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Exhibit 4.2
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SECOND TERMS SUPPLEMENT
TO THE
INDENTURE
DATED AS OF MARCH 27, 1997
between
PNC STUDENT LOAN TRUST I
and
BANKERS TRUST COMPANY
Indenture Trustee
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Dated as of June __, 1997
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Securing
$1,030,000,000
PNC STUDENT LOAN TRUST I STUDENT LOAN ASSET BACKED NOTES
SERIES 1997-2
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TABLE OF CONTENTS
Page
ARTICLE I. ----
DEFINITIONS
ARTICLE II.
AUTHORIZATION, TERMS AND ISSUANCE
SECTION 2.1. Authorization of Series 1997-2 Notes........................6
SECTION 2.2. Purposes....................................................6
SECTION 2.3. Terms of Series 1997-2 Notes................................6
SECTION 2.4 Series 1997-2 Notes.........................................8
SECTION 2.5. Class Interest Rates.......................................10
SECTION 2.6. Additional Provisions Regarding the
Class Interest Rates on the Series
1997-2 Notes...............................................11
ARTICLE III
DISTRIBUTIONS
Section 3.1. Distributions of Interest and Principal....................12
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Issuer for This Second Terms Supplement....................12
SECTION 4.2. Counterparts...............................................12
SECTION 4.3. Indenture Constitutes a Security
Agreement..................................................12
SECTION 4.4. Governing Law..............................................13
SECTION 4.5. Ratification of Indenture..................................13
EXHIBIT A-1 Form of LIBOR Rate Note
EXHIBIT A-2 Form of Fixed Rate Note
EXHIBIT A-3 Form of Class B Note
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SECOND TERMS SUPPLEMENT, dated as of June __, 1997, between
PNC STUDENT LOAN TRUST I, a Delaware business trust (the "Issuer") acting
through THE FIRST NATIONAL BANK OF CHICAGO, a national banking association, 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 an Indenture dated as of March
27, 1997 (the "Indenture").
PRELIMINARY STATEMENT
Section 2.3 of the 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 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 $1,030,000,000 to be known as the
Issuer's Asset Backed Notes, Series 1997-2 (the "Series 1997-2 Notes"), and the
Issuer and the Indenture Trustee are executing and delivering this Second Terms
Supplement in order to provide for the Series 1997-2 Notes. Except as otherwise
specified herein, or as the context may require, capitalized terms used but not
defined herein shall have the meanings set forth in Appendix A to the Transfer
and Servicing Agreement dated as of June __, 1997 (the "Transfer and Servicing
Agreement") among the Issuer, PNC Bank, National Association as Transferor,
Administrator and Master Servicer (in such capacities, the "Transferor", the
"Administrator" and the "Master Servicer," respectively) and the Eligible
Lender Trustee 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 1997-2 Notes and such Swap Counterparty,
all of the Issuer's right, title and interest in and to (a) the Financed
Student Loans listed in Schedule A to the Transfer and Servicing Agreement (as
such Schedule may be amended from time to time including, but not limited to by
the acquisition by the Trust during the Exchange Period of Exchanged Student
Loans) and all obligations of the Obligors thereunder (other than Interest
Subsidy Payments and Special Allowance Payments payable through the Cut-Off
Date (or with respect to the Exchange Student Loans, the applicable
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Subsequent Cut-of Date), including all moneys paid thereunder other than
Interest Subsidy Payments and Special Allowance Payments payable through the
Cut-Off Date, and all written communications received by the Transferor with
respect thereto and still retained by the Transferor in accordance with its
retention policies (including borrower correspondence, notices of death,
disability or bankruptcy and requests for deferrals or forbearance), after the
close of business on June 6, 1997 (the "Cut-Off Date") (or with respect to the
Exchanged 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 the Certificate Monthly Advance Account) and in all
investments and proceeds thereof (including all income thereon), (c) all
proceeds of the foregoing, including without limitation any proceeds of the
conversion, voluntary or involuntary, of any of the foregoing into cash or
other liquid property. Such Grants are made, however, in trust, to secure the
Series 1997-2 Notes and the Swap Agreements, 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 that
the Class A Notes and accounts owed to each Counterparty with respect to Trust
Swap Payments are senior in right of payment to the Class B Notes and except as
otherwise described herein, in the Indenture or any other Basic Document, and
to secure (i) the payment of all amounts due on the Series 1997-2 Notes, as
such amounts become due in accordance with their terms, (ii) the payment of all
other sums payable under the Indenture, this Second Terms Supplement or any
other Basic Document with respect to the Series 1997-2 Notes and (iii)
compliance with the provisions of the Indenture, this Second Terms Supplement
or any other Basic Document with respect to the Series 1997-2 Notes, all as
provided in the Indenture and this Second Terms Supplement.
The Indenture Trustee acknowledges such Grants, accepts the trusts
hereunder in accordance with the provisions hereof and of the Indenture and
agrees to perform the duties herein or therein required.
ARTICLE I.
DEFINITIONS
In addition to the definitions set forth in Appendix A to the Transfer
and Servicing Agreement, the following terms shall be as defined below.
"Authorized Denominations" means, with respect to each Class
of Series 1997-2 Notes, $50,000 and integral multiples of $1,000 in excess
thereof.
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"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.
"Class A Notes" means the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, the Class A-5 Notes, the Class
A-6 Notes, the Class A-7 Notes, the Class A-8 Notes and the Class A-9 Notes.
"Class A-1 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-2 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-3 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-4 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-5 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-6 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-7 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-8 Notes" has the meaning set forth in Section 2.1
herein.
"Class A-9 Notes" has the meaning set forth in Section 2.1
herein.
"Class B Notes" has the meaning set forth in Section 2.1
herein.
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"Class Initial Rate" means for the LIBOR Rate Notes (i)
_______% per annum with respect to the Class A-1 Notes, (ii) ____% per annum
with respect to the Class A-8 Notes, (iii) ___% per annum with respect to the
Class A-9 Notes and (iv) ____% per annum with respect to the Class B Notes.
"Class Interest Rate" means with respect to (i) the LIBOR
Rate Notes, each variable rate of interest per annum borne by a Class of LIBOR
Rate Notes during each Interest Period and determined in accordance with the
provisions of Sections 2.4 and 2.5 hereof, (ii) the Class A-2 Notes _____% per
annum, (iii) the Class A-3 Notes _____% per annum, and (iv) the Class A-4 Notes
____% per annum (v) the Class A-5 notes, ______% per annum, (vi) the Class A-6
Notes, _____% per annum and (vii) the Class A-7 notes, _____% per annum;
provided, however, that in the case of an Event of Default the Class Interest
Rate for each Class of Series 1997-2 Notes shall equal the [applicable]
Non-Payment Rate for such Class of Series 1997-2 Notes.
"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 after giving effect
to all applicable Interest Subsidy Payments and Special Allowance Payments due
with respect to such Financed Student Loan.
"Final Maturity Date" means (i) July 25, 1998 with respect
to the Class A-1 Notes, (ii) January 25, 2000 with respect to the Class A-2
Notes, (iii) January 25, 2001 with respect to the Class A-3 Notes, (iv) January
25, 2002 with respect to the Class A-4 Notes, (v) January 25, 2003 with respect
to the Class A-5 Notes, (vi) January 25, 2004 with respect to the Class A-6
Notes, and (vii) January 25, 2007 with respect to the Class A-7 Notes, and
(viii) January 25, 2008 with respect to the Class A-8 Notes, and (ix) January
25, 2017 with respect to the Class A-9 Notes, and (x) January 25, 2027 with
respect to the Class B Notes.
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"Fixed Rate Notes" means the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes and the
Class A-7 Notes.
"Initial Interest Period" means, as to each Class of Series
1997-2 Notes, the period commencing on the Closing Date and continuing through
(and including) July 24, 1997.
"Interest Period" means, with respect to each Class of Series
1997-2 Notes, the Initial Interest Period and, thereafter, each period
commencing on the 25th day of each month and ending on (and including) the 24th
day of the following month or the Final Maturity Date of such Class, as
applicable (provided that for any Interest Period ending immediately prior to a
Distribution Date, such Interest Period shall end on the day immediately
preceding such Distribution Date and the next Interest Period will begin on
such Distribution Date).
"Interest Rate" means, with respect to each Class of the
Series 1997-2 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 "LIBOR Rate Adjustment Date" means the date on which a
Class Interest Rate for a Class of LIBOR Rate Notes is effective, which is the
15th day of each calendar month.
"LIBOR Rate Determination Date" means the date which is both
two Business Days and two London Banking Days immediately preceding the related
LIBOR Rate Adjustment Date.
"LIBOR Rate Notes" means the Class A-1 Notes, the Class A-8
Notes, the Class A-9 Notes and the Class B Notes.
"Net Loan Rate" means for any Interest Period, the weighted
average Effective Interest Rate for the Collection Period immediately preceding
the last day of such Interest Period, less the Program Operating Expense
Percentage (or less __% per annum during the period from the Closing Date
through December 31, 1998).
"Non-Payment Rate" means (i) for each Class of LIBOR Rate
Notes, One-Month LIBOR plus __% and (ii) for the Fixed Rate Notes, _________.
"Noteholders' Interest Carryover" means, with respect to any
Interest Period for any Class of LIBOR Rate Notes 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 such Class of LIBOR Rate
Notes would have accrued in respect of the related Interest Period had
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interest been calculated based on the applicable Class Interest Rate (without
giving effect to the Net Loan Rate) 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 LIBOR Rate 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 LIBOR Rate Notes on such date pursuant to Sections ____ and ____
of the Transfer and Servicing Agreement.
"Second Terms Supplement" means this Second Terms Supplement,
as from time to time amended or supplemented.
"Series 1997-2 Notes" has the meaning set forth in the
Preliminary Statement.
ARTICLE II.
AUTHORIZATION, TERMS AND ISSUANCE
SECTION 2.1. Authorization of Series 1997-2 Notes. There is
hereby authorized the borrowing of funds, and to evidence such borrowing there
are hereby authorized ten (10) Classes of Series 1997-2 Notes (collectively, the
"Series 1997-2 Notes"), designated as (i)the "PNC Student Loan Trust I, Series
1997-2, Senior LIBOR Rate Class A-1 Asset Backed Notes" (the "Class A-1 Notes")
in the aggregate principal amount of $90,000,000, (ii) the "PNC Student Loan
Trust I, Series 1997-2, Senior Fixed Rate Class A-2 Asset Backed Notes" (the
"Class A-2 Notes") in the aggregate principal amount of $107,000,000, (iii) the
"PNC Student Loan Trust I, Series 1997-2, Senior Fixed Rate Class A-3 Asset
Backed Notes" (the "Class A-3 Notes"), in the aggregate principal amount of
$107,000,000, (iv) the "PNC Student Loan Trust I, Series 1997-2, Senior Fixed
Rate Class A-4 Asset Backed Notes" (the "Class A-4 Notes"), in the aggregate
principal amount of $102,000,000, (v) the "PNC Student Loan Trust I, Series
1997-2, Senior Fixed Rate Class A-5 Asset Backed Notes" (the "Class A-5 Notes"),
in the aggregate principal amount of $94,000,000, (vi) the "PNC Student Loan
Trust I, Series 1997-2, Senior Fixed Rate Class A-6 Asset Backed Notes" (the
"Class A-6 Notes"), in the aggregate principal amount of $72,500,000, (vii) the
"PNC Student Loan Trust I, Series 1997-2, Senior Fixed Rate Class A-7 Asset
Backed Notes" (the
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"Class A-7 Notes"), in the aggregate principal amount of $121,000,000, (viii)
the "PNC Student Loan Trust I, Series 1997-2, Senior LIBOR Rate Class A-8 Asset
Backed Notes" (the "Class A-8 Notes"), in the aggregate principal amount of
$175,000,000, (ix) the "PNC Student Loan Trust I, Series 1997-2, Senior LIBOR
Rate Class A-9 Asset Backed Notes" (the "Class A-9 Notes"), in the aggregate
principal amount of $125,450,000, (x) the "PNC Student Loan Trust I, Series
1997-2, Subordinate LIBOR Rate Class B Asset Backed Notes" (the "Class B Notes")
in the aggregate principal amount of $36,050,000.
SECTION 2.2. Purposes. The Series 1997-2 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 1997-2 Notes. The Series 1997-2
Notes shall be issued in fully registered form, in substantially the form set
forth in Exhibit A-1 hereof (with respect to the Class A Notes, that are LIBOR
Rate Notes), in Exhibit A-2 (with respect to the Class A Notes that are Fixed
Rate Notes) and in Exhibit A-3 (with respect to the Class B Notes), in each
case with such variations, omissions and insertions as may be required by the
circumstances, as may be required or permitted by the Indenture and this Second
Terms Supplement, or be consistent with the Indenture and this Second 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 1997-2 Notes may be issued only in Authorized
Denominations. The Series 1997-2 Notes shall be dated as of the Closing Date.
Each Class of Series 1997-2 Notes shall mature on its Final Maturity Date. Each
Class of Series 1997-2 Notes shall be numbered consecutively from 1 upwards
with the prefix A-1-(with respect to the Class A-1 Notes), A-2-(with respect to
the Class A-2 Notes, A-3- (with respect to the Class A-3 Notes), A-4- (with
respect to the Class A-4 Notes), A-5- (with respect to the Class A-5 Notes),
A-6- (with respect to the Class A-6 Notes), A-7- (with respect to the Class A-7
Notes), A-8- (with respect to the Class A-8 Notes), A-9- (with respect to the
Class A-9 Notes) and B-(with respect to the Class B Notes) preceding each
number. The Series 1997-2 Notes shall be issued to a Securities Depository for
use in a Book-Entry System in accordance with the provisions of Section 2.14 of
the Indenture.
Interest on each Series 1997-2 Note shall accrue on the
Outstanding Amount of such Series 1997-2 Note until such Series 1997-2 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 Closing Date or the most recent
Distribution Date to which interest has been paid or duly provided for. Each
Series 1997-2 Note shall bear interest at an interest rate determined in
accordance with the provisions and subject to the limitations set
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forth herein, and interest on Series 1997-2 Notes shall be paid for the related
Interest Period on each Quarterly Distribution Date (on each Distribution Date
in the case of the Class of A-1 Notes) 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 Series 1997-2 Notes on each
Quarterly Distribution Date (on each Distribution Date in the case of the Class
of A-1 Notes) in an amount equal to the Noteholder's Principal Distribution
Amount on such Distribution Date or Distribution Date as the case may be in the
order and priorities set forth in the Transfer and Servicing Agreement and the
Indenture.
Except as otherwise set forth in the Indenture and the
Transfer and Servicing Agreement, the rights of the Holders of the Class B
Notes to receive distributions with respect to interest shall be subordinated
to the prior rights of the Holders of the Class A Notes to receive all payments
of interest to which they are entitled and each Swap Counterparty to receive
each Trust Swap Payment to which it is entitled and, after each Class of Series
1997-2 Notes has received the full amount of interest to which it is entitled
and each Swap Counterparty has received the full amount of all Trust Swap
Payments to which it is entitled, the rights of the Holders of the Class B
Notes to receive distributions with respect to principal shall be subordinated
to the prior rights of the Holders of the Class A Notes to receive all payments
of principal to which they are entitled.
SECTION 2.4 Series 1997-2 Notes. (a) Until the initial LIBOR
Rate Adjustment Date, each Class of LIBOR Rate Notes shall bear interest at the
Class Initial Rate for such Class. Thereafter, (i) the Class A-1 Notes shall
bear interest during each Interest Period at a Class Interest Rate equal to the
lesser of (x) One-Month LIBOR less ____% and (y) the Net Loan Rate; (ii) the
Class A-8 Notes shall bear interest during each Interest Period at a Class
Interest Rate equal to the lesser of (x) One-Month LIBOR plus ____% and (y) the
Net Loan Rate; (iii) the Class A-9 Notes shall bear interest during each
Interest Period at a Class Interest Rate equal to the lesser of (x) One-Month
LIBOR plus ____% and (y) the Net Loan Rate; and
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(iv) the Class B Notes shall bear interest during each Interest Period at a
Class Interest Rate equal to the lesser of (x) One-Month LIBOR plus ____% and
(y) the Net Loan Rate. Each Class of Fixed Rate Notes shall bear interest
during each Interest Period, including the Initial Interest Period at the Class
Interest Rate applicable to such Class of Fixed Rate Notes. Notwithstanding the
foregoing in no event shall the Class A-8 Notes, the Class A-9 Notes or
the Class B Notes bear interest during any Interest Period at a rate greater
than 18.0% per annum.
(b) With respect to the LIBOR Rate Notes, during each
Interest Period, interest at the related Class Interest Rate shall accrue daily
and shall be computed for the actual number of days elapsed in such Interest
Period on the basis of a year consisting of 360 days. With respect to the Fixed
Rate Notes, during each Interest Period, interest at the related Class Interest
Rate shall accrue daily and shall be computed of 12 months of 30 days each.
(c) If an Event of Default shall have occurred, the Class
Interest Rate on each Class of the Series 1997-2 Notes for the Interest Period
commencing on or immediately after such Event of Default, and for each Interest
Period thereafter, to and including the Interest Period, if any, during which,
or commencing less than two Business Days after, such Event of Default is cured
in accordance with the Indenture and this Second Terms Supplement, shall equal
the Non-Payment Rate on the first day of each such Interest Period;
(d) If for any Interest Period the Class Interest Rate for a
Class of LIBOR Rate Notes (without giving effect to the Net Loan Rate) is
greater than the Net Loan Rate, then the Class Interest Rate applicable to such
Class of LIBOR Rate Notes for that Interest Period will be the Net Loan Rate.
If the Class Interest Rate applicable to such Class of LIBOR Rate Notes for any
Interest Period is the Net Loan Rate, the Master Servicer shall determine the
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Noteholders' Interest Carryover, if any, with respect to such Class of LIBOR
Rate Notes for such Interest Period. Such Noteholders' Interest Carryover shall
bear interest calculated at a rate equal to One-Month LIBOR (as determined by
the Master Servicer from the Distribution Date for the Interest Period with
respect to which such Noteholders' Interest Carryover was calculated, until
paid. For purposes of this Second 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 LIBOR Rate Note of such Class by the Master
Servicer 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 Distribution Date
for an Interest Period with respect to which such Noteholders' Interest
Carryover for a Class of LIBOR Rate Notes has been calculated by the Master
Servicer, the Indenture Trustee shall give written notice to each Noteholder of
the applicable Class of the Noteholders' Interest Carryover applicable to each
Noteholder's LIBOR Rate 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 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 LIBOR Rate 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 LIBOR Rate 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 LIBOR Rate Note of such Class
on the first occurring 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 such Class of LIBOR Rate Notes
and (2) moneys are available pursuant to the terms of this Second Terms
Supplement and the Transfer 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.
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The Noteholders' Interest Carryover for a Class of LIBOR Rate
Notes shall be paid by the Indenture Trustee on Outstanding LIBOR Rate Notes of
such Class on the first occurring Distribution Date for a subsequent Interest
Period if and to the extent that during such Interest Period no additional
Noteholders' Interest Carryover is accruing on such Class of LIBOR Rate Notes.
Any Noteholders' Interest Carryover (and any interest accrued thereon) on any
LIBOR Rate 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 Second Terms Supplement and the Transfer 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 LIBOR Rate Notes on said Final Maturity
Date. To the extent that any portion of the Noteholders' Interest Carryover for
a Class of LIBOR Rate 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 Distribution Date or Dates, as necessary, for a
subsequent Interest Period or Periods for such Class, if and to the extent that
the conditions in the second preceding sentence are satisfied. On any
Distribution Date on which the Indenture Trustee pays only a portion of the
Noteholders' Interest Carryover on a LIBOR Rate Note of such Class, the
Indenture Trustee shall give written notice in the manner set forth in the
immediately preceding paragraph to the Noteholders of such LIBOR Rate Note
receiving such partial payment of the Noteholders' Interest Carryover remaining
unpaid on such LIBOR Rate Note.
(e) In the event that the Master Servicer no longer
determines, or fails to determine, when required, the Class Interest Rate with
respect to a Class of LIBOR Rate 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
Interest Period for such Class of LIBOR Rate Notes shall be the Net Loan Rate
as determined by the Master Servicer (which is responsible for notifying the
Indenture Trustee of such Net Loan Rate), for such next succeeding Interest
Period.
SECTION 2.5. Class Interest Rates. On each LIBOR Rate
Determination Date, the Master Servicer shall determine the Class Interest Rate
for each Class
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of LIBOR Rate Notes that will be applicable to the Interest Period following
such LIBOR Rate Determination Date (without giving effect to the Net Loan
Rate). In connection therewith, the Master Servicer shall calculate One-Month
LIBOR and shall notify the Indenture Trustee and the Eligible Lender Trustee of
One-Month LIBOR. If an Event of Default shall have occurred, the Master
Servicer shall calculate the Non-Payment Rate applicable to the LIBOR Rate
Notes on the LIBOR Rate Determination Date for (i) each Interest Period
commencing after the occurrence and during the continuance of such Event of
Default and (ii) any Interest Period commencing less than two Business Days
after the cure of any Event of Default. The determination by the Master
Servicer of One-Month LIBOR shall (in the absence of manifest error) be final
and binding upon all parties. On each LIBOR Rate Determination Date, the
Master Servicer also shall determine the Net Loan Rate for the related Interest
Period. Based upon such calculations, the Master Servicer shall determine the
Class Interest Rate applicable to each Class of LIBOR Rate Notes for the
applicable Interest Period.
SECTION 2.6. Additional Provisions Regarding the Class
Interest Rates on the Series 1997-2 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 1997-2 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 1997-2 Notes (including interest calculated as
provided herein, plus any other amounts that constitute interest on the Series
1997-2 Notes of such Class under applicable law, which are contracted for,
charged, reserved, taken or received pursuant to the Series 1997-2 Notes of
such Class or related documents) calculated from the date of issuance of the
Series 1997-2 Notes of such Class through any subsequent day during the term of
the Series 1997-2 Notes of such Class or otherwise prior to payment in full of
the Series 1997-2 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 1997-2 Notes of such Class or
related documents or otherwise contracted for, charged, reserved, taken or
received in connection with the Series 1997-2 Notes of such Class, or if the
acceleration of the maturity of the Series 1997-2 Notes of such Class results
in payment to or receipt by the Noteholder or any former Noteholder of the
Series 1997-2 Notes of such Class of any interest in
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excess of that permitted by applicable law, then, notwithstanding any provision
of the Series 1997-2 Notes of such Class or related documents to the contrary,
all excess amounts theretofore paid or received with respect to the Series
1997-2 Notes of such Class shall be credited on the principal balance of the
Series 1997-2 Notes of such Class (or, if the Series 1997-2 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 1997-2 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 1997-2 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 Transfer and
Servicing Agreement, as such Section may be amended from time to time. All
principal payments of Notes of any Class shall be made pro rata to the Holders
of Notes of such Class. No later than each Determination Date, the Master
Servicer shall compute the Principal Factor of each Class of Series 1997-2
Notes for the upcoming Distribution Date and shall notify the Indenture Trustee
of such Principal Factors.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Issuer for This Second Terms Supplement. This
Second Terms Supplement is adopted pursuant to the provisions of the Indenture.
SECTION 4.2. Counterparts. This Second 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
Second Terms Supplement constitutes a security agreement for the purposes of
the Uniform Commercial Code.
13
16
SECTION 4.4. Governing Law. This Second Terms Supplement
shall be governed by and construed in accordance with the laws of the State of
New York.
SECTION 4.5. Ratification of Indenture. As supplemented by
this Second Terms Supplement, the Indenture is in all respects ratified and
confirmed, and the Indenture so supplemented by this Second Terms Supplement
shall be read, taken and construed as one and the same instrument. Each
addition to and amendment of the Indenture contained herein is solely for
purposes of the Series 1997-2 Notes, and shall have no effect on any other
Series of Notes issued pursuant to the Indenture. If any term of this Second
Terms Supplement conflicts with any term of the Indenture or any previously
executed Terms Supplement, this Second Terms Supplement shall control for
purposes of the Series 1997-2 Notes.
14
17
IN WITNESS WHEREOF, the parties hereto have caused this
Second Terms Supplement to be duly executed as of the day and year first above
written.
PNC STUDENT LOAN TRUST I
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible
Lender Trustee
By:
------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, not in its
individual capacity but solely as
Indenture Trustee,
By:
------------------------------------
Name:
Title:
15
18
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared __________________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said _____________ of THE FIRST NATIONAL BANK OF CHICAGO, not in its individual
capacity but solely as Eligible Lender Trustee of PNC STUDENT LOAN TRUST I, a
Delaware 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 ____ day of June,
1997.
-----------------------------
Notary Public in and for
the State of New York.
[SEAL]
My commission expires:
----------------------
16
19
STATE OF NEW YORK, )
) ss.:
COUNTY OF NEW YORK, )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared __________________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said 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 ____ day of June,
1997.
-----------------------------
Notary Public in and for
the State of New York.
[SEAL]
My commission expires:
----------------------
17
20
EXHIBIT A-1
[FORM OF SENIOR LIBOR RATE NOTE]
PNC STUDENT LOAN TRUST I, SERIES 1997-2
SENIOR LIBOR RATE CLASS [A-1] [A-8] [A-9] ASSET BACKED NOTE
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 DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR INTEREST IN PNC
BANK, NATIONAL ASSOCIATION, THE FIRST NATIONAL BANK OF CHICAGO, FIRST CHICAGO
DELAWARE, INC. OR BANKERS TRUST COMPANY.
THIS NOTE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.
No. A-[1][8][9]-_____
$__________
FINAL CLASS
MATURITY DATED INTEREST
Class DATE DATE RATE CUSIP
----- ---- ---- ---- -----
[A-1][A-8] One-Month
[A-9] LIBOR [-] [+]
____% as herein
provided
REGISTERED NOTEHOLDER: CEDE & CO.
-----------------------------------
PRINCIPAL AMOUNT:
21
PNC BANK STUDENT LOAN TRUST I, a Delaware 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 herein, capitalized terms used herein shall have the
respective meanings given to such terms in the Indenture dated as of March 27,
1997 (the "Indenture"), as supplemented by the Second Terms Supplement dated as
of June __, 1997, (the "Second Terms Supplement" and, together with the
Indenture, the "Indenture") between the Issuer and Bankers Trust Company, as
Indenture Trustee.
This is one of a duly authorized issue of notes of the Issuer
designated as "PNC Student Loan Trust I, Series 1997-2, Senior LIBOR Rate Class
[A-1][A-8][A-9] Asset Backed Notes", in the aggregate principal amount of
$_________ (herein referred to as the "Class [A-1][A-8][A-9] Notes" together
with the PNC Student Loan Trust I, Series 1997-2, Senior LIBOR Rate Class
[A-1][A-8][A-9] Asset Backed Notes (the "Class [A-1][A-8][A-9] Notes"), the PNC
Student Loan Trust I, Series 1997-2, Senior LIBOR Rate Class [A-1][A-8][A-9]
Asset Backed Notes (the "Class [A-1] [A-8] [A-9] Notes") and the PNC Student
Loan Trust I, Subordinate LIBOR Rate Class B Asset Backed Notes (the "Class B
Notes and together with the Class [A-1] [A-8] [A-9] and Class [A-1] [A-8]
[A-9] Notes, the "LIBOR Rate Notes" and together with the Fixed Rate Notes, the
"Notes") issued under the Indenture. The Notes are issued to finance the
acquisition of Financed Student Loans by the Trust, and to make certain
deposits into the Pledged Accounts.
The Notes are secured under the Indenture which, together
with certain other documents, assigns to the Indenture Trustee for the benefit
of the Noteholders and each Swap Counterparty 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, the nature and the extent of the liens and security of the
Indenture, the collection and disposition of revenues, the funds charged with
2
22
and pledged to the payment of the principal of and the interest on the Notes,
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 LIBOR Rate Note, the registered owner hereof assents
to all of the provisions of the Indenture.
Distributions of principal and interest will made on each
[Quarterly] Distribution Date to the holders of this LIBOR Rate Note in the
manner described in the Transfer and Servicing Agreement.
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.
If an Event of Default shall have occurred, the Class
Interest Rate on each Class of Notes for the Interest Period commencing on or
immediately after such Event of Default, and for each Interest Period
thereafter, to and including the Interest Period, if any, during which, or
commencing less than two Business Days after, such Event of Default is cured in
accordance with the Indenture, shall equal the applicable Non-Payment Rate on
the first day of each such Interest Period.
The holder of this LIBOR Rate 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 LIBOR Rate 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 LIBOR Rate 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 LIBOR
Rate Note a new LIBOR Rate 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 LIBOR Rate Note and bearing the same
interest as this LIBOR Rate Note.
3
23
In any case where the date fixed for the payment of principal
of or interest on this LIBOR Rate 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 LIBOR Rate Note have happened, do exist and have been
performed in due time, form and manner as required by law.
This LIBOR Rate 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 LIBOR Rate
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.
PNC STUDENT LOAN TRUST I
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
By:
------------------------------------
4
24
CERTIFICATE OF AUTHENTICATION
This Note is one of the LIBOR Rate 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:
---------------------------
5
25
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):
---------------------------
6
26
EXHIBIT A-2
[FORM OF SENIOR FIXED RATE NOTE]
PNC STUDENT LOAN TRUST I, SERIES 1997-2
SENIOR FIXED RATE CLASS [A-2][A-3] [A-4] [A-5] [A-6] [A-7] ASSET BACKED NOTE
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 DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR INTEREST IN PNC
BANK, NATIONAL ASSOCIATION, THE FIRST NATIONAL BANK OF CHICAGO, FIRST CHICAGO
DELAWARE, INC. OR BANKERS TRUST COMPANY.
THIS NOTE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.
No. [A-2] [3] [4] [5] [6] [7] $__________
FINAL CLASS
MATURITY DATED INTEREST
Class DATE DATE RATE CUSIP
----- ---- ---- ---- -----
-----%
[A-2] [A-3]
[A-4] [A-5]
[A-6] [A-7]
REGISTERED NOTEHOLDER: CEDE & CO.
-----------------------------------
PRINCIPAL AMOUNT:
27
PNC BANK STUDENT LOAN TRUST I, a Delaware 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 herein, capitalized terms used herein shall have the
respective meanings given to such terms in the Indenture dated as of March 27,
1997 (the "Indenture"), as supplemented by the Second Terms Supplement dated as
of June __, 1997, (the "Second Terms Supplement" and, together with the
Indenture, the "Indenture") between the Issuer and Bankers Trust Company, as
Indenture Trustee.
This is one of a duly authorized issue of notes of the Issuer
designated as "PNC Student Loan Trust I, Series 1997-2, Senior Fixed Rate Class
[A-2][A-3][A-4][A-5][A-6][A-7] Asset Backed Notes", in the aggregate principal
amount of $_________ (herein referred to as the "Class
[A-2][A-3][A-4][A-5][A-6][A-7] Notes" together with the PNC Student Loan Trust
I, Series 1997-2, Senior Fixed Rate Class [A-2][A-3][A-4][A-5][A-6][A-7] Asset
Backed Notes (the "Class [A-2][A-3][A-4][A-5][A-6][A-7] Notes"), the PNC Student
Loan Trust I, Series 1997-2, Senior Fixed Rate Class
[A-1][A-3][A-4][A-5][A-6][A-7] Asset Backed Notes (the "Class
[A-2][A-3][A-4][A-5][A-6][A-7] Notes"), the PNC Student Loan Trust I, Series
1997-2, Senior Fixed Rate Class [A-2][A-3][A-4][A-5][A-6][A-7] Asset Backed
Notes (the "Class [A-2][A-3][A-4][A-5][A-6][A-7] Notes"), the PNC Student Loan
Trust I, Series 1997-2, Senior Fixed Rate Class [A-2][A-3][A-4][A-5][A-6][A-7]
Asset Backed Notes (the "Class [A-2][A-3][A-4][A-5][A-6][A-7] Note"), the PNC
Student Loan Trust I, Series 1997-2, Senior Fixed Rate Class [A-2] [A-3] [A-4]
[A-5] [A-6] [A-7] Asset Backed Notes (the "Class [A-2] [A-3] [A-4] [A-5] [A-6]
[A-7] Notes") the "Fixed Rate Notes" and together with the LIBOR Rate Notes,
the "Notes")issued under the Indenture. The Notes are issued to finance the
acquisition of Financed Student Loans by the Trust, and to make certain deposits
into the Pledged Accounts.
The Notes are secured under the Indenture which, together
with certain other documents, assigns to the Indenture Trustee for the benefit
of the Noteholders and each Swap Counterparty 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, 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 rights, duties and immunities of the Indenture
1
28
Trustee, the rights of the registered owners of the Notes, and the rights and
obligations of the Issuer. By the acceptance of this Fixed Rate Note, the
registered owner hereof assents to all of the provisions of the Indenture.
Distributions of principal and interest will made on each
Quarterly Distribution Date to the holders of this Fixed Rate Note in the
manner described in the Transfer and Servicing Agreement until the principal
balance of this Fixed Rate Notes is reduced to zero
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.
If an Event of Default shall have occurred, the Class
Interest Rate on each Class of Notes for the Interest Period commencing on or
immediately after such Event of Default, and for each Interest Period
thereafter, to and including the Interest Period, if any, during which, or
commencing less than two Business Days after, such Event of Default is cured in
accordance with the Indenture, shall equal the applicable Non-Payment Rate on
the first day of each such Interest Period.
The holder of this Fixed Rate 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 Fixed Rate 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 Fixed Rate 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 Fixed
Rate Note a new Fixed Rate 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 Fixed Rate Note and bearing the same
interest as this Fixed Rate Note.
In any case where the date fixed for the payment of principal
of or interest on this Fixed Rate 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.
2
29
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 Fixed Rate Note have happened, do exist and have been
performed in due time, form and manner as required by law.
This Fixed Rate 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 Fixed Rate
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.
PNC STUDENT LOAN TRUST I
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
By:
------------------------------------
3
30
CERTIFICATE OF AUTHENTICATION
This Note is one of the Fixed Rate 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:
-----------------------------
4
31
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):
---------------------------
5
32
EXHIBIT A-3
[FORM OF SUBORDINATE LIBOR RATE NOTE]
PNC STUDENT LOAN TRUST I, SERIES 1997-2
SUBORDINATE LIBOR RATE CLASS B ASSET BACKED NOTE
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 DOES NOT REPRESENT DEPOSITS OR OBLIGATIONS OF OR INTEREST IN PNC
BANK, NATIONAL ASSOCIATION, THE FIRST NATIONAL BANK OF CHICAGO, FIRST CHICAGO
DELAWARE, INC. OR BANKERS TRUST COMPANY.
THIS NOTE IS NOT GUARANTEED OR INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY GOVERNMENTAL AGENCY.
** 3 No. B-_____
$__________
FINAL CLASS
MATURITY DATED INTEREST
Class DATE DATE RATE CUSIP
----- ---- ---- ---- -----
B One-Month
LIBOR + ___%
as herein
provided
REGISTERED NOTEHOLDER: CEDE & CO.
-----------------------------------
PRINCIPAL AMOUNT:
6
33
PNC BANK STUDENT LOAN TRUST I, a Delaware 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 herein, capitalized terms used herein shall have the
respective meanings given to such terms in the Indenture dated as of March 27,
1997 (the "Indenture"), as supplemented by the Second Terms Supplement dated as
of June __, 1997, (the "Second Terms Supplement" and, together with the
Indenture, the "Indenture") between the Issuer and Bankers Trust Company, as
Indenture Trustee.
This is one of a duly authorized issue of notes of the Issuer
designated as "PNC Student Loan Trust I, Series 1997-2, Subordinate LIBOR Rate
Class B Asset Backed Notes", in the aggregate principal amount of $_________
(herein referred to as the "Class B Notes" together with the Class A Notes, the
"Notes") issued under the Indenture. The Notes are issued to finance the
acquisition of Financed Student Loans by the Trust, and to make certain
deposits into the Pledged Accounts.
The Notes are secured under the Indenture which, together
with certain other documents, assigns to the Indenture Trustee for the benefit
of the Noteholders and each Swap Counterparty 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, 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 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 Class B Note, the registered owner hereof assents to
all of the provisions of the Indenture.
7
34
DISTRIBUTIONS OF INTEREST AND PRINCIPAL ON THE CLASS B NOTES
ARE SUBORDINATED IN PRIORITY OF PAYMENT OF INTEREST AND PRINCIPAL TO
DISTRIBUTIONS OF INTEREST AND PRINCIPAL ON THE CLASS A NOTES AS DESCRIBED IN
THE SECOND TERMS SUPPLEMENT AND THE TRANSFER AND SERVICING AGREEMENT.
**4 Distributions of principal and interest on this Class B Note
will made to the holders of Class B Notes in the manner described in the
Transfer and Servicing Agreement until the principal balance of the Class B
Notes is reduced to zero. 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.
If an Event of Default shall have occurred, the Class
Interest Rate on each Class of Notes for the Interest Period commencing on or
immediately after such Event of Default, and for each Interest Period
thereafter, to and including the Interest Period, if any, during which, or
commencing less than two Business Days after, such Event of Default is cured in
accordance with the Indenture, shall equal the applicable Non-Payment Rate on
the first day of each such Interest Period.
The holder of this Class B 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 Class B Note may be registered only upon
surrender hereof to the Indenture Trustee together with an assignment duly
executed by the registered owner or its
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attorney or legal representative in such form as shall be satisfactory to the
Indenture Trustee. Upon any such registration of transfer of this Class B 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 Class B Note a new Class B 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
Class B Note and bearing the same interest as Class B Note.
In any case where the date fixed for the payment of principal
of or interest on this Class B 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 Class B Note have happened, do exist and have been performed
in due time, form and manner as required by law.
This Class B 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.
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IN WITNESS WHEREOF, the Issuer has caused this Class B 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.
PNC STUDENT LOAN TRUST I
By: THE FIRST NATIONAL BANK OF CHICAGO,
not in its individual capacity but
solely as Eligible Lender Trustee
By:
-------------------------------------
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CERTIFICATE OF AUTHENTICATION
This Note is one of the Class B 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:
-------------------------------
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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):
------------------------
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