HESC enforceable against HESC in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by HESC of the Guarantee
Agreement to which it is a party, nor the consummation by HESC of the
transactions contemplated therein nor the fulfillment of the terms thereof
by HESC will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of HESC or of any indenture or other agreement
or instrument to which HESC is a party or by which HESC is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to HESC of any court, regulatory body, administrative
agency or governmental body having jurisdiction over HESC.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
HESC before or by any governmental authority that might materially and
adversely affect the performance by HESC of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to HESC's obligations under such Guarantee Agreement) to
which it is a party.
(r) The Representative shall have received an opinion of counsel to
the United Student Aid Funds, Inc. ("USAF"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) USAF has been duly incorporated and is validly existing as a
non-profit corporation in good standing under the laws of the State of
Indiana with full power and authority (corporate and other) to own its
properties and conduct its business, as presently conducted by it, and to
enter into and perform its obligations under the Guarantee Agreement (and
the agreements with the Department under Section 428 of the Higher
Education Act to the extent relevant to USAF's obligations under such
Guarantee Agreement) to which it is a party, and had at all relevant times,
and now has, the power, authority and legal right to guarantee the Financed
Federal Loans covered by such Guarantee Agreement and to receive, subject
to compliance with all applicable conditions, restrictions and limitations
of the Higher Education Act, reinsurance payments from the Department with
respect to claims paid by it on such Financed Federal Loans.
(ii) USAF is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render USAF's obligation under its Guarantee Agreement to guarantee the
Financed Federal Loans covered thereby unenforceable by or on behalf of the
Trust.
(iii) The Guarantee Agreement (and the agreements with the Department
under Section 428 of the Higher Education Act to the extent relevant to
USAF's obligations under such Guarantee Agreement) to which USAF is a party
has been duly authorized, executed and delivered by USAF and is the legal,
valid and binding obligation of USAF enforceable against USAF in accordance
with its terms, except (x) the enforceability thereof may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights and (y) the remedy
of specific performance and injunctive and other forms of equitable relief
may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by USAF of the Guarantee
Agreement to which it is a party, nor the consummation by USAF of the
transactions contemplated therein nor the fulfillment of the terms thereof
by USAF will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of USAF or of any indenture or other agreement
or instrument to which USAF is a party or by which USAF is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to USAF of any court, regulatory body, administrative
agency or governmental body having jurisdiction over USAF.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
USAF before or by any governmental authority that might materially and
adversely affect the performance by USAF of its obligations under, or the
validity or enforceability of, the Guarantee Agreement (or the agreements
with the Department under Section 428 of the Higher Education Act to the
extent relevant to USAF's obligations under such Guarantee Agreement) to
which it is a party.
(s) The Representative shall have received an opinion of Kotin,
Crabtree & Strong, counsel to The Education Resources Institute, Inc., a
Massachusetts non-profit corporation ("TERI"), dated the Closing Date and
satisfactory in form and substance to the Representative and its counsel, to the
effect that:
(i) TERI has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the Commonwealth of
Massachusetts with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Guarantee Agreement to
which it is a party, and had at all relevant times, and now has, the power,
authority and legal right to guarantee the Financed Private Loans covered
by such Guarantee Agreement.
(ii) TERI is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render TERI's obligation under its Guarantee Agreement to guarantee the
Financed Private Loans unenforceable by or on behalf of the Trust.
(iii) The Guarantee Agreement to which TERI is a party has been duly
authorized, executed and delivered by TERI and is the legal, valid and
binding obligation of TERI enforceable against TERI in accordance with its
terms, except (x) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (y) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iii) Neither the execution and delivery by TERI of the Guarantee
Agreement to which it is a party, nor the consummation by TERI of the
transactions contemplated therein nor the fulfillment of the terms thereof
by TERI will conflict with, result in a breach, violation or acceleration
of, or constitute a default under, any term or provision of the certificate
of incorporation or by-laws of TERI or of any indenture or other agreement
or instrument to which TERI is a party or by which TERI is bound, or result
in a violation of or contravene the terms of any statute, order or
regulation applicable to TERI of any court, regulatory body, administrative
agency or governmental body having jurisdiction over TERI.
(iv) There are no actions, proceedings or investigations pending or,
to the best of such counsel's knowledge after due inquiry, threatened
against TERI before or by any governmental authority that might materially
and adversely affect the performance by TERI of its obligations under, or
the validity or enforceability of, the Guarantee Agreement to which it is a
party.
(t) The Representative shall have received an opinion of, counsel to
HEMAR Insurance Company of America, an indirect subsidiary of SLM Holding
Corporation ("HICA"), dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, to the effect that:
(i) HICA has been duly incorporated and is validly existing as a for
profit insurance corporation in good standing under the laws of the state
of South Dakota with full power and authority (corporate and other) to own
its properties and conduct its business, as presently conducted by it, and
to enter into and perform its obligations under the Surety Bonds and the
Endorsement described in the preliminary prospectus dated September 20,
1999 and the Prospectus dated September 30, 1999 and had at all relevant
times, and now has, the power, authority and legal right to insure the
Financed Private Loans covered by such Surety Bonds and the Endorsement
thereto. The Financed Private Loans are subject to the terms and conditions
of the Surety Bonds and the Endorsement under which they have been insured.
(ii) HICA is duly qualified to do business and is in good standing,
and has obtained all necessary licenses and approvals in each jurisdiction
in which failure to qualify or to obtain such license or approval would
render HICA's obligation under the Surety Bonds and the Endorsement thereto
to insure the Financed Private Loans unenforceable by or on behalf of the
Trust.
(iii) The Surety Bonds and the Endorsement thereto to which HICA is a
party have been duly authorized, executed and delivered by HICA and are the
legal, valid and binding obligations of HICA enforceable against HICA in
accordance with its terms, except (x) the enforceability thereof may be
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights and
(y) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(iv) Neither the execution and delivery by HICA of the Surety Bonds
and the Endorsement thereto to which it is a party, nor the consummation by
HICA of the transactions contemplated therein nor the fulfillment of the
terms thereof by HICA will conflict with, result in a breach, violation or
acceleration of, or constitute a default under, any term or provision of
the certificate of incorporation or by-laws of HICA or of any indenture or
other agreement or instrument to which HICA is a party or by which HICA is
bound, or result in a violation of or contravene the terms of any statute,
order or regulation applicable to HICA of any court, regulatory body,
administrative agency or governmental body having jurisdiction over HICA.
(v) There are no actions, proceedings or investigations pending or, to
the best of such counsel's knowledge after due inquiry, threatened against
HICA before or by any governmental authority that might materially and
adversely affect the performance by HICA of its obligations under, or the
validity or enforceability of, the Surety Bonds and the Endorsement thereto
to which it is a party.
(u) The Representative shall have received an opinion of counsel to
the Eligible Lender Trustee, dated the Closing Date and satisfactory in form and
substance to the Representative and its counsel, to the effect that:
(i) The Eligible Lender Trustee is a national banking association duly
incorporated or organized and validly existing under the laws of the United
States.
(ii) The Eligible Lender Trustee has the full corporate trust power to
accept the office of eligible lender trustee under the Trust Agreement and
to enter into and perform its obligations under the Trust Agreement, the
Sale and Servicing Agreement and, on behalf of the Trust, under the
Indenture, the Sale and Servicing Agreement, the Administration Agreement
and the Guarantee Agreements.
(iii) The execution and delivery of the Trust Agreement and the Sale
and Servicing Agreement and, on behalf of the Trust, of the Indenture, the
Sale and Servicing Agreement, the Administration Agreement and the
Guarantee Agreements, and the performance by the Eligible Lender Trustee of
its obligations under the Trust Agreement, the Indenture, the Sale and
Servicing Agreement, the Administration Agreement and the Guarantee
Agreements have been duly authorized by all necessary action of the
Eligible Lender Trustee and each has been duly executed and delivered by
the Eligible Lender Trustee.
(iv) The Trust Agreement, the Sale and Servicing Agreement and the
Administration Agreement constitute valid and binding obligations of the
Eligible Lender Trustee enforceable against the Eligible Lender Trustee in
accordance with their terms.
(v) The execution and delivery by the Eligible Lender Trustee of the
Trust Agreement and the Sale and Servicing Agreement and, on behalf of the
Trust, of the Indenture, the Sale and Servicing Agreement, the
Administration Agreement and the Guarantee Agreements do not require any
consent, approval or authorization of, or any registration or filing with,
any applicable governmental authority.
(vi) Each of the Certificates has been duly executed and delivered by
the Eligible Lender Trustee, as eligible lender trustee and authenticating
agent. Each of the Notes has been duly executed and delivered by the
Eligible Lender Trustee, on behalf of the Trust.
(vii) Neither the consummation by the Eligible Lender Trustee of the
transactions contemplated in the Sale and Servicing Agreement, the
Indenture, the Trust Agreement or the Administration Agreement nor the
fulfillment of the terms thereof by the Eligible Lender Trustee will
conflict with, result in a breach or violation of, or constitute a default
under any law or the charter, by-laws or other organizational documents of
the Eligible Lender Trustee or the terms of any indenture or other
agreement or instrument known to such counsel and to which the Eligible
Lender Trustee or any of its subsidiaries is a party or is bound or any
judgment, order or decree known to such counsel to be applicable to the
Eligible Lender Trustee or any of its subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having
jurisdiction over the Eligible Lender Trustee or any of its subsidiaries.
(viii) There are no actions, suits or proceedings pending or, to the
best of such counsel's knowledge after due inquiry, threatened against the
Eligible Lender Trustee (as eligible lender trustee under the Trust
Agreement or in its individual capacity) before or by any governmental
authority that might materially and adversely affect the performance by the
Eligible Lender Trustee of its obligations under, or the validity or
enforceability of, the Trust Agreement or the Sale and Servicing Agreement.
(ix) The execution, delivery and performance by the Eligible Lender
Trustee of the Sale and Servicing Agreement, the Indenture, the Trust
Agreement, the Administration Agreement or any Guarantee Agreement will not
subject any of the property or assets of the Trust or any portion thereof,
to any lien created by or arising under the Eligible Lender Trustee that
are unrelated to the transactions contemplated in such agreements.
(v) The Representative shall have received an opinion of Pepper
Hamilton LLP, Delaware counsel to the Trust, dated the Closing Date, in
form and substance satisfactory to the Representative and its counsel.
(w) The Representative shall have received an opinion of Pepper
Hamilton LLP, counsel to Bank One Delaware, Inc. in its capacity as Delaware
Trustee under the Trust Agreement, dated the Closing Date, in form and substance
satisfactory to the Representative and its counsel.
(x) The Representative shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the
principal financial officer or the principal accounting officer of KBUSA in
which such officers shall state that, to the best of their knowledge after
reasonable investigation, (i) the representations and warranties of KBUSA,
contained in each Basic Document to which it is a party, are true and correct in
all material respects, that KBUSA has complied with all agreements and satisfied
all conditions on its part to be performed or satisfied under such agreements,
in whatever capacity it is a party to such agreements, at or prior to the
Closing Date, and that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission, and (ii) since June 30,
1999, except as may be disclosed in the Prospectus or in such certificate, no
material adverse change, or any development involving a prospective material
adverse change, in or affecting particularly the business or properties of the
Trust, or KBUSA, as applicable, has occurred.
(y) The Representative shall have received certificates dated the
Closing Date of any two of the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the
principal financial officer or the principal accounting officer of each of the
Sub-Servicers in which such officers shall state that, to the best of their
knowledge after reasonable investigation, (i) the representations and warranties
of such Sub-Servicer contained in the related Subservicing Agreement are true
and correct in all material respects, and that such Sub-Servicer has complied
with all agreements and satisfied all conditions on its part to be performed or
satisfied under such agreements at or prior to the Closing Date, and (ii) since
June 30, 1999, except as may be disclosed in the Prospectus or in such
certificate, no material adverse change, or any development involving a
prospective material adverse change, in or affecting particularly the business
or properties of such Sub-Servicer.
(z) The Representative shall have received evidence satisfactory to it
that, on or before the Closing Date, UCC-1 financing statements have been or are
being filed in the office of the Secretary of State of the States of Ohio,
Pennsylvania, Wisconsin, Delaware, New York and Illinois, as applicable,
reflecting the transfer of the interest of the Seller in the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Trust and the proceeds
thereof to the Trust and the grant of the security interest by the Trust in the
Financed Student Loans and the proceeds thereof to the Indenture Trustee.
(aa) The Certificates shall be rated "A3" by Moody's Investors
Service, Inc. ("Moody's"), "A" Fitch IBCA, Inc. ("Fitch"), and "A" Standard and
Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc. ("S&P")
and each a "Rating Agency"), and no Rating Agency shall have placed any
Certificate under surveillance or review with possible negative implications.
(bb) The issuance of the Notes and the Certificates shall not have
resulted in a reduction or withdrawal by any Rating Agency of the current rating
of any outstanding securities issued or originated by the Seller or any of its
affiliates.
(cc) On the Closing Date, $280,000,000 aggregate principal amount of
the Class A-1 Notes, $625,000,000 aggregate principal amount of the Class A-2
Notes, and $30,000,000 aggregate principal amount of the Class M Notes shall
have been issued and sold.
(dd) TERI shall have furnished to the Representative a certificate of
TERI, signed by the President or any Executive Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to TERI in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ee) PHEAA shall have furnished to the Representative a certificate of
PHEAA, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to PHEAA in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ff) ASA shall have furnished to the Representative a certificate of
ASA, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to ASA in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(gg) Great Lakes shall have furnished to the Representative a
certificate of Great Lakes, signed by the President or any Executive Vice
President, dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Prospectus (excluding any documents
incorporated by reference therein) and this Agreement and that, to the best of
his knowledge any information with respect to Great Lakes in the Prospectus, as
of its date, did not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(hh) NSLP shall have furnished to the Representative a certificate of
NSLP, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to NSLP in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ii) CSAC shall have furnished to the Representative a certificate of
CSAC, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to CSAC in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(jj) ECMC shall have furnished to the Representative a certificate of
ECMC, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to ECMC in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(kk) HESC shall have furnished to the Representative a certificate of
HESC, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to HESC in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(ll) USAF shall have furnished to the Representative a certificate of
USAF, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to USAF in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(mm) HICA shall have furnished to the Representative a certificate of
HICA, signed by the President or any Senior Vice President, dated the Closing
Date, to the effect that the signer of such certificate has carefully examined
the Prospectus (excluding any documents incorporated by reference therein) and
this Agreement and that, to the best of his knowledge any information with
respect to HICA in the Prospectus, as of its date, did not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(nn) Each of the Basic Documents shall have been executed and
delivered by the parties thereto. Each of the Sub-Servicers shall have executed
and delivered the related Sub-Servicing Agreement. Each of the Guarantors shall
have executed and delivered the related Guarantee Agreement.
The Seller will provide or cause to be provided to the Representative
such conformed copies of such of the foregoing opinions, certificates, letters
and documents as the Representative reasonably requests.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Seller will indemnify and
hold each Underwriter harmless against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
(x) the Registration Statement, the Preliminary Prospectus Supplement, the
Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and (y) the Prospectus or any amendment or supplement thereto or any related
Preliminary Prospectus Supplement, or arise out of or are based upon the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading and will reimburse each Underwriter for any legal or
other expenses reasonably incurred by such Underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; PROVIDED, HOWEVER, that the Seller will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the Seller
by any Underwriter through the Representative specifically for use therein.
(b) Each Underwriter agrees, severally and not jointly; to indemnify
and hold harmless the Seller against any losses, claims, damages or liabilities
to which the Seller may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in (x) the Registration Statement, the
Preliminary Prospectus Supplement, the Prospectus or any amendment or supplement
thereto, or arise out of or are based upon the omission or the alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and (y) the Prospectus or any
amendment or supplement thereto or any related Preliminary Prospectus
Supplement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading and in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information relating to
such Underwriter furnished to the Seller by such Underwriter through the
Representative specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Seller in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by the indemnified party of the counsel appointed
by the indemnifying party, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In no event shall the
indemnifying party be liable for fees and expenses for more than one counsel
separate from their own counsel for all indemnified parties in connection with
any one action or related actions in the same jurisdiction arising out of the
same general allegations or circumstances unless any such indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to or in
conflict with those available to the other indemnified parties and in the
judgment of such counsel it is advisable for such indemnified party to employ
separate counsel. An indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnifying party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Seller on the
one hand and the Underwriters on the other from the offering of the Certificates
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Seller on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Seller on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Seller bear to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Seller or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this subsection (d) were
determined by PRO RATA allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities referred to in the first sentence
of this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Certificates underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, except as may be
provided in any agreement among the Underwriters relating to the offering of the
Certificates. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The obligations
of the Underwriters in this subsection (d) to contribute are several in
proportion their respective underwriting obligations and not joint.
(e) The obligations of the Seller under this Section shall be in
addition to any liability which the Seller may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Seller, to each officer of the Seller
who has signed the Registration Statement and to each person, if any, who
controls the Seller within the meaning of the Act.
8. SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement or contained in certificates of officers of the
Seller submitted pursuant hereto shall remain operative and in full force and
effect, regardless of any investigation or statement as to the results thereof,
made by or on behalf of any Underwriter, the Seller or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Certificates. If for any reason the
purchase of the Certificates by the Underwriters is not consummated, the Seller
shall remain responsible for the expenses to be paid or reimbursed by the Seller
pursuant to Section 5 and the respective obligations of the Seller and the
Underwriters pursuant to Section 7 shall remain in effect. If for any reason the
purchase of the Certificates by the Underwriters is not consummated (other than
pursuant to Section 9), the Seller will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Certificates.
9. FAILURE TO PURCHASE THE CERTIFICATES. If any Underwriter or
Underwriters default in their obligations to purchase its portion of the
Certificates hereunder and the aggregate principal amount of the Certificates
that such defaulting Underwriter or Underwriters agreed but failed to purchase
does not exceed 10% of the total principal amount of the Certificates, the
Representative may make arrangements satisfactory to the Seller for the purchase
of such Certificates by other persons, including any of the Underwriters, but if
no such arrangements are made by the Closing Date, the non-defaulting
Underwriters shall be obligated severally, in proportion to their respective
commitments hereunder, to purchase the Certificates that such defaulting
Underwriters agreed but failed to purchase. If any Underwriter or Underwriters
so default and the aggregate principal amount of the Certificates with respect
to such default or defaults exceeds 10% of the total principal amount of the
Certificates and arrangements satisfactory to the Representative and the Seller
for the purchase of such Certificates by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter or the Seller, except as provided in
Section 7. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve a
defaulting Underwriter or Underwriters from liability for its default.
10. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representative at 11 Madison Avenue, New York, NY 10010, Attention:
Joseph Fashano; if sent to the Seller, will be mailed, delivered or telegraphed
and confirmed to it at Key Bank USA, National Association, 800 Superior Avenue,
Cleveland, OH 44144, Attention: Senior Vice President, Education Lending;
PROVIDED, HOWEVER, that any notice to an Underwriter pursuant to Section 7 will
be mailed, delivered or telegraphed and confirmed to such Underwriter. Any such
notice will take effect at the time of receipt.
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligations hereunder.
12. REPRESENTATION OF UNDERWRITERS. The Representative shall act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representative will be binding upon all the
Underwriters.
13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. This Agreement will be governed by, and construed
in accordance with, the laws of the State of New York.
<PAGE>
If the foregoing is in accordance with the understanding of the
Representative of our agreement, kindly sign and return to us one of the
counterparts hereof, whereupon it will become a binding agreement between the
Seller and the several Underwriters in accordance with its terms.
Very truly yours,
KEY BANK USA, NATIONAL ASSOCIATION
By: /s/ Donald Schilling
-------------------------------
Name: Donald Schilling
Title: Senior Vice President
The foregoing Certificate
Underwriting Agreement is hereby confirmed
and accepted as of the date first written above.
CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Paul Vambutas
---------------------------
Name: Paul Vambutas
Title: Vice President
Acting on behalf of itself and as Representative of the
several Underwriters.
<PAGE>
SCHEDULE I
UNDERWRITER Certificates
Credit Suisse First Boston Corporation......................... $65,000,000
Total.......................................................... $65,000,000
===========
<PAGE>
APPENDIX A
[Form of Opinion of Counsel to Key Bank USA, National Association]
September 30, 1999
Credit Suisse First Boston Corporation Moody's Investor Service, Inc.
11 Madison Avenue 99 Church Street, 4th Floor
New York, New York 10010 New York, New York 10007
Bank One, National Association Fitch IBCA, Inc.
1 Bank One Plaza, Suite IL1-0126 One State Street Plaza
Chicago, Illinois 60670-0126 New York, New York 10004
Bankers Trust Company Standard & Poor's Ratings Group
Four Albany Street 26 Broadway, 15th Floor
New York, New York 10006 New York, New York 10004
Re: KEYCORP STUDENT LOAN TRUST 1999-B
Gentlemen:
I am the General Counsel of Key Bank USA, National Association (the
"Bank") and have acted as counsel to the Bank in connection with the issuance
and sale by the KeyCorp Student Loan Trust 1999-B (the "Trust") of (i) Floating
Rate Class A-1 Asset Backed Notes in the aggregate principal amount of
$280,000,000, Floating Rate Class A-2 Asset Backed Notes in the aggregate
principal amount of $625,000,000, and Floating Rate Class M Asset Backed Notes
in the aggregate principal amount of $30,000,000, pursuant to the Note
Underwriting Agreement dated September 30, 1999 between the Bank and Credit
Suisse First Boston Corporation (the "Note Underwriting Agreement") and (ii)
Floating Rate Asset Backed Certificates in the aggregate principal amount of
$65,000,000, pursuant to the Certificate Underwriting Agreement dated September
30, 1999 between the Bank and Credit Suisse First Boston Corporation (the
"Certificate Underwriting Agreement" and, together with the Note Underwriting
Agreement, the "Underwriting Agreements"). Except as otherwise indicated herein,
capitalized terms are defined as set forth in the Underwriting Agreements. As
used herein, "Principal Documents" shall mean, collectively, (a) the Sale and
Servicing Agreement, the Great Lakes Sub-Servicing Agreement, the PHEAA
Sub-Servicing Agreement, the Trust Agreement, the Cap Agreement and the
Administration Agreement, and (b) the Guarantee Agreement to which the Bank,
TERI, and the Eligible Lender Trustee are parties.
Based upon and subject to the limitations and qualifications set forth
below, I am of the opinion that:
(1) The Bank has been duly organized and is validly existing as a
national banking association in good standing under the laws of the United
States of America, with corporate power and authority to own its properties and
to conduct its business as now conducted by it and to enter into and perform its
obligations under the Underwriting Agreements and the Principal Documents, and
had, at all relevant times, and now has the corporate power and authority, and
legal right, to acquire, own, and sell the Initial Financed Student Loans.
(2) The Bank has duly authorized, executed, and delivered the written
order to the Eligible Lender Trustee to authenticate the Certificates. When the
Certificates have been duly executed, authenticated, and delivered in accordance
with the Trust Agreement and the Certificates have been delivered and paid for
pursuant to the Certificate Underwriting Agreement, the Certificates will be
validly issued and entitled to the benefits of the Trust Agreement, subject to
the General Qualifications (as defined in Appendix A).
(3) The Bank has duly authorized, executed, and delivered the written
order to the Eligible Lender Trustee to execute and deliver the Issuer Order to
the Indenture Trustee. When the Notes have been duly executed, delivered, and
authenticated in accordance with the Indenture and delivered and paid for
pursuant to the Note Underwriting Agreement, the Notes will be validly issued
and entitled to the benefits of the Indenture, subject to the General
Qualifications.
(4) The Bank has duly authorized, executed, and delivered the
Underwriting Agreements and the Principal Documents and such Principal Documents
are legal, valid, and binding obligations of the Bank, enforceable against the
Bank in accordance with their terms, subject to the General Qualifications.
(5) Neither the transfer of the Initial Financed Loans by the Bank to
the Eligible Lender Trustee on behalf of the Trust, nor the assignment by the
Bank of the Trust Estate to the Trust, nor the grant by the Trust of the
security interest in the Collateral to the Indenture Trustee pursuant to the
Indenture, nor the execution and delivery by the Bank of the Underwriting
Agreements and the Principal Documents, nor the consummation of the transactions
contemplated by the Underwriting Agreements or the Principal Documents nor the
performance by the Bank of its obligations thereunder will (i) violate the
Articles of Association and by-laws, as amended, of the Bank, (ii) breach, or
result in a default under or acceleration of, any existing obligation of the
Bank in any indenture, agreement, or instrument actually known to me, after a
reasonable investigation, which breach or default would reasonably be expected
to have a material adverse effect on the condition of the Bank, financial or
otherwise, or adversely effect the transactions contemplated by the Principal
Documents, (iii) violate or contravene the terms of any Court Order actually
known to me, or (iv) violate or contravene the terms of applicable provisions of
statutory law or regulation.
(6) There are no actions, proceedings or investigations pending
against the Bank or, to my actual knowledge, threatened against the Bank before
any court, administrative agency, or tribunal (i) asserting the invalidity of
the Trust or any of the Underwriting Agreements or Principal Documents, (ii)
seeking to prevent the consummation of any of the transactions contemplated by
any of the Underwriting Agreements or the Principal Documents or the execution
and delivery thereof, or (iii) that could reasonably be expected to materially
and adversely affect the enforceability of the Underwriting Agreements or
Principal Documents against the Bank or the ability of the Bank to perform its
obligations thereunder.
(7) No consent, approval, authorization, or order of, or filing with,
any court or governmental agency or body is required of the Bank for the
consummation of the transactions contemplated in the Principal Documents, except
such consents, approvals, authorizations, or orders as have been obtained or
such filings as have been made.
(8) To my actual knowledge, there are no legal or governmental
proceedings pending or threatened against the Bank that are required to be
disclosed in the Registration Statement, other than those disclosed therein.
(9) To my actual knowledge, there are no contracts, indentures,
mortgages, loan agreements, notes, leases, or other instruments to which the
Bank is a party that are required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto.
For purposes of this opinion, I have assumed that (i) with respect to
the opinions expressed in paragraphs 4 and 5, the Bank holds the requisite title
and rights to the Financed Student Loans, (ii) the Underwriting Agreements and
the Principal Documents have been duly executed and delivered by all parties
thereto (other than the Bank) and are valid and binding upon and enforceable
against such parties, subject to the General Qualifications, (iii) there has
been no mutual mistake of fact or misunderstanding, fraud, duress, or undue
influence, (iv) all statutes, judicial and administrative decisions, and rules
and regulations constituting Federal law and the laws of the State of Ohio are
generally available to lawyers practicing in the State of Ohio and are in a
format that make legal research reasonably feasible, and (v) Court Orders and
agreements to which the Bank is a party or by which it or its properties are
bound would be enforced as written.
The opinions expressed herein are limited to matters of Federal law
and the laws of the State of Ohio, without giving effect to principles of
conflicts of laws. This Opinion Letter addresses only the specific legal issues
addressed herein and does not, by implication or otherwise, address any other
legal issues, including without limitation: federal securities and tax laws;
state securities, "blue-sky", or tax laws; the characterization of the transfer
of the Initial Financed Student Loans by the Bank to the Trust as a sale of such
Initial Financed Student Loans or a transfer of a security interest therein, or
the form, sufficiency or other legal requirements for such sale or transfer of a
security interest (including the attachment and perfection thereof); laws,
rules, and regulations of municipalities or other political subdivisions of the
State of Ohio; and federal and state laws (such as ERISA and RICO) that in my
reasonable judgment do not relate to the opinions expressed herein.
This opinion is rendered solely to the addressees hereof, for their
use in connection with the transactions contemplated by the Underwriting
Agreements and Principal Documents and may not be relied upon for any other
purpose or by any other person.
Very truly yours,
<PAGE>
APPENDIX A
This Appendix A is attached to, and shall be deemed a part of the
Opinion Letter of Forrest F. Stanley, General Counsel of Key Bank USA, National
Association, to Credit Suisse First Boston Corporation, et al., dated September
30, 1999 (the "Opinion Letter").
A. GENERAL QUALIFICATIONS. As used in the Opinion Letter, the term "General
Qualifications" shall mean and include, without limitation:
(1) the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium, and similar laws affecting the rights and remedies of
creditors generally, including, without limitation, (a) the Federal
Bankruptcy Code; (b) all other Federal and state bankruptcy,
insolvency, reorganization, receivership, moratorium, arrangement, and
assignment for the benefit of creditors laws that affect the rights
and remedies of creditors generally or that have reference to or
affect generally only creditors of specific types of debtors, and
state laws of like character affecting generally only creditors of
financial institutions; (c) state fraudulent transfer and conveyance
laws; (d) judicially developed doctrines relevant to any of the
foregoing laws, such as substantive consolidation of entities;
(2) the effect of general principles of equity, whether applied by a court
of law or equity, including, without limitation, principles: (a)
governing the availability of specific performance, injunctive relief,
or other equitable remedies, including those principles which may
place the award of such remedies, subject to certain guidelines, in
the discretion of the court to which application for such relief is
made; (b) affording equitable defenses against a party seeking
enforcement; (c) requiring good faith and fair dealing in the
performance and enforcement of a contract by the party seeking its
enforcement; (d) requiring reasonableness in the performance and
enforcement of an agreement by the party seeking enforcement of the
contract; (e) requiring consideration of the materiality of a breach
and the consequences of the breach to the party seeking enforcement;
(f) requiring consideration of the impracticability or impossibility
of performance at the time of attempted enforcement; (g) affording
defenses based upon the unconscionability of the enforcing party's
conduct after the parties have entered into the contract; and
(3) the effect of other generally applicable rules of law that: (a) limit
or affect the enforcement of provisions of a contract that purport to
require waiver of the obligations of good faith, fair dealing,
diligence and reasonableness; (b) provide that forum selection clauses
in contracts are not necessarily binding on the court(s) in the forum
selected; (c) limit the availability of a remedy under certain
circumstances where another remedy has been elected; (d) limit the
right of a creditor to use force or cause a breach of the peace in
enforcing rights; (e) relate to the sale or disposition of collateral
or the requirements of a commercially reasonable sale; (f) limit the
enforceability of provisions releasing, exculpating or exempting a
party from, or requiring indemnification of a party for, liability for
its own action or inaction, to the extent the action or inaction
involves gross negligence, recklessness, willful misconduct or
unlawful conduct; (g) may, where less than all of a contract may be
unenforceable, limit the enforceability of the balance of the contract
to circumstances in which the unenforceable portion is not an
essential party of the agreed exchange; (h) govern and afford judicial
discretion regarding the determination of damages and entitlement to
attorneys' fees and other costs; (i) may, in the absence of a waiver
or consent, discharge a guarantor to the extent that (a) action by a
creditor impairs the value of collateral securing guaranteed debt to
the detriment of the guarantor, or (b) guaranteed debt is materially
modified; (j) may permit a party who has materially failed to render
or offer performance required by the contract to cure that failure
unless (a) permitting a cure would unreasonably hinder the aggrieved
party from making substitute arrangements for performance, or (b) it
was important in the circumstances to the aggrieved party that
performance occur by the date stated in the contract.
B. ACTUAL KNOWLEDGE. The phrases "actually known to me," my "actual knowledge"
or similar phrases shall mean the conscious awareness of facts or other
information by me or by any lawyer in the KeyCorp Law Group in Cleveland,
Ohio.
C. COURT ORDERS. The term "Court Orders" shall mean judicial administrative
orders, writs, judgments, and decrees that name the Bank, are specifically
directed to the Bank or its property, and are issued by a court of
competent jurisdiction.
<PAGE>
EXHIBIT B
[Form of Opinion of Thompson Hine & Flory LLP]
September 30, 1999
Credit Suisse First Boston Corporation,
As Representative of the Underwriters
Eleven Madison Avenue
New York, New York 10010-3629
Re: KeyCorp Student Loan Trust 1999-B; Security Interests
Ladies and Gentlemen:
We have acted as counsel to Key Bank USA, National Association (the "Seller",
Key Bank USA, National Association, as master servicer (the "Master Servicer",
and KeyCorp Student Loan Trust 1999-B (the "Trust") in connection with the
negotiation, execution and delivery of the following:
1. the Indenture, dated as of September 1, 1999, by and between the
Trust and Bankers Trust Company, as Indenture Trustee (the
"Indenture Trustee")(the "Indenture");
2. the Trust Agreement, dated as of September 1, 1999 by and among
the Seller, Bank One, National Association, as Eligible Lender
Trustee (the "Eligible Lender Trustee") and Bank One Delaware,
Inc., as Delaware Co-Trustee (the ADelaware Co-Trustee) (the
"Trust Agreement");
3. the Sale and Servicing Agreement, dated as of September 1, 1999,
by and among the Trust, the Seller, the Eligible Lender Trustee
and Key Bank USA, National Association, as Administrator and
Master Servicer (the "Sale and Servicing Agreement");
4. the Subservicing Agreement, dated as of September 1, 1999, by and
between the Master Servicer and Great Lakes Higher Education Loan
Servicing Corporation ("Great Lakes")(the "Great Lakes
Subservicing Agreement");
5. the Subservicing Agreement, dated as of September 1, 1999, by and
between the Master Servicer and Pennsylvania Higher Education
Assistance Agency ("PHEAA")(the "PHEAA Subservicing Agreement");
6. the Administration Agreement, dated as of September 1, 1999, by
and among the Trust, Key Bank USA, National Association, as
Administrator, and the Indenture Trustee (the "Administration
Agreement");
7. the Underwriting Agreement, dated as of September 30, 1999, by
and between the Seller and Credit Suisse First Boston
Corporation, as the Representative of the Underwriters (the
"Underwriting Agreement");
8. the Certificate Underwriting Agreement, dated as of September 30,
1999, by and between the Seller and Credit Suisse First Boston
Corporation, as the Representative of the Underwriters (the
"Certificate Underwriting Agreement");
9. the ISDA Master Agreement and Schedule thereto, each dated as of
September 30, 1999, by and between Key Bank USA and the Trust
(the "Cap Agreement");
10. the Key Bank USA, National Association Registration Statement
dated August 17, 1999 (Registration No. 333-80109), as amended
(such registration statement as so amended being referred to
herein as the "Registration Statement"), including the final
prospectus which was a part thereof when the Registration
Statement was declared effective (the "Prospectus"); and
11. UCC-1 financing statements as listed on EXHIBIT A attached
hereto.
The documents described in numbers 1 through 10 above are collectively referred
to herein as the "Agreements." The documents described in number 11 above and
listed on EXHIBIT A are collectively referred to herein as the "Financing
Statements." This opinion is being delivered pursuant to Section 6(f) of the
Underwriting Agreement and Section 6(f) of the Certificate Underwriting
Agreement. Capitalized terms used herein but not defined herein shall have the
meanings assigned to such terms in the Sale and Servicing Agreement.
Pursuant to the Sale and Servicing Agreement, the Seller is selling to the Trust
(or, in the case of the Initial Financed Student Loans, to the Eligible Lender
Trustee on behalf of the Trust), without recourse, for the benefit of the
Noteholders and the Certificateholders, all of its rights, title and interest in
(i) the Financed Student Loans (other than the Additional Student Loans) (the
"Initial Financed Student Loans") and all obligations of the Obligors
thereunder, including all monies paid thereunder, and all written communications
received by the Seller with respect thereto (including borrower correspondence,
notices of death, disability or bankruptcy and requests for deferrals or
forbearances), on or after the Cutoff Date, or any Subsequent Cutoff Date, as
the case may be; (ii) the Assigned Agreements insofar as they relate to the
Financed Student Loans but not with respect to any other loans covered thereby
(the "Assigned Rights"); (iii) all funds on deposit from time to time in the
Trust Accounts (including all income thereon); and (iv) the proceeds of any and
all of the foregoing (the "Collateral"). Under the terms of the Indenture, the
Trust (and, with respect to the Financed Student Loans, the Eligible Lender
Trustee) will pledge to the Indenture Trustee for the benefit of the Noteholders
all of its right, title and interests in (i) the Financed Student Loans, and all
obligations of the Obligors thereunder, including all monies paid thereunder on
or after the Cutoff Date (or, in the case of Additional Student Loans, on or
after the related Subsequent Cutoff Date); (ii) the Sale and Servicing
Agreement, including the right of the Trust to cause the Seller to repurchase or
a Subservicer to purchase, Financed Student Loans from the Trust under
circumstances described therein and including the Assigned Rights; (iii) each
Guarantee Agreement, including the right of the Issuer to cause the related
Guarantor to make Guaranty Payments in respect of the Financed Student Loans ;
(iv) all funds on deposit from time to time in the Trust Accounts; and (v) 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 from
any of the foregoing.
Concurrently with the sale of the Financed Student Loans to the Eligible Lender
Trustee (on behalf of the Trust) and the pledge of the Financed Student Loans to
the Indenture Trustee, the Eligible Lender Trustee (on behalf of the Trust) will
deliver the Certificates and the Indenture Trustee will deliver the Notes to the
Trust. The Class A Notes are being sold in a public offering pursuant to the
Underwriting Agreement. The Class M Notes and $64,350,000 of the Certificates
are being sold to Key Bank, National Association in a private offering pursuant
to the Certificate Underwriting Agreement and the Underwriting Agreement. Seller
will retain $650,000 of the Certificates.
In rendering the opinion expressed below, we have examined and relied on each of
the documents listed above, as well as originals, or copies certified or
otherwise identified to our satisfaction, of such other documents, corporate
records, certificates of public officials and such other persons, instruments,
laws, statutes, ordinances, regulations and other matters and we have made
investigations of law, as we have deemed appropriate as a basis for the opinion
expressed below, including, but not limited to, Form UCC-11 searches purporting
to show all financing statements filed against the Seller in the jurisdictions
specified in Schedule 1 hereto and the Eligible Lender Trustee and the Trust in
the jurisdictions specified in Schedule 2 hereto as listed below (collectively,
the "Lien Searches"):
1. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of State of
Ohio through July 25, 1999 for financing statements filed against
Seller, the Trust or the Eligible Lender Trustee, under the Ohio UCC
and copies of all such financing statements;
2. certificates of the Recorder of Cuyahoga County, Ohio dated
September 14, 1999, as to its searches of its records through
September 13, 1999 for financing statements filed against Seller, the
Trust or the Eligible Lender Trustee, under the Ohio UCC and copies of
all such financing statements;
3. letter from the Docket Department of Thompson Hine & Flory LLP
dated September 13, 1999, as to filings and notices of state
government tax liens, attachment liens and judgment liens with respect
to Seller, the Trust or the Eligible Lender Trustee, on file in the
Cuyahoga County, Ohio Common Pleas Court;
4. letter from the Docket Department of Thompson Hine & Flory LLP
dated September 13, 1999, as to filings and notices of Federal
government tax liens with respect to the Seller, the Trust or the
Eligible Lender Trustee, on file in the Recorder's Office of Cuyahoga
County, Ohio;
5. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of the
Commonwealth of Pennsylvania through August 31, 1999 for financing
statements filed against Seller, the Trust or the Eligible Lender
Trustee, under the Pennsylvania UCC and copies of all such financing
statements;
6. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Prothonotary of Dauphin
County, Pennsylvania through September 2, 1999 for financing
statements filed against Seller, the Trust or the Eligible Lender
Trustee, under the Pennsylvania UCC and copies of all such financing
statements;
7. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of State of
Wisconsin through July 30, 1999 for financing statements filed against
Seller, the Trust or the Eligible Lender Trustee, under the Wisconsin
UCC and copies of all such financing statements;
8. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Register of Dane
County, Wisconsin through September 3, 1999 for financing statements
filed against Seller, the Trust or the Eligible Lender Trustee, under
the Wisconsin UCC and copies of all such financing statements;
9. certificate of the Recorder of Secretary of State of Delaware dated
September 28, 1999, as to its searches of its records through
September 21, 1999 for financing statements filed against the Trust,
under the Delaware UCC and copies of all such financing statements;
10. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Secretary of State of
Illinois through September 7, 1999 for financing statements filed
against the Trust or the Eligible Lender Trustee, under the Illinois
UCC and copies of all such financing statements;
11. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Recorder of Cook
County, Illinois through August 27, 1999 for financing statements
filed against the Trust or the Eligible Lender Trustee, under the
Illinois UCC and copies of all such financing statements;
12. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the Department of State of
New York through September 3, 1999 for financing statements filed
against the Trust or the Eligible Lender Trustee, under the New York
UCC and copies of all such financing statements; and
13. letters from Intercounty Clearance Corporation dated September 10,
1999, as to its searches of the records of the City Register of New
York County, New York through August 19, 1999 for financing statements
filed against the Trust and the Eligible Lender Trustee, under the New
York UCC and copies of all such financing statements.
In rendering the opinions expressed below, we have relied, without independent
investigation, upon the Lien Searches. We have assumed that all such filings and
notices with respect to Seller have been properly filed and indexed in the
appropriate filing offices and that the Lien Searches accurately and completely
reflect all such filings and notices. Based upon certificates of Seller to the
following effect, we have assumed that no such filing or notice relating to
Seller has been made since the latest date specified in the relevant Lien
Searches.
We have not examined the Financed Student Loans and we have assumed the
conformity of the Financed Student Loans to the requirements of the Agreements.
The opinions expressed herein do not relate to or purport to cover the accuracy
of the descriptions of the Financed Student Loans in the Basic Documents or in
the financing statements filed in the offices described on Schedules 1 and 2
hereto. We have further assumed that each of the Financed Student Loans is in a
form required by the Higher Education Act and is an instrument which by its
terms does not preclude the grant of a security interest under the Agreements.
We have assumed that the promissory notes evidencing the Financed Student Loans
(the "Financed Student Loan Notes") are held and possessed by PHEAA and Great
Lakes, as applicable, pursuant to each of the PHEAA Subservicing Agreement and
the Great Lakes Subservicing Agreement, respectively. We have further assumed
that none of the Eligible Lender Trustee, the Indenture Trustee, PHEAA or Great
Lakes has received any other notice of bailment pursuant to Section 9-305 of the
Uniform Commercial Code with respect to the Financed Student Loan Notes, except
as contemplated by the Sale and Servicing Agreement, the PHEAA Subservicing
Agreement and the Great Lakes Subservicing Agreement.
In our examination in connection with this opinion, we have assumed the
authenticity of all documents submitted to us as originals, the genuineness of
all signatures, the legal capacity of all natural persons and the conformity to
the originals of all documents submitted to us as copies. In making our
examination of the documents executed by the parties thereto, we have assumed
that such parties (other than the Seller and the Trust) had the power, corporate
or otherwise, to enter into and perform all of their respective obligations
thereunder and have also assumed the due authorization by all requisite action,
corporate or otherwise, and the due execution and delivery by such parties of
such documents and the validity and binding effect thereof. We have further
assumed that there is not and will not be any other agreement that modifies or
supplements the agreements expressed in the Agreements. We have assumed there
are no prohibitions in any of the Agreements or the Basic Documents to which the
Trust or the Eligible Lender Trustee is a party that restrict the ability of
either such entity to assign or pledge interests in the Collateral and the
Indenture Trustee under the Indenture.
In rendering this opinion, we have also assumed the following matters and have
considered and relied without independent investigation upon the representations
and covenants made by the Seller in the Agreements or in certain certificates,
as of the time of the respective transfer of the Financed Student Loans by the
Seller to the Eligible Lender Trustee (on behalf of the Trust), and the
subsequent pledge by the Eligible Lender Trustee (on behalf of the Trust) of the
Financed Student Loans to the Indenture Trustee, unless otherwise specified:
A. At no time relevant to our opinion were any of the Financed Student
Loans subject to (1) any lien of any government or any agency or
instrumentality thereof, including, without limitation, any Federal,
state or local tax lien (including, without limitation, liens under
Section 6323(c)(2) and (d) of the Internal Revenue Code of 1986, as
amended), (2) any lien arising under the Employment Retirement Income
Security Act of 1974, as amended, or (3) any lien arising by operation
of law (including, without limitation, any attachment or execution
lien) or other lien which does not require the filing of a financing
statement or other appropriate notice to take priority over other
security interests.
B. No Financed Student Loans will be subject to any interest that is
inconsistent with the transfer of the Financed Student Loans to the
Eligible Lender Trustee (on behalf of the Trust) or the pledge of the
Financed Student Loans to the Indenture Trustee.
C. The chief executive office of the Seller is located at Key Tower,
127 Public Square, Cleveland, Cuyahoga County, Ohio.
D. The chief executive office of the Trust is located at the chief
executive office of the Eligible Lender Trustee, 1 First National
Plaza, Chicago, Illinois 60670.
E. The chief executive office of the Eligible Lender Trustee is
located at 1 First National Plaza, Chicago, Illinois 60670.
F. None of the Seller, Trust or Eligible Lender Trustee has changed
its name, identity or corporate structure, or the location of its
chief executive office within the past four months.
G. There has been delivered to the Eligible Lender Trustee from the
Seller a Schedule of Financed Student Loans in accordance with the
terms of the Sale and Servicing Agreement.
H. The Financing Statements contain the correct name of the applicable
secured party and the current address of the secured party from which
information concerning the security interests may be obtained.
I. The Financing Statements will be filed with the appropriate filing
offices as listed on Exhibit A. We have further assumed that no other
financing statements relating to the Financed Student Loans will be
filed in the filing offices between the date hereof and the actual
date the Financing Statements are filed.
J. Value has been given (1) by the Eligible Lender Trustee (on behalf
of the Trust) to the Seller in connection with the transfer of the
Financed Student Loans by the Seller to the Trust and (2) by the
Indenture Trustee to the Eligible Lender Trustee (on behalf of the
Trust) in connection with the grant of the liens and security
interests by the Trust in favor of the Indenture Trustee.
K. At all times material to our opinion, all factual statements
contained in certificates delivered to us by the Seller, the Indenture
Trustee or the Eligible Lender Trustee were accurate and correct.
The Seller has delivered a certificate stating that, with respect to all
Financed Student Loans transferred to the Trust, it had good and marketable
title to the Financed Student Loans, free and clear of all liens at the time of
transfer and confirming the matters set forth in paragraphs C, F, and G above.
The Eligible Lender Trustee has delivered a certificate stating that it does not
have knowledge of any lien affecting the Financed Student Loans or the proceeds
thereof except as reflected in the Sale and Servicing Agreement and in favor of
the Indenture Trustee as set forth in the Indenture. The Indenture Trustee has
delivered a certificate stating that it does not have knowledge of any lien
affecting the Financed Student Loans or the proceeds thereof except as reflected
in the Sale and Servicing Agreement and the Indenture.
In addition, we have been advised that any Financed Student Loan Notes held or
possessed by PHEAA (which will be held or possessed at PHEAA's office located in
the Commonwealth of Pennsylvania) or Great Lakes (which will be held or
possessed at Great Lakes= office located in the State of Wisconsin) will not be
held or possessed within the State of Ohio. With your consent we are assuming
for the purposes of this opinion that the laws of Delaware, Pennsylvania and
Wisconsin regarding perfection of security interests in the Collateral are the
same as those of the State of Ohio. We have, however, reviewed the most recent
compilations available to us of the laws of the States of Delaware and Wisconsin
and the Commonwealth of Pennsylvania and based on such review have concluded
that UCC Section 9-304 as adopted in Ohio (Section 1309.23 of the Ohio Revised
Code) is substantially similar to UCC Section 9-304 as adopted in the State of
Delaware (6 Del. C. Section 9-304 (1998)), the State of Wisconsin (Wis. Stat.
Section 409.304 (1998)) and the Commonwealth of Pennsylvania (13 Pa. Cons. Stat.
Section 9304 (1998)).
We are admitted to the Bar of the State of Ohio (and, with respect to certain
lawyers in our firm, the Bar of the State of New York) and we express no opinion
herein as to the laws of any jurisdiction other than the laws of the United
States of America and the laws of the State of Ohio, and as to the opinions
expressed in paragraphs (3), (7) and (8), the laws of the State of New York.
For purposes of this opinion, the "Ohio UCC" means the Uniform Commercial Code
as in effect in the State of Ohio.
Based upon the foregoing and subject to the limitations, qualifications,
exceptions and assumptions set forth herein, we are of the opinion that:
(1) If the transfer by the Seller of the Financed Student Loans,
including all moneys paid by the Obligors thereunder, pursuant to the
terms of the Sale and Servicing Agreement is characterized as a sale
for purposes of applicable state commercial law, such transfer has
been effected by delivery of the written assignment in the form of
Exhibit E to the Sale and Servicing Agreement. If the transfer is so
characterized, the Eligible Lender Trustee on behalf of the Trust has
acquired all right, title and interest of the Seller in the Financed
Student Loans, including all moneys paid by the Obligors thereunder,
free and clear of any Liens, other than any Liens the priority of
which is determined under applicable law without regard to the filing
of record of a financing statement in the offices listed on Schedule 1
hereto or Liens the priority of which does require such a filing, but,
upon such filing, may relate back to a date prior to the date on which
the Eligible Lender Trustee on behalf of the Trust acquired the
Financed Student Loans.
(2) If the transfer by the Seller of the Financed Student Loans,
including all moneys paid by the Obligors thereunder, pursuant to the
terms of the Sale and Servicing Agreement is not characterized as a
sale for purposes of applicable state commercial law, the Sale and
Servicing Agreement creates a valid security interest in favor of the
Eligible Lender Trustee on behalf of the Trust in the Financed Student
Loans, including all moneys paid by the Obligors thereunder, that has
been duly perfected by (a) the filing of financing statements executed
by the Seller in the offices indicated in Schedule 1 hereto and (b)
the execution and delivery by PHEAA and Great Lakes of each of the
PHEAA Subservicing Agreement and the Great Lakes Subservicing
Agreement, respectively, and the taking of possession of the Financed
Student Loan Notes by PHEAA and Great Lakes. If the transfer is so
characterized, the filing of such financing statements and the
execution and delivery by PHEAA and Great Lakes of each of the PHEAA
Subservicing Agreement and the Great Lakes Subservicing Agreement,
respectively, have perfected a security interest in such Financed
Student Loans, including all moneys paid by the Obligors thereunder
and proceeds thereof which is prior to any other security interest
which must be perfected under Chapters 1301 through 1310 of the Ohio
UCC by filing appropriate financing statements or taking possession of
the collateral. No filings or other actions, other than the filing of
appropriate UCC continuation statements and the continued possession
of the Financed Student Loan Notes by the applicable Subservicer
pursuant to the Sale and Servicing Agreement, are necessary to
maintain the perfection and priority of such security interest. We
call your attention to the fact that, (X) unless continuous possession
of the Financed Student Loan Notes is retained by the applicable
Subservicer, perfection of the security interest in the Financed
Student Loans will be terminated and (Y) unless appropriate financing
statements are timely filed in the appropriate offices, perfection of
the security interest in the Financed Student Loans, including all
moneys paid by the Obligors thereunder, and in the other Collateral
will be terminated if the Seller hereafter changes its name, identity
or corporate structure so that the financing statements filed in the
offices indicated in Schedule 1 hereto become seriously misleading.
(3) The Indenture creates a valid security interest in the
interest of the Eligible Lender Trustee on behalf of the Trust in the
Financed Student Loans, including all moneys paid by the Obligors
thereunder on or after the Cutoff Date, or any Subsequent Cutoff Date,
as the case may be, in favor of the Indenture Trustee, as trustee for
the benefit of the Noteholders, that has been duly perfected by (a)
the filing of financing statements executed by the Eligible Lender
Trustee in the offices indicated in Schedule 2 hereto and (b) the
execution and delivery by PHEAA and Great Lakes of each of the PHEAA
Subservicing Agreement and the Great Lakes Subservicing Agreement,
respectively, and the taking of possession of the Financed Student
Loan Notes by PHEAA and Great Lakes. The filing of such financing
statements and the execution and delivery by PHEAA and Great Lakes of
each of the PHEAA Subservicing Agreement and the Great Lakes
Subservicing Agreement, respectively, have perfected a security
interest in the interest of the Eligible Lender Trustee on behalf of
the Trust in the Financed Student Loans, including all moneys paid by
the Obligors thereunder and proceeds thereof which is prior to any
other security interest which must be perfected under Chapters 1301
through 1310 of the Ohio UCC by filing appropriate financing
statements or taking possession of the collateral. No filings or other
actions, other than the filing of appropriate UCC continuation
statements and the continued possession of the Financed Student Loan
Notes by the applicable Subservicer on behalf of the Indenture Trustee
pursuant to the Sale and Servicing Agreement, are necessary to
maintain the perfection and priority of such security interest. We
call your attention to the fact that, (X) unless continuous possession
of the Financed Student Loan Notes is retained by the applicable
Subservicer on behalf of the Indenture Trustee, perfection of the
security interest in the Financed Student Loans will be terminated and
(Y) unless appropriate financing statements are timely filed in the
appropriate offices, perfection of the security interest in the
Financed Student Loans, including all moneys paid by the Obligors
thereunder, and in the other Collateral will be terminated if the
Trust hereafter changes its name, identity or corporate structure so
that the financing statements filed in the offices indicated on
Schedule 2 hereto become seriously misleading.
(4) The Seller is not, and will not as a result of the offer and
sale of the Notes and Certificates as contemplated in the Prospectus,
the Underwriting Agreement and the Certificate Underwriting Agreement
become an "investment company" as defined in the Investment Company
Act of 1940 ("Investment Company Act") or a company "controlled by" an
"investment company" within the meaning of the Investment Company Act.
(5) The Trust Agreement need not be qualified under the Trust
Indenture Act of 1939, as amended, and the Trust is not required to
register under the Investment Company Act.
(6) The Indenture need not be qualified under the Trust Indenture
Act of 1939, as amended.
(7) The Trust has duly authorized the execution and delivery of
the Indenture, the Sale and Servicing Agreement, the Administration
Agreement and the Cap Agreement, and, when duly executed and delivered
by the Eligible Lender Trustee, such documents will be valid and
binding obligations of the Trust, enforceable against the Trust in
accordance with their respective terms, subject, as to the
enforceability thereof, to bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors= rights generally and by
the application of general principles of equity.
(8) The Seller has duly executed and delivered the Sale and
Servicing Agreement, the Trust Agreement, the Administration
Agreement, the Underwriting Agreement, the Certificate Underwriting
Agreement and the Cap Agreement, and, when duly executed and delivered
by the Seller, such documents will be valid and binding obligations of
the Seller, enforceable against the Seller in accordance with their
respective terms, subject, as to the enforceability thereof, to
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors= rights generally and by the application of
general principles of equity.
(9) The Master Servicer has duly executed and delivered the PHEAA
Subservicing Agreement and the Great Lakes Subservicing Agreement,
and, when duly executed and delivered by the Master Servicer, such
documents will be valid and binding obligations of the Master
Servicer, enforceable against the Seller in accordance with their
respective terms, subject, as to the enforceability thereof, to
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors= rights generally and by the application of
general principles of equity.
(10) The execution and delivery of the Control Agreement by the
parties thereto perfects the security interest of the Seller in the
securities accounts therein described, subject to the exceptions and
exclusions therein provided (the "Securities Accounts"). The Sale and
Servicing Agreement is effective to assign the Seller's security
interest in the Securities Accounts to the Trust, notwithstanding the
fact that the Trust is not a party to the Control Agreement. The
Indenture is effective to assign the Trust's security interest in the
Securities Accounts to the Indenture Trustee, notwithstanding the fact
that the Indenture Trustee is not a party to the Control Agreement.
Section 1309.21(B) of the Ohio UCC (UCC Section 9-302(2)) provides
that no filing under the Ohio UCC is required to continue the
perfected status of a security interest against creditors of and
transferees from the original debtor if a secured party assigns a
perfected security interest. As to the priority of the security
interest in the Securities Accounts transferred first by the Seller to
the Trust and then by the Trust to the Indenture Trustee, assuming, on
the basis of the representations and warranties contained in the
Control Agreement that no other control or similar agreement has been
entered into by the securities intermediary referred to in the Control
Agreement, while there is no case or statute on point, we are of the
opinion that an Ohio court addressing the issue would hold (a) the
assignment of the Seller's first priority perfected security interests
in the Securities Accounts to the Trust would continue such first
priority perfected security interests in favor of the Trust and (b)
the subsequent assignment of the Trust's first priority perfected
security interests in the Securities Accounts to the Indenture Trustee
would continue such first priority perfected security interests in
favor of the Indenture Trustee.
Our opinions with respect to the creation and perfection of the
security interests in the Collateral (and in the Securities Accounts described
in the Control Agreement) are subject to the following exceptions:
(a) the opinions expressed in paragraphs (2) and (3) with respect to
proceeds is subject to (i) the effect of limitations under Section 9-306 of the
UCC on the priority and perfection of a security interest in proceeds, (ii) the
rights of a person in possession of proceeds consisting of money or instruments
(as defined in Section 9-105(l)(I) of the UCC) and (iii) the rights of a
purchaser of negotiable instruments or chattel paper (as defined in Section
9-105(l)(I) of the UCC) to the extent provided in Section 9-308 and 9-309 of the
UCC;
(b) in the case of property which becomes collateral after the date
the Sale and Servicing Agreement and the Indenture are duly executed, delivered
and accepted, Section 552 of the United States Bankruptcy Code limits the extent
to which property acquired by a debtor after the commencement of a case under
the United States Bankruptcy Code may be subject to a security interest arising
from a security agreement entered into by the debtor before the commencement of
such case;
(c) in the case of any Collateral, the Trust's, the Eligible Lender
Trustee=s or the Indenture Trustee=s respective security interests will
terminate upon a disposition of such Collateral authorized by the Trust, the
Eligible Lender Trustee or the Indenture Trustee, as applicable;
(d) we express no opinion as to the perfection or priority of any
security interest in favor of the Trust, the Eligible Lender Trustee or the
Indenture Trustee in any property acquired by any debtor more than four months
after such debtor changes its name, identity or corporate structure so as to
make the then filed Financing Statements seriously misleading, unless
appropriate new financing statements or amendments are filed before the
expiration is such four month period.
Our opinions with respect to the security interests of the Trust, the
Eligible Lender Trustee and the Indenture Trustee in the Collateral are subject
to the following qualifications:
(i) we express no opinion with respect to the priority of the
respective security interests of the Trust, the Eligible Lender Trustee and the
Indenture Trustee in the Collateral against (a) a lien creditor who attached or
levied on the Collateral prior to the perfection of the security interest of the
Trust, the Eligible Lender Trustee or the Indenture Trustee, (b) a security
interest in Collateral perfected under the laws of another jurisdiction to the
extent the Collateral was located in such jurisdiction within four months prior
to the date of the perfection of the security interest of the Trust, the
Eligible Lender Trustee or the Indenture Trustee, as applicable, (c) a lien or
claim in Collateral arising by operation of law that does not require filing or
possession in order to take priority over a prior perfected security interest,
(d) a lien, claim or encumbrance in favor of the United States of America or any
State, or any agency or instrumentality of either of them, or any other
governmental entity (including without limitation federal tax liens, liens
arising under the Employee Retirement Income Security Act of 1974, as amended,
or claims given priority pursuant to 31 U.S.C. ' 3713), or (e) a security
interest in Collateral perfected without possession pursuant to Section
1309.23(D) or (E) of the Ohio UCC [UCC Sections 9-304(4) or (5)]; and
(ii) this opinion is limited to the matters set forth herein, and no
opinion is implied or may be inferred beyond the matters expressly stated.
A copy of this opinion may be delivered to Moody's Investors Service,
Inc., Fitch IBCA, Inc., Standard & Poor=s Rating Group, Bank One, National
Association, as Eligible Lender Trustee, Bank One Delaware, Inc., as Delaware
Co-Trustee and Bankers Trust Company, as Indenture Trustee, each of which may
rely upon this opinion as if it were addressed to them. This opinion is solely
for the benefit of the addressees hereof and the persons named in the
immediately preceding sentence and is not to be quoted or referred to in any
manner without our prior written consent.
Respectfully submitted,
<PAGE>
SCHEDULE 1
1. Recorder's Office of County of Cuyahoga, Ohio
2. Secretary of State of Ohio
<PAGE>
SCHEDULE 2
8. Recorder's Office of Cook County, Illinois
9. Secretary of State of Illinois
3. Recorder's Office of New York County, New York
10. Department of State of New York
11. Recorder's Office of New Castle County, Delaware
12. Secretary of State of Delaware
13. Prothonotary of Dauphin County, Pennsylvania
14. Secretary of the Commonwealth of Pennsylvania
15. Recorder's Office of Dane County, Wisconsin
16. Secretary of State of Wisconsin
17. Recorder's Office of County of Cuyahoga, Ohio
18. Secretary of State of Ohio
<PAGE>
EXHIBIT A
KEYCORP STUDENT LOAN TRUST 1999-B
UCC FINANCING STATEMENTS DATE
UCC-1 (Debtor: Key Bank USA) - Ohio Secretary of State [Submitted] 9/23/99
UCC-1 (Debtor: Key Bank USA) - Cuyahoga County, Ohio 9/23/99
Recorder's Office
UCC-1 (Debtor: Key Bank USA) - Delaware Secretary of State __/__/99
UCC-1 (Debtor: Key Bank USA) - New Castle County, Delaware __/__/99
Recorder's Office
UCC-1 (Debtor: Key Bank USA) - Secretary of the Commonwealth 9/24/99
of Pennsylvania
UCC-1 (Debtor: Key Bank USA) - Prothonotary of Dauphin County, 9/24/99
Pennsylvania
UCC-1 (Debtor: Key Bank USA) - Wisconsin Secretary of State 9/24/99
UCC-1 (Debtor: Key Bank USA) - Dane County, Wisconsin 9/24/99
Recorder's Office
UCC-1 (Debtor: Trust) - Ohio Secretary of State [Submitted] 9/23/99
UCC-1 (Debtor: Trust) - Cuyahoga County, Ohio Recorder's Office 9/23/99
UCC-1 (Debtor: Trust) - Delaware Secretary of State __/__/99
UCC-1 (Debtor: Trust) - New Castle County, Delaware Recorder's Office __/__/99
UCC-1 (Debtor: Trust) - Secretary of the Commonwealth 9/24/99
of Pennsylvania
UCC-1 (Debtor: Trust) - Prothonotary of Dauphin County, 9/24/99
Pennsylvania
<PAGE>
UCC FINANCING STATEMENTS DATE
UCC-1 (Debtor: Trust) - Wisconsin Secretary of State 9/24/99
UCC-1 (Debtor: Trust) - Dane County, Wisconsin Recorder's Office 9/24/99
UCC-1 (Debtor: Trust) - New York Secretary of State 9/24/99
UCC-1 (Debtor: Trust) - New York County __/__/99
UCC-1 (Debtor: Trust) - Illinois Secretary of State 9/24/99
UCC-1 (Debtor: Trust) - Cook County, Illinois Recorder's Office 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Ohio Secretary of
State [Submitted] 9/23/99
UCC-1 (Debtor: Eligible Lender Trustee) - Cuyahoga County, Ohio 9/23/99
Recorder's Office
UCC-1 (Debtor: Eligible Lender Trustee) - Delaware Secretary of State __/__/99
UCC-1 (Debtor: Eligible Lender Trustee) - New Castle County, Delaware __/__/99
Recorder's Office
UCC-1 (Debtor: Eligible Lender Trustee) - Secretary of the Commonwealth 9/24/99
of Pennsylvania
UCC-1 (Debtor: Eligible Lender Trustee) - Prothonotary of
Dauphin County, Pennsylvania 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Wisconsin Secretary of State 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Dane County, Wisconsin 9/24/99
Recorder's Office
UCC-1 (Debtor: Eligible Lender Trustee) - New York Secretary of State 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - New York County __/__/99
October 8, 1999UCC-1 (Debtor: Eligible Lender Trustee) - Illinois
Secretary of State 9/24/99
UCC-1 (Debtor: Eligible Lender Trustee) - Cook County, Illinois 9/24/99
Recorder's Office
<PAGE>
UCC FINANCING STATEMENTS DATE
<PAGE>
[Form of Opinion of Thompson Hine & Flory LLP]
September 30, 1999
Credit Suisse First Boston Corporation,
As Representative of the Underwriters
Park Avenue Plaza
Eleven Madison Avenue
New York, New York 10010-3629
Re: KeyCorp Student Loan Trust 1999-B; Prospectus Disclosure
Ladies and Gentlemen:
We have acted as counsel for Key Bank USA, National Association (the "Seller")
in connection with the issuance by the KeyCorp Student Loan Trust 1999-B of the
Floating Rate Asset Backed Notes in the aggregate principal amount of
$935,000,000 and the Floating Rate Asset Backed Certificates in the aggregate
principal amount of $65,000,000. This opinion letter is furnished to you
pursuant to Section 6(f) of the Underwriting Agreement (the "Underwriting
Agreement") dated September 30, 1999 between the Seller and Credit Suisse First
Boston Corporation, as Representative of the Underwriters ("Underwriters") and
Section 6(f) of the Certificate Underwriting Agreement ("Certificate
Underwriting Agreement") dated September 30, 1999 between the Seller and Credit
Suisse First Boston Corporation, as Representative of the Underwriters. Except
as otherwise indicated herein, capitalized terms used in this opinion letter are
defined as set forth in the Underwriting Agreement or the Certificate
Underwriting Agreement, as applicable.
In that capacity, we have participated in the preparation of (i) the Prospectus
dated September 20, 1999 (the "Base Prospectus") and (ii) the Prospectus
Supplement dated September 30, 1999 (the "Prospectus Supplement," and
collectively, the "Prospectus") and we have from time to time had discussions
with officers and employees of the Seller and your employees and counsel
concerning the information contained in the Prospectus.
Based on the foregoing, we are of the opinion that the statements contained in
the Base Prospectus under the headings "Student Loan Financing Business -
Insurance of Student Loans, Guarantors of Student Loans," "Description of the
Notes," "Description of the Certificates," "Description of the Transfer and
Servicing Agreements" and "Certain Legal Aspects of the Financed Student Loans,"
to the extent that they describe legal matters, present fair summaries of such
legal matters.
The statements contained in the Prospectus Supplement under the captions "The
Financed Student Loan Pool - Insurance of Student Loans; Guarantors of Student
Loans - GUARANTORS FOR THE FINANCED FEDERAL LOANS," "-GUARANTORS FOR THE
GUARANTEED PRIVATE LOANS," "Description of the Securities" and "Description of
the Transfer and Servicing Agreements," insofar as such statements purport to
summarize the provisions of the Guarantee Agreements, the Certificates, the
Notes, the Indenture, the Administration Agreement, the Sale and Servicing
Agreement and the Trust Agreement, present fair summaries of such provisions.
We have not independently verified and, except as described in the two
immediately preceding paragraphs, are not herein passing upon and do not assume
any responsibility for, the accuracy, completeness or fairness of the
information contained in the Prospectus. Based upon the participation and
discussions described above, however, no facts have come to our attention to
cause us to believe that the Prospectus (except for the financial statements,
financial schedules and other numerical, financial and statistical information
contained therein, and (other than any description of any agreements or
instruments referred to above) any information therein concerning ASA, CSAC,
HESC, HICA, NSLP, TERI, USAF or PHEAA in its capacity as Guarantor, but not in
its capacity as Servicer, as to all of which we express no view) as of its date
or the date hereof contains any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
This opinion is furnished by us, as counsel for the Seller to you, solely for
your benefit as purchasers of the Notes and the Certificates and solely with
respect to the initial purchase of the Notes and the Certificates by you, upon
the understanding that we are not hereby assuming any professional
responsibility to any other person.
Very truly yours,
EXECUTION COPY
==============================================================================
INDENTURE
between
KEYCORP STUDENT LOAN TRUST 1999-B,
as Issuer
and
BANKERS TRUST COMPANY,
not in its individual capacity but
solely as Indenture Trustee
Dated as of September 1, 1999
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1.01. Definitions and Usage.........................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.............2
ARTICLE II
THE NOTES
SECTION 2.01. Form..........................................................3
SECTION 2.02. Execution, Authentication and Delivery........................3
SECTION 2.03. Temporary Notes...............................................4
SECTION 2.04. Registration; Registration of Transfer and Exchange...........4
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes....................5
SECTION 2.06. Persons Deemed Owner..........................................6
SECTION 2.07. Payment of Principal and Interest; Defaulted
Interest; Noteholders' Interest Index Carryover...............7
SECTION 2.08. Cancellation...................................................8
SECTION 2.09. Release of Collateral..........................................9
SECTION 2.10. Book-Entry Notes...............................................9
SECTION 2.11. Notices to Clearing Agency....................................10
SECTION 2.12. Definitive Notes..............................................10
ARTICLE III
COVENANTS
SECTION 3.01. Payment to Noteholders.......................................11
SECTION 3.02. Maintenance of Office or Agency..............................11
SECTION 3.03. Money for Payments To Be Held in Trust.......................11
SECTION 3.04. Existence....................................................13
SECTION 3.05. Protection of Indenture Trust Estate.........................13
SECTION 3.06. Opinions as to Indenture Trust Estate........................14
SECTION 3.07. Performance of Obligations; Master Servicing of Financed
Student Loans................................................14
SECTION 3.08. Negative Covenants...........................................17
SECTION 3.09. Annual Statement as to Compliance............................17
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms..........18
SECTION 3.11. Successor or Transferee......................................19
SECTION 3.12. No Other Business............................................19
SECTION 3.13. No Borrowing.................................................20
SECTION 3.14. Obligations of Master Servicer and Administrator.............20
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities............20
SECTION 3.16. Capital Expenditures.........................................20
SECTION 3.17. Restricted Payments..........................................20
SECTION 3.18. Notice of Events of Default..................................20
SECTION 3.19. Further Instruments and Acts.................................21
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture.......................21
SECTION 4.02. Application of Trust Money....................................22
SECTION 4.03. Repayment of Moneys Held by Paying Agent......................22
SECTION 4.04. Auction of Financed Student Loans.............................23
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default.............................................23
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment............25
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee..........................................25
SECTION 5.04. Remedies; Priorities..........................................28
SECTION 5.05. Optional Preservation of the Financed Student Loans...........32
SECTION 5.06. Limitation of Suits...........................................32
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest..................33
SECTION 5.08. Restoration of Rights and Remedies............................33
SECTION 5.09. Rights and Remedies Cumulative................................34
SECTION 5.10. Delay or Omission Not a Waiver................................34
SECTION 5.11. Control by Noteholders........................................34
SECTION 5.12. Waiver of Past Defaults.......................................35
SECTION 5.13. Undertaking for Costs.........................................35
SECTION 5.14. Waiver of Stay or Extension Laws..............................35
SECTION 5.15. Action on Notes...............................................36
SECTION 5.16. Performance and Enforcement of Certain Obligations............36
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee...................................37
SECTION 6.02. Rights of Indenture Trustee...................................38
SECTION 6.03. Individual Rights of Indenture Trustee........................39
SECTION 6.04. Indenture Trustee's Disclaimer................................39
SECTION 6.05. Notice of Defaults............................................39
SECTION 6.06. Reports by Indenture Trustee to Noteholders...................39
SECTION 6.07. Compensation and Indemnity....................................40
SECTION 6.08. Replacement of Indenture Trustee..............................40
SECTION 6.09. Successor Indenture Trustee by Merger.........................41
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee.................42
SECTION 6.11. Eligibility; Disqualification.................................43
SECTION 6.12. Preferential Collection of Claims Against Issuer..............43
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders......................................43
SECTION 7.02. Preservation of Information; Communications to Noteholders....44
SECTION 7.03. Reports by Issuer.............................................44
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. Collection of Money...........................................45
SECTION 8.02. Trust Accounts................................................45
SECTION 8.03. General Provisions Regarding Accounts.........................47
SECTION 8.04. Release of Indenture Trust Estate.............................47
SECTION 8.05. Opinion of Counsel............................................48
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders........48
SECTION 9.02. Supplemental Indentures with Consent of Noteholders...........49
SECTION 9.03. Execution of Supplemental Indentures..........................51
SECTION 9.04. Effect of Supplemental Indenture..............................51
SECTION 9.05. Conformity with Trust Indenture Act...........................51
SECTION 9.06. Reference in Notes to Supplemental Indentures.................51
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Redemption....................................................52
SECTION 10.02. Form of Redemption Notice.....................................53
SECTION 10.03. Notes Payable on Redemption Date..............................53
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Compliance Certificates and Opinions, etc.....................54
SECTION 11.02. Form of Documents Delivered to Indenture Trustee..............56
SECTION 11.03. Acts of Noteholders...........................................56
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies...............................................57
SECTION 11.05. Notices to Noteholders; Waiver................................58
SECTION 11.06. Alternate Payment and Notice Provisions.......................58
SECTION 11.07. Conflict with Trust Indenture Act.............................58
SECTION 11.08. Effect of Headings and Table of Contents......................59
SECTION 11.09. Successors and Assigns........................................59
SECTION 11.10. Separability..................................................59
SECTION 11.11. Benefits of Indenture.........................................59
SECTION 11.12. Legal Holidays................................................59
SECTION 11.13. Governing Law.................................................59
SECTION 11.14. Counterparts..................................................59
SECTION 11.15. Recording of Indenture........................................60
SECTION 11.16. Trust Obligations.............................................60
SECTION 11.17. No Petition...................................................60
SECTION 11.18. Inspection....................................................60
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Initial Financed Student Loans
SCHEDULE B Schedule of Additional Student Loans
SCHEDULE C Location of Financed Student Loan Files
EXHIBIT A-1 Form of Class A-1 Note
EXHIBIT A-2 Form of Class A-2 Note
EXHIBIT A-3 Form of Class M Note
EXHIBIT B Form of Note Depository Agreement
<PAGE>
INDENTURE dated as of September 1, 1999, between
KEYCORP STUDENT LOAN TRUST 1999-B, a New York trust
(the "Issuer"), and BANKERS TRUST COMPANY, a New York
banking corporation, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Floating Rate
Class A-1 Asset Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2
Asset Backed Notes (the "Class A-2 Notes" and together with the Class A-1 Notes,
the "Class A Notes"), and the Floating Rate Class M Asset Backed Notes (the
"Class M Notes", and together with the Class A Notes, the "Notes"):
GRANTING CLAUSE
The Issuer (and, with respect to the Financed Student Loans, the
Eligible Lender Trustee on behalf of the Issuer) hereby Grants to the Indenture
Trustee at the Closing Date, as trustee for the benefit of the holders of the
Notes, all the Issuer's right, title and interest in and to the following:
(a) the Financed Student Loans, and all obligations of the Obligors
thereunder including all moneys paid thereunder on or after the Cutoff Date
(or, in the case of Additional Student Loans, on or after the related
Subsequent Cutoff Date);
(b) the Sale and Servicing Agreement, including the right of the
Issuer to cause the Seller to repurchase or the Master Servicer to
purchase, Financed Student Loans from the Issuer under circumstances
described therein and including the Assigned Rights;
(c) each Guarantee Agreement, including the right of the Issuer to
cause the related Guarantor to make Guarantee Payments in respect of the
Financed Student Loans;
(d) all funds on deposit from time to time in the Trust Accounts,
including the Reserve Account Initial Deposit and the Pre-Funded Amount;
(e) the Cap Agreement and all payments made by the Cap Provider
thereunder in respect of the Class A-1 Cap Payment, Class A-2 Cap Payment
and Class M Cap Payment; and
(f) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the holders
of the Notes, acknowledges such Grant, accepts the trusts under this Indenture
in accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the holders of the Notes may be adequately and effectively
protected.
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1.01. DEFINITIONS AND USAGE. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
defined herein are defined in Appendix A hereto, which also contains rules as to
usage that shall be applicable herein.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a holder of the Notes.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
ARTICLE II
THE NOTES
SECTION 2.01. FORM. The Class A-1 Notes, Class A-2 Notes and the Class
M Notes, together with the Indenture Trustee's certificate of authentication,
shall be in substantially the forms set forth in Exhibits A-1, A-2 and A-3,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Class A-1 Notes, the Class A-2 Notes and the Class M Notes set forth in
Exhibits A-1, A-2 and A-3 are part of the terms of this Indenture.
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Notes for original issue in an aggregate principal amount of $280,000,000, with
respect to the Class A-1 Notes , $625,000,000, with respect to the Class A-2
Notes, and $30,000,000 with respect to the Class M Notes, except as provided in
Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. TEMPORARY NOTES. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the holder of the
Notes. Upon surrender for cancellation of any one or more temporary Notes, the
Issuer shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the holders of the Notes and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the holder of the Notes shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations and a like
aggregate principal amount.
At the option of the holder of the Notes, Notes may be exchanged for
other Notes in any authorized denominations, a like class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, if the requirements
of Section 8-401(1) of the UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the holder of the Notes shall obtain
from the Indenture Trustee, the Notes which the holder of the Notes making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
The Issuer initially appoints The Depository Trust Company ("DTC") to
act as depositary (the "Depositary") with respect to the each Class of the
Notes.
The Issuer initially appoints the Indenture Trustee to act as
custodian with respect to the Notes.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by the
holder of the Notes thereof or such holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.
No service charge shall be made to a holder of the Notes for any
registration of transfer or exchange of Notes, but the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.06 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8-405 of the UCC are met, the
Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within 15 days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. If, after the delivery of such replacement Note
or payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu of which
such replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the holder of the Notes thereof of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of, interest (and any
Noteholders' Interest Index Carryover and payments made under the Cap Agreement
with respect to such Class of Notes), if any, on such Note and for all other
purposes whatsoever, whether or not such Note be overdue, and neither the
Issuer, the Indenture Trustee nor any agent of the Issuer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST;
NOTEHOLDERS' INTEREST INDEX CARRYOVER. (a) The Class A-1 Notes, the Class A-2
Notes and Class M Notes shall accrue interest as provided in the forms of the
Class A-1 Note, the Class A-2 Note and the Class M Note set forth in Exhibits
A-1, A-2 and A-3 respectively, and such interest shall be payable on each
Distribution Date as specified therein, subject to Section 3.01; provided,
however, that on any Distribution Date on which a Class M Interest Subordination
Event exists, the amount of interest due and payable on the Class M Notes on
such Distribution Date will be reduced by the amount of such interest applied to
the Noteholders' Priority Principal Distribution Amount on such Distribution
Date and the amount so deferred will be payable, together with interest thereon,
on the first Distribution Date on which a Class M Interest Subordination Event
no longer exists. Any installment of interest (and any Noteholders' Interest
Index Carryover with respect to each Class of Notes) or principal, if any,
payable on any Note which is punctually paid or duly provided for by the Issuer
on the applicable Distribution Date shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered on the Record Date by
check mailed first-class, postage prepaid to such Person's address as it appears
on the Note Register on such Record Date, except that, unless Definitive Notes
have been issued pursuant to Section 2.12, with respect to Notes registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payment will be made by wire transfer in
immediately available funds to the account designated by such nominee and except
for the final installment of principal payable with respect to such Note on a
Distribution Date or on the applicable Note Final Maturity Date which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on
each Distribution Date as provided in the form of the Class A-1 Note, the Class
A-2 Note and the Class M Note set forth in Exhibits A-1, A-2 and A-3,
respectively, to the extent the amount of funds required and available to be
distributed in respect of principal on such Class of Notes pursuant to the Sale
and Servicing Agreement; PROVIDED, HOWEVER, the entire unpaid principal amount
of each Class of Notes shall be due and payable on its Final Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing, if the Indenture Trustee or
the Controlling Noteholders representing not less than a majority of the
Outstanding Amount of the Controlling Notes have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02. All
principal payments on each Class of Notes shall be made pro rata to the holders
of such Class of Notes entitled thereto. The Indenture Trustee shall notify the
Person in whose name a Note is registered at the close of business on the Record
Date preceding the Distribution Date on which the Issuer expects that the final
installment of principal of and interest (and any Noteholders' Interest Index
Carryover with respect to such Class of Notes) on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final
Distribution Date and shall specify that such final installment will be payable
only upon presentation and surrender of such Note and shall specify the place
where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
the holders of the Notes as provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are holders of the
Notes on a subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Issuer shall fix or cause to be
fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each holder of the
Notes a notice that states the special record date, the payment date and the
amount of defaulted interest to be paid.
(d) The Noteholders' Interest Index Carryover with respect to the
Class A Notes for each Distribution Date (including all unpaid Noteholders'
Interest Index Carryover for such Class A Notes for prior Distribution Dates and
interest accrued thereon at the applicable Note Interest Rate for each
applicable Interest Period) shall be payable to the Class A Notes, pro rata
based on the amount of Noteholders' Interest Index Carryover then owing on each
such Class A Notes, on each Distribution Date solely to the extent of funds
required and available (including any Class A Cap Funds) to be distributed to
the holders of the Class A Notes by the Indenture Trustee pursuant to Section
5.05(c)(x) or 5.06(e) of the Sale and Servicing Agreement. The Noteholders'
Interest Index Carryover with respect to the Class M Notes for each Distribution
Date (including all unpaid Noteholders' Interest Index Carryover for such Class
M Notes for prior Distribution Dates and interest accrued thereon at the
applicable Note Interest Rate for each applicable Interest Period) shall be
payable to the Class M Notes, on each Distribution Date solely to the extent of
funds required and available (including any Class M Cap Funds) to be distributed
to the holders of such Class of Notes by the Indenture Trustee pursuant to
Section 5.05(c)(xi) or 5.06(e) of the Sale and Servicing Agreement. Any
Noteholders' Interest Index Carryover payable on any Distribution Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the applicable Record Date by check mailed first-class postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date, except that, unless Definitive Notes have been issued pursuant to
Section 2.12, with respect to the Notes registered on the Record Date in the
name of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment will be made by wire transfer in immediately available funds to
the account designated by such nominee. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.03.
SECTION 2.08. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time, unless the Issuer shall direct by an Issuer Order that
they be returned to it and so long as such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
SECTION 2.09. RELEASE OF COLLATERAL. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officers' Certificate of the Issuer, an Opinion of Counsel and Independent
Certificates in accordance with TIA ss. 314(c) and 314(d)(l) or an Opinion of
Counsel in lieu of such Independent Certificates to the effect that the TIA does
not require any such Independent Certificates.
SECTION 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note (as
defined below) representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.12:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee may deal with the
Clearing Agency for all purposes (including the payment of principal of and
interest and other amounts on the Notes) as the authorized representative
of the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreements.
Unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest and other amounts on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of the holders of the Notes
evidencing a specified percentage of the Outstanding Amount of the Notes,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from Note
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
SECTION 2.11. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the holders of the Notes is required under this Indenture,
unless and until Definitive Notes shall have been issued to Note Owners pursuant
to Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to the holders of the Notes to the
Clearing Agency.
SECTION 2.12. DEFINITIVE NOTES. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, a Master Servicer Default or an
Administrator Default, Note Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of such Class of Notes advise the
Clearing Agency (which shall then notify the Indenture Trustee) in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Note Owners of such Class of Notes, then the
Indenture Trustee will cause the Clearing Agency to notify all Note Owners of
such Class of Notes, through the Clearing Agency, of the occurrence of any such
event and of the availability of Definitive Notes to such Note Owners requesting
the same. Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
holders of the Definitive Notes as the Noteholders for such Class of Notes.
<PAGE>
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT TO NOTEHOLDERS. The Issuer will duly and
punctually pay the principal of (subject to the parenthetical in the following
sentence), interest, if any, on and any unpaid Noteholders' Interest Index
Carryover (but only to the extent provided in Sections 2.07(d) and 8.02(c)) with
respect to each Class of Notes in accordance with the terms of such Notes and
this Indenture. Without limiting the foregoing, subject to Section 8.02(c), the
Issuer will cause to be distributed to the holders of the Class A-1 Notes, to
the holders of the Class A-2 Notes and to the holders of the Class M Notes that
portion of the amounts on deposit in the Trust Accounts on a Distribution Date
(other than any Eligible Investments deposited therein that will mature on the
Business Day preceding a subsequent Distribution Date), to which the holders of
the Notes are entitled to receive pursuant to the Sale and Servicing Agreement.
Amounts properly withheld under the Code by any Person from a payment to any
holder of the Notes of interest (including any Noteholders' Interest Index
Carryover) and/or principal shall be considered as having been paid by the
Issuer to such holder of the Notes for all purposes of this Indenture.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange. The
Issuer hereby initially appoints the Indenture Trustee to serve as its agent for
the foregoing purposes. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders may be made or served at the Corporate Trust Office,
and the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders in respect of the Notes.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts distributed from the Collection
Account or any other Trust Account pursuant to Section 8.02(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so distributed from the Collection Account for payments of Notes shall
be paid over to the Issuer except as provided in this Section. The Indenture
Trustee is hereby appointed as the initial "Paying Agent" hereunder and the
Indenture Trustee hereby accepts such appointment.
On or before the Business Day next preceding each Distribution Date
and Redemption Date, the Issuer shall distribute or cause to be distributed to
the Indenture Trustee (or any other Paying Agent) an aggregate sum sufficient to
pay the amounts then becoming due under the Notes and/or Certificates, such sum
to be held in trust for the benefit of the Persons entitled thereto and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer of
which it has actual knowledge (or any other obligor upon the Notes) in the
making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the holder of the Notes thereof
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to the holders of the Notes whose Notes have been called but have
not been surrendered for redemption or whose right to or interest in moneys due
and payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
holder of the Notes).
SECTION 3.04. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a trust under the laws of the State of New
York (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.05. PROTECTION OF INDENTURE TRUST ESTATE. The Issuer will
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate and the
rights of the Indenture Trustee and the holders of the Notes in such
Indenture Trust Estate against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
SECTION 3.06. OPINIONS AS TO INDENTURE TRUST ESTATE. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and security
interest of this Indenture and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning in 2000,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and the execution and filing of any
financing statements and continuation statements that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until April 30 in the following calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; MASTER SERVICING OF FINANCED
STUDENT LOANS. (a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Indenture Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture, the Sale and
Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officers' Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Master Servicer and the Administrator to assist
the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all its obligations
and agreements contained in this Indenture, the other Basic Documents and in the
instruments and agreements included in the Indenture Trust Estate, including
filing or causing to be filed all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture and the Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic Document or
any provision thereof without the consent of the Indenture Trustee or the
Controlling Noteholders of at least a majority of the Outstanding Amount of the
Controlling Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Master
Servicer Default or an Administrator Default under the Sale and Servicing
Agreement, the Issuer shall promptly notify the Indenture Trustee and the Rating
Agencies thereof, and shall specify in such notice the action, if any, the
Issuer is taking with respect to such default. If a Master Servicer Default
shall arise from the failure of the Master Servicer to perform any of its duties
or obligations under the Sale and Servicing Agreement, or an Administrator
Default shall arise from the failure of the Administrator to perform any of its
duties or obligations under the Sale and Servicing Agreement or the
Administration Agreement, as the case may be, with respect to the Financed
Student Loans, the Issuer shall take all reasonable steps available to it to
enforce its rights under the Basic Documents in respect of such failure.
(e) As promptly as possible after the giving of notice of termination
to the Master Servicer of the Master Servicer's rights and powers, or to the
Administrator of the Administrator's rights and powers, pursuant to Section 8.01
of the Sale and Servicing Agreement, the Issuer shall appoint a successor master
servicer (the "Successor Master Servicer"), or a successor administrator (the
"Successor Administrator"), and such Successor Master Servicer or Administrator,
as the case may be, shall accept its appointment by a written assumption in a
form acceptable to the Indenture Trustee. In the event that a Successor Master
Servicer or Administrator has not been appointed and accepted its appointment at
the time when the Master Servicer or Administrator, as the case may be, ceases
to act as Master Servicer or Administrator, as the case may be, the Indenture
Trustee without further action shall automatically be appointed a Successor
Master Servicer or Administrator, as the case may be. The Indenture Trustee may
resign as the Master Servicer or the Administrator by giving written notice of
such resignation to the Issuer and in such event will be released from such
duties and obligations, such release not to be effective until the date a new
master servicer or a new administrator enters into an agreement with the Issuer
as provided below; PROVIDED, HOWEVER, that nothing herein shall require or
permit the Indenture Trustee to act as Master Servicer, or otherwise master
service Financed Student Loans, in violation of the Higher Education Act. Upon
delivery of any such notice to the Issuer, the Issuer shall obtain a new master
servicer or a new administrator as a Successor Master Servicer or Administrator
under the Sale and Servicing Agreement. Any Successor Master Servicer or
Administrator, as the case may be, other than the Indenture Trustee shall (i) be
an established institution (A) that satisfies any requirements of the Higher
Education Act applicable to servicers and (B) whose regular business includes
the servicing or administration of student loans and (ii) enter into a master
servicing agreement or an administration agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the predecessor Master Servicer or the provisions of the
Sale and Servicing Agreement and the Administration Agreement applicable to the
Administrator. If within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such a new master servicer or
administrator, as the case may be, the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint, a Successor Master
Servicer or Administrator; PROVIDED, HOWEVER, that such right to appoint or to
petition for the appointment of any such successor shall in no event relieve the
Indenture Trustee from any obligations otherwise imposed on it under the Basic
Documents until such successor has in fact assumed such appointment. In
connection with any such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Sale and
Servicing Agreement, and in accordance with Section 8.02 of the Sale and
Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing or administration of the Financed Student Loans
(such agreement to be in form and substance satisfactory to the Indenture
Trustee). If the Indenture Trustee shall succeed as provided herein to the
Master Servicer's duties with respect to Financed Student Loans or the
Administrator's duties with respect to the Issuer and the Financed Student
Loans, as the case may be, it shall do so in its individual capacity and not in
its capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Master Servicer or the Administrator, as the case may be, and
the servicing or administration of the Financed Student Loans. In case the
Indenture Trustee shall become successor to the Master Servicer or the
Administrator, as the case may be, under the Sale and Servicing Agreement, the
Indenture Trustee shall be entitled to appoint as Master Servicer or as
Administrator, as the case may be, any one of its affiliates or agents, provided
that such appointment shall not affect or alter in any way the liability of the
Indenture Trustee as a successor for the performance of the duties and
obligations of the Master Servicer or the Administrator in accordance with the
terms hereof.
(f) Upon any termination of the Master Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, or any termination of the
Administrator's rights and powers pursuant to the Sale and Servicing Agreement,
as the case may be, the Issuer shall promptly notify the Indenture Trustee. As
soon as a Successor Master Servicer or a Successor Administrator is appointed,
the Issuer shall notify the Indenture Trustee of such appointment, specifying in
such notice the name and address of such Successor Master Servicer or such
Successor Administrator.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee or the Controlling Noteholders of
at least a majority in Outstanding Amount of the Controlling Notes, amend,
modify, waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of any
Collateral or the Basic Documents, except to the extent otherwise provided
therein, or waive timely performance or observance by the Master Servicer, the
Administrator, the Seller, the Issuer or the Eligible Lender Trustee under the
Sale and Servicing Agreement; PROVIDED, HOWEVER, that no such amendment shall
(i) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, distributions that are required to be made for the benefit of the
holders of the Notes, or (ii) reduce the aforesaid percentage of the Notes which
are required to consent to any such amendment, without the consent of the
holders of all the Outstanding Notes. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
holders of the Notes, the Issuer agrees, promptly following a request by the
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.08. NEGATIVE COVENANTS. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or any other Basic
Document, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the
Indenture Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest (including any Noteholders' Interest Index Carryover) payable in
respect of, the Notes (other than amounts properly withheld from such
payments under the Code or applicable state law) or assert any claim
against any present or former holder of the Notes by reason of the payment
of the taxes levied or assessed upon any part of the Indenture Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Indenture Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than tax
liens and other liens that arise by operation of law, in each case arising
solely as a result of an action or omission of the related Obligor, and
other than as expressly permitted by the Basic Documents) or (C) permit the
lien of this Indenture not to constitute a valid first priority (other than
with respect to any such tax or other lien) security interest in the
Indenture Trust Estate.
SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each fiscal
year of the Issuer (commencing with the fiscal year 2000), an Officers'
Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officers and the nature and status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. (a)
The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of, interest on and any Noteholders'
Interest Index Carryover, if any, with respect to all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Pennsylvania
state tax consequence to the Issuer, any holder of the Notes or any holder
of the Certificates;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, the due and punctual payment of the principal of, interest on and
Noteholders' Interest Index Carryover, if any, with respect to all Notes
and the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agrees by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of holders of the Notes, (D)
unless otherwise provided in such supplemental indenture, expressly agrees
to indemnify, defend and hold harmless the Issuer against and from any
loss, liability or expense arising under or related to this Indenture and
the Notes and (E) expressly agrees by means of such supplemental indenture
that such Person (or if a group of Persons, then one specified Person)
shall make all filings with the Commission (and any other appropriate
Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Pennsylvania
state tax consequence to the Issuer, any holder of the Notes or any holder
of the Certificates;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), KeyCorp Student Loan Trust 1999-B will
be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery by the Issuer of written notice to the Indenture Trustee
stating that KeyCorp Student Loan Trust 1999-B is to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Financed Student Loans and making Additional Fundings in the manner contemplated
by this Indenture and the other Basic Documents and activities incidental
thereto.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. OBLIGATIONS OF MASTER SERVICER AND ADMINISTRATOR. The
Issuer shall cause the Master Servicer to comply with Sections 4.08(a), 4.09,
4.10 and 4.11 of the Sale and Servicing Agreement and the Administrator to
comply with Sections 4.08(b) and (c), 4.09, 4.10 and 5.07 thereof.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Eligible Lender Trustee or any owner of a beneficial interest in
the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Master Servicer or the Administrator,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; PROVIDED, HOWEVER, that the Issuer may make, or
cause to be made, distributions to the Master Servicer, the Eligible Lender
Trustee, the Indenture Trustee, the holders of the Certificates, the holders of
the Notes, the Administrator and the Seller as contemplated by, and to the
extent funds are available for such purpose under, the Sale and Servicing
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the other Basic Documents.
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Seller of its obligations
under the Sale and Servicing Agreement, or the Master Servicer of its
obligations under the Sale and Servicing Agreement or the Administrator of its
obligations under the Sale and Servicing Agreement or the Administration
Agreement. In addition, the Issuer shall deliver to the Indenture Trustee,
within five days after the occurrence thereof, written notice in the form of an
Officers' Certificate of the Issuer of any event which with the giving of notice
and the lapse of time would become an Event of Default under Section 5.01(iii),
its status and what action the Issuer is taking or proposes to take with respect
thereto.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of holders of the Notes to receive
payments of principal thereof and interest (including any Noteholders' Interest
Index Carryover) thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and
3.13, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.07 and
the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights
of holders of the Notes as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when:
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.05 and (ii) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to
the Issuer or discharged from such trust, as provided in Section 3.03)
have been delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Class A-1
Final Maturity Date, the Class A-2 Final Maturity Date or
the Class M Final Maturity Date, as the case may be,
within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee
for the giving of notice of redemption by the Indenture
Trustee in the name, and at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior to
the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to the Class A-1 Final Maturity Date, the Class
A-2 Final Maturity Date or the Class M Final Maturity Date, as the
case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officers' Certificate of the Issuer, an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each meeting
the applicable requirements of Section 11.01(a) and, subject to
Section 11.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest (including any Noteholders' Interest Index Carryover); but such moneys
need not be segregated from other funds except to the extent required herein or
in the Sale and Servicing Agreement or required by law.
SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
SECTION 4.04. AUCTION OF FINANCED STUDENT LOANS. Any Financed Student
Loans remaining in the Trust as of the end of the Collection Period immediately
preceding the November 2009 Distribution Date will be offered for sale in the
aggregate by the Indenture Trustee as either a single pool (a "Single Pool
Sale") or in two separate pools (a "Two Pool Sale") as determined by the
Administrator in its sole discretion; provided, however, that if a Coordination
Agreement requires the offering of the Access Loans to PHEAA, TERI and/or LAI,
the Administrator shall instruct the Indenture Trustee, in accordance with
Section 10.06(a) of the Sale and Servicing Agreement, to offer for sale the
Financed Student Loans that are Access Loans as a single pool as part of a Two
Pool Sale. KeyCorp, its affiliates, and unrelated third parties may offer bids
to purchase such Financed Student Loans on such Distribution Date. If at least
two bids are received, with respect to a Single Pool Sale, the Indenture Trustee
will solicit and resolicit bids from all participating bidders until only one
bid remains for such Financed Student Loans or the remaining bidders decline to
resubmit bids and, with respect to a Two Pool Sale, if at least two bids are
received for either pool of Financed Student Loans, the Indenture Trustee will
solicit and resolicit bids from all participating bidders until only one bid
remains with respect to each pool of Financed Student Loans, or the remaining
bidders decline to resubmit bids. The Indenture Trustee shall, with respect to a
Single Pool Sale, accept the highest of such remaining bids from a single bidder
if it is equal to or in excess of the Minimum Purchase Amount, and with respect
to a Two Pool Sale, accept the highest of such remaining bids for each pool of
Financed Student Loans, if the sum of the such two bids is equal to or in excess
of the Minimum Purchase Amount. If (i) at least two bids are not received with
respect to a Single Pool Sale (or at least two bids for each pool of Financed
Student Loans with respect to a Two Pool Sale), or (ii) the highest bid (with
respect to a Single Pool Sale) or the combination of the highest two bids (with
respect to a Two Pool Sale), as the case may be, after the resolicitation
process is completed is not equal to or in excess of the Minimum Purchase
Amount, the Indenture Trustee will not consummate such sale. In connection with
the determination of the Minimum Purchase Amount, the Indenture Trustee may
consult, and, at the direction of the Seller, shall consult, with a financial
advisor (which may be the Administrator) to determine if the fair market value
of the Financed Student Loans has been offered. The proceeds of any such sale
will be applied in the order of priority set forth in Section 5.04(b) of this
Indenture. If the sale is not consummated in accordance with the foregoing, the
Indenture Trustee may, but shall not be under any obligation to, solicit bids to
purchase the Financed Student Loans on future Distribution Dates upon terms
similar to those described above.. In addition, notwithstanding anything herein
to the contrary, the Indenture Trustee's rights hereunder to sell the Financed
Student Loans shall be subject to the provisions of Section 10.06 of the Sale
and Servicing Agreement.
ARTICLE V
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest (including, subject to the
limitations of Sections 2.07(d) and 8.02(c), any Noteholders' Interest
Index Carryover but excluding any interest on the Class M Notes paid as
part of the Noteholders' Priority Principal Distribution Amount on any
Distribution Date on which a Class M Interest Subordination Event exists,
on any Note when the same becomes due and payable, and such default shall
continue for a period of five days (so long as the Class A Notes are
outstanding, each holder of any Class M Note or the Note Owner of any such
Class M Note, by such holder's acceptance of such Class M Note or
beneficial interest therein, as the case may be, shall be deemed to have
consented to the delay in payment of interest on such Class M Note and to
have waived its right to institute suit for enforcement of any such
payment); or
(ii) default in the payment of the principal of any Note when the same
becomes due and payable to the extent funds exist therefor or at maturity
thereof; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is elsewhere
in this Section specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have
been made, and such default shall continue or not be cured, or the
circumstance or condition in respect of which such misrepresentation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer and
the Indenture Trustee by the holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a notice of Default hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Indenture Trust Estate in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Indenture Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Indenture Trust Estate, or
the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default should occur and be continuing, then and in every such case
the Indenture Trustee or the Controlling Noteholders representing not less than
a majority of the Outstanding Amount of the Controlling Notes may declare all
the Notes to be immediately due and payable, by a notice in writing to the
Issuer (and to the Indenture Trustee if given by holders of the Notes), and upon
any such declaration the unpaid principal amount of such Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Controlling Noteholders representing a majority of the Outstanding Amount of the
Controlling Notes, by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. (a) The Issuer covenants that if (i) default is made in the
payment of any interest (including, subject to the limitations of Sections
2.07(d) and 8.02(c), any unpaid Noteholders' Interest Index Carryover) on any
Note when the same becomes due and payable, and such default continues for a
period of five days, or (ii) default is made in the payment of the principal of
or any installment of the principal on its Final Maturity Date or of any Note
when the same becomes due and payable in accordance with Section 2.07(b), the
Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of
the holders of the Notes, the whole amount then due and payable on such Notes
for principal and interest (and any unpaid Noteholders' Interest Index
Carryover) with interest upon the overdue principal, and, to the extent payment
at such rate of interest shall be legally enforceable, upon overdue installments
of interest (and any unpaid Noteholders' Interest Index Carryover) at the rate
specified in Section 2.07 and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the holders of the
Notes, by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Indenture Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest (including any unpaid Noteholders' Interest Index
Carryover) owing and unpaid in respect of the Notes and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor Indenture
Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence or bad faith) and of the holders of the
Notes allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Notes in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the holders of the Notes and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the holders of the Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such holders of the Notes to
make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such holders of the
Notes, to pay to the Indenture Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any holder of the Notes any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any holder of the
Notes thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any holder of the Notes in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the holders of the Notes, and it shall not be necessary to
make any holder of the Notes a party to any such Proceedings.
SECTION 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other
obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Indenture Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the holders of the Notes; and
(iv) sell the Indenture Trust Estate or any portion thereof or rights
or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.01(i) or (ii), unless (i) the holders
of all outstanding Notes consent to such sale, (ii) the proceeds of such sale
are sufficient to pay in full the principal of and the accrued interest on the
outstanding Notes at the date of such sale or (iii) the Indenture Trustee
determines that the collections on the Financed Student Loans would not be
sufficient on an ongoing basis to make all payments on the Notes as such
payments would have become due if such obligations had not been declared due and
payable, and the Indenture Trustee obtains the consent of the holders of 66 2/3%
of the aggregate principal amount of the Notes then outstanding; provided,
further, that the Indenture Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, other than an Event of Default
described in Section 5.01(i) or (ii) unless (i) the proceeds of the sale or
liquidation of the Trust Estate distributable to the holders of the Certificates
are sufficient to pay to the holders of the Certificates the outstanding
principal balance of the Certificates plus accrued and unpaid return thereon or
(ii) after receipt of notice from the Eligible Lender Trustee that the proceeds
of such sale or liquidation distributable to the holders of the Certificates
would not be sufficient to pay to the holders of the Certificates the
outstanding principal balance of the Certificates plus accrued and unpaid return
thereon, the holders of the Certificates of at least a majority of the
outstanding principal balance of the Certificates consent thereto. In addition,
notwithstanding anything herein to the contrary, the Indenture Trustee's rights
hereunder to sell the Financed Student Loans shall be subject to the provisions
of Section 10.06 of the Sale and Servicing Agreement.
(b) If the Indenture Trustee collects any money or property under this
Article V following the occurrence and during the continuation of an Event of
Default with respect to Sections 5.01(i), 5.01(ii), 5.01(iv) or 5.01(v) above or
following the acceleration of the Notes pursuant to Section 5.02, it shall pay
out the money or property in the following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07;
SECOND: pro rata to the Master Servicer for due and unpaid Master
Servicing Fees and to the Administrator for due and unpaid Administration
Fees;
THIRD: to the holders of the Class A Notes for amounts due and unpaid
on the Class A Notes for interest (other than any Noteholders' Interest
Index Carryover), ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class A Notes for interest;
FOURTH: to the holders of the Class A Notes for amounts due and unpaid
on the Class A Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class A Notes
for principal;
FIFTH: to the holders of the Class M Notes for amounts due and unpaid
on the Class M Notes for interest (other than any Noteholders' Interest
Index Carryover);
SIXTH: to the holders of the Class M Notes for amounts due and unpaid
on the Class M Notes for principal;
SEVENTH: to the Issuer for distribution of principal and interest due
and unpaid to the holders of the Certificates;
EIGHTH: to the holders of the Class A Notes for any unpaid
Noteholders' Interest Index Carryover with respect to the Class A Notes,
ratably, without preference or priority of any kind, according to the
amount of Noteholders' Interest Index Carryover attributable to each such
Class A Note;
NINTH: to the holders of the Class M Notes for any unpaid Noteholders'
Interest Index Carryover with respect to the Class M Notes;
TENTH: to the Issuer for distribution to the holders of the
Certificates for any unpaid Certificateholders' Interest Index Carryover;
ELEVENTH: to the Cap Provider all previously unreimbursed Class A-1
Cap Payments, Class A-2 Cap Payments, Class M Cap Payments and Certificate
Cap Payments; and
TWELFTH: to the Issuer, for distribution in accordance with the terms
of the Sale and Servicing Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to the holders of the Notes pursuant to this Section. At least 15 days
before such record date, the Issuer shall mail to each holder of the Notes and
the Indenture Trustee a notice that states the record date, the payment date and
the amount to be paid.
(c) If the Indenture Trustee collects any money or property under this
Article V following the occurrence and during the continuation of an Event of
Default, other than with respect to Events of Default under Sections 5.01(i),
5.01(ii), 5.01(iv) or 5.01(v) above or following the acceleration of the Notes
pursuant to Section 5.02, it shall pay out the money or property in the
following order:
(i) to the Indenture Trustee for amounts due under Section 6.07 of
this Indenture;
(ii) to the Seller, any amounts on deposit in the Collection Account
which consist of Guarantee Payments made by TERI in excess of the Maximum
TERI Payments Amount;
(iii) pro rata, from the amount of Available Funds remaining after the
application of clauses (i) and (ii), (x) to the Master Servicer, the Master
Servicing Fee due with respect to the preceding calendar month and all
unpaid Master Servicing Fees from prior months, and (y) to the
Administrator, the Administration Fee and all unpaid Administration Fees
from prior Collection Periods;
(iv) to the holders of the Class A Notes, from the amount of Available
Funds remaining after the application of clauses (i), (ii) and (iii), the
Noteholders' Interest Distribution Amount for the Class A-1 Notes and Class
A-2 Notes pursuant to Section 8.02(c) of this Indenture;
(v) to the holders of the Class M Notes, from the amount of Available
Funds remaining after the application of clauses (i) through (iv), the
Noteholders' Interest Distribution Amount for the Class M Notes pursuant to
Section 8.02(c) of this Indenture;
(vi) to the Issuer, from the amount of Available Funds remaining after
the application of clauses (i) through (v), the amount of the
Certificateholders' Interest Distribution Amount;
(vii) to the Reserve Account from the amount of Available Funds
remaining after the application of clauses (i) through (vi), an amount, up
to the amount, if any, necessary to reinstate the balance of the Reserve
Account up to the Specified Reserve Account Balance;
(viii) to the holders of the Notes, from the amount of Available Funds
remaining after the application of clauses (i) through (vii), the
Noteholders' Principal Distribution Amount to be allocated pursuant to
Section 8.02(c)(iii) of this Indenture;
(ix) on the Distribution Date on which the last outstanding Class of
Notes is paid in full, to the Issuer, from the amount of Available Funds
remaining after the application of clauses (i) through (viii), the amount
of the Certificateholders' Principal Distribution Amount;
(x) to the holders of the Class A Notes on a pro rata basis, based on
the amount of Noteholders' Interest Index Carryover owing on each class of
Class A Notes, from (1) the amount of Available Funds remaining after the
application of clauses (i) through (ix) and (2) the Class A Cap Funds, if
any, the aggregate unpaid amount of Noteholders' Interest Index Carryover,
if any, with respect to the Class A Notes;
(xi) to the holders of the Class M Notes, from (1) the amount of
Available Funds remaining after application of clauses (i) through (x), and
(2) the Class M Cap Funds, if any, the aggregate amount of Noteholders'
Interest Index Carryover, if any, with respect to the Class M Notes;
(xii) to the Issuer, from (1) the amount of Available Funds remaining
after the application of clauses (i) through (xi) and (2) the Certificate
Cap Funds, the aggregate unpaid amount of the Certificateholders' Interest
Index Carryover, if any;
(xiii) to the Cap Provider, an amount sufficient to reimburse the Cap
Provider for all previous Class A-1 Cap Payments, Class A-2 Cap Payments,
Class M Cap Payments and Certificate Cap Payments made by the Cap Provider
under the Cap Agreement and not previously reimbursed pursuant to this
clause (xiii); and
(xiv) to or upon the order of the Seller, the amount of Available
Funds remaining after the application of clauses (i) through (xiii).
Notwithstanding anything to the contrary contained in this Section
5.04(c), (1) on the second consecutive Distribution Date that the outstanding
principal balance of the Notes (after giving effect to any amounts to be
distributed to the holders of the Notes pursuant to Section 5.04(c) (viii)
above) is in excess of the Note Collateralization Amount, the holders of the
Notes shall receive the Noteholders' Priority Principal Distribution Amount in
the order of priority specified in Section 8.02(c) of this Indenture prior to
any distribution to the Issuer of the amount equal to of the Certificateholders'
Interest Distribution Amount on such Distribution Date pursuant to Section
5.04(c) (vi) above or (2) on the second consecutive Distribution Date that the
outstanding principal balance of the Class A Notes (after giving effect to any
amounts to be distributed to the holders of the Class A Notes pursuant to
Section 5.04(c)(vii) above) is in excess of the Note Collateralization Amount,
the holders of the Class A Notes shall receive the Noteholders' Priority
Principal Distribution Amount in the order of priority specified in Section
8.02(c) of this Indenture prior to any payment to the holders of the Class M
Notes of the Noteholders' Interest Distribution Amount for the Class M Notes on
such Distribution Date pursuant to Section 5.04(c)(v) above. In the event that
any Class of Notes receives a payment in respect of the Noteholders' Priority
Distribution Amount, the Administrator, on behalf of the Trust, shall give
notice to each Rating Agency of such payment.
The Indenture Trustee may fix a record date and payment date for any
payment to the holders of the Notes pursuant to this Section. At least 15 days
before such record date, the Issuer shall mail to each holder of the Notes and
the Indenture Trustee a notice that states the record date, the payment date and
the amount to be paid.
(d) If the Indenture Trustee, in compliance with Section 5.04(a), (b)
or (c) is deemed to have a conflict of interest under the TIA and is required to
resign as Indenture Trustee hereunder, the Indenture Trustee, pursuant to
Section 6.10, may appoint one or more indenture trustees to act separately
hereunder for each Class of Notes (in the case of the Class A Notes, such
indenture trustee shall act for all Class A Notes as if they comprised a single
Class). In the event separate indenture trustees are appointed for one or more
Classes of Notes:
(i) so long as any amounts remain unpaid with respect to the Class A
Notes, only the Indenture Trustee for the Class A Noteholders shall be
entitled to waive any Event of Default, Master Servicer Default or
Administrator Default or exercise any remedies under this Indenture; and
(ii) after the Class A Notes have been paid in full, the Indenture
Trustee for the Class M Noteholders shall be entitled to waive any Event of
Default, Master Servicer Default or Administrator Default or exercise any
remedies under this Indenture.
SECTION 5.05. OPTIONAL PRESERVATION OF THE FINANCED STUDENT LOANS. If
the Notes have been declared to be due and payable under Section 5.02 following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the holders of the Notes that there be at all times
sufficient funds for the payment of principal of and interest (including any
unpaid Noteholders' Interest Index Carryover) on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Indenture Trust Estate. In determining whether to
maintain possession of the Indenture Trust Estate, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Indenture Trust Estate for such
purpose.
SECTION 5.06. LIMITATION OF SUITS. No holder of the Notes shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such holder of the Notes has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the holders of not less than 25% of the Outstanding Amount of the
Notes in the aggregate have made written request to the Indenture Trustee
to institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such holder of the Notes have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceeding; and
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the holders of a
majority of the Outstanding Amount of the Controlling Notes;
it being understood and intended that no one or more holders of the Notes shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other holders of the Notes or to obtain or to seek to obtain priority or
preference over any other holders of the Notes or to enforce any right under
this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Controlling
Noteholders, each representing less than a majority of the Outstanding Amount of
the Controlling Notes, the Indenture Trustee in its sole discretion may
determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, any holder
of the Notes shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such holder of the Notes.
SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any holder of the Notes has instituted any Proceeding to enforce any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such holder of the Notes, then and in every such case the Issuer,
the Indenture Trustee and the holders of the Notes shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the holders of the Notes shall continue as though no such
Proceeding had been instituted.
SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the holders of
the Notes is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any holder of the Notes to exercise any right or remedy
accruing upon any Default shall impair any such right or remedy or constitute a
waiver of any such Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee or to the holders of
the Notes may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee or by the holders of the Notes, as the case
may be.
SECTION 5.11. CONTROL BY NOTEHOLDERS. The holders of a majority of the
Outstanding Amount of the Controlling Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; PROVIDED that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Indenture Trust Estate shall
be by the holders of not less than 100% of the Outstanding Amount of the
Notes;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Indenture Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
holders of less than 100% of the Outstanding Amount of the Notes to sell or
liquidate the Indenture Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
PROVIDED, HOWEVER, that, subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any holders of the Notes not
consenting to such action.
SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the time a judgment or
decree for payment of money due has been obtained as described in Section 5.02,
the Controlling Noteholders of not less than a majority of the Outstanding
Amount of the Controlling Notes may waive any past Default and its consequences
except a Default (a) in payment when due of principal of or interest (including,
subject to the limitations of Sections 2.07(d) and 8.02(c), any Noteholders'
Interest Index Carryover) on any of the Notes or (b) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of each
holder of the Notes. In the case of any such waiver, the Issuer, the Indenture
Trustee and the holders of the Notes shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each holder of the Notes by such Noteholder's acceptance of any Note
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any holder of the Notes, or group
of holders of the Notes, in each case holding in the aggregate more than 10% of
the Outstanding Amount of the Notes or (c) any suit instituted by any holder of
the Notes for the enforcement of the payment of principal of or interest
(including any unpaid Noteholders' Interest Index Carryover) on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the holders of the Notes shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the
Indenture Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance with
Section 5.04(b).
SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller, the Administrator and the Master Servicer, as applicable, of each
of their obligations to the Issuer under or in connection with the Sale and
Servicing Agreement (and with respect to the Administrator only, the
Administration Agreement) in accordance with the terms thereof, and to exercise
any and all rights, remedies, powers and privileges lawfully available to the
Issuer under or in connection with the Sale and Servicing Agreement (and the
Administration Agreement) to the extent and in the manner directed by the
Indenture Trustee, including the transmission of notices of default on the part
of the Seller, the Administrator or the Master Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller, the Administrator or the Master Servicer of
each of their obligations under the Sale and Servicing Agreement (and the
Administration Agreement).
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone (confirmed in writing promptly thereafter)) of the holders of
66-2/3% of the Outstanding Amount of the Controlling Notes shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the
Seller, the Administrator or the Master Servicer under or in connection with the
Sale and Servicing Agreement (and the Administration Agreement), including the
right or power to take any action to compel or secure performance or observance
by the Seller, the Administrator or the Master Servicer of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement
(and the Administration Agreement) and any right of the Issuer to take such
action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to a Responsible Officer of the Indenture Trustee and
conforming to the requirements of this Indenture; PROVIDED, HOWEVER, that
the Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.01.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity satisfactory to it against any loss,
liability or expense is not reasonably assured to it.
(h) Except as expressly provided in the Basic Documents, the Indenture
Trustee shall have no obligation to administer, service or collect the Financed
Student Loans or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Financed Student Loans.
(i) In the event that the Indenture Trustee is the Paying Agent or the
Note Registrar, the rights and protections afforded to the Indenture Trustee
pursuant to this Indenture shall also be afforded to the Indenture Trustee in
its capacity as Paying Agent or Note Registrar.
(j) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.01.
(k) Notwithstanding any other provision in this Indenture or the other
Basic Documents, nothing in this Indenture or the other Basic Documents shall be
construed to limit the legal responsibility of the Indenture Trustee to the U.S.
Secretary of Education or a Guarantor for any violations of statutory or
regulatory requirements that may occur with respect to loans held by the
Indenture Trustee pursuant to, or to otherwise comply with its obligations
under, the Higher Education Act or implementing regulations, it being expressly
understood that the Indenture Trustee has no obligation or duty pursuant to this
Section except in the event of Foreclosure or pursuant to Section 8.02 of the
Sale and Servicing Agreement as a successor Master Servicer.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Indenture Trustee need not investigate any
fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officers' Certificate of the Issuer or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) In the event that the Person acting as Indenture Trustee is also
acting as securities intermediary all the rights, powers, immunities and
indemnities afforded to the Indenture Trustee under the Basic Documents shall
also be afforded to the securities intermediary.
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is either actually known or written notice of the existence
thereof has been delivered to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each holder of the Notes notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest (including any Noteholders' Interest Index
Carryover) on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice if and
so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of holders of the Notes.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS. The
Indenture Trustee shall deliver to each holder of the Notes (and to each Person
who was a holder of the Notes at any time during the applicable calendar year)
such information as may be required to enable such holder to prepare its Federal
and state income tax returns. Within 60 days after each December 31 beginning
with the December 31 following the date of this Indenture, the Indenture Trustee
shall mail to each holder of the Notes a brief report as of such December 31
that complies with TIA ss. 313(a) if required by said section. The Indenture
Trustee shall also comply with TIA ss. 313(b). A copy of each such report
required pursuant to TIA ss.ss. 313(a) or (b) shall, at the time of such
transmission to holders of the Notes, be filed by the Indenture Trustee with the
Commission and with each securities exchange, if any, upon which the Notes are
listed, provided that the Issuer has previously notified the Indenture Trustee
of such listing.
SECTION 6.07. COMPENSATION AND INDEMNITY. The Issuer shall cause the
Administrator to pay to the Indenture Trustee reasonable compensation for its
services in accordance with a separate agreement between the Administrator and
the Indenture Trustee and shall cause the Administrator to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it as provided in such separate agreement. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall cause the Administrator to indemnify the Indenture
Trustee against any and all loss, liability or expense (including attorneys'
fees and expenses) incurred by it in connection with the administration of this
trust and the performance of its duties hereunder and under the other Basic
Documents. The Indenture Trustee shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Failure by the Indenture
Trustee to so notify the Issuer and the Administrator shall not relieve the
Issuer or the Administrator of its obligations hereunder and under the other
Basic Documents. The Issuer shall cause the Administrator to defend the claim
and the Administrator shall not be liable for the legal fees and expenses of the
Indenture Trustee after it has assumed such defense; PROVIDED, HOWEVER, that, in
the event that there may be a conflict between the positions of the Indenture
Trustee and the Administrator in conducting the defense of such claim, the
Indenture Trustee shall be entitled to separate counsel the fees and expenses of
which shall be paid by the Administrator on behalf of the Issuer. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture or the earlier
resignation or removal of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of a Default specified in Section 5.01(iv)
or (v) with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable Federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Controlling Noteholders
of a majority in Outstanding Amount of the Controlling Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture Trustee;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the Indenture Trustee under this Indenture. The successor
Indenture Trustee shall mail a notice of its succession to the holders of the
Notes. The retiring Indenture Trustee shall promptly transfer all property held
by it as Indenture Trustee to the successor Indenture Trustee upon payment of
all monies due and owing to the retiring Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Controlling Noteholders of a majority in
Outstanding Amount of the Controlling Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any holder
of the Notes may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Indenture Trust Estate, and to vest
in such Person or Persons, in such capacity and for the benefit of the holders
of the Notes, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to holders of the Notes of the appointment of any co-trustee or separate
trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long term debt rating of Baa3 or better by Moody's. The Indenture Trustee
shall comply with TIA ss. 310(b), including the optional provision permitted by
the second sentence of TIA ss. 310(b)(9); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES
OF NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the holders of the Notes as of such Record Date, (b) at such other times as
the Indenture Trustee may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; PROVIDED,
HOWEVER, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the holders of the Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of the holders of the Notes received
by the Indenture Trustee in its capacity as Note Registrar. The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.
(b) Holders of the Notes may communicate pursuant to TIA ss. 312(b)
with other holders of the Notes with respect to their rights under this
Indenture or under the Notes. Upon receipt by the Indenture Trustee of any
request by a holder of the Notes to receive a copy of the current list of
holders of the Notes (whether or not made pursuant to TIA ss. 312(b)), the
Indenture Trustee shall promptly notify the Administrator thereof by providing
to the Administrator a copy of such request and a copy of the list of holders of
the Notes produced in response thereto.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss. 312(c).
(d) The Indenture Trustee shall furnish to the holders of the Notes
promptly upon receipt of a written request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other instruments furnished to the Indenture Trustee under the Basic Documents.
SECTION 7.03. REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
(ii) file with the Indenture Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the Commission
such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all holders of the Notes described in TIA ss.
313(c)) such summaries of any information, documents and reports required
to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it on behalf of the holders of
the Notes pursuant to the Sale and Servicing Agreement as provided in this
Indenture. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Indenture Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default under this Indenture and any right to proceed thereafter as provided in
Article V.
SECTION 8.02. TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Administrator to establish and maintain, in the name of
the Indenture Trustee, for the benefit of the holders of the Notes and the
holders of the Certificates, the Trust Accounts as provided in Section 5.01 of
the Sale and Servicing Agreement.
(b) On or before the Business Day preceding each Distribution Date,
all Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 5.02 of the Sale and
Servicing Agreement. On or before each Distribution Date, the Noteholders'
Distribution Amount and any Noteholders' Interest Index Carryover, if any, with
respect to the preceding Collection Period will be distributed from the
Collection Account and any other Trust Account to the Indenture Trustee (or any
other Paying Agent) on behalf of the holders of the Notes as provided in
Sections 5.04(c), 5.05 and 5.06 of the Sale and Servicing Agreement.
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee (or any other Paying Agent) shall distribute all amounts received by it
on behalf of the holders of the Notes pursuant to paragraph (b) above to the
holders of the Notes to the extent of amounts due and unpaid on the Notes for
principal, interest and any Noteholders' Interest Index Carryover in the
following amounts and in the following order of priority (except as otherwise
provided in Section 5.04(b) and 5.04(c)):
(i) the Noteholders' Interest Distribution Amount with respect to the
Class A-1 and Class A-2 Notes, to the holders of the Class A-1 Notes and
the holders of the Class A-2 Notes in an amount equal to the accrued and
unpaid interest on the Notes; provided that if there are not sufficient
funds received to pay the entire amount of accrued and unpaid interest then
due on such Notes, the amounts so received shall be applied to the payment
of such interest on the Notes on a pro rata basis;
(ii) with respect to any Distribution Date on which the Class A Notes
are entitled to receive the Noteholders' Priority Distribution Amount, the
applicable Noteholders' Priority Distribution Amount to the holders of the
Class A-1 Notes until the Outstanding Amount of the Class A-1 Notes is
reduced to zero, then to the holders of the Class A-2 Notes until the
Outstanding Amount of the Class A-2 Notes is reduced to zero;
(iii) the Noteholders' Interest Distribution Amount with respect to
the Class M Notes, to the holders of the Class M Notes in an amount equal
to the accrued and unpaid interest on the Class M Notes;
(iv) the applicable Noteholders' Principal Distribution Amount, to the
holders of the Class A-1 Notes until the Outstanding Amount of the Class
A-1 Notes is reduced to zero, and then to the holders of the Class A-2
Notes until the Outstanding Amount of the Class A-2 Notes is reduced to
zero;
(v) the applicable Noteholders' Principal Distribution Amount, to the
holders of the Class M Notes until the Outstanding Amount of the Class M
Notes is reduced to zero; and
(vi) the applicable Noteholders' Interest Index Carryover with respect
to the Class A Notes, if any, to the holders of the Class A-1 Notes and the
holders of the Class A-2 Notes; provided that if insufficient funds are
received to pay the entire Noteholders' Interest Index Carryover with
respect to the Class A Notes then outstanding, the amounts so received
shall be applied to the payment of such Noteholders' Interest Index
Carryover on a pro rata basis.
(vii) the applicable Noteholders' Interest Index Carryover with
respect to the Class M Notes, if any, to the holders of the Class M Notes.
SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no
Default shall have occurred and be continuing, all or a portion of the funds in
the Trust Accounts shall be invested in Eligible Investments and reinvested by
the Indenture Trustee upon Issuer Order, subject to the provisions of Section
5.01(b) of the Sale and Servicing Agreement. All income or other gain from
investments of moneys deposited in the Trust Accounts shall be deposited by the
Indenture Trustee in the Collection Account, and any loss resulting from such
investments shall be charged to such Trust Account. The Issuer will not direct
the Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred
and be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.02, or, if such Notes shall have
been declared due and payable following an Event of Default, amounts collected
or receivable from the Indenture Trust Estate are being applied in accordance
with Section 5.05 as if there had not been such a declaration; then the
Indenture Trustee shall, to the fullest extent practicable, invest and reinvest
funds in the Trust Accounts in one or more Eligible Investments.
SECTION 8.04. RELEASE OF INDENTURE TRUST ESTATE. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid, release any remaining portion of the Indenture Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officers' Certificate of the Issuer, an Opinion of
Counsel and (if required by TIA) Independent Certificates in accordance with TIA
ss.ss. 314(c) and 314(d)(1) and meeting the applicable requirements of
Section 11.01.
(c) Each holder of the Notes, by the acceptance of a Note,
acknowledges that from time to time during the Funding Period the Indenture
Trustee shall release the lien of this Indenture on those Financed Federal Loans
to be sold to the Seller and as to which the Seller will simultaneously deposit
the aggregate Purchase Amounts thereof into the Escrow Account in accordance
with, and subject to the terms and conditions of, Section 2.03 of the Sale and
Servicing Agreement, and each holder of the Notes consents to such release.
SECTION 8.05. OPINION OF COUNSEL. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.04(c), as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Notes or the rights of the holders of the
Notes in contravention of the provisions of this Indenture; PROVIDED, HOWEVER,
that such Opinion of Counsel shall not be required to express an opinion as to
the fair value of the Indenture Trust Estate. Counsel rendering any such opinion
may rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of any holders of the Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action shall
not materially adversely affect the interests of the holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the holders of the Notes but with
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any holder of the Notes.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Controlling
Noteholders of not less than a majority of the Outstanding Amount of the
Controlling Notes, by Act of such holders of the Controlling Notes delivered to
the Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without
the consent of the holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest (including any unpaid Noteholders' Interest Index Carryover) on
any Note, or reduce the principal amount thereof, the interest rate thereon
or the Redemption Price with respect thereto, change the provisions of this
Indenture relating to the application of payments received from the Cap
Provider with respect to the Cap Agreement, collections on, or the proceeds
of the sale of, the Indenture Trust Estate to payment of principal of or
interest (including any unpaid Noteholders' Interest Index Carryover) on
the Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes, the
consent of the holders of the Notes of which is required for any such
supplemental indenture, or the consent of the holders of the Notes of which
is required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided for
in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Indenture Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the holder of each Outstanding
Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest
(including any Noteholders' Interest Index Carryover) or principal due on
any Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
holders of the Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Indenture
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive any holder of any Note of the security provided by the
lien of this Indenture.
It shall not be necessary for any Act of holders of the Notes under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the holders of the Notes to which such amendment or supplemental
indenture relates a notice prepared by the Issuer setting forth in general terms
the substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. REDEMPTION. (a) (i) In the event that on the Special
Determination Date the Subsequent Pool Pre-Funded Amount, after giving effect to
the purchase of any Subsequent Pool Student Loans on such date is greater than
$10,000,000, each Class of Notes will be redeemed in part, on a pro rata basis
based upon the initial principal amount of each such Class, in an aggregate
principal amount equal to the Noteholders' Percentage of such Subsequent Pool
Pre-Funded Amount on the following Distribution Date. In the event that on the
Special Determination Date the Subsequent Pool Pre-Funded Amount, after giving
effect to the purchase of any Subsequent Pool Student Loans on such date, is
greater than zero but less than or equal to $10,000,000, the Class A-1 Notes
will be redeemed in an amount equal to such Subsequent Pool Pre-Funded Amount.
(ii) In the event that on the Distribution Date on which the Funding
Period ends (or on the Distribution Date immediately following the last day of
the Funding Period, if the Funding Period does not end on a Distribution Date)
any amount remains on deposit in the Pre-Funding Account after giving effect to
the making of all Additional Fundings during the Funding Period, including any
such Additional Fundings on such Redemption Date, the Class A-1 Notes will be
redeemed until the principal amount thereof is reduced to zero, then the Class
A-2 Notes will be redeemed in part to the extent of any remaining funds until
the principal amount thereof is reduced to zero, and then the Class M Notes will
be redeemed in part to the extent of any remaining funds until the principal
amount thereof is reduced to zero, in each case on a pro rata basis within each
Class, in an aggregate principal amount equal to the amount then on deposit in
the Pre-Funding Account.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.02 of the Trust Agreement, that portion of the amounts on deposit in
the Trust Accounts to be distributed to the holders of the Notes shall be paid
to the holders of the Notes up to the Outstanding Amount of the Notes and all
accrued and unpaid interest thereon and any accrued and unpaid Noteholders'
Interest Index Carryover with respect thereto (but only to the extent provided
by Sections 2.07(d) and 8.02(c)). If amounts are to be paid to holders of the
Notes pursuant to this Section 10.01(b), the Master Servicer, the Administrator
or the Issuer shall, to the extent practicable, furnish notice of such event to
the Indenture Trustee not later than 25 days prior to the Redemption Date
whereupon all such amounts shall be payable on the Redemption Date.
SECTION 10.02. FORM OF REDEMPTION NOTICE. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each holder of the Notes, as of the close of
business on the Record Date preceding the applicable Redemption Date, at such
Noteholder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
SECTION 10.03. NOTES PAYABLE ON REDEMPTION DATE. The Notes or portions
thereof to be redeemed shall on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
<PAGE>
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officers' Certificate of the Issuer stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or other
property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii) Other than any property released as contemplated by clause (v)
below, whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee
an Officers' Certificate of the Issuer certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days
of such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property as
contemplated by clause (v) below, or securities released from the lien of
this Indenture since the commencement of the then-current calendar year, as
set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but
such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.09 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of Financed Student Loans as and to the extent permitted or
required by the Basic Documents, (B) make cash payments out of the Trust
Accounts as and to the extent permitted or required by the Basic Documents
and (C) convey to the Seller, in order to allow the Seller to make
Consolidation Loans, those specified Financed Student Loans as and to the
extent permitted or required by and in accordance with Section 8.04(c)
hereof and Section 2.03 of the Sale and Servicing Agreement, so long as the
Issuer shall deliver to the Indenture Trustee every six months, commencing
March 1, 2000 an Officers' Certificate of the Issuer stating that all the
dispositions of Collateral described in clauses (A), (B) or (C) above that
occurred during the immediately preceding six calendar months were in the
ordinary course of the Issuer's business and that the proceeds thereof were
applied in accordance with the Basic Documents.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Master Servicer, the Seller, the Issuer or the Administrator, stating that
the information with respect to such factual matters is in the possession of the
Master Servicer, the Seller, the Issuer or the Administrator, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.03. ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by holders of the Notes may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such holders of the Notes in person or by agents duly appointed in writing;
and except as herein otherwise expressly provided such action shall become
effective when such instrument or instruments are delivered to the Indenture
Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the holders of the
Notes signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the holder of any Notes shall bind the holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of holders of the Notes or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or act of holders of the Notes is to be made
upon, given or furnished to or filed with:
(a) the Indenture Trustee by any holder of the Notes or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Indenture Trustee at its Corporate Trust
Office, or
(b) the Issuer by the Indenture Trustee or by any holder of the Notes
shall be sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to the Issuer addressed to: KeyCorp Student
Loan Trust 1999-B, in care of Bank One, National Association, 1 Bank One
Plaza, Suite IL1-0126, Chicago, Illinois 60670, Attention: Corporate Trust
Administration; with a copy to the Administrator, 800 Superior Avenue,
Fourth Floor, Cleveland, Ohio 44114, Attention: KeyCorp Education
Resources, KeyCorp Student Loan Trust 1999-B, or at any other address
previously furnished in writing to the Indenture Trustee by the Issuer or
the Administrator. The Issuer shall promptly transmit any notice received
by it from the holders of the Notes to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Eligible Lender Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in the
case of Moody's, at the following address: Moody's Investors Service, Inc., ABS
Monitoring Department, 99 Church Street, New York, New York 10007; (ii) in the
case of Standard & Poor's, at the following address: Standard & Poor's Rating
Services, 55 Water Street, New York, New York 10041, Attention of Asset Backed
Surveillance Department; and (iii) Fitch IBCA, Inc., Municipal Structured
Finance Group, One State Street Plaza, New York, New York, 10004; or as to each
of the foregoing, at such other address as shall be designated by written notice
to the other parties.
SECTION 11.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to holders of the Notes of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each holder of the Notes affected by
such event, at his address as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to holders of the Notes is given
by mail, neither the failure to mail such notice nor any defect in any notice so
mailed to any particular holder of the Notes shall affect the sufficiency of
such notice with respect to other holders of the Notes, and any notice that is
mailed in the manner herein provided shall conclusively be presumed to have been
duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by holders of the Notes shall be filed with the
Indenture Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to holders of the Notes when such notice is required
to be given pursuant to any provision of this Indenture, then any manner of
giving such notice as shall be satisfactory to the Indenture Trustee shall be
deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default.
SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any holder of the Notes
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such holder of the Notes, that is different from the methods
provided for in this Indenture for such payments or notices. The Issuer will
furnish to the Indenture Trustee a copy of each such agreement and the Indenture
Trustee will cause payments to be made and notices to be given in accordance
with such agreements.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA ss.ss. 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind the successors, co-trustees and agents (excluding any
legal representatives or accountants) of the Indenture Trustee.
SECTION 11.10. SEPARABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the holders of the Notes, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Indenture Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the holders of the Notes or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
SECTION 11.16. TRUST OBLIGATIONS. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Seller, the
Administrator, the Master Servicer, the Eligible Lender Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Seller, the
Administrator, the Master Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity or (ii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Seller, the Administrator,
the Master Servicer, the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, any holder or owner of a beneficial interest in the Issuer,
the Eligible Lender Trustee or the Indenture Trustee or of any successor or
assign of the Seller, the Administrator, the Master Servicer, the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Eligible Lender Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the
Eligible Lender Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each holder of the Notes, by accepting a Note, hereby
covenant and agree that they will not at any time institute against the Seller
or the Issuer, or join in any institution against the Seller or the Issuer of,
any bankruptcy, reorganization, arrangement, insolvency, receivership or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the other Basic Documents.
SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information obtained from such examination or inspection except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
<PAGE>
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
KEYCORP STUDENT LOAN TRUST 1999-B,
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee,
By: /s/ Jeffrey L. Kinney
------------------------------
Name: Jeffrey L. Kinney
Title: Vice President
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By: /s/ Christopher D. Lew
----------------------------------
Name: Christopher D. Lew
Title: Assistant Treasurer
Acknowledged and accepted as to
the Granting Clause as of the
day and year first above written:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual
capacity but solely as
Eligible Lender Trustee,
By: /s/ Jeffrey L. Kinney
------------------------------
Name: Jeffrey L Kinney
Title: Vice President
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 30th day of September in the year 1999, before me, the
undersigned, personally appeared Jeffrey L. Kinney, a Vice President of BANK
ONE, NATIONAL ASSOCIATION, as Eligible Lender Trustee of KEYCORP STUDENT LOAN
TRUST 1999-B, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of September,
1999.
/s/ Maria K. Montgomery
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
April 4, 2000
<PAGE>
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
On the 30th day of September in the year 1999, before me, the
undersigned, personally appeared Christopher D. Lew, an Assistant Treasurer of
BANKERS TRUST COMPANY, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of September,
1999.
/s/ Maria K. Montgomery
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
April 4, 2000
<PAGE>
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
On the 30th day of September in the year 1999, before me, the
undersigned, personally appeared Jeffrey L. Kinney, a Vice President of BANK
ONE, NATIONAL ASSOCIATION, personally known to me or proved to me on the basis
of satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 30th day of September,
1999.
/s/ Maria K. Montgomery
------------------------------
Notary Public in and for
the State of New York.
My commission expires:
April 4, 2000
<PAGE>
APPENDIX A
[See Appendix A to the Sale and Servicing Agreement]
<PAGE>
SCHEDULE A
TO THE INDENTURE
PART I
SCHEDULE OF INITIAL POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee.
PART II
SCHEDULE OF INITIAL POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
<PAGE>
SCHEDULE B
TO THE INDENTURE
PART I
SCHEDULE OF SUBSEQUENT POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee
PART II
SCHEDULE OF SUBSEQUENT POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
PART III
SCHEDULE OF OTHER SUBSEQUENT STUDENT LOANS
To be included on Schedule A to each related Transfer Agreement.
<PAGE>
SCHEDULE C
TO THE INDENTURE
LOCATION OF FINANCED STUDENT LOAN FILES - PHEAA
Documents relating to the Financed Student Loans being sub-serviced by PHEAA on
behalf of the Master Servicer pursuant to the PHEAA Sub-Servicing Agreement
(including original notes) are stored at PHEAA's facility at 1200 North 7th
Street, Harrisburg, Pennsylvania 17102.
LOCATION OF FINANCED STUDENT LOAN FILES - GREAT LAKES
Documents relating to the Financed Student Loans being sub-serviced by Great
Lakes on behalf of the Master Servicer pursuant to the Great Lakes Sub-Servicing
Agreement(including original notes) are stored at Great Lakes' facilities at
2401 International Lane, Madison, Wisconsin 53704, and, on behalf of Great
Lakes, at the offices of Datakeep Inc., 2538 Daniels Street, Madison, Wisconsin
53718.
<PAGE>
EXHIBIT A-1
TO THE INDENTURE
[FORM OF CLASS A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 1/
No.
KEYCORP STUDENT LOAN TRUST 1999-B
FLOATING RATE CLASS A-1 ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-B, a trust organized and existing
under the laws of the State of New York (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the August 2007 Distribution Date
(the "Final Maturity Date").
- ---------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
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.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 1999-B
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement,
By:
--------------------------------
Authorized Signatory
Date: September 30, 1999
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By:
---------------------------
Authorized Signatory
Date: September 30, 1999
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-1 Asset Backed Notes (herein called the
"Class A-1 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Class A-1 Notes are subject to all
terms of the Indenture. Capitalized but undefined terms shall have the meanings
set forth in the Indenture dated as of September 1, 1999 between KeyCorp Student
Loan Trust 1999-B and Bankers Trust Company as Trustee including Appendix A to
the Indenture.
The Class A-1 Notes and the Issuer's Floating Rate Class A-2 Asset
Backed Notes (the "Class A-2 Notes" and together with the Class A-1 Notes, the
"Class A Notes") are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture. The rights of the
Issuer's Floating Rate Class M Asset Backed Notes (the "Class M Notes" and
together with the Class A Notes, the "Notes") are and will be subordinated to
the rights of the Class A Notes as provided in the Indenture.
Principal of the Notes will be payable on each Distribution Date to
the extent funds are available therefor set forth in the Sale and Servicing
Agreement and the Indenture. "Distribution Date" means the twenty-fifth day of
each February, May, August and November, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing February 25, 2000.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Controlling Noteholders
representing not less than a majority of the Outstanding Amount of the
Controlling Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Notes of the same class shall be made pro rata to the holders of
such Notes entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of each Class of Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Note Interest Rate for
such Class of Notes; provided, however, that on any Distribution Date on which a
Class M Interest Subordination Event exists, the amount of interest due and
payable on the Class M Notes on such Distribution Date will be reduced by the
amount of such interest applied to the Noteholders' Priority Principal
Distribution Amount on such Distribution Date and the amount so deferred will be
payable, together with interest thereon, on the first Distribution Date on which
a Class M Interest Subordination Event no longer exists.
The "Note Interest Rate" means, with respect to any Interest Period,
(x) in the case of the Class A-1 Notes, the interest rate per annum (computed on
the basis of the actual number of days elapsed in the related Interest Period
divided by 360) equal to the lesser of (i) Three-Month LIBOR plus 0.28% and (ii)
the Student Loan Rate for such Interest Period, (y) in the case of the Class A-2
Notes, the interest rate per annum (computed on the basis of the actual number
of days elapsed in the related Interest Period divided by 360) equal to the
lesser of (i) Three-Month LIBOR plus 0.43% and (ii) the Student Loan Rate for
such Interest Period, and (z) in the case of the Class M Notes, the interest
rate per annum (computed on the basis of the actual number of days elapsed in
the related Interest Period divided by 360) equal to the lesser of (i)
Three-Month LIBOR plus 0.70% and (ii) the Student Loan Rate for such Interest
Period.
The "Student Loan Rate" means for any Class of Securities for any
Interest Period will equal the product of (a) the quotient obtained by dividing
(i) 365 (or 366 in a leap year) by (ii) the actual number of days elapsed in
such Interest Period and (b) the percentage equivalent of a fraction, (i) the
numerator of which is equal to Expected Interest Collections for the Collection
Period relating to such Interest Period less the Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "Three-Month LIBOR" means the London
interbank offered rate for deposits in U.S. dollars having a maturity of three
months commencing on the related LIBOR Determination Date (the "Index Maturity")
which appears on Telerate Page 3750 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the U.S. dollars to leading European banks
having the Index Maturity and in a principal amount equal to an amount of not
less than U.S. $1,000,000; provided that if the banks selected as aforesaid are
not quoting as mentioned in this sentence, Three-Month LIBOR in effect for the
applicable Interest Period will be Three-Month LIBOR in effect for the previous
Interest Period. For purposes of calculating Three-Month LIBOR, a Business Day
is any day on which banks in London and New York City are open for the
transaction of business. Interest due for any Interest Period will be determined
based on the actual number of days in such Interest Period over a 360 day year.
"Reference Bank" means a leading bank (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not
controlling, controlled by or under common control with the Administrator and
(iii) having an established place of business in London.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding November 26, 1999 and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26, 1999 to
but excluding February 25, 2000. For purposes of this definition, a "Business
Day" is any day on which banks in London and New York City are open for the
transaction of business.
Any Noteholders' Interest Index Carryover with respect to the Class A
Notes that may exist on any Distribution Date attributable shall be payable to
the holders of the Class A Notes, on a pro rata basis based on the amount of
Noteholders' Interest Index Carryover then owing on the Class A Notes on that
Distribution Date and any succeeding Distribution Dates solely out of the funds
available and required to be applied thereto pursuant to the Sale and Servicing
Agreement. Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Class M Notes shall be payable to the
holders of the Class M Notes on that Distribution Date and any succeeding
Distribution Date solely out of the funds available and required to be applied
thereto pursuant to the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture, the Class A-1 Notes may be redeemed in
part, on a pro rata basis among all the holders of such Notes, on the
Distribution Date on which the Funding Period ends (or on the Distribution Date
immediately following the last day of the Funding Period, if the Funding Period
does not end on a Distribution Date) in the event that any amounts remain on
deposit in the Pre-Funding Account after giving effect to all Additional
Fundings, including any occurring on such Distribution Date.
As provided in the Indenture, if as of the Special Determination Date,
the Subsequent Pool Pre-Funded Amount is greater than $10,000,000, such amount
will be distributed on the first Distribution Date thereafter to redeem each
Class of Notes and prepay the Certificates on a pro rata basis, based on the
initial principal balance of each Class of Notes and the Initial Certificate
Balance; if such amount is $10,000,000 or less, it will be distributed on such
Distribution Date only to the holders of the Class A-1 Notes to redeem such
Class A-1 Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Eligible Lender Trustee
or the Indenture Trustee, except as any such Person may have expressly agreed
and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Seller, the Administrator, the
Master Servicer, the Noteholders and the Note Owners that, for purposes of
Federal and State income tax and any other tax measured in whole or in part by
income, this Note will qualify as indebtedness of the Issuer. The Noteholders
and the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of the Issuer.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Seller or the Issuer, or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Bankers Trust Company in its individual
capacity, Bank One, National Association, in its individual capacity, any owner
of a beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The holder of the Notes by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
<PAGE>
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.
<PAGE>
EXHIBIT A-2
TO THE INDENTURE
[FORM OF CLASS A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 1/
No.
KEYCORP STUDENT LOAN TRUST 1999-B
FLOATING RATE CLASS A-2 ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-B, a trust organized and existing
under the laws of the State of New York (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the August 2027 Distribution Date
(the "Final Maturity Date").
- ----------------------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
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.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 1999-B
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement,
By:
--------------------------------
Authorized Signatory
Date: September 30, 1999
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By:
---------------------------------
Authorized Signatory
Date: September 30, 1999
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-2 Asset Backed Notes (herein called the
"Class A-2 Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Class A-2 Notes are subject to all
terms of the Indenture. Capitalized but undefined terms shall have the meanings
set forth in the Indenture dated as of September 1, 1999 between KeyCorp Student
Loan Trust 1999-B and Bankers Trust Company as Trustee including Appendix A to
the Indenture.
The Class A-2 Notes and the Issuer's Floating Rate Class A-1 Asset
Backed Notes (the "Class A-1 Notes" and together with the Class A-2 Notes, the
"Class A Notes") are and will be equally and ratably secured by the collateral
pledged as security therefor as provided in the Indenture. The rights of the
Issuer's Floating Rate Class M Asset Backed Notes (the "Class M Notes" and
together with the Class A Notes, the "Notes") are and will be subordinated to
the rights of the Class A Notes as provided in the Indenture.
Principal of the Notes will be payable on each Distribution Date to
the extent funds are available therefor set forth in the Sale and Servicing
Agreement and the Indenture. "Distribution Date" means the twenty-fifth day of
each February, May, August and November, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing February 25, 2000.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Controlling Noteholders
representing not less than a majority of the Outstanding Amount of the
Controlling Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Notes of the same class shall be made pro rata to the holders of
such Notes entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of each Class of Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Note Interest Rate for
such Class of Notes; provided, however, that on any Distribution Date on which a
Class M Interest Subordination Event exists, the amount of interest due and
payable on the Class M Notes on such Distribution Date will be reduced by the
amount of such interest applied to the Noteholders' Priority Principal
Distribution Amount on such Distribution Date and the amount so deferred will be
payable, together with interest thereon, on the first Distribution Date on which
a Class M Interest Subordination Event no longer exists.
The "Note Interest Rate" means, with respect to any Interest Period,
(x) in the case of the Class A-1 Notes, the interest rate per annum (computed on
the basis of the actual number of days elapsed in the related Interest Period
divided by 360) equal to the lesser of (i) Three-Month LIBOR plus 0.28% and (ii)
the Student Loan Rate for such Interest Period, (y) in the case of the Class A-2
Notes, the interest rate per annum (computed on the basis of the actual number
of days elapsed in the related Interest Period divided by 360) equal to the
lesser of (i) Three Monthly LIBOR plus 0.43% and (ii) the Student Loan Rate for
such Interest Period, and (z) in the case of the Class M Notes, the interest
rate per annum (computed on the basis of the actual number of days elapsed in
the related Interest Period divided by 360) equal to the lesser of (i)
Three-Month LIBOR plus 0.70% and (ii) the Student Loan Rate for such Interest
Period.
The "Student Loan Rate" means for any Class of Securities for any
Interest Period will equal the product of (a) the quotient obtained by dividing
(i) 365 (or 366 in a leap year) by (ii) the actual number of days elapsed in
such Interest Period and (b) the percentage equivalent of a fraction, (i) the
numerator of which is equal to Expected Interest Collections for the Collection
Period relating to such Interest Period less the Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "Three-Month LIBOR" means the London
interbank offered rate for deposits in U.S. dollars having a maturity of three
months commencing on the related LIBOR Determination Date (the "Index Maturity")
which appears on Telerate Page 3750 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the U.S. dollars to leading European banks
having the Index Maturity and in a principal amount equal to an amount of not
less than U.S. $1,000,000; provided that if the banks selected as aforesaid are
not quoting as mentioned in this sentence, Three-Month LIBOR in effect for the
applicable Interest Period will be Three-Month LIBOR in effect for the previous
Interest Period.
"Reference Bank" means a leading bank (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not
controlling, controlled by or under common control with the Administrator and
(iii) having an established place of business in London.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding November 26, 1999 and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26 1999 to
but excluding February 25, 2000. For purposes of this definition, a "Business
Day" is any day on which Banks in London and New York City are open for the
transaction of business.
Any Noteholders' Interest Index Carryover with respect to the Class A
Notes that may exist on any Distribution Date attributable shall be payable to
the holders of the Class A Notes, on a pro rata basis based on the amount of
Noteholders' Interest Index Carryover then owing on the Class A Notes on that
Distribution Date and any succeeding Distribution Dates solely out of the funds
available and required to be applied thereto pursuant to the Sale and Servicing
Agreement. Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Class M Notes shall be payable to the
holders of the Class M Notes on that Distribution Date and any succeeding
Distribution Date solely out of the funds available and required to be applied
thereto pursuant to the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture, if as of the Special Determination Date,
the Subsequent Pool Pre-Funded Amount is greater than $10,000,000, such amount
will be distributed on the first Distribution Date thereafter to redeem each
Class of Notes and prepay the Certificates on a pro rata basis, based on the
initial principal balance of each Class of Notes and the Initial Certificate
Balance; if such amount is $10,000,000 or less, it will be distributed on such
Distribution Date only to the holders of the Class A-1 Notes to redeem such
Class A-1 Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Eligible Lender Trustee
or the Indenture Trustee, except as any such Person may have expressly agreed
and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Seller, the Administrator, the
Master Servicer, the Noteholders and the Note Owners that, for purposes of
Federal and State income tax and any other tax measured in whole or in part by
income, this Note will qualify as indebtedness of the Issuer. The Noteholders
and the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of the Issuer.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Seller or the Issuer, or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Bankers Trust Company in its individual
capacity, Bank One, National Association, in its individual capacity, any owner
of a beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The holder of the Notes by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
<PAGE>
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.
<PAGE>
EXHIBIT A-3
TO THE INDENTURE
[FORM OF CLASS M NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 1/
No.
KEYCORP STUDENT LOAN TRUST 1999-B
FLOATING RATE CLASS M ASSET BACKED NOTES
KeyCorp Student Loan Trust 1999-B, a trust organized and existing
under the laws of the State of New York (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the August 2029 Distribution Date
(the "Final Maturity Date").
- --------------------
1/ Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE>
The Issuer will pay interest on this Note at the rate per annum equal
to the Note Interest Rate (as defined on the reverse hereof) for the Class M
Notes, on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.01 of the Indenture. Interest on this Note
will accrue for each Distribution Date from the most recent Distribution Date on
which interest has been paid to but excluding such Distribution Date or, if no
interest has yet been paid, from the Closing Date. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 1999-B
By: BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee under the Trust Agreement,
By:
-----------------------------------
Authorized Signatory
Date: September 30, 1999
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
BANKERS TRUST COMPANY, not in its individual
capacity but solely as Indenture Trustee,
By:
--------------------------------
Authorized Signatory
Date: September 30, 1999
<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class M Asset Backed Notes (herein called the
"Class M Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Class M Notes are subject to all terms
of the Indenture. Capitalized but undefined terms shall have the meanings set
forth in the Indenture dated as of September 1, 1999 between KeyCorp Student
Loan Trust 1999-B and Bankers Trust Company as Trustee including Appendix A to
the Indenture.
The Issuer's Floating Rate Class A-1 Asset Backed Notes (the "Class
A-1 Notes") and the Issuer's Floating Rate Class A-2 Asset Backed Notes (the
"Class A-2 Notes" and together with the Class A-1 Notes, the "Class A Notes")
are and will be equally and ratably secured by the collateral pledged as
security therefor as provided in the Indenture. The rights of the Class M Notes
(collectively, the Class M Notes and the Class A Notes are referred to as, the
"Notes") are and will be subordinated to the rights of the Class A Notes as
provided in the Indenture..
Principal of the Notes will be payable on each Distribution Date to
the extent funds are available therefor set forth in the Sale and Servicing
Agreement and the Indenture. "Distribution Date" means the twenty-fifth day of
each February, May, August and November, or, if any such date is not a Business
Day, the next succeeding Business Day, commencing February 25, 2000.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Controlling Noteholders
representing not less than a majority of the Outstanding Amount of the
Controlling Notes shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Notes of the same class shall be made pro rata to the holders of
such Notes entitled thereto.
Interest on the Notes will be payable on each Distribution Date on the
principal amount outstanding of each Class of Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Note Interest Rate for
such Class of Notes; provided, however, that on any Distribution Date on which a
Class M Interest Subordination Event exists, the amount of interest due and
payable on the Class M Notes on such Distribution Date will be reduced by the
amount of such interest applied to the Noteholders' Priority Principal
Distribution Amount on such Distribution Date and the amount so deferred will be
payable, together with interest thereon, on the first Distribution Date on which
a Class M Interest Subordination Event no longer exists.
The "Note Interest Rate" means, with respect to any Interest Period,
(x) in the case of the Class A-1 Notes, the interest rate per annum (computed on
the basis of the actual number of days elapsed in the related Interest Period
divided by 360) equal to the lesser of (i) Three-Month LIBOR plus 0.28% and (ii)
the Student Loan Rate for such Interest Period, (y) in the case of the Class A-2
Notes, the interest rate per annum (computed on the basis of the actual number
of days elapsed in the related Interest Period divided by 360) equal to the
lesser of (i) Three-Month LIBOR plus 0.43% and (ii) the Student Loan Rate for
such Interest Period, and (z) in the case of the Class M Notes, the interest
rate per annum (computed on the basis of the actual number of days elapsed in
the related Interest Period divided by 360) equal to the lesser of (i)
Three-Month LIBOR plus 0.70% and (ii) the Student Loan Rate for such Interest
Period.
The "Student Loan Rate" means for any Class of Securities for any
Interest Period will equal the product of (a) the quotient obtained by dividing
(i) 365 (or 366 in a leap year) by (ii) the actual number of days elapsed in
such Interest Period and (b) the percentage equivalent of a fraction, (i) the
numerator of which is equal to Expected Interest Collections for the Collection
Period relating to such Interest Period less the Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "Three-Month LIBOR" means the London
interbank offered rate for deposits in U.S. dollars having a maturity of three
months commencing on the related LIBOR Determination Date (the "Index Maturity")
which appears on Telerate Page 3750 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the U.S. dollars to leading European banks
having the Index Maturity and in a principal amount equal to an amount of not
less than U.S. $1,000,000; provided that if the banks selected as aforesaid are
not quoting as mentioned in this sentence, Three-Month LIBOR in effect for the
applicable Interest Period will be Three-Month LIBOR in effect for the previous
Interest Period.
"Reference Bank" means a leading bank (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not
controlling, controlled by or under common control with the Administrator and
(iii) having an established place of business in London.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding November 26, 1999 and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26 1999 to
but excluding February 25, 2000. For purposes of this definition, a "Business
Day" is any day on which Banks in London and New York City are open for the
transaction of business.
Any Noteholders' Interest Index Carryover with respect to the Class A
Notes that may exist on any Distribution Date attributable shall be payable to
the holders of the Class A Notes, on a pro rata basis based on the amount of
Noteholders' Interest Index Carryover then owing on the Class A Notes on that
Distribution Date and any succeeding Distribution Dates solely out of the funds
available and required to be applied thereto pursuant to the Sale and Servicing
Agreement. Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Class M Notes shall be payable to the
holders of the Class M Notes on that Distribution Date and any succeeding
Distribution Date solely out of the funds available and required to be applied
thereto pursuant to the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture, if as of the Special Determination Date,
the Subsequent Pool Pre-Funded Amount is greater than $10,000,000, such amount
will be distributed on the first Distribution Date thereafter to redeem each
Class of Notes and prepay the Certificates on a pro rata basis, based on the
initial principal balance of each Class of Notes and the Initial Certificate
Balance; if such amount is $10,000,000 or less, it will be distributed on such
Distribution Date only to the holders of the Class A-1 Notes to redeem such
Class A-1 Notes.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Indenture Trustee on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Eligible Lender Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Eligible Lender Trustee
or the Indenture Trustee, except as any such Person may have expressly agreed
and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Seller, the Administrator, the
Master Servicer, the Noteholders and the Note Owners that, for purposes of
Federal and State income tax and any other tax measured in whole or in part by
income, this Note will qualify as indebtedness of the Issuer. The Noteholders
and the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of the Issuer.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Seller or the Issuer, or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Bankers Trust Company in its individual
capacity, Bank One, National Association, in its individual capacity, any owner
of a beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture; it being expressly understood that said covenants,
obligations and indemnifications have been made by the Eligible Lender Trustee
for the sole purposes of binding the interests of the Eligible Lender Trustee in
the assets of the Issuer. The holder of the Notes by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
DEFAULT IN THE PAYMENT OF INTEREST ON A CLASS M NOTE IS NOT AN EVENT
OF DEFAULT UNDER THE INDENTURE SO LONG AS ANY CLASS A NOTES ARE OUTSTANDING. BY
ACCEPTANCE OF THIS CLASS M NOTE OR ANY BENEFICIAL INTEREST HEREIN, YOU ARE
DEEMED TO HAVE CONSENTED TO THE DELAY IN PAYMENT OF INTEREST ON SUCH CLASS M
NOTE AND WAIVED YOUR RIGHTS TO INSTITUTE SUIT FOR ENFORCEMENT OF ANY SUCH
PAYMENT TO THE EXTENT DESCRIBED IN THE INDENTURE.
<PAGE>
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.
EXECUTION COPY
AMENDED AND RESTATED
TRUST AGREEMENT
between
KEY BANK USA, NATIONAL ASSOCIATION
as Depositor
and
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee
Dated as of September 1, 1999
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
ARTICLE II
Organization
SECTION 2.01. Name....................................................... 1
SECTION 2.02. Office......................................................2
SECTION 2.03. Purposes and Powers.........................................2
SECTION 2.04. Appointment of Eligible Lender Trustee......................2
SECTION 2.05. Initial Capital Contribution of Trust Estate................3
SECTION 2.06. Declaration of Trust........................................3
SECTION 2.07. Liability of the Certificateholders.........................3
SECTION 2.08. Title to Trust Property.....................................4
SECTION 2.09. Representations and Warranties of the Depositor.............4
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Beneficial Ownership................................6
SECTION 3.02. The Trust Certificates......................................6
SECTION 3.03. Authentication of Trust Certificates........................6
SECTION 3.04. Registration of Transfer and Exchange of Trust Certificates.6
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates.....7
SECTION 3.06. Persons Deemed Owners.......................................8
SECTION 3.07. Access to List of Certificateholders' Names and Addresses...8
SECTION 3.08. Maintenance of Office or Agency.............................9
SECTION 3.09. Appointment of Certificate Paying Agent.....................9
SECTION 3.10. Disposition by Depositor...................................10
SECTION 3.11. Book-Entry Certificates....................................10
SECTION 3.12. Notices to Clearing Agency.................................11
SECTION 3.13. Definitive Certificates....................................11
ARTICLE IV
Actions by Eligible Lender Trustee
SECTION 4.01. Prior Notice to Certificateholders with Respect to
Certain Matters............................................12
SECTION 4.02. Action by Certificateholders with Respect to
Certain Matters............................................12
SECTION 4.03. Action by Certificateholders with Respect to Bankruptcy....13
SECTION 4.04. Restrictions on Certificateholders' Power..................13
SECTION 4.05. Majority Control...........................................13
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Application of Trust Funds.................................13
SECTION 5.02. Method of Payment..........................................14
SECTION 5.03. No Segregation of Moneys; No Interest......................14
SECTION 5.04. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service
and Others.................................................14
SECTION 5.05. Signature on Returns; Tax Matters Partner..................15
ARTICLE VI
Authority and Duties of Eligible Lender Trustee
SECTION 6.01. General Authority..........................................15
SECTION 6.02. General Duties.............................................16
SECTION 6.03. Action Upon Instruction....................................16
SECTION 6.04. No Duties Except as Specified in this Trust Agreement,
the Sale and Servicing Agreement, or in Instructions.......17
SECTION 6.05. No Action Except Under Specified Documents or Instructions.18
SECTION 6.06. Restrictions...............................................18
ARTICLE VII
Concerning the Eligible Lender Trustee
SECTION 7.01. Acceptance of Trusts and Duties............................18
SECTION 7.02. Furnishing of Documents....................................19
SECTION 7.03. Representations and Warranties.............................20
SECTION 7.04. Reliance; Advice of Counsel................................20
SECTION 7.05. Not Acting in Individual Capacity..........................21
SECTION 7.06. Eligible Lender Trustee Not Liable for Trust
Certificates or Financed Student Loans.....................21
SECTION 7.07. Eligible Lender Trustee May Own Trust Certificates
and Notes..................................................22
ARTICLE VIII
Compensation of Eligible Lender Trustee
SECTION 8.01. Eligible Lender Trustee's Fees and Expenses................22
SECTION 8.02. Payments to the Eligible Lender Trustee....................22
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement.............................22
SECTION 9.02. [RESERVED].................................................23
ARTICLE X
Successor Eligible Lender Trustees and
Additional Eligible Lender Trustees
SECTION 10.01. Eligibility Requirements for Eligible Lender Trustee......24
SECTION 10.02. Resignation or Removal of Eligible Lender Trustee.........24
SECTION 10.03. Successor Eligible Lender Trustee.........................25
SECTION 10.04. Merger or Consolidation of Eligible Lender Trustee........26
SECTION 10.05. Appointment of Co-Eligible Lender Trustee or
Separate Eligible Lender Trustee..........................26
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments................................28
SECTION 11.02. No Legal Title to Trust Estate in Certificateholders......29
SECTION 11.03. Limitations on Rights of Others...........................29
SECTION 11.04. Notices...................................................29
SECTION 11.05. Severability..............................................29
SECTION 11.06. Separate Counterparts.....................................30
SECTION 11.07. Successors and Assigns....................................30
SECTION 11.08. No Petition...............................................30
SECTION 11.09. No Recourse...............................................30
SECTION 11.10. Headings..................................................30
SECTION 11.11. Governing Law.............................................31
EXHIBIT A Form of Certificate
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT (the "Trust Agreement") dated as
of September 1, 1999, between KEY BANK USA, NATIONAL ASSOCIATION, a national
banking association, as Depositor (the "Depositor"), and BANK ONE, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), amending and
restating that certain trust agreement (the "Original Trust Agreement") dated as
of September 1, 1999 between the parties hereto.
WHEREAS the Original Trust Agreement was entered into as of September
1, 1999;
WHEREAS the Original Trust Agreement is hereby amended and restated in
its entirety as of September 1, 1999 in order to make such changes and
modifications as are set forth herein; and
WHEREAS, in connection therewith, the Depositor and the Eligible
Lender Trustee agree that the terms and provisions of the Original Trust
Agreement shall no longer have any force and effect with respect to any date on
or after the date as of which this Amended and Restated Trust Agreement is being
entered into (other than Section 4 thereof to the extent applicable to the
allocation of collections, Interest Subsidy Payments and Special Allowance
Payments accruing during any period prior to the Cutoff Date).
NOW, THEREFORE, the Depositor and the Eligible Lender Trustee hereby
agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Capitalized terms used but not defined herein are defined in Appendix
A to the Sale and Servicing Agreement, which also contains rules as to
construction and usage that shall be applicable herein.
ARTICLE II
ORGANIZATION
SECTION 2.01. NAME. The Trust created under the Original Trust
Agreement shall be known as "KeyCorp Student Loan Trust 1999-B" in which name
the Eligible Lender Trustee may conduct the business of the Trust, make and
execute contracts and other instruments on behalf of the Trust and sue and be
sued. The Trust shall constitute a business trust under Chapter 38 of Title 12
of the Delaware Code, 12 DEL. C. ss.ss. 3801 et seq.(the "Business Trust Act")
SECTION 2.02. OFFICE. The office of the Trust shall be in care of the
Eligible Lender Trustee at its Corporate Trust Office or at such other address
as the Eligible Lender Trustee may designate by written notice to the holders of
the Trust Certificates and the Depositor.
SECTION 2.03. PURPOSES AND POWERS. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Trust Agreement and to sell the Notes and the
Trust Certificates in one or more transactions;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to purchase the Financed Student Loans and to fund the
Pre-Funding Account pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the holders of the Trust Certificates pursuant to the terms of the Sale
and Servicing Agreement any portion of the Trust Estate released from the
Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with conservation of the
Trust Estate and the making of distributions to the holders of the Trust
Certificates, the holders of the Notes and the others specified in Section
5.05 of the Sale and Servicing Agreement.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Trust
Agreement or the other Basic Documents.
SECTION 2.04. APPOINTMENT OF ELIGIBLE LENDER TRUSTEE. The Depositor
hereby appoints the Eligible Lender Trustee as trustee of the Trust effective as
of the date hereof, to have all the rights, powers and duties set forth herein.
Bank One Delaware, Inc. is appointed the initial Delaware Trustee. The
Delaware Trustee shall not have any of the powers or duties of the Eligible
Lender Trustee or of a trustee generally set forth herein, except as required
under the Delaware Business Trust Act. The Delaware Trustee shall be a trustee
hereunder for the sole and limited purpose of fulfilling the requirements of
Section 3807(a) of the Delaware Business Trust Act.
SECTION 2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. Pursuant
to the Original Trust Agreement, the Depositor has sold, assigned, transferred,
conveyed and set over to the Eligible Lender Trustee, as of the date thereof,
the sum of $10.00. The Eligible Lender Trustee hereby acknowledges receipt in
trust from the Depositor, as of the date thereof, of the foregoing contribution,
which shall constitute the initial Trust Estate and shall be deposited in the
Collection Account. The Depositor shall pay the organizational expenses of the
Trust as they may arise or shall, upon the request of the Eligible Lender
Trustee, promptly reimburse the Eligible Lender Trustee for any such expenses
paid by the Eligible Lender Trustee.
SECTION 2.06. DECLARATION OF TRUST. The Eligible Lender Trustee hereby
declares that it will hold the Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the holders of the Trust
Certificates, subject to the obligations of the Trust under the other Basic
Documents. It is the intention of the parties hereto that the Trust constitute a
business trust under the Business Trust Act and that this Trust Agreement
constitute the governing instrument of such trust. It is the intention of the
parties hereto that, solely for income and franchise tax purposes, the Trust
shall be treated as a partnership, with the assets of the partnership being the
Financed Student Loans and other assets held by the Trust, the partners of the
partnership being the holders of the Trust Certificates (including the Depositor
in its capacity as recipient of distributions from the Reserve Account), and the
Notes being debt of the partnership. The parties agree that, unless otherwise
required by appropriate tax authorities, the Trust will file or cause to be
filed annual or other necessary returns, reports and other forms consistent with
the characterization of the Trust as a partnership for such tax purposes.
Effective as of the date hereof, the Eligible Lender Trustee shall have all
rights, powers and duties set forth herein with respect to accomplishing the
purposes of the Trust.
SECTION 2.07. LIABILITY OF THE CERTIFICATEHOLDERS. (a) The Depositor
shall be liable directly to and will indemnify the injured party for all losses,
claims, damages, liabilities and expenses of the Trust (including Expenses, to
the extent not paid out of the Trust Estate) to the extent that the Depositor
would be liable if the Trust were a partnership under the Delaware Revised
Uniform Limited Partnership Act in which the Depositor were a general partner;
PROVIDED, HOWEVER, that the Depositor shall not be liable for any losses
incurred by a holder of the Trust Certificates or a Certificate Owner in the
capacity of an investor in the Trust Certificates or a holder of the Notes or a
Note Owner in the capacity of an investor in the Notes. In addition, any third
party creditors of the Trust (other than in connection with the obligations
described in the preceding sentence for which the Depositor shall not be liable)
shall be deemed third party beneficiaries of this paragraph. The obligations of
the Depositor under this paragraph shall be evidenced by the uncertificated
residual interest in the Trust owned by the Depositor, which shall be, and
hereby is, deemed to be a class of uncertificated Trust Certificates separate
from all other Trust Certificates issued by the Trust; PROVIDED that the rights
and obligations evidenced by all Trust Certificates, regardless of class, except
as provided in this Section, shall be identical.
(b) No holder of a Trust Certificate, other than to the extent set
forth in paragraph (a) with respect to the Depositor, shall have any personal
liability for any liability or obligation of the Trust.
SECTION 2.08. TITLE TO TRUST PROPERTY. Legal title to all the Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Estate to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Eligible Lender Trustee, a co-trustee and/or
a separate trustee, as the case may be; provided that, legal title to the
Financed Student Loans shall be vested at all times in the Eligible Lender
Trustee on behalf of the Trust.
SECTION 2.09. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor hereby
represents and warrants to the Eligible Lender Trustee that:
(a) The Depositor is duly organized and validly existing as a national
banking association in good standing under the laws of the United States of
America, with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(b) The Depositor has the corporate power and authority to execute and
deliver this Trust Agreement and to carry out its terms; the Depositor has
full corporate power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust (or with the Eligible
Lender Trustee on behalf of the Trust) and the Depositor has duly
authorized such sale and assignment and deposit to the Trust (or to the
Eligible Lender Trustee on behalf of the Trust) by all necessary corporate
action; and the execution, delivery and performance of this Trust Agreement
has been duly authorized by the Depositor by all necessary corporate
action.
(c) This Trust Agreement constitutes a legal, valid and binding
obligation of the Depositor enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally or the rights of creditors of
banks the deposit accounts of which are insured by the FDIC and subject to
general principles of equity.
(d) The consummation of the transactions contemplated by this Trust
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time or both) a default under, the
articles of association or by-laws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by which
it is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument (other than pursuant to the Basic Documents); nor violate
any law or, to the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any Federal or state
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
SECTION 2.10. FEDERAL INCOME TAX ALLOCATIONS. Net income of the Trust
with respect to any Loan Group for any Collection Period as determined for
Federal income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof) shall be allocated:
(a) among the holders of the Trust Certificates as of the close of
business on the last day of such Collection Period, in proportion to their
ownership of principal amount of Trust Certificates on such date, an amount
of net income up to the sum of (i) the portion of the Certificateholders'
Interest Distribution Amount and the Certificateholders' Interest Index
Carryover if any, for the related Distribution Date allocable to such
Collection Period, (ii) interest on the excess, if any, of the
Certificateholders' Interest Distribution Amount for the preceding
Distribution Date over the amount in respect of interest that is actually
distributed to such holders of the Trust Certificates on such preceding
Distribution Date, to the extent permitted by law, at the Certificate Rate
for such Collection Period and (iii) the portion of the market discount on
the Financed Student Loans accrued during such quarter that is allocable to
the excess, if any, of the initial aggregate principal amount of the Trust
Certificates over their initial aggregate issue price; and
(b) to the Depositor, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in the preceding
sentence. Net losses of the Trust if any, for any month as determined for
Federal income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof) shall be allocated to the Depositor to
the extent the Depositor is reasonably expected to bear the economic burden of
such net losses, and any remaining net losses shall be allocated among the
remaining holders of the Trust Certificates as of the close of business on the
last day of such month in proportion to their ownership of principal amount of
Trust Certificates on such Record Date. The Depositor is authorized to modify
the allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the Depositor or to the holders of the Trust Certificates, or as
otherwise required by the Code.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01. INITIAL BENEFICIAL OWNERSHIP. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.05 and until
the issuance of the Trust Certificates, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION 3.02. THE TRUST CERTIFICATES. The Trust Certificates shall be
issued in denominations of $1,000 or in integral multiples of $1,000 in excess
thereof; PROVIDED, HOWEVER, that one Book-Entry Certificate may be issued in a
different denomination, and PROVIDED, FURTHER, that if Definitive Certificates
are issued, the Trust Certificate issued to the Depositor, pursuant to Section
3.10, may be issued in a different denomination. The Trust Certificates shall be
in the form of Exhibit A hereto and shall be executed on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Eligible Lender
Trustee. Trust Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be valid and binding
obligations of the Trust, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Trust Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Certificates.
The Depositor shall also be the owner of an uncertificated residual
interest in the Trust, which shall for all purposes hereof be considered a
separate Class of Trust Certificates, with a Certificate Balance of zero, that
is subordinated in payment rights to the holders of all other Trust
Certificates, as set forth in Sections 5.04(b) and 5.04(c) of the Indenture and
Section 5.05(c) of the Sale and Servicing Agreement.
SECTION 3.03. AUTHENTICATION OF TRUST CERTIFICATES. Concurrently with
the initial sale of the Financed Student Loans to the Trust pursuant to the Sale
and Servicing Agreement, the Eligible Lender Trustee shall cause the Trust
Certificates in an aggregate principal amount equal to the Initial Certificate
Balance to be executed on behalf of the Trust, authenticated and delivered to or
upon the written order of the Depositor, signed by its chairman of the board,
its president or any vice president, without further action by the Depositor, in
authorized denominations. No Trust Certificate shall entitle its holder to any
benefit under this Trust Agreement, or shall be valid for any purpose, unless
there shall appear on such Trust Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Eligible
Lender Trustee or First Chicago Trust Company of New York, as the Eligible
Lender Trustee's authenticating agent, by manual signature; such authentication
shall constitute conclusive evidence that such Trust Certificate shall have been
duly authenticated and delivered hereunder. All Trust Certificates shall be
dated the date of their authentication. No further Trust Certificates shall be
issued except pursuant to Section 3.04, 3.05 or 3.13 hereunder.
SECTION 3.04. REGISTRATION OF TRANSFER AND EXCHANGE OF TRUST
CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Eligible
Lender Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. The Eligible
Lender Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate
at the office or agency maintained pursuant to Section 3.08, the Eligible Lender
Trustee shall execute, authenticate and deliver (or shall cause First Chicago
Trust Company of New York as its authenticating agent to authenticate and
deliver), in the name of the designated transferee or transferees, one or more
new Trust Certificates in authorized denominations of a like aggregate amount
dated the date of authentication by the Eligible Lender Trustee or any
authenticating agent. At the option of a holder of the Trust Certificates, Trust
Certificates may be exchanged for other Trust Certificates of authorized
denominations of a like aggregate amount upon surrender of the Trust
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.08.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Eligible Lender Trustee and the Certificate Registrar
duly executed by the holder of the Trust Certificates or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in Security Transfer Agent's
Medallion Program ("STAMP") or such other "signature guarantee program" as may
be determined by the Certificate Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Exchange Act. Each Trust Certificate
surrendered for registration of transfer or exchange shall be cancelled and
subsequently disposed of by the Eligible Lender Trustee in accordance with its
customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Eligible Lender Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the Eligible
Lender Trustee shall not be required to make and the Certificate Registrar need
not register transfers or exchanges of Trust Certificates for a period of 15
days preceding any Distribution Date with respect to the Trust Certificates.
The Trust Certificates and any beneficial interest in such Trust
Certificates may not be acquired by (a) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(b) an individual retirement account described in Section 408(a) of the Code or
(c) any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding a
Trust Certificate or an interest therein, the holder of the Trust Certificates
thereof or Certificate Owner thereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
SECTION 3.05. MUTILATED, DESTROYED, LOST OR STOLEN TRUST CERTIFICATES.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate, and (b)
there shall be delivered to the Certificate Registrar and the Eligible Lender
Trustee such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Trust Certificate shall
have been acquired by a bona fide purchaser, the Eligible Lender Trustee on
behalf of the Trust shall execute and the Eligible Lender Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of the same
class in authorized denominations of like aggregate amount. In connection with
the issuance of any new Trust Certificate under this Section, the Eligible
Lender Trustee and the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Trust Certificate issued pursuant to this
Section shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
SECTION 3.06. PERSONS DEEMED OWNERS. Prior to due presentation of a
Trust Certificate for registration of transfer, the Eligible Lender Trustee or
the Certificate Registrar and any agent of any thereof may treat the Person in
whose name any Trust Certificate shall be registered in the Certificate Register
as the owner of such Trust Certificate for the purpose of receiving
distributions pursuant to Section 5.01 and for all other purposes whatsoever,
and neither the Eligible Lender Trustee, the Certificate Registrar nor any agent
of any thereof shall be bound by any notice to the contrary.
SECTION 3.07. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Eligible Lender Trustee shall furnish or cause to be furnished to
the Depositor, within 15 days after receipt by the Eligible Lender Trustee of a
request therefor from the Depositor in writing, a list, in such form as the
Depositor may reasonably require, of the names and addresses of the holders of
the Trust Certificates as of the most recent Record Date. If three or more
holders of the Trust Certificates or one or more holders of the Trust
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Eligible Lender Trustee, and such application states that the
applicants desire to communicate with other holders of the Trust Certificates
with respect to their rights under this Trust Agreement or under the Trust
Certificates and such application is accompanied by a copy of the communication
that such applicants propose to transmit, then the Eligible Lender Trustee
shall, within five Business Days after the receipt of such application, afford
such applicants access during normal business hours to the current list of the
holders of the Trust Certificates. Upon receipt of any such application, the
Eligible Lender Trustee will promptly notify the Depositor by providing a copy
of such application and a copy of the list of the holders of the Trust
Certificates produced in response thereto. Each holder of the Trust
Certificates, by receiving and holding a Trust Certificate, shall be deemed to
have agreed not to hold any of the Depositor, the Certificate Registrar or the
Eligible Lender Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 3.08. MAINTENANCE OF OFFICE OR AGENCY. The Eligible Lender
Trustee shall maintain in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where Trust Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Eligible Lender Trustee in respect of the Trust
Certificates and the other Basic Documents may be served. The Eligible Lender
Trustee initially designates 1 Bank One Plaza, Suite IL1-0126, Chicago, Illinois
60670, as its principal Corporate Trust Office. The Eligible Lender Trustee
hereby designates First Chicago Trust Company of New York as the initial
authenticating agent (the "Authenticating Agent") to act on its behalf. The
Eligible Lender Trustee's New York office and the Authenticating Agent's office
are located at First Chicago Trust Company of New York, 14 Wall Street, 8th
Floor, New York, New York 10005, Attention: Corporate Trust Administration. The
Eligible Lender Trustee shall give prompt written notice to the Depositor and to
the holders of the Trust Certificates of any change in the location of the
Certificate Register or any such office or agency.
SECTION 3.09. APPOINTMENT OF CERTIFICATE PAYING AGENT. The Certificate
Paying Agent shall make distributions to the holders of the Trust Certificates
from the amounts received from the Indenture Trustee out of the Trust Accounts
pursuant to Section 5.01 and shall report the amounts of such distributions to
the Eligible Lender Trustee. Any Certificate Paying Agent shall have the
revocable power to receive such funds from the Indenture Trustee for the purpose
of making the distributions referred to above. The Eligible Lender Trustee may
revoke such power and remove the Certificate Paying Agent if the Eligible Lender
Trustee determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Trust Agreement in any
material respect. The Certificate Paying Agent shall initially be the Eligible
Lender Trustee, and any co-paying agent chosen by the Eligible Lender Trustee,
and acceptable to the Administrator (which consent shall not be unreasonably
withheld). The Eligible Lender Trustee shall be permitted to resign as
Certificate Paying Agent upon 30 days' written notice to the Administrator. In
the event that the Eligible Lender Trustee shall no longer be the Certificate
Paying Agent, the Eligible Lender Trustee, shall appoint a successor to act as
Certificate Paying Agent (which shall be a bank or trust company). The Eligible
Lender Trustee shall cause such successor Certificate Paying Agent or any
additional Certificate Paying Agent appointed by the Eligible Lender Trustee to
execute and deliver to the Eligible Lender Trustee an instrument in which such
successor Certificate Paying Agent or additional Certificate Paying Agent shall
agree with the Eligible Lender Trustee that as Certificate Paying Agent, such
successor Certificate Paying Agent or additional Certificate Paying Agent will
hold all sums, if any, held by it for payment to the holders of the Trust
Certificates in trust for the benefit of the holders of the Trust Certificates
entitled thereto until such sums shall be paid to such holders of the Trust
Certificates. The Certificate Paying Agent shall return all unclaimed funds to
the Eligible Lender Trustee and upon removal of a Certificate Paying Agent such
Certificate Paying Agent shall also return all funds in its possession to the
Eligible Lender Trustee. The provisions of Sections 7.01, 7.03, 7.04, 7.05 and
8.01 shall apply to the Eligible Lender Trustee also in its role as Certificate
Paying Agent, for so long as the Eligible Lender Trustee shall act as
Certificate Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Trust Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 3.10. DISPOSITION BY DEPOSITOR. On and after the Closing Date,
the Depositor hereby agrees to retain beneficial ownership (and, at its option,
record ownership) of Trust Certificates representing at least 1.00% of the
Certificate Balance. Any attempted transfer of such beneficial interest that
would reduce such beneficial interest of the Depositor below 1.00% of the
Certificate Balance shall be void. At any time, the Depositor may, by written
request to the Eligible Lender Trustee, and the Eligible Lender Trustee shall,
cause a Definitive Certificate to be issued to the Depositor; PROVIDED, HOWEVER,
that such Trust Certificate shall contain a legend stating "THIS CERTIFICATE IS
NONTRANSFERABLE".
SECTION 3.11. BOOK-ENTRY CERTIFICATES. The Trust Certificates, upon
original issuance, will be issued in the form of a typewritten Trust Certificate
or Trust Certificates representing Book-Entry Certificates, to be delivered to
The Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Trust; PROVIDED, HOWEVER, that one Definitive Certificate (as defined below)
may be issued to the Depositor pursuant to Section 3.10. Such Book-Entry
Certificate or Book-Entry Certificates shall initially be registered on the
Certificate Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Certificate Owner (other than the Depositor) will
receive a Definitive Certificate representing such Certificate Owner's interest
in such Trust Certificate, except as provided in Section 3.13. Unless and until
definitive, fully registered Trust Certificates (the "Definitive Certificates")
have been issued to Certificate Owners pursuant to Section 3.13:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Certificate Registrar and the Eligible Lender Trustee shall
be entitled to deal with the Clearing Agency for all purposes of this Trust
Agreement (including the payment of principal of and interest on the Trust
Certificates and the giving of instructions or directions hereunder) as the
sole holder of the Trust Certificates and shall have no obligation to the
Certificate Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Trust Agreement, the provisions of this
Section shall control;
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Certificates are issued pursuant to
Section 3.13, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Trust Certificates to such Clearing Agency
Participants; and
(v) whenever this Trust Agreement requires or permits actions to be
taken based upon instructions or directions of the holders of the Trust
Certificates evidencing a specified percentage of the Certificate Balance,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from
Certificate Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in the Trust Certificates and has delivered such instructions to
the Eligible Lender Trustee.
SECTION 3.12. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the holders of the Trust Certificates is required under this
Trust Agreement, unless and until Definitive Certificates shall have been issued
to Certificate Owners pursuant to Section 3.13, the Eligible Lender Trustee
shall give all such notices and communications specified herein to be given to
the holders of the Trust Certificates to the Clearing Agency, and shall have no
obligations to the Certificate Owners.
SECTION 3.13. DEFINITIVE CERTIFICATES. If (i) the Administrator
advises the Eligible Lender Trustee in writing that the Clearing Agency is no
longer willing or able to discharge properly its responsibilities with respect
to the Trust Certificates, and the Administrator is unable to locate a qualified
successor, (ii) the Administrator at its option advises the Eligible Lender
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency, or (iii) after the occurrence of an Event of Default, a Master
Servicer Default or an Administrator Default Certificate Owners representing
beneficial interests aggregating at least a majority of the Certificate Balance
advise the Clearing Agency (which shall then notify the Eligible Lender Trustee)
in writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interest of the Certificate Owners, then the
Eligible Lender Trustee shall cause the Clearing Agency to notify all
Certificate Owners of the occurrence of any such event and of the availability
of the Definitive Certificates to Certificate Owners requesting the same;
PROVIDED, HOWEVER, that at any time, and without causing the discontinuance of a
book-entry system through the Clearing Agency, the Depositor may request that
its 1.00% beneficial interest in the Trust Certificates be issued to it in the
form of a Definitive Certificate, which Trust Certificate shall contain the
legend "THIS CERTIFICATE IS NONTRANSFERABLE," and the Depositor shall become the
record owner of such Definitive Certificate in the Certificate Register. Upon
surrender to the Eligible Lender Trustee of the typewritten Trust Certificate or
Trust Certificates representing the Book-Entry Certificates by the Clearing
Agency, accompanied by registration instructions, the Eligible Lender Trustee
shall execute and authenticate the Definitive Certificates in accordance with
the instructions of the Clearing Agency. Neither the Certificate Registrar nor
the Eligible Lender 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 Certificates, the Eligible
Lender Trustee shall recognize the registered holders of the Definitive
Certificates as the holders of the Trust Certificates. The Definitive
Certificates shall, at the expense of the Depositor, be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Eligible Lender Trustee, as evidenced by its execution thereof.
ARTICLE IV
ACTIONS BY ELIGIBLE LENDER TRUSTEE
SECTION 4.01. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. With respect to the following matters, the Eligible Lender
Trustee shall not take action unless at least 30 days before the taking of such
action, the Eligible Lender Trustee shall have notified the holders of the Trust
Certificates in writing of the proposed action and the holders of the Trust
Certificates shall not have notified the Eligible Lender Trustee in writing
prior to the 30th day after such notice is given that such holders of the Trust
Certificates have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection of the
Financed Student Loans) and the compromise of any material action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of Financed Student
Loans);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any holder of the Notes is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any holder of the Notes is not required
and such amendment materially adversely affects the interest of the holders
of the Trust Certificates;
(d) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially
adversely affect the interests of the holders of the Trust Certificates; or
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Certificate Paying Agent or Indenture Trustee or pursuant to
this Trust Agreement of a successor Certificate Registrar, or the consent
to the assignment by the Note Registrar, Certificate Paying Agent or
Indenture Trustee or Certificate Registrar of its obligations under the
Indenture or this Trust Agreement, as applicable.
SECTION 4.02. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Eligible Lender Trustee shall not have the power, except upon the
direction of the holders of the Trust Certificates, to (a) remove the Master
Servicer or the Administrator under the Sale and Servicing Agreement pursuant to
Section 8.01 thereof or (b) except as expressly provided in the Basic Documents,
sell the Financed Student Loans after the termination of the Indenture. The
Eligible Lender Trustee shall take the actions referred to in the preceding
sentence only upon written instructions signed by the holders of the Trust
Certificates.
SECTION 4.03. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY.
The Eligible Lender Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all holders of the Trust Certificates and the delivery to the
Eligible Lender Trustee by each such holder of the Trust Certificates of a
certificate certifying that such holder of the Trust Certificates reasonably
believes that the Trust is insolvent.
SECTION 4.04. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The holders
of the Trust Certificates shall not direct the Eligible Lender Trustee to take
or refrain from taking any action if such action or inaction would be contrary
to any obligations of the Trust or the Eligible Lender Trustee under the Higher
Education Act or this Trust Agreement or any of the other Basic Documents or
would be contrary to Section 2.03 nor shall the Eligible Lender Trustee be
permitted to follow any such direction, if given.
SECTION 4.05. MAJORITY CONTROL. Except as expressly provided herein,
any action that may be taken by the holders of the Trust Certificates under this
Trust Agreement may be taken by the holders of Trust Certificates evidencing not
less than a majority of the sum of the Certificate Balances. Except as expressly
provided herein, any written notice of the holders of the Trust Certificates
delivered pursuant to this Trust Agreement shall be effective if signed by
holders of the Trust Certificates evidencing not less than a majority of the
Certificate Balance at the time of the delivery of such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01. APPLICATION OF TRUST FUNDS. (a) On each Distribution
Date, the Eligible Lender Trustee will distribute to holders of the
Certificates, on a pro rata basis, amounts received from the Indenture Trustee
pursuant to Sections 5.05 and 5.06 of the Sale and Servicing Agreement on such
Distribution Date.
(b) On each Distribution Date, the Eligible Lender Trustee shall send
to each holder of the Trust Certificates the statement provided to the
Eligible Lender Trustee by the Administrator pursuant to Section 5.07 of
the Sale and Servicing Agreement on such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a holder of the Trust Certificates,
such tax shall reduce the amount otherwise distributable to such holder in
accordance with this Section. The Eligible Lender Trustee is hereby
authorized and directed to retain from amounts otherwise distributable to
the holders of the Trust Certificates sufficient funds for the payment of
any tax that is legally owed by the Trust (but such authorization shall not
prevent the Eligible Lender Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted
by law, pending the outcome of such proceedings). The amount of any
withholding tax imposed with respect to a holder of the Trust Certificates
shall be treated as cash distributed to such holder of the Trust
Certificates at the time it is withheld by the Trust to be remitted to the
appropriate taxing authority. If there is a possibility that withholding
tax is payable with respect to a distribution (such as a distribution to a
non-U.S. holder of the Trust Certificates), the Eligible Lender Trustee in
its sole discretion may (but unless otherwise required by law shall be
obligated to) withhold such amounts in accordance with this paragraph (c).
In the event that a holder of the Trust Certificates wishes to apply for a
refund of any such withholding tax, the Eligible Lender Trustee shall
reasonably cooperate with such holder in making such claim so long as such
holder of the Trust Certificates agrees to reimburse the Eligible Lender
Trustee for any out-of-pocket expenses incurred.
SECTION 5.02. METHOD OF PAYMENT. Subject to Section 9.01(c),
distributions required to be made to the holders of the Trust Certificates on
any Distribution Date shall be made to each such holder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such holder at a bank or other entity having appropriate
facilities therefor, if such holder shall have provided to the Certificate
Registrar appropriate written instructions signed by two authorized officers, if
any, at least five Business Days prior to such Distribution Date and such
holder's Trust Certificates in the aggregate evidence a denomination of not less
than $1,000,000, or, if not, by check mailed to such holder at the address of
such holder appearing in the Certificate Register; PROVIDED, HOWEVER, that,
unless Definitive Certificates have been issued pursuant to Section 3.13, with
respect to Trust Certificates registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
distributions will be made by wire transfer in immediately available funds to
the account designated by such nominee. Notwithstanding the foregoing, the final
distribution in respect of any Trust Certificate (whether on its Final Maturity
Date or otherwise) will be payable only upon presentation and surrender of such
Trust Certificate at the Corporate Trust Office of the Eligible Lender Trustee
or such other location specified in writing to the holder thereof.
SECTION 5.03. NO SEGREGATION OF MONEYS; NO INTEREST. Subject to
Section 5.01, moneys received by the Eligible Lender Trustee hereunder need not
be segregated in any manner, except to the extent required by law or the Sale
and Servicing Agreement and may be deposited under such general conditions as
may be prescribed by law, and the Eligible Lender Trustee shall not be liable
for any interest thereon.
SECTION 5.04. ACCOUNTING AND REPORTS TO THE NOTEHOLDERS,
CERTIFICATEHOLDERS, THE INTERNAL REVENUE SERVICE AND OTHERS. The Eligible Lender
Trustee shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual method of accounting, (b) deliver to each
holder of the Trust Certificates (and to each Person who was a holder of the
Trust Certificates at any time during the applicable calendar year), as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each such holder of the Trust
Certificates to prepare its Federal and state income tax returns, (c) file such
tax returns relating to the Trust (including a partnership information return,
Internal Revenue Service Form 1065), and make such elections as may from time to
time be required or appropriate under any applicable state or Federal statute or
rule or regulation thereunder so as to maintain the Trust's characterization as
a partnership for Federal income tax purposes, (d) cause such tax returns to be
signed in the manner required by law and (e) collect or cause to be collected
any withholding tax as described in and in accordance with Section 5.01(c) with
respect to income or distributions to the holders of the Trust Certificates. The
Eligible Lender Trustee shall elect under Section 1278 of the Code to include in
income currently any market discount that accrues with respect to the Financed
Student Loans. The Eligible Lender Trustee shall not make the election provided
under Section 754 of the Code.
SECTION 5.05. SIGNATURE ON RETURNS; TAX MATTERS PARTNER. (a) The
Eligible Lender Trustee shall sign on behalf of the Trust the tax returns of the
Trust, unless applicable law requires a holder of the Trust Certificates to sign
such documents, in which case such documents shall be signed by the Depositor.
(b) The Depositor shall be designated the "tax matters partner" of the
Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
ARTICLE VI
AUTHORITY AND DUTIES OF ELIGIBLE LENDER TRUSTEE
SECTION 6.01. GENERAL AUTHORITY. The Eligible Lender Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is to be a
party, in each case, in such form as the Depositor shall approve as evidenced
conclusively by the Eligible Lender Trustee's execution thereof, and, on behalf
of the Trust, to direct the Indenture Trustee to authenticate and deliver Notes
in the aggregate principal amount of $935,000,000. The Eligible Lender Trustee
is also authorized and directed on behalf of the Trust (i) to acquire and hold
legal title to the Financed Student Loans from the Depositor and (ii) to take
all actions required pursuant to Section 4.02(c) of the Sale and Servicing
Agreement, and otherwise follow the direction of and cooperate with the
Administrator in submitting, pursuing and collecting any claims to and with the
Department with respect to any Interest Subsidy Payments and Special Allowance
Payments relating to the Financed Federal Loans.
In addition to the foregoing, the Eligible Lender Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust pursuant to the Basic Documents. The Eligible Lender Trustee is further
authorized from time to time to take such action as the Administrator directs or
instructs with respect to the Basic Documents and is directed to take such
action to the extent that the Administrator is expressly required pursuant to
the Basic Documents to cause the Eligible Lender Trustee to act.
SECTION 6.02. GENERAL DUTIES. It shall be the duty of the Eligible
Lender Trustee to discharge (or cause to be discharged) all its responsibilities
pursuant to the terms of this Trust Agreement and the other Basic Documents to
which the Trust is a party and to administer the Trust in the interest of the
holders of the Trust Certificates, subject to and in accordance with the
provisions of this Trust Agreement and the other Basic Documents. Without
limiting the foregoing, the Eligible Lender Trustee shall on behalf of the Trust
file and prove any claim or claims that may exist on behalf of the Trust against
the Depositor in connection with any claims paying procedure as part of an
insolvency or a receivership proceeding involving the Depositor. Notwithstanding
the foregoing, the Eligible Lender Trustee shall be deemed to have discharged
its duties and responsibilities hereunder and under the other Basic Documents to
the extent the Administrator has agreed in the Administration Agreement to
perform any act or to discharge any duty of the Eligible Lender Trustee
hereunder or under any other Basic Document, and the Eligible Lender Trustee
shall not be held liable for the default or failure of the Administrator to
carry out its obligations under the Administration Agreement. Except as
expressly provided in the Basic Documents, the Eligible Lender Trustee shall
have no obligation to administer, service or collect the Financed Student Loans
or to maintain, monitor or otherwise supervise the administration, servicing or
collection of the Financed Student Loans.
SECTION 6.03. ACTION UPON INSTRUCTION. (a) Subject to Article IV,
Section 7.01 and in accordance with the terms of the Basic Documents, the
holders of the Trust Certificates may by written instruction direct the Eligible
Lender Trustee in the management of the Trust. Such direction may be exercised
at any time by written instruction of the holders of the Trust Certificates
pursuant to Article IV.
(b) The Eligible Lender Trustee shall not be required to take any
action hereunder or under any other Basic Document if the Eligible Lender
Trustee shall have reasonably determined, or shall have been advised by
counsel, that such action is likely to result in liability on the part of
the Eligible Lender Trustee or is contrary to the terms hereof or of any
other Basic Document or is otherwise contrary to law.
(c) Whenever the Eligible Lender Trustee is unable to determine the
appropriate course of action between alternative courses of action
permitted or required by the terms of this Trust Agreement or under any
other Basic Document, the Eligible Lender Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to
the holders of the Trust Certificates requesting instruction as to the
course of action to be adopted, and to the extent the Eligible Lender
Trustee acts in good faith in accordance with any written instruction of
the holders of the Trust Certificates received, the Eligible Lender Trustee
shall not be liable on account of such action to any Person. If the
Eligible Lender Trustee shall not have received appropriate instruction
within 10 days of such notice (or within such shorter period of time as
reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from
taking such action, not inconsistent with this Trust Agreement or the other
Basic Documents, as it shall deem to be in the best interests of the
holders of the Trust Certificates, and shall have no liability to any
Person for such action or inaction.
(d) In the event that the Eligible Lender Trustee is unsure as to the
application of any provision of this Trust Agreement or any other Basic
Document or any such provision is ambiguous as to its application, or is,
or appears to be, in conflict with any other applicable provision, or in
the event that this Trust Agreement permits any determination by the
Eligible Lender Trustee or is silent or is incomplete as to the course of
action that the Eligible Lender Trustee is required to take with respect to
a particular set of facts, the Eligible Lender Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the holders
of the Trust Certificates requesting instruction and, to the extent that
the Eligible Lender Trustee acts or refrains from acting in good faith in
accordance with any such instruction received, the Eligible Lender Trustee
shall not be liable, on account of such action or inaction, to any Person.
If the Eligible Lender Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or
refrain from taking such action, not inconsistent with this Trust Agreement
or the other Basic Documents, as it shall deem to be in the best interests
of the holders of the Trust Certificates, and shall have no liability to
any Person for such action or inaction.
SECTION 6.04. NO DUTIES EXCEPT AS SPECIFIED IN THIS TRUST AGREEMENT,
THE SALE AND SERVICING AGREEMENT, OR IN INSTRUCTIONS. The Eligible Lender
Trustee shall not have any duty or obligation to manage, make any payment with
respect to, register, record, sell, service, dispose of or otherwise deal with
the Trust Estate, or to otherwise take or refrain from taking any action under,
or in connection with, any document contemplated hereby to which the Eligible
Lender Trustee is a party, except as expressly provided by the terms of this
Trust Agreement, the Sale and Servicing Agreement, or in any document or written
instruction received by the Eligible Lender Trustee pursuant to Section 6.03;
and no implied duties or obligations shall be read into this Trust Agreement or
any other Basic Document against the Eligible Lender Trustee. The Eligible
Lender Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any Commission filing for the Trust or to record
this Trust Agreement or any other Basic Document. The Eligible Lender Trustee
and the Delaware Trustee each severally and not jointly, nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Trust Estate that result
from actions by, or claims against, Bank One, National Association, in its
individual capacity or as the Eligible Lender Trustee or against Bank One
Delaware, Inc., in its individual capacity or as Delaware Trustee, as
applicable, that are not related to the ownership or the administration of the
Trust Estate.
SECTION 6.05. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Eligible Lender Trustee shall not manage, control, use, sell,
service, dispose of or otherwise deal with any part of the Trust Estate except
(i) in accordance with the powers granted to and the authority conferred upon
the Eligible Lender Trustee pursuant to this Trust Agreement, (ii) in accordance
with the other Basic Documents to which it is a party and (iii) in accordance
with any document or instruction delivered to the Eligible Lender Trustee
pursuant to Section 6.03.
SECTION 6.06. RESTRICTIONS. The Eligible Lender Trustee and the
Delaware Trustee shall not take any action (a) that is inconsistent with the
purposes of the Trust set forth in Section 2.03 or (b) that, to the actual
knowledge of the Eligible Lender Trustee or the Delaware Trustee, would result
in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The holders of the Trust Certificates shall not direct the Eligible
Lender Trustee or the Delaware Trustee to take action that would violate the
provisions of this Section.
ARTICLE VII
CONCERNING THE ELIGIBLE LENDER TRUSTEE
SECTION 7.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Eligible Lender
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Trust
Agreement. The Eligible Lender Trustee also agrees to disburse all moneys
actually received by it constituting part of the Trust Estate upon the terms of
this Trust Agreement and the other Basic Documents. The Eligible Lender Trustee
shall not be answerable or accountable hereunder or under any other Basic
Document under any circumstances, except (i) for its own willful misconduct or
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Eligible Lender
Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Eligible Lender Trustee shall not be liable for any error of
judgment made by a responsible officer of the Eligible Lender Trustee;
(b) the Eligible Lender Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
direction or instructions of the Administrator or any holder of the Trust
Certificates;
(c) subject to Section 7.07 hereof, no provision of this Trust
Agreement or any other Basic Document shall require the Eligible Lender
Trustee to expend or risk funds or otherwise incur any financial liability
in the performance of any of its rights or powers hereunder or under any
other Basic Document, if the Eligible Lender Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Eligible Lender Trustee be liable
for indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Eligible Lender Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Trust Agreement or for the
due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Estate or
for or in respect of the validity or sufficiency of the Basic Documents,
other than the certificate of authentication on the Trust Certificates, and
the Eligible Lender Trustee shall in no event assume or incur any
liability, duty, or obligation to any holder of the Notes or to any holder
of the Trust Certificates, other than as expressly provided for herein and
in the other Basic Documents;
(f) subject to Section 7.07 hereof, the Eligible Lender Trustee shall
not be liable for the action or inaction, default or misconduct of the
Administrator, the Seller, the Cap Provider, the Indenture Trustee or the
Master Servicer under any of the other Basic Documents or otherwise and the
Eligible Lender Trustee shall have no obligation or liability to perform
the obligations of the Trust under this Trust Agreement, or the other Basic
Documents that are required to be performed by the Administrator under the
Sale and Servicing Agreement, or the Administration Agreement, the
Indenture Trustee under the Indenture or the Master Servicer under the Sale
and Servicing Agreement, or the Cap Provider under the Cap Agreement; and
(g) the Eligible Lender Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Trust Agreement,
or to institute, conduct or defend any litigation under this Trust
Agreement or otherwise or in relation to this Trust Agreement or any other
Basic Document, at the request, order or direction of any of the holders of
the Trust Certificates, unless such holders have offered to the Eligible
Lender Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Eligible Lender
Trustee therein or thereby. The right of the Eligible Lender Trustee to
perform any discretionary act enumerated in this Trust Agreement or in any
other Basic Document shall not be construed as a duty, and the Eligible
Lender Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of any such act.
SECTION 7.02. FURNISHING OF DOCUMENTS. The Eligible Lender Trustee
shall furnish to the holders of the Trust Certificates 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 Eligible Lender Trustee under the Basic Documents.
SECTION 7.03. REPRESENTATIONS AND WARRANTIES. The Eligible Lender
Trustee hereby represents and warrants to the Depositor, for the benefit of the
holders of the Trust Certificates, that:
(a) It is a national banking association duly organized and validly
existing in good standing under the laws of the United States and having an
office located within the State of New York. It has all requisite corporate
power and authority to execute, deliver and perform its obligations under
this Trust Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Trust Agreement, and this Trust
Agreement will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Trust Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Trust
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof will
contravene any Federal or Delaware state law, governmental rule or
regulation governing the banking or trust powers of the Eligible Lender
Trustee or any judgment or order binding on it, or constitute any default
under its charter documents or by-laws or any indenture, mortgage,
contract, agreement or instrument to which it is a party or by which any of
its properties may be bound.
(d) It is an "eligible lender" as such term is defined in Section
435(d) of the Higher Education Act, for purposes of holding legal title to
the Financed Student Loans as contemplated by this Trust Agreement and the
other Basic Documents, has obtained a lender identification number with
respect to the Trust from the Department and has in effect a Guarantee
Agreement with each of the Guarantors with respect to the Financed Student
Loans.
SECTION 7.04. RELIANCE; ADVICE OF COUNSEL (a) The Eligible Lender
Trustee shall incur no liability to anyone in acting upon any signature,
instrument, direction, notice, resolution, request, consent, order, certificate,
report, opinion, bond, or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. The Eligible
Lender Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Eligible Lender Trustee may
for all purposes hereof rely on a certificate, signed by the president or any
vice president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter and such certificate shall constitute full
protection to the Eligible Lender Trustee for any action taken or omitted to be
taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Trust Agreement or
the other Basic Documents, the Eligible Lender Trustee (i) may act directly
or through its agents or attorneys pursuant to agreements entered into with
any of them, and the Eligible Lender Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if such agents or
attorneys shall have been selected by the Eligible Lender Trustee with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it. The
Eligible Lender Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written opinion or
advice of any such counsel, accountants or other such persons and not
contrary to this Trust Agreement or any other Basic Document.
SECTION 7.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VII, in accepting the trusts hereby created BANK ONE, NATIONAL
ASSOCIATION, acts solely as Eligible Lender Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Eligible Lender
Trustee by reason of the transactions contemplated by this Trust Agreement or
any other Basic Document shall look only to the Trust Estate for payment or
satisfaction thereof.
Notwithstanding any other provision in this Trust Agreement or the
other Basic Documents, nothing in this Trust Agreement or the other Basic
Documents shall be construed to limit the legal responsibility of the Eligible
Lender Trustee or 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 Eligible Lender Trustee or the Indenture
Trustee, pursuant to or to otherwise comply with their obligations under the
Higher Education Act or implementing regulations.
SECTION 7.06. ELIGIBLE LENDER TRUSTEE NOT LIABLE FOR TRUST
CERTIFICATES OR FINANCED STUDENT LOANS. The recitals contained herein and in the
Trust Certificates (other than the signature and countersignature of the
Eligible Lender Trustee on the Trust Certificates) shall be taken as the
statements of the Depositor and the Eligible Lender Trustee assumes no
responsibility for the correctness thereof. The Eligible Lender Trustee makes no
representations as to the validity or sufficiency of this Trust Agreement, the
Trust Certificates or any other Basic Document (other than the signature and
countersignature of the Eligible Lender Trustee on the Trust Certificates) or
the Notes, or of any Financed Student Loan or related documents. Subject to
Section 7.07 hereof, the Eligible Lender Trustee shall at no time have any
responsibility (or liability except for willfully or negligently terminating or
allowing to be terminated any of the Guarantee Agreements, in a case where the
Eligible Lender Trustee knows of any facts or circumstances which will or could
reasonably be expected to result in any such termination) for or with respect to
the legality, validity, enforceability and eligibility for Guarantee Payments,
federal reinsurance, Interest Subsidy Payments or Special Allowance Payments, as
applicable, of any Financed Student Loan, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to holders of the Trust Certificates under this Trust Agreement or
the holders of the Notes under the Indenture, including: the existence and
contents of any computer or other record of any Financed Student Loan; the
validity of the assignment of any Financed Student Loan to the Eligible Lender
Trustee on behalf of the Trust; the completeness of any Financed Student Loan;
the performance or enforcement (except as expressly set forth in any Basic
Document) of any Financed Student Loan; the compliance by the Depositor or the
Master Servicer with any warranty or representation made under any Basic
Document or in any related document or the accuracy of any such warranty or
representation or any action or inaction of the Administrator, the Indenture
Trustee, the Cap Provider or the Master Servicer or any Sub-Servicer taken in
the name of the Eligible Lender Trustee.
SECTION 7.07. ELIGIBLE LENDER TRUSTEE MAY OWN TRUST CERTIFICATES AND
NOTES The Eligible Lender Trustee in its individual or any other capacity may
become the owner or pledgee of Trust Certificates or Notes and may deal with the
Depositor, the Administrator, the Indenture Trustee, the Cap Provider and the
Master Servicer in banking transactions with the same rights as it would have if
it were not Eligible Lender Trustee.
ARTICLE VIII
COMPENSATION OF ELIGIBLE LENDER TRUSTEE
SECTION 8.01. ELIGIBLE LENDER TRUSTEE'S FEES AND EXPENSES. The
Eligible Lender Trustee shall receive as compensation for its services hereunder
such fees as have been separately agreed upon before the date hereof between the
Depositor and the Eligible Lender Trustee, and the Eligible Lender Trustee shall
be entitled to be reimbursed by the Depositor, to the extent provided in such
separate agreement, for its other reasonable expenses hereunder.
SECTION 8.02. PAYMENTS TO THE ELIGIBLE LENDER TRUSTEE. Any amounts
paid to the Eligible Lender Trustee pursuant to Section 8.01 hereof or pursuant
to Section 6.03 or 6.04 of the Sale and Servicing Agreement shall be deemed not
to be a part of the Trust Estate immediately after such payment.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. TERMINATION OF TRUST AGREEMENT. (a) This Trust Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect upon the final distribution by the Eligible Lender Trustee of
all moneys or other property or proceeds of the Trust Estate in accordance with
the terms of the Indenture, the Sale and Servicing Agreement and Article V. The
bankruptcy, liquidation, dissolution, death or incapacity of any holder of the
Trust Certificates shall not (x) operate to terminate this Trust Agreement or
the Trust, nor (y) entitle such holder's legal representatives or heirs to claim
an accounting or to take any action or proceeding in any court for a partition
or winding up of all or any part of the Trust or Trust Estate nor (z) otherwise
affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the Depositor nor
any holder of the Trust Certificates shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the holders of the Trust Certificates shall
surrender their Trust Certificates to the Certificate Paying Agent for
payment of the final distribution and cancellation, shall be given promptly
by the Eligible Lender Trustee by letter to the holders of the Trust
Certificates mailed within five Business Days of receipt of notice of such
termination from the Administrator given pursuant to Section 9.01(d) of the
Sale and Servicing Agreement, stating (i) the Distribution Date upon which
final payment of the Trust Certificates shall be made upon presentation and
surrender of the Trust Certificates at the office of the Certificate Paying
Agent therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Distribution Date
is not applicable, payments being made only upon presentation and surrender
of the Trust Certificates at the office of the Certificate Paying Agent
therein specified. The Eligible Lender Trustee shall give such notice to
the Certificate Registrar (if other than the Eligible Lender Trustee) and
the Certificate Paying Agent at the time such notice is given to the
holders of the Trust Certificates. Upon presentation and surrender of the
Trust Certificates, the Certificate Paying Agent shall cause to be
distributed to the holders of the Trust Certificates amounts distributable
to such holders on such Distribution Date pursuant to Section 5.01.
In the event that all the holders of the Trust Certificates shall not
surrender their Trust Certificates for cancellation within six months after the
date specified in the above-mentioned written notice, the Eligible Lender
Trustee shall give a second written notice to the remaining holders of the Trust
Certificates to surrender their Trust Certificates for cancellation and receive
the final distribution with respect thereto. If within one year after the second
notice all the Trust Certificates shall not have been surrendered for
cancellation, the Eligible Lender Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining holders of
the Trust Certificates concerning surrender of their Trust Certificates, and the
cost thereof shall be paid out of the funds and other assets that shall remain
subject to this Trust Agreement. Any funds remaining in the Trust after
exhaustion of such remedies and no later than five years after the first such
notice shall be distributed by the Eligible Lender Trustee to the Depositor.
SECTION 9.02. [RESERVED]
ARTICLE X
SUCCESSOR ELIGIBLE LENDER TRUSTEES AND
ADDITIONAL ELIGIBLE LENDER TRUSTEES
SECTION 10.01. ELIGIBILITY REQUIREMENTS FOR ELIGIBLE LENDER TRUSTEE.
The Eligible Lender Trustee shall at all times be a corporation or association
(i) qualifying as an "eligible lender" as such term is defined in Section 435(d)
of the Higher Education Act for purposes of holding legal title to the Financed
Student Loans on behalf of the Trust, with a valid lender identification number
with respect to the Trust from the Department; (ii) being authorized to exercise
corporate trust powers and hold legal title to the Financed Student Loans; (iii)
having in effect Guarantee Agreements with each of the Guarantors; (iv) having a
combined capital and surplus of at least $50,000,000 and being subject to
supervision or examination by Federal or state authorities; (v) incorporated or
authorized to do business in the State of New York or which is a national bank
having an office located within the State of New York; and (vi) having (or
having a parent which has) a rating of at least Baa3 by Moody's and at least BBB
by S&P. If the Eligible Lender Trustee shall publish reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of the Eligible Lender Trustee shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Eligible Lender Trustee or the
Delaware Trustee, as the case may be, shall cease to be eligible in accordance
with the provisions of this Section, in the case of the Eligible Lender Trustee,
or Section 3807(a) of the Delaware Business Trust Act, in the case of the
Delaware Trustee, the Eligible Lender Trustee or the Delaware Trustee, as the
case may be, shall resign immediately in the manner and with the effect
specified in Section 10.02.
SECTION 10.02. RESIGNATION OR REMOVAL OF ELIGIBLE LENDER TRUSTEE. The
Eligible Lender Trustee and the Delaware Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Administrator. Upon receiving such notice of resignation, the Administrator
shall promptly appoint a successor Eligible Lender Trustee or Delaware Trustee,
as the case may be, meeting the eligibility requirements of Section 10.01 (or in
the case of the Delaware Trustee, meeting the requirements of Section 3807(a) of
the Delaware Business Trust Act) by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Eligible Lender Trustee
or the Delaware Trustee, as the case may be, and one copy to the successor
Eligible Lender Trustee or the Delaware Trustee, as the case may be. If no
successor Eligible Lender Trustee or Delaware Trustee, as the case may be, shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Eligible Lender Trustee or
Delaware Trustee, as the case may be, may petition any court of competent
jurisdiction for the appointment of a successor Eligible Lender Trustee or
Delaware Trustee, as the case may be; PROVIDED, HOWEVER, that such right to
appoint or to petition for the appointment of any such successor shall in no
event relieve the resigning Eligible Lender Trustee or Delaware Trustee, as the
case may be, from any obligations otherwise imposed on it under the Basic
Documents until such successor has in fact assumed such appointment.
If at any time the Eligible Lender Trustee or the Delaware Trustee, as
the case may be, shall cease to be eligible in accordance with the provisions of
Section 10.01 (or the Delaware Trustee shall cease to satisfy the requirements
of Section 3807(a) of the Delaware Business Trust Act) and shall fail to resign
after written request therefor by the Administrator, or if at any time an
Insolvency Event with respect to the Eligible Lender Trustee or the Delaware
Trustee, as the case may be, shall have occurred and be continuing, then the
Administrator may remove the Eligible Lender Trustee or the Delaware Trustee, as
the case may be. If the Administrator shall remove the Eligible Lender Trustee
or the Delaware Trustee, as the case may be, under the authority of the
immediately preceding sentence, the Administrator shall promptly appoint a
successor Eligible Lender Trustee or Delaware Trustee, as the case may be, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Eligible Lender Trustee or Delaware Trustee, as the
case may be, so removed and one copy to the successor Eligible Lender Trustee or
Delaware Trustee, as the case may be, and payment of all fees owed to the
outgoing Eligible Lender Trustee or Delaware Trustee, as the case may be.
Any resignation or removal of the Eligible Lender Trustee or the
Delaware Trustee, as the case may be, and appointment of a successor Eligible
Lender Trustee or Delaware Trustee, as the case may be, pursuant to any of the
provisions of this Section shall not become effective until acceptance of
appointment by the successor Eligible Lender Trustee or Delaware Trustee, as the
case may be, pursuant to Section 10.03 and payment of all fees and expenses owed
to the outgoing Eligible Lender Trustee or Delaware Trustee, as the case may be.
The Administrator shall provide notice of such resignation or removal of the
Eligible Lender Trustee or Delaware Trustee, as the case may be, to each of the
Rating Agencies.
SECTION 10.03. SUCCESSOR ELIGIBLE LENDER TRUSTEE. Any successor
Eligible Lender Trustee or Delaware Trustee, appointed pursuant to Section 10.02
shall execute, acknowledge and deliver to the Administrator and to its
predecessor Eligible Lender Trustee or Delaware Trustee, as the case may be, an
instrument accepting such appointment under this Trust Agreement, and thereupon
the resignation or removal of the predecessor Eligible Lender Trustee or
Delaware Trustee, as the case may be, shall become effective and such successor
Eligible Lender Trustee or Delaware Trustee, as the case may be, without any
further act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under this Trust Agreement,
with like effect as if originally named as Eligible Lender Trustee or Delaware
Trustee, as the case may be. The predecessor Eligible Lender Trustee or Delaware
Trustee, as the case may be, shall upon payment of its fees and expenses deliver
to the successor Eligible Lender Trustee or Delaware Trustee, as the case may
be, all documents, statements, moneys and properties held by it under this Trust
Agreement and shall assign, if permissible, to the successor Eligible Lender
Trustee or Delaware Trustee, as the case may be, the lender identification
number obtained from the Department on behalf of the Trust; and the
Administrator and the predecessor Eligible Lender Trustee or Delaware Trustee,
as the case may be, shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Eligible Lender Trustee or Delaware Trustee, as the
case may be, all such rights, powers, duties and obligations.
No successor Eligible Lender Trustee or Delaware Trustee, as the case
may be, shall accept appointment as provided in this Section unless at the time
of such acceptance such successor Eligible Lender Trustee or Delaware Trustee,
as the case may be, shall be eligible pursuant to Section 10.01 (or in the case
of the Delaware Trustee, satisfy the requirements of Section 3807(a) of the
Delaware Business Trust Act).
Upon acceptance of appointment by a successor Eligible Lender Trustee
or Delaware Trustee, as the case may be, pursuant to this Section, the
Administrator shall mail notice of the successor of such Eligible Lender Trustee
or Delaware Trustee, as the case may be, to all holders of the Trust
Certificates, the Indenture Trustee, all holders of the Notes and the Rating
Agencies. If the Administrator shall fail to mail such notice within 10 days
after acceptance of appointment by the successor Eligible Lender Trustee or
Delaware Trustee, as the case may be, the successor Eligible Lender Trustee or
Delaware Trustee, as the case may be, shall cause such notice to be mailed at
the expense of the Administrator.
SECTION 10.04. MERGER OR CONSOLIDATION OF ELIGIBLE LENDER TRUSTEE. Any
corporation into which the Eligible Lender Trustee or Delaware Trustee, as the
case may be, may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Eligible Lender Trustee or Delaware Trustee, as the case may be, shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Eligible Lender Trustee or Delaware Trustee, as the case
may be, shall, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, be the successor of the Eligible Lender Trustee or Delaware
Trustee, as the case may be, hereunder; PROVIDED that such corporation shall be
eligible pursuant to Section 10.01 (or in the case of the Delaware Trustee,
satisfy the requirements of Section 3807(a) of the Delaware Business Trust Act);
PROVIDED FURTHER that the Eligible Lender Trustee or Delaware Trustee, as the
case may be, shall mail notice of such merger or consolidation to the Rating
Agencies.
SECTION 10.05. APPOINTMENT OF CO-ELIGIBLE LENDER TRUSTEE OR SEPARATE
ELIGIBLE LENDER TRUSTEE Notwithstanding any other provisions of this Trust
Agreement, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust may at the time be located, the
Administrator and the Eligible Lender Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Eligible Lender Trustee, meeting the eligibility
requirements of clauses (i) through (iii) of Section 10.01, to act as
co-trustee, jointly with the Eligible Lender Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust Estate, or any part thereof,
and, subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Eligible Lender
Trustee may consider necessary or desirable. If the Administrator shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Eligible Lender Trustee alone shall have the power to make such
appointment. No co-trustee or separate trustee under this Trust Agreement shall
be required to meet the terms of eligibility as a successor trustee pursuant to
clauses (iv) and (v) of Section 10.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.03.
Each 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 Eligible Lender Trustee shall be conferred upon and exercised or
performed by the Eligible Lender 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 Eligible Lender
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 Eligible Lender Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties, and
obligations (including the holding of title to the Trust or any portion
thereof in any such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, solely at the direction of the
Eligible Lender Trustee;
(ii) no trustee under this Trust Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Trust
Agreement; and
(iii) the Administrator and the Eligible Lender Trustee acting jointly
may at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Eligible Lender
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Trust
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Eligible Lender Trustee or separately, as may be provided
therein, subject to all the provisions of this Trust Agreement, specifically
including every provision of this Trust Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Eligible Lender
Trustee. Each such instrument shall be filed with the Eligible Lender Trustee
and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Eligible Lender Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Trust Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all its estates, properties, rights, remedies and trusts shall vest in
and be exercised by the Eligible Lender Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. SUPPLEMENTS AND AMENDMENTS. This Trust Agreement may be
amended by the Depositor and the Eligible Lender Trustee, with prior written
notice to the Rating Agencies, without the consent of any of the holders of the
Notes or the holders of the Trust Certificates, to cure any ambiguity, to
correct or supplement any provisions in this Trust Agreement or for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions in this Trust Agreement or of modifying in any manner the rights of
the holders of the Notes or the holders of the Trust Certificates; 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 any
Class of Notes or holder of the Trust Certificates.
This Trust Agreement may also be amended from time to time by the
Depositor and the Eligible Lender Trustee, with prior written notice to the
Rating Agencies, (i) with the consent of the Controlling Noteholders evidencing
not less than a majority of the Outstanding Amount of the Controlling Notes and
(ii) with the consent of the holders of the Trust Certificates evidencing not
less than a majority of the Certificate Balance for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Trust Agreement or of modifying in any manner the rights of the holders of
any Class of Notes or the holders of the Trust Certificates; PROVIDED, HOWEVER,
that no such amendment shall (a) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, collections of payments on Financed
Student Loans or distributions that shall be required to be made for the benefit
of the holders of any Class of Notes or the holders of any class of Trust
Certificates or (b) reduce the aforesaid percentage of the Outstanding Amount of
the Controlling Notes and the Certificate Balances required to consent to any
such amendment, without the consent of all the outstanding Controlling
Noteholders and holders of the Trust Certificates.
Promptly after the execution of any such amendment or consent, the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment or consent to each holder of the Trust Certificates, the
Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of the holders of the Trust
Certificates, the holders of any class of Notes or the Indenture Trustee
pursuant to this Section to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of the holders of the Trust Certificates provided for in this Trust
Agreement or in any other Basic Document) and of evidencing the authorization of
the execution thereof by holders of the Trust Certificates shall be subject to
such reasonable requirements as the Eligible Lender Trustee may prescribe.
Prior to the execution of any amendment to this Trust Agreement, the
Eligible Lender Trustee shall be entitled to receive and rely upon an Opinion of
Counsel stating that the execution of such amendment is authorized or permitted
by this Trust Agreement. The Eligible Lender Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Eligible Lender
Trustee's own rights, duties or immunities under this Trust Agreement or
otherwise.
SECTION 11.02. NO LEGAL TITLE TO TRUST ESTATE IN CERTIFICATEHOLDERS.
The holders of the Trust Certificates shall not have legal title to any part of
the Trust Estate. The holders of the Trust Certificates shall be entitled to
receive distributions with respect to their undivided beneficial ownership
interest therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title, or interest of the holders
of the Trust Certificates to and in their beneficial ownership interest in the
Trust Estate shall operate to terminate this Trust Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Trust Estate.
SECTION 11.03. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section
2.07, the provisions of this Trust Agreement are solely for the benefit of the
Eligible Lender Trustee, the Depositor, the holders of the Trust Certificates,
the Administrator and, to the extent expressly provided herein, the Indenture
Trustee and the holders of the Notes, and nothing in this Trust Agreement (other
than Section 2.07), whether express or implied, shall be construed to give to
any other Person any legal or equitable right, remedy or claim in the Trust
Estate or under or in respect of this Trust Agreement or any covenants,
conditions or provisions contained herein.
SECTION 11.04. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days after
mailing if mailed by certified mail, postage prepaid (except that notice to the
Eligible Lender Trustee shall be deemed given only upon actual receipt by the
Eligible Lender Trustee), if to the Eligible Lender Trustee, addressed to its
Corporate Trust Office; if to the Depositor, addressed to Key Bank USA, National
Association, 800 Superior Avenue, Cleveland, Ohio 44114, Attention: Senior Vice
President, Education Lending, or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a holder of the
Trust Certificates shall be given by first-class mail, postage prepaid, at
the address of such holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in this Trust Agreement shall be
conclusively presumed to have been duly given, whether or not such holder
receives such notice.
SECTION 11.05. SEVERABILITY. Any provision of this Trust Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.06. SEPARATE COUNTERPARTS. This Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.07. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor and its successors, the Eligible Lender Trustee and its successors,
each holder of the Trust Certificates and its successors and permitted assigns,
all as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a holder of the Trust Certificates shall bind the
successors and assigns of such holder.
SECTION 11.08. NO PETITION. (a) The Depositor will not at any time
institute against the Trust any bankruptcy proceedings under any United States
Federal or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificates, the Notes, this Trust Agreement or any of
the other Basic Documents.
(b) The Eligible Lender Trustee (not in its individual capacity but
solely as Eligible Lender Trustee), by entering into this Trust Agreement,
each holder of the Trust Certificates, by accepting a Trust Certificate,
and the Indenture Trustee and each holder of the Notes by accepting the
benefits of this Trust Agreement, hereby covenant and agree that they will
not at any time institute against the Depositor or the Trust, or join in
any institution against the Depositor or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to
the Trust Certificates, the Notes, this Trust Agreement or any of the other
Basic Documents.
SECTION 11.09. NO RECOURSE. Each holder of the Trust Certificates by
accepting a Trust Certificate acknowledges that such holder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Seller, the Master Servicer, the Administrator, the
Eligible Lender Trustee, the Cap Provider, the Indenture Trustee or any
Affiliate thereof or any officer, director or employee of any thereof and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Trust Agreement, the Trust
Certificates or the other Basic Documents.
SECTION 11.10. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
BANK ONE, NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Eligible Lender Trustee,
By: /s/ Jeffrey L. Kinney
----------------------------
Name: Jeffrey L. Kinney
Title: Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
Depositor,
By: /s/ Darlene H. Dimitrijevs
------------------------------
Name: Darlene H. Dimitrijevs
Title: Senior Vice President
Acknowledged and accepted as of the day
and year first above written:
BANK ONE DELAWARE, INC.,
as Delaware Trustee
By: /s/ Steven M. Wagner
----------------------------
Name: Steven M. Wagner
Title: First Vice President
<PAGE>
EXHIBIT A
TO THE TRUST AGREEMENT
[FORM OF TRUST CERTIFICATE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Trust Certificate 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 certificate 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.
THIS TRUST CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A
BENEFIT PLAN (AS DEFINED BELOW). THIS CERTIFICATE IS NOT GUARANTEED OR INSURED
BY ANY GOVERNMENTAL AGENCY.
[THIS TRUST CERTIFICATE IS NONTRANSFERABLE.]1
NUMBER:
$-----------
CUSIP NO.
KEYCORP STUDENT LOAN TRUST 1999-B
FLOATING RATE ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of law school, medical
school, dental school, graduate business school and other graduate
school student loans sold to the Trust by Key Bank USA, National
Association.
(This Trust Certificate does not represent an interest in or
obligation of Key Bank USA, National Association, the Eligible Lender
Trustee (as defined below), the Delaware Trustee (as defined below) or
any of their respective affiliates, except to the extent described
below.)
- --------------------------
1 To be included only on the Certificates issued to the Depositor,
evidencing its 1.00% beneficial interest, and any Certificates issued in
exchange therefor.
<PAGE>
THIS CERTIFIES THAT ______________________________ is the registered
owner of ________________ dollars nonassessable, fully-paid, fractional
undivided interest in the KeyCorp Student Loan Trust 1999-B (the "Trust"), a
statutory business trust formed under the laws of the State of Delaware by Key
Bank USA, National Association, a national banking association (the "Seller").
The Trust was created pursuant to a Trust Agreement dated as of September 1,
1999, as amended and restated as of September 1, 1999 (the "Trust Agreement"),
between the Seller and Bank One, National Association, a national banking
association, not in its individual capacity but solely as eligible lender
trustee on behalf of the Trust (the "Eligible Lender Trustee") and pursuant to
which Bank One Delaware, Inc. serves as Delaware Trustee (the "Delaware
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in Appendix A to the Sale and
Servicing Agreement (the "Sale and Servicing Agreement") dated as of September
1, 1999, among the Trust, the Eligible Lender Trustee, the Seller, Key Bank USA,
National Association, as master servicer (the "Master Servicer"), and Key Bank
USA, National Association, as administrator (the "Administrator"); such Appendix
A also contains rules as to usage that shall be applicable herein.
This Certificate is one of the duly authorized Certificates designated
as "Floating Rate Asset Backed Certificates" (herein called the "Trust
Certificates"). Issued under the Indenture dated as of September 1, 1999,
between the Trust and Bankers Trust Company, as Indenture Trustee, are Notes
designated as "Floating Rate Asset Backed Notes" (the "Notes"). This Trust
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Trust Certificate by virtue of the acceptance hereof assents and by which such
holder is bound. The property of the Trust includes a pool of undergraduate and
graduate school student loans (the "Financed Student Loans"), all moneys paid
thereunder (except from the proceeds on any Guarantee Payments made by TERI) on
or after September 1, 1999 (or, in the case of Financed Student Loans that
constitute Additional Student Loans, on or after the respective Subsequent
Cutoff Dates), certain bank accounts and the proceeds thereof and certain other
rights under the Trust Agreement and the Sale and Servicing Agreement and all
proceeds of the foregoing. The rights of the holders of the Trust Certificates
to the assets of the Trust are subordinated to the rights of the holders of the
Notes, as set forth in the Sale and Servicing Agreement.
Under the Trust Agreement, to the extent of funds available therefor,
interest on the Certificate Balance of this Trust Certificate at the Certificate
Rate for this Trust Certificate, and principal and certain other amounts will be
distributed on the twenty-seventh day of February, May August and November (or,
if such twenty-seventh day is not a Business Day, the next succeeding Business
Day) (each a "Distribution Date"), commencing on February 25, 2000 to the person
in whose name this Trust Certificate is registered at the close of business on
the twenty-sixth day of the calendar month in which such Distribution Date
occurs (the "Record Date"), in each case to the extent of such holder's
fractional undivided interest in the amount or amounts to be distributed to the
holders of the Trust Certificates on such Distribution Date pursuant to the Sale
and Servicing Agreement.
The Trust Certificates may be paid in part, in certain circumstances
on a pro rata basis among all holders of Securities, on February 25, 2000 to the
extent the Subsequent Pool Pre-Funded Amount is greater than $10,000,000 as of
the Special Determination Date after giving effect to the purchase of any
Subsequent Pool Student Loans on such date.
Each holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate from
Available Funds and amounts on deposit in the Reserve Account are subordinated
to the rights of the holders of the Notes as described in the Sale and Servicing
Agreement and the Indenture.
It is the intent of the Seller, the Master Servicer, the
Administrator, the holders of the Trust Certificates and the Certificate Owners
that, for purposes of Federal income, state and local income and franchise and
any other income taxes, the Trust will be treated as a partnership and the
holders of the Trust Certificates (including the Depositor in its capacity as
recipient of distributions from the Reserve Account) will be treated as partners
in that partnership. The Depositor and the other holders of the Trust
Certificates by acceptance of a Trust Certificate (and the Certificate Owners by
acceptance of a beneficial interest in a Trust Certificate), agree to treat, and
to take no action inconsistent with the treatment of, the Trust Certificates for
such tax purposes as partnership interests in the Trust.
Each holder of a Trust Certificate or Certificate Owner, by its
acceptance of a Trust Certificate or, in the case of a Certificate Owner, a
beneficial interest in a Trust Certificate, covenants and agrees that such
holder or Certificate Owner, as the case may be, will not at any time institute
against the Seller or the Trust, or join in any institution against the Seller
or the Trust of, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes, the Trust Agreement
or any of the other Basic Documents.
The Trust Certificates do not represent an obligation of, or an
interest in, the Seller, the Master Servicer, the Administrator, the Eligible
Lender Trustee or any affiliates of any of them, and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated herein, in the Trust Agreement or in the other Basic Documents. In
addition, this Trust Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Financed Student Loans, all as more specifically set forth in the
Sale and Servicing Agreement. A copy of each of the Sale and Servicing Agreement
and the Trust Agreement may be examined during normal business hours at the
principal office of the Seller, and at such other places, if any, designated by
the Seller, by any holder of the Trust Certificates upon request.
The Trust Certificates (including any beneficial interests therein)
may not be acquired by or for the account of (i) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) an individual retirement account described in Section 408(a) of
the Internal Revenue Code of 1986, as amended, or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in the
entity (each, a "Benefit Plan"). By accepting and holding this Trust
Certificate, the Holder hereof shall be deemed to have represented and warranted
that it is not a Benefit Plan.
This Trust Certificate shall be construed in accordance with the laws
of the State of Delaware, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Eligible Lender Trustee or its
authenticating agent, by manual signature, this Trust Certificate shall not
entitle the holder hereof to any benefit under the Trust Agreement or the Sale
and Servicing Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Eligible Lender Trustee on behalf of the Trust
and not in its individual capacity has caused this Trust Certificate to be duly
executed as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 1999-B
By: BANK ONE, NATIONAL ASSOCIATION, not
in its individual capacity but solely as
Eligible Lender Trustee,
By:
-----------------------------
Authorized Signatory
Date: September 30, 1999
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement.
BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee,
By:
--------------------------
Authorized Signatory
[OR
BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Eligible
Lender Trustee,
By: FIRST CHICAGO TRUST COMPANY OF
NEW YORK, as Authenticating Agent,
By:
-----------------------------
Authorized Signatory]
Date: September 30, 1999
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
__________________________________________________ Attorney to transfer said
Trust Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
____________________*
Signature Guaranteed:
____________________*
* NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Trust Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
EXECUTION COPY
SALE AND SERVICING AGREEMENT
among
KEYCORP STUDENT LOAN TRUST 1999-B
as Issuer,
KEY BANK USA, NATIONAL ASSOCIATION
as Seller,
KEY BANK USA, NATIONAL ASSOCIATION
as Master Servicer,
BANK ONE, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Eligible Lender Trustee,
and
KEY BANK USA, NATIONAL ASSOCIATION
as Administrator
Dated as of September 1, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions and Usage..........................................1
ARTICLE II Conveyance of Financed Student Loans...........................2
SECTION 2.01. Conveyance of Initial Financed Student Loans...............2
SECTION 2.02. Conveyance of Subsequent Pool Student Loans and Other
Subsequent Student Loans...................................2
SECTION 2.03. Conveyance of Financed Student Loans by the Eligible
Lender Trustee to the Seller in Connection with
Consolidation Loans........................................4
SECTION 2.04. Endorsement................................................5
ARTICLE III The Financed Student Loans.....................................5
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Financed Student Loans......................5
SECTION 3.02. Repurchase upon Breach; Reimbursement......................8
SECTION 3.03. Custody of Financed Student Loan Files.....................9
SECTION 3.04. Duties of Master Servicer as Custodian.....................10
SECTION 3.05. Instructions; Authority To Act.............................10
SECTION 3.06. Custodian's Indemnification................................11
SECTION 3.07. Effective Period and Termination...........................11
SECTION 3.08. Schedule of Financed Student Loans.........................11
ARTICLE IV Administration and Servicing of Financed Student Loans.........12
SECTION 4.01. Duties of Master Servicer..................................12
SECTION 4.02. Collection of Financed Student Loan Payments...............13
SECTION 4.03. Realization upon Financed Student Loans....................15
SECTION 4.04. Computation of Note InterestRate and Certificate Rate......15
SECTION 4.05. No Impairment..............................................15
SECTION 4.06. Purchase of Financed StudentLoans; Reimbursement...........16
SECTION 4.07. Master Servicing Fee.......................................16
SECTION 4.08. Administrator's Certificate; Servicer's Report.............17
SECTION 4.09. Annual Statement as to Compliance; Notice of Default.......17
SECTION 4.10. Annual Independent Certified Public Accountants' Report....18
SECTION 4.11. Access to Certain Documentation and Information
Regarding Financed Student Loans...........................19
SECTION 4.12. Master Servicer and Administrator Expenses.................19
SECTION 4.13. Appointment of Sub-Servicers...............................20
SECTION 4.14. Special Programs...........................................20
ARTICLE V Distributions; Accounts; Statements to Certificateholders
and Noteholders................................................21
SECTION 5.01. Establishment of Trust Accounts............................21
SECTION 5.02. Collections................................................23
SECTION 5.03. Application of Collections.................................24
SECTION 5.04. Additional Deposits........................................24
SECTION 5.05. Distributions..............................................25
SECTION 5.06. Reserve Account............................................28
SECTION 5.07. Statements to Certificateholders and Noteholders...........30
SECTION 5.08. Pre-Funding Account........................................32
SECTION 5.09. Seller Optional Deposit....................................35
ARTICLE VI The Seller and the Administrator...............................35
SECTION 6.01. Representations of Seller and Administrator................35
SECTION 6.02. Existence..................................................37
SECTION 6.03. Liability of Seller; Indemnities...........................37
SECTION 6.04. Liability of Administrator; Indemnities....................39
SECTION 6.05. Merger or Consolidation of, or Assumption of the
Obligations of, Seller or Administrator....................39
SECTION 6.06. Limitation on Liability of Seller, Administrator
and Others.................................................40
SECTION 6.07. Seller May Own Certificates or Notes.......................41
SECTION 6.08. Key Bank USA, National Association Not To
Resign as Administrator....................................41
ARTICLE VII The Master Servicer............................................42
SECTION 7.01. Representations of Master Servicer.........................42
SECTION 7.02. Indemnities of Master Servicer.............................43
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Master Servicer............................44
SECTION 7.04. Limitation on Liability of Master Servicer and Others......45
SECTION 7.05. Key Bank USA, National Association, Not To Resign
as Master Servicer.........................................46
ARTICLE VIII Default........................................................46
SECTION 8.01. Master Servicer Default; Administrator Default.............46
SECTION 8.02. Appointment of Successor...................................49
SECTION 8.03. Notification to Noteholders and Certificateholders..........50
SECTION 8.04. Waiver of Past Defaults....................................50
ARTICLE IX Termination....................................................51
SECTION 9.01. Termination................................................51
ARTICLE X Additional Provisions Regarding Financed Student Loans.........52
SECTION 10.01. Periodic Reports...........................................52
SECTION 10.02. Cooperation................................................53
SECTION 10.03. Confidentiality............................................53
SECTION 10.04. Future Purchases...........................................53
SECTION 10.05. Private Guarantee Fee......................................53
SECTION 10.06. Bids/First Refusal Rights..................................54
SECTION 10.07. Consolidation Loans........................................55
ARTICLE XI Miscellaneous..................................................55
SECTION 11.01. Amendment..................................................55
SECTION 11.02. Protection of Interests in Trust...........................56
SECTION 11.03. Notices....................................................58
SECTION 11.04. Assignment.................................................59
SECTION 11.05. Limitations on Rights of Others............................59
SECTION 11.06. Severability...............................................59
SECTION 11.07. Separate Counterparts......................................59
SECTION 11.08. Headings...................................................59
SECTION 11.09. Governing Law..............................................59
SECTION 11.10. Assignment to Indenture Trustee............................59
SECTION 11.11 Nonpetition Covenants......................................60
SECTION 11.12. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee..........................................60
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Initial Financed Student Loans
SCHEDULE B Schedule of Additional Student Loans
SCHEDULE C Location of Financed Student Loan Files
SCHEDULE D Provisions to be Audited Regarding
Master Servicer (Sub-Servicers) and Administrator
SCHEDULE E Servicing Fees Schedule
EXHIBIT A Form of Report to Noteholders
EXHIBIT B Form of Report to Certificateholders
EXHIBIT C [RESERVED]
EXHIBIT D Form of Assignment on Closing Date
EXHIBIT E Form of Transfer Agreement
<PAGE>
SALE AND SERVICING AGREEMENT dated as of September 1, 1999, among
KEYCORP STUDENT LOAN TRUST 1999-B, a Delaware statutory business trust (the
"Issuer"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking association
and successor in interest to Society National Bank (the "Seller"), KEY BANK USA,
NATIONAL ASSOCIATION, a national banking association, as master servicer (the
"Master Servicer"), BANK ONE, NATIONAL ASSOCIATION, a national banking
association, solely as eligible lender trustee on behalf of the Issuer and not
in its individual capacity (the "Eligible Lender Trustee"), and KEY BANK USA,
NATIONAL ASSOCIATION, a national banking association, as administrator (the
"Administrator").
WHEREAS, the Seller intends to assign to the Issuer its rights in a
portfolio of undergraduate and graduate school student loans originated in the
ordinary course of business by the Seller or its predecessors, subject to
revocation by the Seller;
WHEREAS, the Seller intends to assign to the Issuer during a limited
period additional student loans it currently owns and student loans it may
originate or acquire in the future;
WHEREAS, the Issuer desires to purchase, and the Seller is willing to
sell to the Issuer, such student loans;
WHEREAS, the Eligible Lender Trustee is willing to hold legal title
to, and serve as eligible lender trustee with respect to, such student loans on
behalf of the Issuer;
WHEREAS, the Master Servicer is willing to master service such student
loans; and
WHEREAS, the Administrator is willing to undertake certain
administrative functions with respect to such student loans.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Capitalized terms used but not defined herein are defined in Appendix
A hereto, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
CONVEYANCE OF FINANCED STUDENT LOANS
SECTION 2.01. CONVEYANCE OF INITIAL FINANCED STUDENT LOANS. In
consideration of the Issuer's delivery to or upon the order of the Seller on the
Closing Date of the net proceeds from the sale of the Notes and the Certificates
and the other amounts to be distributed from time to time to the Seller in
accordance with the terms of this Agreement, the Seller (or, in the case of the
Initial Financed Student Loans, Bank One, National Association, as eligible
lender trustee, on behalf of the Seller) does hereby, as evidenced by a duly
executed written assignment in the form of Exhibit D, sell, transfer, assign,
set over and otherwise convey to the Issuer (or, in the case of the Initial
Financed Student Loans, to the Eligible Lender Trustee on behalf of the Issuer),
without recourse (subject to the obligations herein):
(i) all right, title and interest of the Seller in and to the Initial
Financed Student Loans and all obligations of the Obligors thereunder,
including all moneys paid thereunder, and all written communications
received by the Seller with respect thereto (including borrower
correspondence, notices of death, disability or bankruptcy and requests for
deferrals or forbearances), on or after the Cutoff Date;
(ii) all right, title and interest of the Seller under the Assigned
Agreements insofar as they relate to the Financed Guaranteed Private Loans
but not with respect to any other loans covered thereby (the "Assigned
Rights");
(iii) all right, title and interest of the Seller in and to all funds
on deposit from time to time in the Trust Accounts, including, but not
limited to, the Reserve Account Initial Deposit and the Pre-Funded Amount
(including all income thereon); and
(iv) the proceeds of any and all of the foregoing.
SECTION 2.02. CONVEYANCE OF SUBSEQUENT POOL STUDENT LOANS AND OTHER
SUBSEQUENT STUDENT LOANS. (a) Subject to the conditions set forth in paragraph
(b) below, in consideration of the Issuer's delivery on the related Transfer
Date to or upon the order of the Seller of the amount described in Section
5.08(a) to be delivered to the Seller, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Eligible Lender Trustee on behalf
of the Issuer, without recourse (subject to the obligations herein) all right,
title and interest of the Seller in and to each Subsequent Pool Student Loan and
each Other Subsequent Student Loan, and all obligations of the Obligors
thereunder including all moneys paid thereunder, and all written communications
received by the Seller with respect thereto (including borrower correspondence,
notices of death, disability or bankruptcy and requests for deferrals or
forbearances), on and after the related Subsequent Cutoff Date, made from time
to time during the Funding Period.
(b) The Seller shall transfer to the Eligible Lender Trustee on behalf
of the Issuer the Subsequent Pool Student Loans and/or the Other Subsequent
Student Loans for a given Transfer Date and the other property and rights
related thereto described in paragraph (a) above only upon the satisfaction of
each of the following conditions on or prior to such Transfer Date:
(i) the Seller shall have delivered to the Eligible Lender Trustee and
the Indenture Trustee a duly executed written assignment (including an
acceptance by the Eligible Lender Trustee and the Indenture Trustee) in
substantially the form of Exhibit E (each, a "Transfer Agreement"), which
shall include supplements to Schedule B listing such Subsequent Pool
Student Loans and/or the Other Subsequent Student Loans, as applicable;
(ii) except any of the Additional Student loans transferred on the
Closing Date or the day immediately following, the Seller shall have
delivered, at least two days prior to such Transfer Date, notice of such
transfer to the Eligible Lender Trustee, the Indenture Trustee and the
Rating Agencies, including a listing of the designation and the aggregate
principal balance of such Subsequent Pool Student Loans or Other Subsequent
Student Loans, as the case may be;
(iii) the Seller shall, to the extent required by Section 5.02, have
deposited in the Collection Account all collections in respect of the
Subsequent Pool Student Loans and/or Other Subsequent Student Loans on and
after each applicable Subsequent Cutoff Date;
(iv) as of each Transfer Date, the Seller was not insolvent nor will
it have been made insolvent by such transfer nor is it aware of any pending
insolvency;
(v) such addition will not result in a material adverse Federal or
State tax consequence to the Issuer, the holders of Notes or the holders of
Certificates;
(vi) the Funding Period shall not have terminated and, with respect to
Subsequent Pool Student Loans, the Transfer Date is on or prior to the
Special Determination Date;
(vii) the Seller shall have delivered to the Indenture Trustee and the
Eligible Lender Trustee an Officers' Certificate confirming the
satisfaction of each condition precedent specified in this paragraph (b);
(viii) the Seller shall have delivered (A) to the Rating Agencies an
Opinion of Counsel with respect to the transfer of the Subsequent Pool
Student Loans and/or Other Subsequent Student Loans transferred on such
Transfer Date, substantially in the form of the Opinion of Counsel
delivered to the Rating Agencies on the Closing Date, and (B) to the
Eligible Lender Trustee and the Indenture Trustee the Opinion of Counsel
required by Section 11.02(i)(1);
(ix) the Seller shall have taken any action required to maintain the
first perfected ownership interest of the Issuer in the Trust Estate and
the first perfected security interest of the Indenture Trustee in the
Collateral;
(x) no selection procedures believed by the Seller to be adverse to
the interests of the holders of Certificates or the holders of Notes shall
have been utilized in selecting the Subsequent Pool Student Loans or the
Other Subsequent Student Loans; and
(xi) no Consolidation Loan will be transferred to the Issuer unless at
least one underlying student loan to be consolidated is a Financed Student
Loan already held by the Eligible Lender Trustee on behalf of the Issuer.
PROVIDED, HOWEVER, that the Seller shall not incur any liability as a result of
transferring Subsequent Pool Student Loans or Other Subsequent Student Loans on
any Transfer Date at a time when the condition set forth in clause (v) was not
satisfied, if at the time of such transfer the Authorized Officers of the
Seller, after reasonable inquiry of in-house counsel to the Seller, were not
aware of any fact that would reasonably suggest that such condition would not be
satisfied as of such date.
(c) The Seller covenants to transfer during the Funding Period to the
Eligible Lender Trustee on behalf of the Issuer pursuant to paragraph (a) above
Other Subsequent Student Loans with an aggregate principal balance of not less
than $60,000,000.00 (less amounts withdrawn from the Other Additional
Pre-Funding Subaccount pursuant to Section 5.08(d) of this Agreement and, in
addition, on the Closing Date, $332,308.29 shall be paid to the Seller, from the
Other Additional Pre-Funding Subaccount, representing the difference between the
Calculated Pool Balance relating to Initial Pool 2 Student Loans as of the
Cutoff Date and the Calculated Pool Balance relating to the Initial Pool 2
Student Loans as of the Statistical Cutoff Date.); PROVIDED, HOWEVER, that the
Seller shall have no liability for a breach of the foregoing covenant as a
result of the Seller not having made or owned prior to the date hereof Other
Subsequent Student Loans equal to the amount specified above during the Funding
Period, the Seller not being able to transfer Other Subsequent Student Loans
because of Section 2.02(b)(xii) or there being insufficient funds available in
the Escrow Account and the Pre-Funding Account for the Eligible Lender Trustee
to consummate such acquisitions on behalf of the Issuer.
SECTION 2.03. CONVEYANCE OF FINANCED STUDENT LOANS BY THE ELIGIBLE
LENDER TRUSTEE TO THE SELLER IN CONNECTION WITH CONSOLIDATION LOANS. On any
date, upon receipt of written notice (or telephonic or facsimile notice followed
by written notice) from the Seller (or from the Master Servicer (or a
Sub-Servicer) on behalf of the Seller) by the Eligible Lender Trustee and the
Indenture Trustee, the Eligible Lender Trustee, on behalf of the Issuer, will
convey to the Seller the Financed Student Loans identified in such notice, which
are to be repaid pursuant to the Consolidation Loans to be made by the Seller.
SECTION 2.04. ENDORSEMENT. The Seller hereby appoints each of the
Eligible Lender Trustee and the Indenture Trustee as the Seller's true and
lawful attorney-in-fact with full power of substitution to endorse the Seller's
name on any promissory note evidencing the Initial Financed Student Loans and
any Additional Student Loans transferred to the Eligible Lender Trustee on
behalf of the Trust pursuant to Sections 2.01 and 2.02. The Seller acknowledges
and agrees that this power of attorney shall be construed as a power coupled
with an interest, shall be irrevocable as long as the Trust Agreement remains in
effect and shall continue in effect until the Trust Agreement terminates.
ARTICLE III
THE FINANCED STUDENT LOANS
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO
THE FINANCED STUDENT LOANS. The Seller makes the following representations and
warranties as to the Financed Student Loans on which the Issuer is deemed to
have relied in acquiring (through the Eligible Lender Trustee) the Financed
Student Loans. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Initial Financed Student Loans and the Subsequent Pool Student Loans, and as of
the applicable Transfer Date, in the case of the Other Subsequent Student Loans,
but shall survive the sale, transfer and assignment of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) CHARACTERISTICS OF FINANCED STUDENT LOANS. Each Financed Student
Loan (A) was originated in the United States of America, its territories,
its possessions or other areas subject to its jurisdiction by the Seller in
the ordinary course of its business to an eligible borrower under
applicable law and agreements and was fully and properly executed by the
parties thereto and (B) provides or, when the payment schedule with respect
thereto is determined, will provide for payments on a periodic basis that
fully amortize the principal amount of such Financed Student Loan by its
maturity and yield interest at the rate applicable thereto, as such
maturity may be modified in accordance with any applicable deferral or
forbearance periods granted in accordance with applicable laws and
restrictions, including those of the Higher Education Act, any Guarantee
Agreement or the Programs. Each Financed Student Loan that is a Financed
Federal Loan qualifies the holder thereof to receive Interest Subsidy
Payments (other than SLS Loans, unsubsidized Stafford Loans and certain
Consolidation Loans) and Special Allowance Payments from the Department and
Guarantee Payments from the applicable Guarantor and qualifies the
applicable Guarantor to receive reinsurance payments thereon from the
Department. Each Financed Student Loan that is a Financed Guaranteed
Private Loan qualifies the holder thereof to receive Guarantee Payments
from the applicable Guarantor pursuant to the related Guarantee Agreement.
(ii) SCHEDULES OF FINANCED STUDENT LOANS. The information set forth in
Schedules A and B to this Agreement and Schedule A to the related Transfer
Agreement is true and correct in all material respects as of the opening of
business on the Cutoff Date (with respect to Schedules A and B to this
Agreement) or each applicable Subsequent Cutoff Date, as applicable, and no
selection procedures believed to be adverse to the holders of Notes or the
holders of Certificates were utilized in selecting the Initial Financed
Student Loans or the Additional Student Loans, as applicable. The computer
tape regarding the Initial Financed Student Loans and the Subsequent Pool
Student Loans made available to the Issuer and its assigns is true and
correct in all respects as of the Cutoff Date. There will be no material
changes made to either Schedule A or Schedule B to this Agreement (with
respect to the Initial Financed Student Loans or the Subsequent Pool
Student Loans) prior to the Special Determination Date without the
acknowledgement of the Rating Agencies that such material change will not
affect the ratings assigned to any Class of the Notes or the Certificates.
(iii) COMPLIANCE WITH LAW. Each Financed Student Loan complied at the
time it was originated or made and at the execution of this Agreement or
the applicable Transfer Agreement, as the case may be, complies, and the
Seller and its agents, with respect to each such Financed Student Loan,
have at all times complied, in all material respects with all requirements
of applicable Federal, state and local laws and regulations thereunder,
including the Higher Education Act, usury law, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Federal Reserve Board's
Regulation B and other consumer credit laws and equal credit opportunity
and disclosure laws and all applicable requirements of any Guarantee
Agreements.
(iv) BINDING OBLIGATION. Each Financed Student Loan represents the
genuine, legal, valid and binding payment obligation in writing of the
borrower thereof, enforceable by or on behalf of the holder thereof in
accordance with its terms, and no Financed Student Loan has been satisfied,
subordinated or rescinded, subject to clause (xiii) below.
(v) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened or exists with respect to any
Financed Student Loan.
(vi) NO DEFAULT. No Initial Financed Student Loan or Subsequent Pool
Student Loan has a payment that is more than 180 days overdue as of the
Cutoff Date or, with respect to the Other Subsequent Student Loans, more
than 90 days overdue as of the applicable Subsequent Cutoff Date, as the
case may be, and, except as permitted in this paragraph, no default,
breach, violation or event permitting acceleration under the terms of any
Financed Student Loan has occurred; and, except for payment defaults
continuing for a period of not more than 150 days or 90 days, as
applicable, no continuing condition that with notice or the lapse of time
or both would constitute a default, breach, violation or event permitting
acceleration under the terms of any Financed Student Loan has arisen; and
the Seller has not waived and shall not waive any of the foregoing other
than as permitted by the Basic Documents.
(vii) TITLE. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Financed Student
Loans from the Seller to the Eligible Lender Trustee on behalf of the
Issuer and that the beneficial interest in and title to such Financed
Student Loans not be part of the debtor's estate in the event of the
appointment of a receiver with respect to the Seller. No Financed Student
Loan has been sold, transferred, assigned or pledged by the Seller to any
Person other than the Eligible Lender Trustee on behalf of the Issuer.
Immediately prior to the transfer and assignment herein contemplated, the
Seller had good title to each Financed Student Loan, free and clear of all
Liens and, immediately upon the transfer thereof, the Eligible Lender
Trustee on behalf of the Issuer shall have good title to each such Financed
Student Loan, free and clear of all Liens or the transfer shall have been
perfected under the UCC.
(viii) LAWFUL ASSIGNMENT. No Financed Student Loan has been originated
in, or is subject to the laws of, any jurisdiction under which the sale,
transfer and assignment of such Financed Student Loan or any Financed
Student Loan under this Agreement, each Transfer Agreement or the Indenture
is unlawful, void or voidable.
(ix) SECURITY INTEREST PERFECTED. All filings (including UCC filings)
and/or delivery requirements necessary in any jurisdiction to give the
Eligible Lender Trustee on behalf of the Issuer a first perfected ownership
interest in the Financed Student Loans, and to give the Indenture Trustee a
first perfected security interest therein, have been made or satisfied, as
the case may be.
(x) ONE ORIGINAL. There is only one original executed copy of the
promissory note evidencing each Financed Student Loan.
(xi) PRINCIPAL BALANCE. The aggregate principal balance of the Initial
Financed Student Loans, plus accrued interest to be capitalized with
respect thereto, as of the Statistical Cutoff Date, is $742,794,276.40, and
the aggregate principal balance of the Subsequent Pool Student Loans, plus
accrued interest to be capitalized with respect thereto, as of the
Statistical Cutoff Date, $175,202,524.95.
(xii) NO CLAIMS. As of the Cutoff Date, no claim for payment with
respect to an Initial Financed Student Loan has been made to a Guarantor,
and as of the related Subsequent Cutoff Date no claim for payment with
respect to an Additional Student Loan will have been made.
(xiii) NO BANKRUPTCIES OR DEATHS. No borrower of any Financed Student
Loan as of September 1, 1999 (in the case of the Initial Financed Student
Loans), or the applicable Subsequent Cutoff Date (in the case of Additional
Student Loans) was noted in the related Financed Student Loan File as being
currently involved in a bankruptcy proceeding or as having died.
(xiv) INTEREST ACCRUING. Each Financed Student Loan is accruing
interest (whether or not such interest is being paid currently, by the
borrower or by the Department, or is being capitalized), except as
otherwise expressly permitted by the Basic Documents.
(xv) SELLER'S REPRESENTATIONS. The representations and warranties of
the Seller contained in Section 6.01 are true and correct.
SECTION 3.02. REPURCHASE UPON BREACH; REIMBURSEMENT. The Seller, the
Master Servicer or the Eligible Lender Trustee, as the case may be, shall inform
the other parties to this Agreement and the Indenture Trustee promptly, in
writing, upon the discovery of any breach of the Seller's representations and
warranties made pursuant to Section 3.01 or Section 6.01. Unless any such breach
shall have been cured within 60 days following the discovery thereof by the
Eligible Lender Trustee or receipt by the Eligible Lender Trustee of written
notice from the Seller or the Master Servicer of such breach, the Seller shall
be obligated to repurchase any Financed Student Loan in which the interests of
the holders of Notes or the holders of Certificates are materially and adversely
affected by any such breach as of the first day succeeding the end of such
60-day period that is the last day of a Collection Period; provided that it is
understood that any such breach that does not affect any Guarantor's obligation
to guarantee payment of each Financed Student Loan that is a Financed Guaranteed
Loan to the Eligible Lender Trustee in accordance with the related Guarantee
Agreements will not be considered to have a material adverse effect for this
purpose. In consideration of and simultaneously with the repurchase of the
Financed Student Loan, the Seller shall remit the Purchase Amount, in the manner
specified in Section 5.04, and the Issuer shall execute such assignments and
other documents reasonably requested by the Seller in order to effect such
transfer. Upon any such transfer of a Financed Student Loan, legal title to, and
beneficial ownership and control of, the related Financed Student Loan File will
thereafter belong to the Seller. In addition, if any such breach by the Seller
does not trigger such a repurchase obligation but does result in the refusal by
a Federal Guarantor to guarantee all or a portion of the accrued interest, or
the loss (including any obligation of the Issuer to repay to the Department) of
certain Interest Subsidy Payments and Special Allowance Payments, with respect
to a Financed Federal Loan, then, unless such breach, if curable, is cured
within 60 days, the Seller shall reimburse the Issuer by remitting an amount
equal to the sum of all such non-guaranteed interest amounts and such forfeited
Interest Subsidy Payments and Special Allowance Payments in the manner specified
in Section 5.04. Subject to the provisions of Section 6.03, the sole remedy of
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the holders of
Notes or the holders of Certificates with respect to a breach of representations
and warranties pursuant to Section 3.01 and the agreement contained in this
Section shall be to require the Seller to repurchase Financed Student Loans or
to reimburse the Issuer as provided above pursuant to this Section, subject to
the conditions contained herein.
SECTION 3.03. CUSTODY OF FINANCED STUDENT LOAN FILES. To assure
uniform quality in servicing the Financed Student Loans and to reduce
administrative costs, the Issuer hereby appoints the Master Servicer, and the
Master Servicer hereby accepts such appointment, to act for the benefit of the
Issuer and the Indenture Trustee as custodian of the following documents or
instruments related to the Financed Student Loans (as set forth in Schedules A
and B hereto), which are also hereby constructively delivered to the Indenture
Trustee, as pledgee of the Issuer (or, in the case of the Additional Student
Loans, will be, as of the applicable Transfer Date, constructively delivered to
the Indenture Trustee, as pledgee of the Issuer) with respect to each Financed
Student Loan:
(a) the original fully executed copy of the note evidencing the
Financed Student Loan;
(b) the original loan application fully executed by the borrower; and
(c) any and all other documents and computerized records that any of
the Master Servicer (or a Sub-Servicer on behalf of the Master Servicer), the
Administrator or the Seller shall keep on file, in accordance with its customary
procedures, relating to such Financed Student Loan or any Obligor with respect
thereto.
Notwithstanding the foregoing, and without releasing the Master
Servicer from its duties and obligations hereunder, for so long as Key Bank USA,
National Association, or an affiliate thereof, is the Master Servicer hereunder,
the Master Servicer shall (and in all other cases, may) appoint one or more
Sub-Servicers to act as "custodian" on behalf of the Issuer and the Indenture
Trustee (but at the direction of the Master Servicer) with respect to the
Financed Student Loans such Sub-Servicer is servicing, in each case consistent
with the terms of this Article III, and all references to the Master Servicer
shall be read to apply to such Sub-Servicer acting at the direction of the
Master Servicer; and, provided, further, that if Key Bank USA, National
Association is the Master Servicer, the Master Servicer shall not replace such
Sub-Servicer unless and until a successor Sub-Servicer assumes the role of
"custodian" on behalf of the Issuer and the Indenture Trustee with respect to
all the Financed Student Loans it will be servicing.
The appointment of the Master Servicer as custodian hereunder is for
administrative purposes only and does not, and is not intended to, transfer any
of the Issuer's or the Indenture Trustee's right, title or interest in or to the
Initial Financed Student Loans (or Additional Student Loans) to the Master
Servicer and the Master Servicer hereby acknowledges that it has not and will
not obtain any such right, title or interest in or to such Initial Financed
Student Loans (or Additional Student Loans).
SECTION 3.04. DUTIES OF MASTER SERVICER AS CUSTODIAN. (a) SAFEKEEPING.
The Master Servicer, as custodian, shall (or shall cause the applicable
Sub-Servicers to) hold the Financed Student Loan Files for the benefit of the
Issuer and the Indenture Trustee and maintain such accurate and complete
accounts, records and computer systems pertaining to each Financed Student Loan
File as shall enable the Issuer to comply with this Agreement. In performing its
duties as custodian the Master Servicer shall (or shall cause the applicable
Sub-Servicers to) act with reasonable care, using that degree of skill and
attention that the Master Servicer (or such Sub-Servicer) exercises with respect
to the student loan files relating to all comparable student loans that the
Master Servicer (or such Sub-Servicer) services and shall ensure that it
complies fully and completely with all applicable Federal and State laws,
including the Higher Education Act, with respect thereto. The Master Servicer
shall (or shall cause the applicable Sub-Servicers to) conduct, or cause to be
conducted, periodic audits of the Financed Student Loan Files held by it under
this Agreement and of the related accounts, records and computer systems, in
such a manner as shall enable the Issuer or the Indenture Trustee to verify the
accuracy of the Master Servicer's (or such Sub-Servicer's) record keeping. The
Master Servicer shall (or shall cause the applicable Sub-Servicers to) promptly
report to the Issuer and the Indenture Trustee any failure on its part (or on
the part of a Sub-Servicer) to hold the Financed Student Loan Files and maintain
its accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed to
require an initial review or any periodic review by the Issuer, the Eligible
Lender Trustee or the Indenture Trustee of the Financed Student Loan Files.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Master Servicer, as
custodian, shall (or shall cause the applicable Sub-Servicers to) maintain each
Financed Student Loan File at one of its offices (or the offices of the
applicable Sub-Servicer) specified in Schedule C to this Agreement or at such
other office as shall be specified by written notice to the Issuer and the
Indenture Trustee not later than 90 days after any change in location. Upon
reasonable prior notice, the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) make available to the Issuer and the Indenture
Trustee or their respective duly authorized representatives, attorneys or
auditors a list of locations of the Financed Student Loan Files and the related
accounts, records and computer systems maintained by the Master Servicer (or
such Sub-Servicer) at such times during normal business hours as the Issuer or
the Indenture Trustee shall instruct.
(c) RELEASE OF DOCUMENTS. Upon instruction from the Indenture Trustee,
the Master Servicer, as custodian, shall (or shall cause the applicable
Sub-Servicers to) release any Financed Student Loan File to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.
SECTION 3.05. INSTRUCTIONS; AUTHORITY TO ACT. The Master Servicer, as
custodian, shall be deemed to have received proper instructions with respect to
the Financed Student Loan Files upon its receipt of written instructions signed
by a Responsible Officer of the Indenture Trustee.
SECTION 3.06. CUSTODIAN'S INDEMNIFICATION. The Master Servicer as
custodian shall pay for any loss, liability or expense, including reasonable
attorney's fees, that may be imposed on, incurred by or asserted against the
Issuer, the Eligible Lender Trustee or the Indenture Trustee or any of their
officers, directors, employees and agents as the result of any improper act or
omission in any way relating to the maintenance and custody by the Master
Servicer (or any Sub-Servicer) as custodian of the Financed Student Loan Files
where the final determination that any such improper act or omission by the
Master Servicer resulted in such loss, liability or expense is established by a
court of law, by an arbitrator or by way of settlement agreed to by the Master
Servicer; PROVIDED, HOWEVER, that the Master Servicer shall not be liable to the
Eligible Lender Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Eligible Lender Trustee and
the Master Servicer shall not be liable to the Indenture Trustee for any portion
of any such amount resulting from the willful misfeasance, bad faith or
negligence of the Indenture Trustee.
SECTION 3.07. EFFECTIVE PERIOD AND TERMINATION. The appointment of the
Master Servicer as custodian shall become effective as of the Closing Date and
shall continue in full force and effect for so long as the Master Servicer shall
remain the Master Servicer hereunder, subject to the requirements of Section
3.03 hereof. If the Master Servicer or any successor Master Servicer shall
resign as Master Servicer in accordance with the provisions of this Agreement or
if all the rights and obligations of the Master Servicer or any such successor
Master Servicer shall have been terminated under Section 8.01, the appointment
of the Master Servicer or such successor Master Servicer as custodian shall be
terminated simultaneously with the effectiveness of such termination. As soon as
practicable on or after any termination of such appointment (and in any event
within (i) 10 Business Days, with respect to that portion of the Financed
Student Loan Files it holds consisting of electronic records and information,
and (ii) 40 Business Days, with respect to the remaining portion of the Financed
Student Loan Files it holds), the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) deliver the Financed Student Loan Files it holds to
the Indenture Trustee or the Indenture Trustee's agent at such place or places
as the Indenture Trustee may reasonably designate.
SECTION 3.08. SCHEDULE OF FINANCED STUDENT LOANS. Schedules A and B
hereto shall indicate by name any Sub-Servicer who has been appointed by the
Master Servicer to service, on behalf of the Master Servicer, each Financed
Student Loan. Such indication may be amended by the Master Servicer, from time
to time, to replace the name of the applicable Sub-Servicer, in accordance with
the provisions of this Agreement relating to the servicing of the Financed
Student Loans.
ARTICLE IV
ADMINISTRATION AND SERVICING OF FINANCED STUDENT LOANS
SECTION 4.01. DUTIES OF MASTER SERVICER. The Master Servicer, for the
benefit of the Issuer (to the extent provided herein), shall (or shall cause the
applicable Sub-Servicer to) manage, service, administer and make collections on
the Financed Student Loans with reasonable care, using that degree of skill and
attention that the Master Servicer (or such Sub-Servicer) exercises with respect
to all comparable student loans that it services. Without limiting the
generality of the foregoing or of any other provision set forth in this
Agreement and notwithstanding any other provision to the contrary set forth
herein, the Master Servicer shall (or shall cause the applicable Sub-Servicer
to) manage, service, administer and make collections with respect to the
Financed Student Loans (other than collection of any Interest Subsidy Payments
and Special Allowance Payments, which the Eligible Lender Trustee will perform
on behalf of the Trust) in accordance with, and otherwise comply with, all
applicable Federal and state laws, including all applicable standards,
guidelines and requirements of the Higher Education Act (in the case of the
Financed Federal Loans) and any Guarantee Agreement (in the case of the Financed
Guaranteed Loans), the failure to comply with which would adversely affect the
eligibility of one or more of the Financed Federal Loans for federal reinsurance
or Interest Subsidy Payments or Special Allowance Payments or one or more of the
Financed Guaranteed Loans for receipt of Guarantee Payments or would have an
adverse effect on the holders of Certificates or the holders of Notes. The
Master Servicer also hereby acknowledges that its obligation to service (or to
cause the applicable Sub-Servicer to sub-service on its behalf) the Financed
Student Loans includes those Additional Student Loans conveyed by the Seller to
the Eligible Lender Trustee on behalf of the Trust pursuant to Section 2.02 and
the related Transfer Agreement, a copy of which shall be delivered to the Master
Servicer by the Seller promptly upon execution thereof; PROVIDED that any
failure by the Seller to so deliver a Transfer Agreement shall not affect the
Master Servicer's obligations hereunder to service (or to cause the applicable
Sub-Servicer to sub-service on its behalf) all the Financed Student Loans.
The Master Servicer's duties (or the duties of the applicable
Sub-Servicers on behalf of the Master Servicer) shall include collection and
posting of all payments, responding to inquiries of borrowers on such Financed
Student Loans, monitoring borrowers' status, making required disclosures to
borrowers, investigating delinquencies, sending payment coupons to borrowers and
otherwise establishing repayment terms, reporting tax information to borrowers,
if applicable, accounting for collections and furnishing monthly and annual
statements with respect thereto to the Administrator. Subject to the provisions
of Section 4.02, the Master Servicer shall (or shall cause the applicable
Sub-Servicer to) follow its customary standards, policies and procedures in
performing its duties as Master Servicer (or Sub-Servicer, as the case may be).
Without limiting the generality of the foregoing, the Master Servicer is
authorized and empowered to execute and deliver (and may cause the applicable
Sub-Servicer to execute and deliver), on behalf of itself, the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the holders of Certificates and
the holders of Notes or any of them, instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Financed Student Loans; PROVIDED, HOWEVER,
that the Master Servicer agrees that it will not (nor will it permit a
Sub-Servicer to) (a) permit any rescission or cancellation of a Financed Student
Loan except as ordered by a court of competent jurisdiction or governmental
authority or as otherwise consented to in writing by the Eligible Lender Trustee
and the Indenture Trustee or (b) reschedule, revise, defer or otherwise
compromise with respect to payments due on any Financed Student Loan except
pursuant to any applicable deferral or forbearance periods or otherwise in
accordance with all applicable standards, guidelines and requirements of the
Higher Education Act, any Guarantee Agreement or the Programs with respect to
the servicing of the Financed Student Loans and except as otherwise permitted in
accordance with Section 4.14; PROVIDED FURTHER, HOWEVER, that the Master
Servicer shall not agree (nor shall it permit any Sub-Servicer to agree) to any
decrease of the interest rate on, or the principal amount payable with respect
to, any Financed Student Loan except in accordance with the applicable
standards, guidelines and requirements of the Higher Education Act, any
Guarantee Agreement or the Programs and as otherwise permitted in accordance
with Section 4.14. The Eligible Lender Trustee on behalf of the Issuer hereby
grants a power of attorney and all necessary authorization to the Master
Servicer to (or to cause the applicable Sub-Servicer to) maintain any and all
collection procedures with respect to the Financed Student Loans it services (or
sub-services), including filing, pursuing and recovering claims against the
Guarantors for Guarantee Payments and taking any steps to enforce such Financed
Student Loan such as commencing a legal proceeding to enforce a Financed Student
Loan in the name of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the holders of Certificates or the holders of Notes. The Eligible
Lender Trustee or the Indenture Trustee shall upon the written request of the
Master Servicer or the Administrator furnish the Master Servicer or the
Administrator (or at written the direction of the Master Servicer or the
Administrator, the related Sub-Servicer) with any other powers of attorney and
other documents reasonably necessary or appropriate to enable the Master
Servicer or the Administrator (or related Sub-Servicer) to carry out their
servicing and administrative duties hereunder (or under the related
Sub-Servicing Agreement).
Notwithstanding the foregoing, and without releasing the Master
Servicer from its duties and obligations hereunder, the Master Servicer may
appoint one or more of the Sub-Servicers to act as "sub-servicer" on its behalf
with respect to the Financed Student Loans such Sub-Servicer is sub-servicing,
in each case consistent with the terms of this Article IV and any other
provision of this Agreement, and all references to the Master Servicer shall be
read to apply to such Sub-Servicer acting on behalf of the Master Servicer.
SECTION 4.02. COLLECTION OF FINANCED STUDENT LOAN PAYMENTS. (a) The
Master Servicer shall (or shall cause the applicable Sub-Servicer to) make
reasonable efforts (including all efforts that may be specified under the Higher
Education Act or any Guarantee Agreement) to collect all payments called for
under the terms and provisions of the Financed Student Loans as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable student loans that it services. The Master
Servicer shall (or shall cause the applicable Sub-Servicer to) allocate
collections with respect to the Financed Student Loans between principal and
interest in accordance with Section 5.03. With the written consent of the
Administrator, the Master Servicer (or at the direction of the Master Servicer,
the related Sub-Servicer) may in its discretion waive any charge or any other
fee that may be collected in the ordinary course of servicing a Financed Student
Loan.
(b) The Master Servicer shall (or shall cause the applicable
Sub-Servicer to) make reasonable efforts to claim, pursue and collect all
Guarantee Payments from the Guarantors pursuant to the Guarantee Agreements with
respect to any of the Financed Guaranteed Loans as and when the same shall
become due and payable, shall comply with all applicable laws and agreements
with respect to claiming, pursuing and collecting such payments and shall follow
such practices and procedures as it follows with respect to all comparable
guarantee agreements and student loans that it services. In connection
therewith, the Master Servicer is hereby authorized and empowered (or at the
direction of the Master Servicer, the related Sub-Servicer is authorized and
empowered) to convey to any Guarantor the note and the related Financed Student
Loan File representing any Financed Guaranteed Loan in connection with
submitting a claim to such Guarantor for a Guarantee Payment in accordance with
the terms of the applicable Guarantee Agreement.
(c) The Eligible Lender Trustee shall, with the assistance of the
Administrator as set forth below and on behalf of the Issuer, make reasonable
efforts to claim, pursue and collect all Interest Subsidy Payments and Special
Allowance Payments from the Department with respect to any of the Financed
Federal Loans as and when the same shall become due and payable, shall comply
with all applicable laws and agreements with respect to claiming, pursuing and
collecting such payments and shall follow such practices and procedures as the
Administrator follows with respect to its own student loans. All amounts so
collected by the Eligible Lender Trustee shall constitute Available Funds for
the applicable Collection Period and shall be deposited into the Collection
Account in accordance with Section 5.02. In connection therewith, the
Administrator shall prepare and file with the Department on a timely basis all
claims forms and other documents and filings necessary or appropriate in
connection with the claiming of Interest Subsidy Payments and Special Allowance
Payments on behalf of the Eligible Lender Trustee and shall otherwise assist the
Eligible Lender Trustee in pursuing and collecting such Interest Subsidy
Payments and Special Allowance Payments from the Department. The Eligible Lender
Trustee shall upon the written request of the Administrator furnish the
Administrator with any power of attorney and other documents reasonably
necessary or appropriate to enable the Administrator to prepare and file such
claims forms and other documents and filings.
The Eligible Lender Trustee may permit trusts, other than the Trust,
established by the Seller to securitize student loans to use the Department
lender identification number applicable to the Trust. In such event, the
Eligible Lender Trustee may claim and collect Interest Subsidy Payments and
Special Allowance Payments with respect to Financed Student Loans in the Trust
and student loans in such other trusts using such common lender identification
number. Notwithstanding anything herein or in the Basic Documents to the
contrary, any amounts assessed against payments (including, but not limited to,
Interest Subsidy Payments and Special Allowance Payments) due from the
Department or any Federal Guarantor to any such other trust using such common
lender identification number as a result of amounts (including, but not limited
to, the Federal Consolidation Loan Rebate) owing to the Department or any
Federal Guarantor from the Trust will be deemed for all purposes hereof and of
the Basic Documents (including for purposes of determining amounts paid by the
Department or any Federal Guarantor with respect to the student loans in the
Trust and such other trust) to have been assessed against the Trust and shall be
deducted by the Eligible Lender Trustee or the Master Servicer and paid to such
other trust from any collections made by them which would otherwise have been
payable to the Collection Account, for the Trust. If so specified in the
servicing agreement applicable to any such other trust, any amounts assessed
against payments due from the Department or any Federal Guarantor to the Trust
as a result of amounts owing to the Department or any Federal Guarantor from
such other trust using such common lender identification number will be deemed
to have been assessed against such other trust and will be deducted by the
Eligible Lender Trustee or the Master Servicer from any collections made by them
which would otherwise be payable to the collection account for such other trust
and paid to the Trust.
SECTION 4.03. REALIZATION UPON FINANCED STUDENT LOANS. For the benefit
of the Issuer, the Master Servicer shall (or shall cause the applicable
Sub-Servicer to) use reasonable efforts consistent with its customary servicing
practices and procedures and including all efforts that may be specified under
the Higher Education Act or any applicable Guarantee Agreement in its servicing
(or sub-servicing) of any delinquent Financed Student Loans.
SECTION 4.04. COMPUTATION OF NOTE INTEREST RATE AND CERTIFICATE RATE.
Prior to each Determination Date, the Administrator shall determine each Note
Interest Rate and the Certificate Rate that will be applicable to the
Distribution Date following such Determination Date, in compliance with its
obligation to prepare and deliver an Administrator's Certificate on such
Determination Date pursuant to Section 4.08. In connection therewith, the
Administrator shall calculate the T-Bill Rate in accordance with the definition
thereof calculate Three-Month LIBOR in accordance with the definition thereof
and shall also determine the Student Loan Rate with respect to such Distribution
Date; provided, however, that no such calculation of the Student Loan Rate shall
be required to be made unless the T-Bill Rate or Three-Month LIBOR for such
Interest Period is 100 basis points greater than the T-Bill Rate of the
preceding Determination Date or Three-Month LIBOR of the preceding Determination
Date, respectively, or with respect to T-Bill Indexed Securities only, the 52
Week Treasury Bill Rate is 100 basis points less than the T-Bill Rate as of such
Determination Date.
SECTION 4.05. NO IMPAIRMENT. The Master Servicer shall not (nor shall
it permit the applicable Sub-Servicer to) impair the rights of the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the holders of Certificates or
the holders of Notes in such Financed Student Loans.
SECTION 4.06. PURCHASE OF FINANCED STUDENT LOANS; REIMBURSEMENT. The
Eligible Lender Trustee or the Master Servicer (or the applicable Sub-Servicer
on its behalf) shall inform the other party as well as the Indenture Trustee and
the Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.01, 4.02, 4.03 or 4.05. Unless the breach shall have been cured within
60 days following such discovery (or, at the Master Servicer's election, the
last day of the first month following such discovery), the Master Servicer shall
purchase any Financed Student Loan in which the interests of the holders of
Notes or the holders of Certificates are materially and adversely affected by
such breach as of the first day succeeding the end of such 60-day period that is
the last day of a Collection Period (it being understood that any such breach
that does not affect any Guarantor's obligation to guarantee payment of such
Financed Student Loan in accordance with Guarantee Agreements will not be
considered to have a material adverse effect for this purpose). If the Master
Servicer takes any action or fails to take any action (including, without
limitation, all actions taken or not taken by a Sub-Servicer on its behalf)
during any Collection Period pursuant to the sections referred to above that
impairs the rights of the Issuer, the Indenture Trustee, the Eligible Lender
Trustee, the holders of Certificates or the holders of Notes in any Financed
Student Loan or otherwise than as provided in such sections, the Master Servicer
shall purchase such Financed Student Loan as of the last day of such Collection
Period. In consideration of the purchase of any such Financed Student Loan
pursuant to either of the two preceding sentences, the Master Servicer shall
remit the Purchase Amount in the manner specified in Section 5.04. In addition,
if any such breach by the Master Servicer (or a Sub-Servicer acting on its
behalf) does not trigger such a purchase obligation but does result in the
refusal by a Federal Guarantor to guarantee all or a portion of the accrued
interest, or the loss (including any obligation of the Issuer to repay to the
Department) of certain Interest Subsidy Payments and Special Allowance Payments,
with respect to a Financed Federal Loan, then, unless such breach, if curable,
is cured within 60 days, the Master Servicer shall reimburse the Issuer by
remitting an amount equal to the sum of all such non-guaranteed interest amounts
and such forfeited Interest Subsidy Payments and Special Allowance Payments in
the manner specified in Section 5.04. Subject to Section 7.02, the sole remedy
of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the holders
of Certificates and the holders of Notes with respect to a breach pursuant to
Section 4.01, 4.02, 4.03 or 4.05 shall be to require the Master Servicer to
purchase Financed Student Loans or to reimburse the Issuer as provided above
pursuant to this Section. The Eligible Lender Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the purchase of any Financed Student Loan or the reimbursement for any
interest penalty pursuant to this Section 4.06. Notwithstanding the foregoing,
the Master Servicer, at its option, may permit or cause a Sub-Servicer to
purchase a Financed Student Loan from the Trust in its stead, in the manner and
for the reasons set forth above.
SECTION 4.07. MASTER SERVICING FEE; The Master Servicing Fee for
each calendar month payable on each Monthly Servicing Payment Date shall be
equal to the amounts determined by reference to the schedule of fees as set
forth in the Servicing Fee Schedule, attached hereto as Schedule E.
SECTION 4.08. ADMINISTRATOR'S CERTIFICATE; SERVICER'S REPORT. (a) On
or before (i) the seventh day of each month (or, if any such day is not a
Business Day, on the next succeeding Business Day), the Master Servicer shall
(or shall cause each Sub-Servicer to) deliver to the Seller a Servicer's Report
with respect to the preceding calendar month containing all information
necessary for the preparation of the applicable Transfer Agreement (including
Schedule A), and (ii) the Closing Date or the fifteenth day of each month (or,
if any such day is not a Business Day, on the next succeeding Business Day) or
any other Transfer Date, the Master Servicer shall (or shall cause each
Sub-Servicer to) deliver to the Administrator a Servicer's Report with respect
to the preceding calendar month containing all information necessary for the
Administrator's preparation of the Administrator's Officer's Certificate and the
Administrator's Certificate covering such calendar month referred to in
paragraphs (b) and (c) below.
(b) On each Determination Date prior to a Monthly Servicing Payment
Date that is not a Distribution Date, the Administrator shall deliver to the
Eligible Lender Trustee, the Indenture Trustee and (if the Seller is not the
Administrator) the Seller, an Officer's Certificate of the Administrator
containing all information necessary to pay the Master Servicer the Master
Servicing Fee due on such Monthly Servicing Payment Date pursuant to Sections
5.05(b) and 5.06. In addition, on the Business Day preceding each Transfer Date
during the Funding Period, the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee, and (if the Seller is not the
Administrator) the Seller, an Officer's Certificate of the Administrator
containing all information necessary to make the transfers from the Escrow
Account and the Pre-Funding Account on such Transfer Date pursuant to Section
5.08.
(c) On each Determination Date prior to a Distribution Date, the
Administrator shall deliver to the Eligible Lender Trustee, the Indenture
Trustee and (if the Seller is not the Administrator) the Seller, with a copy to
the Rating Agencies, an Administrator's Certificate containing all information
necessary to make the distributions pursuant to Sections 5.05, 5.06 and
5.08(c)(i) and (ii), if applicable, for the Collection Period preceding the date
of such Administrator's Certificate as well as the amount of any Class A-1 Cap
Payment, Class A-2 Cap Payment, Class M Cap Payment and Certificate Cap Payment
for such Distribution Date. Financed Student Loans to be repurchased by the
Seller (whether pursuant to Section 2.03 or 3.02), purchased by the Master
Servicer (or a Sub-Servicer on its behalf) or acquired by any Guarantor shall be
identified by the Administrator by type of loan and borrower social security
number with respect to such Financed Student Loan (as specified in Schedule A).
SECTION 4.09. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) Each of the Administrator and the Master Servicer shall (and the Master
Servicer shall cause each Sub-Servicer to) deliver to the Seller, the Eligible
Lender Trustee and the Indenture Trustee, on or before March 30 of each year
beginning March 30, 2000, an Officers' Certificate of the Administrator or
Master Servicer (and each Sub-Servicer) as the case may be, dated as of December
31 of the preceding year, stating that (i) a review of the activities of the
Administrator or the Master Servicer (and each Sub-Servicer on its behalf), as
the case may be, during the preceding 12-month period (or, in the case of the
first such certificate, during the period from the Closing Date to December 31,
1999) and of its performance under this Agreement (or the related Sub-Servicing
Agreement, as applicable) has been made under such officers' supervision and
(ii) to the best of such officers' knowledge, based on such review, the
Administrator or the Master Servicer (or such Sub-Servicer), as the case may be,
has fulfilled all its obligations under this Agreement and the Administration
Agreement (or the related Sub-Servicing Agreement), as applicable, throughout
such year or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof. The Indenture Trustee shall send a copy of each such
Officers' Certificate and each report referred to in Section 4.10 to the Rating
Agencies. A copy of each such Officers' Certificate and each report referred to
in Section 4.10 may be obtained by any holder of Certificates, Certificate
Owner, holder of Notes or Note Owner by a request in writing to the Eligible
Lender Trustee addressed to its Corporate Trust Office, together with evidence
satisfactory to the Eligible Lender Trustee that such Person is one of the
foregoing parties. Upon the telephone request of the Eligible Lender Trustee,
the Indenture Trustee will promptly furnish the Eligible Lender Trustee a list
of holders of Notes as of the date specified by the Eligible Lender Trustee.
(b) The Master Servicer shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Seller, and the Rating Agencies, promptly after
having obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice in an Officers' Certificate of the Master Servicer of
any event which with the giving of notice or lapse of time, or both, would
become a Master Servicer Default under Section 8.01(a)(1) or (2) or would cause
Key Bank USA, National Association, to fail to meet any Rating Agency Condition
pursuant to Section 5.02(iii).
(c) The Administrator shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Master Servicer and the Rating Agencies, promptly
after having obtained knowledge thereof, but in no event later than five
Business Days thereafter, written notice in an Officers' Certificate of the
Administrator of any event which with the giving of notice or lapse of time, or
both, would become an Administrator Default under Section 8.01(b)(1) or (2) or
would cause Key Bank USA, National Association, to fail to meet any Rating
Agency Condition pursuant to Section 5.02(iii).
SECTION 4.10. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
Each of the Administrator and the Master Servicer shall (or the Master Servicer
shall cause each Sub-Servicer to) cause a firm of independent certified public
accountants, which may also render other services to the Administrator or the
Master Servicer (or such Sub-Servicer), as the case may be, to deliver to the
Seller, the Eligible Lender Trustee and the Indenture Trustee on or before March
31 of each year beginning March 31, 2001, (a) a report expressing a summary of
findings based upon a comparison of the mathematical calculations of certain
amounts set forth in the Servicer's Reports during the preceding calendar year
(or, in the case of the first such report, the period from the Closing Date to
December 31, 2000) with the Master Servicer's (or such Sub-Servicer's) computer
reports that were the source of such amounts and a report with regard to the
assertions by the Master Servicer's (or such Sub-Servicer's) management about
the Master Servicer's (or such Sub-Servicer's) compliance with the provisions of
this Agreement set forth on Schedule D hereto during the preceding calendar year
(or, in the case of the first such report, the period from the Closing Date to
December 31, 2000) and (b) a report addressed to the Master Servicer (and the
related Sub-Servicer), the Seller, the Eligible Lender Trustee, the Indenture
Trustee and each Rating Agency to the effect that (i) such accountants have
relied upon the assertions by the Master Servicer's (or such Sub-Servicer's)
management about the Master Servicer's (or such Sub-Servicer's) compliance with
this Agreement (or the related Sub-Servicing Agreement) during the preceding
calendar year (or, in the case of the first such report, during the period from
the Closing Date to December 31, 2000) and (ii) in such accountants' opinion,
such assertions are fairly stated in all material respects, except for such
exceptions as such firm shall believe to be immaterial and such other exceptions
as shall be set forth in such report. In the event such firm requires the
Indenture Trustee and the Eligible Lender Trustee to agree to the procedures
performed by such firm, the Master Servicer shall direct the Indenture Trustee
in writing to so agree; it being understood and agreed that the Indenture
Trustee and the Eligible Lender Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Indenture
Trustee and the Eligible Lender Trustee make no independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
Such report will also indicate that the firm is independent of the
Administrator or the Master Servicer (or such Sub-Servicer), as the case may be,
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 4.11. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING FINANCED STUDENT Loans. Upon reasonable prior notice, the Master
Servicer shall (or shall cause the Sub-Servicers to) provide to the holders of
Certificates and the holders of Notes access to the Financed Student Loan Files
in such cases where the holders of Certificates or the holders of Notes shall be
required by applicable statutes or regulations to review such documentation, as
demonstrated by evidence satisfactory to the Master Servicer (and the applicable
Sub-Servicer under the related Sub-Servicing Agreement) in its (or their)
reasonable judgment. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Master Servicer (or the applicable Sub-Servicer). Nothing in this
Section shall affect the obligation of the Master Servicer (or the applicable
Sub-Servicer on its behalf) to observe any applicable law prohibiting disclosure
of information regarding the Obligors and the failure of the Master Servicer (or
the applicable Sub-Servicer) to provide access to information as a result of
such obligation shall not constitute a breach of this Section.
SECTION 4.12. MASTER SERVICER AND ADMINISTRATOR EXPENSES. The Master
Servicer and the Administrator shall be severally required to pay or cause to be
paid all expenses incurred by it (or its agents acting on its behalf) in
connection with its activities hereunder, including fees and disbursements of
independent accountants, taxes imposed on the Master Servicer or the
Administrator, as the case may be, and expenses incurred in connection with
distributions and reports to the Administrator or to the holders of Certificates
and the holders of Notes, as the case may be.
SECTION 4.13. APPOINTMENT OF SUB-SERVICERS. The Master Servicer may at
any time, (i) upon the written consent of the Administrator, appoint one or more
Sub-Servicers to perform all or any portion of its obligations as Master
Servicer hereunder, provided, that the Rating Agency Condition shall have been
satisfied in connection therewith, and (ii) without notice or consent, delegate
specific duties to sub-contractors who are in the business of performing such
duties; PROVIDED, HOWEVER, that the Master Servicer shall remain obligated and
be liable to the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
holders of Certificates and the holders of Notes for the servicing and
administering of the Financed Student Loans, in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such Sub-Servicer or other delegation of such duties and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Financed Student Loans. The fees and
expenses of each Sub-Servicer (and any such sub-contractors) shall be as agreed
between the Master Servicer and the applicable Sub-Servicer or a sub-contractor
from time to time and none of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the holders of Certificates or the holders of Notes shall
have any responsibility therefor. The parties hereto hereby acknowledge and
consent to the appointment of PHEAA and Great Lakes as the initial Sub-Servicers
(and custodians of the Financed Student Loans each such Sub-Servicer is
servicing) pursuant to the PHEAA Sub-Servicing Agreement and the Great Lakes
Sub-Servicing Agreement, respectively, and acknowledge that the requirements of
this Section 4.13 are deemed to have been met with respect to PHEAA and Great
Lakes.
SECTION 4.14. SPECIAL PROGRAMS. The Master Servicer may at its option,
but is under no obligation to, offer (and may permit the Sub-Servicers to offer)
borrowers of the Financed Student Loans certain special incentive programs,
whether or not in existence as of the date of this Agreement, generally offered
to the obligors of comparable loans owned by the Seller; PROVIDED, HOWEVER, that
to the extent such programs are: (a) not in existence as of the date of this
Agreement and are not required by the Higher Education Act (in the case of the
Financed Federal Loans), or (b) not part of the special incentive program
designated as the "Keys2Repay Program" by the Seller, and have the effect of
reducing the yield on the Financed Student Loans (either by reducing borrower
payments or reducing principal balance), such special programs shall be applied
to borrowers of Financed Student Loans only if and to the extent the Issuer
receives payment from the Seller in an amount sufficient to offset such
reduction of yield netted against any payments owed by the Trust to the Seller
pursuant to this Agreement.
ARTICLE V
DISTRIBUTIONS; ACCOUNTS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNTS. (a) (i) The
Administrator, for the benefit of the Issuer, shall establish and maintain
in the name of the Indenture Trustee an Eligible Deposit Account (the
"Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Issuer. The
Collection Account will initially be established as a segregated trust
account at KeyBank National Association in the name of the Indenture
Trustee. The Seller will make an initial deposit into the Collection
Account on the Closing Date of cash or certain Eligible Investments equal
to $12,803,198.65.
(ii) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Reserve Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Issuer.
The Reserve Account will initially be established as a segregated trust
account at KeyBank National Association in the name of the Indenture
Trustee.
(iii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Pre-Funding Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Issuer. The Pre-Funding Account will initially be established as a
segregated trust account at KeyBank National Association in the name of the
Indenture Trustee.
(iv) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Escrow Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Issuer.
The Escrow Account will initially be established as a segregated trust
account at KeyBank National Association in the name of the Indenture
Trustee.
(v) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Cap Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Issuer. The Cap
Account will initially be established as a segregated trust account at
KeyBank National Association in the name of the Indenture Trustee.
(b) Funds on deposit in the Collection Account, the Reserve Account,
the Pre-Funding Account, the Cap Account and the Escrow Account (collectively,
the "Trust Accounts") shall be invested by the Indenture Trustee (or any
custodian or designated agent with respect to any amounts on deposit in such
accounts) in Eligible Investments pursuant to written instructions by the
Administrator; PROVIDED, HOWEVER, it is understood and agreed that neither the
Administrator nor the Indenture Trustee shall be liable for any loss arising
from such investment in Eligible Investments. All such Eligible Investments
shall be held by (or by any custodian on behalf of) the Indenture Trustee for
the benefit of the Issuer; provided that on the Business Day preceding each
Distribution Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Available
Funds for such Distribution Date. Other than as described in the following
proviso or as otherwise permitted by the Rating Agencies, funds on deposit in
the Trust Accounts shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the Business Day
preceding the following Distribution Date; PROVIDED, HOWEVER, that funds on
deposit in Trust Accounts may, and all funds on deposit in the Cap Account
shall, be invested in Eligible Investments of the Indenture Trustee which may
mature so that such funds will be available on such Distribution Date. Funds
deposited in a Trust Account on a Business Day which immediately precedes a
Distribution Date upon the maturity of any Eligible Investments are not required
to be invested overnight.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon) and all such
funds, investments, proceeds and income shall be part of the Trust Estate.
Subject to the Administrator's power to instruct the Indenture Trustee
pursuant to paragraph (b) above and paragraph (c)(iii) below, the Trust
Accounts shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Issuer. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee
(or the Administrator on its behalf) agrees, by its acceptance hereto, that
it shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Trust Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Trust Account. In connection with the
foregoing, the Administrator agrees that, in the event that any of the
Trust Accounts are not accounts with the Indenture Trustee, the
Administrator shall notify the Indenture Trustee in writing promptly upon
any of such Trust Accounts ceasing to be an Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit accounts shall
be held solely in Eligible Deposit Accounts, subject to the last sentence of
Section 5.01(c)(i); and, subject to Section 5.01(b), each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the Indenture
Trustee, and the Indenture Trustee shall have sole signature authority with
respect thereto;
(B) any Trust Account Property shall be Delivered to the Indenture
Trustee in accordance with the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Indenture Trustee or such other
Person acting solely for the Indenture Trustee as required for Delivery;
(C) In the event that the Indenture Trustee, in its capacity as
securities intermediary has or subsequently obtains by agreement, operation of
law or otherwise a security interest in the Trust Accounts or any security
entitlement credited thereto, the Indenture Trustee, in its capacity as
securities intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Indenture Trustee. The financial
assets and other items deposited to the Trust Accounts will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any person
other than the Indenture Trustee (except that the Indenture Trustee, in its
capacity as securities intermediary may set off (i) all amounts due to it in
respect of its customary fees and expenses for the routine maintenance and
operation of the Trust Accounts, and (ii) the face amount of any checks which
have been credited to the Trust Accounts but are subsequently returned unpaid
because of uncollected or insufficient funds).
(iii) The Administrator shall have the power, revocable for cause or
upon the occurrence and during the continuance of an Administrator Default
by the Indenture Trustee or by the Eligible Lender Trustee with the consent
of the Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Trust Accounts for the purpose of
permitting the Master Servicer, the Administrator or the Eligible Lender
Trustee to carry out its respective duties hereunder or permitting the
Indenture Trustee to carry out its duties under the Indenture.
SECTION 5.02. COLLECTIONS. The Master Servicer shall (or shall cause
the applicable Sub-Servicers to) remit within two Business Days of receipt
thereof to the Collection Account all payments by or on behalf of the Obligors
with respect to the Financed Student Loans (other than Purchased Student Loans),
and all Liquidation Proceeds, as collected during the Collection Period.
Notwithstanding the foregoing, for so long as (i) Key Bank USA, National
Association remains the Administrator, (ii) no Administrator Default shall have
occurred and be continuing and (iii) prior to ceasing daily remittances to the
Collection Account, the Rating Agency Condition shall have been satisfied (and
any conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with), the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) remit such collections within two Business Days of
receipt thereof to the Administrator, and the Administrator need not deposit
such collections into the Collection Account until one Business Day immediately
prior to the next following Distribution Date; PROVIDED, HOWEVER, that,
notwithstanding the foregoing, on or before the Business Day preceding each
Monthly Servicing Payment Date that is not a Distribution Date, the
Administrator shall deposit into the Collection Account (i) Guarantee Payments
made by TERI in excess of the Maximum TERI Payments Amount and (ii) that portion
of such amounts received by it that is equal to the Master Servicing Fee payable
on such date. In the event that any of the foregoing conditions for ceasing
daily remittances shall no longer be satisfied, then the Administrator shall
deposit all collections held by it into the Collection Account within five
Business Days thereof. For purposes of this Article V, the phrase "payments by
or on behalf of Obligors" shall mean payments made with respect to the Financed
Student Loans by or on behalf of borrowers thereof and the Guarantors (but
excluding the Department).
SECTION 5.03. APPLICATION OF COLLECTIONS. (a) With respect to each
Financed Student Loan, all collections (including all Guarantee Payments, but
subject to the Maximum TERI Payments Amount with respect to TERI Guarantee
Payments) with respect thereto for the Collection Period shall be applied to
interest and principal on such Financed Student Loan by the Master Servicer (or
the applicable Sub-Servicer on its behalf) in accordance with its customary
practice by allocating to interest the portion of such collection equal to the
product of (A) the applicable interest rate on such Financed Student Loan, (B)
the unpaid principal balance of such Financed Student Loan and (C) the period of
time elapsed since the preceding payment of interest on such Financed Student
Loan was made (over the actual number of days in a year) ("Interest
Collections") and by allocating the remainder of such collection to principal.
(b) All Liquidation Proceeds shall be applied to the related Financed
Student Loan.
SECTION 5.04. ADDITIONAL DEPOSITS. (a) Within two Business Days after
receipt thereof, the Eligible Lender Trustee shall deposit in the Collection
Account the aggregate amount of Interest Subsidy Payments and Special Allowance
Payments received by it with respect to the Financed Federal Loans. The Master
Servicer shall (or shall cause the applicable Sub-Servicers to) deposit in the
Collection Account the aggregate Purchase Amount with respect to Purchased
Student Loans and all other amounts to be paid by the Master Servicer under
Section 4.06 when such amounts are due, and the Seller shall deposit or cause to
be deposited therein the aggregate Purchase Amount with respect to Purchased
Student Loans and all other amounts to be paid by the Seller under Sections 3.02
and 9.01 when such amounts are due.
(b) Notwithstanding anything to the contrary set forth in paragraph
(a) above, if daily deposits to the Collection Account are not required pursuant
to Section 5.02, the Eligible Lender Trustee, the Seller and the Master Servicer
(or the Sub-Servicers on its behalf) shall pay the amounts referred to in
paragraph (a) above that would otherwise be deposited into the Collection
Account to the Administrator. The Administrator shall not be required to deposit
such amounts into the Collection Account until the Business Day preceding each
Distribution Date.
(c) On the Determination Date preceding each Distribution Date prior
to the termination of the Cap Agreement, the Administrator, in its capacity as
calculation agent under the Cap Agreement, shall determine the amount, if any,
of the Class A-1 Cap Payment, Class A-2 Cap Payment, Class M Cap Payment and
Certificate Cap Payment for such Distribution Date and shall instruct the Cap
Provider to deposit such amounts into the Cap Account on the Business Day prior
to such Distribution Date. In addition, upon the occurrence of an event of
default under the Cap Agreement or an early termination of the Cap Agreement,
the Administrator shall instruct the Cap Provider to deposit the amount of any
termination payment into the Cap Account.
SECTION 5.05. DISTRIBUTIONS. (a) On each Determination Date, the
Administrator shall calculate all amounts required to determine the amounts to
be deposited in the Collection Account from the other Trust Accounts, the
amounts to be distributed therefrom on the related Monthly Servicing Payment
Date or Distribution Date and the Class A-1 Cap Payment, Class A-2 Cap Payment,
Class M Cap Payment, Certificate Cap Payment, Class A Cap Funds, Class M Cap
Funds and Certificate Cap Funds. The Administrator, in its capacity as
calculation agent under the Administration Agreement, shall instruct the
Indenture Trustee (based on the information contained in the Administrator's
Certificate delivered pursuant to Section 4.08(a)), to withdraw from the Cap
Account the amount of any Class A Cap Funds, Class M Cap Funds and Certificate
Cap Funds and to distribute such amounts to the Noteholders and
Certificateholders on the related Distribution Date as provided in Section
5.05(c).
(b) On each Monthly Servicing Payment Date that is not a Distribution
Date, the Administrator shall instruct the Indenture Trustee (based on the
information contained in the Administrator's Officer's Certificate and each
related Servicer's Report delivered pursuant to Section 4.08(a) and (b)) to
distribute (i) to the Seller any amounts on deposit in the Collection Account
which consist of Guarantee Payments made by TERI in excess of the Maximum TERI
Payments Amount and (ii) to the Master Servicer by 11:00 a.m. (New York time),
from and to the extent of the Available Funds on deposit in the Collection
Account the Master Servicing Fee due with respect to the preceding calendar
month and all unpaid Master Servicing Fees from prior months, and the Indenture
Trustee shall comply with such instructions.
(c) On each Distribution Date, the Administrator shall instruct the
Indenture Trustee (based on the information contained in the Administrator's
Certificate and each related Servicer's Report delivered pursuant to Section
4.08(a) and (c)) to make the following deposits and distributions to the Persons
or to the account specified below by 11:00 a.m. (New York time), to the extent
of the amount of Available Funds in the Collection Account, in the following
order of priority and the Indenture Trustee shall comply with such instructions:
(i) to the Seller, any amounts on deposit in the Collection Account
which consist of Guarantee Payments made by TERI in excess of the Maximum
TERI Payments Amount;
(ii) to the Master Servicer, the Master Servicing Fee due with respect
to the preceding calendar month and all unpaid Master Servicing Fees from
prior months;
(iii) to the Administrator, from the amount of Available Funds
remaining after the application of clauses (i) and (ii), the Administration
Fee and all unpaid Administration Fees from prior Collection Periods;
(iv) to the holders of the Class A Notes, from the amount of Available
Funds remaining after the application of clauses (i), (ii) and (iii), the
Noteholders' Interest Distribution Amount for the Class A-1 Notes and Class
A-2 Notes pursuant to Section 8.02(c)(i) of the Indenture;
(v) to the holders of the Class M Notes, from the amount of Available
Funds remaining after the application of clauses (i) through (iv),
Noteholders' Interest Distribution Amount for the Class M Notes pursuant to
Section 8.02(c)(ii) of the Indenture;
(vi) to the Eligible Lender Trustee on behalf of the holders of the
Certificates, from the amount of Available Funds remaining after the
application of clauses (i) through (v), the Certificateholders' Interest
Distribution Amount;
(vii) to the Reserve Account from the amount of Available Funds
remaining after the application of clauses (i) through (vi), an amount, up
to the amount, if any, necessary to reinstate the balance of the Reserve
Account up to the Specified Reserve Account Balance;
(viii) to the holders of the Notes, from the amount of Available Funds
remaining after the application of clauses (i) through (vii), the
Noteholders' Principal Distribution Amount to be allocated pursuant to
Section 8.02(c)(iii) of the Indenture;
(ix) on each Distribution Date on and after the date on which the
Notes have been paid in full, to the Eligible Lender Trustee on behalf of
the holders of the related Certificates, from the amount of Available Funds
remaining after the application of clauses (i) through (viii), the
Certificateholders' Principal Distribution Amount;
(x) to the holders of the Class A Notes on a pro rata basis, based on
the amount of Noteholders' Interest Index Carryover owing on each class of
Class A Notes, from (1) the amount of Available Funds remaining after the
application of clauses (i) through (ix) and (2) the Class A Cap Funds, if
any, the aggregate unpaid amount of Noteholders' Interest Index Carryover,
if any, with respect to the Class A Notes;
(xi) to the holders of the Class M Notes, from (1) the amount of
Available Funds remaining after application of clauses (i) through (x), and
(2) the Class M Cap Funds, if any, the aggregate amount of Noteholders'
Interest Index Carryover, if any, with respect to the Class M Notes;
(xii) to the Eligible Lender Trustee on behalf of the holders of the
Certificates, from (1) the amount of Available Funds remaining after the
application of clauses (i) through (xi) and (2) the Certificate Cap Funds,
the aggregate unpaid amount of the Certificateholders' Interest Index
Carryover, if any;
(xiii) to the Cap Provider, an amount sufficient to reimburse the Cap
Provider for all previous Class A-1 Cap Payments, Class A-2 Cap Payments,
Class M Cap Payments and Certificate Cap Payments made by the Cap Provider
under the Cap Agreement and not previously reimbursed pursuant to this
clause (xiii); and
(xiv) to or upon the order of the Seller, the amount of Available
Funds remaining after the application of clauses (i) through (xiii).
Notwithstanding anything to the contrary contained in this Section
5.05(c), (1) on the second consecutive Distribution Date that the
outstanding principal balance of the Notes (after giving effect to any
amounts to be distributed to the holders of the Notes pursuant to Section
5.05(c) (viii) above) is in excess of the Note Collateralization Amount,
the holders of the Notes shall receive the Noteholders' Priority Principal
Distribution Amount in the order of priority specified in Section
8.02(c)(iii) of the Indenture prior to any payment to the holders of the
Certificates of the Certificateholders' Interest Distribution Amount on
such Distribution Date pursuant to Section 5.05(c) (vi) above and (2) on
the second consecutive Distribution Date that the outstanding principal
balance of the Class A Notes (after giving effect to any amounts to be
distributed to the holders of the Class A Notes pursuant to Section
5.05(c)(vii) above) is in excess of the Note Collateralization Amount, the
holders of the Class A Notes shall receive the Noteholders' Priority
Principal Distribution Amount in the order of priority specified in Section
8.02(c)(iii) of the Indenture prior to any payment to the holders of the
Class M Notes of the Noteholders' Interest Distribution Amount for the
Class M Notes on such Distribution Date pursuant to Section 5.05(c)(v)
above. In the event that any Class of Notes receives a payment in respect
of the Noteholders' Priority Distribution Amount, the Administrator, on
behalf of the Trust, shall give notice to each Rating Agency of such
payment.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default specified in Section 5.01(i), 5.01(ii),
5.01(iv), and 5.01(v) of the Indenture and the acceleration of the Notes
pursuant to Section 5.02 of the Indenture, no amounts will be distributed
to the Certificateholders until the Noteholders have received all accrued
and unpaid interest on the Notes (other than any Noteholders' Interest
Index Carryover) and the outstanding principal balance of the Notes has
been reduced to zero as provided in Section 5.04(b) of the Indenture. The
Administrator, on behalf of the Trust, shall give notice to each Rating
Agency of the occurrence of any such Event of Default.
SECTION 5.06. RESERVE ACCOUNT. (a) On the Closing Date, the Seller
shall deposit the Reserve Account Initial Deposit into the Reserve Account. On
the Closing Date, the Reserve Account Initial Deposit will equal the Specified
Reserve Account Balance as of the Closing Date.
(b) (i) In the event that the Master Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date exceeds the amount distributed to
the Master Servicer pursuant to Sections 5.05(b)(ii) and 5.05(c)(ii) on such
Monthly Servicing Payment Date or Distribution Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on such
Monthly Servicing Payment Date or Distribution Date an amount equal to such
excess, to the extent of funds available therein, and to distribute such amount
to the Master Servicer.
(ii) In the event that the Administration Fee for any Distribution
Date exceeds the amount distributed to the Administrator pursuant to
Section 5.05(c)(iii) on such Distribution Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on each
Distribution Date an amount equal to such excess, to the extent of funds
available therein after giving effect to paragraph (b)(i) above, and to
distribute such amount to the Administrator.
(iii) [Reserved]
(iv) [Reserved]
(v) In the event that the Noteholders' Interest Distribution Amount
with respect to the Class A Notes for a Distribution Date exceeds the
amount distributed to the holders of the Class A Notes pursuant to Section
5.05(c)(iv) on such Distribution Date, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account on such Distribution
Date an amount equal to such excess, to the extent of funds available
therein after giving effect to paragraph (b)(i) and (b)(ii) above, and to
distribute such amount to the holders of Notes entitled thereto, in the
same order and priority as is set forth in Section 5.05(c)(iv); PROVIDED,
HOWEVER, that, amounts on deposit in the Reserve Account will not be
available to cover any unpaid Noteholders' Interest Index Carryover with
respect to the Class A Notes.
(vi) In the event that (A) the Noteholders' Interest Distribution
Amount with respect to the Class M Notes for a Distribution Date exceeds
the amount distributed to holders of Class M Notes pursuant to Section
5.05(c)(v) on such Distribution Date and (B) the Note Collateralization
Amount is equal to or greater than the outstanding principal balance of the
Class A Notes (after giving effect to distributions on the Notes on such
Distribution Date) for the second consecutive Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing on such
Distribution Date to withdraw from the Reserve Account on such Distribution
Date an amount equal to the excess described in clause (A) above, to the
extent of funds available therein after giving effect to paragraphs (b)(i),
(b)(ii) and (b)(v) above, and to distribute such amount to the holders of
Class M Notes entitled thereto, in the same order and priority as is set
forth in Section 5.05(c)(v); PROVIDED, HOWEVER, that amounts on deposit in
the Reserve Account will not be available to cover any unpaid Noteholders'
Interest Index Carryover with respect to the Class M Notes.
(vii) In the event that (A) the Certificateholders' Interest
Distribution Amount for a Distribution Date exceeds the amount distributed
to holders of Certificates pursuant to Section 5.05(c)(vi) on such
Distribution Date and (B) the Note Collateralization Amount is equal to or
greater than the outstanding principal balance of the Notes (after giving
effect to distributions on the Notes on such Distribution Date) for the
second consecutive Distribution Date, the Administrator shall instruct the
Indenture Trustee on such Distribution Date to withdraw from the Reserve
Account on such Distribution Date an amount equal to the excess described
in clause (A) above, to the extent of funds available therein after giving
effect to paragraphs (b)(i), (b)(ii), (b)(v) and (b)(vi) above, and to
distribute such amount to the holders of Certificates entitled thereto, in
the same order and priority as is set forth in Section 5.05(c)(vi);
PROVIDED, HOWEVER, that amounts on deposit in the Reserve Account will not
be available to cover any unpaid Certificateholders' Interest Index
Carryover.
(viii) In the event and to the extent that on any Distribution Date,
there is a Realized Loss Amount, the Administrator shall instruct the
Indenture Trustee on such date to withdraw from the Reserve Account on such
date an amount equal to such Realized Loss Amount, to the extent of funds
available therein, after giving effect to paragraphs (b)(i), (b)(ii),
(b)(v), (b)(vi) and (b)(vii) above, and to distribute such amounts first,
in the order of priority set forth in Section 5.05(c)(viii) and, after the
outstanding principal balance of the Notes have been paid in full, in the
order of priority set forth in Section 5.05(c)(ix).
(ix) In the event that on the Final Maturity Date for the Class A-1
Notes, the outstanding principal balance of the Class A-1 Notes (prior to
giving effect to any distribution of principal thereon on such date)
exceeds the amount of principal distributed to the holders of the Class A-1
Notes on such date pursuant to Section 5.05(c)(viii), the Administrator
shall instruct the Indenture Trustee on such date to withdraw from the
Reserve Account on such date an amount equal to such excess, to the extent
of funds available therein, after giving effect to paragraphs (b)(i),
(b)(ii), (b)(v), (b)(vi), (b)(vii) and (b)(viii) above and to distribute
such amount to the holders of the Class A-1 Notes, in the same order and
priority as is set forth in Section 5.05(c)(viii).
(x) In the event that on the Final Maturity Date for the Class A-2
Notes the outstanding principal balance of the Class A-2 Notes (prior to
giving effect to any distribution of principal thereon on such date),
exceeds the amount of principal distributed to the holders of the Class A-2
Notes on such date pursuant to Section 5.05(c)(viii), the Administrator
shall instruct the Indenture Trustee on such date to withdraw from the
Reserve Account on such date an amount equal to such excess, to the extent
of funds available therein, after giving effect to paragraphs (b)(i),
(b)(ii), (b)(v), (b)(vi), (b)(vii), (b)(viii) and (b)(ix) above, and to
distribute such amount to the holders of the Class A-2 Notes, in the same
order and priority as set forth in Section 5.05 (c)(viii).
(xi) In the event that on the Final Maturity Date for the Class M
Notes the Noteholders' Principal Distribution Amount exceeds the amount
distributed to the holders of the Class M Notes pursuant to Section
5.05(c)(viii), the Administrator shall instruct the Indenture Trustee on
such date to withdraw from the Reserve Account on such date an amount equal
to such excess, to the extent of funds available therein after giving
effect to paragraphs (b)(i), (b)(ii), (b)(v), (b)(vi), (b)(vii), (b)(viii),
(b)(ix) and (b)(x) above, and to distribute such amount to the holders of
Certificates entitled thereto, in the same order and priority as is set
forth in Section 5.05(c)(viii).
(xii) In the event that on the Final Maturity Date for the
Certificates the Certificateholders' Principal Distribution Amount exceeds
the amount distributed to the holders of the Certificates pursuant to
Section 5.05(c)(ix), the Administrator shall instruct the Indenture Trustee
on such date to withdraw from the Reserve Account on such date an amount
equal to such excess, to the extent of funds available therein after giving
effect to paragraphs (b)(i), (b)(ii), (b)(v), (b)(vi), (b)(vii), (b)(viii),
(b)(ix), (b)(x) and (b)(xi) above, and to distribute such amount to the
holders of Certificates entitled thereto, in the same order and priority as
is set forth in Section 5.05 (c)(ix).
(c) [Reserved]
(d) If the amount on deposit in the Reserve Account on any
Distribution Date (without giving effect to all deposits or withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve
Account Balance for such Distribution Date, the Administrator shall instruct the
Indenture Trustee to deposit the amount of such excess into the Collection
Account for distribution on such Distribution Date.
(e) Following the payment in full of the aggregate outstanding
principal balance of the Notes and the Certificate Balance and of all other
amounts owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to holders of Notes and Certificates, the Master Servicer or the
Administrator (including any Noteholders' Interest Index Carryover and
Certificateholders' Interest Index Carryover) and the termination of the Trust,
any amount remaining on deposit in the Reserve Account shall be distributed to
the Seller. The Seller shall in no event be required to refund any amounts
properly distributed pursuant to this Section 5.06(e).
SECTION 5.07. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. On
each Determination Date preceding a Distribution Date, the Administrator shall
provide to the Indenture Trustee (with a copy to the Rating Agencies) for the
Indenture Trustee to forward on such succeeding Distribution Date to each holder
of record of the Notes and to the Eligible Lender Trustee for the Eligible
Lender Trustee to forward on such succeeding Distribution Date to each holder of
record of the Certificates a statement substantially in the form of Exhibits A
and B, respectively, setting forth at least the following information as to the
Notes and the Certificates, to the extent applicable:
(i) the amount of the distribution allocable to principal of each of
the Class A-1 Notes, the Class A-2 Notes, the Class M Notes and the
Certificates;
(ii) the amount of the distribution allocable to interest on each of
the Class A-1 Notes, the Class A-2 Notes, the Class M Notes and the
Certificates together with the interest rates applicable with respect
thereto (indicating whether such interest rates are based on (x) the T-Bill
Rate, in the case of T-Bill Indexed Securities or Three-Month LIBOR in the
case of LIBOR Indexed Securities or (y) the Student Loan Rate and
specifying what each such interest rate would have been if it had been
calculated using the alternate basis; provided that no such calculation of
the Student Loan Rate will be required to be made unless the T-Bill Rate or
Three-Month LIBOR for such Interest Period is 100 basis points greater than
the T-Bill Rate of the preceding Determination Date or Three-Month LIBOR,
of the preceding Determination Date, respectively, or with respect to
T-Bill Indexed Securities only, the 52 Week Treasury Bill Rate is 100 basis
points less than the T-Bill Rate as of such Determination Date);
(iii) the amount of (A) any Class A-1 Cap Payment, Class A-2 Cap
Payment, Class M Cap Payment and Certificate Cap Payment on such
Distribution Date and (B) the distribution, if any, allocable to any
Noteholders' Interest Index Carryover with respect to each Class of Notes
and any Certificateholders' Interest Index Carryover together with the
outstanding amount, if any, of each thereof after giving effect to any such
distribution;
(iv) the Pool Balance as of the close of business on the last day of
the preceding Collection Period, after giving effect to payments allocated
to principal reported as described in clause (i) above;
(v) the aggregate outstanding principal balance of each class of
Notes, the Certificate Balance and each Pool Factor as of such Distribution
Date, after giving effect to payments allocated to principal reported under
clause (i) above;
(vi) the amount of the Master Servicing Fee paid to the Master
Servicer and the amount of the Administration Fee paid to the
Administrator, respectively, with respect to such Collection Period;
(vii) the amount of the aggregate Realized Losses, if any, for such
Collection Period and the balance of Financed Student Loans that are
delinquent in each delinquency period as of the end of such Collection
Period;
(viii) the balance of the Reserve Account on such Distribution Date,
after giving effect to changes therein on such Distribution Date and the
amount of any Interest and Expense Draw and Realized Loss Draw on such
Distribution Date;
(ix) for Distribution Dates during the Funding Period, the remaining
Pre-Funded Amount on such Distribution Date, after giving effect to changes
therein during the related Collection Period;
(x) for the first Distribution Date, the Subsequent Pool Pre-Funded
Amount, if any, remaining in the Subsequent Pool Pre-Funding Subaccount
that has not been used to acquire Subsequent Pool Student Loans and is
being paid out to the holders of the Notes and holders of the Certificates;
and
(xi) for the first Distribution Date on or following the end of the
Funding Period, the amount of any remaining Pre-Funded Amount that has not
been used to make Additional Fundings and is being paid out to the holders
of the Notes.
Each amount set forth pursuant to clauses (i), (ii), (iii), (v) and (vi) above
shall be expressed as a dollar amount per $1,000 of original principal balance
of a Certificate or Note, as applicable. A copy of the statements referred to
above may be obtained by any Certificate Owner or Note Owner by a written
request to the Eligible Lender Trustee or the Indenture Trustee, respectively,
addressed to the respective Corporate Trust Office.
SECTION 5.08. PRE-FUNDING ACCOUNT. (a) On the Closing Date, the Seller
will deposit in the Pre-Funding Account $235,202,524.95 from the net proceeds of
the sale of the Notes and the Certificates. A portion of the amount on deposit
in the Pre-Funding Account equal to $175,202,524.95 (the "Subsequent Pool
Pre-Funded Amount") will be credited on the Closing Date to a designated
subaccount maintained by the Indenture Trustee within the Pre-Funding Account
(the "Subsequent Pool Pre-Funding Subaccount"). The remainder of the amount on
deposit in the Pre-Funding Account equal to $60,000,000.00 will be credited on
the Closing Date to a designated subaccount maintained by the Indenture Trustee
within the Pre-Funding Account (the "Other Additional Pre-Funding Subaccount").
No funds in the Other Additional Pre-Funding Subaccount may be used to purchase
Subsequent Pool Student Loans until the Subsequent Pool Pre-Funded Amount has
been reduced to zero. On each Transfer Date during the Funding Period on which
Subsequent Pool Student Loans are to be conveyed to the Eligible Lender Trustee
on behalf of the Issuer, the Administrator shall instruct the Indenture Trustee
to withdraw an amount equal to 100% of the sum of (x) the principal balance of,
plus (y) to the extent capitalized or to be capitalized, accrued interest on,
such Subsequent Pool Student Loans, first from the Subsequent Pool Pre-Funding
Subaccount until the Subsequent Pool Pre-Funded Amount has been reduced to zero
and then any remainder from the Other Additional Pre-Funding Subaccount. On each
Transfer Date during the Funding Period on which Other Subsequent Student Loans
are to be conveyed to the Eligible Lender Trustee on behalf of the Issuer, the
Administrator shall instruct the Indenture Trustee to withdraw an amount equal
to 100.00% of the sum of (x) the principal balance of, plus (y) to the extent
capitalized or to be capitalized, accrued interest on, such Other Subsequent
Student Loans (each sum of clauses (x) and (y) set forth in this sentence and
the previous sentence being, a "Transferred Balance"), first from the Escrow
Account until all amounts deposited therein during the calendar month
immediately preceding the Transfer Date have been reduced to zero and then any
remainder from the Other Additional Pre-Funding Subaccount. The Administrator
shall instruct the Indenture Trustee to distribute any Transferred Balance to or
upon the order of the Seller upon satisfaction of the conditions set forth in
Section 2.02(b) with respect to such transfer. On each Transfer Date on which
Guarantee Fee Advances are to be conveyed to the Eligible Lender Trustee on
behalf of the Issuer, the Administrator shall instruct the Indenture Trustee to
withdraw from the Other Additional Pre-Funding Subaccount an amount equal to the
principal balance of such Guarantee Fee Advances and to distribute such amount
to or upon the order of the Seller upon satisfaction of the conditions set forth
in Section 2.02(b) with respect to such transfer of Guarantee Fee Advances.
(b) In the event that any funds deposited in the Escrow Account during
the calendar month immediately preceding any Transfer Date remain on deposit
therein on such Transfer Date, after giving effect to all Additional Fundings to
be made with respect to such Transfer Date pursuant to paragraph (a) above, the
Indenture Trustee shall transfer such remaining funds from the Escrow Account to
the Collection Account and such funds shall be considered collections with
respect to the Financed Student Loans.
(c) (i) If as of the Special Determination Date (after giving effect
to all Additional Fundings on such date) the Subsequent Pool Pre-Funded
Amount has not been reduced to zero, the Administrator shall instruct the
Indenture Trustee pursuant to Section 4.08(c) to withdraw from the
Subsequent Pool Pre-Funding Subaccount on the first Distribution Date the
remaining Subsequent Pool Pre-Funded Amount on deposit in such subaccount
and, (x) if such amount is greater than $10,000,000, distribute the
applicable Noteholders' Percentage of such amount to the holders of Class
A-1 Notes, Class A-2 and Class M Notes, on a pro rata basis based on the
aggregate initial principal amounts of the Class A-1 Notes, the Class A-2
Notes and the Class M Notes, as a payment of principal, and distribute the
Certificateholders' Percentage of such amount to the holders of
Certificates as a payment of principal in the same manner as the
Certificateholders' Principal Distribution Amount is distributed, and (y)
if such amount is $10,000,000 or less, distribute such amount to the
holders of Class A-1 Notes as a payment of principal in the same manner as
the Noteholders' Principal Distribution Amount is distributed.
(ii) If (x) the Pre-Funded Amount has not been reduced to zero on the
Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period) after giving effect to any
reductions in the Pre-Funded Amount on such Distribution Date pursuant to
paragraph (a) above, the Administrator shall instruct the Indenture Trustee
pursuant to Section 4.08(c) to withdraw from the Pre-Funding Account on
such Distribution Date an amount equal to the Pre-Funded Amount and shall
transfer such remaining funds from the Pre-Funding Account to the
Collection Account and such funds shall be considered collections with
respect to the Financed Student Loans for the related Collection Period.
(d) (i) In the event that the Master Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date during the Funding Period
exceeds the amount distributed to the Master Servicer pursuant to Sections
5.05(b)(ii), 5.05(c)(ii) and 5.06(b)(i) on such Monthly Servicing Payment
Date or Distribution Date, the Administrator shall instruct the Indenture
Trustee to withdraw from the Other Additional Pre-Funding Subaccount on
such Monthly Servicing Payment Date or Distribution Date an amount equal to
such excess, to the extent of funds available therein, and to distribute
such amount to the Master Servicer.
(ii) In the event that the Administration Fee for any Distribution
Date during the Funding Period exceeds the amount distributed to the
Administrator pursuant to Sections 5.05(c)(iii) and 5.06(b)(ii) on such
Distribution Date, the Administrator shall instruct the Indenture Trustee
to withdraw from the Other Additional Pre-Funding Subaccount on each
Distribution Date an amount equal to such excess, to the extent of funds
available therein after giving effect to paragraph (d)(i) above, and to
distribute such amount to the Administrator.
(iii) In the event that the Noteholders' Interest Distribution Amount
with respect to the Class A Notes for a Distribution Date during the
Funding Period exceeds the amount distributed to the holders of Notes
pursuant to Sections 5.05(c)(iv) and 5.06(b)(v) on such Distribution Date,
the Administrator shall instruct the Indenture Trustee to withdraw from the
Other Additional Pre-Funding Subaccount on such Distribution Date an amount
equal to such excess, to the extent of funds available therein after giving
effect to paragraph (d)(i) and (d)(ii) above, and to distribute such amount
to the holders of Notes entitled thereto, in the same order and priority as
is set forth in Section 5.05(c)(iv).
(iv) In the event that (x) the Noteholders' Interest Distribution
Amount with respect to the Class M Notes for a Distribution Date exceeds
the amount distributed to the holders of Class M Notes pursuant to Sections
5.05(c)(v) and 5.06(b)(vi) on such Distribution Date and (y) the Note
Collateralization Amount is equal to or greater than the outstanding
principal balance of the Class A Notes (after giving effect to
distributions on the Notes, on such Distribution Date), the Administrator
shall instruct the Indenture Trustee on such Distribution Date to withdraw
from the Other Additional Pre-Funding Subaccount on such Distribution Date
to withdraw from the Other Additional Pre-Funding Subaccount on such
Distribution Date an amount equal to the excess described in clause (x)
above, to the extent of funds available therein after giving effect to
paragraphs (d)(i), (d)(ii) and (d)(iii) above, and to distribute such
amount to the holders of Class M Notes entitled thereto, in the same order
and priority as is set forth in Section 5.05(c)(v).
(v) In the event that (x) the Certificateholders' Interest
Distribution Amount for a Distribution Date exceeds the amount distributed
to the holders of Certificates pursuant to Sections 5.05(c)(vi) and
5.06(b)(vii) on such Distribution Date and (y) the Note Collateralization
Amount is equal to or greater than the outstanding principal balance of the
Notes (after giving effect to distributions on the Notes, on such
Distribution Date), the Administrator shall instruct the Indenture Trustee
on such Distribution Date to withdraw from the Other Additional Pre-Funding
Subaccount on such Distribution Date an amount equal to the excess
described in clause (x) above, to the extent of funds available therein
after giving effect to paragraphs (d)(i), (d)(ii), (d)(iii) and (d)(iv)
above, and to distribute such amount to the holders of Certificates
entitled thereto, in the same order and priority as is set forth in Section
5.05(c)(vi).
(vi) In the event the Realized Loss Amount for any Distribution Date
exceeds the amount withdrawn from the Reserve Account pursuant to Section
5.06(b)(viii), the Administrator shall instruct the Indenture Trustee on
such Distribution Date to withdraw from the Other Additional Pre-Funding
Subaccount or such Distribution Date an amount equal to such excess to the
extent of funds available therein after giving effect to paragraphs (d)(i),
(d)(ii), (d)(iii), (d)(iv) and (d)(vi) above, and to distribute such amount
in the same order of priority as if such amount had been withdrawn from the
Reserve Account pursuant to Section 5.06(b)(viii) on such Distribution
Date.
SECTION 5.09. SELLER OPTIONAL DEPOSIT. On or prior to any Distribution
Date, the Seller may, but shall not be obligated to, make an optional deposit
(each, a "Seller Optional Deposit") to the Reserve Account from funds to be
released to the Seller pursuant to Section 5.05(c)(xiv) on such Distribution
Date or otherwise. Any Seller Optional Deposit shall be applied on the related
Distribution Date in the same manner as other funds on deposit in the Reserve
Account on the related Distribution Date in accordance with Section 5.06.
ARTICLE VI
THE SELLER AND THE ADMINISTRATOR
SECTION 6.01. REPRESENTATIONS OF SELLER AND ADMINISTRATOR. Key Bank
USA, National Association, as Seller and Administrator, makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Financed Student Loans. The representations speak as of the execution and
delivery of this Agreement and the Administration Agreement and as of the
Closing Date, in the case of the Initial Financed Student Loans, and as of the
applicable Transfer Date, in the case of the Additional Student Loans, and shall
survive the sale of the Financed Student Loans to the Eligible Lender Trustee on
behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to
the Indenture. As used below, references to Key Bank USA, National Association
shall mean Key Bank USA, National Association in its capacity as both the Seller
and the Administrator.
(a) ORGANIZATION AND GOOD STANDING. Key Bank USA, National Association
is duly organized and validly existing as a national banking association in good
standing under the laws of the United States of America, with the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to acquire and own
the Financed Student Loans.
(b) POWER AND AUTHORITY OF THE SELLER. The Seller has the corporate
power and authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full corporate power and authority to sell and assign the
property to be sold and assigned to and deposited with the Issuer (or with the
Eligible Lender Trustee on behalf of the Issuer) and the Seller has duly
authorized such sale and assignment to the Issuer (or to the Eligible Lender
Trustee on behalf of the Issuer) by all necessary corporate action; and the
execution, delivery and performance of this Agreement have been duly authorized
by the Seller by all necessary corporate action.
(c) POWER AND AUTHORITY OF THE ADMINISTRATOR. The Administrator has
the corporate power and authority to execute and deliver this Agreement and the
Administration Agreement and to carry out their terms, and the execution,
delivery and performance of this Agreement and the Administration Agreement have
been duly authorized by the Administrator by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of Key Bank USA, National Association and the Administration
Agreement constitutes a legal, valid and binding obligation of the
Administrator, in each case enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and similar laws relating to
creditors' rights generally or the rights of creditors of banks the deposit
accounts of which are insured by the FDIC and subject to general principles of
equity.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement or the Administration Agreement and the fulfillment of the terms
hereof or thereof do not conflict with, result in any breach of any of the terms
and provisions of, nor constitute (with or without notice or lapse of time or
both) a default under, the articles of association or by-laws of Key Bank USA,
National Association, or any indenture, agreement or other instrument to which
Key Bank USA, National Association is a party or by which it shall be bound,
which breach or default would reasonably be expected to have a material adverse
effect on the condition of Key Bank USA, National Association, financial or
otherwise, or adversely affect the transactions contemplated by this Agreement
or the Administration Agreement; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the knowledge of Key Bank USA, National Association, any
order, rule or regulation applicable to Key Bank USA, National Association of
any court or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over Key Bank USA,
National Association or its properties.
(f) NO PROCEEDINGS. There are no proceedings or, to its best
knowledge, investigations pending against Key Bank USA, National Association or,
to its best knowledge, threatened against Key Bank USA, National Association
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Key Bank USA, National Association or
its properties: (i) asserting the invalidity of this Agreement, the Indenture or
any of the other Basic Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the consummation of any
of the transactions contemplated by this Agreement, the Indenture or any of the
other Basic Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the performance
by Key Bank USA, National Association of its obligations under, or the validity
or enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) seeking to affect adversely the
Federal or state income tax attributes of the Issuer, the Notes or the
Certificates.
(g) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by Key Bank USA, National Association in connection with the execution and
delivery by Key Bank USA, National Association of this Agreement and the
performance by Key Bank USA, National Association of the transactions
contemplated by this Agreement, and in connection with the execution and
delivery by the Administrator of the Administration Agreement and the
performance by the Administrator of its duties thereunder, have in each case
been duly obtained, effected or given and are in full force and effect.
SECTION 6.02. EXISTENCE. During the term of this Agreement, the Seller
will keep in full force and effect its existence, rights and franchises as a
national banking association under the laws of the jurisdiction of its
organization, subject, however, to Section 6.05 hereof.
SECTION 6.03. LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Eligible Lender Trustee, the Delaware Trustee and the Indenture Trustee and
their officers, directors, employees and agents from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents (except any
such income taxes arising out of fees paid to the Eligible Lender Trustee or the
Indenture Trustee), including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case of the
Issuer, not including any taxes asserted with respect to, and as of the date of,
the sale of the Financed Student Loans to the Eligible Lender Trustee on behalf
of the Issuer or the issuance and original sale of the Certificates and the
Notes, or asserted with respect to ownership of the Financed Student Loans or
Federal or other income taxes arising out of distributions on the Certificates
and the Notes) and costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee, the
Master Servicer, the holders of Certificates and the holders of Notes and the
officers, directors, employees and agents of the Issuer, the Eligible Lender
Trustee, the Delaware Trustee, the Indenture Trustee and the Master Servicer
from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or imposed upon such Person through, (i) the
Seller's willful misfeasance, bad faith or negligence in the performance of its
duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement and (ii) the Seller's or the
Issuer's violation of Federal or state securities laws in connection with the
offering and sale of the Notes and the Certificates.
(c) The Seller shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Eligible Lender Trustee, the Delaware
Trustee and their respective officers, directors, employees and agents from and
against, all costs, expenses, losses, claims, damages, obligations and
liabilities arising out of, incurred in connection with or relating to the Trust
Agreement, the other Basic Documents, the Trust Estate, the acceptance or
performance of the trusts and duties set forth herein and in the Trust Agreement
or the action or the inaction of the Eligible Lender Trustee hereunder and of
the Eligible Lender Trustee and the Delaware Trustee under the Trust Agreement,
except to the extent that such cost, expense, loss, claim, damage, obligation or
liability: (i) shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Eligible Lender Trustee or the Delaware
Trustee, as applicable, (ii) shall arise from any breach by the Eligible Lender
Trustee of its covenants under any of the Basic Documents or the Delaware
Trustee under the Trust Agreement; or (iii) shall arise from the breach by the
Eligible Lender Trustee of any of its representations or warranties set forth in
Section 7.03 of the Trust Agreement. In the event of any claim, action or
proceeding for which indemnity will be sought pursuant to this paragraph, the
Eligible Lender Trustee's or the Delaware Trustee's, as applicable, choice of
legal counsel shall be subject to the approval of the Seller, which approval
shall not be unreasonably withheld.
(d) The Seller shall pay any and all taxes levied or assessed upon all
or any part of the Trust Estate (other than those taxes expressly excluded from
the Seller's responsibilities pursuant to Section 6.03(a) above).
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee, Delaware Trustee or the Indenture
Trustee and the termination of this Agreement or the Indenture or the Trust
Agreement, as applicable, and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others, such
Person shall promptly repay such amounts to the Seller, without interest.
SECTION 6.04. LIABILITY OF ADMINISTRATOR; INDEMNITIES. The
Administrator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Administrator under this Agreement or
the Administration Agreement.
The Administrator shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Delaware Trustee, the Indenture
Trustee, the Master Servicer, the holders of Certificates and the holders of
Notes and any of the officers, directors, employees and agents of the Issuer,
the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee and the
Master Servicer from and against any and all costs, expenses, losses, claims,
damages and liabilities to the extent that such cost, expense, loss, claim,
damage or liability arose out of, or was imposed upon any such Person through,
the negligence, willful misfeasance or bad faith of the Administrator in the
performance of its duties under this Agreement or the Administration Agreement
or by reason of reckless disregard of its obligations and duties hereunder or
thereunder.
The Administrator shall pay reasonable compensation to the Indenture
Trustee and shall reimburse the Indenture Trustee for all reasonable expenses,
disbursements and advances, and indemnify, defend and hold harmless the
Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of, Section
6.07 of the Indenture.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 6.05) as Administrator pursuant to Section 8.01(b), or a resignation
by such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee, Delaware Trustee or the Indenture
Trustee or the termination of this Agreement and the Administration Agreement
and shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Administrator shall have made any indemnity payments pursuant
to this Section and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Administrator, without interest.
SECTION 6.05. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER OR ADMINISTRATOR. Any Person (a) into which the Seller or
the Administrator, as the case may be, may be merged or consolidated, (b) which
may result from any merger or consolidation to which the Seller or the
Administrator, as the case may be, shall be a party or (c) which may succeed to
the properties and assets of the Seller or the Administrator, as the case may
be, substantially as a whole, shall be the successor to the Seller or the
Administrator, as the case may be, without the execution or filing of any
document or any further act by any of the parties to this Agreement or to the
Administration Agreement; PROVIDED, HOWEVER, that each of the Seller and the
Administrator hereby covenant that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving Seller
or Administrator, as the case may be, if other than Key Bank USA, National
Association (or affiliate thereof), executes an agreement of assumption to
perform every obligation of the Seller under this Agreement or the Administrator
under this Agreement and the Administration Agreement, as the case may be, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.01 or 6.01 shall have been breached and no
Administrator Default, and no event that, after notice or lapse of time, or
both, would become an Administrator Default shall have occurred and be
continuing, (iii) the surviving Seller or Administrator, as the case may be, if
other than Key Bank USA, National Association (or affiliate thereof), shall have
delivered to the Eligible Lender Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Seller or Administrator, as the case may be, shall have a consolidated
net worth at least equal to that of the predecessor Seller or Administrator, as
the case may be, (v) such transaction will not result in a material adverse
Federal or state tax consequence to the Issuer, the holders of Notes or the
holders of Certificates and (vi) unless Key Bank USA, National Association (or
affiliate thereof) is the surviving entity, the Seller or the Administrator, as
the case may be, shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and Indenture
Trustee, respectively, in the Financed Student Loans and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
SECTION 6.06. LIMITATION ON LIABILITY OF SELLER, ADMINISTRATOR AND
OTHERS. (a) The Seller and any director or officer or employee or agent of the
Seller may rely in good faith on the advice of counsel or on any document of any
kind, prima facie properly executed and submitted by any Person respecting any
matters arising hereunder (provided that such reliance shall not limit in any
way the Seller's obligations under Section 3.02). The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability.
(b) Neither the Administrator nor any of its directors, officers,
employees or agents shall be under any liability to the Issuer, the holders of
Notes or the holders of Certificates, the Indenture Trustee or the Eligible
Lender Trustee except as provided under this Agreement or the Administration
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or the Administration Agreement or for errors in
judgment; PROVIDED, HOWEVER, that this provision shall not protect the
Administrator or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement or under the Administration Agreement. The
Administrator and any of its directors, officers, employees or agents may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder or under the Administration Agreement.
Except as provided in this Agreement or the Administration Agreement,
the Administrator shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its duties to administer
the Financed Student Loans and the Trust in accordance with this Agreement and
the Administration Agreement, and that in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, that the Administrator may undertake
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the holders
of Certificates under this Agreement and the holders of Notes under the
Indenture.
SECTION 6.07. SELLER MAY OWN CERTIFICATES OR NOTES. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any other Basic Document.
SECTION 6.08. KEY BANK USA, NATIONAL ASSOCIATION NOT TO RESIGN AS
ADMINISTRATOR. Subject to the provisions of Section 6.05, Key Bank USA, National
Association shall not resign from the obligations and duties imposed on it as
Administrator under this Agreement and under the Administration Agreement except
upon determination that the performance of its duties under this Agreement and
under the Administration Agreement shall no longer be permissible under
applicable law or shall violate any final order of a court or administrative
agency with jurisdiction over Key Bank USA, National Association or its
properties. Notice of any such determination permitting the resignation of Key
Bank USA, National Association shall be communicated to the Eligible Lender
Trustee and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Eligible Lender Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Administrator shall have assumed the responsibilities and obligations of Key
Bank USA, National Association in accordance with Section 8.02.
ARTICLE VII
THE MASTER SERVICER
SECTION 7.01. REPRESENTATIONS OF MASTER SERVICER. The Master Servicer
makes the following representations on which the Issuer is deemed to have relied
in acquiring (through the Eligible Lender Trustee) the Financed Student Loans
and appointing the Master Servicer as master servicer hereunder. The
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date, in the case of the Initial Financed Student Loans, and as
of the applicable Transfer Date, in the case of the Additional Student Loans,
but shall survive the sale, transfer and assignment of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Master Servicer is duly
organized and validly existing as a national banking association in good
standing under the laws of the United States of America, with the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to master service
the Financed Student Loans and to hold the Financed Student Loan Files as
custodian.
(b) DUE QUALIFICATION. The Master Servicer is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the master servicing of the Financed Student Loans as
required by this Agreement) shall require such qualifications.
(c) POWER AND AUTHORITY OF THE MASTER SERVICER. The Master Servicer
has the corporate power and authority to execute and deliver this Agreement and
to carry out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Master Servicer by all necessary
corporate action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Master Servicer enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally or the rights of creditors of banks
the deposit accounts of which are insured by the FDIC and subject to general
principles of equity.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under the articles of
association or by-laws of the Master Servicer, or any indenture, agreement or
other instrument to which the Master Servicer is a party or by which it shall be
bound nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement); which breach or default would reasonably
be expected to have a material adverse effect on the condition of the Master
Servicer, financial or otherwise, or adversely affect the transactions
contemplated by this Agreement; nor violate any law or, to the knowledge of the
Master Servicer, any order, rule or regulation applicable to the Master Servicer
of any court or of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Master
Servicer or its properties.
(f) NO PROCEEDINGS. There are no proceedings, or, to the Master
Servicer's best knowledge, investigations pending, or, to the Master Servicer's
best knowledge, threatened against the Master Servicer, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Master Servicer or its properties: (i) asserting
the invalidity of this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the Master
Servicer of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates or (iv) relating to the Master Servicer and which might adversely
affect the Federal or state income tax attributes of the Notes or the
Certificates.
(g) NO AMENDMENT OR WAIVER. No provision of a Financed Student Loan
has been waived, altered or modified in any respect, except pursuant to a
document, instrument or writing included in the Financed Student Loan File, and
no such amendment, waiver, alteration or modification causes such Financed
Student Loan not to conform to the other warranties contained in this Section or
those of the Seller contained in Section 3.01.
(h) LOCATION OF FINANCED STUDENT LOAN FILES. The Financed Student Loan
Files are kept in the offices of the Master Servicer (or applicable Sub-Servicer
on its behalf) specified in Schedule C hereto, or at such other office specified
in accordance with Section 3.04(b).
SECTION 7.02. INDEMNITIES OF MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Master Servicer under this Agreement.
The Master Servicer shall pay for any loss, liability or expense,
including reasonable attorney's fees, that may be imposed on, incurred by or
asserted against the Issuer, the Eligible Lender Trustee, the Indenture Trustee,
the Seller, the Administrator, the holders of Certificates or the holders of
Notes or any of the officers, directors, employees and agents of the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Administrator or the Seller
to the extent that such loss, liability or expense arose out of, or was imposed
upon any such Person through, the negligence, willful misfeasance or bad faith
of the Master Servicer (or any Sub-Servicer acting on its behalf) in the
performance of its obligations and duties under this Agreement or by reason of
the reckless disregard of its obligations and duties (of those of any
Sub-Servicer acting on its behalf) under this Agreement, where the final
determination that any such loss, liability or expense arose out of, or was
imposed upon any such Person through, any such negligence, willful misfeasance,
bad faith or recklessness on the part of the Master Servicer (or such
Sub-Servicer acting on its behalf) is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Master Servicer.
Notwithstanding the foregoing, if the Master Servicer is rendered unable, in
whole or in part, by a force outside the control of the parties hereto
(including acts of God, acts of war, fires, earthquakes and other disasters) to
satisfy its obligations under this Agreement, the Master Servicer shall not be
deemed to have breached any such obligation upon delivery of written notice of
such event to the other parties hereto, for so long as the Master Servicer
remains unable to perform such obligation as a result of such event.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Master Servicer (or any successor thereto pursuant
to Section 7.03) as Master Servicer pursuant to Section 8.01(a), or a
resignation by such Master Servicer pursuant to this Agreement, the Master
Servicer shall be deemed to be the Master Servicer pending appointment of a
successor Master Servicer pursuant to Section 8.02.
Liability of the Master Servicer under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
or the termination of this Agreement. If the Master Servicer shall have made any
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter collects any of such amounts from others, such
Person shall promptly repay such amounts to the Master Servicer, without
interest.
SECTION 7.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, MASTER Servicer. Any Person (a) into which the Master Servicer
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Master Servicer shall be a party or (c) which may
succeed to the properties and assets of the Master Servicer substantially as a
whole, shall be the successor to the Master Servicer without the execution or
filing of any document or any further act by any of the parties to this
Agreement; PROVIDED, HOWEVER, that the Master Servicer hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Master Servicer, if other than Key Bank USA,
National Association (or affiliate thereof), executes an agreement of assumption
to perform every obligation of the Master Servicer under this Agreement, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.01 shall have been breached and no event
that, after notice or lapse of time, or both, would become a Master Servicer
Default shall have occurred and be continuing, (iii) the surviving Master
Servicer, if other than Key Bank USA, National Association (or affiliate
thereof), shall have delivered to the Eligible Lender Trustee and the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Master Servicer shall have a consolidated net
worth at least equal to that of the predecessor Master Servicer, (v) unless Key
Bank USA, National Association (or affiliate thereof) is the surviving entity,
such transaction will not result in a material adverse Federal or state tax
consequence to the Issuer, the holders of Notes or the holders of Certificates
and (vi) unless Key Bank USA, National Association (or affiliate thereof) is the
surviving entity, the Master Servicer shall have delivered to the Eligible
Lender Trustee and the Indenture Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Eligible Lender
Trustee and Indenture Trustee, respectively, in the Financed Student Loans and
reciting the details of such filings, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interests.
SECTION 7.04. LIMITATION ON LIABILITY OF MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
holders of Notes or the holders of Certificates, except as provided under this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Master Servicer or any such person against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Master Servicer
and any director, officer, employee or agent of the Master Servicer may rely in
good faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any person respecting any matters arising
under this Agreement.
Except as provided in this Agreement, the Master Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Financed Student Loans in
accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, that the Master Servicer may undertake
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the holders
of Certificates under this Agreement and the holders of Notes under the
Indenture.
SECTION 7.05. KEY BANK USA, NATIONAL ASSOCIATION, NOT TO RESIGN AS
MASTER SERVICER. Subject to the provisions of Section 7.03, Key Bank USA,
National Association, shall not resign from the obligations and duties hereby
imposed on it as Master Servicer under this Agreement except upon determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of Key Bank USA, National Association, as Master Servicer shall
be communicated to the Eligible Lender Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently
with or promptly after such notice. No such resignation shall become effective
until the Indenture Trustee or a Successor Master Servicer shall have assumed
the responsibilities and obligations of Key Bank USA, National Association, as
Master Servicer in accordance with Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. MASTER SERVICER DEFAULT; ADMINISTRATOR DEFAULT. (a)
MASTER SERVICER DEFAULT. If any one of the following events (a "Master Servicer
Default") shall occur and be continuing:
(1) any failure by the Master Servicer (i) to deliver (or cause to be
delivered) to the Indenture Trustee for deposit in any of the Trust Accounts any
payment required by the Basic Documents or (ii) in the event that daily deposits
into the Collection Account are not required, to deliver (or cause to be
delivered) to the Administrator any payment required by the Basic Documents,
which failure in case of either clause (i) or (ii) continues unremedied for
three Business Days after written notice of such failure is received by the
Master Servicer from the Eligible Lender Trustee, the Indenture Trustee or the
Administrator or after discovery of such failure by an officer of the Master
Servicer; or
(2) any failure by the Master Servicer duly to observe or to perform
(or to cause to be observed or performed) in any material respect any other
covenants or agreements of the Master Servicer set forth in this Agreement or
any other Basic Document, which failure shall (i) materially and adversely
affect the rights of the holders of Notes or the holders of Certificates and
(ii) continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given (A) to the Master Servicer by the Indenture Trustee, the Eligible
Lender Trustee, or the Administrator or (B) to the Master Servicer, and to the
Indenture Trustee and the Eligible Lender Trustee by the holders of Notes or the
holders of Certificates, as applicable, representing not less than 25% of the
Outstanding Amount of the Notes or 25% of the outstanding Certificate Balance;
(3) an Insolvency Event occurs with respect to the Master Servicer; or
(4) any failure by the Master Servicer to comply with any applicable
requirements under the Higher Education Act resulting in a loss of its
eligibility, if applicable, as a third-party servicer (or the failure of the
Master Servicer to replace promptly any Sub-Servicer that has lost its
eligibility as a third-party servicer);
then, and in each and every case, so long as the Master Servicer Default shall
not have been remedied, either the Indenture Trustee, or the holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Master Servicer (and to the Indenture Trustee and
the Eligible Lender Trustee if given by the holders of Notes) may terminate all
the rights and obligations (other than the obligations set forth in Section 7.02
hereof) of the Master Servicer under this Agreement. On or after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer under this Agreement, whether with respect to the Notes, the
Certificates or the Financed Student Loans or otherwise, shall, without further
action, pass to and be vested in the Indenture Trustee or such successor Master
Servicer as may be appointed under Section 8.02; and, without limitation, the
Indenture Trustee and the Eligible Lender Trustee are hereby authorized and
empowered to execute and deliver, for the benefit of the predecessor Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Financed Student Loans and related
documents, or otherwise. The predecessor Master Servicer shall cooperate with
the successor Master Servicer, the Indenture Trustee and the Eligible Lender
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Master Servicer under this Agreement and all Sub-Servicing
Agreements, including the transfer to the successor Master Servicer of its
rights under all existing Sub-Servicing Agreements and for administration by it
of all cash amounts that shall at the time be held by the predecessor Master
Servicer for deposit, or shall thereafter be received by it with respect to a
Financed Student Loan. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with transferring the Financed Student Loan Files
to the successor Master Servicer and amending this Agreement, the Sub-Servicing
Agreements and any other Basic Documents to reflect such succession as Master
Servicer pursuant to this Section shall be paid by the predecessor Master
Servicer upon presentation of reasonable documentation of such costs and
expenses. Upon receipt of notice of the occurrence of a Master Servicer Default,
the Eligible Lender Trustee shall give notice thereof to the Rating Agencies.
Notwithstanding the foregoing, the successor Master Servicer shall have the
option to assume the rights of the predecessor Master Servicer under each
Sub-Servicing Agreement, or to enter into new Sub-Servicing Agreements with the
existing or other replacement Sub-Servicers; PROVIDED, HOWEVER, that unless the
existing Sub-Servicer is in breach of its Sub-Servicing Agreement, any and all
contractual damages, costs and expenses owed to any Sub-Servicer under the
existing Sub-Servicing Agreements by reason of such cancellation, shall be borne
by the successor Master Servicer.
(b) ADMINISTRATOR DEFAULT. If any one of the following events (an
"Administrator Default") shall occur and be continuing:
(1) (i) in the event that daily deposits into the Collection Account
are not required, any failure by the Administrator to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts any Available Funds required to
be paid on or before the Business Day immediately preceding any Monthly
Servicing Payment Date or Distribution Date, as applicable, or (ii) any failure
by the Administrator to direct the Indenture Trustee to make any required
distributions from any of the Trust Accounts, which failure in case of either
clause (i) or (ii) continues unremedied for three Business Days after written
notice of such failure is received by the Administrator from the Indenture
Trustee or the Eligible Lender Trustee or after discovery of such failure by an
officer of the Administrator; or
(2) any failure by the Administrator duly to observe or to perform in
any material respect any other covenants or agreements of the Administrator set
forth in this Agreement, the Administration Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect the rights of
the holders of Notes or the holders of Certificates and (ii) continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A) to
the Administrator by the Indenture Trustee or the Eligible Lender Trustee or (B)
to the Administrator and to the Indenture Trustee and the Eligible Lender
Trustee by the holders of Notes or the holders of Certificates, as applicable,
representing not less than 25% of the Outstanding Amount of the Notes or 25% of
the outstanding Certificate Balance; or
(3) an Insolvency Event occurs with respect to the Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee, or the holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Administrator (and to the Indenture Trustee and the
Eligible Lender Trustee if given by the holders of Notes) may terminate all the
rights and obligations (other than the obligations set forth in Section 6.04
hereof) of the Administrator under this Agreement and the Administration
Agreement. On or after the receipt by the Administrator of such written notice,
all authority and power of the Administrator under this Agreement and the
Administration Agreement, whether with respect to Notes, the Certificates or the
Financed Student Loans or otherwise, shall, without further action, pass to and
be vested in the Indenture Trustee or such successor Administrator as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee and
the Eligible Lender Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator, the Indenture Trustee and the
Eligible Lender Trustee in effecting the termination of the responsibilities and
rights of the predecessor Administrator under this Agreement and the
Administration Agreement. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with amending this Agreement and the
Administration Agreement to reflect such succession as Administrator pursuant to
this Section shall be paid by the predecessor Administrator upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice of
the occurrence of a Administrator Default, the Eligible Lender Trustee shall
give notice thereof to the Rating Agencies.
SECTION 8.02. APPOINTMENT OF SUCCESSOR. (a) Upon receipt by the Master
Servicer or the Administrator, as the case may be, of notice of termination
pursuant to Section 8.01, or the resignation by the Master Servicer or the
Administrator, as the case may be, in accordance with the terms of this
Agreement, the predecessor Master Servicer or Administrator, as the case may be,
shall continue to perform its functions as Master Servicer or Administrator, as
the case may be, under this Agreement or under this Agreement and the
Administration Agreement, as the case may be, in the case of termination, only
until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the later of (x) the date 120 days from the delivery
to the Eligible Lender Trustee and the Indenture Trustee of written notice of
such resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Master
Servicer or Administrator, as the case may be, shall become unable to act as
Master Servicer or Administrator, as the case may be, as specified in the notice
of resignation and accompanying Opinion of Counsel. In the event of the
termination hereunder of a Master Servicer or the Administrator, as the case may
be, the Issuer shall appoint a successor Master Servicer or Administrator, as
the case may be, acceptable to the Indenture Trustee, and the successor Master
Servicer or Administrator, as the case may be, shall accept its appointment by a
written assumption in form acceptable to the Indenture Trustee. In the event
that a successor Master Servicer or Administrator, as the case may be, has not
been appointed at the time when the predecessor Master Servicer or
Administrator, as the case may be, has ceased to act as Master Servicer or
Administrator in accordance with this Section, the Indenture Trustee without
further action shall automatically be appointed the successor Master Servicer or
Administrator, as the case may be, and the Indenture Trustee shall be entitled
to the applicable portion of the Master Servicing Fee or the Administration Fee,
as the case may be. Notwithstanding the above, the Indenture Trustee shall, if
it shall be unwilling or legally unable so to act, appoint or petition a court
of competent jurisdiction to appoint any established institution whose regular
business shall include the servicing of student loans, as the successor to a
Master Servicer under this Agreement or to the Administrator under this
Agreement and the Administration Agreement; PROVIDED, HOWEVER, that such right
to appoint or to petition for the appointment of any such successor Master
Servicer shall in no event relieve the Indenture Trustee from any obligations
otherwise imposed on it under the Basic Documents until such successor has in
fact assumed such appointment.
(b) Upon appointment, the successor Master Servicer or Administrator,
as the case may be (including the Indenture Trustee acting as successor Master
Servicer or Administrator, as the case may be), shall be the successor in all
respects to the predecessor Master Servicer or Administrator, as the case may
be, and shall be subject to all the responsibilities, duties and liabilities
placed on the predecessor Master Servicer or Administrator, as the case may be,
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Master Servicer or Administrator (which shall not
exceed the applicable portion of the Master Servicing Fee or the Administration
Fee, as the case may be, unless such compensation arrangements will not result
in a downgrading of Notes or the Certificates by any Rating Agency) and all the
rights granted to the predecessor Master Servicer or Administrator, as the case
may be, by the terms and provisions of this Agreement.
(c) Neither the Master Servicer nor the Administrator may resign
unless it is prohibited from serving as such by law as evidenced by an Opinion
of Counsel to such effect delivered to the Indenture Trustee and the Eligible
Lender Trustee. Notwithstanding the foregoing or anything to the contrary herein
or in the other Basic Documents, the Indenture Trustee, to the extent it is
acting as successor Master Servicer or Administrator pursuant hereto and
thereto, shall be entitled to resign to the extent a qualified successor Master
Servicer or Administrator has been appointed and has assumed all the obligations
of the Master Servicer or the Administrator, as the case may be, in accordance
with the terms of this Agreement and the other Basic Documents.
SECTION 8.03. NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon
any termination of, or appointment of a successor to, the Master Servicer or the
Administrator, as the case may be, pursuant to this Article VIII, the Eligible
Lender Trustee shall give prompt written notice thereof to the holders of
Certificates and the Indenture Trustee shall give prompt written notice thereof
to holders of Notes and the Rating Agencies (which, in the case of any such
appointment of a successor, shall consist of prior written notice thereof to the
Rating Agencies).
SECTION 8.04. WAIVER OF PAST DEFAULTS. The Controlling Noteholders
evidencing not less than a majority of the Outstanding Amount of the Controlling
Notes (or the holders of Certificates evidencing not less than a majority of the
outstanding Certificate Balance, in the case of any default which does not
adversely affect the Indenture Trustee or the holders of any Class of Notes)
may, on behalf of all the holders of Notes and the holders of Certificates,
waive in writing any default by the Master Servicer in the performance of its
obligations hereunder, and any default by the Administrator in the performance
of its obligations hereunder and under the Administration Agreement, and any
consequences thereof, except a default in making any required deposits to or
payments from any of the Trust Accounts (or giving instructions regarding the
same) in accordance with this Agreement. Upon any such waiver of a past default,
such default shall cease to exist, and any Master Servicer Default or
Administrator Default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement and the Administration Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION. (a) OPTIONAL PURCHASE OF ALL FINANCED
STUDENT LOANS. As of the last day of any Collection Period immediately preceding
a Distribution Date as of which the sum of the then outstanding Pool Balance is
5% or less of the Adjusted Initial Pool Balance, the Seller shall have the
option to purchase the Trust Estate, other than the Trust Accounts; PROVIDED,
HOWEVER, that, unless Moody's agrees otherwise, the Seller may not effect any
such purchase so long as the rating on its long-term debt obligations is less
than Baa3 by Moody's and BBB by S&P, unless the Eligible Lender Trustee and the
Indenture Trustee shall have given notice to each of the Rating Agencies and
shall have received an Opinion of Counsel to the effect that such purchase would
not constitute a fraudulent conveyance. To exercise such option, the Seller
shall deposit pursuant to Section 5.04 in the Collection Account an amount equal
to the aggregate Purchase Amount for the Financed Student Loans and the related
rights with respect thereto, plus the appraised value of any such other property
held by the Trust other than the Trust Accounts, such value to be determined by
an appraiser mutually agreed upon by the Seller and the Eligible Lender Trustee,
and shall succeed to all interests in and to the Trust; PROVIDED, HOWEVER, that
the Seller may not effect such purchase if the aggregate Purchase Amount to be
so deposited in the Collection Account does not equal or exceed an amount equal
to the sum of (i) the unpaid principal amount of the Notes then outstanding plus
accrued and unpaid interest thereon at the applicable Note Interest Rates to the
date of exercise and the amount of unpaid Noteholders' Interest Index Carryover
with respect thereto and (ii) the unpaid Certificate Balance, plus accrued and
unpaid interest thereon at the Certificate Rate to the date of exercise and the
amount of unpaid Certificateholders' Interest Index Carryover with respect
thereto.
(b) [RESERVED]
(c) AUCTION OF FINANCED STUDENT LOANS. Any Financed Student Loans
remaining in the Trust as of the end of the Collection Period immediately
preceding the November 2009 Distribution Date will be offered for sale in the
aggregate by the Indenture Trustee as either a single pool (a "Single Pool
Sale") or in two separate pools (a "Two Pool Sale") as determined by the
Administrator in its sole discretion; provided, however, that if a Coordination
Agreement requires the offering of the Access Loans to PHEAA, TERI and/or LAI,
the Indenture Trustee shall, in accordance with Section 10.06(a) of this
Agreement, offer for sale the Financed Student Loans that are Access Loans as a
single pool as part of a Two Pool Sale. KeyCorp, its affiliates, and unrelated
third parties may offer bids to purchase such Financed Student Loans on such
Distribution Date. If at least two bids are received, with respect to a Single
Pool Sale, the Indenture Trustee will solicit and resolicit bids from all
participating bidders until only one bid remains for such Financed Student Loans
or the remaining bidders decline to resubmit bids and, with respect to a Two
Pool Sale, if at least two bids are received for either pool of Financed Student
Loans, the Indenture Trustee will solicit and resolicit bids from all
participating bidders until only one bid remains with respect to each pool of
Financed Student Loans, or the remaining bidders decline to resubmit bids. The
Indenture Trustee shall, with respect to a Single Pool Sale, accept the highest
of such remaining bids from a single bidder if it is equal to or in excess of
the Minimum Purchase Amount, and with respect to a Two Pool Sale, accept the
highest of such remaining bids for each pool of Financed Student Loans, if the
sum of the such two bids is equal to or in excess of the Minimum Purchase
Amount. If (i) at least two bids are not received with respect to a Single Pool
Sale (or at least two bids for each pool of Financed Student Loans with respect
to a Two Pool Sale), or (ii) the highest bid (with respect to a Single Pool
Sale) or the combination of the highest two bids (with respect to a Two Pool
Sale), as the case may be, after the resolicitation process is completed is not
equal to or in excess of the Minimum Purchase Amount, the Indenture Trustee will
not consummate such sale. In connection with the determination of the Minimum
Purchase Amount, the Indenture Trustee may consult, and, at the direction of the
Seller, shall consult, with a financial advisor (which may be the Administrator)
to determine if the fair market value of the Financed Student Loans has been
offered. The proceeds of any such sale will be applied in the order of priority
set forth in Section 5.04(b) of the Indenture. If the sale is not consummated in
accordance with the foregoing, the Indenture Trustee may, but shall not be under
any obligation to, solicit bids to purchase the Financed Student Loans on future
Distribution Dates upon terms similar to those described above.
(d) NOTICE. As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to the
Eligible Lender Trustee and the Indenture Trustee as soon as practicable after
the Administrator has received notice thereof.
(e) SUCCESSION. Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the Notes,
the holders of Certificates will succeed to the rights of the holders of Notes
hereunder other than Section 5.06(b) and the Eligible Lender Trustee will
succeed to the rights of (except for the rights of the Indenture Trustee which
have accrued prior to the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes), and assume the
obligations of, the Indenture Trustee pursuant to this Agreement and any other
Basic Documents.
ARTICLE X
ADDITIONAL PROVISIONS REGARDING FINANCED STUDENT LOANS
SECTION 10.01. PERIODIC REPORTS. No later than the fifteenth day of
each month, and for so long as the Eligible Lender Trustee on behalf of the
Trust shall own the Financed Student Loans, the Trust shall furnish to LAI or
cause to be furnished in an electronic form suitable to LAI, a record of all
Financed Student Loans which are Access Loans (the "Record"), as of the last day
of the preceding month. The Master Servicer shall (or shall cause the applicable
Sub-Servicers to) furnish the Record to LAI on behalf of the Trust (or on behalf
of the Indenture Trustee in the event that the Indenture Trustee becomes the
owner of the Financed Student Loans) as required by this Section 10.01. The
Master Servicer, acting on behalf of the Trust, shall honor LAI's reasonable
request for additional Records, at LAI's expense. The Record shall be on a
borrower level, by loan, and shall include, but need not be limited to, the
information required to be delivered by the Seller to LAI pursuant to the second
paragraph of Section 10.7 of the 1996-1998 Coordination Agreement. The Master
Servicer acknowledges and agrees that the costs and expenses to produce and
distribute (or to cause the applicable Sub-Servicers to produce and distribute)
the Record are part of the data transfer fee payable to it pursuant to the
Servicing Fee Schedule, attached as Schedule E to this Agreement and agrees that
no additional fees will be payable by the Trust or the Administrator to produce
and deliver the Record.
In addition to the foregoing Record, the parties hereto acknowledge
and agree that LAI may obtain from the Master Servicer (or the applicable
Sub-Servicers) at the sole cost and expense of LAI such additional information
as LAI may reasonably request concerning the Financed Student Loans which are
Access Loans, including, but not limited to, information on defaults, average
principal balance, and complaints. Any such request shall be made in writing to
the Administrator, with a copy to the Eligible Lender Trustee and the Master
Servicer. The Trust shall not be obligated to incur or pay any costs or expenses
associated with the production or delivery of such additional information,
except that, if the additional information requested by LAI is contained in any
monthly or other periodic report produced by the Master Servicer (or a
Sub-Servicer acting on its behalf) and delivered to the Trust (or to the
Administrator on behalf of the Trust) pursuant to this Agreement, the Trust
shall provide a copy of such report, or excerpts therefrom, to LAI and the
Administrator shall bear all photocopying and postage charges for producing and
mailing such copy.
The Indenture Trustee agrees to assume and perform the obligations of
the Trust under this Section 10.01 in the event that the Indenture Trustee
forecloses upon its security interest in and becomes the owner of the Financed
Student Loans.
SECTION 10.02. COOPERATION. With regard to the Financed Student Loans
which are Access Loans, the Trust, the Indenture Trustee, the Eligible Lender
Trustee, the Master Servicer and the Administrator each agree to cooperate with
each other, with each applicable Sub-Servicer and LAI, with the other parties to
the Coordination Agreements and with each of their internal or external
auditors, or governmental examiners, at the expense of the party requesting such
cooperation, and to provide any information regarding origination, disbursement,
servicing, and data collection relating to such loans as reasonably requested by
the other parties, their auditors, or governmental examiners as necessary or
desirable for the performance of an audit or examination. In that regard, each
party shall make available any necessary supporting records to each other party
and shall resolve any discrepancy claimed to exist in such records to the
reasonable satisfaction of the other party within 30 days of the date that the
other party has claimed that a discrepancy exists. Notwithstanding the
foregoing, the parties acknowledge that audit reviews conducted during heavy
processing periods may disrupt such operations. Accordingly, unless a party has
reason to believe that another party is in material breach of the performance of
its obligations under this Agreement, the Administration Agreement, the Trust
Agreement or the Indenture, reviews by internal or external auditors shall only
be scheduled during the months of January, February, April, May, June,
September, October, November or December.
SECTION 10.03. CONFIDENTIALITY. Each party to this Agreement and the
Indenture Trustee agrees to maintain the confidentiality of all data, materials
and information relating to The Access Group SM Loan Program and the Financed
Student Loans entrusted to it by another party hereto or any party to any of the
Coordination Agreements. Each party also agrees not to use such data, materials
and information for any purpose other than the limited purpose of performing its
obligations under this Agreement, the Administration Agreement, the Indenture,
the Trust Agreement or the Coordination Agreements. This section shall not be
deemed to preclude the disclosure of (i) information relating to the historical
performance of the Financed Student Loans (including, but not limited to,
statistical information relating to defaults, prepayments, consolidations,
deferrals and forbearances) by the Seller or the Administrator or, with the
consent of the Administrator, by the Eligible Lender Trustee or Indenture
Trustee, (ii) such information as in any of the Master Servicer's (or any
Sub-Servicer's acting on behalf of the Master Servicer), Administrator's,
Eligible Lender Trustee's or Indenture Trustee's discretion may be required
under any of this Agreement, the Trust Agreement, the Indenture or the
Administration Agreement to be disclosed to holders of the Notes or
Certificates, (iii) such information as may be required to be disclosed under
applicable laws, rules, regulations or governmental orders, (iv) information
obtained by the Indenture Trustee in the performance of its obligations as
Indenture Trustee, provided that the Indenture Trustee shall maintain the
confidentiality of all account level and borrower level information, including
without limitation, the borrower's name, address and social security number and
the account balance and account history or (v) disclosure by LAI of information
in the Record or other information received by LAI pursuant to Section 10.01 of
this Agreement.
SECTION 10.04. FUTURE PURCHASES. The Trust, the Eligible Lender
Trustee and the Indenture Trustee each hereby agree that, in the event of any
sale or other transfer of any Financed Student Loans that are Access Loans to
any third party, the Trust, the Eligible Lender Trustee or the Indenture
Trustee, as the case may be, as seller, or the Administrator acting on their
behalf, (i) shall use reasonable efforts to obtain from the purchaser or
transferee of such Access Loans an agreement in form and substance satisfactory
to LAI pursuant to which such purchaser or transferee agrees to observe and
comply with the obligations of the parties to this Agreement under Sections
10.02 and 10.03 hereof and the obligations of the Trust, the Eligible Lender
Trustee or the Indenture Trustee, as the case may be, as seller, or the
Administrator acting on its behalf, under this clause (i) of Section 10.04
hereof and (ii) shall obtain from any such purchaser or transferee an agreement
to provide LAI with prior notice of any future sale of such Access Loans, or
portion thereof, acquired by such purchaser or transferee and an agreement to
comply with the obligations of the Trust under Section 10.01 and the obligations
of the seller under this clause (ii) of Section 10.04 and under the last
sentence of Section 10.06(a) of this Agreement (provided, however, that if the
purchaser or transferee does not retain the Master Servicer (or the related
Sub-Servicer) as servicer, the obligation to deliver "Reports" shall be
construed as an obligation to deliver reports containing information
substantially similar to the information contained in Reports).
SECTION 10.05. PRIVATE GUARANTEE FEE. The Seller acknowledges and
agrees that, with respect to the Access Loans that are "Privately Guaranteed
Loans" (as defined in the 1992, 1993-1995 and 1996-1998 Coordination Agreements)
that have not yet entered repayment and are Financed Student Loans, the Seller
retains the obligation, pursuant to Section 9.2 of the 1992, 1993-1995 and
1996-1998 Coordination Agreements, to advance to the borrower an additional
private guarantee fee equal to 2% of the original principal amount of any such
Privately Guaranteed Loan made to a student since the commencement of the
1992-1993 Law Access(R) Program through the 1995-1996 Access Group Loan Program,
and, commencing with the 1996-1998 Access Group Loan Program a fee of 4% of the
original principal amount of each LAL Loan, 3% of each GAL Loan and BEL Loan and
2% for each MAL Loan, DAL Loan and REL Loan (each such term as defined in the
1992, 1993-1995 and 1996-1998 Coordination Agreements). The proceeds of such
advances shall be remitted in accordance with the 1992, 1993-1995 and 1996-1998
Coordination Agreements and Assigned Agreements.
SECTION 10.06. BIDS/FIRST REFUSAL RIGHTS. (a) If required pursuant to
a Coordination Agreement (and only to the extent required thereunder), in
connection with any contemplated sale of any Financed Student Loans pursuant to
Section 9.02(c) of this Agreement, the Indenture Trustee, on behalf of the
Trust, shall notify PHEAA, ASA, LAI and TERI of any proposed solicitation of
bids or offers to purchase the pool of Access Loans offered for sale as part of
Two Pool Sale, such notice to be delivered not less than thirty (30) days prior
to the date upon which bids or offers are to be received by the Indenture
Trustee. Each of PHEAA, TERI and LAI shall be given an opportunity to submit a
bid or offer to purchase all such Access Loans being offered for sale within
such thirty (30) day period and if no other bid exceeds PHEAA's, TERI's or LAI's
bid and if PHEAA's, TERI's or LAI's bid, in combination with the highest bid for
the other pool of Financed Student Loans being sold, is equal to or in excess of
the Minimum Purchase Amount the Indenture Trustee, on behalf of the Trust, shall
convey such pool of Access Loans offered for sale to whichever of PHEAA, TERI or
LAI, as the case may be, submitted the highest bid. If no combination of bids
that are received pursuant to any solicitation process in connection with a Two
Pool Sale are equal to or in excess of the Minimum Purchase Amount, the
Indenture Trustee will not consummate a sale of such Financed Student Loans. The
Indenture Trustee, on behalf of the Trust, shall require any purchaser or
transferee who acquires Financed Student Loans that are Access Loans to acquire
all Financed Student Loans of a borrower owned by the Trust and not in default,
except that, with regard thereto, the Indenture Trustee, on behalf of the Trust,
may sell or transfer to a purchaser or transferee all Financed Federal Loans of
a borrower and sell or transfer to a different purchaser or transferee all
Financed Guaranteed Private Loans of the same borrower.
(b) The provisions of this Section 10.06 shall not apply to any sale
or other transfer of any Financed Student Loans to the Seller, the Administrator
or the Master Servicer (or a Sub-Servicer acting in its stead) as may be
required or permitted under this Agreement or any Guarantor in connection with
the enforcement of any applicable Guarantee Agreement. Key Bank USA, National
Association, acknowledges that if any Financed Student Loan that is an Access
Loan is reacquired by it, such Financed Student Loan shall from the time of such
reacquisition become subject to the restrictions and requirements on sale or
transfer of loans by Key Bank USA, National Association, under the applicable
Coordination Agreement.
SECTION 10.07. CONSOLIDATION LOANS. The parties to this Agreement, to
the extent applicable, hereby acknowledge and agree that, solely for purposes of
allocating consolidation loans that relate to Access Loans among lenders,
pursuant to Section 8.1 of the 1996-1998 Coordination Agreement, Section 8.1 of
the 1993-1995 Coordination Agreement, Section 8.1 of the 1992 Coordination
Agreement and any similar provision in any similar Coordination Agreement with
respect to subsequent academic years, Key Bank USA, National Association, shall
be deemed to be the owner of, and lender on, all Financed Student Loans.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENT. This Agreement may be amended by the Seller,
the Master Servicer, the Administrator and the Eligible Lender Trustee, with the
consent of the Indenture Trustee, but without the consent of any of the holders
of Notes or the holders of Certificates (which shall not be unreasonably
withheld), to cure any ambiguity, to correct or supplement any provisions in
this Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of modifying in
any manner the rights of the holders of Notes or the holders of Certificates;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Eligible Lender Trustee and the Indenture Trustee,
adversely affect in any material respect the interests of any holder of Notes or
holder of Certificates.
This Agreement may also be amended from time to time by the Seller,
the Master Servicer, the Administrator and the Eligible Lender Trustee, with the
consent of the Indenture Trustee, the consent of the Controlling Noteholders
evidencing not less than a majority of the Outstanding Amount of the Controlling
Notes, the consent of the holders of Certificates evidencing not less than a
majority of the Certificate Balance for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the holders of any Class of Notes or
the holders of Certificates; PROVIDED, HOWEVER, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments with respect to Financed Student Loans or
distributions that shall be required to be made for the benefit of the holders
of Notes or the holders of Certificates or (b) reduce the aforesaid percentage
of the Outstanding Amount of the Controlling Notes and the Certificate Balance,
holders of Controlling Notes or the holders of Certificates of which are
required to consent to any such amendment, without the consent of all
outstanding holders of all Classes of Notes and holders of Certificates.
Promptly after the execution of any such amendment or consent (or, in
the case of the Rating Agencies, five Business Days prior thereto), the Eligible
Lender Trustee shall furnish written notification of the substance of such
amendment or consent to each holder of Certificates, the Indenture Trustee and
each of the Rating Agencies.
It shall not be necessary for the consent of holders of Certificates
or holders of Notes pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall be entitled to receive
and rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 11.02(i)(1). The Eligible Lender Trustee and the Indenture Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
SECTION 11.02. PROTECTION OF INTERESTS IN TRUST. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Issuer, the Eligible Lender Trustee and the Indenture Trustee in the Financed
Student Loans and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Eligible Lender Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Master Servicer shall (nor shall the
Master Servicer permit a Sub-Servicer to) change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given the Eligible Lender Trustee and the Indenture Trustee at least five
days' prior written notice thereof and shall have promptly filed (or cause to be
filed) appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Seller and the Master Servicer shall have an obligation (and
the Master Servicer shall cause each Sub-Servicer) to give the Eligible Lender
Trustee and the Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall promptly file (or cause to be filed) any such
amendment. The Master Servicer shall (and shall cause each Sub-Servicer to) at
all times maintain each office from which it shall service Financed Student
Loans, and its principal executive office, within the United States of America.
(d) The Master Servicer shall (and shall cause the applicable
Sub-Servicer to) maintain accounts and records as to each Financed Student Loan
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Financed Student Loan, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Financed Student Loan and the amounts from time to time deposited in the
Collection Account in respect of such Financed Student Loan.
(e) The Master Servicer shall (and shall cause the applicable
Sub-Servicer to) maintain its computer systems so that, from and after the time
of sale under this Agreement of the Financed Student Loans, the Master
Servicer's (or the related Sub-Servicer's) master computer records (including
any backup archives) that refer to a Financed Student Loan shall indicate
clearly the interest of the Issuer, the Eligible Lender Trustee and the
Indenture Trustee in such Financed Student Loan and that such Financed Student
Loan is owned by the Eligible Lender Trustee on behalf of the Issuer and has
been pledged to the Indenture Trustee. Indication of the Issuer's, the Eligible
Lender Trustee's and the Indenture Trustee's interest in a Financed Student Loan
shall be deleted from or modified on the Master Servicer's (or the related
Sub-Servicer's) computer systems when, and only when, the related Financed
Student Loan shall have been paid in full or repurchased.
(f) If at any time the Seller or the Administrator shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
student loans to any prospective purchaser, lender or other transferee, the
Master Servicer shall (or shall cause the applicable Sub-Servicer to) give to
such prospective purchaser, lender or other transferee computer tapes, records
or printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Financed Student Loan, shall indicate
clearly that such Financed Student Loan has been sold and is owned by the
Eligible Lender Trustee on behalf of the Issuer and has been pledged to the
Indenture Trustee.
(g) Upon reasonable notice, the Master Servicer shall (and shall cause
the applicable Sub-Servicer to) permit the Indenture Trustee and its agents at
any time during normal business hours to inspect, audit (subject to Section
10.02 with respect to Financed Student Loans that are Access Loans) and make
copies of and abstracts from the Master Servicer's (or the related
Sub-Servicer's) records regarding any Financed Student Loan.
(h) Upon request at any time the Eligible Lender Trustee or the
Indenture Trustee shall have reasonable grounds to believe that such request
would be necessary in connection with its performance of its duties under the
Basic Documents, the Master Servicer shall (or shall cause the applicable
Sub-Servicer to) furnish to the Eligible Lender Trustee or to the Indenture
Trustee (in each case, with a copy to the Administrator), within five Business
Days, a list of all Financed Student Loans (by borrower social security number,
type of loan and date of issuance) then held as part of the Trust, and the
Administrator shall furnish to the Eligible Lender Trustee or to the Indenture
Trustee, within 20 Business Days thereafter, a comparison of such list to the
list of Initial Financed Student Loans set forth in Schedule A as of the Closing
Date, and, for each Financed Student Loan that has been added to or removed from
the pool of loans held by the Eligible Lender Trustee on behalf of the Issuer,
information as to the date as of which and circumstances under which each such
Financed Student Loan was so added or removed.
(i) The Seller shall deliver to the Eligible Lender Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement and of
each amendment thereto and on each Transfer Date, an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and the
Indenture Trustee in the Financed Student Loans, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest; and
(2) within 120 days after the beginning of each calendar year
commencing April 30, 2000, an Opinion of Counsel, dated as of a date during such
120-day period, either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and the Indenture Trustee in the Financed Student Loans, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest; PROVIDED that a single Opinion of Counsel may be delivered in
satisfaction of the foregoing requirement and that of Section 3.06(b) of the
Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify (as of the date of such opinion and given all applicable laws as in
effect on such date) any action necessary to be taken in the following year to
preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 11.03. NOTICES. All demands, notices, instructions, directions
and communications upon or to the Seller, the Administrator, the Master
Servicer, the Issuer, the Eligible Lender Trustee, the Indenture Trustee or the
Rating Agencies under this Agreement shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, (or in the form of telex
or facsimile notice, followed by written notice delivered as aforesaid) and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller, the Master Servicer or the Administrator, to Key Bank USA, National
Association, 800 Superior Avenue, Fourth Floor, Cleveland, Ohio 44114,
Attention: Key Education Resources, KeyCorp Student Loan Trust 1999-B
(telephone: (216) 828-9342; facsimile: (216) 828-9301), (b) in the case of the
Issuer or the Eligible Lender Trustee, at the Corporate Trust Office of the
Eligible Lender Trustee, (c) in the case of the Indenture Trustee, at its
Corporate Trust Office, (d) in the case of Moody's, to Moody's Investors
Service, Inc., 99 Church Street, New York, New York 10007, Attention: ABS
Monitoring Department (telephone: (212) 553-4948; facsimile: (212) 553-4600),
(e) in the case of Fitch, to Fitch IBCA, Inc., One State Street Plaza, New York,
New York 10004, (telephone: (212) 908-0500; facsimile: (212) 480-4435), and (f)
in the case of S&P to Standard & Poor's, 55 Water Street, Attention: Asset
Backed Surveillance Department (telephone (212) 438-2000; facsimile (212)
438-2649), as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 11.04. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.05 and 7.03 and as provided
in the provisions of this Agreement concerning the resignation of the Master
Servicer or the Administrator, this Agreement may not be assigned by the Seller,
the Administrator or the Master Servicer. This Agreement may only be assigned by
the Eligible Lender Trustee to its permitted successor pursuant to the Trust
Agreement.
SECTION 11.05. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Master Servicer, the
Issuer and the Eligible Lender Trustee and for the benefit of the holders of
Certificates, the Indenture Trustee and the holders of Notes, as third party
beneficiaries, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy or
claim in the Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 11.06. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.07. SEPARATE COUNTERPARTS. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.08. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10. ASSIGNMENT TO INDENTURE TRUSTEE. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
holders of the Notes of a security interest in all right, title and interest of
the Issuer in, to and under the Financed Student Loans and/or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 11.11. NONPETITION COVENANTS. (a) Notwithstanding any prior
termination of this Agreement, the Master Servicer, the Administrator and the
Seller shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Issuer, acquiesce, petition or
otherwise invoke or cause the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuer under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Master Servicer or any successor Master Servicer shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Seller, acquiesce, petition or otherwise invoke or cause the
Seller to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller under any
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.
SECTION 11.12. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND
INDENTURE TRUSTEE. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been signed by Bank One, National Association, not
in its individual capacity but solely in its capacity as Eligible Lender Trustee
of the Issuer and, subject to paragraph (d) below, in no event shall Bank One,
National Association, in its individual capacity or, except as expressly
provided in the Trust Agreement, as beneficial owner of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto as to all of which recourse shall be had
solely to the assets of the Issuer.
(b) [RESERVED]
(c) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and, except as provided in paragraph
(d) below, in no event shall Bankers Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
(d) 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 Eligible Lender Trustee or
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 Eligible Lender Trustee or 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 8.01 as a successor Master
Servicer.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
KEYCORP STUDENT LOAN TRUST 1999-B,
as Issuer,
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee on behalf of
the Trust,
By: /s/ Jeffrey L. Kinney
-------------------------
Name: Jeffrey L. Kinney
Title: Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
as Seller,
By: /s/ Darlene H. Dimitrijevs
------------------------------
Name: Darlene H. Dimitrijevs
Title: Senior Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
as Master Servicer,
By: /s/ Darlene H. Dimitrijevs
-------------------------------
Name: Darlene H. Dimitrijevs
Title: Senior Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
as Administrator,
By: /s/ Darlene H. Dimitrijevs
------------------------------
Name: Darlene H. Dimitrijevs
Title: Senior Vice President
<PAGE>
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee,
By: /s/ Jeffrey L. Kinney
------------------------------
Name: Jeffrey L. Kinney
Title: Vice President
Acknowledged, accepted, and with
respect to Article X, agreed to,
as of the day and year
first above written:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee,
By: /s/ Christopher D. Lew
-------------------------
Name: Christopher D. Lew
Title: Assistant Treasurer
Acknowledged and accepted
as of the day and year
first above written:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely in its capacity as
securities intermediary
under Section 5.01,
By: /s/ Christopher D. Lew
---------------------------
Name: Christopher D. Lew
Title: Assistant Treasurer
<PAGE>
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.
(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
"ACCESS LOANS" means those Financed Student Loans that were originated
under The Law Access(R) Program or The Access GroupSM Loan Program as
administered by LSAS or LAI.
"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.
"ADJUSTED INITIAL POOL BALANCE" means, the sum of the Pool Balance as
of the Cutoff Date, which is $742,794,276.40, plus as 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).
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of September 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 and containing the information required by Section 4.08(c).
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AMERITRUST" means Ameritrust Company National Association,
predecessor in interest to Society.
"APPLICABLE INDEX" means (1) with respect to LIBOR Indexed Securities,
Three-Month LIBOR and (2) with respect to Treasury Indexed Securities, the
T-Bill Rate.
"APPLICABLE NOTE MARGIN" means with respect to the Class A-1 Notes,
0.28%, with respect to the Class A-2 Notes, 0.43% and with respect to the Class
M Notes, 0.70%.
"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 TERI and the Seller (as successor to Ameritrust), (ii)
the Security Agreement dated as of January 28, 1992, between TERI and the Seller
(as successor to Ameritrust), (iii) the Letter Agreement dated as of January 28,
1992, between LSAS and the Seller (as successor to Ameritrust), (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 TERI, and (vi) the Private Guarantee Agreement dated as
of March 23, 1995, among the Seller, TERI, Society National Bank, Indiana, and
Wilmington Trust Company, (vii) the Consolidated Deposit Agreement and
Consolidated Security Agreement each dated November 1, 1995 between TERI and
Society, (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, Society and Seller,
respectively; and (ix) the Pledged Collateral Account Control Agreement dated as
of January 1, 1999, among TERI, Seller and McDonald Investments Inc., a
wholly-owned subsidiary of KeyCorp, all 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 (ix) above.
"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),
(iv) with respect to the Master Servicer, any officer of the Master Servicer or
any of its Affiliates who is authorized to act for the Master Servicer in
matters relating to or to be acted upon by the Master Servicer pursuant to the
Basic Documents and who is identified on the list of Authorized Officers
delivered by the Master Servicer to the Indenture Trustee on the Closing Date
(as such list may be modified or supplemented from time to time thereafter), and
(v) with respect to any Sub-Servicer, any officer of the Sub-Servicer or any of
its Affiliates who is authorized to act for such Sub-Servicer in matters
relating to or to be acted upon by the Sub-Servicer, pursuant to the applicable
Sub-Servicing Agreement, and who is identified on the list of Authorized
Officers delivered by such Sub-Servicer to the Master Servicer 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:
(i) all collections received by the Master Servicer (or any
Sub-Servicer acting on its behalf) 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, (y) any applicable
administrative fees, late fees or similar fees received from a borrower,
and (z) 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 the Master Servicer
(or any Sub-Servicer acting on its behalf) under an obligation which arose
during the elapsed portion of such Collection Period;
(v) the aggregate amounts, if any, received from the Seller or the
Master Servicer (or any Sub-Servicer acting on its behalf), 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;
(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 Class M 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 Noteholders' Interest Distribution Amount with respect to the Class M
Notes for such Distribution Date, and (3) 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, (A) in
the case of clause (1) above such items, (B) in the case of clause (2)
above, such Noteholders' Interest Distribution Amount and (C) in the case
of clause (3) 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 Administration Agreement, the Certificate
Depository Agreement, the Note Depository Agreement, the Guarantee Agreements,
the Cap Agreement, 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.
"CALCULATED POOL BALANCE" means, at any time, the aggregate principal
balance of the Financed Student Loans, or specified subset thereof, at the
Cutoff Date, Subsequent Cutoff Date or Statistical Cutoff Date, as specified
(including accrued interest thereon at such date to the extent such interest
will be capitalized upon commencement of repayment).
"CAP ACCOUNT" means the account designated as such, established and
maintained pursuant to Section 5.01 of the Sale and Servicing Agreement.
"CAP AGREEMENT" means that certain interest rate protection agreement,
dated as of September 30, 1999, between the Trust and the Cap Provider as
documented according to a 1992 ISDA Master Agreement (Multicurrency--Cross
Border), modified to reflect the terms of the Notes, the Certificates, the Basic
Documents and the related confirmation.
"CAP PROVIDER" means Key Bank USA, National Association in its
capacity as a party to the Cap Agreement.
"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 CAP FUNDS" means, with respect to any Distribution Date
the lesser of (x) the Certificate Cap Payment relating to such Distribution Date
and (y) the amount of funds remaining on deposit in the Cap Account on such
Distribution Date after giving effect to the application of such funds pursuant
to Sections 5.05(c)(x) and 5.05(c)(xi) of the Sale and Servicing Agreement on
such Distribution Date.
"CERTIFICATE CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal to (x) the
positive difference, if any, between (1) the amount, if any, by which the amount
of interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Certificates minus (2) the amount of Available Funds, if any,
remaining to pay the Certificateholders' Interest Index Carryover on such
Distribution Date pursuant to Section 5.05(c)(xii) of the Sale and Servicing
Agreement plus (y) interest calculated at the Formula Rate for the Certificates
due but unpaid by the Cap Provider under clause (x).
"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.
"CERTIFICATE MARGIN" means 0.90%.
"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-Bill Indexed Securities, the weighted average of the
T-Bill 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) the Certificate Margin and (ii) the Student Loan Rate for such Interest
Period. The interest rate per annum for any Certificates that are T-Bill 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 September 30, 1999 between the Seller and the
Underwriters.
"CERTIFICATEHOLDER" means a Person in whose name a Certificate is
registered in the Certificate Register.
"CERTIFICATEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the Certificateholders' Interest Distribution Amount for such
Distribution Date plus, for each Distribution Date on and after 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, 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-Bill Rate, if such Certificates are T-Bill 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-Bill Rate in the case
of T-Bill Indexed Securities or Three-Month LIBOR, in the case of LIBOR Indexed
Securities plus the Certificate Margin); 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)(xii) 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 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" means reference to any of the Class A-1, Class A-2 or Class M
Notes, or the Certificates, as applicable.
"CLASS A CAP FUNDS" means, with respect to any Distribution Date the
lesser of (x) the sum of the Class A-1 Cap Payment and the Class A-2 Cap Payment
relating to such Distribution Date and (y) the amount of funds on deposit in the
Cap Account on such Distribution Date.
"CLASS A-1 CAP PAYMENT" means with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal to (x) the
positive difference, if any, between (1) the amount, if any, by which the amount
of interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Class A-1 Notes minus (2) the amount of Available Funds, if any,
remaining to pay the Noteholders' Interest Index Carryover with respect to the
Class A-1 Notes on such Distribution Date pursuant to Section 5.05(c)(x)(1) of
the Sale and Servicing Agreement for the Class A-1 Notes for such Interest
Period plus (y) interest calculated at the Formula Rate for the Class A-1 Notes
on any amounts due but unpaid by the Cap Provider under clause (x).
"CLASS A-2 CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal to (x) the
positive difference, if any, between (1) the amount, if any, by which the amount
of interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Class A-2 Notes minus(2) the amount of Available Funds, if any,
remaining to pay the Noteholders' Interest Index Carryover with respect to the
Class A-2 Notes on such Distribution Date pursuant to Section 5.05(c)(x)(1) of
the Sale and Servicing Agreement plus (y) interest calculated at the Formula
Rate for the Class A-2 Notes due but unpaid by the Cap Provider under clause
(x).
"CLASS M CAP FUNDS" means with respect to any Distribution Date the
lesser of (x) the Class M Cap Payment relating to such Distribution Date and (y)
the amount of funds remaining on deposit in the Cap Account on such Distribution
Date after giving effect to the application of such funds pursuant to Sections
5.05(c)(x) of the Sale and Servicing Agreement on such Distribution Date.
"CLASS M CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal (x) the positive
difference, if any, between (1) the amount, if any, by which the amount of
interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Class M Notes minus (2) the amount of Available Funds, if any,
remaining to pay the Noteholders' Interest Index Carryover with respect to the
Class M Notes on such Distribution Date pursuant to Section 5.05(c)(xi)(1) of
the Sale and Servicing Agreement plus (y) interest calculated at the Formula
Rate for the Class M Certificates due but unpaid by the Cap Provider under
clause (x).
"CLASS A NOTES" means the Class A-1 Notes and Class A-2 Notes.
"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.
"CLASS M INTEREST SUBORDINATION EVENT" means the second consecutive
Distribution Date that the outstanding principal balance of the Class A Notes
(after giving effect to any amounts to be distributed on such Distribution Date
to the holders of the Class A Notes pursuant to either Section 5.05(c) (viii) of
the Sale and Servicing Agreement or Section 5.04(c) (viii) of the Indenture, as
applicable) is in excess of the Note Collateralization Amount.
"CLASS M NOTE" means a Floating Rate Class M Note issued pursuant to
the Indenture, substantially in the form of Exhibit A-3 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 September 30, 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 with respect to the Initial
Financed Student Loans, or the Subsequent Cutoff Date with respect to Subsequent
Pool Student Loans, as applicable, and ending on January 31, 2000 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.
"CONSOLIDATION LOANS" means Federal Consolidation Loans and Private
Consolidation Loans, collectively.
"CONTROLLING NOTES" means the Class A Notes, or if the Class A Notes
have been paid in full, the Class M Notes.
"CONTROLLING NOTEHOLDERS" means the holders of the Class A Notes or if
the Class A Notes have been paid in full, the holders of the Class M Notes.
"COORDINATION AGREEMENTS" means the following agreements, as the same
may be amended and restated from time to time, (i) the Coordination Agreement,
dated as of February 15, 1990, as amended, by and among LAI (as successor to
LSAS), PHEAA, ASA, TERI and Society (as successor by merger to Ameritrust) (the
"1990 Coordination Agreement"); (ii) the Coordination Agreement, dated as of
January 4, 1991, as amended, by and among LAI (as successor to LSAS), PHEAA,
ASA, TERI and Society (as successor by merger to Ameritrust) (the "1991
Coordination Agreement"); (iii) the Coordination Agreement, dated as of January
28, 1992, as amended, by and among LAI (as successor to LSAS), PHEAA, ASA, ELSI,
TERI and Society (as successor by merger to Ameritrust) (the "1992 Coordination
Agreement"); (iv) the Coordination Agreement, dated as of December 21, 1992, as
amended, by and among LAI (as successor to LSAS), PHEAA, ASA, ELSI, TERI and
Society (the "1993-1995 Coordination Agreement"); and (v) the Coordination
Agreement, dated as of March 23, 1995, as amended, by and among LAI, PHEAA, ASA,
TERI and Society (the "1996-1998 Coordination Agreement").
"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 Albany Street, 10th Floor, New York, New
York 10006, Attention: Corporate Trust and Agency Group, Structured Finance Team
(telephone: (212) 250-6595; facsimile: (212) 250-6439) 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 1 Bank One Plaza, Suite IL1-0126, Chicago, Illinois
60670, Attention: Corporate Trust Administration (telephone: (312) 407-1892;
facsimile: (312) 407-1708); 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).
"CSAC means the California Student Aid Commission, an agency of the
State of California.
"CUTOFF DATE" means (i) with respect to the Initial Pool 1 Student
Loans, September 1, 1999, and (ii) with respect to the Initial Pool 2 Student
Loans, September 27, 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.
"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;
(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;
(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.
"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-fifth day of each February, May, August and November or, if such day is
not a Business Day, the immediately following Business Day, commencing on
February 25, 2000.
"DTC" means the Depository Trust Company, a New York corporation.
"ECMC" means Educational Credit Management Corporation, a Minnesota
corporation.
"ELSI" means Education Loan Services, Inc., a Massachusetts
corporation.
"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 Moody's, (ii) either (A) a long term
senior unsecured debt rating of AAA by S&P or (B) a short-term senior unsecured
debt rating A-1+ by S&P, and (iii) if rated by Fitch (A) a long term senior
unsecured debt rating of AAA by Fitch and (B) short-term senior of F-1+ by
Fitch, or any other long-term, short-term or certificate of deposit rating
acceptable to the Rating Agencies, 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 Moody's in the highest
investment category granted thereby and, if rated by S&P and/or Fitch, in
the highest investment category granted by S&P and/or Fitch, respectively;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Moody's in the
highest investment category granted thereby and, if rated by S&P and/or
Fitch, in the highest investment category granted by S&P and/or Fitch,
respectively;
(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 Moody's of Aaa, if rated by S&P from S&P of
AAAm or AAAm-G, or 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, PROVIDED, HOWEVER,
that notice of investment in such repurchase obligations, setting forth the
amount and type of each such repurchase obligation, shall be given to each
Rating Agency; 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 Bank One, National Association, 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.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"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, but (y) with respect to Federal
Consolidation Loans for which applications were received on or after October 1,
1998 but before February 1, 1999, equal to 0.62% per annum, in each case on the
outstanding balance of such Federal Consolidation Loan.
"FEDERAL GUARANTOR" means, collectively, PHEAA, ASA, CSAC, ECMC, HESC,
NSLP and USAF.
"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-BILL 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 August
2007 Distribution Date, (ii) for the Class A-2 Notes the August 2027
Distribution Date, (iii) for the Class M Notes, the August 2029 Distribution
Date, and (iv) for the Certificates, the November 2036 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, CSAC,
ECMC, HESC, NSLP or USAF and are reinsured by the Department.
"FINANCED GUARANTEED LOANS" means the collective reference to the
Financed Federal Loans and the Financed Guaranteed Private Loans.
"FINANCED GUARANTEED PRIVATE LOANS" means those Financed Student Loans
that are guaranteed as to the payment of principal and interest by TERI or HICA
and are not reinsured by the Department or any other governmental entity.
"FINANCED PRIVATE LOANS" means the collective reference to Financed
Guaranteed Private Loans and Financed Unguaranteed Private Loans.
"FINANCED STUDENT LOAN" means the collective reference to the Initial
Financed Student Loans and the Additional Student Loans.
"FINANCED STUDENT LOAN FILES" means the documents specified in Section
3.03 of the Sale and Servicing Agreement.
"FINANCED UNGUARANTEED PRIVATE LOANS" means those Financed Student
Loans that are not guaranteed as to the payment of principal or interest by any
federal or private guarantor, or by any other party or governmental agency,
including, without limitation, the Seller.
"FORMULA RATE" means for any Interest Period (1) with respect to the
Class A-1 Notes, the Applicable Index plus the Applicable Note Margin, (2) with
respect to the Class A-2 Notes, the Applicable Index plus the Applicable Note
Margin, (3) with respect to the Class M Notes, the Applicable Index plus the
Applicable Note Margin and (4) with respect to the Certificates, the Applicable
Index plus the Certificate Margin.
"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
Master 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
November 2001 Distribution Date.
"GRADUATE LOAN PROGRAMS" means the loan programs, under which the
Seller made 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 grant a lien 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.
"GREAT LAKES" means Great Lakes Educational Loan Services, Inc. a
Wisconsin corporation.
"GREAT LAKES SUB-SERVICING AGREEMENT" means the Subservicing
Agreement, dated as of September 1, 1999, between Great Lakes and the Master
Servicer.
"GUARANTEE AGREEMENTS" means (i) in the case of PHEAA, the Lender
Agreement for Guarantee of Student Loans With Federal Reinsurance and the Lender
Participation Agreement for Consolidation Loans, in each case dated as of July
28, 1999, between PHEAA and the Eligible Lender Trustee on behalf of the Issuer,
(ii) in the case of ASA, the Holder Guarantee Agreement dated as of July 28,
1999, between ASA and the Eligible Lender Trustee on behalf of the Issuer, (iii)
in the case of CSAC, the Agreement dated as of July 28, 1999, between CSAC and
the Eligible Lender Trustee on behalf of the Issuer, (iv) in the case of ECMC,
the Agreement dated as of July 28, 1999, between ECMC and the Eligible Lender
Trustee on behalf of the Issuer, (v) in the case of HESC, the Loan Guarantee
Agreement dated as of July 28, 1999, between HESC and the Eligible Lender
Trustee on behalf of the Issuer, (vi) in the case of NSLP, the Lender Agreement
for Guarantee of Student Loans With Federal Reinsurance and the Lender Agreement
for Guarantee of Federal Consolidation Loans with Federal Reinsurance, each
dated as of July 28, 1999 between NSLP and the Eligible Lender Trustee on behalf
of the Issuer, (vii) in the case of USAF, the USA Group Master Loan Agreement
dated as of July 28, 1999, between USAF and the Eligible Lender Trustee on
behalf of the Issuer, (viii) in the case of TERI, the Guarantee Agreement dated
as of July 28, 1999, among TERI, the Seller and the Eligible Lender Trustee on
behalf of the Issuer and (ix) in the case of HICA, the Second Endorsement to
Alternative Dental Educational Assistance Loan Surety Bond Numbers 1994-A,
1994-B, 1995-A and 1996-A dated as of July 28, 1999 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, collectively, PHEAA, ASA, CSAC, HESC, ECMC, NSLP,
USAF, TERI and HICA.
"HESC" means the New York State Higher Education Services Corporation,
an educational corporation created by an act of the Legislature of the State of
New York.
"HICA" means HEMAR Insurance Company of America, a South Dakota
corporation.
"HICA TRIGGER EVENT" means, on any Distribution Date, when the
cumulative Realized Losses on any of the Guaranteed Private Loans that are
guaranteed by HICA exceeds 20% of the Initial Financed Student Loan Pool Balance
consisting of all Guaranteed Private Loans that are guaranteed by HICA;
provided, however, that a HICA Trigger Event shall not have occurred if HICA is
continuing to pay claims with respect to all Guaranteed Private Loans guaranteed
by HICA.
"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 September 1, 1999, between
the Issuer and the Indenture Trustee.
"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 $65,000,000.
"INITIAL FINANCED STUDENT LOANS" means collectively, the Initial Pool
1 Student Loans and Initial Pool 2 Student Loans.
"INITIAL FINANCED STUDENT LOAN POOL BALANCE" means, at any time, the
Calculated Pool Balance of the Financed Student Loans, or specified subset
thereof, as of the related Cutoff Date (in the case of the Initial Financed
Student Loans, or specified subset thereof) or the related Subsequent Cutoff
Date (with respect to Additional Student Loans or specified subset thereof).
"INITIAL POOL 1 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of Initial Pool 1 Student Loans on the
Closing Date as set forth in part I of Schedule A to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape),
which student loans the Seller shall transfer to the Eligible Lender Trustee on
behalf of the Issuer pursuant to the Sale and Servicing Agreement on the Closing
Date.
"INITIAL POOL 2 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of Initial Pool 2 Student Loans on the
Closing Date as set forth in part II of Schedule A to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape),
which student loans the Seller shall transfer to the Eligible Lender Trustee on
behalf of the Issuer pursuant to the Sale and Servicing Agreement on the Closing
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 AND EXPENSE DRAW" means any withdrawals from the Reserve
Account pursuant to Sections 5.06(b)(i) through (b)(vii) of the Sale and
Servicing Agreement.
"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 November 26, 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 November 26,
1999 to but excluding February 25, 2000 (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.
"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-B 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.
"LAI" means Law Access, Inc., a non-stock corporation organized under
the laws of the State of Delaware, and the successor in interest to LSAS.
"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 November 26, 1999, and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26, 1999 to
but excluding February 25, 2000. For purposes of this definition a "Business
Day" is any day on which banks in London and New York City are open for the
transaction of business.
"LIBOR INDEXED SECURITIES" means the Class A-1 Notes, the Class A-2
Notes, the Class M Notes and the Certificates.
"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 Master Servicer (or any Sub-Servicer acting on its behalf) or
which the Master Servicer (or any Sub-Servicer acting on its behalf) 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 or Guarantee Payments received, net of the sum of any amounts
expended by the Master Servicer (or any Sub-Servicer acting on its behalf) 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.
"LSAS" means the Law School Admission Services, Inc.
"MASTER SERVICER" means Key Bank USA, National Association, a national
banking association.
"MASTER SERVICER DEFAULT" means an event specified in Section 8.01(a)
of the Sale and Servicing Agreement.
"MASTER SERVICING FEE" has the meaning specified in the Servicing Fee
Schedule attached to the Sale and Servicing Agreement as Schedule E.
"MAXIMUM TERI PAYMENTS AMOUNT" means an amount equal to 19% of the
Adjusted 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-fifth day of each
calendar month, or, if such day is not a Business Day, the immediately following
Business Day, commencing on October 25, 1999.
"MOODY'S" means Moody's 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.
"NON-GUARANTEED GRADUATE PRIVATE LOANS" means the Non-Guaranteed
Private Loans that have been made to graduate students.
"NON-GUARANTEED PRIVATE GRADUATE LOAN TRIGGER EVENT" means, on any
Distribution Date, when the cumulative Realized Losses on the Non-Guaranteed
Graduate Private Loans exceeds 20% of the Initial Financed Student Loan Pool
Balance consisting of all Non-Guaranteed Graduate Private Loans.
"NON-GUARANTEED PRIVATE UNDERGRADUATE LOAN TRIGGER EVENT" means, on
any Distribution Date, when cumulative Realized Losses net of subsequent
Recoveries with respect to the Non-Guaranteed Undergraduate Private Loans
exceeds 15% of the Initial Financed Student Loan Pool Balance with respect to
all Non-Guaranteed Undergraduate Private Loans.
"NON-GUARANTEED UNDERGRADUATE PRIVATE LOANS" means the Non-Guaranteed
Private Loans that have been made to undergraduate students.
"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, and (iii) 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-Bill
Indexed Securities, the weighted average of the T-Bill 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-Bill 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 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 November 26, 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 November 26,
1999 to but excluding February 25, 2000 (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 November 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 September 30, 1999 between the Seller and the Underwriters.
"NOTEHOLDER" means the Person in whose name a Note is registered in
the Note Register.
"NOTEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of the aggregate Noteholders' Interest Distribution
Amount with respect to each Class of Notes 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 (1) the weighted
average of the Note Interest Rates for the Class A Notes and (2) the Note
Interest Rate for the Class M Notes, in the case of the Class M Notes, in each
case, from such preceding Distribution Date to the current Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date and any Class of Notes, 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 such Class of Notes on the
immediately preceding Distribution Date after giving effect to all principal
distributions to such 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 class and such Distribution Date;
provided, that the Noteholders' Interest Distribution Amount will not include
any Noteholders' Interest Index Carryover for such class.
"NOTEHOLDERS' INTEREST INDEX CARRYOVER" means, with respect to any
Distribution Date and any Class of Notes as to which the Note Interest Rate for
such Class of 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 Class of Notes that would have accrued in respect of the related Interest
Period had interest been calculated based on the T-Bill Rate, if such Class of
Notes are T-Bill Indexed Securities or Three-Month LIBOR if such Notes are LIBOR
Indexed Securities, in each case, plus the Applicable Note Margin, over (b) the
amount of interest on such Class of 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-Bill Rate, in the case of T-Bill Indexed Securities or Three-Month LIBOR, in
the case of LIBOR Indexed Securities plus the Applicable Note Margin); PROVIDED,
HOWEVER, that on the Final Maturity Date for such Class of Notes, the
Noteholders' Interest Index Carryover for such Class of Notes will be equal to
the lesser of (i) the Noteholders' Interest Index Carryover for such Class of
Notes 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 Class
of Notes on such date pursuant to 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 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 and Class M Notes will include the amount required to reduce the
outstanding principal balance of the Class A-2 Notes and Class M Notes to zero.
In the event that on two consecutive Distribution Dates 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.
"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, Class A-2 Notes and Class M Notes.
"NSLP" means the Nebraska Student Loan Program, a Nebraska
corporation.
"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, (iii) in the case of the Master Servicer, a
certificate signed by any two Authorized Officers of the Master Servicer and
(iv) in the case of any Sub-Servicer, a certificate signed by any two Authorized
Officers of such Sub-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
acceptable 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, (ii) with respect to the
Seller, the Administrator or the Master Servicer, one or more written opinions
of counsel who may be an employee of or counsel to the Seller, the Administrator
or the Master Servicer, which counsel shall be acceptable to the Indenture
Trustee, the Eligible Lender Trustee or the Rating Agencies, as applicable, and
(iii) with respect to the a Sub-Servicer, one or more written opinions of
counsel who may be an employee of or counsel to Sub-Servicer, which counsel
shall be acceptable to the Master Servicer.
"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 may be in the form of microfiche or computer tape) and each
such Schedule A shall also be deemed to be a supplement to part III of Schedule
B to the Sale and Servicing Agreement.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Noteholders thereof (PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
PROVIDED that in determining whether the Noteholders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
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.
"PARITY DATE" means the Distribution Date on which the aggregate
principal balance of the Notes and Certificates (after giving effect to all
distributions pursuant to Section 5.05(c) of the Sale and Servicing Agreement)
equals the sum of the Pool Balance and amounts on deposit in the Pre-Funding
Account as of the last day of the related Collection Period.
"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 SUB-SERVICING AGREEMENT" means the Subservicing Agreement,
dated as of September 1, 1999, between PHEAA and the Master Servicer.
"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 Master Servicer (or any Sub-Servicer
acting on its behalf), (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, (iii) for the Class M Notes, a seven-digit decimal figure
equal to the outstanding principal balance of the Class M Notes divided by the
original outstanding principal balance of the Class M Notes, and (iv) 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 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 that is guaranteed, 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.
"PRIVATE GRADUATE LOAN TRIGGER EVENT" means, on any Distribution Date,
when: (1) a TERI Trigger Event, (2) a HICA Trigger Event, or (3) a
Non-Guaranteed Private Graduate Loan Trigger Event shall have occurred.
"PRIVATE GUARANTOR" means, collectively, HICA and TERI.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PROGRAMS" means the Graduate Loan Programs and Undergraduate 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, 100% of the amount required to prepay in full the
respective Financed Student Loan, if it is an Initial Financed Student Loan,
100% 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 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 expected to be capitalized upon entry into repayment 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 the Master
Servicer (or any Sub-Servicer acting on its behalf) 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 Moody's, S&P 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, the Master Servicer and each
Sub-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 none of
the Rating Agencies shall have notified the Seller, the Master Servicer, 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 LOSS AMOUNT" means (1) with respect to any Distribution Date
prior to the Parity Date an amount equal to the positive difference of any of
(x) the sum of the Pool Balance and amounts on deposit in the Pre-Funding
Account as of the last day of the second preceding Collection Period (or, in the
case of the First Distribution Date, as of the Cutoff Date), minus the sum of
the Pool Balance and amounts on deposit in the Pre-Funding Account as of the
last day of the related Collection Period, minus (y) the amount of Available
Funds remaining to be distributed as Noteholders' Principal Distribution Amount
on such Distribution Date pursuant to Section 5.05(c)(viii) of the Sale and
Servicing Agreement or, if the outstanding principal balance of Notes has been
reduced to zero, Certificateholders' Principal Distribution Amount on such
Distribution Date pursuant to Section 5.05(c)(ix) of the Sale and Servicing
Agreement and (2) with respect to any Distribution Date on and after the Parity
Date, an amount equal to (A) the Noteholders' Principal Distribution Amount for
such Distribution Date or, if the outstanding principal balance of the Notes has
been reduced to zero, the Certificateholders' Principal Distribution Amount for
such Distribution Date minus (B) the amount of Available Funds remaining to be
distributed as Noteholders' Principal Distribution Amount on such Distribution
Date pursuant to Section 5.05(c)(viii) of the Sale and Servicing Agreement or,
if the outstanding principal balance of the Notes has been reduced to zero,
Certificateholders' Principal Distribution Amount on such Distribution Date
pursuant to Section 5.05(c)(ix) of the Sale and Servicing Agreement.
"REALIZED LOSS DRAW" means with respect to any Distribution Date, the
amount of any withdrawal from the Reserve Account on such Distribution Date
pursuant to Section 5.06(b)(viii) of the Sale and Servicing Agreement.
"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-fourth 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 Collection Period in which such Financed Student Loan
became a Liquidated Student Loan, net of the sum of any amounts expended by the
Master Servicer (or any Sub-Servicer acting on its behalf) 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.
"REMOTE TIME-SHARING SERVICES PROGRAM" means the various services and
programs made available by PHEAA to the Seller pursuant to the Society RT-SS
Agreement.
"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 $17,500,000.00.
"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
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.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of September 1, 1999 among the Issuer, the Seller, the Administrator,
the Eligible Lender Trustee and the Master Servicer.
"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
or computer tape), 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, Class M 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 Financed Student Loan.
"SERVICER'S REPORT" means any report of the Master Servicer (or any
Sub-Servicer acting at the direction of the Master Servicer) delivered pursuant
to Section 4.08(a) or (b) of the Sale and Servicing Agreement, substantially in
the form acceptable to the Administrator.
"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.
"SOCIETY" means Society National Bank, predecessor in interest to the
Seller and successor in interest to Ameritrust.
"SOCIETY/PHEAA SERVICING AGREEMENT" means (i) the Servicing Agreement,
dated March 23, 1995, by and between PHEAA and Seller, as amended from time to
time and including all servicing schedules and other exhibits, or (ii) after the
expiration of the agreement described in clause (i), the then current service
agreement (including all servicing schedules) between Seller and PHEAA pursuant
to which PHEAA services student loans owned by Seller, or if no such service
agreement exists, the last such service agreement to be in existence, and any
references to specific sections of the Society/PHEAA Servicing Agreement shall
mean the sections of the agreement described in clause (i) of this definition or
the substantially similar provisions of the relevant agreement described in
clause (ii) of this definition
"SOCIETY RT-SS AGREEMENT" means (i) the Remote Time-Sharing Services
Agreement, dated January 28, 1992, by and between PHEAA and Society, as amended
from time to time, relating to certain Financed Student Loans, or (ii) after the
expiration of the agreement described in clause (i), the then current agreement
relating to the provision of remote time-sharing services between PHEAA and the
Seller, or if no such agreement exists, the last such agreement to be in
existence; and any references to specific sections of the Society RT-SS
Agreement shall mean the sections of the agreement described in clause (i) of
this definition or the substantially similar provisions of the relevant
agreement described in clause (ii) of this definition.
"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 December 24, 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 November 2009 Distribution Date, the Specified Collateral Balance will be
zero. Following the occurrence and during the continuation of a Trigger Event,
the Specified Collateral Balance will be zero.
"SPECIFIED RESERVE ACCOUNT BALANCE" means with respect to any
Distribution Date an amount equal to the greater of (i) 1.75% of the aggregate
outstanding principal and (ii) $2 million; provided, however, that in no event
will such balance exceed the sum of the outstanding principal amount of the
Notes and the outstanding principal balance of the Certificates.
"STAFFORD LOAN" means a Financed Federal Loan designated as such that
is made under the Federal Stafford Loan Program in accordance with the Higher
Education Act.
"STATE" means any one of the 50 States of the United States of America
or the District of Columbia.
"STATISTICAL CUTOFF DATE" means, with respect to the Initial Financed
Student Loans, September 1, 1999 and, with respect to the Subsequent Pool
Student Loans, August 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 Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
"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 collectively, the Subsequent
Pool 1 Student Loans and the Subsequent Pool 2 Student Loans.
"SUBSEQUENT POOL 1 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of the Subsequent Pool 1 Student Loans on
the Closing Date as set forth in part I to Schedule B to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape), as
such schedule may be amended or supplemented, 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.
"SUBSEQUENT POOL 2 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of the Subsequent Pool 2 Student Loans on
the Closing Date as set forth in part II to Schedule B to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape), as
such schedule may be amended or supplemented, 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.
"SUB-SERVICER" initially means each of PHEAA, in its capacity as
sub-servicer of the Financed Student Loans it services on behalf of the Master
Servicer pursuant to the PHEAA Sub-Servicing Agreement, and Great Lakes, as
sub-servicer of the Financed Student Loans it services on behalf of the Master
Servicer pursuant to the Great Lakes Sub-Servicing Agreement, as applicable, and
such other Sub-Servicers as may, from time to time, be appointed by the Master
Servicer as Sub-Servicers in accordance with the provisions of Section 4.13 of
the Sale and Servicing Agreement.
"SUCCESSOR ADMINISTRATOR" has the meaning specified in Section 3.07(e)
of the Indenture.
"SUCCESSOR MASTER SERVICER" has the meaning specified in Section
3.07(e) of the Indenture.
"T-BILL INDEXED SECURITIES" means none.
"T-BILL 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 Bill
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-Bill 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-Bill Rate shall
be subject to a Lock-In Period of six Business Days.
"TELERATE PAGE 3750" means the display page so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices) or such
comparable page on a comparable service.
"TERI" means The Education Resources Institute, Inc., a Massachusetts
non-profit corporation.
"TERI TRIGGER EVENT" means, on any Distribution Date, when the
cumulative Realized Losses on any of the Guaranteed Private Loans that are
guaranteed by TERI exceeds 20% of the Initial Financed Student Loan Pool Balance
consisting of all Guaranteed Private Loans that are guaranteed by TERI;
provided, however, that a TERI Trigger Event shall not have occurred if TERI is
continuing to pay claims with respect to all Guaranteed Private Loans guaranteed
by TERI.
"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 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.
"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 Section
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.
"TRIGGER EVENT" means, on any Distribution Date, when: (1) a
Non-Guaranteed Private Undergraduate Loan Trigger Event has occurred, or (2) a
Private Graduate Loan Trigger Event has occurred; provided, however, that if all
three Ratings Agencies consent in writing, no Trigger Event shall have occurred
with respect to such Distribution Date.
"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 Trust Agreement dated as of September 1,
1999 as amended and restated by the Amended and Restated Trust Agreement dated
as of September 1, 1999, each 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 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 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.
"UNDERGRADUATE LOAN PROGRAMS" means the "Key Alternative Loan
Program," pursuant to which the Seller made loans to students enrolled in
approved or accredited undergraduate institutions.
"USAF" means United Student Aid Fund, Inc., an Indiana corporation.
"UNDERWRITERS" shall mean Credit Suisse First Boston Corporation and
McDonald Investments Inc., a wholly-owned subsidiary of KeyCorp.
"UNDERWRITING AGREEMENT" shall mean the Note Underwriting Agreement or
the Certificate Underwriting Agreement, as applicable.
<PAGE>
SCHEDULE A
TO THE
SALE AND SERVICING AGREEMENT
PART I
SCHEDULE OF INITIAL POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee.
PART II
SCHEDULE OF INITIAL POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
<PAGE>
SCHEDULE B
TO THE
SALE AND SERVICING AGREEMENT
PART I
SCHEDULE OF SUBSEQUENT POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee
PART II
SCHEDULE OF SUBSEQUENT POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
PART III
SCHEDULE OF OTHER SUBSEQUENT STUDENT LOANS
To be included on Schedule A to each related Transfer Agreement.
<PAGE>
SCHEDULE C
TO THE
SALE AND SERVICING AGREEMENT
LOCATION OF FINANCED STUDENT LOAN FILES - PHEAA
Documents relating to the Financed Student Loans being sub-serviced by
PHEAA on behalf of the Master Servicer pursuant to the PHEAA Sub-Servicing
Agreement (including original notes) are stored at PHEAA's facility at 1200
North 7th Street, Harrisburg, Pennsylvania 17102.
LOCATION OF FINANCED STUDENT LOAN FILES - GREAT LAKES
Documents relating to the Financed Student Loans being sub-serviced by
Great Lakes on behalf of the Master Servicer pursuant to the Great Lakes
Sub-Servicing Agreement (including original notes) are stored at Great Lakes'
facilities at 2401 International Lane, Madison, Wisconsin 53704, and, on behalf
of Great Lakes, at the offices of Datakeep Inc., 2538 Daniels Street, Madison,
Wisconsin 53718.
<PAGE>
SCHEDULE D
TO THE
SALE AND SERVICING AGREEMENT
MASTER SERVICING OR SUB-SERVICING PROVISIONS TO BE AUDITED PURSUANT TO SECTION
4.10
Sections 3.03, 3.04, 4.01, 4.02, 4.03, 4.06, 4.08, 5.02 and 5.03 of the Sale and
Servicing Agreement (but only to the extent that the Master Servicer has
performed such duties) [otherwise to be included as part of the applicable
Sub-Servicer's audit report to be provided pursuant to Section 4.10 of this
Agreement and the related Sub-Servicing Agreement].
ADMINISTRATIVE PROVISIONS TO BE AUDITED PURSUANT TO SECTION 4.10
Sections 4.04, 4.08, 5.05, 5.06, 5.07 and 5.08 of the Sale and Servicing
Agreement.
Sections 1(a)(xx), 1(b)(iii), 2 and 3 of the Administration Agreement.
<PAGE>
SCHEDULE E
TO THE
SALE AND SERVICING AGREEMENT
1. FEES. The Master Servicing Fee payable to the Master Servicer on
each Monthly Servicing Payment Date in accordance with Sections 4.07 and
5.05(b)(ii) and (c)(ii) of the Sale and Servicing Agreement shall be equal to
0.0416666% (0.50% on an annualized basis) (the "Master Servicing Fee
Percentage") of the Pool Balance as of the last day of the preceding calendar
month (the "Master Servicing Fee").
2. ADJUSTMENTS. If a demonstrable and significant increase occurs in
the costs incurred by the Master Servicer in providing and/or arranging for the
services to be provided under the Sale and Servicing Agreement, whether due to
changes in applicable governmental regulations, guarantor program requirements
or regulations, United States Postal Service postage rates or some other
identifiable cost increasing event, the Seller, the Eligible Lender Trustee on
behalf of the Trust and the Master Servicer shall negotiate in good faith a
reasonable increase in the Master Servicing Fee Percentage to reflect the
increased costs of the Master Servicer.
<PAGE>
EXHIBIT A
TO THE
SALE AND SERVICING AGREEMENT
Form of Noteholders' Statement
pursuant to Section 5.07(b) of Sale
and Servicing Agreement (capitalized
terms used herein are defined in
APPENDIX A THERETO)
Distribution Date:___________________
(i) Amount of principal being paid or distributed in respect of the
Class A-1 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-1 Notes)
(ii) Amount of principal being paid or distributed in respect of the
Class A-2 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-2 Notes)
(iii) Amount of principal being paid or distributed in respect of the
Class M Notes:___________ ($_______ per $1,000 original principal amount of
Class M Notes)
(iv) Amount of interest being paid or distributed in respect of the
Class A-1 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-1 Notes)
(v) Amount of interest being paid or distributed in respect of the
Class A-2 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-2 Notes)
(vi) Amount of interest being paid or distributed in respect of the
Class M Notes:___________ ($_______ per $1,000 original principal amount of
Class M Notes)
(vii) Amount of Noteholders' Interest Index Carryover being paid or
distributed (if any) and amount remaining (if any):
(1) Distributed to Class A-1 Noteholders: _______($_______ per
$1,000 original principal amount of Class A-1 Notes)
(2) Distributed to Class A-2 Noteholders: _______($_______ per
$1,000 original principal amount of Class A-2 Notes)
(3) Distributed to Class M Noteholders: _______($_______ per
$1,000 original principal amount of Class M Notes)
(4) Balance on Class A-1 Notes:__________ ($_______ per $1,000
original principal amount of Class A-1 Notes)
(5) Balance on Class A-2 Notes:__________ ($_______ per $1,000
original principal amount of Class A-2 Notes)
(6) Balance on Class M Notes:__________ ($_______ per $1,000
original principal amount of Class M Notes)
(viii) Payments made under the Cap Agreement on such date:
_______________ ($______________ with respect to the Class A-1 Notes,
$___________ with respect to Class A-2 Notes, and $__________ with respect to
the Class M Notes); and the total outstanding amount owed to the Cap Provider:
$________________.
(ix) Pool Balance at the end of the related Collection Period:________
(x) After giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:____________
(2) Pool Factor for the Class A-1 Notes:____________
(b) (1) outstanding principal amount of Class A-2
Notes:____________
(2) Pool Factor for the Class A-2 Notes:____________
(c) (1) outstanding principal amount of Class M
Notes:____________
(2) Pool Factor for the Class M Notes:____________
(d) (1) Certificate Balance:________________
(2) Pool Factor for the Certificates:____________
(xi) Note Interest Rate for the Notes:
(a) In general:
[(1) T-Bill Rate for the period from the previous
Distribution Date to this Distribution Date was _____%;][1]
or
[(1) Three-Month LIBOR for the period from the previous
Distribution Date to this Distribution Date was ___% [in the case
of the initial Interest Period Three-Month LIBOR was _____% for
the period from the Closing Date to but excluding November 26,
1999 and _____% for the period from and including November 26,
1999 to but excluding February 25, 2000] and] [2]
[(2)] the Student Loan Rate was _____%.[1][2]
(b) Note Interest Rate for the Class A-1 Notes: ______% (based on
[T-Bill Rate] [Three-Month LIBOR] [Student Loan Rate])
(c) Note Interest Rate for the Class A-2 Notes __% (based on
[T-Bill Rate] [Three-Month LIBOR] [Student Loan Rate]
(d) Note Interest Rate for the Class M Notes __% (based on
[T-Bill Rate] [Three-Month LIBOR][Student Loan Rate]
(xii) Amount of Master Servicing Fee for related Collection Period:
____________ ($_______ per $1,000 original principal amount of Class A-1 Notes,
$_________ per $1,000 original principal balance of Class A-2 Notes, and
$_________ per $1,000 original principal balance of Class M Notes);
(xiii) Amount of Administration Fee for related Collection
Period:____________ ($_______ per $1,000 original principal amount of Class A-1
Notes, $_________ per $1,000 original principal balance of Class A-2 Notes, and
$_________ per $1,000 original principal balance of Class M Notes);
(xiv) (a) Aggregate amount of Realized Losses (if any) for the related
Collection Period:
(b) Balance of Financed Student Loans that are delinquent in each
delinquency period as of the end of the related Collection Period:
[(xv) Amount in the Pre-Funding Account:_________]3
[(xvi) (a) Amount remaining in the Subsequent Pool Pre-Funding
Subaccount not used to acquire Subsequent Pool Student Loans: ______;
(b) Amount of (a) to be paid to the holders of the Class A-1 Notes:
__________]4
(c) Amount of (a) to be paid to the holders of the Class A-2 Notes:
________; and
(d) Amount of (a) to be paid to the holders of the Class M Notes:
________; and
[(xvii) Amount in the Pre-Funding Account at the end of the Funding
Period to be distributed as a payment of principal in respect of the
Notes:__________]5
- -------------------------
[1 This Calculation not required unless the T-Bill Rate for such Interest
Period is 100 basis points greater than the T-Bill Rate of the preceding
Determination Date or the 52 Week Treasury Bill Rate is 100 basis points
less than the T-Bill as of such Determination Date.]
2[ This calculation not required unless Three-Month LIBOR for such Interest
Period is 100 bais points greater than Three-Month LIBOR of the preceding
Determination Date.]
3 To be included for each Distribution Date during the Funding Period.
4 To be included for First Distribution Date only.
5 To be included for the Distribution Date on or immediately following the
end of the Funding Period.
<PAGE>
EXHIBIT B
TO THE
SALE AND SERVICING AGREEMENT
Form of Certificateholders' Statement
pursuant to Section 5.07(b) of Sale
and Servicing Agreement (capitalized
terms used herein are defined in
APPENDIX A THERETO)
Distribution Date:___________________
(i) Amount of principal being paid or distributed in respect of the
Certificates:___________ ($_______ per $1,000 original principal amount of the
Certificates)1
(ii) Amount of interest being paid or distributed in respect of the
Certificates:______________ ($_______ per $1,000 original principal amount of
Certificates)
(iii) Amount of Certificateholders' Interest Index Carryover being
paid or distributed (if any) and amount remaining (if any):
(1) Distributed: ______________ ($_______ per $1,000 original
principal amount of Certificates)
(2) Balance: ______________ ($_______ per $1,000 original
principal amount of Certificates)
(iv) Payments made under the Cap Agreement on such date: _________
($_________ with respect to the Certificates and $________ with respect to the
Notes); and the total outstanding amount owed to the Cap Provider: $___________.
(v) Pool Balance at the end of related Collection Period:
(vi) After giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:____________
(2) Pool Factor for Class A-1 Notes:____________
(b) (1) outstanding principal amount of Class A-2 Notes:________
(2) Pool Factor for Class A-2 Notes:____________
(c) (1) outstanding principal amount of Class M Notes:__________
(2) Pool Factor for Class M Notes:____________
(d) (1) Certificate Balance:______________
(2) Certificate Pool Factor:____________
(vii) Certificate Rate:
(a) In general:
[(1) T-Bill Rate for the period from the previous
Distribution Date to this Distribution Date was _____%;][2]
[(2) Three-Month LIBOR for the period from the previous
Distribution Date to this Distribution Date was __% [in the
case of the initial Interest Period Three-Month LIBOR was
_____% for the period from the Closing Date to but excluding
November 26, 1999 and _____% for the period from and
including November 26, 1999 to but excluding February 25,
2000] and][3]. (3) the Student Loan Rate was _____%.[2][3]
(b) Certificate Rate: ______% (based on [T-Bill Rate]
[Three-Month LIBOR][Student Loan Rate])
(viii) Amount of Master Servicing Fee for the related Collection
Period: ____________ ($_______ per $1,000 original principal amount of
Certificates):___________
(ix) Amount of Administration Fee for the related Collection Period:
____________ ($_______ per $1,000 original principal amount of Certificates)
(x) (a) Aggregate amount of Realized Losses (if any) for the related
Collection Period:
(b) Balance of Financed Student Loans that are delinquent in each
delinquency period as of the end of the related Collection Period:__________
(xi) Amount in the Reserve Account:____________
(xii) Amount in the Pre-Funding Account:_________4
(xiii) (a) Amount remaining in the Subsequent Pool Pre-Funding
Subaccount not used to acquire Subsequent Pool Student Loans: ______;
(b) Amount of (a) to be paid to Certificateholders: ________5
- ---------------------------
1 Only after the Notes have been paid in full.
[2 This Calculation not required unless the T-Bill for such Interest Period is
basis points greater than the T-Bill of the preceding Determination Date or
the 52 Week Treasury Bill Rate is 100 basis points less than the T-Bill
Rate as of such Determination Date.]
[3 This Calculation not required unless Three-Month LIBOR for such Interest
Period is 100 basis points greater than Three-Month LIBOR of the Preceding
Determination Date.]
4 To be included for each Distribution Date during the Funding Period.
5 To be included for First Distribution Date only.
<PAGE>
EXHIBIT C
TO THE
SALE AND SERVICING AGREEMENT
[RESERVED]
<PAGE>
EXHIBIT D
TO THE
SALE AND SERVICING AGREEMENT
ASSIGNMENT
For value received, in accordance with the Sale and Servicing
Agreement (the "Sale and Servicing Agreement") dated as of September 1, 1999,
among the undersigned, as seller (the "Seller"), as master servicer (the "Master
Servicer") and as administrator (the "Administrator"), KeyCorp Student Loan
Trust 1999-B (the "Trust"), and Bank One, National Association, not in its
individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender
Trustee"), the undersigned (the Seller, as beneficial owner, and Bank One,
National Association, as eligible lender trustee on behalf of the Seller) does
hereby sell, assign, transfer and otherwise convey unto the Eligible Lender
Trustee on behalf of the Trust, without recourse (subject to the obligations set
forth in the Sale and Servicing Agreement), all right, title and interest of the
undersigned in and to (i) the Initial Financed Student Loans and all obligations
of the Obligors thereunder including all moneys paid thereunder on or after the
Cutoff Date, (ii) the Assigned Rights, (iii) all funds on deposit from time to
time in the Trust Accounts, including the Reserve Account Initial Deposit and
the Pre-Funded Amount and in all investments and proceeds thereof (including all
income thereon) and (iv) the proceeds of any and all of the foregoing (including
proceeds derived from the voluntary or involuntary conversion of any of the
Initial Financed Student Loans into cash or other liquidated property, such as
proceeds from the applicable Guarantee Agreement. The foregoing sale does not
constitute and is not intended to result in any assumption by the Eligible
Lender Trustee or the Trust of any obligation of the Seller to the Obligors with
respect to Initial Financed Student Loans or any other person in connection with
the Initial Financed Student Loans or any agreement or instrument relating to
any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Initial Financed Student Loan
described in Schedule A to the Sale and Servicing Agreement in favor of the
Eligible Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Sale and Servicing Agreement) against the
undersigned. This endorsement may be effected by attaching a facsimile hereof to
each or any of such promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Sale
and Servicing Agreement and is to be governed by the Sale and Servicing
Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in Appendix A to the Sale and Servicing Agreement, which also
contains rules as to usage that shall be applicable herein.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of September 29, 1999.
KEY BANK USA, NATIONAL
ASSOCIATION, as Seller
By:
----------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, as
eligible lender trustee
By:
---------------------------------
Name:
Title:
<PAGE>
EXHIBIT E
TO THE
SALE AND SERVICING AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. ____ OF ADDITIONAL STUDENT LOANS dated as of _________,
______, among KEYCORP STUDENT LOAN TRUST 1999-B, a Delaware statutory business
trust (the "Issuer"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking
association, as seller (the "Seller"), BANK ONE, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity but solely as
Eligible Lender Trustee of the Issuer (the "Eligible Lender Trustee"), and KEY
BANK USA, NATIONAL ASSOCIATION, a national banking association, as administrator
(the "Administrator").
W I T N E S S E T H:
WHEREAS the Issuer, the Seller, the Eligible Lender Trustee, the
Master Servicer and the Administrator are parties to the Sale and Servicing
Agreement dated as of September 1, 1999 (as amended or supplemented, the "Sale
and Servicing Agreement");
WHEREAS the Seller, as depositor, and the Eligible Lender Trustee are
parties to the Amended and Restated Trust Agreement dated as of September 1,
1999 (as amended or supplemented, the "Trust Agreement");
WHEREAS pursuant to the Sale and Servicing Agreement, the Seller
wishes to convey the Additional Student Loans referred to in Section 2 of this
Agreement (the "Additional Student Loans") to the Eligible Lender Trustee on
behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are willing to
accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS AND USAGE. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in Appendix A to the
Sale and Servicing Agreement, which also contains rules of construction and
usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"SUBSEQUENT CUTOFF DATE" means, with respect to each Additional
Student Loan, the date specified as such on Schedule A hereto.
"TRANSFER DATE" means, with respect to the Additional Student Loans,
______________, ____.
2. SCHEDULES OF FINANCED STUDENT LOANS. Attached hereto as Schedule A
is a supplement to Schedule B to the Sale and Servicing Agreement listing the
Additional Student Loans to be conveyed on the Transfer Date to the Eligible
Lender Trustee on behalf of the Issuer pursuant to this Agreement.
3. CONVEYANCE OF ADDITIONAL STUDENT LOANS. In consideration of the
Issuer's delivery to or upon the order of the Seller of $__________, the Seller
does hereby sell, transfer, assign, set over and otherwise convey, without
recourse (except as expressly provided in the Sale and Servicing Agreement), to
the Eligible Lender Trustee on behalf of the Issuer:
(a) all right, title and interest of the Seller in and to each
Additional Student Loan, and all moneys received thereon, on and after the
related Subsequent Cutoff Date; and
(b) the proceeds of any and all of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to the Issuer as of the date of this Agreement and as of
the Transfer Date that:
(a) ORGANIZATION AND GOOD STANDING. The Seller is duly organized and
validly existing as a national banking association in good standing under
the laws of the United States of America, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to acquire
and own the Additional Student Loans.
(b) POWER AND AUTHORITY. The Seller has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
the Seller has full corporate power and corporate authority to sell and
assign the property to be sold and assigned to and deposited with the
Issuer (or with the Eligible Lender Trustee on behalf of the Issuer) and
the Seller has duly authorized such sale and assignment to the Issuer (or
to the Eligible Lender Trustee on behalf of the Issuer) by all necessary
corporate action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Seller by all necessary
corporate action.
(c) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Seller enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally or the rights of creditors of
banks the deposit accounts of which are insured by the FDIC and subject to
general principles of equity.
(d) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time or both) a default
under, the articles of association or by-laws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or
by which it shall be bound which breach or default would reasonably be
expected to have a material adverse effect on the condition of Key Bank
USA, National Association, financial or otherwise, or adversely affect the
transactions contemplated by this Agreement or any other Basic Document;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the knowledge of the Seller, any order, rule or regulation
applicable to the Seller of any court or of any Federal or State regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(e) NO PROCEEDINGS. There are no proceedings or to its best knowledge
investigations pending against the Seller or, to its best knowledge,
threatened against the Seller, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture or any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the
other Basic Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) seeking to affect
adversely the Federal or State income tax attributes of the Issuer, the
Notes or the Certificates.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution
and delivery by the Seller of this Agreement and the performance by the
Seller of the transactions contemplated by this Agreement have been duly
obtained, effected or given and are in full force and effect.
(g) PRINCIPAL BALANCE. The aggregate principal balance of the
Additional Student Loans listed on Schedule A attached hereto and conveyed
to the Eligible Lender Trustee on behalf of the Issuer pursuant to this
Agreement as of their respective Subsequent Cutoff Dates is $___________.
5. CONDITIONS PRECEDENT. The obligation of the Issuer to acquire the
Additional Student Loans hereunder is subject to the satisfaction, on or prior
to the Transfer Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Seller in Section 4 of this Agreement and in Section
3.01 of the Sale and Servicing Agreement shall be true and correct as of
the date of this Agreement and as of the Transfer Date.
(b) SALE AND SERVICING AGREEMENT CONDITIONS. Each of the conditions
set forth in Section 2.02(b) of the Sale and Servicing Agreement shall have
been satisfied.
(c) DELIVERY OF ASSIGNMENT. The Seller shall have delivered an
Assignment substantially in the form of Annex A hereto.
(d) ADDITIONAL INFORMATION. The Seller shall have delivered to the
Issuer such information as was reasonably requested by the Issuer to
satisfy itself as to (i) the accuracy of the representations and warranties
set forth in Section 4 of this Agreement and in Section 3.01 of the Sale
and Servicing Agreement and (ii) the satisfaction of the conditions set
forth in this Section 5.
6. RATIFICATION OF AGREEMENT. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
7. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
9. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
KEYCORP STUDENT LOAN TRUST 1999-B,
by BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee,
By: -----------------------------
Name:
Title:
KEY BANK USA, NATIONAL ASSOCIATION, Seller,
By: -----------------------------
Name:
Title:
KEY BANK USA, NATIONAL ASSOCIATION,
Administrator,
By: ----------------------------
Name:
Title:
<PAGE>
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Eligible Lender Trustee,
By:
----------------------------
Name:
Title:
Acknowledged and accepted as
of the date first above written:
BANKERS TRUST COMPANY,
not in its individual
capacity but solely as
Indenture Trustee,
By:
-----------------------
Name:
Title:
<PAGE>
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans and their related Subsequent Cutoff Dates]
<PAGE>
ANNEX A
TO THE TRANSFER AGREEMENT
ASSIGNMENT
For value received, in accordance with the Sale and Servicing
Agreement (the "Sale and Servicing Agreement") dated as of September 1, 1999,
among the undersigned, as seller (the "Seller"), and as administrator (the
"Administrator"), KeyCorp Student Loan Trust 1999-B (the "Trust"), and Bank One,
National Association, not in its individual capacity but solely as Eligible
Lender Trustee (the "Eligible Lender Trustee"), and the Transfer Agreement No.
dated as of, ____, (the "Transfer Agreement") among the Seller, the
Administrator, the Trust and the Eligible Lender Trustee, the undersigned does
hereby sell, assign, transfer and otherwise convey unto the Eligible Lender
Trustee on behalf of the Trust, without recourse (subject to the obligations set
forth in the Sale and Servicing Agreement), all right, title and interest of the
undersigned in and to (i) the Additional Student Loans (as such term is defined
in the Transfer Agreement) and all moneys received thereon, on and after each
applicable Subsequent Cutoff Date (as such term is defined in the Transfer
Agreement) and (ii) the proceeds of any and all of the foregoing (including but
not limited to proceeds derived from the voluntary or involuntary conversion of
any of the Additional Student Loans into cash or other liquidated property, such
as proceeds from the applicable Guarantee Agreement (as such term is defined in
the Transfer Agreement)). The foregoing sale does not constitute and is not
intended to result in any assumption by the Eligible Lender Trustee or the Trust
of any obligation of the Seller to the borrowers of such Additional Student
Loans or any other person in connection with the Additional Student Loans or any
agreement or instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Additional Student Loan described
in Schedule A to the Transfer Agreement in favor of the Eligible Lender Trustee
on behalf of the Trust, without recourse (subject to the obligations set forth
in the Sale and Servicing Agreement) against the undersigned. This endorsement
may be effected by attaching a facsimile hereof to each or any of such
promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Sale
and Servicing Agreement and the Transfer Agreement and is to be governed by the
Sale and Servicing Agreement and the Transfer Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in the Transfer Agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of, ____.
KEY BANK USA, NATIONAL ASSOCIATION,
as Seller
By:
------------------------
Name:
Title:
EXECUTION COPY
ADMINISTRATION AGREEMENT (this "Agreement") dated as of September 1,
1999, among KEYCORP STUDENT LOAN TRUST 1999-B, a Delaware statutory business
trust (the "Issuer"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking
association, as administrator (the "Administrator"), and BANKERS TRUST COMPANY,
a New York banking corporation, not in its individual capacity but solely as
Indenture Trustee (the "Indenture Trustee").
W I T N E S S E T H
WHEREAS the Issuer is issuing three classes of Floating Rate Asset
Backed Notes (the "Notes") pursuant to the Indenture dated as of September 1,
1999 (the "Indenture"), between the Issuer and the Indenture Trustee
(capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture, which also contains rules
of usage and construction that shall be applicable herein);
WHEREAS the Issuer has entered into certain agreements in connection
with the issuance of the Notes and the Certificates, including the Sale and
Servicing Agreement, the Note Depository Agreement, the Certificate Depository
Agreement (the Certificate Depository Agreement and the Note Depository
Agreement being collectively referred to herein as the "Depository Agreement"),
the Cap Agreement, the Guarantee Agreements and the Indenture (all such
agreements being collectively referred to herein as the "Related Agreements");
WHEREAS, pursuant to the Related Agreements, the Issuer and the
Eligible Lender Trustee are required to perform certain duties in connection
with (a) the Notes and the Collateral therefor pledged pursuant to the Indenture
and (b) the Certificates (the registered holders of the Certificates being
referred to herein as the "Owners");
WHEREAS the Issuer and the Eligible Lender Trustee desire to have the
Administrator perform certain of the duties of the Issuer and the Eligible
Lender Trustee referred to in the preceding clause, and to provide such
additional services consistent with the terms of this Agreement and the Related
Agreements as the Issuer and the Eligible Lender Trustee may from time to time
request;
WHEREAS the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Eligible Lender Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:
1. DUTIES OF THE ADMINISTRATOR.
(a) DUTIES WITH RESPECT TO THE INDENTURE AND DEPOSITORY AGREEMENT. The
Administrator shall perform all duties of the Issuer on behalf of the Issuer
under the Depository Agreement. In addition, the Administrator shall consult
with the Eligible Lender Trustee as the Administrator deems appropriate
regarding the duties of the Issuer under the Indenture and the Depository
Agreement. The Administrator shall monitor the performance of the Issuer and
shall advise the Eligible Lender Trustee when action is necessary to comply with
the Issuer's duties under the Indenture and the Depository Agreement. The
Administrator shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture and the Depository
Agreement. In furtherance of the foregoing, the Administrator shall take all
appropriate action that is the duty of the Issuer or the Administrator to take
pursuant to the Indenture, including such of the foregoing as are required with
respect to the following matters (references are to sections of the Indenture):
(i) the duty to cause the Note Registrar to keep the Note Register and
to give the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note Register
(Section 2.04);
(ii) the fixing or causing to be fixed of any specified record date
and the notification of the Indenture Trustee and the holders of the Notes
with respect to special payment dates, if any (Section 2.07(c));
(iii) the preparation of or obtaining of the documents and instruments
required for authentication of the Notes and delivery of the same to the
Indenture Trustee (Section 2.02);
(iv) the preparation, obtaining or filing of the instruments, opinions
and certificates and other documents required for the release of collateral
(Section 2.09);
(v) the duty to cause the Note Registrar to maintain on behalf of the
Issuer an office in the Borough of Manhattan, City of New York, for
registration of transfer or exchange of Notes (Section 3.02);
(vi) the duty to cause newly appointed Paying Agents, if any, to
deliver to the Indenture Trustee the instrument specified in the Indenture
regarding funds held in trust (Section 3.03);
(vii) the direction to the Paying Agents to deposit moneys with the
Indenture Trustee (Section 3.03);
(viii) the obtaining and preservation of the Issuer's qualification to
do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of the Indenture, the
Notes, the Collateral and each other instrument and agreement included in
the Indenture Trust Estate (Section 3.04);
(ix) the preparation of all supplements, amendments, financing
statements, continuation statements, instruments of further assurance and
other instruments, in accordance with Section 3.05 of the Indenture,
necessary to protect the Indenture Trust Estate (Section 3.05);
(x) the delivery by the Issuer of the Opinion of Counsel on the
Closing Date and the annual delivery of Opinions of Counsel, in accordance
with Section 3.06 of the Indenture, as to the Indenture Trust Estate, and
the annual delivery of the Officers' Certificate of the Issuer and certain
other statements, in accordance with Section 3.09 of the Indenture, as to
compliance with the Indenture (Sections 3.06 and 3.09);
(xi) the identification to the Indenture Trustee in an Officers'
Certificate of the Issuer of a Person with whom the Issuer has contracted
to perform its duties under the Indenture (Section 3.07(b));
(xii) the notification of the Indenture Trustee and the Rating
Agencies of a Master Servicer Default known to the Administrator pursuant
to the Sale and Servicing Agreement and, if such Master Servicer Default
arises from the failure of the Master Servicer to perform any of its duties
under the Sale and Servicing Agreement, the taking of all reasonable steps
available to enforce the Issuer's rights under the Basic Documents in
respect of such failure (Section 3.07(d));
(xiii) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10);
(xiv) the delivery of notice to the Indenture Trustee of each Event of
Default, any Default under Section 5.01(iii) of the Indenture and each
default by the Master Servicer, the Administrator or the Seller under the
Sale and Servicing Agreement known to the Administrator (Section 3.18);
(xv) the monitoring of the Issuer's obligations as to the satisfaction
and discharge of the Indenture and the preparation of an Officers'
Certificate of the Issuer and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.01);
(xvi) the determination of the time, method, place and the mailing of
notices in connection with an auction of the Financed Student Loans and
performance of related duties pursuant to Sections 9.01(c) and 10.06(a) of
the Sale and Servicing Agreement (Section 4.04);
(xvii) the compliance with any written directive of the Indenture
Trustee with respect to the sale of the Indenture Trust Estate in a
commercially reasonable manner if an Event of Default shall have occurred
and be continuing (Section 5.04);
(xviii) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or removal
of any co-trustee or separate trustee (Sections 6.08 and 6.10);
(xix) the furnishing of the Indenture Trustee with the names and
addresses of the holders of the Notes during any period when the Indenture
Trustee is not the Note Registrar (Section 7.01);
(xx) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable State agencies and the Indenture
Trustee of documents required to be filed on a periodic basis with, and
summaries thereof as may be required by rules and regulations prescribed
by, the Commission and any applicable State agencies and the transmission
of such summaries, as necessary, to the holders of the Notes (Section
7.03);
(xxi) the opening of one or more accounts in the Issuer's name, the
preparation of Issuer Orders, Officers' Certificates of the Issuer and
Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections 8.02
and 8.03);
(xxii) the preparation of an Issuer Request and Officers' Certificate
of the Issuer and the obtaining of an Opinion of Counsel and Independent
Certificates, if necessary, for the release of the Indenture Trust Estate
(Sections 8.04 and 8.05);
(xxiii) the preparation of Issuer Orders and the obtaining of Opinions
of Counsel with respect to the execution of supplemental indentures and the
mailing to the holders of the Notes of notices with respect to such
supplemental indentures (Sections 9.01, 9.02 and 9.03);
(xxiv) the preparation of or obtaining of the documents and
instruments required for the execution and authentication of new Notes
conforming to any supplemental indenture and the delivery of the same to
the Eligible Lender Trustee and the Indenture Trustee, respectively
(Section 9.06);
(xxv) the notification of the holders of the Notes of redemption of
the Notes or the duty to cause the Indenture Trustee to provide such
notification (Section 10.02);
(xxvi) the preparation of all Officers' Certificates of the Issuer,
Opinions of Counsel and Independent Certificates with respect to any
requests by the Issuer to the Indenture Trustee to take any action under
the Indenture (Section 11.01(a));
(xxvii) the preparation and delivery of Officers' Certificates of the
Issuer and the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section 11.01(b));
(xxviii) the preparation and delivery to the holders of the Notes and
the Indenture Trustee of any agreements with respect to alternate payment
and notice provisions (Section 11.06);
(xxix) the recording of the Indenture, if applicable (Section 11.15);
and
(xxx) conducting on behalf of the Indenture Trustee any auction of the
Financed Student Loans (Section 4.04).
(b) DUTIES WITH RESPECT TO THE ISSUER. (i) In addition to the duties
of the Administrator set forth above and in the other Related Agreements, the
Administrator shall perform such calculations (and in such capacity is hereby
appointed the "Calculation Agent" for the Issuer) and shall prepare for
execution by the Issuer or the Eligible Lender Trustee or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer or the Eligible Lender Trustee to prepare, file or deliver pursuant to
the Related Agreements, and at the request of the Eligible Lender Trustee shall
take all appropriate action that it is the duty of the Issuer to take pursuant
to the Related Agreements. Subject to Section 5 of this Agreement, and in
accordance with the directions of the Eligible Lender Trustee, the Administrator
shall administer, perform or supervise the performance of such other activities
in connection with the Collateral (including the Related Agreements) as are not
covered by any of the foregoing provisions and as are expressly requested by the
Eligible Lender Trustee and are reasonably within the capability of the
Administrator.
(ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for promptly
notifying the Eligible Lender Trustee in the event that any withholding tax is
imposed on the Issuer's payments (or allocations of income) to an Owner as
contemplated in Section 5.01(c) of the Trust Agreement. Any such notice shall
specify the amount of any withholding tax required to be withheld by the
Eligible Lender Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Eligible Lender Trustee set forth in Section
5.04(a), (b), (c) and (d) of the Trust Agreement with respect to, among other
things, accounting and reports to Owners; PROVIDED, HOWEVER, that the Eligible
Lender Trustee shall retain responsibility for the distribution of the Schedule
K-1s necessary to enable each Owner to prepare its Federal and state income tax
returns.
(iv) The Administrator shall perform the duties of the Administrator
specified in Section 10.02 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Eligible Lender Trustee, and
any other duties expressly required to be performed by the Administrator under
the Trust Agreement, the Sale and Servicing Agreement and the other Related
Agreements.
(v) The Administrator shall perform the duties of the Eligible Lender
Trustee with respect to Section 10.04 of the Sale and Servicing Agreement in
connection with the sale of any Access Loans by the Issuer.
(vi) The Administrator shall be the Calculation Agent under the Cap
Agreement and shall give notice to the Cap Provider pursuant to Section 5.04(c)
of the Sale and Servicing Agreement when payments are due to the Issuer under
the Cap Agreement.
(vii) The Administrator agrees to provide notice on behalf of the
Issuer to all other parties and the Rating Agencies of the occurrence of any
event requiring such notice under each of the Basic Documents.
(viii) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into transactions
with or otherwise deal with any of its Affiliates; PROVIDED, HOWEVER, that the
terms of any such transactions or dealings shall be in accordance with any
directions received from the Issuer and shall be, in the Administrator's
opinion, no less favorable to the Issuer than would be available from
unaffiliated parties.
(c) DUTIES OF THE ADMINISTRATOR, AS ADMINISTRATOR. The Administrator
agrees to perform all duties to be performed by the Administrator as set forth
in this Agreement, the Sale and Servicing Agreement and each of the other Basic
Documents.
(d) NON-MINISTERIAL MATTERS. With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Eligible Lender Trustee
of the proposed action and the Eligible Lender Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, "non-ministerial matters" shall include:
(i) [Reserved];
(ii) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the Issuer
(other than in connection with the collection of the Financed Student
Loans);
(iii) the amendment, supplement, change or modification to any of the
Basic Documents;
(iv) the appointment of successor Note Registrars, successor Paying
Agents and successor Indenture Trustees pursuant to the Indenture or the
appointment of Successor Administrators or Successor Master Servicers, or
the consent to the assignment by the Note Registrar, Paying Agent or
Indenture Trustee of its obligations under the Indenture; and
(v) the removal of the Indenture Trustee.
(e) EXCEPTIONS. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Administrator shall not be obligated to, and shall not, (i) make any
payments to the holders of the Notes under the Related Agreements, (ii) sell the
Indenture Trust Estate pursuant to Section 5.04 of the Indenture, (iii) take any
other action that the Issuer directs the Administrator not to take on its
behalf, (iv) in connection with its duties hereunder assume any indemnification
obligation of any other Person or (v) service the Financed Student Loans.
2. RECORDS. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer at any time
during normal business hours.
3. COMPENSATION. As compensation for the performance of the
Administrator's obligations under this Agreement and as reimbursement for its
expenses related thereto, the Administrator shall be entitled to $3,000 per
quarter payable in arrears on each Distribution Date which shall be solely an
obligation of the Issuer.
4. ADDITIONAL INFORMATION TO BE FURNISHED TO THE ISSUER. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
5. INDEPENDENCE OF THE ADMINISTRATOR. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not be
subject to the supervision of the Issuer or the Eligible Lender Trustee with
respect to the manner in which it accomplishes the performance of its
obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Eligible Lender Trustee.
6. NO JOINT VENTURE. Nothing contained in this Agreement (i) shall
constitute the Administrator and either of the Issuer or the Eligible Lender
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii) shall be construed to
impose any liability as such on any of them or (iii) shall be deemed to confer
on any of them any express, implied or apparent authority to incur any
obligation or liability on behalf of the others.
7. OTHER ACTIVITIES OF ADMINISTRATOR. Nothing herein shall prevent the
Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Eligible Lender Trustee or the
Indenture Trustee.
8. TERM OF AGREEMENT; RESIGNATION AND REMOVAL OF ADMINISTRATOR. (a)
This Agreement shall continue in force until the dissolution of the Issuer, upon
which event this Agreement shall automatically terminate.
(b) The provisions of Article VI and Article VIII of the Sale and
Servicing Agreement relating to the resignation or removal of the Administrator
and the failure of the Administrator to perform its duties under this Agreement
or under the Sale and Servicing Agreement are hereby incorporated by reference
herein.
9. ACTION UPON TERMINATION, RESIGNATION OR REMOVAL. Promptly upon the
effective date of termination of this Agreement pursuant to Section 8(a) or the
resignation or removal of the Administrator pursuant to Section 8(b) and the
Sale and Servicing Agreement, the Administrator shall be entitled to be paid all
fees and reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such termination
pursuant to Section 8(a) deliver to the Issuer all property and documents of or
relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator, the Administrator
shall cooperate with the Issuer and take all reasonable steps requested to
assist the Issuer in making an orderly transfer of the duties of the
Administrator.
10. NOTICES. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:
(a) if to the Issuer or the Eligible Lender Trustee, to
KeyCorp Student Loan Trust 1999-B
c/o Bank One National Association
1 Bank One Plaza
Suite IL1-0126
Chicago, Illinois 60670
Attention: Corporate Trust Administration
(b) if to the Administrator, to
Key Bank USA, National Association
800 Superior Avenue, 4th Floor
Cleveland, Ohio 44114
Attention: Key Education Resources
KeyCorp Student Loan Trust 1999-B
(c) if to the Indenture Trustee, to
Bankers Trust Company
Four Albany Street, 10th Floor
New York, New York 10006
Attention: Corporate Trust and Agency Group,
Structured Finance Team
or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed given
if such notice is mailed by certified mail, postage prepaid, or hand-delivered
to the address of such party as provided above.
11. AMENDMENTS. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the Administrator
and the Indenture Trustee, with the written consent of the Eligible Lender
Trustee, without the consent of the holders of the Notes and the holders of the
Certificates, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in
any manner the rights of the holders of the Notes or the holders of the
Certificates; provided that such amendment will not, in an Opinion of Counsel
obtained on behalf of the Issuer and satisfactory to the Indenture Trustee and
the Eligible Lender Trustee, materially and adversely affect the interest of any
holder of the Notes or holder of the Certificates. This Agreement may also be
amended by the Issuer, the Administrator and the Indenture Trustee with the
written consent of the Eligible Lender Trustee, the holders of the Notes of at
least a majority in the Outstanding Amount of the Notes and the holders of the
Certificates of at least a majority of the sum of the Certificate Balances for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the holders of the Notes or the holders of the Certificates; PROVIDED,
HOWEVER, that no such amendment may (i) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments with
respect to Financed Student Loans or distributions that are required to be made
for the benefit of the holders of the Notes or the holders of the Certificates
or (ii) reduce the aforesaid percentage of the holders of the Notes and the
holders of the Certificates which are required to consent to any such amendment,
without the consent of all Outstanding holders of the Notes and holders of the
Certificates. Notwithstanding the foregoing, the Administrator may not amend
this Agreement without the permission of the Depositor, which permission shall
not be unreasonably withheld. Prior to the execution of any such amendment, the
Administrator shall furnish written notification of the substance of such
amendment to each of the Rating Agencies.
12. SUCCESSORS AND ASSIGNS. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.05 and 6.08 of the Sale and
Servicing Agreement, this Agreement may not be assigned by the Administrator.
Subject to the foregoing, this Agreement shall bind any successors or assigns of
the parties hereto.
l3. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
14. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which when so executed shall together constitute but one and the same
agreement.
16. SEVERABILITY. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
17. NOT APPLICABLE TO KEY BANK USA, NATIONAL ASSOCIATION IN OTHER
CAPACITIES. Nothing in this Agreement shall affect any obligation Key Bank USA,
National Association may have in any other capacity under the Basic Documents.
18. PROVISIONS OF SALE AND SERVICING AGREEMENT CONTROL. The provisions
of the Sale and Servicing Agreement relating to the Administrator and to this
Agreement shall in all events govern and are hereby incorporated herein and, to
the extent any provision herein shall be inconsistent with any such provision of
the Sale and Servicing Agreement, the Sale and Servicing Agreement shall govern.
19. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND INDENTURE
Trustee. (a) Notwithstanding anything contained herein to the contrary, except
as provided in subsection (c) of this section, this instrument has been
countersigned by Bank One National Association not in its individual capacity
but solely in its capacity as Eligible Lender Trustee of the Issuer and subject
to the succeeding paragraph, in no event shall Bank One National Association, in
its individual capacity, Bankers Trust Company or any Owner of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, 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 Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall Bankers Trust
Company have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. (c)
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 Eligible Lender Trustee's or the Indenture Trustee's
legal responsibility 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 Eligible Lender Trustee or the Indenture Trustee pursuant
to, or to otherwise comply with, their obligations under the Higher Education
Act or implementing regulations.
20. THIRD-PARTY BENEFICIARIES. The Eligible Lender Trustee is a
third-party beneficiary to this Agreement and is entitled to the rights and
benefits hereunder and may enforce the provisions hereof as if it were a party
hereto.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
KEYCORP STUDENT LOAN TRUST
1999-B
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee,
By: /s/ Jeffrey L. Kinney
--------------------------
Name: Jeffrey L. Kinney
Title: Vice President
BANKERS TRUST COMPANY, not in its
individual capacity but solely as Indenture
Trustee,
By: /s/ Christopher D. Lew
---------------------------
Name: Christopher D. Lew
Title: Assistant Treasurer
KEY BANK USA, NATIONAL ASSOCIATION, as
Administrator,
By: /s/ Darlene H. Dimitrijevs
-------------------------------
Name: Darlene H. Dimitrijevs
Title: Senior Vice President
