EXECUTION COPY
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FOURTH TERMS SUPPLEMENT
TO THE
INDENTURE
DATED AS OF MARCH 28, 1995
between
CLASSNOTES TRUST 1995-I
(f/k/a Education Loan Alliance 1995-I)
and
BANKERS TRUST COMPANY
Indenture Trustee
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Dated as of December 27, 1996
----------------------
Securing
$140,000,000
ASSET-BACKED NOTES
SERIES 1996-2
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions...........................................2
ARTICLE II
AUTHORIZATION, TERMS AND ISSUANCE
SECTION 2.1. Authorization of Series 1996-2 Notes..................6
SECTION 2.2. Purposes..............................................7
SECTION 2.3. Terms of Series 1996-2 Notes Generally................7
SECTION 2.4. Series 1996-2 Notes...................................8
SECTION 2.5. Class Interest Rate..................................10
SECTION 2.6. Additional Provisions Regarding the Interest
Rates on the Series 1996-2 Notes.....................11
ARTICLE III
DISTRIBUTIONS
SECTION 3.1. Distribution of Interest and Principal...............12
SECTION 3.2. Selection of Notes to Receive Payments
of Principal.........................................12
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Issuer for This Fourth Terms Supplement.............12
SECTION 4.2. Counterparts........................................12
SECTION 4.3. Indenture Constitutes a Security Agreement..........12
SECTION 4.4. Governing Law.......................................12
SECTION 4.5. Ratification of Master Indenture....................13
EXHIBIT A Form of LIBOR Rate Notes
EXHIBIT B Form of Notice of Payment Default
EXHIBIT C Form of Notice of Cure of Payment Default
FOURTH TERMS SUPPLEMENT, dated as of December 27, 1996, between CLASSNOTES
TRUST 1995-I (formerly known as Education Loan Alliance 1995-I), a Pennsylvania
business trust, (the "Issuer") acting through DAUPHIN DEPOSIT BANK AND TRUST
COMPANY, a Pennsylvania bank and trust company, not in its individual capacity
but solely as eligible lender trustee (the "Eligible Lender Trustee"), and
BANKERS TRUST COMPANY, a New York banking corporation duly established, existing
and authorized to accept and execute trusts of the character herein set out
under and by virtue of the laws of the State of New York, with its principal
corporate trust office in New York, New York, (the "Indenture Trustee"), as
Indenture Trustee under a Master Indenture dated as of March 28, 1995 (the
"Master Indenture").
PRELIMINARY STATEMENT
Section 2.3 of the Master Indenture provides, among other things, that the
Issuer, as provided in the Trust Agreement, and the Indenture Trustee may enter
into an indenture supplemental to the Master Indenture for the purpose of
authorizing a Series of Notes and to specify certain terms of such Series of
Notes. The Issuer has duly authorized the creation of a Series of Notes in an
aggregate principal amount not to exceed $140,000,000 to be known as the
Issuer's Asset Backed Notes, Series 1996-2 (the "Series 1996-2 Notes"), and the
Issuer and the Indenture Trustee are executing and delivering this Fourth Terms
Supplement in order to provide for the Series 1996-2 Notes. Except as otherwise
specified herein, or as the context may require, capitalized terms used but not
defined herein are defined in Appendix A to the Third Supplemental Sale and
Servicing Agreement dated as of December 27, 1996 (the "Third Supplemental Sale
and Servicing Agreement") among the Issuer, Trans-World Insurance Company (the
"Administrator"), the Eligible Lender Trustee and The Money Store Inc. ("TMSI"),
which Appendix A also contains rules as to usage that shall be applicable
herein.
GRANTING CLAUSES
The Issuer hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Series 1996-2 Notes, and (other than with respect
to clause (d) below) any Series of Notes issued previously and any Series of
Notes that may be issued hereafter, all of the Issuer's right, title and
interest in and to (a) the Financed Student Loans listed in Schedule A to the
Third Supplemental Sale and Servicing Agreement (as such Schedule may be amended
from time to time including, but not limited to, by the purchase by the Trust
during the Funding Period of any Additional Financed Student Loans) and all
obligations of the Obligors 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 forbearance),
on and after the applicable Cut-off Date (or, with respect to the Additional
Financed Student Loans, the applicable Subsequent Cut-off Date), (b) all funds
on deposit from time to time in the Trust Accounts (other than the Certificate
Distribution Account) and in all investments and proceeds thereof (including all
income thereon), (c) all proceeds of the foregoing, including without
limitation, proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property and (d) the Note Surety Bond
relating to the Series 1996-2 Notes. Such Grants are made, however, in trust, to
secure the Series 1996-2 Notes and, other than with respect to clause (d) above,
any Series of Notes issued previously and any Series of Notes issued hereafter,
equally and ratably without prejudice, priority or distinction, between any Note
and any other Note by reason of difference in time of issuance or otherwise
except to the extent otherwise described herein, and to secure (i) the payment
of all amounts due on the Series 1996-2 Notes, any Series of Notes issued
previously and any Series of Notes issued hereafter, as such amounts become due
in accordance with their terms, (ii) the payment of all other sums payable under
the Master Indenture or this Fourth Terms Supplement with respect to the Series
1996-2 Notes, any Series of Notes issued previously and any Series of Notes
issued hereafter, and (iii) compliance with the provisions of the Master
Indenture and this Fourth Terms Supplement with respect to the Series 1996-2
Notes, any Series of Notes issued previously and any Series of Notes issued
hereafter, all as provided in the Master Indenture and this Fourth Terms
Supplement.
The Indenture Trustee acknowledges such Grants, accepts the trusts
hereunder in accordance with the provisions hereof and of the Master Indenture
and agrees to perform the duties herein or therein required to the best of its
ability to the end that the interests of the Holders of the Series 1996-2 Notes,
any Series of Notes issued previously by the Issuer and any Series of Notes
issued by the Issuer hereafter may be adequately and effectively protected.
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS.
"ADMINISTRATOR" means Trans-World Insurance Company
d/b/a Educaid, an Arizona insurance company, and its successors and assigns.
"AUTHORIZED DENOMINATIONS" means, with respect to the
Series 1996-2 Notes, $50,000 and integral multiples of $1,000 in excess thereof.
"BOOK-ENTRY FORM" or "BOOK-ENTRY SYSTEM" means a form or
system under which (i) the beneficial right to principal and interest may be
transferred only through a book entry, (ii) physical securities in registered
form are issued only to a Securities Depository or its nominee as registered
owner, with the securities "immobilized" to the custody of the Securities
Depository, and (iii) the book entry is the record that identifies the owners of
beneficial interests in that principal and interest.
"BUSINESS DAY" means any day on which the New York Stock
Exchange is open for trading and any day other than a Saturday, a Sunday or a
day on which banking institutions or trust companies in New York, California,
New Jersey or Pennsylvania are authorized or obligated by law, regulation or
executive order to remain closed.
"CLASS A-9 NOTES", has the meaning set forth in
Section 2.1 herein.
"CLASS INITIAL PERIOD" means, as to the Class A-9 Notes, the
period commencing on the Closing Date and continuing through the day immediately
preceding the Class Initial Rate Adjustment Date for the Class A-9 Notes.
"CLASS INITIAL RATE" means 5.74406% per annum for the Class
A-9 Notes.
"CLASS INITIAL RATE ADJUSTMENT DATE" means with respect to
the Class A-9 Notes, January 15, 1997.
"CLASS INTEREST PERIOD" means, with respect to the Class A-9
Notes, the Class Initial Period and each period commencing on a Class Rate
Adjustment Date for such Class and ending on the day before (i) the next Class
Rate Adjustment Date for such Class or (ii) the Final Maturity Date of such
Class, as applicable.
"CLASS INTEREST RATE" means each variable rate of interest per
annum borne by the Class A-9 Notes for each Class Interest Period and determined
in accordance with the provisions of Sections 2.4 and 2.5 hereof; provided,
however, that in the event of an Event of Default, the Class Interest Rate shall
equal the Non-Payment Rate.
"CLASS RATE ADJUSTMENT DATE" means the date on which an
Interest Rate is effective with respect to the Class A-9 Notes, which is the
15th day of each calendar month.
"CLASS RATE DETERMINATION DATE" means, with respect to the
Class A-9 Notes, the date which is both a Business Day and a London Banking Day
immediately preceding the date of commencement of an Interest Period for the
Class A-9 Notes.
"CLOSING DATE" means with respect to the Series 1996-2 Notes,
December 27, 1996, the date of initial issuance and delivery of the Series
1996-2 Notes hereunder.
"CUT-OFF DATE" means, (i) with respect to the Financed
Student Loans already pledged to the Indenture Trustee on the Closing Date,
November 30, 1996 and (ii) with respect to the Financed Student Loans pledged to
the Indenture Trustee on the Closing Date, December 26, 1996.
"EFFECTIVE INTEREST RATE" means, for any Financed Student
Loan and any Collection Period, the per annum rate at which such Financed
Student Loan accrues interest during such Collection Period, and in the case of
a Federal Loan, after giving effect to all applicable Interest Subsidy Payments
and Special Allowance Payments due with respect to such Federal Loan.
"EVENT OF DEFAULT" means, with respect to the Series 1996-2
Notes, (i) a default in the due and punctual payment of any installment of
interest or principal on the Class A-9 Notes, or (ii) a default in the due and
punctual payment of any interest on and principal of the Class A-9 Notes at
their Final Maturity Date.
"FINAL MATURITY DATE" means April 15, 2002 with respect to
the Class A-9 Notes.
"FOURTH TERMS SUPPLEMENT" means this Fourth Terms Supplement,
as from time to time amended or supplemented.
"FUNDING PERIOD" means, with respect to the Series 1996-2
Notes, the period beginning on the Closing Date and ending on the first to occur
of (a) the Note Distribution Date on which the amount on deposit in the
Pre-Funding Account (after giving effect to any transfers therefrom in
connection with any Additional Fundings on or prior to such Note Distribution
Date) is less than $200,000, (b) the date on which an Event of Default, a Master
Servicer Default or an Administrator Default occurs, (c) the date on which an
Insolvency Event occurs with respect to the Seller and (d) the close of business
on April 1, 1997, or such later date as may be agreed to by the Surety Provider.
"INTEREST PERIOD" means, with respect to any Class of Series
1996-2 Notes, the respective Class Interest Period.
"INTEREST RATE" means, with respect to the Series 1996-2
Notes, the rate of interest per annum borne by such Class as of the time
referred to, including, without limitation, the related Class Initial Rate and
the related Class Interest Rate.
"LIBOR DETERMINATION DATE" means, with respect to the Class
A-9 Notes, the date which is both a Business Day and a London Banking Day prior
to the commencement of each related Interest Period.
"LIBOR RATE NOTES" means the Class A-9 Notes.
"LONDON BANKING DAY" means any Business Day on which dealings
in deposits in United States dollars are transacted in the London interbank
market.
"MASTER INDENTURE" means the Master Indenture dated as of
March 28, 1995, as amended from time to time, between the Issuer and the
Indenture Trustee.
"NET LOAN RATE" means for any Interest Period, the weighted
average Effective Interest Rate for the Collection Period immediately preceding
such Interest Period less 1.60%.
"NON-PAYMENT RATE" means One-Month LIBOR plus 1.50%.
"NOTEHOLDERS' INTEREST CARRYOVER" means, with respect to any
Interest Period for which the Class Interest Rate for such Interest Period is
based on the Net 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 applicable
One-Month LIBOR over (b) the amount of interest on such Class of Notes actually
accrued in respect of such Interest Period based on the Net Loan Rate, together
with the unpaid portion of any such excess from prior Interest Periods (and
interest accrued thereon, to the extent permitted by law, at the applicable rate
calculated based on One-Month LIBOR); provided, however, that, with respect to
any Class of LIBOR Rate Notes, on the related Final Maturity Date, the portion
of the Noteholders' Interest Carryover allocable to such Class of Notes will be
equal to the lesser of (i) the Noteholders' Interest Carryover on such date
determined as described above and (ii) the amount of funds, if any, required and
available to be distributed to such Class of Notes on such date pursuant to
Sections 5.5(e)(iv) and 5.6(b)(B) of the Third Supplemental Sale and Servicing
Agreement.
"NOTE DISTRIBUTION DATE" means with respect to the Class A-9
Notes, the 15th day of each month (or if such day is not a Business Day, the
next succeeding Business Day), commencing January 1997.
"NOTE SURETY BOND" means each surety bond issued by the
Surety Provider in favor of the Eligible Lender Trustee for the benefit of the
holders of the Class A-9 Notes.
"ONE-MONTH LIBOR" means the London interbank offered rate for
deposits in U.S. dollars having a maturity of one month commencing on the
related LIBOR Determination Date (the "Index Maturity") which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750, the rate for that day
will be determined on the basis of the rates at which deposits in U.S. dollars,
having the Index Maturity and in a principal amount of not less than U.S.
$1,000,000, are offered at approximately 11:00 a.m., London time, on such LIBOR
Determination Date to prime banks in the London interbank market by the
Reference Banks. The Indenture Trustee 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 Indenture Trustee, at approximately 11:00 a.m., New
York City time, on such LIBOR Determination Date for loans in U.S. dollars to
leading European banks having the Index Maturity and in a principal amount equal
to an amount of not less than U.S. $1,000,000; provided that if the banks
selected as aforesaid are not quoting as mentioned in this sentence, One-Month
LIBOR in effect for the applicable Interest Period will be One-Month LIBOR in
effect for the previous Interest Period.
"PAYMENT DEFAULT" means, with respect to the Class A-9 Notes,
a default in the due and punctual payment of any Noteholders' Interest
Distribution Amount or Noteholders' Principal Distribution Amount on the related
Note Distribution Date or Final Maturity Date, as applicable.
"RECORD DATE" means, with respect to the Class A-9 Notes, the
close of business on the second Business Day immediately preceding the related
Note Distribution Date.
"REFERENCE BANK" means a lending bank (i) engaged in
transactions in Eurodollar deposits in the international Eurocurrency market,
(ii) not controlling, controlled by or under common control with the
Administrator or The Money Store Inc. and (iii) having an established place of
business in London.
"TELERATE PAGE 3750" means the display page so designated on
the Dow Xxxxx Telerate Service (or such other page as may replace that page on
that service for the purpose of displaying comparable rates or prices).
ARTICLE II.
AUTHORIZATION, TERMS AND ISSUANCE
SECTION 2.1. AUTHORIZATION OF SERIES 1996-2 NOTES. There is
hereby authorized the borrowing of funds, and to evidence such borrowing there
is hereby authorized one Class of Series 1996-2 Notes (the "Series 1996-2
Notes"), designated the "ClassNotes Trust 1995-I Asset-Backed Notes, Series
1996-2, Class A-9" (the "Class A-9 Notes") in the aggregate principal amount of
$140,000,000.
SECTION 2.2. PURPOSES. The Series 1996-2 Notes are authorized
to finance the acquisition by the Issuer of Financed Student Loans and to make
deposits to the Trust Accounts required hereby.
SECTION 2.3. TERMS OF SERIES 1996-2 NOTES GENERALLY. The
Series 1996-2 Notes shall be issued in fully registered form, in substantially
the form set forth in Exhibit A hereof, with such variations, omissions and
insertions as may be required by the circumstances, as may be required or
permitted by the Master Indenture and this Fourth Terms Supplement, or be
consistent with the Master Indenture and this Fourth Terms Supplement and
necessary or appropriate to conform to the rules and requirements of any
governmental authority or any usage or requirement of law with respect thereto.
The Series 1996-2 Notes may be issued only in Authorized
Denominations. The Series 1996-2 Notes shall be dated as of the Closing Date.
The Class A-9 Notes shall mature on its Final Maturity Date. The Class A-9 Notes
shall be numbered consecutively from 1 upwards with the prefix A-9 - preceding
each number. The Series 1996-2 Notes shall be issued to a Securities Depository
for use in a Book-Entry System in accordance with the provisions of Section 2.13
of the Indenture.
Interest on each Series 1996-2 Note shall accrue on the
Outstanding Amount of such Series 1996-2 Note until such Series 1996-2 Note has
been paid in full or payment has been duly provided for, as the case may be, and
shall accrue from the later of the initial date thereof or the most recent Note
Distribution Date to which interest has been paid or duly provided for. Each
Series 1996-2 Note shall bear interest at an interest rate determined in
accordance with the provisions and subject to the limitations set forth herein,
and interest on the Class A-9 Notes shall be paid for the related Class Initial
Period and each Class Interest Period for such Class thereafter on each Note
Distribution Date for such Class and on each date of payment of principal
thereof to the extent of interest accrued on the principal then being paid.
Principal will be paid to the Class A-9 Notes on each Note
Distribution Date for such Class in an amount equal to the Noteholder's
Principal Distribution Amount on such Note Distribution Date; provided, however,
that if any Class of a Series of Notes issued previously or hereafter has an
earlier Final Maturity Date than the Class A-9 Notes, principal will be paid to
each such Class of previously or subsequently issued Notes with an earlier Final
Maturity Date prior to the Class A-9.
SECTION 2.4. SERIES 1996-2 NOTES. The initial Rate Adjustment
Date for the Class A-9 Notes shall be the Class Initial Rate Adjustment Date.
During the Class Initial Period, the Class A-9 Notes shall
bear interest at the Class Initial Rate for such Class. Thereafter, the Class
A-9 Notes shall bear interest during each applicable Interest Period at a Class
Interest Rate equal to (i) the lesser of One-Month LIBOR plus 0.08% and (ii) the
Net Loan Rate.
During the Class Initial Period for the Class A-9 Notes and
each Interest Period thereafter, interest at the Class Interest Rate shall
accrue daily and shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days.
Notwithstanding the foregoing,
(a) if an Event of Default shall have occurred, the Class
Interest Rate on the Class A-9 Notes for the Class Interest Period for such
Class commencing on or immediately after such Event of Default, and for each
Class Interest Period thereafter, to and including the Class Interest Period, if
any, during which, or commencing less than two Business Days after, such Event
of Default is cured in accordance with the Master Indenture and this Fourth
Terms Supplement, shall equal the Non-Payment Rate on the first day of each
such Class Interest Period.
(b) If the LIBOR Rate for a Class of LIBOR Rate Notes is
greater than the Net Loan Rate, then the Class Interest Rate applicable to such
Class of Series 1996-2 Notes for that Class Interest Period will be the Net Loan
Rate. If the Class Interest Rate applicable to such Class of Series 1996-2 Notes
for any Class Interest Period is the Net Loan Rate, the Indenture Trustee shall
determine the Noteholders' Interest Carryover, if any, with respect to such
Class of Series 1996-2 Notes for such Class Interest Period. Such Noteholders'
Interest Carryover shall bear interest calculated at a rate equal to One-Month
LIBOR (as determined by the Indenture Trustee) from the Note Distribution Date
for the Class Interest Period with respect to which such Noteholders' Interest
Carryover was calculated, until paid. For purposes of this Fourth Terms
Supplement, any reference to "principal" or "interest" herein shall not include
within the meaning of such words Noteholders' Interest Carryover or any interest
accrued on any such Noteholders' Interest Carryover. Such Noteholders' Interest
Carryover shall be separately calculated for each Series 1996-2 Note of such
Class by the Indenture Trustee during such Class Interest Period in sufficient
time for the Indenture Trustee to give notice to each Noteholder of such
Noteholders' Interest Carryover as required in the next succeeding sentence. On
the Note Distribution Date for a Class Interest Period with respect to which
such Noteholders' Interest Carryover for a Class of Series 1996-2 Notes has been
calculated by the Indenture Trustee, the Indenture Trustee shall give written
notice to each Noteholder of the applicable Class of the Noteholders' Interest
Carryover applicable to each Noteholder's Series 1996-2 Note of such Class,
which written notice may be included in any other written statement sent by the
Indenture Trustee to such Noteholders, and shall be mailed on such Note
Distribution Date by first-class mail, postage prepaid, to each such Noteholder
at such Noteholder's address as it appears on the registration books maintained
by the Note Registrar. Such notice shall state, in addition to such Noteholders'
Interest Carryover, that, unless and until the Final Maturity Date for such
Class of Series 1996-2 Notes has occurred (after which all accrued Noteholders'
Interest Carryover (and all accrued interest thereon) that remains unpaid shall
be canceled and no Noteholders' Interest Carryover (and interest accrued
thereon) shall be paid with respect to a Series 1996-2 Note of such Class), (i)
the Noteholders' Interest Carryover (and interest accrued thereon calculated at
a rate equal to One-Month LIBOR) shall be paid by the Indenture Trustee on a
Series 1996-2 Note of such Class on the first occurring Note Distribution Date
for such Class for a subsequent Class Interest Period if and to the extent that
(1) during such Class Interest Period no additional Noteholders' Interest
Carryover is accruing on such Class of Series 1996-2 Notes and (2) moneys are
available pursuant to the terms of this Fourth Terms Supplement and the
applicable Sale and Servicing Agreement in an amount sufficient to pay all or a
portion of such Noteholders' Interest Carryover and (ii) interest shall accrue
on the Noteholders' Interest Carryover at a rate equal to One-Month LIBOR until
such Noteholders' Interest Carryover is paid in full or the related Final
Maturity Date occurs.
The Noteholders' Interest Carryover for a Class of Series
1996-2 Notes shall be paid by the Indenture Trustee on Outstanding Series 1996-2
Notes of such Class on the Note Distribution Date for such Class following the
first occurring Note Distribution Date for a subsequent Class Interest Period if
and to the extent that during such Class Interest Period no additional
Noteholders' Interest Carryover is accruing on such Class of Series 1996-2
Notes. Any Noteholders' Interest Carryover (and any interest accrued thereon) on
any Series 1996- 2 Note which is due and payable on the related Final Maturity
Date shall be paid to the Noteholder thereof on said Final Maturity Date to the
extent that moneys are available therefor in accordance with the provisions of
this Fourth Terms Supplement and the applicable Sale and Servicing Agreement;
provided, however, that any Noteholders' Interest Carryover (and any interest
accrued thereon) which is not yet due and payable on said Final Maturity Date
shall be canceled with respect to said Series 1996-2 Notes on said Final
Maturity Date. To the extent that any portion of the Noteholders' Interest
Carryover for a Class of Series 1996-2 Notes remains unpaid after payment of a
portion thereof, such unpaid portion of the Noteholders' Interest Carryover
shall be paid in whole or in part as required hereunder until fully paid by the
Indenture Trustee on the next occurring Note Distribution Date or Dates, as
necessary, for a subsequent Class Interest Period or Periods for such Class, if
and to the extent that the conditions in the second preceding sentence are
satisfied. On any Note Distribution Date on which the Indenture Trustee pays
only a portion of the Noteholders' Interest Carryover on an Series 1996-2 Note
of such Class, the Indenture Trustee shall give written notice in the manner set
forth in the immediately preceding paragraph to the Noteholder of such Series
1996-2 Note receiving such partial payment of the Noteholders' Interest
Carryover remaining unpaid on such Series 1996-2 Note.
The Note Distribution Date in such subsequent Class Interest
Period on which such Noteholders' Interest Carryover for a Class of Series
1996-2 Notes shall be paid shall be determined by the Indenture Trustee in
accordance with the provisions of the immediately preceding paragraph, and the
Indenture Trustee shall make payment of the Noteholders' Interest Carryover in
the same manner as, and from the same Account from which, it pays interest on
the Series 1996-2 Notes on a Note Distribution Date.
(c) In the event that the Indenture Trustee no longer
determines, or fails to determine, when required, the Class Interest Rate with
respect to the Series 1996-2 Notes, or, if for any reason such manner of
determination shall be held to be invalid or unenforceable by a court of
competent jurisdiction, the Class Interest Rate for the next succeeding Class
Interest Period for the Series 1996-2 Notes shall be the Net Loan Rate as
determined by the Administrator (which is responsible for notifying the
Indenture Trustee of such Net Loan Rate), for such next succeeding Interest
Period.
SECTION 2.5. CLASS INTEREST RATE.
SECTION 2.5.1. PAYMENT DEFAULTS. The Indenture Trustee shall
determine not later than 2:00 p.m., eastern time, on the Business Day next
succeeding a Note Distribution Date, whether a Payment Default has occurred. If
a Payment Default has occurred, the Indenture Trustee shall, not later than 2:15
p.m., eastern time, on such Business Day, send a notice thereof in substantially
the form of Exhibit B attached hereto to the Eligible Lender Trustee and the
Surety Provider by telecopy or similar means and, if such Payment Default is
cured, the Indenture Trustee shall immediately send a notice in substantially
the form of Exhibit C attached hereto to the Eligible Lender Trustee and the
Surety Provider by telecopy or similar means.
SECTION 2.5.2. CALCULATION OF ONE-MONTH LIBOR AND NON-PAYMENT
RATE. The Indenture Trustee shall calculate One-Month LIBOR on each Class Rate
Determination Date and shall notify the Eligible Lender Trustee of One-Month
LIBOR. If a Payment Default shall have occurred, the Indenture Trustee shall
calculate the Non-Payment Rate on the Class Rate Determination Date for (i) each
Class Interest Period commencing after the occurrence and during the continuance
of such Payment Default and (ii) any Class Interest Period commencing less than
two Business Days after the cure of any Payment Default. The determination by
the Indenture Trustee of One-Month LIBOR shall (in the absence of manifest
error) be final and binding upon all parties.
SECTION 2.6. ADDITIONAL PROVISIONS REGARDING THE CLASS
INTEREST RATES ON THE SERIES 1996-2 NOTES. The determination of a Class Interest
Rate by the Indenture Trustee or any other Person pursuant to the provisions of
the applicable Section of this Article II shall be conclusive and binding on the
Noteholders of the Class of Series 1996-2 Notes to which such Class Interest
Rate applies, and the Issuer and the Indenture Trustee may rely thereon for all
purposes.
In no event shall the cumulative amount of interest paid or
payable on a Class of Series 1996-2 Notes (including interest calculated as
provided herein, plus any other amounts that constitute interest on the Series
1996-2 Notes of such Class under applicable law, which are contracted for,
charged, reserved, taken or received pursuant to the Series 1996-2 Notes of such
Class or related documents) calculated from the date of issuance of the Series
1996-2 Notes of such Class through any subsequent day during the term of the
Series 1996-2 Notes of such Class or otherwise prior to payment in full of the
Series 1996-2 Notes of such Class exceed the amount permitted by applicable law.
If the applicable law is ever judicially interpreted so as to render usurious
any amount called for under the Series 1996-2 Notes of such Class or related
documents or otherwise contracted for, charged, reserved, taken or received in
connection with the Series 1996-2 Notes of such Class, or if the acceleration of
the maturity of the Series 1996-2 Notes of such Class results in payment to or
receipt by the Noteholder or any former Noteholder of the Series 1996-2 Notes of
such Class of any interest in excess of that permitted by applicable law, then,
notwithstanding any provision of the Series 1996-2 Notes of such Class or
related documents to the contrary, all excess amounts theretofore paid or
received with respect to the Series 1996-2 Notes of such Class shall be credited
on the principal balance of the Series 1996-2 Notes of such Class (or, if the
Series 1996-2 Notes of such Class have been paid or would thereby be paid in
full, refunded by the recipient thereof), and the provisions of the Series
1996-2 Notes of such Class and related documents shall automatically and
immediately be deemed reformed and the amounts thereafter collectible hereunder
and thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for under the Series 1996-2
Notes of such Class and under the related documents.
ARTICLE III
DISTRIBUTIONS
Section 3.1 DISTRIBUTIONS OF INTEREST AND PRINCIPAL. The
Indenture Trustee shall make distributions from and to the several Trust
Accounts in the manner provided for in Section 5.5 of the Third Supplemental
Sale and Servicing Agreement, as such Section may be amended from time to time.
Section 3.2 SELECTION OF NOTES TO RECEIVE PAYMENTS OF
PRINCIPAL. On each Note Distribution Date for which the Class A-9 Notes are
receiving a payment of principal, such principal will be distributed pro rata
among all owners of the Class A-9 Notes as of the related Record Date based on
the amount of Class A-9 Notes so owned, and such distributions may be made in
amounts less than $50,000.
Notice of the specific Notes to receive payments of principal
is to be given by the Indenture Trustee by first-class mail, postage prepaid,
mailed not less than 15 days but no more than 30 days before the applicable Note
Distribution Date at the address of the applicable Noteholder appearing on the
registration books. Any defect in or failure to give such mailed notice shall
not affect the validity of proceedings for the payment of any other Notes not
affected by such failure or defect. All notices of payment are to state: (i) the
applicable Note Distribution Date; (ii) the amount of principal to be paid, and
(iii) the Class of the Notes to be paid.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. ISSUER FOR THIS FOURTH TERMS SUPPLEMENT. This
Fourth Terms Supplement is adopted pursuant to the provisions of the Master
Indenture.
SECTION 4.2. COUNTERPARTS. This Fourth Terms Supplement may
be simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
SECTION 4.3. INDENTURE CONSTITUTES A SECURITY AGREEMENT. This
Fourth Terms Supplement constitutes a security agreement for the purposes of the
Uniform Commercial Code.
SECTION 4.4. GOVERNING LAW. This Fourth Terms Supplement
shall be governed by and construed in accordance with the laws of the State of
New York.
SECTION 4.5. RATIFICATION OF MASTER INDENTURE. As
supplemented by this Fourth Terms Supplement and each previously executed Terms
Supplement, the Master Indenture is in all respects ratified and confirmed, and
the Master Indenture as so supplemented by this Fourth Terms Supplement and each
previously executed Terms Supplement shall be read, taken and construed as one
and the same instrument. Each addition to and amendment of the Master Indenture
contained herein is solely for purposes of the Series 1996-2 Notes, and shall
have no effect on any other Series of Notes issued pursuant to the Master
Indenture. If any term of this Fourth Terms Supplement conflicts with any term
of the Master Indenture or any previously executed Terms Supplement, this Fourth
Terms Supplement shall control for purposes of the Series 1996-2 Notes.
Notwithstanding the foregoing, the percentage set forth in clause (ii) of the
definition of Specified Reserve Account Balance relating to each Series of Notes
shall be 102.25%, or such other percentage as may be agreed to in writing by the
Administrator and the Surety Provider. It is the express intention of the
parties hereto that the Specified Reserve Account Balance shall be determined by
reference to the aggregate outstanding principal balances of each Series of
Notes and Certificates. Notice of any change to the definition of Specified
Reserve Account Balance shall be given by the Administrator to the Rating
Agencies.
IN WITNESS WHEREOF, the parties hereto have caused this
Fourth Terms Supplement to be duly executed as of the day and year first above
written.
CLASSNOTES TRUST 1995-I
By: DAUPHIN DEPOSIT BANK AND
TRUST COMPANY, not in its
individual capacity
Attest: but solely as Eligible
Lender Trustee
By:/S/ Xxx X. Xxxx By:/s/ Xxxx X. Xxxxx
Name: Xxx X. Xxxx Name:Xxxx X. Xxxxx
Title: Assistant Secretary Title: Vice President
Attest: BANKERS TRUST COMPANY, not in its
individual capacity but solely
as Indenture Trustee,
By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title:Assistant Treasurer
CONSENTED TO:
AMBAC INDEMNITY CORPORATION
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title:First Vice President
TRANS-WORLD INSURANCE COMPANY
D/B/A EDUCAID
By: /s/ Xxxxx Xxxxxxx
Name: Xxxxx Xxxxxxx
Title:Treasurer
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and
for said county and state, on this day personally appeared Xxxx X. Xxxxx, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said Vice
President of Dauphin Deposit Bank and Trust Company, not in its individual
capacity but solely as Eligible Lender Trustee of CLASSNOTES TRUST 1995-I, a
Pennsylvania trust, and that he executed the same as the act of said trust for
the purpose and consideration therein expressed, and in the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 27th day of
December, 1996.
/s/ Xxxxx Xxxxxxx
Notary Public in and for
the State of New York.
[SEAL]
My commission expires:
December 4, 0000
XXXXX XX XXX XXXX, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and
for said county and state, on this day personally appeared Xxxxxx X. Xxxxxx,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said Assistant Treasurer of BANKERS TRUST COMPANY, a New York banking
corporation, and that she executed the same as the act of said corporation for
the purpose and consideration therein expressed, and in the capacities therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the 27th day of
December, 1996.
/s/ Xxxxx Xxxxxxx
Notary Public in and for
the State of New York.
[SEAL]
My commission expires:
December 4, 1997
EXHIBIT A
[FORM OF LIBOR RATE NOTES]
CLASSNOTES TRUST 1995-I
(f/k/a EDUCATION LOAN ALLIANCE 1995-I)
ASSET BACKED NOTES
SERIES 1996-2
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.
THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL
AGENCY.
No. A-9-_ $__________
FINAL CLASS
MATURITY DATED INTEREST
CLASS DATE DATE RATE CUSIP
_____ _______ ______ ________ ______
X-0 XXXXX + ____%
as herein
provided
REGISTERED NOTEHOLDER: CEDE & CO.
__________________
PRINCIPAL AMOUNT: __________________
CLASSNOTES TRUST 1995-I (formerly known as Education Loan
Alliance 1995-I), a Pennsylvania business trust (the "Issuer"), for value
received, promises to pay, from the sources herein described, to the Registered
Noteholder identified above, or registered assigns, upon presentation and
surrender hereof at the Corporate Trust Office of Bankers Trust Company, as
Paying Agent, or at the principal office of any successor or additional Paying
Agent, the Principal Amount identified above on the Final Maturity Date
identified above, and to pay to the registered owner hereof, interest and
principal hereon in lawful money of the United States of America at the Class
Interest Rate on the dates as provided herein. Unless otherwise defined in this
Series 1996-2 Note, capitalized terms used in this Series 1996-2 Note shall have
the respective meanings given to such terms in the Master Indenture dated as of
March 28, 1995 (the "Master Indenture"), as supplemented by the Fourth Terms
Supplement dated as of December 27, 1996, (the "Fourth Terms Supplement" and,
together with the Master Indenture, the "Indenture") between the Issuer and
Bankers Trust Company, as Indenture Trustee.
This Series 1996-2 Note is one of a duly authorized issue of
notes of the Issuer designated as "ClassNotes Trust 1995-I Asset-Backed Notes,
Series 1996-2" (herein referred to collectively as the "Series 1996-2 Notes"),
in the aggregate principal amount of $140,000,000 issued under the Indenture.
The Series 1996-2 Notes are issued to finance the acquisition and consolidation
of Financed Student Loans, and to make certain deposits to the Pledged Accounts.
The Master Indenture provides for the issuance, from time to
time, under the conditions, limitations and restrictions set forth therein, of
additional notes on a parity with all Series of obligations issued or to be
issued under the Indenture, for the purpose of providing additional funds for
the acquisition and consolidation of Financed Student Loans (said additional
notes, together with Series 1996-2 Notes, being collectively referred to herein
as the "Notes").
The Notes are secured under the Indenture which, together
with certain other documents, assigns to the Indenture Trustee for the benefit
of the Noteholders all the rights and remedies of the Issuer under certain
Financed Student Loans and rights under various contracts providing for the
issuance, guarantee and servicing of such Financed Student Loans. Reference is
hereby made to the Indenture for the provisions, among others, with respect to
the custody and application of the proceeds of the Notes, definitions of certain
capitalized terms used in this Series 1996-2 Note, the nature and the extent of
the liens and security of the Indenture, the collection and disposition of
revenues, the funds charged with and pledged to the payment of the principal of
and the interest on the Notes, the terms and conditions under which additional
Notes may be issued, the rights, duties and immunities of the Indenture Trustee,
the rights of the registered owners of the Notes, and the rights and obligations
of the Issuer. By the acceptance of this Series 1996-2 Note, the registered
owner hereof assents to all of the provisions of the Indenture.
The unpaid principal amount hereof from time to time
outstanding shall bear interest at a Class Interest Rate, as described below,
payable on each applicable Note Distribution Date to the extent of interest
accrued on the principal then outstanding, such interest to accrue from the
later of the date hereof or the date through which interest has been paid or
duly provided for. Interest at a Class Interest Rate established pursuant to the
Fourth Terms Supplement shall be computed for the actual number of days elapsed
on the basis of a year consisting of 360 days.
During the Initial Period, this Series 1996-2 Note shall bear
interest at the Class Initial Rate equal to the rate set forth in the Fourth
Terms Supplement. Thereafter, this Series 1996-2 Note generally shall bear
interest at a Class Interest Rate equal to One-Month LIBOR plus the margin set
forth in the Fourth Terms Supplement.
If the LIBOR Rate for the Series 1996-2 Notes is greater than
the Net Loan Rate, then the Class Interest Rate applicable to the Series 1996-2
Notes for that Interest Period will be the Net Loan Rate. If the Class Interest
Rate applicable to the Series 1996-2 Notes for any Interest Period is the Net
Loan Rate, the Indenture Trustee shall determine the Noteholders' Interest
Carryover, if any, with respect to the Series 1996-2 Notes for such Interest
Period. Such Noteholders' Interest Carryover shall bear interest calculated at a
rate equal to One-Month LIBOR from the Note Distribution Date for each Interest
Period with respect to which such Noteholders' Carryover was calculated until
paid. For purposes of this Series 1996-2 Note, any reference to "principal" or
"interest" herein shall not include within the meaning of such words
Noteholders' Interest Carryover or any interest accrued on any such Noteholders'
Interest Carryover. Such Noteholders' Interest Carryover shall be calculated by
the Indenture Trustee during such Interest Period in sufficient time for the
Indenture Trustee to give notice to each Noteholder of such Noteholders'
Interest Carryover as required in the next succeeding sentence. On the Note
Distribution Date for an Interest Period with respect to which such Noteholders'
Interest Carryover has been calculated by the Indenture Trustee, the Indenture
Trustee shall give written notice to each Noteholder of the Noteholders'
Interest Carryover applicable to each Noteholder's Series 1996-2 Notes, which
written notice may accompany the payment of interest by check made to each such
Noteholder on such Note Distribution Date or otherwise shall be mailed on such
Note Distribution Date by first class mail, postage prepaid, to each such
Noteholder at such Noteholder's address as it appears on the registration books
maintained by the Registrar. Such notice shall state, in addition to such
Noteholders' Interest Carryover, that, unless and until the Final Maturity Date
for such Series 1996-2 (after which no Noteholders' Interest Carryover (and all
accrued interest thereon) shall be paid with respect to a Series 1996-2 Note),
(i) the Noteholders' Interest Carryover (and interest accrued thereon calculated
on the basis of One-Month LIBOR) shall be paid by the Indenture Trustee on a
Series 1996-2 Note on the first occurring Note Distribution Date for a
subsequent Interest Period if and to the extent that (1) during such Interest
Period no additional Noteholders' Interest Carryover is accruing on the Series
1996-2 Notes and (2) moneys are available on such Note Distribution Date
pursuant to the terms of the Fourth Terms Supplement in an amount sufficient to
pay all or a portion of such Noteholders' Interest Carryover and (ii) interest
shall accrue on the Noteholders' Interest Carryover at a rate equal to One-Month
LIBOR until such Noteholders' Interest Carryover is paid in full or is
cancelled.
The Noteholders' Interest Carryover for the Series 1996-2
Notes shall be paid by the Indenture Trustee on Outstanding Series 1996-2 Notes
on the first occurring Note Distribution Date for a subsequent Interest Period
if and to the extent that (i) during such Interest Period, no additional
Noteholders' Interest Carryover is accruing on the Series 1996-2 Notes and (ii)
on such Note Distribution Date there are sufficient moneys available pursuant to
the terms of the Fourth Terms Supplement to pay all or a portion of the
Noteholders' Interest Carryover due on the Series 1996-2 Notes on such Note
Distribution Date. Any Noteholders' Interest Carryover (and any interest accrued
thereon) on any Series 1996-2 Note which is due and payable on the related Final
Maturity Date, shall be paid to the Noteholder thereof on said Final Maturity
Date to the extent that moneys are available therefor in accordance with the
Fourth Terms Supplement; provided, however, that any Noteholders' Interest
Carryover (and any interest accrued thereon) which is not yet due and payable on
said Final Maturity Date shall be cancelled with respect to said Series 1996-2
Note on said Final Maturity Date. To the extent that any portion of the
Noteholders' Interest Carryover remains unpaid after payment of a portion
thereof, such unpaid portion of the Noteholders' Interest Carryover shall be
paid in whole or in part until fully paid by the Indenture Trustee on the next
occurring Note Distribution Date or Dates, as necessary, for a subsequent
Interest Period or Periods, if and to the extent that the conditions in the
immediately preceding sentence are satisfied.
The Note Distribution Date in such subsequent Interest Period
on which such Noteholders' Interest Carryover for the Series 1996-2 Notes shall
be paid shall be determined by the Indenture Trustee in accordance with the
provisions of the immediately preceding paragraph, and the Indenture Trustee
shall make payment of the Noteholders' Interest Carryover in the same manner as,
and from the same account from which, it pays interest on the Series 1996-2
Notes on a Note Distribution Date.
Distributions of principal will made on each Note
Distribution Date to the Class of Notes with the earliest Final Maturity Date in
the manner described in the Third Supplemental Sale and Servicing Agreement. On
each Note Distribution Date for which the Class A-9 Notes are receiving a
payment of principal, such principal will be distributed pro rata among all
owners of the Class A-9 Notes as of the related Record Date based on the amount
of Class A-9 Notes so owned, and such distributions may be made in amounts less
than $50,000.
If an Event of Default as defined in the Indenture occurs,
the principal of and interest on all Notes issued under the Indenture may be
declared due and payable upon the conditions and in the manner and with the
effect provided in the Indenture. The Indenture and the rights and obligations
of the Issuer, the Indenture Trustee and the Noteholder hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
The Noteholder of this Series 1996-2 Note shall have no right
to enforce the provisions of the Indenture or to institute action to enforce the
covenants therein, or to take any action with respect to any Event of Default
under the Indenture, or to institute, appear in or defend any suit or other
proceeding with respect thereto, except as provided in the Indenture.
The transfer of this Series 1996-2 Note may be registered
only upon surrender hereof to the Indenture Trustee together with an assignment
duly executed by the registered owner or its attorney or legal representative in
such form as shall be satisfactory to the Indenture Trustee. Upon any such
registration of transfer of this Series 1996-2 Note and subject to the payment
of any fees and charges as provided by the Indenture, the Issuer shall execute
and the Indenture Trustee shall authenticate and deliver in exchange for this
Series 1996- 2 Note a new Series 1996-2 Note or Notes registered in the name of
the transferee, in any denomination or denominations authorized by the
Indenture, of the same maturity and in an aggregate principal amount equal to
the unredeemed principal amount of this Series 1996-2 Note and bearing the same
interest as this Series 1996-2 Note.
In any case where the date fixed for the payment of principal
of or interest on this Series 1996-2 Note shall not be a Business Day, then
payment of such principal or interest 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 fixed for the payment thereof.
It is hereby certified, recited and declared that all acts,
conditions and things required to have happened, to exist and to have been
performed precedent to and in the execution and delivery of the Indenture and
issuance of this Series 1996-2 Note have happened, do exist and have been
performed in due time, form and manner as required by law.
This Series 1996-2 Note shall not be valid or become
obligatory for any purpose or be entitled to any security or benefit under the
Indenture until the certificate of authentication hereon shall have been
manually signed by the Indenture Trustee.
IN WITNESS WHEREOF, the Issuer has caused this Series 1996-2
Note to be executed in its name by the manual or facsimile signature of an
Authorized Officer and the manual or facsimile signature of an Assistant
Secretary, and has caused its corporate seal or a facsimile thereof to be hereto
affixed.
CLASSNOTES TRUST 1995-I
By: DAUPHIN DEPOSIT BANK AND TRUST COMPANY,
not in its individual capacity but
solely as Eligible Lender Trustee
By:__________________________________________
(SEAL)
Attest:
__________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This Note is one of the Series 1996-2 Notes designated in and
issued under the provisions of the within mentioned Indenture.
BANKERS TRUST COMPANY
New York, New York, as
Indenture Trustee
By:__________________________________
Authorized Representative
Date of Authentication:
-----------------------
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto , the
within Note and irrevocably appoints ,
attorney-in-fact, to transfer the within Note on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: ___________ ___________________________
NOTICE: The signature to Signature Guaranteed:
this assignment must
correspond with the name as ___________________________
it appears upon the face of
the within Note in every par-
ticular, without any alter-
ation whatsoever.
Name and Address:__________________________
Tax Identification Number or
Social Security Number(s):___________________________
[END OF FORM OF LIBOR RATE NOTES]
EXHIBIT B
CLASSNOTES TRUST 1995-I
ASSET BACKED NOTES, SERIES 1996-2, CLASS A-9
NOTICE OF PAYMENT DEFAULT
NOTICE IS HEREBY GIVEN that an Event of Default has occurred
and is continuing with respect to the Notes identified above. The Class Interest
Rate for the Series 1996- 2, Class A-9 Notes for the next succeeding Interest
Period shall be the Non-Payment Rate.
BANKERS TRUST COMPANY,
as Indenture Trustee
Dated: By:______________________________
Name:
Title:
EXHIBIT C
CLASSNOTES TRUST 1995-I
ASSET BACKED NOTES, SERIES 1996-2, CLASS A-9
NOTICE OF CURE OF PAYMENT DEFAULT
NOTICE IS HEREBY GIVEN that an Event of Default with respect
to the Notes identified above has been waived or cured. The next Note
Distribution Date is ______________________________.
BANKERS TRUST COMPANY,
as Indenture Trustee
Dated: By:_________________________
Name:
Title:
