EXECUTION COPY
SALE AND SERVICING AGREEMENT
Among
KEYCORP STUDENT LOAN TRUST 2001-A
as Issuer,
KEY CONSUMER RECEIVABLES LLC,
as Depositor
KEY BANK USA, NATIONAL ASSOCIATION
as Master Servicer,
BANK ONE, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Eligible Lender Trustee,
and
KEY BANK USA, NATIONAL ASSOCIATION
as Administrator
Dated as of September 1, 2001
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Usage......................................1
ARTICLE II Conveyance of Financed Student Loans.......................1
SECTION 2.01. Conveyance of Initial Financed Student Loans...............1
SECTION 2.02. Conveyance of Other Student Loans..........................2
SECTION 2.03. Conveyance of Financed Student Loans by the Eligible
Lender Trustee to the Depositor in Connection with
Consolidation Loans........................................4
SECTION 2.04. Endorsement................................................5
SECTION 2.05. Sale Not Secured Financing.................................5
SECTION 2.06. MPN Loans..................................................6
ARTICLE III The Financed Student Loans.................................7
SECTION 3.01. Representations and Warranties of Depositor with Respect
to the Financed Student Loans..............................7
SECTION 3.02. Repurchase upon Breach; Reimbursement.....................12
SECTION 3.03. Custody of Financed Student Loan Files....................13
SECTION 3.04. Duties of Master Servicer as Custodian....................14
SECTION 3.05. Instructions; Authority To Act............................15
SECTION 3.06. Custodian's Indemnification...............................15
SECTION 3.07. Effective Period and Termination..........................15
SECTION 3.08. Schedule of Financed Student Loans........................15
ARTICLE IV Administration and Servicing of Financed Student Loans....16
SECTION 4.01. Duties of Master Servicer.................................16
SECTION 4.02. Collection of Financed Student Loan Payments..............18
SECTION 4.03. Realization upon Financed Student Loans...................19
SECTION 4.04. Computation of Note Interest Rate.........................19
SECTION 4.05. No Impairment.............................................20
SECTION 4.06. Purchase of Financed Student Loans; Reimbursement.........20
SECTION 4.07. Master Servicing Fee......................................21
SECTION 4.08. Administrator's Certificate; Servicer's Report............21
SECTION 4.09. Annual Statement as to Compliance; Notice of Default......22
SECTION 4.10. Annual Independent Certified Public Accountants' Report...23
SECTION 4.11. Access to Certain Documentation and Information
Regarding Financed Student Loans..........................24
SECTION 4.12. Master Servicer and Administrator Expenses................24
SECTION 4.13. Appointment of Sub-Servicers..............................24
SECTION 4.14. Special Programs..........................................25
SECTION 4.15. Maintenance of Fidelity Bond and Errors and Omission
Policy....................................................25
ARTICLE V Distributions; Accounts; Statements to Noteholders........26
SECTION 5.01. Establishment of Trust Accounts...........................26
SECTION 5.02. Collections...............................................29
SECTION 5.03. Application of Collections................................30
SECTION 5.04. Additional Deposits.......................................30
SECTION 5.05. Distributions.............................................32
SECTION 5.06. Reserve Accounts..........................................37
SECTION 5.07. Statements to Noteholders.................................40
SECTION 5.08. Pre-Funding Account.......................................42
SECTION 5.09. Depositor Optional Deposit................................45
ARTICLE VI The Administrator and the Depositor.......................45
SECTION 6.01. Representations of the Administrator......................45
SECTION 6.02. Representations of the Depositor..........................47
SECTION 6.03. Existence.................................................48
SECTION 6.04. Liability of the Depositor; Indemnities...................49
SECTION 6.05. Liability of Administrator; Indemnities...................50
SECTION 6.06. Merger or Consolidation of, or Assumption of the
Obligations of, the Administrator and the Depositor.......51
SECTION 6.07. Limitation on Liability of the Depositor, Administrator
and Others................................................52
SECTION 6.08. Ownership by the Depositor, KBUSA and its Affiliates......52
SECTION 6.09. Key Bank USA, National Association Not To Resign as
Administrator.............................................53
ARTICLE VII The Master Servicer.......................................53
SECTION 7.01. Representations of Master Servicer........................53
SECTION 7.02. Indemnities of Master Servicer............................55
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Master Servicer...........................56
SECTION 7.04. Limitation on Liability of Master Servicer and Others.....56
SECTION 7.05. Key Bank USA, National Association, Not To Resign as
Master Servicer...........................................57
ARTICLE VIII Default...................................................57
SECTION 8.01. Master Servicer Default; Administrator Default............57
SECTION 8.02. Appointment of Successor..................................61
SECTION 8.03. Notification to Noteholders...............................63
SECTION 8.04. Waiver of Past Defaults...................................63
ARTICLE IX Termination...............................................63
SECTION 9.01. Termination...............................................63
ARTICLE X Additional Provisions Regarding Financed Student Loans....67
SECTION 10.01. Periodic Reports..........................................67
SECTION 10.02. Cooperation...............................................67
SECTION 10.03. Confidentiality...........................................68
SECTION 10.04. Future Purchases..........................................68
SECTION 10.05. Private Guarantee Fee.....................................69
SECTION 10.06. Bids/First Refusal Rights.................................69
SECTION 10.07. Consolidation Loans.......................................70
ARTICLE XI Miscellaneous.............................................70
SECTION 11.01. Amendment.................................................70
SECTION 11.02. Protection of Interests in Trust..........................72
SECTION 11.03. Notices...................................................74
SECTION 11.04. Assignment................................................75
SECTION 11.05. Limitations on Rights of Others...........................75
SECTION 11.06. Severability..............................................75
SECTION 11.07. Separate Counterparts.....................................75
SECTION 11.08. Headings..................................................75
SECTION 11.09. Governing Law.............................................75
SECTION 11.10. Assignment to Indenture Trustee...........................76
SECTION 11.11. Nonpetition Covenants.....................................76
SECTION 11.12. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee.........................................76
SECTION 11.13. Consent of the Securities Insurer.........................77
APPENDIX A Definitions and Usage
SCHEDULE A-1 Schedule of Group I Initial Financed Student Loans
SCHEDULE A-2 Schedule of Group II Initial Financed Student Loans
SCHEDULE B-1 Schedule of Group I Additional Student Loans
SCHEDULE B-2 Schedule of Group II Additional Student Loans
SCHEDULE C Location of Financed Student Loan Files
SCHEDULE D [Reserved]
SCHEDULE E Servicing Fees Schedule
EXHIBIT A Form of Report to Noteholders
EXHIBIT B [RESERVED]
EXHIBIT C [RESERVED]
EXHIBIT D Form of Assignment on Closing Date
EXHIBIT E Form of Subsequent Transfer Agreement
SALE AND SERVICING AGREEMENT dated as of September 1, 2001, among
KEYCORP STUDENT LOAN TRUST 2001-A, a Delaware statutory business trust (the
"Issuer"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking association,
as master servicer (the "Master Servicer"), KEY CONSUMER RECEIVABLES LLC, a
Delaware limited liability company, as depositor (the "Depositor") BANK ONE,
NATIONAL ASSOCIATION, a national banking association, solely as eligible lender
trustee on behalf of the Issuer and not in its individual capacity (the
"Eligible Lender Trustee"), and KEY BANK USA, NATIONAL ASSOCIATION, a national
banking association, as administrator (the "Administrator").
WHEREAS, the Depositor intends to assign to the Issuer its rights in
two portfolios of undergraduate and graduate school student loans purchased from
Key Bank USA, National Association ("KBUSA") and Key Consumer QSPE LLC ("QSPE"
and together with "KBUSA" the "Sellers");
WHEREAS, the Depositor intends to assign to the Issuer during a
limited period additional student loans it will acquire in the future in the
future from the Sellers;
WHEREAS, the Issuer desires to purchase, and the Depositor is willing
to sell to the Issuer, such student loans;
WHEREAS, the Eligible Lender Trustee is willing to hold legal title
to, and serve as eligible lender trustee with respect to, such student loans on
behalf of the Issuer;
WHEREAS, the Master Servicer is willing to master service such student
loans; and
WHEREAS, the Administrator is willing to undertake certain
administrative functions with respect to such student loans.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Capitalized terms used but not defined herein are defined in Appendix
A hereto, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
CONVEYANCE OF FINANCED STUDENT LOANS
SECTION 2.01. CONVEYANCE OF INITIAL FINANCED STUDENT LOANS. In
consideration of the Issuer's delivery to or upon the order of the Depositor on
the Closing Date of the Certificates and of the net proceeds from the sale of
the Notes and the other amounts to be distributed from time to time to the
Depositor in accordance with the terms of this Agreement, the Depositor (and
with respect to legal title, the Depositor Eligible Lender Trustee, on behalf of
the Depositor) does hereby, as evidenced by a duly executed written assignment
in the form of Exhibit D, sell, transfer, assign, set over and otherwise convey
to the Issuer (and with respect to legal title, to the Eligible Lender Trustee
on behalf of the Issuer), without recourse (subject to the obligations herein):
(i) all right, title and interest of the Depositor (and the Depositor
Eligible Lender Trustee) in and to the Initial Financed Student Loans and
all obligations of the Obligors thereunder, including all moneys paid
thereunder, and all written communications received by the Depositor (and
the Depositor Eligible Lender Trustee) with respect thereto (including
borrower correspondence, notices of death, disability or bankruptcy and
requests for deferrals or forbearances), on or after the Cutoff Date;
(ii) (x) all right, title and interest of the Depositor (and the
Depositor Eligible Lender Trustee), as assigned to the Depositor by the
Sellers, under the Assigned Agreements insofar as they relate to the
Financed Guaranteed Private Loans but not with respect to any other loans
covered thereby and (y) all right, title and interest of the Depositor (and
the Depositor Eligible Lender Trustee) in and to (but none of the
obligations under) each of the Student Loan Transfer Agreements
(collectively, the "Assigned Rights");
(iii) all right, title and interest of the Depositor in and to all
funds on deposit from time to time in the Trust Accounts, including, but
not limited to, the Group I and Group II Reserve Account Initial Deposit
and the Group I and Group II Pre-Funded Amount (including all income
thereon); and
(iv) the proceeds of any and all of the foregoing.
SECTION 2.02. CONVEYANCE OF OTHER STUDENT LOANS. (a) Subject to the
conditions set forth in paragraph (b) below, in consideration of the Issuer's
delivery on the related Subsequent Transfer Date to or upon the order of the
Depositor of the amount described in Section 5.08(a) to be delivered to the
Depositor, the Depositor does hereby sell, transfer, assign, set over and
otherwise convey to the Eligible Lender Trustee on behalf of the Issuer, without
recourse (subject to the obligations herein) all right, title and interest of
the Depositor (and with respect to legal title, the Depositor Eligible Lender
Trustee on behalf of the Depositor) in and to each Other Student Loan, and all
obligations of the Obligors thereunder including all moneys paid thereunder, and
all written communications received by the Depositor with respect thereto
(including borrower correspondence, notices of death, disability or bankruptcy
and requests for deferrals or forbearances), on and after the related Subsequent
Cutoff Date, made from time to time during the Group I and Group II Funding
Period, as applicable.
(b) The Depositor (and the Depositor Eligible Lender Trustee) shall
transfer to the Eligible Lender Trustee on behalf of the Issuer the Other
Student Loans for a given Subsequent Transfer Date and the other property and
rights related thereto described in paragraph (a) above only upon the
satisfaction of each of the following conditions on or prior to such Subsequent
Transfer Date:
(i) the Depositor (and the Depositor Eligible Lender Trustee) shall
have delivered to the Eligible Lender Trustee and the Indenture Trustee,
with copies to the Securities Insurer and the Swap Counterparty, a duly
executed written assignment (including an acceptance by the Eligible Lender
Trustee and the Indenture Trustee) in substantially the form of Exhibit E
(each, a "Subsequent Transfer Agreement"), which shall include supplements
to Schedule B-1 or B-2, with respect to Other Student Loans that will be
Group I or Group II Student Loans, respectively, listing such Other Student
Loans;
(ii) the Depositor shall have delivered, at least two days prior to
such Subsequent Transfer Date, notice of such transfer to the Eligible
Lender Trustee, the Indenture Trustee, the Securities Insurer and the Swap
Counterparty, and the Rating Agencies, including a listing of the
designation and the aggregate principal balance of such Other Student
Loans, and whether each such Other Student Loan will be a Group I or Group
II Student Loan, the case may be;
(iii) the Depositor shall (or shall cause the applicable Seller to),
to the extent required by Section 5.02, deposit in the Group I or Group II
Collection Account Subaccount, as applicable, all collections in respect of
the Other Student Loans on and after each applicable Subsequent Cutoff
Date;
(iv) as of each Subsequent Transfer Date, the Depositor shall not be
insolvent nor will it have been made insolvent by such transfer nor is it
aware of any pending insolvency;
(v) such addition will not result in a material adverse Federal or
State tax consequence to the Issuer or the holders of Notes;
(vi) with respect to Group I Student Loans, the Group I Funding Period
shall not have terminated, and, with respect to Group II Student Loans, the
Group II Funding Period shall not have terminated;
(vii) the Depositor shall have delivered to the Indenture Trustee and
the Eligible Lender Trustee, with copies to the Securities Insurer and the
Swap Counterparty, an Officers' Certificate confirming the satisfaction of
each condition precedent specified in this paragraph (b);
(viii) the Depositor shall have delivered (A) to the Rating Agencies,
with copies to the Securities Insurer and the Swap Counterparty, an Opinion
of Counsel with respect to the transfer of the Other Student Loans
transferred on such Subsequent Transfer Date, substantially in the form of
the Opinion of Counsel delivered to the Rating Agencies, the Securities
Insurer and the Swap Counterparty, on the Closing Date, and (B) to the
Eligible Lender Trustee, the Securities Insurer, the Swap Counterparty and
the Indenture Trustee the Opinion of Counsel required by Section
11.02(i)(1);
(ix) the Depositor shall have taken any action required to maintain
the first perfected ownership interest of the Issuer in the Trust Estate
and the first perfected security interest of the Indenture Trustee in the
Collateral;
(x) no selection procedures believed by the Depositor to be adverse to
the interests of the holders of Notes, the Securities Insurer (but only
with respect to the Group II Student Loans) or the Swap Counterparty shall
have been utilized in selecting the Other Student Loans;
(xi) no Consolidation Loan will be transferred to the Issuer unless at
least one underlying student loan to be consolidated is a Financed Student
Loan already held by the Eligible Lender Trustee on behalf of the Issuer;
and
(xii) with respect to each Other Student Loan that is also an MPN
Loan, the representations and warranties of the Depositor or the Master
Servicer contained in Section 2.06 hereof, will be true and correct on the
related Subsequent Transfer Date, and the Depositor will (and will cause
KBUSA to) adhere to the covenants set forth in Section 2.06 with respect to
such Transferred MPN Loan.
PROVIDED, HOWEVER, that the Depositor shall not incur any liability as a result
of transferring Other Student Loans on any Subsequent Transfer Date at a time
when the condition set forth in clause (v) was not satisfied, if at the time of
such transfer the Authorized Officers of the Depositor, after reasonable inquiry
of in-house counsel to the Depositor, were not aware of any fact that would
reasonably suggest that such condition would not be satisfied as of such date.
(c) The Depositor covenants to transfer during each of the Group I and
Group II Funding Period to the Eligible Lender Trustee on behalf of the Issuer
pursuant to paragraph (a) above Other Student Loans with an aggregate principal
balance of not less than $20,000,000, with respect to the Group I Student Loans
and $28,000,000 with respect to the Group II Student Loans, respectively, (less
amounts withdrawn from the Group I and Group II Pre-Funding Account, as
applicable, pursuant to Section 5.08(d) of this Agreement); PROVIDED, however,
that the Depositor shall have no liability for a breach of the foregoing
covenant as a result of the Depositor not having owned prior to the date hereof
Other Student Loans equal to the amount specified above during either the Group
I or Group II Funding Period, as applicable, or there being insufficient funds
available in the Group I or Group II Escrow Account, as the case may be, and the
Group I or Group II Pre-Funding Account, as the case may be, for the Eligible
Lender Trustee to consummate such acquisitions on behalf of the Issuer.
SECTION 2.03. CONVEYANCE OF FINANCED STUDENT LOANS BY THE ELIGIBLE
LENDER TRUSTEE TO THE DEPOSITOR IN CONNECTION WITH CONSOLIDATION LOANS. On any
date, upon receipt of written notice (or telephonic or facsimile notice followed
by written notice) from the Depositor (or from KBUSA or the Master Servicer (or
a Sub-Servicer) on behalf of the Depositor) by the Eligible Lender Trustee and
the Indenture Trustee, the Eligible Lender Trustee, on behalf of the Issuer,
will convey to the Depositor (or to either the Depositor Eligible Lender Trustee
or KBUSA as its designee) the Financed Student Loans identified in such notice,
which are to be repaid pursuant to the Consolidation Loans to be made by the
Depositor.
SECTION 2.04. ENDORSEMENT. The Depositor (and the Depositor Eligible
Lender Trustee, each) hereby appoints each of the Eligible Lender Trustee and
the Indenture Trustee as the Depositor's (and the Depositor Eligible Lender
Trustee's) true and lawful attorney-in-fact with full power of substitution to
endorse the Depositor's (and the Depositor Eligible Lender Trustee's) name on
any promissory note evidencing the Initial Financed Student Loans and any
Additional Student Loans transferred to the Eligible Lender Trustee on behalf of
the Trust pursuant to Sections 2.01 and 2.02. The Depositor (and the Depositor
Eligible Lender Trustee each) acknowledges and agrees that this power of
attorney shall be construed as a power coupled with an interest, shall be
irrevocable as long as the Trust Agreement remains in effect and shall continue
in effect until the Trust Agreement terminates.
SECTION 2.05. SALE NOT SECURED FINANCING. It is the express intent of
the parties hereto that each conveyance of the Financed Student Loans by the
Depositor to the Issuer, as contemplated by this Agreement be (and be treated
as) a sale. It is, further, not the intention of the parties that such
conveyance be deemed a pledge of any such Financed Student Loans by the
Depositor to the Issuer to secure a debt or other obligation of the Depositor.
However, in the event that, notwithstanding the intent of the parties, any of
the Financed Student Loans are held by a court to continue to be property of the
Depositor, then (a) this Agreement shall also be deemed to be a security
agreement within the meaning of Articles 8 and 9 of the applicable Uniform
Commercial Code; (b) the transfer of such Financed Student Loans provided for
herein shall be deemed to be a grant by the Depositor to the Issuer of a
security interest in all of the Depositor's right, title and interest in and to
such Financed Student Loans and all amounts payable to the holders of such
Financed Student Loans in accordance with the terms thereof and all proceeds of
the conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, to the extent the Issuer would
otherwise be entitled to own such Financed Student Loans and proceeds pursuant
to Article II hereof, including all amounts, other than investment earnings,
from time to time held or invested in any Trust Accounts created pursuant to
this Agreement, whether in the form of cash, instruments, securities or other
property; (c) the possession by the Sub-Servicers of each Financed Student Loan
File or by the Indenture Trustee of each applicable Trust Account, and such
other items of property as constitute instruments, money, negotiable documents
or tangible chattel paper shall be deemed to be "possession by the secured
party" for purposes of perfecting the security interest pursuant to Section
9-313(a) (or comparable provision) of the applicable Uniform Commercial Code;
and (d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Issuer for the purpose
of perfecting such security interest under applicable law. Any assignment of the
interest of the Issuer pursuant to any provision hereof or pursuant to the
Indenture shall also be deemed to be an assignment of any security interest
created hereby. The Depositor and the Issuer shall, to the extent consistent
with this Agreement, take such actions as may be reasonably necessary to ensure
that, if this Agreement were deemed to create a security interest in the
Financed Student Loans, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the this Agreement and the Indenture.
SECTION 2.06. MPN LOANS. With respect to each Transferred MPN Loan and
each related Master Note that relates to a KBUSA Student Loan, the Depositor,
and with respect to each Transferred MPN Loan and each related Master Note that
relates to a QSPE Student Loan, the Master Servicer, hereby represents and
warrants, and KBUSA, as the applicable MPN Holder, on an on-going basis, hereby
covenants as follows:
(A) TRANSFER OF BENEFICIAL INTEREST IN TRANSFERRED MPN LOAN. Each
Transferred MPN Loan represents a 100% beneficial interest in such MPN
Loan, and is being transferred to the Issuer pursuant to this Agreement.
The MPN Holder shall hold bare legal title to the Master Note solely for
the benefit of all MPN Loan Holders; PROVIDED, HOWEVER, that the MPN Holder
may be also be an MPN Loan Holder. The sale of an MPN Loan excludes an
assignment of the Depositor's right to offer future MPN Loans under a
Master Note. The MPN Holder shall not provide to MPN Loan Holders more than
one copy of the Master Note for each MPN Loan, to be marked "Official Copy"
in red ink.
(B) CUSTODY OF MASTER NOTE. The MPN Holder shall hold, or cause the
Master Servicer or a Sub-Servicer to hold, the Master Note underlying each
Transferred MPN Loan for the use and benefit of all present and future MPN
Loan Holders. The MPN Holder shall maintain, or cause the Master Servicer
or a Sub-Servicer to maintain, continuous and exclusive possession,
dominion and control over the Master Note and related documents. The MPN
Holder shall not sell, transfer, assign or pledge any such Master Note
except as is otherwise agreed to between the MPN Holder and the Securities
Insurer.
(C) MPN LOAN TRANSFERS. The MPN Holder shall maintain book-entry
records with respect to the identity of present and future MPN Loan
Holders. The MPN Holder shall not transfer or register the transfer of any
MPN Loan to any other person except in accordance with the instructions of
the person identified on its books and records as the MPN Loan Holder.
(D) MPN LOAN MODIFICATION; SUBSEQUENT ADVANCES; COPIES OF MASTER NOTE.
The MPN Holder shall not agree to any modification, waiver, forbearance or
amendment of any term of any Transferred MPN Loan other than as provided in
Section 4.01 of this Agreement. The MPN Holder shall make no subsequent
advances to a borrower under the related Master Note except pursuant to a
separate MPN Loan. The MPN Holder shall not provide to any person other
than an MPN Loan Holder any copy of a Master Note except to the Master
Servicer or a Sub-Servicer for administrative purposes or for the MPN
Holder's internal administrative purposes.
(E) ACCESS TO INFORMATION. The MPN Holder shall furnish to the
Indenture Trustee from time to time upon written request of the Securities
Insurer or the Indenture Trustee (i) a list of the names and addresses of
all MPN Loan Holders, (ii) a list containing the names and social security
numbers of the borrowers under the related Master Notes, (iii) access to
inspect the Master Notes and related records upon reasonable advance
notice, and (iv) such other information with respect to the Master Notes
which is reasonably requested by the Securities Insurer (with respect to
Group II Student Loans) or the Indenture Trustee.
(F) RESIGNATION OR REMOVAL OF MPN HOLDER. The MPN Holder may at any
time resign by giving written notice thereof to the Indenture Trustee and
delivering all related Master Notes to a successor MPN Holder, which agrees
to the terms of this Agreement, or to the Indenture Trustee. If at any time
the MPN Holder shall fail to perform its duties hereunder, or shall be
adjudged bankrupt or insolvent, then the Indenture Trustee, at the written
direction of a majority in interest of the Group I Controlling Noteholders
(with respect to the Group I Student Loans) may remove the MPN Holder and
appoint a successor MPN Holder, which agrees to the terms of this Agreement
by written instrument, a copy of which instrument shall be delivered to the
MPN Holder so removed, or may require the MPN Holder to deliver the related
Master Notes to the Indenture Trustee.
(G) MPN HOLDER OTHER THAN KBUSA. So long as KBUSA has not transferred
all of its right, title and interest in a related Master Note, if KBUSA is
not the MPN Holder, KBUSA shall cause such other MPN Holder to perform all
covenants of the MPN Holder set forth in this Agreement.
(H) FINANCING STATEMENTS AND FURTHER ASSURANCES. KBUSA will cause to
be filed all necessary financing statements or other instruments, and any
amendments or continuation statements relating thereto, necessary to be
kept and filed in such manner and in such places as may be required by law
to give to and maintain (i) with the Eligible Lender Trustee, on behalf of
the Issuer, a first priority perfected ownership interest in such MPN
Loans, and (ii) with the Indenture Trustee, for the benefit of the
Noteholders, a first priority perfected security interest in such MPN
Loans. KBUSA shall from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, within 10 days of such
request, such amendments to the Basic Documents and such further
instruments and take such further action as may be reasonably necessary to
maintain such first priority perfected ownership and security interests.
ARTICLE III
THE FINANCED STUDENT LOANS
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR WITH RESPECT
TO THE FINANCED STUDENT LOANS. The Depositor (on behalf of itself), with respect
to all Financed Student Loans that are also KBUSA Student Loans, and the Master
Servicer (on behalf of the Depositor), with respect to all Financed Student
Loans that are also QSPE Student Loans, each, severally and not jointly, makes
the following representations and warranties as to the applicable Financed
Student Loans on which the Issuer is deemed to have relied in acquiring (through
the Eligible Lender Trustee) the Financed Student Loans. Such representations
and warranties speak as of the execution and delivery of this Agreement and as
of the Closing Date, in the case of the Initial Financed Student Loans and as of
the applicable Subsequent Transfer Date, in the case of the Other Student Loans,
but shall survive the sale, transfer and assignment of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) CHARACTERISTICS OF FINANCED STUDENT LOANS. Each Financed Student
Loan (A) was originated in the United States of America, its territories,
its possessions or other areas subject to its jurisdiction by KBUSA (or
originated by another lender in the United States of America and purchased
by KBUSA) in the ordinary course of its business to an eligible borrower
under applicable law and agreements and was fully and properly executed by
the parties thereto and (B) provides or, when the payment schedule with
respect thereto is determined, will provide for payments on a periodic
basis that fully amortize the principal amount of such Financed Student
Loan by its maturity and yield interest at the rate applicable thereto, as
such maturity may be modified in accordance with any applicable deferral or
forbearance periods granted in accordance with applicable laws and
restrictions, including those of the Higher Education Act, any Guarantee
Agreement or the Programs. Each Group I Student Loan that is a Financed
Federal Loan qualifies the holder thereof to receive Interest Subsidy
Payments (other than SLS Loans, unsubsidized Xxxxxxxx Loans and certain
Consolidation Loans) and Special Allowance Payments from the Department and
Guarantee Payments from the applicable Guarantor and qualifies the
applicable Guarantor to receive reinsurance payments thereon from the
Department. Each Group II Student Loan that is a Financed Guaranteed
Private Loan qualifies the holder thereof to receive Guarantee Payments
from the applicable Guarantor pursuant to the related Guarantee Agreement.
(ii) SCHEDULES OF FINANCED STUDENT LOANS. The information set forth in
Schedule A-1 (with respect to all Financed Student Loans that are Group I
Student Loans), Schedule A-2 (with respect to all Financed Student Loans
that are Group II Student Loans), Schedule B-1 (with respect to all Other
Student Loans that are Group I Student Loans), and Schedule B-2 (with
respect to all Other Student Loans that are Group II Student Loans), to
this Agreement and Schedule A to the related Subsequent Transfer Agreement
is true and correct in all material respects as of the opening of business
on the Cutoff Date (with respect to Schedules A-1 and A-2 to this
Agreement) or each applicable Subsequent Cutoff Date (with respect to
Schedules B-1 and B-2 to this Agreement), as applicable, and no selection
procedures believed to be adverse to the holders of Notes, the Securities
Insurer or the Swap Counterparty were utilized in selecting the Initial
Financed Student Loans or the Additional Student Loans, as applicable. The
computer tapes regarding the Group I and Group II Initial Financed Student
Loans made available to the Issuer, its assigns, the Securities Insurer
(with respect to the Group II Student Loans) and Swap Counterparty are true
and correct in all respects as of the Cutoff Date. There will be no
material changes made to either Schedule A-1 or A-2 to this Agreement
without the acknowledgement of the Rating Agencies that such material
change will not affect the ratings assigned to any Class of the Notes (and
with respect to the Group II Notes, without regard to the Group II Notes
Guaranty Insurance Policy).
(iii) COMPLIANCE WITH LAW. Each Financed Student Loan complied at the
time it was originated or made and at the execution of this Agreement or
the applicable Subsequent Transfer Agreement, as the case may be, complies,
and the Depositor and its agents (including for such purpose, each of the
Sellers), with respect to each such Financed Student Loan, have at all
times complied, in all material respects with all requirements of
applicable Federal, state and local laws and regulations thereunder,
including the Higher Education Act (with respect to the Group I Student
Loans), usury law, the Federal Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Federal Reserve Board's Regulation B and other
consumer credit laws and equal credit opportunity and disclosure laws and
all applicable requirements of any Guarantee Agreements.
(iv) BINDING OBLIGATION. Each Financed Student Loan represents the
genuine, legal, valid and binding payment obligation in writing of the
borrower thereof, enforceable by or on behalf of the holder thereof in
accordance with its terms, and no Financed Student Loan has been satisfied,
subordinated or rescinded, subject to clause (xiii) below.
(v) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened or exists with respect to any
Financed Student Loan.
(vi) NO DEFAULT. No Initial Financed Student Loan has a payment that
is more than 180 days overdue as of the Cutoff Date or, with respect to the
Other Student Loans, more than 90 days overdue as of the applicable
Subsequent Cutoff Date, as the case may be, and, except as permitted in
this paragraph, no default, breach, violation or event permitting
acceleration under the terms of any Financed Student Loan has occurred;
and, except for payment defaults continuing for a period of not more than
150 days or 90 days, as applicable, no continuing condition that with
notice or the lapse of time or both would constitute a default, breach,
violation or event permitting acceleration under the terms of any Financed
Student Loan has arisen; and neither the Depositor nor any Seller, has
waived and none of the Depositor, KBUSA or QSPE shall waive any of the
foregoing other than as permitted by the Basic Documents.
(vii) TITLE. It is the intention of the Depositor that the transfer
and assignment herein contemplated constitute a sale of the Financed
Student Loans from the Depositor (and the Depositor Eligible Lender
Trustee) to the Eligible Lender Trustee on behalf of the Issuer and that
the beneficial interest in and title to such Financed Student Loans not be
part of the debtor's estate in the event of an insolvency or bankruptcy
proceeding with respect to the Depositor. No Financed Student Loan has been
sold, transferred, assigned or pledged by the Depositor to any Person other
than the Eligible Lender Trustee on behalf of the Issuer. Immediately prior
to the transfer and assignment herein contemplated, the Depositor had good
title to each Financed Student Loan, free and clear of all Liens and,
immediately upon the transfer thereof, the Eligible Lender Trustee on
behalf of the Issuer shall have good title to each such Financed Student
Loan, free and clear of all Liens or the transfer shall have been perfected
under the UCC.
(viii) LAWFUL ASSIGNMENT. No Financed Student Loan has been originated
in, or is subject to the laws of, any jurisdiction under which the sale,
transfer and assignment of such Financed Student Loan or any Financed
Student Loan under this Agreement, each Subsequent Transfer Agreement or
the Indenture is unlawful, void or voidable.
(ix) SECURITY INTEREST PERFECTED; DELIVERY OF LOAN FILES. All filings
(including UCC filings) and/or delivery requirements necessary in any
jurisdiction to give the Eligible Lender Trustee on behalf of the Issuer a
first perfected ownership interest in the Financed Student Loans, and to
give the Indenture Trustee a first perfected security interest therein,
have been made or satisfied, as the case may be. A Financed Student Loan
File has been delivered to the Master Servicer (or a Sub-Servicer) for each
Financed Student Loan and each such file contains the original fully
executed note (or a copy of a fully executed master promissory note)
evidencing such Financed Student Loan.
(x) ONE ORIGINAL. There is only one original executed copy of the
promissory note evidencing each Financed Student Loan.
(xi) PRINCIPAL BALANCE. The aggregate principal balance of the Group I
Initial Financed Student Loans, plus accrued interest to be capitalized
with respect thereto, as of the Statistical Cutoff Date, is $318,490,501
and the aggregate principal balance of the Group II Initial Financed
Student Loans, plus accrued interest to be capitalized with respect
thereto, as of the Statistical Cutoff Date, is $415,481,701.
(xii) NO CLAIMS. As of the Cutoff Date, no claim for payment with
respect to an Initial Financed Student Loan has been made to a Guarantor,
and as of the related Subsequent Cutoff Date no claim for payment with
respect to an Additional Student Loan will have been made.
(xiii) NO BANKRUPTCIES OR DEATHS. No borrower of any Financed Student
Loan as of September 1, 2001 (in the case of the Initial Financed Student
Loans), or the applicable Subsequent Cutoff Date (in the case of Additional
Student Loans) was noted in the related Financed Student Loan File as being
currently involved in a bankruptcy proceeding or as having died.
(xiv) INTEREST ACCRUING. Each Financed Student Loan is accruing
interest (whether or not such interest is being paid currently, by the
borrower or by the Department, or is being capitalized), except as
otherwise expressly permitted by the Basic Documents.
(xv) NO GOVERNMENT BORROWER. No borrower of a Financed Student Loan is
the United States of America or any State or any agency, department,
subdivision or instrumentality thereof.
(xvi) ORIGINATION. Each Financed Student Loan was originated in the
United States of America, its territories, its possessions or other areas
subject to its jurisdiction, and was originated or purchased for value by
the applicable Seller and by the Depositor in the ordinary course of its
business. KBUSA had all necessary licenses and permits to originate or
originally purchase each Financed Student Loan at the time of its
origination or purchase of such Financed Student Loan.
(xvii) ORIGINATION PRACTICES. The origination practices used by the
originator or KBUSA with respect to the Financed Student Loans have been in
all respects in compliance with all applicable laws and regulations.
(xviii) CONFORMANCE WITH UNDERWRITING GUIDELINES. Each Group II
Student Loan constituting a Financed Private Loan was underwritten in
accordance with the guidelines of KBUSA in existence as of the Closing Date
and made available to the Underwriters, the Securities Insurer and the
Rating Agencies.
(xix) NO SUB-PRIME STUDENT LOANS. The Financed Student Loans do not
and will not include any Financed Student Loans originated to individuals
who have previously defaulted on their student loans.
(xx) NO NON-PERFORMING LOANS. No Financed Student Loan, as of the
Statistical Cutoff Date, is in default nor does the Depositor expect to
write-off any amount thereof as a loss.
(xxi) COHORT DEFAULT RATES. With respect to the Initial Financed
Student Loans only, and based on the most recently published Cohort Default
Rates available on the Closing Date, no Group I or Group II Student Loans
made to borrowers attending educational institutions with published Cohort
Default Rates greater than twenty percent (20%) have been sold by the
Depositor to the Issuer if, and to the extent that, such acquisition would
cause the aggregate principal amount of either the Group I or Group II
Student Loans included in the Trust Estate made to borrowers attending
educational institutions with published Cohort Default Rates greater than
twenty percent (20%) to exceed eight percent (8%) of the aggregate
principal amount of the Group I or Group II Student Loans, respectively,
sold to the Issuer pursuant to this Agreement.
(xxii) INSTRUMENT. Each promissory note executed by a borrower
evidencing a Financed Student Loan (other than any master promissory note)
constitutes an "instrument" within the meaning of the UCC as in effect in
the states in which each such borrower resides at origination.
(xxiii) DEPOSITOR'S REPRESENTATIONS. The representations and
warranties of the Depositor contained in Section 6.01 hereof are true and
correct.
(xxiv) MPN LOANS. With respect to each Financed Student Loan that is
also an MPN Loan, the representations and warranties contained in Section
2.06 hereof are true and correct, and the Depositor shall cause KBUSA to
adhere to the covenants set forth in Section 2.06 with respect to such
Transferred MPN Loans.
SECTION 3.02. REPURCHASE UPON BREACH; REIMBURSEMENT. The Depositor,
the Master Servicer or the Eligible Lender Trustee, as the case may be, shall
inform the other parties to this Agreement, the Securities Insurer, the Swap
Counterparty, and the Indenture Trustee promptly, in writing, upon the discovery
of any breach of the representations, warranties or covenants made pursuant to
Section 3.01 or Section 6.01. Unless any such breach shall have been cured
within 60 days following the discovery thereof by the Eligible Lender Trustee or
receipt by the Eligible Lender Trustee of written notice from the Depositor, the
Securities Insurer or the Master Servicer of such breach, (x) the Depositor,
with respect to any Financed Student Loan that is a KBUSA Student Loan, shall be
obligated to repurchase (or shall cause KBUSA to repurchase) or (y) the Master
Servicer, with respect to any Financed Student Loan that is a QSPE Student Loan,
shall be obligated to repurchase any such Financed Student Loan in which the
interests of the holders of related group of Notes, the Swap Counterparty or the
Securities Insurer (but only with respect to Group II Student Loans) are
materially and adversely affected by any such breach (as determined by the
Securities Insurer with respect to Group II Student Loans (unless a Securities
Insurer Default has occurred and is continuing)), as of the first day succeeding
the end of such 60-day period that is the last day of a Collection Period;
provided that it is understood that any such breach that does not affect any
Guarantor's obligation to guarantee payment of each Financed Student Loan that
is a Financed Guaranteed Loan to the Eligible Lender Trustee in accordance with
the related Guarantee Agreements will not be considered to have a material
adverse effect for this purpose. In consideration of and simultaneously with the
repurchase of the Financed Student Loan, the Depositor (or KBUSA on its behalf)
or the Master Servicer, as applicable, shall remit the Purchase Amount, in the
manner specified in Section 5.04, and the Issuer shall execute such assignments
and other documents reasonably requested by the Depositor (or KBUSA on its
behalf) or the Master Servicer, as applicable, in order to effect such transfer.
Upon any such transfer of a Financed Student Loan, legal title to, and
beneficial ownership and control of, the related Financed Student Loan File will
thereafter belong to the Depositor (or KBUSA as its designee) or the Master
Servicer, as the case may be. In addition, if any such breach does not trigger
such a repurchase obligation but does result in the refusal by a Federal
Guarantor to guarantee all or a portion of the accrued interest, or the loss
(including any obligation of the Issuer to repay to the Department) of certain
Interest Subsidy Payments and Special Allowance Payments, with respect to a
Financed Federal Loan, then, unless such breach, if curable, is cured within 60
days, the Depositor (or KBUSA on its behalf) or the Master Servicer, as
applicable, shall reimburse the Issuer by remitting an amount equal to the sum
of all such non-guaranteed interest amounts and such forfeited Interest Subsidy
Payments and Special Allowance Payments (with respect to the Group I Student
Loans) in the manner specified in Section 5.04. Subject to the provisions of
Section 6.03 hereof, and Section 3.04(b) of the Insurance Agreement, the sole
remedy of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
holders of related group of Notes, the Securities Insurer (with respect to the
Group II Student Loans only) and Swap Counterparty with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Depositor (or KBUSA on its
behalf) or the Master Servicer, as applicable, to repurchase such Financed
Student Loans or to reimburse the Issuer as provided above pursuant to this
Section, subject to the conditions contained herein.
SECTION 3.03. CUSTODY OF FINANCED STUDENT LOAN FILES. To assure
uniform quality in servicing the Financed Student Loans and to reduce
administrative costs, the Issuer hereby appoints the Master Servicer, and the
Master Servicer hereby accepts such appointment, to act for the benefit of the
Issuer and the Indenture Trustee as custodian of the following documents or
instruments related to the Group I and Group II Student Loans (as set forth in
Schedules X-0, X-0, X-0 and B-2 hereto), which are also hereby constructively
delivered to the Indenture Trustee, as pledgee of the Issuer (or, in the case of
the Additional Student Loans, will be, as of the applicable Subsequent Transfer
Date, constructively delivered to the Indenture Trustee, as pledgee of the
Issuer) with respect to each Financed Student Loan:
(a) the original fully executed copy of the note (or a copy of a fully
executed master promissory note) evidencing the Financed Student Loan;
(b) the original loan application fully executed by the borrower; and
(c) any and all other documents and computerized records that any of
the Master Servicer (or a Sub-Servicer on behalf of the Master Servicer), the
Administrator, the Depositor, or the applicable Seller shall keep on file, in
accordance with its customary procedures, relating to such Financed Student Loan
or any Obligor with respect thereto.
Notwithstanding the foregoing, and without releasing the Master
Servicer from its duties and obligations hereunder, for so long as Key Bank USA,
National Association, or an affiliate thereof, is the Master Servicer hereunder,
the Master Servicer shall (and in all other cases, may) appoint one or more
Sub-Servicers to act as "custodian" on behalf of the Issuer and the Indenture
Trustee (but at the direction of the Master Servicer) with respect to the
Financed Student Loans such Sub-Servicer is servicing, in each case consistent
with the terms of this Article III, and all references to the Master Servicer,
as custodian shall be read to apply to such Sub-Servicer acting as custodian
pursuant to this Agreement and the related subservicing agreement; and,
provided, further, that if Key Bank USA, National Association is the Master
Servicer, the Master Servicer shall not replace such Sub-Servicer unless and
until a successor Sub-Servicer assumes the role of "custodian" on behalf of the
Issuer and the Indenture Trustee with respect to all the Financed Student Loans
it will be servicing. Notwithstanding the foregoing, the Master Servicer shall
be responsible hereunder for any breaches by any Sub-Servicer of its obligations
as custodian hereunder.
The appointment of the Master Servicer or any Sub-Servicer as
custodian hereunder is for administrative purposes only and does not, and is not
intended to, transfer any of the Issuer's or the Indenture Trustee's right,
title or interest in or to the Initial Financed Student Loans (or Additional
Student Loans) to the Master Servicer or such Sub-Servicer and the Master
Servicer hereby acknowledges (and each Sub-Servicer in the related subservicing
agreement acknowledges) that it has not and will not obtain any such right,
title or interest in or to such Initial Financed Student Loans (or Additional
Student Loans). The Master Servicer (so long as it is Key Bank USA, National
Association) hereby acknowledges that it does not currently have possession, and
agrees that it will not at any time in the future take physical possession, of
any Financed Student Loan Files.
SECTION 3.04. DUTIES OF MASTER SERVICER AS CUSTODIAN. (a) SAFEKEEPING.
The Master Servicer, as custodian, shall (or shall cause the applicable
Sub-Servicers to) hold the Financed Student Loan Files for the benefit of the
Issuer and the Indenture Trustee and maintain such accurate and complete
accounts, records and computer systems pertaining to each Financed Student Loan
File as shall enable the Issuer to comply with this Agreement. In performing its
duties as custodian the Master Servicer shall (or shall cause the applicable
Sub-Servicers to) act with reasonable care, using that degree of skill and
attention that the Master Servicer (or such Sub-Servicer) exercises with respect
to the student loan files relating to all comparable student loans that the
Master Servicer (or such Sub-Servicer) services and shall ensure that it
complies fully and completely with all applicable Federal and State laws,
including the Higher Education Act, with respect thereto. The Master Servicer
shall (or shall cause the applicable Sub-Servicers to) conduct, or cause to be
conducted, periodic audits of the Financed Student Loan Files held by it under
this Agreement and of the related accounts, records and computer systems, in
such a manner as shall enable the Issuer or the Indenture Trustee to verify the
accuracy of the Master Servicer's (or such Sub-Servicer's) record keeping. The
Master Servicer shall (or shall cause the applicable Sub-Servicers to) promptly
report to the Issuer and the Indenture Trustee any failure on its part (or on
the part of a Sub-Servicer) to hold the Financed Student Loan Files and maintain
its accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. The Master Servicer shall (or
shall cause each Sub-Servicer) to deliver the Trust Receipts to the Issuer, the
Indenture Trustee, the Securities Insurer and the Swap Counterparty on the
Closing Date. Nothing herein shall be deemed to require any periodic review by
the Issuer, the Eligible Lender Trustee or the Indenture Trustee of the Financed
Student Loan Files.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Master Servicer, as
custodian, shall (or shall cause the applicable Sub-Servicers to) maintain each
Financed Student Loan File at one of its offices (or the offices of the
applicable Sub-Servicer) specified in Schedule C to this Agreement or at such
other office as shall be specified by written notice to the Issuer, the
Securities Insurer and the Indenture Trustee not later than 60 days prior to any
change in location. Upon reasonable prior notice, the Master Servicer shall (or
shall cause the applicable Sub-Servicers to) make available to the Issuer, the
Securities Insurer and the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors a list of locations of the Financed
Student Loan Files and the related accounts, records and computer systems
maintained by the Master Servicer (or such Sub-Servicer) at such times during
normal business hours as the Issuer or the Indenture Trustee shall instruct.
(c) RELEASE OF DOCUMENTS. Upon instruction from the Indenture Trustee,
the Master Servicer, as custodian, shall (or shall cause the applicable
Sub-Servicers to) release any Financed Student Loan File to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.
SECTION 3.05. INSTRUCTIONS; AUTHORITY TO ACT. The Master Servicer, as
custodian, shall be deemed to have received proper instructions with respect to
the Financed Student Loan Files upon its receipt of written instructions signed
by a Responsible Officer of the Indenture Trustee.
SECTION 3.06. CUSTODIAN'S INDEMNIFICATION. The Master Servicer as
custodian shall pay for any loss, liability or expense, including reasonable
attorney's fees, that may be imposed on, incurred by or asserted against the
Issuer, the Eligible Lender Trustee, the Securities Insurer or the Indenture
Trustee or any of their officers, directors, employees and agents as the result
of any improper act or omission in any way relating to the maintenance and
custody by the Master Servicer (or any Sub-Servicer) as custodian of the
Financed Student Loan Files where the final determination that any such improper
act or omission by the Master Servicer resulted in such loss, liability or
expense is established by a court of law, by an arbitrator or by way of
settlement agreed to by the Master Servicer; PROVIDED, HOWEVER, that the Master
Servicer shall not be liable to the Eligible Lender Trustee for any portion of
any such amount resulting from the willful misfeasance, bad faith or negligence
of the Eligible Lender Trustee and the Master Servicer shall not be liable to
the Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.
SECTION 3.07. EFFECTIVE PERIOD AND TERMINATION. The appointment of the
Master Servicer as custodian shall become effective as of the Closing Date and
shall continue in full force and effect for so long as the Master Servicer shall
remain the Master Servicer hereunder, subject to the requirements of Section
3.03 hereof. If the Master Servicer or any successor Master Servicer shall
resign as Master Servicer in accordance with the provisions of this Agreement or
if all the rights and obligations of the Master Servicer or any such successor
Master Servicer shall have been terminated under Section 8.01, the appointment
of the Master Servicer or such successor Master Servicer as custodian shall be
terminated simultaneously with the effectiveness of such termination. As soon as
practicable on or after any termination of such appointment (and in any event
within (i) 10 Business Days, with respect to that portion of the Financed
Student Loan Files it holds consisting of electronic records and information,
and (ii) 40 Business Days, with respect to the remaining portion of the Financed
Student Loan Files it holds), the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) deliver the Financed Student Loan Files it holds to
the Indenture Trustee or the Indenture Trustee's agent at such place or places
as the Indenture Trustee may reasonably designate; provided, however, that until
such time as such Financed Student Loan Files have been delivered, the Master
Servicer shall continue to be responsible for the custody of such Financed
Student Loan Files.
SECTION 3.08. SCHEDULE OF FINANCED STUDENT LOANS. Schedules X-0, X-0,
X-0 and B-2 hereto shall indicate by name any Sub-Servicer who has been
appointed by the Master Servicer to service, on behalf of the Master Servicer,
each Group I or Group II Student Loan, as applicable. Such indication may be
amended by the Master Servicer, from time to time, to replace the name of the
applicable Sub-Servicer, in accordance with the provisions of this Agreement
relating to the servicing of the Financed Student Loans.
ARTICLE IV
ADMINISTRATION AND SERVICING OF FINANCED STUDENT LOANS
SECTION 4.01. DUTIES OF MASTER SERVICER. The Master Servicer, for the
benefit of the Issuer (to the extent provided herein), shall (or shall cause the
applicable Sub-Servicer to) manage, service, administer and make collections on
the Group I and Group II Student Loans with reasonable care, using that degree
of skill and attention that the Master Servicer (or such Sub-Servicer) exercises
with respect to all comparable student loans that it services but in any event,
in accordance with customary and usual standards of practice of prudent lenders
and loan servicers administering similar student loans. Without limiting the
generality of the foregoing or of any other provision set forth in this
Agreement and notwithstanding any other provision to the contrary set forth
herein, the Master Servicer shall (or shall cause the applicable Sub-Servicer
to) manage, service, administer and make collections with respect to the Group I
and Group II Student Loans (other than collection of any Interest Subsidy
Payments and Special Allowance Payments, which the Eligible Lender Trustee will
perform on behalf of the Trust) in accordance with, and otherwise comply with,
all applicable Federal and state laws, including all applicable standards,
guidelines and requirements of the Higher Education Act (in the case of the
Financed Federal Loans) and any Guarantee Agreement (in the case of the Financed
Guaranteed Loans), the failure to comply with which would adversely affect the
eligibility of one or more of the Financed Federal Loans for federal reinsurance
or Interest Subsidy Payments or Special Allowance Payments or one or more of the
Financed Guaranteed Loans for receipt of Guarantee Payments or would have an
adverse effect on the holders of Group I or Group II Notes, as applicable. The
Master Servicer also hereby acknowledges that its obligation to service (or to
cause the applicable Sub-Servicer to sub-service on its behalf) the Group I and
Group II Student Loans includes those Additional Group I Student Loans and
Additional Group II Student Loans, as the case may be conveyed by the Depositor
to the Eligible Lender Trustee on behalf of the Trust pursuant to Section 2.02
and the related Subsequent Transfer Agreement, a copy of which shall be
delivered to the Master Servicer by the Depositor promptly upon execution
thereof; PROVIDED that any failure by the Depositor to so deliver a Subsequent
Transfer Agreement shall not affect the Master Servicer's obligations hereunder
to service (or to cause the applicable Sub-Servicer to sub-service on its
behalf) all the Group I and Group II Student Loans.
The Master Servicer's duties (or the duties of the applicable
Sub-Servicers on behalf of the Master Servicer) shall include collection and
posting of all payments, responding to inquiries of borrowers on such Financed
Student Loans, monitoring borrowers' status, making required disclosures to
borrowers, investigating delinquencies, sending payment coupons to borrowers and
otherwise establishing repayment terms, reporting tax information to borrowers,
if applicable, accounting for collections and furnishing monthly and annual
statements with respect thereto to the Administrator. The Master Servicer shall
(or shall cause the applicable Sub-Servicers to) keep separate records with
respect to the Group I and Group II Student Loans so that separate reports can
be generated with respect to each group of Financed Student Loans. Subject to
the provisions of Section 4.02 and the first paragraph of this Section 4.01, the
Master Servicer shall (or shall cause the applicable Sub-Servicer to) follow its
customary standards, policies and procedures in performing its duties as Master
Servicer (or Sub-Servicer, as the case may be). Without limiting the generality
of the foregoing, the Master Servicer is authorized and empowered to execute and
deliver (and may cause the applicable Sub-Servicer to execute and deliver), on
behalf of itself, the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the Securities Insurer (with respect to the Group II Student Loans
only), the Swap Counterparty and the holders of the related group of Notes or
any of them, instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to such
Group I or Group II Student Loans; PROVIDED, HOWEVER, that the Master Servicer
agrees that it will not (nor will it permit a Sub-Servicer to) (a) permit any
rescission or cancellation of a Group I or Group II Student Loan except as
ordered by a court of competent jurisdiction or governmental authority or as
otherwise consented to in writing by the Eligible Lender Trustee, the Securities
Insurer (with respect to the Group II Student Loans only, and provided that no
Securities Insurer Default has occurred and is continuing) and the Indenture
Trustee or (b) reschedule, revise, defer or otherwise compromise with respect to
payments due on any Group I or Group II Student Loan except pursuant to any
applicable deferral or forbearance periods or otherwise in accordance with all
applicable standards, guidelines and requirements of the Higher Education Act,
any Guarantee Agreement or the Programs with respect to the servicing of the
Group I and Group II Student Loans and except as otherwise permitted in
accordance with Section 4.14; PROVIDED FURTHER, HOWEVER, that the Master
Servicer shall not agree (nor shall it permit any Sub-Servicer to agree) to any
decrease of the interest rate on, or the principal amount payable with respect
to, any Group I or Group II Student Loan except in accordance with the
applicable standards, guidelines and requirements of the Higher Education Act,
any Guarantee Agreement or the Programs and as otherwise permitted in accordance
with Section 4.14. The Eligible Lender Trustee on behalf of the Issuer hereby
grants a power of attorney and all necessary authorization to the Master
Servicer to (or to cause the applicable Sub-Servicer to) maintain any and all
collection procedures with respect to the Group I and Group II Student Loans it
services (or sub-services), including filing, pursuing and recovering claims
against the Guarantors for Guarantee Payments and taking any steps to enforce
such Group I and Group II Student Loan such as commencing a legal proceeding to
enforce a Group I or Group II Student Loan in the name of the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Securities Insurer (with
respect to Group II Student Loans only), the Swap Counterparty or the holders of
the related group of Notes. The Eligible Lender Trustee or the Indenture Trustee
shall upon the written request of the Master Servicer or the Administrator
furnish the Master Servicer or the Administrator (or at the written direction of
the Master Servicer or the Administrator, the related Sub-Servicer) with any
other powers of attorney and other documents reasonably necessary or appropriate
to enable the Master Servicer or the Administrator (or related Sub-Servicer) to
carry out their servicing and administrative duties hereunder (or under the
related Sub-Servicing Agreement).
Notwithstanding the foregoing, and without releasing the Master
Servicer from its duties and obligations hereunder, the Master Servicer has
appointed Great Lakes and PHEAA as Sub-Servicers and may appoint one or more
additional Sub-Servicers to act as "sub-servicer" on its behalf with respect to
the Financed Student Loans such Sub-Servicer is sub-servicing, in each case
consistent with the terms of this Article IV and any other provision of this
Agreement, and all references to the Master Servicer shall be read to apply to
such Sub-Servicer acting on behalf of the Master Servicer. In addition, the
Master Servicer may, in the event that a Sub-Servicer has been terminated or is
no longer servicing the Financed Student Loans, perform the servicing functions
required hereunder for up to 180 days, or a longer period of time if the Rating
Agency Condition is met (with respect to the Group I Student Loans) or if
consented to by the Securities Insurer (with respect to the Group II Student
Loans only).
In addition, none of KBUSA, the Depositor or the Master Servicer shall
make any change to a Program that affects any Group I or Group II Student Loan,
if such change would have a material adverse effect on the interests of the
Group I or Group II Noteholders, as applicable, or, with respect to the Group II
Student Loans only, the Securities Insurer without the consent of the Securities
Insurer (provided that no Securities Insurer Default has occurred and is
continuing). The Master Servicer, the Depositor or KBUSA shall deliver to the
Securities Insurer a copy of each change to a Program that materially affects
any of the Group II Student Loans.
SECTION 4.02. COLLECTION OF FINANCED STUDENT LOAN PAYMENTS. (a) The
Master Servicer shall (or shall cause the applicable Sub-Servicer to) make
reasonable efforts (including all efforts that may be specified under the Higher
Education Act or any Guarantee Agreement) to collect all payments called for
under the terms and provisions of the Group I or Group II Student Loans as and
when the same shall become due and shall follow such collection procedures as it
follows with respect to all comparable student loans that it services. The
Master Servicer shall (or shall cause the applicable Sub-Servicer to) allocate
collections with respect to the Group I and Group II Student Loans between
principal and interest in accordance with Section 5.03. With the written consent
of the Administrator, the Master Servicer (or at the direction of the Master
Servicer, the related Sub-Servicer) may in its discretion waive any charge or
any other fee that may be collected in the ordinary course of servicing a Group
I or Group II Student Loan.
(b) The Master Servicer shall (or shall cause the applicable
Sub-Servicer to) make reasonable efforts to claim, pursue and collect all
Guarantee Payments from the Guarantors pursuant to the Guarantee Agreements with
respect to any of the Financed Guaranteed Loans as and when the same shall
become due and payable, shall comply with all applicable laws and agreements
with respect to claiming, pursuing and collecting such payments and shall follow
such practices and procedures as it follows with respect to all comparable
guarantee agreements and student loans that it services. In connection
therewith, the Master Servicer is hereby authorized and empowered (or at the
direction of the Master Servicer, the related Sub-Servicer is authorized and
empowered) to convey to any Guarantor the note and the related Financed Student
Loan File representing any Financed Guaranteed Loan in connection with
submitting a claim to such Guarantor for a Guarantee Payment in accordance with
the terms of the applicable Guarantee Agreement.
(c) The Eligible Lender Trustee shall, with the assistance of the
Administrator as set forth below and on behalf of the Issuer, make reasonable
efforts to claim, pursue and collect all Interest Subsidy Payments and Special
Allowance Payments from the Department with respect to any of the Financed
Federal Loans as and when the same shall become due and payable, shall comply
with all applicable laws and agreements with respect to claiming, pursuing and
collecting such payments and shall follow such practices and procedures as the
Administrator follows with respect to its own student loans. All amounts so
collected by the Eligible Lender Trustee shall constitute Group I Available
Funds for the applicable Collection Period and shall be deposited into the Group
I Collection Account Subaccount, in accordance with Section 5.02. In connection
therewith, the Administrator shall prepare and file with the Department on a
timely basis all claims forms and other documents and filings necessary or
appropriate in connection with the claiming of Interest Subsidy Payments and
Special Allowance Payments on behalf of the Eligible Lender Trustee and shall
otherwise assist the Eligible Lender Trustee in pursuing and collecting such
Interest Subsidy Payments and Special Allowance Payments from the Department.
The Eligible Lender Trustee shall upon the written request of the Administrator
furnish the Administrator with any power of attorney and other documents
reasonably necessary or appropriate to enable the Administrator to prepare and
file such claims forms and other documents and filings.
The Eligible Lender Trustee may permit trusts, other than the Trust,
established by the Depositor or KBUSA to securitize student loans to use the
Department lender identification number applicable to the Trust. In such event,
the Eligible Lender Trustee may claim and collect Interest Subsidy Payments and
Special Allowance Payments with respect to Group I Student Loans in the Trust
and student loans in such other trusts using such common lender identification
number. Notwithstanding anything herein or in the Basic Documents to the
contrary, any amounts assessed against payments (including, but not limited to,
Interest Subsidy Payments and Special Allowance Payments) due from the
Department or any Federal Guarantor to any such other trust using such common
lender identification number as a result of amounts (including, but not limited
to, the Federal Consolidation Loan Rebate) owing to the Department or any
Federal Guarantor from the Trust will be deemed for all purposes hereof and of
the Basic Documents (including for purposes of determining amounts paid by the
Department or any Federal Guarantor with respect to the student loans in the
Trust and such other trust) to have been assessed against the Trust and shall be
deducted by the Eligible Lender Trustee or the Master Servicer and paid to such
other trust from any collections made by them which would otherwise have been
payable to the Group I Collection Account Subaccount for the Trust. If so
specified in the servicing agreement applicable to any such other trust, any
amounts assessed against payments due from the Department or any Federal
Guarantor to the Trust as a result of amounts owing to the Department or any
Federal Guarantor from such other trust using such common lender identification
number will be deemed to have been assessed against such other trust and will be
deducted by the Eligible Lender Trustee or the Master Servicer from any
collections made by them which would otherwise be payable to the collection
account for such other trust and paid to the Trust.
SECTION 4.03. REALIZATION UPON FINANCED STUDENT LOANS. For the benefit
of the Issuer, the Master Servicer shall (or shall cause the applicable
Sub-Servicer to) use reasonable efforts consistent with its customary servicing
practices and procedures and including all efforts that may be specified under
the Higher Education Act or any applicable Guarantee Agreement in its servicing
(or sub-servicing) of any delinquent Group I or Group II Student Loans.
SECTION 4.04. COMPUTATION OF NOTE INTEREST RATE. Prior to each
Determination Date, the Administrator shall determine each Note Interest Rate
that will be applicable to the Distribution Date following such Determination
Date, in compliance with its obligation to prepare and deliver an
Administrator's Certificate on such Determination Date pursuant to Section 4.08.
In connection therewith, the Administrator shall calculate Three-Month LIBOR in
accordance with the definition thereof and shall also determine each of the
Student Loan Rates with respect to the Group I and Group II Student Loans with
respect to such Distribution Date.
SECTION 4.05. NO IMPAIRMENT. The Master Servicer shall not (nor shall
it permit the applicable Sub-Servicer to) impair the rights of the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Securities Insurer (with
respect to the Group II Student Loans only), the Swap Counterparty or the
holders of Notes in such Financed Student Loans.
SECTION 4.06. PURCHASE OF FINANCED STUDENT LOANS; REIMBURSEMENT. The
Eligible Lender Trustee or the Master Servicer (or the applicable Sub-Servicer
on its behalf) shall inform the other party as well as the Indenture Trustee,
the Securities Insurer, the Swap Counterparty, the Depositor and KBUSA promptly,
in writing, upon the discovery of any breach pursuant to Section 4.01, 4.02,
4.03 or 4.05. Unless the breach shall have been cured within 60 days following
such discovery (or, at the Master Servicer's election, the last day of the first
month following such discovery), the Master Servicer shall purchase any Group I
or Group II Student Loan in which the interests of the Securities Insurer (with
respect to the Group II Student Loans only), the Swap Counterparty or the
holders of related group of Notes are materially and adversely affected by any
such breach (as determined by the Securities Insurer with respect to Group II
Student Loans only (unless a Securities Insurer Default has occurred and is
continuing)), as of the first day succeeding the end of such 60-day period that
is the last day of a Collection Period (it being understood that any such breach
that does not affect any Guarantor's obligation to guarantee payment of such
Group I or Group II Student Loan in accordance with Guarantee Agreements will
not be considered to have a material adverse effect for this purpose). If the
Master Servicer takes any action or fails to take any action (including, without
limitation, all actions taken or not taken by a Sub-Servicer on its behalf)
during any Collection Period pursuant to the sections referred to above that
impairs the rights of the Issuer, the Indenture Trustee, the Eligible Lender
Trustee, the Securities Insurer (with respect to the Group II Student Loans
only), the Swap Counterparty or the holders of the related group of Notes in any
Financed Student Loan or otherwise than as provided in such sections, the Master
Servicer shall purchase such Group I or Group II Student Loan as of the last day
of such Collection Period. In consideration of the purchase of any such Group I
or Group II Student Loan pursuant to either of the two preceding sentences, the
Master Servicer shall remit the related Purchase Amount in the manner specified
in Section 5.04. In addition, if any such breach by the Master Servicer (or a
Sub-Servicer acting on its behalf) does not trigger such a purchase obligation
but does result in the refusal by a Federal Guarantor to guarantee all or a
portion of the accrued interest, or the loss (including any obligation of the
Issuer to repay to the Department) of certain Interest Subsidy Payments and
Special Allowance Payments, with respect to a Financed Federal Loan, then,
unless such breach, if curable, is cured within 60 days, the Master Servicer
shall reimburse the Issuer by remitting an amount equal to the sum of all such
non-guaranteed interest amounts and such forfeited Interest Subsidy Payments and
Special Allowance Payments in the manner specified in Section 5.04. Subject to
Section 7.02, the sole remedy of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the holders of related group of Notes, the Securities Insurer
(with respect to the Group II Student Loans only) and Swap Counterparty with
respect to a breach pursuant to Section 4.01, 4.02, 4.03 or 4.05 shall be to
require the Master Servicer to purchase such Group I and/or Group II Student
Loans or to reimburse the Issuer as provided above pursuant to this Section. The
Eligible Lender Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the purchase of
any Group I or Group II Student Loan or the reimbursement for any interest
penalty pursuant to this Section 4.06. Notwithstanding the foregoing, the Master
Servicer, at its option, may permit or cause a Sub-Servicer to purchase a Group
I or Group II Student Loan from the Trust in its stead, in the manner and for
the reasons set forth above.
SECTION 4.07. MASTER SERVICING FEE. (a) The Master Servicing Fee for
each calendar month and each group of Financed Student Loans payable on each
Monthly Servicing Payment Date shall be equal to the amounts determined by
reference to the schedule of fees as set forth in the Servicing Fee Schedule,
attached hereto as Schedule E.
(b) The Master Servicer hereby agrees and acknowledges that as part of
the consideration represented by the Master Servicing Fee, the Master Servicer
will make the representations and warranties with respect to the QSPE Student
Loans contained in Section 3.01 and undertakes the purchase obligations with
respect to any breach of such representations and warranties set forth in
Section 3.02. The parties to this Agreement each hereby acknowledges that the
purchase of the QSPE Student Loans by the Trust would not be possible without
the Master Servicer agreeing to make such representations and warranties and
undertake such related purchase obligations.
SECTION 4.08. ADMINISTRATOR'S CERTIFICATE; SERVICER'S REPORT. (a) On
or before (i) the seventh day of each month (or, if any such day is not a
Business Day, on the next succeeding Business Day), the Master Servicer shall
(or shall cause each Sub-Servicer to) deliver to the Depositor, the
Administrator and KBUSA a Servicer's Report with respect to the preceding
calendar month containing all information necessary for the preparation of the
applicable Subsequent Transfer Agreement (including Schedule A thereto), and
(ii) the Closing Date or the fifteenth day of each month (or, if any such day is
not a Business Day, on the next succeeding Business Day) or any other Subsequent
Transfer Date, the Master Servicer shall (or shall cause each Sub-Servicer to)
deliver to the Administrator a Servicer's Report with respect to the preceding
calendar month containing all information necessary for the Administrator's
preparation of the Administrator's Officer's Certificate and the Administrator's
Certificate covering such calendar month referred to in paragraphs (b) and (c)
below.
(b) On each Determination Date prior to a Monthly Servicing Payment
Date that is not a Distribution Date, the Administrator shall deliver to the
Eligible Lender Trustee, the Indenture Trustee, the Securities Insurer, the
Depositor, the Swap Counterparty and (if the KBUSA is not the Administrator)
KBUSA, an Officer's Certificate of the Administrator containing all information
necessary to pay the Master Servicer the related Master Servicing Fee for each
group of Financed Student Loans due on such Monthly Servicing Payment Date
pursuant to Sections 5.05(b) and 5.06. In addition, on the Business Day
preceding each Subsequent Transfer Date during the Funding Period, the
Administrator shall deliver to the Eligible Lender Trustee, the Indenture
Trustee, the Securities Insurer, the Depositor and (if KBUSA is not the
Administrator) KBUSA, an Officer's Certificate of the Administrator containing
all information necessary to make the transfers from the Group I and Group II
Escrow Account, as applicable, and the Group I and Group II Pre-Funding Account,
as applicable, on such Subsequent Transfer Date pursuant to Section 5.08.
(c) On each Determination Date prior to a Distribution Date, the
Administrator shall deliver to the Eligible Lender Trustee, the Indenture
Trustee, the Securities Insurer, the Swap Counterparty, the Depositor and (if
KBUSA is not the Administrator) the KBUSA, with a copy to the Rating Agencies,
an Administrator's Certificate containing all information necessary to make the
distributions pursuant to Sections 5.05, 5.06 and 5.08(c) and (d), if
applicable, for the Collection Period preceding the date of such Administrator's
Certificate, as well as (x) with respect to each of the Interest Rate Swaps, the
amount of the related Net Trust Swap Payment or the related Net Trust Swap
Receipt (and the related Net Payment or Net Receipt, as applicable), (y) (i)
with respect to the Group I Cap Agreement, the amount of any Class I-A-1 Cap
Payment, Class I-A-2 Cap Payment and Class I-B Cap Payment, as the case may be,
and (ii) with respect to the Group II Cap Agreement, the amount of any Class
II-A-1 Cap Payment and Class II-A-2 Cap Payment for such Distribution Date, as
the case may be, and (z) with respect to the Group II Notes, the amount of any
Deficiency Amount and any Preference Amounts, as applicable. In addition, the
Administrator shall prepare and deliver to the Indenture Trustee any required
Group II Notes Guaranty Insurance Policy Notice to permit the Indenture Trustee
to make a claim for an Insured Payment with respect to such Distribution Date
under the Group II Notes Guaranty Insurance Policy. All Group I and/or Group II
Student Loans to be repurchased by the Depositor (or KBUSA on its behalf) or
purchased by the Master Servicer (or a Sub-Servicer on its behalf) or acquired
by any Guarantor shall be identified by the Administrator by type of loan and
borrower social security number with respect to such Group I Student Loan (as
specified in Schedule X-0, X-0, X-0 or B-2, as the case may be).
SECTION 4.09. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) Each of the Administrator and the Master Servicer shall (and the Master
Servicer shall cause each Sub-Servicer to) deliver to the Depositor, KBUSA, the
Eligible Lender Trustee, the Securities Insurer, the Swap Counterparty, and the
Indenture Trustee, on or before March 31 of each year beginning March 31, 2002,
an Officers' Certificate of the Administrator or Master Servicer (and each
Sub-Servicer) as the case may be, dated as of December 31 of the preceding year,
stating that (i) a review of the activities of the Administrator or the Master
Servicer (and each Sub-Servicer on its behalf), as the case may be, during the
preceding 12-month period (or, in the case of the first such certificate, during
the period from the Closing Date to December 31, 2001) and of its performance
under this Agreement (or the related Sub-Servicing Agreement, as applicable) has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Administrator or the Master
Servicer (or such Sub-Servicer), as the case may be, has fulfilled all its
obligations under this Agreement and the Administration Agreement (or the
related Sub-Servicing Agreement), as applicable, throughout such year or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof. The
Indenture Trustee shall send a copy of each such Officers' Certificate and each
report referred to in Section 4.10 to the Rating Agencies. A copy of each such
Officers' Certificate and each report referred to in Section 4.10 may be
obtained by any holder of Notes or Note Owner by a request in writing to the
Eligible Lender Trustee addressed to its Corporate Trust Office, together with
evidence satisfactory to the Eligible Lender Trustee that such Person is one of
the foregoing parties. Upon the telephone request of the Eligible Lender
Trustee, the Indenture Trustee will promptly furnish the Eligible Lender Trustee
a list of holders of Notes as of the date specified by the Eligible Lender
Trustee.
(b) The Master Servicer shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Depositor, the Securities Insurer, the Swap
Counterparty and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice in an Officers' Certificate of the Master Servicer of any event which
with the giving of notice or lapse of time, or both, would become a Master
Servicer Default under Section 8.01(a)(1) or (2) or would cause Key Bank USA,
National Association, to fail to meet the definition of an Eligible Institution.
(c) The Administrator shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Master Servicer, KBUSA, the Depositor, the Securities
Insurer, the Swap Counterparty and the Rating Agencies, promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice in an Officers' Certificate of the Administrator of
any event which with the giving of notice or lapse of time, or both, would
become an Administrator Default under Section 8.01(b)(1) or (2) or would cause
Key Bank USA, National Association, to fail to meet the definition of an
Eligible Institution.
SECTION 4.10. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
Each of the Administrator and the Master Servicer shall (or the Master Servicer
shall cause each Sub-Servicer to) cause a firm of independent certified public
accountants, which may also render other services to the Administrator or the
Master Servicer (or such Sub-Servicer), as the case may be, to deliver to the
Depositor, the Eligible Lender Trustee, the Securities Insurer, the Swap
Counterparty and the Indenture Trustee on or before March 31 of each year
beginning March 31, 2003, a report addressed to the said parties, to the effect
that such firm has examined certain documents and records relating to the
servicing of the Financed Student Loans during the preceding calendar year (or,
in the case of the first such report, during the period from the date hereof to
December 31, 2002), and that, on the basis of the accounting and auditing
procedures considered appropriate under the circumstances (but in any event, in
accordance with standards established by the American Institute of Certified
Public Accountants), such firm is of the opinion that such servicing was
conducted in compliance with the terms of this Agreement, except for (i) such
exceptions as such firm shall believe to be immaterial and (ii) such other
exceptions as shall be set forth in such report. In the event such firm requires
the Indenture Trustee and the Eligible Lender Trustee to agree to the procedures
performed by such firm, the Master Servicer shall direct the Indenture Trustee
in writing to so agree; it being understood and agreed that the Indenture
Trustee and the Eligible Lender Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Indenture
Trustee and the Eligible Lender Trustee make no independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
Such report will also indicate that the firm is independent of the
Administrator or the Master Servicer (or such Sub-Servicer), as the case may be,
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
In addition, the Master Servicer (or each Sub-Servicer) shall comply
with and each such firm of independent certified public accountants will perform
its examination in accordance with the Audit Guide, COMPLIANCE AUDITS
(ATTESTATION ENGAGEMENTS) FOR LENDERS AND LENDER SERVICERS PARTICIPATING IN THE
FEDERAL FAMILY EDUCATION LOAN PROGRAM (Audit Guide), issued by the U.S.
Department of Education, Office of the Inspector General, dated October 1996 or
as subsequently revised and deliver such report in accordance with regulation.
SECTION 4.11. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING FINANCED STUDENT LOANS. Upon reasonable prior notice, the Master
Servicer shall (or shall cause the Sub-Servicers to) provide to the Securities
Insurer, the Depositor, the Swap Counterparty and the holders of the related
group of Notes access to the related Financed Student Loan Files in such cases
where the Securities Insurer, the Swap Counterparty or the holders of the
related group of Notes shall be required by applicable statutes or regulations
to review such documentation, as demonstrated by evidence satisfactory to the
Master Servicer (and the applicable Sub-Servicer under the related Sub-Servicing
Agreement) in its (or their) reasonable judgment. Access shall be afforded
without charge, but only upon reasonable request and during the normal business
hours at the respective offices of the Master Servicer (or the applicable
Sub-Servicer). Nothing in this Section shall affect the obligation of the Master
Servicer (or the applicable Sub-Servicer on its behalf) to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of the Master Servicer (or the applicable Sub-Servicer) to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
SECTION 4.12. MASTER SERVICER AND ADMINISTRATOR EXPENSES. The Master
Servicer and the Administrator shall be severally required to pay or cause to be
paid all expenses incurred by it (or its agents acting on its behalf) in
connection with its activities hereunder, including fees and disbursements of
independent accountants, taxes imposed on the Master Servicer or the
Administrator, as the case may be, and expenses incurred in connection with
distributions and reports to the Administrator, the Securities Insurer, the Swap
Counterparty, the Depositor, the Eligible Lender Trustee, or to the holders of
the related group of Notes, as the case may be.
SECTION 4.13. APPOINTMENT OF SUB-SERVICERS. The Master Servicer may at
any time, (i) upon the written consent of the Administrator and (with respect to
the Group II Student Loans only and provided that no Securities Insurer Default
has occurred and is continuing) the Securities Insurer, appoint one or more
Sub-Servicers to perform all or any portion of its obligations as Master
Servicer hereunder, provided, that the Rating Agency Condition shall have been
satisfied in connection therewith, and (ii) without notice or consent, delegate
specific duties to sub-contractors who are in the business of performing such
duties; PROVIDED, HOWEVER, that the Master Servicer shall remain obligated and
be liable to the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Securities Insurer (with respect to the Group II Student Loans only) and the
holders of the related group of Notes for the servicing and administering of the
Group I and Group II Student Loans, in accordance with the provisions hereof
without diminution of such obligation and liability by virtue of the appointment
of such Sub-Servicer or other delegation of such duties and to the same extent
and under the same terms and conditions as if the Master Servicer alone were
servicing and administering the Group I and Group II Student Loans. The fees and
expenses of each Sub-Servicer (and any such sub-contractors) shall be as agreed
between the Master Servicer and the applicable Sub-Servicer or a sub-contractor
from time to time and none of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the Securities Insurer, the Swap Counterparty or the holders
of Notes shall have any responsibility therefor. The parties hereto and the
Securities Insurer hereby acknowledge and consent to the appointment of PHEAA
and Great Lakes as the initial Sub-Servicers (and custodians of the Financed
Student Loans each such Sub-Servicer is servicing) pursuant to the PHEAA
Sub-Servicing Agreements and the Great Lakes Sub-Servicing Agreement,
respectively, and acknowledge that the requirements of this Section 4.13 are
deemed to have been met with respect to PHEAA and Great Lakes. With respect to
the Group II Student Loans only, the Master Servicer hereby agrees to obtain the
approval of the Securities Insurer with the respect to the appointment of any
additional or replacement Sub-Servicer, to the extent the identity of such
proposed new Sub-Servicer has not been included in the letter agreement, dated
the Closing Date, between the Master Servicer and the Securities Insurer
(provided that no Securities Insurer Default has occurred and is continuing). In
addition, with respect to the Group II Student Loans only the prior written
consent of the Securities Insurer (provided that no Securities Insurer Default
has occurred and is continuing) is required for any sub-servicing agreement not
substantially in the form of the Great Lakes Sub-Servicing Agreement or the
PHEAA Sub-Servicing Agreements.
SECTION 4.14. SPECIAL PROGRAMS. The Master Servicer may at its option,
but is under no obligation to, offer (and may permit the Sub-Servicers to offer)
borrowers of the Group I and Group II Student Loans certain special incentive
programs, whether or not in existence as of the date of this Agreement,
generally offered to the obligors of comparable loans owned by the applicable
Seller; PROVIDED, HOWEVER, that to the extent such programs are: (a) not in
existence as of the date of this Agreement and are not required by the Higher
Education Act (in the case of the Financed Federal Loans), or (b) not part of
the special incentive program designated as the "Keys2Repay Program" by KBUSA,
and have the effect of reducing the yield on the related Group I or Group II
Student Loans (either by reducing borrower payments or reducing principal
balance), such special programs shall be applied to borrowers of Group I or
Group II Student Loans only if and to the extent the Issuer receives payment
from the Depositor (or KBUSA on its behalf) in an amount sufficient to offset
such reduction of yield netted against any payments owed by the Trust to the
Depositor pursuant to this Agreement.
SECTION 4.15. MAINTENANCE OF FIDELITY BOND AND ERRORS AND OMISSION
POLICY. The Master Servicer shall maintain in full force and effect, at such
time as its long-term debt is rated less than A- by Fitch, A- by S&P or A3 by
Xxxxx'x, a policy or policies of insurance covering errors and omissions and a
fidelity bond in respect of its officers, employees and agents. Such policy or
policies and such fidelity bond shall be in such form and amounts as is
generally customary among Persons that service a portfolio of student loans
having an aggregate principal amount of $100,000,000 or more and that are
generally regarded as servicers acceptable to institutional investors.
ARTICLE V
DISTRIBUTIONS; ACCOUNTS;
STATEMENTS TO NOTEHOLDERS
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNTS. (a) (i) The
Administrator, for the benefit of the Issuer, shall establish and maintain in
the name of the Indenture Trustee an Eligible Deposit Account (the "Collection
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Issuer, the Securities Insurer (with
respect to collections with respect to the Group II Student Loans only) and the
Swap Counterparty. The Collection Account will have two separate subaccounts:
the first, wherein collections with respect to the Group I Student Loans will be
deposited for the benefit of the Group I Noteholders and the Swap Counterparty
(for amounts due under the Group I Interest Rate Swap) (the "Group I Collection
Account Subaccount"), and the second wherein collections with respect to the
Group II Student Loans will be deposited for the benefit of the Group II
Noteholders, the Securities Insurer and the Swap Counterparty (for amounts due
under the Group II Interest Rate Swap) (the "Group II Collection Account
Subaccount"). The Collection Account will initially be established as a
segregated trust account at KeyBank National Association in the name of the
Indenture Trustee. The Depositor will make an initial deposit on the Closing
Date into (x) the Group I Collection Account Subaccount of cash or certain
Eligible Investments equal to $1,834,499 and (y) the Group II Collection Account
Subaccount of cash or certain Eligible Investments equal to $743,299.
(ii) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee two Eligible Deposit
Accounts (the "Reserve Accounts"), one with respect to the Group I Notes
(the "Group I Reserve Account") and the other with respect to the Group II
Notes (the "Group II Reserve Account") each bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Issuer, the Securities Insurer (with respect to the Group II Reserve
Account only) and the Swap Counterparty. The Reserve Accounts each
initially will be established as segregated trust accounts at KeyBank
National Association in the name of the Indenture Trustee. The Depositor
will make an initial deposit on the Closing Date into (x) the Group I
Reserve Account of cash or certain Eligible Investments equal to $875,000
and (y) the Group II Reserve Account of cash or certain Eligible
Investments equal to $13,500,000.
(iii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee two Eligible
Deposit Accounts (the "Pre-Funding Accounts"), one with respect to the
Group I Notes (the "Group I Pre-Funding Account") and the other with
respect to the Group II Notes (the "Group II Pre-Funding Account") each
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Issuer, the Securities Insurer (with
respect to the Group II Pre-Funding Account only) and the Swap
Counterparty. The Pre-Funding Accounts each initially will be established
as segregated trust accounts at KeyBank National Association in the name of
the Indenture Trustee. The Depositor will make an initial deposit on the
Closing Date into (x) the Group I Pre-Funding Account of cash or certain
Eligible Investments equal to $20,000,000 and (y) the Group II Pre-Funding
Account of cash or certain Eligible Investments equal to $28,000,000.
(iv) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee two Eligible Deposit
Accounts (the "Escrow Accounts"), one with respect to the Group I Notes
(the "Group I Escrow Account") and the other with respect to the Group II
Notes (the "Group II Escrow Account") each bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Issuer, the Securities Insurer (with respect to the Group II Escrow Account
only) and the Swap Counterparty. The Escrow Accounts each initially will be
established as segregated trust accounts at KeyBank National Association in
the name of the Indenture Trustee. The Depositor will make an initial
deposit on the Closing Date into (x) the Group I Escrow Account of cash or
certain Eligible Investments equal to $0 and (y) the Group II Escrow
Account of cash or certain Eligible Investments equal to $0.
(v) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee two Eligible Deposit
Accounts (the "Cap Accounts"), one with respect to the Group I Notes (the
"Group I Cap Account") and the other with respect to the Group II Notes
(the "Group II Cap Account") each bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Issuer,
the Securities Insurer (with respect to the Group II Cap Account only) and
the Swap Counterparty. The Cap Accounts each initially will be established
as segregated trust accounts at KeyBank National Association in the name of
the Indenture Trustee.
(b) Funds on deposit in the Collection Account, the Reserve Accounts,
the Pre-Funding Accounts, the Cap Accounts, and the Escrow Accounts
(collectively, the "Trust Accounts") shall be invested by the Indenture Trustee
(or any custodian or designated agent with respect to any amounts on deposit in
such accounts) in Eligible Investments pursuant to written instructions by the
Administrator; PROVIDED, HOWEVER, it is understood and agreed that neither the
Administrator nor the Indenture Trustee shall be liable for any loss arising
from such investment in Eligible Investments. All such Eligible Investments
shall be held by (or by any custodian on behalf of) the Indenture Trustee for
the benefit of the Issuer; provided that on the Business Day preceding each
Distribution Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be deposited into the
Group I Collection Account Subaccount (with respect to all Trust Accounts
relating to the Group I Notes or the Group I Student Loans) or the Group II
Collection Account Subaccount (with respect to all Trust Accounts relating to
the Group II Notes or the Group II Student Loans) and shall constitute a portion
of the Group I or Group II Available Funds, respectively, for such Distribution
Date. Other than as described in the following proviso or as otherwise permitted
by the Rating Agencies, funds on deposit in the Trust Accounts shall be invested
in Eligible Investments that will mature so that such funds will be available at
the close of business on the Business Day preceding the following Distribution
Date; PROVIDED, HOWEVER, that funds on deposit in Trust Accounts may, and all
funds on deposit in the Cap Accounts shall, be invested in Eligible Investments
of the Indenture Trustee which may mature so that such funds will be available
on such Distribution Date. Funds deposited in a Trust Account on a Business Day
which immediately precedes a Distribution Date upon the maturity of any Eligible
Investments are not required to be invested overnight.
(c) (i) The Indenture Trustee, on behalf of the related group of
Noteholders, the Securities Insurer (with respect to Trust Accounts relating to
the Group II Notes and Group II Student Loans only) and the Swap Counterparty,
shall possess all right, title and interest in all funds on deposit from time to
time in the Trust Accounts and in all proceeds thereof (including all income
thereon) and all such funds, investments, proceeds and income shall be part of
the Indenture Trust Estate. Subject to the Administrator's power to instruct the
Indenture Trustee pursuant to paragraph (b) above and paragraph (c)(iii) below,
the Trust Accounts shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the related group of Noteholders, the Securities
Insurer (with respect to Trust Accounts relating to the Group II Notes and Group
II Student Loans only) and the Swap Counterparty. If, at any time, any of the
Trust Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee
(or the Administrator on its behalf) agrees, by its acceptance hereto, that it
shall within 5 Business Days (or such longer period, not to exceed 30 calendar
days, as to which each Rating Agency and the Securities Insurer (with respect to
Trust Accounts relating to the Group II Notes or Group II Student Loans and
provided that no Securities Insurer Default has occurred and is continuing) may
consent) establish a new Trust Account as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust Account. In
connection with the foregoing, the Administrator agrees that, in the event that
any of the Trust Accounts are not accounts with the Indenture Trustee, the
Administrator shall notify the Indenture Trustee, the Securities Insurer and the
Swap Counterparty, in writing, promptly upon any of such Trust Accounts ceasing
to be an Eligible Deposit Account. In the event that Key Bank USA National
Association is no longer the Administrator and the Master Servicer, the
Indenture Trustee shall, at the written direction of the Securities Insurer
(with respect to the Trust Accounts relating to the Group II Notes or Group II
Student Loans only and provided that no Securities Insurer Default has occurred
and is continuing), establish new Trust Accounts at an institution other than
KeyBank National Association.
(ii) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit accounts shall
be held solely in Eligible Deposit Accounts, subject to the last sentence
of Section 5.01(c)(i); and, subject to Section 5.01(b), each such Eligible
Deposit Account shall be subject to the exclusive custody and control of
the Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
(B) any Trust Account Property shall be Delivered to the Indenture
Trustee in accordance with the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Indenture Trustee or such
other Person acting solely for the Indenture Trustee as required for
Delivery;
(C) In the event that the Indenture Trustee, in its capacity as
securities intermediary has or subsequently obtains by agreement, operation
of law or otherwise a security interest in the Trust Accounts or any
security entitlement credited thereto, the Indenture Trustee, in its
capacity as securities intermediary hereby agrees that such security
interest shall be subordinate to the security interest of the Indenture
Trustee. The financial assets and other items deposited to the Trust
Accounts will not be subject to deduction, set-off, banker's lien, or any
other right in favor of any person other than the Indenture Trustee (except
that the Indenture Trustee, in its capacity as securities intermediary may
set off (i) the face amount of any checks which have been credited to the
Trust Accounts but are subsequently returned unpaid because of uncollected
or insufficient funds, and (ii) with respect to Trust Accounts relating the
Group II Notes or Group II Student Loans only and provided that a
Securities Insurer Default has occurred and is continuing or the Securities
Insurer has been removed pursuant to Section 8A.5 of the Indenture, all
amounts due to it in respect of its customary fees and expenses for the
routine maintenance and operation of the Trust Accounts.
(D) The Administrator shall have the power, revocable for cause or
upon the occurrence and during the continuance of an Administrator Default
by the Indenture Trustee or the Securities Insurer (with respect to matters
affecting the Group II Notes only) or by the Eligible Lender Trustee with
the consent of the Indenture Trustee and the Securities Insurer (with
respect to matters affecting the Group II Notes only), to instruct the
Indenture Trustee to make withdrawals and payments from the Trust Accounts
for the purpose of permitting the Master Servicer, the Administrator or the
Eligible Lender Trustee to carry out its respective duties hereunder or
permitting the Indenture Trustee to carry out its duties under the
Indenture.
SECTION 5.02. COLLECTIONS. The Master Servicer shall (or shall cause
the applicable Sub-Servicers to) remit within two Business Days of receipt
thereof to the Group I Collection Account Subaccount (with respect to the Group
I Student Loans) or the Group II Collection Account Subaccount (with respect to
the Group II Student Loans) all payments by or on behalf of the Obligors with
respect to the Group I and Group II Student Loans, respectively (other than
Purchased Student Loans), and all related Liquidation Proceeds and Recoveries,
as collected during the Collection Period. Notwithstanding the foregoing, for so
long as (i) Key Bank USA, National Association remains the Administrator, (ii)
no Administrator Default shall have occurred and be continuing and (iii) prior
to ceasing daily remittances to the applicable subaccount of the Collection
Account, the Rating Agency Condition shall have been satisfied (which the
parties hereto agree shall be deemed to have been satisfied on the Closing Date)
(and any conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with), the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) remit such collections within two Business Days of
receipt thereof to the Administrator, and the Administrator need not deposit
such collections into the Group I Collection Account Subaccount or the Group II
Collection Account Subaccount, as applicable, until one Business Day immediately
prior to the next following Distribution Date; provided, however, that,
notwithstanding the foregoing, on or before the Business Day preceding each
Monthly Servicing Payment Date that is not a Distribution Date, the
Administrator shall deposit into the Group I Collection Account Subaccount or
the Group II Collection Account Subaccount, as applicable, (i) with respect to
the Group II Student Loans only, Guarantee Payments made by XXXX in excess of
the Maximum XXXX Payments Amount, and (ii) that portion of such amounts received
by it that is equal to the related Master Servicing Fee payable on such date. In
the event that any of the foregoing conditions for ceasing daily remittances
shall no longer be satisfied, then the Administrator shall deposit all
collections held by it into the Group I Collection Account Subaccount or the
Group II Collection Account Subaccount, as applicable, within two Business Days
thereof. For purposes of this Article V, the phrase "payments by or on behalf of
Obligors" shall mean payments made with respect to the Group I or Group II
Student Loans, as applicable, by or on behalf of borrowers thereof and the
Guarantors (but excluding the Department).
SECTION 5.03. APPLICATION OF COLLECTIONS. (a) With respect to each
Group I and Group II Student Loan, all collections (including all Guarantee
Payments, but, with respect to Group II Student Loans, subject to the Maximum
XXXX Payments Amount with respect to XXXX Guarantee Payments) with respect
thereto for the Collection Period shall be applied to interest and principal on
such Group I or Group II Student Loan, as applicable, by the Master Servicer (or
the applicable Sub-Servicer on its behalf) in accordance with its customary
practice by allocating to interest the portion of such collection equal to the
product of (A) the applicable interest rate on such Group I or Group II Student
Loan, as applicable (B) the unpaid principal balance of such Group I or Group II
Student Loan, as applicable, and (C) the period of time elapsed since the
preceding payment of interest on such Group I or Group II Student Loan, as
applicable, was made (over the actual number of days in a year) ("Interest
Collections") and by allocating the remainder of such collection to principal.
(b) All Liquidation Proceeds shall be applied to the related Group I
or Group II Student Loan, as applicable.
SECTION 5.04. ADDITIONAL DEPOSITS. (a) Within two Business Days after
receipt thereof, the Eligible Lender Trustee shall deposit in the Group I
Collection Account Subaccount the aggregate amount of Interest Subsidy Payments
and Special Allowance Payments received by it with respect to the Financed
Federal Loans. The Master Servicer shall (or shall cause the applicable
Sub-Servicers to) deposit in Group I Collection Account Subaccount or the Group
II Collection Account Subaccount, as applicable, the aggregate Purchase Amount
with respect to Purchased Student Loans, which are Group I or Group II Student
Loans, and all other amounts to be paid by the Master Servicer under Section
4.06 when such amounts are due, and the Depositor (or KBUSA on its behalf) or
the Master Servicer, as applicable, shall deposit or cause to be deposited
therein the aggregate Purchase Amount with respect to Purchased Student Loans
and all other amounts to be paid by the Depositor (or KBUSA on its behalf) or
the Master Servicer, as applicable, under Sections 3.02 and 9.01 when such
amounts are due.
(b) The Indenture Trustee shall remit to the Group II Collection
Account Subaccount all Insured Payments delivered pursuant to a Group II Notes
Guaranty Insurance Policy Notice on the date of receipt thereof from the
Securities Insurer; provided that all Insured Payments shall be distributed only
to the Group II Noteholders in accordance with the terms of the Group II Notes
Guaranty Insurance Policy and such amounts may not be applied in any other
manner.
(c) (i) (X) On the Determination Date preceding each Distribution Date
prior to the termination of the Group I Cap Agreement, the Administrator, in its
capacity as calculation agent under the Group I Cap Agreement, shall determine
the amount, if any, of the Class I-A-1 Cap Payment, Class I-A-2 Cap Payment and
Class I-B Cap Payment for such Distribution Date and shall instruct the Cap
Provider to deposit such amounts into the Group I Cap Account on the Business
Day prior to such Distribution Date. In addition, upon the occurrence of an
event of default under the Group I Cap Agreement or an early termination of the
Group I Cap Agreement, the Administrator shall instruct the Cap Provider to
deposit the amount of any termination payment into the Group I Cap Account; and
(Y) on the Determination Date preceding each Distribution Date prior to the
termination of the Group II Cap Agreement, the Administrator, in its capacity as
calculation agent under the Group II Cap Agreement, shall determine the amount,
if any, of the Class II-A-1 Cap Payment, and Class II-A-2 Cap Payment for such
Distribution Date and shall instruct the Cap Provider to deposit such amounts
into the Group II Cap Account on the Business Day prior to such Distribution
Date. In addition, upon the occurrence of an event of default under the Group II
Cap Agreement or an early termination of the Group II Cap Agreement, the
Administrator shall instruct the Cap Provider to deposit the amount of any
termination payment into the Group II Cap Account.
(ii) With respect to each of the Interest Rate Swaps, on the
Determination Date preceding each Distribution Date prior to the
termination of the Group I or Group II Interest Rate Swap, as the case may
be, the Administrator, in its capacity as calculation agent under the Group
I and Group II Interest Rate Swap, respectively, shall determine the
amount, if any, of the related Net Trust Swap Payment, the related Net
Trust Swap Payment Carryover Shortfall, the related Net Trust Swap Receipt
and the related Net Trust Swap Receipt Carryover Shortfall for such
Distribution Date. With respect to each of the Interest Rate Swaps, the
Administrator on the related Determination Date shall either (I) instruct
the Indenture Trustee, on behalf of the Trust, to make a distribution to
the Swap Counterparty on the related Distribution Date, in an amount equal
to the excess of the amount of the Trust Swap Payment Amount, with respect
to the Group I or Group II Interest Rate Swap, as applicable, over amount
of the Trust Swap Receipt Amount, with respect to the Group I or Group II
Interest Rate Swap, as applicable (each a "Net Payment"), in the priority
set forth in Section 5.05(c)(X)(3) with respect to the Group I Interest
Rate Swap or Section 5.05(c)(Y)(5) with respect to the Group II Interest
Rate Swap below, or (II) instruct the Swap Counterparty to deposit an
amount equal to the excess of the amount of the Trust Swap Receipt Amount,
with respect to the Group I or Group II Interest Rate Swap, as applicable,
over amount of the Trust Swap Payment Amount, with respect to the Group I
or Group II Interest Rate Swap, as applicable (each a "Net Receipt") into
the Group I Collection Account Subaccount or the Group II Collection
Account Subaccount, as the case may be, on each Distribution Date. In
addition, upon the occurrence of an event of default under the Group I or
Group Interest Rate Swap or an early termination of the Group I or Group II
Interest Rate Swap, the Administrator shall either instruct the Swap
Counterparty to deposit the amount of any Termination Payment owed to the
Trust into the Group I Collection Account Subaccount or the Group II
Collection Account Subaccount, as applicable, or instruct the Indenture
Trustee to make any related Termination Payment owed to the Swap
Counterparty, in the priority set forth in either (x) Section 5.05(c)(X)(3)
or 5.05(c)(X)(10), with respect to the Group I Interest Rate Swap, or (y)
Section 5.05(c)(Y)(5) or 5.05(c)(Y)(11),with respect to the Group II
Interest Rate Swap, as applicable.
SECTION 5.05. DISTRIBUTIONS. (a) On each Determination Date, the
Administrator shall calculate all amounts required to determine the amounts to
be transferred from each of the Trust Accounts into the applicable subaccount of
the Collection Account, the amounts to be distributed therefrom on the related
Monthly Servicing Payment Date or Distribution Date, the Class I-A-1 Cap
Payment, Class I-A-2 Cap Payment, Class I-B Cap Payment, Class II-A-1 Cap
Payment, Class II-A-2 Cap Payment, Group I Cap Funds and Group II Cap Funds, if
any, and the amounts owed under each of the Group I and Group II Interest Rate
Swaps, pursuant to Section 5.04(c)(ii) above. The Administrator, in its capacity
as calculation agent under the Administration Agreement, shall instruct the
Indenture Trustee in writing (based on the information contained in the
Administrator's Certificate delivered pursuant to Section 4.08(a)), to withdraw
from the Group I or Group II Cap Account, as applicable, the amount of any Group
I or Group II Cap Funds, respectively, and to distribute such amounts to the
Group I or Group II Noteholders, respectively, on the related Distribution Date
as provided in Section 5.05(c).
(b) On each Monthly Servicing Payment Date that is not a Distribution
Date, the Administrator shall instruct the Indenture Trustee in writing (based
on the information contained in the Administrator's Officer's Certificate and
each related Servicer's Report delivered pursuant to Section 4.08(a) and (b)) to
distribute (i) with respect to the Group II Student Loans only, to the Depositor
(or at the Depositor's written instruction, to the applicable Seller) any
amounts on deposit in the Collection Account which consist of Guarantee Payments
made by XXXX in excess of the Maximum XXXX Payments Amount and (ii) to the
Master Servicer by 11:00 a.m. (New York time), from and to the extent of the
Group I or Group II Available Funds on deposit in the Group I Collection Account
Subaccount or the Group II Collection Account Subaccount, respectively, the
related Master Servicing Fee with respect to the Group I or Group II Student
Loans, as applicable, due with respect to the preceding calendar month and all
related unpaid Master Servicing Fees from prior months, and the Indenture
Trustee shall comply with such instructions.
(c) (X) With respect to the Group I Notes, on each Distribution Date,
the Administrator shall instruct the Indenture Trustee in writing (based on the
information contained in the Administrator's Certificate and each related
Servicer's Report delivered pursuant to Section 4.08(a) and (c)) to make the
following deposits and distributions to the Persons or to the account specified
below by 11:00 a.m. (New York time), to the extent of the amount of Group I
Available Funds in the Group I Collection Account Subaccount, in the following
order of priority and the Indenture Trustee shall comply with such instructions:
(1) to the Master Servicer, the Master Servicing Fee with respect to
the Group I Student Loans due on such Distribution Date and all prior unpaid
Master Servicing Fees allocated to the Group I Student Loans;
(2) from the amount of Group I Available Funds remaining after the
application of clause (1), to the Administrator, the portion of the
Administration Fee allocated to the Group I Notes and all unpaid Administration
Fees from prior Collection Periods allocated to the Group I Notes;
(3) from the amount of Group I Available Funds remaining after the
application of clauses (1) and (2), (x) to the holders of the Group I Class A
Notes, the Noteholders' Interest Distribution Amount for the Group I Class A
Notes pursuant to Section 8.02(c)(X)(i) of the Indenture, and (y) and to the
Swap Counterparty, the Net Payment with respect to the Group I Interest Rate
Swap, if any, for such Distribution Date, and the remainder of any related
Termination Payment resulting from an Event of Default (as defined in the Group
I Interest Rate Swap) to the extent that the Trust is the Defaulting Party (as
defined in the Group I Interest Rate Swap) (other than an Event of Default
specified in Section 5(a)(i) of the Group I Interest Rate Swap), PRO RATA, based
on the ratio of each such amount to the total of such amounts;
(4) from the amount of Group I Available Funds remaining after the
application of clauses (1) through (3), to the Group I Reserve Account, an
amount, up to the amount, if any, necessary to reinstate the balance of the
Group I Reserve Account to the related Specified Reserve Account Balance;
(5) from the amount of Group I Available Funds remaining after the
application of clauses (1) through (4) and provided that a Subordinate Note
Interest Trigger is not in effect on such Distribution Date, to the holders of
the Class I-B Notes, the Noteholders' Interest Distribution Amount for the Class
I-B Notes pursuant to Section 8.02(c)(X)(ii) of the Indenture;
(6) from the amount of Group I Available Funds remaining after the
application of clauses (1) through (5), to the holders of the Group I Notes, the
Group I Principal Distribution Amount pursuant to Section 8.02(c)(X)(iii) of the
Indenture, in the following order of priority: (a) prior to the Stepdown Date,
or after the Stepdown Date if a Subordinate Note Principal Trigger is in effect,
the Group I Principal Distribution Amount for the Group I Notes will be payable
solely to the Group I Senior Notes in sequential order beginning with the Class
I-A-1 Notes until paid in full, then to the Class I-A-2 Notes until paid in
full, and then to the Class I-B Notes; and (b) after the Stepdown Date and so
long as no Subordinate Note Principal Trigger is in effect, the Senior
Percentage of the Principal Distribution Amount for the Group I Notes will be
payable to the Group I Senior Notes (in the same order of priority as described
in the preceding sentence) and the Subordinate Percentage of the Group I
Principal Distribution Amount will be payable to the Class I-B Notes;
(7) from the amount of Group I Available Funds remaining after the
application of clauses (1) through (6) and in the event that a Subordinate Note
Interest Trigger is in effect with respect to such Distribution Date, to the
holders of the Class I-B Notes, the Noteholders' Interest Distribution Amount
for the Class I-B Notes pursuant to Section 8.02(c)(X)(iv) of the Indenture;
(8) from (x) the amount of Group I Available Funds remaining after the
application of clauses (1) through (7), and (y) the Group I Cap Funds, if any,
to the holders of the Group I Class A Notes on a pro rata basis based on the
amount of any Noteholders' Interest Index Carryover owing on each such Class of
Group I Class A Notes, the aggregate unpaid amount of such Noteholders' Interest
Index Carryover, if any, with respect to the Group I Class A Notes;
(9) from (x) the amount of Group I Available Funds remaining after the
application of clauses (1) through (8), and (y) the Group I Cap Funds remaining
after application of clause (8), if any, to the to the holders of the Class I-B
Notes, the aggregate unpaid amount of Noteholders' Interest Index Carryover, if
any, with respect to the Class I-B Notes;
(10) from the amount of Group I Available Funds remaining after the
application of clauses (1) through (9), to the Swap Counterparty, all
Termination Payments and all other unpaid amounts owed to the Swap Counterparty
under the Group I Interest Rate Swap not paid pursuant to clause (3) above;
(11) from the amount of Group I Available Funds remaining after the
application of clauses (1) through (10), to the Cap Provider, an amount
sufficient to reimburse the Cap Provider for all Class I-A-1 Cap Payments, Class
I-A-2 Cap Payments, Class I-B Cap Payments, and any other amounts due to the Cap
Provider under the Group I Interest Rate Cap and not previously reimbursed; and
(12) from the amount of Group I Available Funds remaining after the
application of clauses (1) through (11), after all payments shown above are
made, any remaining amounts: (x) for so long as the Group II Notes remain
outstanding (or any sums are owed to the Securities Insurer, the Swap
Counterparty or the Cap Provider with respect to the Group II Notes), will
become Group II Available Funds as provided in the definition of Group II
Available Funds, or (y) after all of the Group II Notes are no longer
outstanding (and no other sums are owed to the Securities Insurer, the Swap
Counterparty or the Cap Provider with respect to the Group II Notes), will be
paid to the Eligible Lender Trustee on behalf of the holder of the Certificates.
(Y) With respect to the Group II Notes, on each Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing (based on the
information contained in the Administrator's Certificate and each related
Servicer's Report delivered pursuant to Section 4.08(a) and (c)) to make the
following deposits and distributions to the Persons or to the account specified
below by 11:00 a.m. (New York time), to the extent of the amount of Group II
Available Funds in the Group II Collection Account Subaccount, in the following
order of priority and the Indenture Trustee shall comply with such instructions:
(1) to the Depositor (for distribution to the applicable Seller), any
amounts on deposit in the Group II Collection Account Subaccount which consist
of Guarantee Payments made by XXXX in excess of the Maximum XXXX Payments
Amount;
(2) to the Master Servicer, the Master Servicing Fee with respect to
the Group II Student Loans due on such Distribution Date and all prior unpaid
Master Servicing Fees allocated to the Group II Student Loans;
(3) from the amount of Group II Available Funds remaining after the
application of clauses (1) and (2), to the Administrator, the portion of the
Administration Fee allocated to the Group II Notes and all unpaid Administration
Fees from prior Collection Periods allocated to the Group II Notes;
(4) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (3), and provided that no Securities Insurer
Default has occurred and is continuing, to the Securities Insurer, the Insurer
Premium and all unpaid Insurer Premiums from prior Collection Periods;
(5) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (4), (x) to the holders of the Group II Class
A Notes, the Noteholders' Interest Distribution Amount for the Group II Class A
Notes pursuant to Section 8.02(c)(Y)(i) of the Indenture, and (y) to the Swap
Counterparty, the Net Payment with respect to the Group II Interest Rate Swap,
if any, for such Distribution Date, and the remainder of any related Termination
Payment resulting from an Event of Default (as defined in the Group II Interest
Rate Swap) to the extent that the Trust is the Defaulting Party (as defined in
the Group II Interest Rate Swap) (other than an Event of Default specified in
Section 5(a)(i) of the Group II Interest Rate Swap), PRO RATA, based on the
ratio of each such amount to the total of such amounts;
(6) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (5), to the Securities Insurer, provided that
a Securities Insurer Default has not occurred and is continuing, reimbursement
for all amounts owed pursuant to draws with respect to any payments of interest
under any of the Group II Notes Guaranty Insurance Policy, plus interest thereon
as determined in accordance with the Insurance Agreement;
(7) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (6), to the Group II Reserve Account, an
amount, up to the amount, if any, necessary to reinstate the balance of the
Group II Reserve Account to the related Specified Reserve Account Balance;
(8) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (7), sequentially in the following order,
first, to the holders of the Class II-A-1 Notes, the applicable Noteholders'
Principal Distribution Amount as set forth in Section 8.02(c)(Y)(ii) of the
Indenture, until their outstanding principal balance has been reduced to zero,
second, to the Securities Insurer, provided that no Securities Insurer Default
has occurred and is continuing, reimbursement for all amounts owed pursuant to
draws with respect to any payments of principal under the Group II Notes
Guaranty Insurance Policy made to the holders of the Class II-A-1 Notes, plus
interest thereon determined in accordance with the Insurance Agreement, third,
to the holders of the Class II-A-2 Notes, the applicable Noteholders' Principal
Distribution Amount as set forth in Section 8.02(c)(Y)(ii) of the Indenture,
until their outstanding principal balance has been reduced to zero, and fourth,
to the Securities Insurer, provided that no Securities Insurer Default has
occurred and is continuing, reimbursement for all amounts owed pursuant to draws
with respect to any payments of principal under the Group II Notes Guaranty
Insurance Policy made to the holders of the Class II-A-2 Notes, plus interest
thereon determined in accordance with the Insurance Agreement;
(9) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (8), to the Securities Insurer, an amount
equal to all unreimbursed Insured Payments made on prior Distribution Dates,
together with accrued interest thereon; to the extent not previously reimbursed
above, and all other amounts owed to the Securities Insurer under the Insurance
Agreement.
(10) from (x) the amount of Group II Available Funds remaining after
the application of clauses (1) through (9), and (y) the Group II Cap Funds, if
any, to the holders of the Group II Notes, on a pro rata basis based on the
amount of any Noteholders' Interest Index Carryover owing on each such Class of
Group II Notes, the aggregate unpaid amount of Noteholders' Interest Index
Carryover, if any, with respect to the Group II Notes;
(11) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (10), to the Swap Counterparty, all
Termination Payments and all other unpaid amounts owed to the Swap Counterparty
under the Group II Interest Rate Swap not paid pursuant to clause (5) above;
(12) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (11), to the Cap Provider, an amount
sufficient to reimburse the Cap Provider for all Class II-A-1 Cap Payments and
Class II-A-2 Cap Payments and any other amounts due to the Cap Provider under
the Group II Interest Rate Cap and not previously reimbursed;
(13) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (12), to the extent Group I Available Funds
are insufficient to pay the Noteholders' Interest Distribution Amount to any
Class of the Group I Notes pursuant to Section 5.05(c)(X)(3) and (5) above, to
the applicable Group I Noteholders, sequentially, first to the holders of the
Group I Class A Notes, pro rata based on their current Outstanding Amounts, and
second to the holders of the Class I-B Notes, pursuant to Section 8.02(c)(X) of
the Indenture;
(14) from the amount of Group II Available Funds remaining after the
application of clauses (1) through (13), to the extent Group I Available Funds
are insufficient to make all required payments to the Swap Counterparty and/or
the Cap Provider owed to either of them for the Group I Interest Rate Swap or
the Group I Interest Rate Cap, as applicable, to the Swap Counterparty and the
Swap Provider, pro rata, up to the amount of such deficiency; and
(15) to the Eligible Lender Trustee on behalf of the holder of the
Certificates, the amount of Group II Available Funds remaining after the
application of clauses (1) through (14).
SECTION 5.06. RESERVE ACCOUNTS. (a) On the Closing Date, the Depositor
shall deposit the Group I Reserve Account Initial Deposit, in the amount of
$875,000, into the Group I Reserve Account and the Group II Reserve Account
Initial Deposit, in the amount of $13,500,000, into the Group II Reserve
Account. On the Closing Date, the Group I Reserve Account Initial Deposit and
the Group II Reserve Account Initial Deposit will equal the related Specified
Reserve Account Balance for the Group I and Group II Reserve Accounts,
respectively, as of the Closing Date.
(b) (i) In the event that the Master Servicing Fee with respect to the
Group I or Group II Student Loans for any Monthly Servicing Payment Date or
Distribution Date exceeds the amount distributed to the Master Servicer pursuant
to Sections 5.05(b)(ii) and either Section 5.05(c)(X)(1), with respect to the
Group I Student Loans, or Section 5.05(c)(Y)(2), with respect to the Group II
Student Loans, on such Monthly Servicing Payment Date or Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing to withdraw from
the Group I or Group II Reserve Account, as the case may be, on such Monthly
Servicing Payment Date or Distribution Date an amount equal to such excess, to
the extent of funds available therein, and to distribute such amount to the
Master Servicer.
(ii) In the event that the Administration Fee allocated to the Group I
or Group II Notes for any Distribution Date exceeds the amount distributed
to the Administrator pursuant to Section 5.05(c)(X)(2), with respect to the
Group I Notes, or Section 5.05(c)(Y)(3), with respect to the Group II
Notes, on such Distribution Date, the Administrator shall instruct the
Indenture Trustee in writing to withdraw from the Group I or Group II
Reserve Account, as the case may be, on each Distribution Date an amount
equal to such excess, to the extent of funds available therein after giving
effect to paragraph (b)(i) above, and to distribute such amount to the
Administrator.
(iii) With respect to the Group II Notes only, in the event that the
amounts due to the Securities Insurer for the Insurer Premium for any
Distribution Date exceeds the amount distributed to the Securities Insurer
pursuant to Section 5.05(c)(Y)(4) on such Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing to withdraw
from the Group II Reserve Account on each Distribution Date (provided that
no Securities Insurer Default has occurred and is continuing) an amount
equal to such excess, to the extent of funds available therein after giving
effect to paragraphs (b)(i) and b(ii) above, and to distribute such amount
to the Securities Insurer.
(iv) In the event that the Noteholders' Interest Distribution Amount
with respect to either the Group I Class A Notes or the Group II Class A
Notes, or the related Net Payment with respect to the Group I or Group II
Interest Rate Swap, respectively (including the remainder of any related
Termination Payment resulting from an Event of Default (as defined in the
related Interest Rate Swap) to the extent that the Trust is the Defaulting
Party (as defined in the related Interest Rate Swap) (other than an Event
of Default specified in Section 5(a)(i) of the related Interest Rate
Swap)), if any, due the Swap Counterparty, for a Distribution Date exceeds
the amount distributed to the holders of the Group I Class A Notes or the
Group II Class A Notes, respectively, and the Swap Counterparty, as
applicable, pursuant to Section 5.05(c)(X)(3), with respect to the Group I
Notes, or Section 5.05(c)(Y)(5), with respect to the Group II Notes, as the
case may be, on such Distribution Date, the Administrator shall instruct
the Indenture Trustee in writing to withdraw from the Group I or Group II
Reserve Account, as applicable, on such Distribution Date an amount equal
to such excess, to the extent of funds available therein in each case after
giving effect to paragraph (b)(i) through b(iii) above, and to distribute
such amount pro rata (based on the amount of such excess allocable to the
holders of the Group I Class A Notes or the Group II Class A Notes, as
applicable, on the one hand and the Swap Counterparty under the related
Interest Rate Swap on the other hand) to (x) the holders of Group I or
Group II Notes, as applicable, entitled thereto in the same order and
priority as is set forth in Section 5.05(c)(X)(3), with respect to the
Group I Notes, or Section 5.05(c)(Y)(5), with respect to the Group II
Notes, as the case may be, and (y) to the Swap Counterparty under the
related Interest Rate Swap; PROVIDED, HOWEVER, that, amounts on deposit in
the Group I or Group II Reserve Account, as applicable, will not be
available to cover any unpaid Noteholders' Interest Index Carryover with
respect to the Group I Class A Notes or the Group II Class A Notes,
respectively.
(v) In the event that the Noteholders' Interest Distribution Amount
with respect to the Class I-B Notes for a Distribution Date exceeds the
amount distributed to the holders of the Class I-B Notes pursuant to
Section 5.05(c)(X)(5) and provided that a Subordinate Note Interest Trigger
is not in effect on such Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the Group I
Reserve Account on such Distribution Date an amount equal to such excess,
to the extent of funds available therein after giving effect to paragraph
(b)(i) through b(iv) above, and to distribute such amount to the holders of
the Class I-B Notes entitled thereto in the same order and priority as is
set forth in Section 5.05(c)(X)(5); PROVIDED, HOWEVER, that, amounts on
deposit in the Group I Reserve Account will not be available to cover any
unpaid Noteholders' Interest Index Carryover with respect to the Class I-B
Notes.
(vi) In the event and to the extent that on any Distribution Date,
there is a Realized Loss Amount with respect to either the Group I or Group
II Student Loans, the Administrator shall instruct the Indenture Trustee in
writing on such date to withdraw from the Group I or Group II Reserve
Account, respectively, on such date an amount equal to the Realized Loss
Amount for the Group I or Group II Student Loans, as applicable, to the
extent of funds available therein, in each case after giving effect to
paragraphs (b)(i) through (b)(v) above, and to distribute such amounts, in
the order of priority set forth in Section 5.05(c)(X)(6) with respect to
the Group I Notes or Section 5.05(c)(Y)(8) with respect to the Group II
Notes.
(vii) With respect to the Group I Notes only, (X) in the event that on
the Final Maturity Date for the Class I-A-1 Notes, the outstanding
principal balance of the Class I-A-1 Notes (prior to giving effect to any
distribution of principal thereon on such date) exceeds the amount of
principal distributed to the holders of the Class I-A-1 Notes on such date
pursuant to Section 5.05(c)(X)(6), the Administrator shall instruct the
Indenture Trustee in writing on such date to withdraw from the Group I
Reserve Account on such date an amount equal to such excess, to the extent
of funds available therein, after giving effect to paragraphs (b)(i)
through (b)(vi) above and to distribute such amount to the holders of the
Class I-A-1 Notes, in the same order and priority as is set forth in
Section 5.05(c)(X)(6); (Y) in the event that on the Final Maturity Date for
the Class I-A-2 Notes the outstanding principal balance of the Class I-A-2
Notes (prior to giving effect to any distribution of principal thereon on
such date), exceeds the amount of principal distributed to the holders of
the Class I-A-2 Notes on such date pursuant to Section 5.05(c)(X)(6), the
Administrator shall instruct the Indenture Trustee in writing on such date
to withdraw from the Group I Reserve Account on such date an amount equal
to such excess, to the extent of funds available therein, after giving
effect to paragraphs (b)(i) through (b)(vi) above, and to distribute such
amount to the holders of the Class I-A-2 Notes, in the same order and
priority as set forth in Section 5.05(c)(X)(6); and (Z) in the event that
on the Final Maturity Date for the Class I-B Notes the outstanding
principal balance of the Class I-B Notes (prior to giving effect to any
distribution of principal thereon on such date), exceeds the amount of
principal distributed to the holders of the Class I-B Notes on such date
pursuant to Section 5.05(c)(X)(6), the Administrator shall instruct the
Indenture Trustee in writing on such date to withdraw from the Group I
Reserve Account on such date an amount equal to such excess, to the extent
of funds available therein, after giving effect to paragraphs (b)(i)
through (b)(vi) above, and to distribute such amount to the holders of the
Class I-B Notes, in the same order and priority as set forth in Section
5.05(c)(X)(6).
(viii) With respect to the Group II Notes only, (X) in the event that
on the Final Maturity Date for the Class II-A-1 Notes, the outstanding
principal balance of the Class II-A-1 Notes (prior to giving effect to any
distribution of principal thereon on such date) exceeds the amount of
principal distributed to the holders of the Class II-A-1 Notes on such date
pursuant to Section 5.05(c)(Y)(8), the Administrator shall instruct the
Indenture Trustee in writing on such date to withdraw from the Group II
Reserve Account on such date an amount equal to such excess, to the extent
of funds available therein, after giving effect to paragraphs (b)(i)
through (b)(vii) above and to distribute such amount to the holders of the
Class II-A-1 Notes, in the same order and priority as is set forth in
Section 5.05(c)(Y)(8); and (Y) in the event that on the Final Maturity Date
for the Class II-A-2 Notes the outstanding principal balance of the Class
II-A-2 Notes (prior to giving effect to any distribution of principal
thereon on such date), exceeds the amount of principal distributed to the
holders of the Class II-A-2 Notes on such date pursuant to Section
5.05(c)(Y)(8), the Administrator shall instruct the Indenture Trustee in
writing on such date to withdraw from the Group II Reserve Account on such
date an amount equal to such excess, to the extent of funds available
therein, after giving effect to paragraphs (b)(i) through (b)(vii) above,
and to distribute such amount to the holders of the Class II-A-2 Notes, in
the same order and priority as set forth in Section 5.05(c)(Y)(8).
(c) If the amount on deposit in either the Group I or Group II Reserve
Account, as applicable, on any Distribution Date (without giving effect to all
deposits or withdrawals therefrom on such Distribution Date) is greater than the
related Specified Reserve Account Balance for such Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing to deposit the
amount of such excess into the Group I Collection Account Subaccount or the
Group II Collection Account Subaccount, as applicable, for distribution on such
Distribution Date.
(d) Following the payment in full of the aggregate outstanding
principal balance of the Group I or Group II Notes, as the case may be, and of
all other amounts owing or to be distributed hereunder or under the Indenture or
the Trust Agreement to holders of Group I or Group II Notes, respectively, the
Securities Insurer (with respect to the Group II Notes only), the Swap
Counterparty, the Master Servicer or the Administrator (including any related
Noteholders' Interest Index Carryover), or (with respect to the Group II Notes
only) under the Insurance Agreement to the Securities Insurer, or under the
Group I or Group II Interest Rate Swap, as applicable, to the Swap Counterparty
and the termination of the Trust, if applicable, (x) any amount remaining on
deposit in the Group I Reserve Account, shall become Group II Available Funds on
the related Distribution Date, and (y) any amount remaining on deposit in the
Group II Reserve Account shall be distributed to the Depositor. The Depositor
shall in no event be required to refund any amounts properly distributed
pursuant to this Section 5.06(d).
SECTION 5.07. STATEMENTS TO NOTEHOLDERS. On each Determination Date
preceding a Distribution Date, the Administrator shall provide to the Indenture
Trustee (with a copy to the Securities Insurer, the Swap Counterparty, the
Eligible Lender Trustee, the Depositor and the Rating Agencies) for the
Indenture Trustee to forward on such succeeding Distribution Date to each holder
of record of the Notes a statement substantially in the form of Exhibit A,
setting forth at least the following information as to the Notes, to the extent
applicable:
(1) the amount of the distribution allocable to principal of each
Class of Notes;
(2) the amount of the distribution allocable to interest on each Class
of Notes, together with the interest rates applicable with respect thereto
(indicating whether such interest rates are based on the related Formula Rate or
on the related Student Loan Rate and specifying what each such interest rate
would have been if it had been calculated using the alternate basis; provided
that no such calculation of the related Student Loan Rate will be required to be
made unless the Student Loan Rate Calculation Trigger is in effect on such
Distribution Date);
(3) (A) the amount of any Class I-A-1 Cap Payment, Class I-A-2 Cap
Payment and Class I-B Cap Payment made under the Group I Interest Rate Cap or
any Class II-A-1 Cap Payment or Class II-A-2 Cap Payment made under the Group II
Interest Rate Cap on such Distribution Date, and (B) the amount of the
distribution, if any, allocable to any Noteholders' Interest Index Carryover
with respect to each Class of Notes, as applicable, together with the
outstanding amount, if any, of each thereof after giving effect to any such
distribution;
(4) the Group I and Group II Pool Balance as of the close of business
on the last day of the preceding Collection Period, after giving effect to the
related payments allocated to principal reported as described in clause (1)
above;
(5) the aggregate outstanding principal balance of each Class of
Notes, and each Pool Factor as of such Distribution Date, after giving effect to
related payments allocated to principal reported under clause (1) above;
(6) (A) the amount of the Master Servicing Fee paid to the Master
Servicer, (B) the amount of the Administration Fee paid to the Administrator, in
each case as allocated to the Group I Notes and the Group II Notes, and (C) the
Insurer Premium, with respect to the Group II Notes only, and, in each case,
with respect to such Collection Period, together with the amount, if any, of the
Master Servicing Fee, Administration Fee or Insurer Premium remaining unpaid
after giving effect to all such payments;
(7) the amount of the aggregate Realized Losses for each of the Group
I and Group II Student Loans, if any, for such Collection Period and the balance
of Group I and Group II Student Loans that are delinquent in each delinquency
period as of the end of such Collection Period;
(8) (A) the balance of the Group I Reserve Account and the Group II
Reserve Accounts on such Distribution Date, after giving effect to changes
therein on such Distribution Date; (B) the amount of any Interest and Expense
Draw on such Distribution Date, and (C) the amount of any Realized Loss Draw on
such Distribution Date, in each case with respect to the Group I and the Group
II Reserve Accounts;
(9) for Distribution Dates during the Funding Period, the remaining
Group I Pre-Funded Amount and Group II Pre-Funded Amount on such Distribution
Date, after giving effect to changes therein during the related Collection
Period;
(10) for the first Distribution Date on or following the end of the
Funding Period, the amount of any remaining Group I Pre-Funded Amount and Group
II Pre-Funded Amount that has not been used to make Additional Fundings with
respect to Additional Group I or Additional Group II Student Loans, and is being
paid out to the related Group I or Group II Noteholders, as the case may be;
(11) With respect to the Group II Notes, the aggregate amount of all
Guarantee Payments made by XXXX that were deposited into the Group II Collection
Account Subaccount, net of any amounts paid to the Depositor (for distribution
to the related Seller) pursuant to Section 5.05(c)(Y)(1), and also expressed as
a percentage of the Group II Initial Financed Student Loan Pool Balance;
(12) the aggregate amount, if any, due and owing to the Cap Provider
for previous payments under the Group I and Group II Interest Rate Caps;
(13) the amount of any payments received or made by the Trust under
the Group I Interest Rate Swap and the Group II Interest Rate Swap on such
Distribution Date, and the aggregate amount, if any, either owed to or owed by
the Swap Counterparty under the Group I and/or Group II Interest Rate Swaps with
respect to amounts not paid or received by the Trust on previous Distribution
Dates; and
(14) with respect to the Group II Notes only, the amount of any
Insured Payments made with respect to such Distribution Date, if any, the
amount, if any, paid to the Securities Insurer for previously made Insured
Payments on such Distribution Date or otherwise pursuant to the Insurance
Agreement, and the aggregate amount, if any, owing to the Securities Insurer for
all unreimbursed Insured Payments made to the Trust.
Each amount set forth pursuant to clauses (1), (2), (3), (5) and (6) above shall
be expressed as a dollar amount per $1,000 of original principal balance of a
Note. A copy of the statements referred to above may be obtained by any Note
Owner by a written request to the Indenture Trustee, respectively, addressed to
the respective Corporate Trust Office.
SECTION 5.08. PRE-FUNDING ACCOUNT. (a) On the Closing Date, the
Depositor will deposit in (x) the Group I Pre-Funding Account $20,000,000 and
(y) the Group II Pre-Funding Account $28,000,000, in each case from the net
proceeds of the sale of the Group I and Group II Notes, respectively (and, to
the extent required, a capital contribution from KBUSA). On each Subsequent
Transfer Date during the Funding Period on which Other Student Loans are to be
conveyed to the Eligible Lender Trustee on behalf of the Issuer, the
Administrator shall instruct the Indenture Trustee in writing to withdraw an
amount equal to 101% (with respect to each Group I Student Loan) or 100% (with
respect to each Group II Student Loan) of the sum of (x) the principal balance
of, plus (y) to the extent capitalized or to be capitalized, accrued interest
on, such Other Student Loans (each sum of clauses (x) and (y) set forth in this
sentence and the previous sentence being, a "Transferred Balance"), (A) with
respect to Other Student Loans that are Additional Group I Student Loans, first
from the Group I Escrow Account until all amounts deposited therein during the
calendar month immediately preceding the Subsequent Transfer Date have been
reduced to zero and then any remainder from the Group I Pre-Funding Account; and
(B) with respect to Other Student Loans that are Additional Group II Student
Loans, first from the Group II Escrow Account until all amounts deposited
therein during the calendar month immediately preceding the Subsequent Transfer
Date have been reduced to zero and then any remainder from the Group II
Pre-Funding Account. The Administrator shall instruct the Indenture Trustee in
writing to distribute any Transferred Balance to or upon the order of the
Depositor upon satisfaction of the conditions set forth in Section 2.02(b) with
respect to such transfer. On each Subsequent Transfer Date on which Guarantee
Fee Advances are to be conveyed to the Eligible Lender Trustee on behalf of the
Issuer, the Administrator shall instruct the Indenture Trustee in writing to
withdraw from the Group I or Group II Pre-Funding Account, as the case may be,
an amount equal to the principal balance of such Guarantee Fee Advances and to
distribute such amount to or upon the order of the Depositor upon satisfaction
of the conditions set forth in Section 2.02(b) with respect to such transfer of
Guarantee Fee Advances.
(b) In the event that any funds deposited in the Group I or Group II
Escrow Account, as applicable, during the calendar month immediately preceding
any Subsequent Transfer Date remain on deposit therein on such Subsequent
Transfer Date, after giving effect to all Additional Fundings to be made with
respect to such Subsequent Transfer Date pursuant to paragraph (a) above, the
Indenture Trustee shall transfer such remaining funds from the Group I or Group
II Escrow Account, as the case may be, to the Group I Collection Account
Subaccount or the Group II Collection Account Subaccount, respectively, and such
funds shall be considered collections with respect to the Group I or Group II
Student Loans, as applicable, for the related Collection Period.
(c) If (x) the Group I or Group II Pre-Funded Amount, as the case may
be, has not been reduced to zero on the Distribution Date on which the Funding
Period with respect to the Group I or Group II Notes, respectively, ends (or, if
the related Funding Period does not end on a Distribution Date, on the first
Distribution Date following the end of the related Funding Period) after giving
effect to any reductions in the Group I or Group II Pre-Funded Amount,
respectively, on such Distribution Date pursuant to paragraph (a) above, the
Administrator shall instruct the Indenture Trustee in writing pursuant to
Section 4.08(c) to withdraw from the Group I or Group II Pre-Funding Account, as
the case may be, on such Distribution Date an amount equal to the Group I or
Group II Pre-Funded Amount, respectively, and shall transfer such remaining
funds from the Group I or Group II Pre-Funding Account, respectively, to the
Group I Collection Account Subaccount or the Group II Collection Account
Subaccount, respectively, and such funds shall be considered collections with
respect to the Group I or Group II Student Loans, respectively, for the related
Collection Period.
(d) (i) In the event that the Master Servicing Fee with respect to the
Group I or Group II Student Loans for any Monthly Servicing Payment Date or
Distribution Date during the related Funding Period exceeds the amount
distributed to the Master Servicer pursuant to Sections 5.05(b)(ii),
5.05(c)(X)(1) (with respect to the Group I Notes) or 5.05(c)(Y)(2) (with
respect to the Group II Notes), and 5.06(b)(i) on such Monthly Servicing
Payment Date or Distribution Date, the Administrator shall instruct the
Indenture Trustee in writing to withdraw from the Group I or Group II
Pre-Funding Account, as applicable, on such Monthly Servicing Payment Date
or Distribution Date an amount equal to such excess, to the extent of funds
available therein, and to distribute such amount to the Master Servicer.
(ii) In the event that the Administration Fee allocated to the Group I
or Group II Notes for any Distribution Date during the related Funding
Period exceeds the amount distributed to the Administrator pursuant to
Sections 5.05(c)(X)(2) (with respect to the Group I Notes) or 5.05(c)(Y)(3)
(with respect to the Group II Notes), and 5.06(b)(ii) on such Distribution
Date, the Administrator shall instruct the Indenture Trustee in writing to
withdraw from the Group I or Group II Pre-Funding Account, as applicable,
on such Distribution Date an amount equal to such excess, to the extent of
funds available therein after giving effect to paragraph (d)(i) above, and
to distribute such amount to the Administrator.
(iii) With respect to the Group II Notes only, in the event that the
Insurer Premium due to the Securities Insurer for any Distribution Date
during the Funding Period with respect to the Group II Notes exceeds the
amount distributed to the Securities Insurer pursuant to Sections
5.05(Y)(c)(4) and 5.06(b)(iii) on such Distribution Date, the Administrator
shall instruct the Indenture Trustee in writing to withdraw from the Group
II Pre-Funding Account on each Distribution Date (provided that no
Securities Insurer Default has occurred and is continuing) an amount equal
to such excess, to the extent of funds available therein after giving
effect to paragraphs (d)(i) and (ii) above, and to distribute such amount
to the Securities Insurer.
(iv) In the event that the Noteholders' Interest Distribution Amount
with respect to the either the Group I Class A Notes or the Group II Class
A Notes, or the related Net Payment with respect to the Group I or Group II
Interest Rate Swap, respectively (including the remainder of any related
Termination Payment resulting from an Event of Default (as defined in the
related Interest Rate Swap) to the extent that the Trust is the Defaulting
Party (as defined in the related Interest Rate Swap) (other than an Event
of Default specified in Section 5(a)(i) of the related Interest Rate
Swap)), if any, due the Swap Counterparty, for a Distribution Date exceeds
the amount distributed to the holders of the Group I Class A Notes or the
Group II Class A Notes, respectively, and the Swap Counterparty, as
applicable, pursuant to Section 5.05(c)(X)(3), with respect to the Group I
Notes, or Section 5.05(c)(Y)(5), with respect to the Group II Notes, as the
case may be, and Section 5.06(b)(iv) on such Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing to withdraw
from the Group I or Group II Pre-Funding Account, as applicable, on such
Distribution Date an amount equal to such excess, to the extent of funds
available therein in each case after giving effect to paragraph (d)(i)
through d(iii) above, and to distribute such amount pro rata (based on the
amount of such excess allocable to the holders of the Group I Class A Notes
or the Group II Class A Notes, as applicable, on the one hand and the Swap
Counterparty under the related Interest Rate Swap on the other hand) to (x)
the holders of Group I or Group II Notes, as applicable, entitled thereto
in the same order and priority as is set forth in Section 5.05(c)(X)(3),
with respect to the Group I Notes, or Section 5.05(c)(Y)(5), with respect
to the Group II Notes, as the case may be, and (y) to the Swap Counterparty
under the related Interest Rate Swap; PROVIDED, HOWEVER, that, amounts on
deposit in the Group I or Group II Pre-Funding Account, as applicable, will
not be available to cover any unpaid Noteholders' Interest Index Carryover
with respect to the Group I Class A Notes or the Group II Class A Notes,
respectively.
(v) In the event that the Noteholders' Interest Distribution Amount
with respect to the Class I-B Notes for a Distribution Date exceeds the
amount distributed to the holders of the Class I-B Notes pursuant to
Section 5.05(c)(X)(5) and Section 5.06(b)(v), and provided that a
Subordinate Note Interest Trigger is not in effect on such Distribution
Date, the Administrator shall instruct the Indenture Trustee in writing to
withdraw from the Group I Pre-Funding Account on such Distribution Date an
amount equal to such excess, to the extent of funds available therein after
giving effect to paragraph (d)(i) through (d)(iv) above, and to distribute
such amount to the holders of the Class I-B Notes entitled thereto in the
same order and priority as is set forth in Section 5.05(c)(X)(5); PROVIDED,
HOWEVER, that, amounts on deposit in the Group I Pre-Funding Account will
not be available to cover any unpaid Noteholders' Interest Index Carryover
with respect to the Class I-B Notes.
(vi) In the event and to the extent that on any Distribution Date,
there is a Realized Loss Amount with respect to either the Group I or Group
II Student Loans that exceeds the amount withdrawn from the Reserve Account
pursuant to Section 5.06(b)(vi), the Administrator shall instruct the
Indenture Trustee in writing on such date to withdraw from the Group I or
Group II Pre-Funding Account, as applicable, on such date an amount equal
to the Realized Loss Amount for the Group I or the Group II Student Loans,
as applicable, to the extent of funds available therein, in each case after
giving effect to paragraphs (d)(i) through (d)(v) above, and to distribute
such amount in the same order of priority as if such amount had been
withdrawn from the Reserve Account pursuant to Section 5.06(b)(vi) on such
Distribution Date.
SECTION 5.09. DEPOSITOR OPTIONAL DEPOSIT. On or prior to any
Distribution Date, the Depositor may, but shall not be obligated to, make an
optional deposit (each, a "Depositor Optional Deposit") to the Group I or Group
II Reserve Account, as applicable, from funds to be released to the Depositor
pursuant to Section 5.05(c)(Y)(15) on such Distribution Date or otherwise. Any
Depositor Optional Deposit shall be applied on the related Distribution Date in
the same manner as other funds on deposit in the Group I or Group II Reserve
Account, as the case may be, on the related Distribution Date in accordance with
Section 5.06.
ARTICLE VI
THE ADMINISTRATOR AND THE DEPOSITOR
SECTION 6.01. REPRESENTATIONS OF THE ADMINISTRATOR. Key Bank USA,
National Association, as Administrator, makes the following representations on
which the Issuer is deemed to have relied in acquiring the Financed Student
Loans. The representations speak as of the execution and delivery of this
Agreement, the KBUSA Student Loan Transfer Agreement and the Administration
Agreement and as of the Closing Date, in the case of the Initial Financed
Student Loans, and as of the applicable Subsequent Transfer Date, in the case of
the Additional Student Loans, and shall survive the sale of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. KBUSA is duly organized and
validly existing as a national banking association in good standing under the
laws of the United States of America, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the KBUSA Student
Loans.
(b) POWER AND AUTHORITY OF KBUSA. KBUSA has the corporate power and
authority to execute and deliver this Agreement and the Administration Agreement
and to carry out their respective terms; this Agreement and the Administration
Agreement have been duly authorized by KBUSA by all necessary corporate action;
KBUSA has full corporate power and authority to sell and assign the property to
be sold and assigned to and deposited with the Depositor pursuant to the KBUSA
Student Loan Transfer Agreement (or with the Eligible Lender Trustee on behalf
of the Depositor) and KBUSA has duly authorized such sale and assignment to the
Depositor (or to the Eligible Lender Trustee on behalf of the Depositor) by all
necessary corporate action.
(c) BINDING OBLIGATION. This Agreement, the KBUSA Student Loan
Transfer Agreement and the Administration Agreement each constitutes a legal,
valid and binding obligation of KBUSA, in each case enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization and
similar laws relating to creditors' rights generally or the rights of creditors
of banks the deposit accounts of which are insured by the FDIC and subject to
general principles of equity.
(d) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement, the KBUSA Student Loan Transfer Agreement or the Administration
Agreement and the fulfillment of the terms hereof or thereof do not conflict
with, result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the articles
of association or by-laws of KBUSA, or any indenture, agreement or other
instrument to which KBUSA is a party or by which it shall be bound, which breach
or default would reasonably be expected to have a material adverse effect on the
condition of KBUSA, financial or otherwise, or adversely affect the transactions
contemplated by this Agreement, the KBUSA Student Loan Transfer Agreement or the
Administration Agreement; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the knowledge of KBUSA, any order, rule or regulation
applicable to KBUSA of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over KBUSA or its properties.
(e) NO PROCEEDINGS. There are no proceedings or, to its best
knowledge, investigations pending against KBUSA or, to its best knowledge,
threatened against KBUSA before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over KBUSA or
its properties: (i) asserting the invalidity of this Agreement, the Indenture or
any of the other Basic Documents or the Notes, (ii) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by KBUSA of
its obligations under, or the validity or enforceability of, this Agreement, the
Indenture, any of the other Basic Documents or the Notes or (iv) seeking to
affect adversely the Federal or state income tax attributes of the Issuer or the
Notes.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by KBUSA in connection with the execution and delivery by KBUSA of this
Agreement, the KBUSA Student Loan Transfer Agreement and the Administration
Agreement and the performance by KBUSA of its duties contemplated by this
Agreement and the Administration Agreement, have in each case been duly
obtained, effected or given and are in full force and effect.
(g) RESOLUTIONS. The resolutions of the Board of Directors of KBUSA
approving this Agreement and the other Basic Documents to which it is a party
and all documents relating thereto are and shall be continuously reflected in
the minutes of the Board of Directors of KBUSA. This Agreement and each of the
other Basic Documents to which it is a party and all documents relating thereto
are and shall be, continuously from the time of their respective execution by
KBUSA, official records of KBUSA.
SECTION 6.02. REPRESENTATIONS OF THE DEPOSITOR. The Depositor, makes
the following representations on which the Issuer is deemed to have relied in
acquiring the Financed Student Loans. The representations speak as of the
execution and delivery of this Agreement and as of the Closing Date, in the case
of the Initial Financed Student Loans, and as of the applicable Subsequent
Transfer Date, in the case of the Additional Student Loans, and shall survive
the sale of the Financed Student Loans to the Eligible Lender Trustee on behalf
of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly organized
and validly existing as a limited liability company in good standing under the
laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently owned
and such business is presently conducted, and had at all relevant times, and
has, the power, authority and legal right to acquire and own the Financed
Student Loans.
(b) POWER AND AUTHORITY OF THE DEPOSITOR. The Depositor has the
corporate power and authority to execute and deliver this Agreement and to carry
out its terms; the Depositor has full corporate power and authority to sell and
assign the property to be sold and assigned to and deposited with the Issuer (or
with the Eligible Lender Trustee on behalf of the Issuer) and the Depositor has
duly authorized such sale and assignment to the Issuer (or to the Eligible
Lender Trustee on behalf of the Issuer) by all necessary corporate action; and
the execution, delivery and performance of this Agreement have been duly
authorized by the Depositor by all necessary limited liability company action.
(c) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Depositor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar laws
relating to creditors' rights generally and subject to general principles of
equity.
(d) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof or thereof do not
conflict with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time or both) a default under,
the limited liability company agreement or other organization documents of the
Depositor, or any indenture, agreement or other instrument to which the
Depositor is a party or by which it shall be bound, which breach or default
would reasonably be expected to have a material adverse effect on the condition
of the Depositor, financial or otherwise, or adversely affect the transactions
contemplated by this Agreement; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the knowledge of the Depositor, any order, rule or
regulation applicable to the Depositor of any court or of any Federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or its properties.
(e) NO PROCEEDINGS. There are no proceedings or, to its best
knowledge, investigations pending against the Depositor or, to its best
knowledge, threatened against the Depositor before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties: (i) asserting the invalidity of this
Agreement, the Indenture or any of the other Basic Documents or the Notes, (ii)
seeking to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the other
Basic Documents, (iii) seeking any determination or ruling that could reasonably
be expected to have a material and adverse effect on the performance by the
Depositor of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents or the Notes or (iv)
seeking to affect adversely the Federal or state income tax attributes of the
Issuer or the Notes.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by the Depositor in connection with the execution and delivery by the
Depositor of this Agreement and the performance by the Depositor of the
transactions contemplated by this Agreement have been duly obtained, effected or
given and are in full force and effect.
(g) RESOLUTIONS. The resolutions of the Board of Directors of the
Depositor approving this Agreement and the Trust Agreement and all documents
relating thereto are and shall be continuously reflected in the minutes of the
Board of Directors of the Depositor. This Agreement and the Trust Agreement and
all documents relating thereto are and shall be, continuously from the time of
their respective execution by the Depositor, official records of the Depositor.
SECTION 6.03. EXISTENCE. During the term of this Agreement, the
Depositor will keep in full force and effect its existence as a special purpose
limited liability company under the laws of the State of Delaware.
SECTION 6.04. LIABILITY OF THE DEPOSITOR; INDEMNITIES. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement.
(a) KBUSA and the Depositor shall jointly and severally indemnify,
defend and hold harmless the Issuer, the Eligible Lender Trustee, the Securities
Insurer, the Swap Counterparty, the Delaware Trustee and the Indenture Trustee
and their officers, directors, employees and agents from and against any taxes
that may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents (except any
such income taxes arising out of fees paid to the Eligible Lender Trustee or the
Indenture Trustee), including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case of the
Issuer, not including any taxes asserted with respect to, and as of the date of,
the sale of the Financed Student Loans to the Eligible Lender Trustee on behalf
of the Issuer or the issuance and original sale of the Notes, or asserted with
respect to ownership of the Financed Student Loans or Federal or other income
taxes arising out of distributions on the Notes) and costs and expenses in
defending against the same.
(b) KBUSA and the Depositor shall jointly and severally indemnify,
defend and hold harmless the Issuer, the Eligible Lender Trustee, the Delaware
Trustee, the Securities Insurer, the Swap Counterparty, the Indenture Trustee,
the Master Servicer and the holders of Notes and the officers, directors,
employees and agents of the Issuer, the Eligible Lender Trustee, the Delaware
Trustee, the Securities Insurer, the Swap Counterparty, the Indenture Trustee
and the Master Servicer from and against any and all costs, expenses, losses,
claims, damages and liabilities arising out of, or imposed upon such Person
through, (i) the Depositor's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and (ii) KBUSA's
the Depositor's or the Issuer's violation of Federal or state securities laws in
connection with the offering and sale of the Notes.
(c) KBUSA and the Depositor shall jointly and severally be liable as
primary obligor for, and shall indemnify, defend and hold harmless the Eligible
Lender Trustee, the Delaware Trustee and their respective officers, directors,
employees and agents from and against, all costs, expenses, losses, claims,
damages, obligations and liabilities arising out of, incurred in connection with
or relating to the Trust Agreement, the other Basic Documents, the Trust Estate,
the acceptance or performance of the trusts and duties set forth herein and in
the Trust Agreement or the action or the inaction of the Eligible Lender Trustee
hereunder and of the Eligible Lender Trustee and the Delaware Trustee under the
Trust Agreement, except to the extent that such cost, expense, loss, claim,
damage, obligation or liability: (i) shall be due to the willful misfeasance,
bad faith or negligence (except for errors in judgment) of the Eligible Lender
Trustee or the Delaware Trustee, as applicable, (ii) shall arise from any breach
by the Eligible Lender Trustee of its covenants under any of the Basic Documents
or the Delaware Trustee under the Trust Agreement; or (iii) shall arise from the
breach by the Eligible Lender Trustee of any of its representations or
warranties set forth in Section 7.03 of the Trust Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant to this
paragraph, the Eligible Lender Trustee's or the Delaware Trustee's, as
applicable, choice of legal counsel shall be subject to the approval of the
Depositor and KBUSA, which approval shall not be unreasonably withheld.
(d) The Depositor shall pay any and all taxes levied or assessed upon
all or any part of the Trust Estate (other than those taxes expressly excluded
from the Depositor's responsibilities pursuant to Section 6.03(a) above).
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee, Delaware Trustee or the Indenture
Trustee and the termination of this Agreement or the Indenture or the Trust
Agreement, as applicable, and shall include reasonable fees and expenses of
counsel and expenses of litigation. If KBUSA or the Depositor shall have made
any indemnity payments pursuant to this Section and the Person to or on behalf
of whom such payments are made thereafter shall collect any of such amounts from
others, such Person shall promptly repay such amounts to the Depositor or KBUSA,
as applicable, without interest.
SECTION 6.05. LIABILITY OF ADMINISTRATOR; INDEMNITIES. The
Administrator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Administrator under this Agreement or
the Administration Agreement.
The Administrator shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Depositor, the Delaware Trustee, the
Securities Insurer, the Indenture Trustee, the Master Servicer, the holders of
Notes and any of the officers, directors, employees and agents of the Issuer,
the Eligible Lender Trustee, the Delaware Trustee, the Securities Insurer, the
Swap Counterparty, the Indenture Trustee and the Master Servicer from and
against any and all costs, expenses, losses, claims, damages and liabilities to
the extent that such cost, expense, loss, claim, damage or liability arose out
of, or was imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Administrator in the performance of its duties
under this Agreement or the Administration Agreement or by reason of reckless
disregard of its obligations and duties hereunder or thereunder.
The Administrator shall pay reasonable compensation to the Indenture
Trustee and shall reimburse the Indenture Trustee for all reasonable expenses,
disbursements and advances, and indemnify, defend and hold harmless the
Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of, Section
6.07 of the Indenture.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 6.05) as Administrator pursuant to Section 8.01(b), or a resignation
by such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee, Delaware Trustee or the Indenture
Trustee or the termination of this Agreement and the Administration Agreement
and shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Administrator shall have made any indemnity payments pursuant
to this Section and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Administrator, without interest.
SECTION 6.06. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, THE ADMINISTRATOR AND THE DEPOSITOR. Any Person (a) into which
the Administrator may be merged or consolidated, (b) which may result from any
merger or consolidation to which the Administrator shall be a party or (c) which
may succeed to the properties and assets of the Administrator substantially as a
whole, shall be the successor to the Administrator without the execution or
filing of any document or any further act by any of the parties to this
Agreement or to the Administration Agreement; PROVIDED, HOWEVER, that the
Administrator hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
Administrator, as the case may be, if other than Key Bank USA, National
Association (or affiliate thereof), executes an agreement of assumption to
perform every obligation of the Administrator under this Agreement and the
Administration Agreement, (ii) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.01 or 6.01
shall have been breached and no Administrator Default, and no event that, after
notice or lapse of time, or both, would become an Administrator Default shall
have occurred and be continuing, (iii) the surviving Administrator if other than
Key Bank USA, National Association (or affiliate thereof), shall have delivered
to the Securities Insurer, the Swap Counterparty, Eligible Lender Trustee and
the Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been complied
with, and that the Rating Agency Condition shall have been satisfied with
respect to such transaction, (iv) the surviving Administrator shall have a
consolidated net worth at least equal to that of the predecessor Administrator,
(v) such transaction will not result in a material adverse Federal or state tax
consequence to the Issuer or the holders of Notes and (vi) unless Key Bank USA,
National Association (or affiliate thereof) is the surviving entity, the
Administrator shall have delivered to the Securities Insurer, the Swap
Counterparty, the Eligible Lender Trustee and the Indenture Trustee an Opinion
of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Eligible Lender Trustee and Indenture Trustee, respectively, in
the Financed Student Loans and reciting the details of such filings, or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interests.
Without the prior written consent of the Securities Insurer (provided
that a Securities Insurer Default has not occurred and is continuing), and the
prior written confirmation from each Rating Agency that its then current ratings
of each Class of Notes would not be downgraded, the Depositor shall not be
merged or consolidated with any other entity.
SECTION 6.07. LIMITATION ON LIABILITY OF THE DEPOSITOR, ADMINISTRATOR
AND OTHERS. (a) The Depositor and any director or officer or employee or agent
of the Depositor may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising hereunder (provided that such reliance shall not
limit in any way the Depositor's obligations under Section 3.02). The Depositor
shall not be under any obligation to appear in, prosecute or defend any legal
action that shall not be incidental to its obligations under this Agreement, and
that in its opinion may involve it in any expense or liability.
(b) Neither the Administrator nor any of its directors, officers,
employees or agents shall be under any liability to the Issuer, the Securities
Insurer, the Depositor, the Swap Counterparty, the holders of Notes, the
Indenture Trustee or the Eligible Lender Trustee except as provided under this
Agreement or the Administration Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement or the
Administration Agreement or for errors in judgment; PROVIDED, HOWEVER, that this
provision shall not protect the Administrator or any such person against any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement or under the
Administration Agreement. The Administrator and any of its directors, officers,
employees or agents may rely in good faith on the advice of counsel or on any
document of any kind, prima facie properly executed and submitted by any Person
respecting any matters arising hereunder or under the Administration Agreement.
Except as provided in this Agreement or the Administration Agreement,
the Administrator shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its duties to administer
the Financed Student Loans and the Trust in accordance with this Agreement and
the Administration Agreement, and that in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, that the Administrator may undertake
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the holders
of Notes under the Indenture.
SECTION 6.08. OWNERSHIP BY THE DEPOSITOR, KBUSA AND ITS AFFILIATES.
(a) None of the Depositor, KBUSA, any insider, nor any Affiliate thereof may in
its individual or any other capacity become the owner or pledgee of any Group II
Notes; PROVIDED, HOWEVER, that (i) an Affiliate of KBUSA or the Depositor may
become a pledgee of such Notes (or an owner as a result of executing on any such
pledge) in the ordinary course of its business, (ii) an Affiliate of KBUSA or
the Depositor may become the owner of such Notes in the ordinary course of its
market-making activities, (iii) KBUSA, or an Affiliate of KBUSA, may hold such
Notes (A) in a fiduciary capacity in connection with its discretionary and
non-discretionary investment management activities or (B) in connection with its
mutual fund management activities, in each case with the same rights as it would
have if it were not KBUSA, or an Affiliate of KBUSA or the Depositor, except as
otherwise expressly provided herein or in any other Basic Document or the Group
II Notes Guaranty Insurance Policy.
(b) The Depositor or an Affiliate thereof (to the extent permitted
under the Trust Agreement) shall own the Certificate, with the same rights as it
would have if it were not the Depositor or an Affiliate thereof, except as
otherwise expressly provided herein or in any other Basic Document or the Group
II Notes Guaranty Insurance Policy.
SECTION 6.09. KEY BANK USA, NATIONAL ASSOCIATION NOT TO RESIGN AS
ADMINISTRATOR. Subject to the provisions of Section 6.05, Key Bank USA, National
Association shall not resign from the obligations and duties imposed on it as
Administrator under this Agreement and under the Administration Agreement except
upon determination that the performance of its duties under this Agreement and
under the Administration Agreement shall no longer be permissible under
applicable law or shall violate any final order of a court or administrative
agency with jurisdiction over Key Bank USA, National Association or its
properties. Notice of any such determination permitting the resignation of Key
Bank USA, National Association shall be communicated to the Eligible Lender
Trustee, the Securities Insurer and the Indenture Trustee at the earliest
practicable time (and, if such communication is not in writing, shall be
confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee, the Securities Insurer, the Swap
Counterparty and the Indenture Trustee concurrently with or promptly after such
notice. No such resignation shall become effective until the Indenture Trustee
or a successor Administrator shall have assumed the responsibilities and
obligations of Key Bank USA, National Association in accordance with Section
8.02.
ARTICLE VII
THE MASTER SERVICER
SECTION 7.01. REPRESENTATIONS OF MASTER SERVICER. The Master Servicer
makes the following representations on which the Issuer is deemed to have relied
in acquiring (through the Eligible Lender Trustee) the Financed Student Loans
and appointing the Master Servicer as master servicer hereunder. The
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date, in the case of the Initial Financed Student Loans, and as
of the applicable Subsequent Transfer Date, in the case of the Additional
Student Loans, but shall survive the sale, transfer and assignment of the
Financed Student Loans to the Eligible Lender Trustee on behalf of the Issuer
and the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Master Servicer is duly
organized and validly existing as a national banking association in good
standing under the laws of the United States of America, with the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to master service
the Financed Student Loans and to hold the Financed Student Loan Files as
custodian.
(b) DUE QUALIFICATION. The Master Servicer is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the master servicing of the Financed Student Loans as
required by this Agreement) shall require such qualifications.
(c) POWER AND AUTHORITY OF THE MASTER SERVICER. The Master Servicer
has the corporate power and authority to execute and deliver this Agreement and
to carry out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Master Servicer by all necessary
corporate action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Master Servicer enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally or the rights of creditors of banks
the deposit accounts of which are insured by the FDIC and subject to general
principles of equity.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under the articles of
association or by-laws of the Master Servicer, or any indenture, agreement or
other instrument to which the Master Servicer is a party or by which it shall be
bound nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement); which breach or default would reasonably
be expected to have a material adverse effect on the condition of the Master
Servicer, financial or otherwise, or adversely affect the transactions
contemplated by this Agreement; nor violate any law or, to the knowledge of the
Master Servicer, any order, rule or regulation applicable to the Master Servicer
of any court or of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Master
Servicer or its properties.
(f) NO PROCEEDINGS. There are no proceedings, or, to the Master
Servicer's best knowledge, investigations pending, or, to the Master Servicer's
best knowledge, threatened against the Master Servicer, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Master Servicer or its properties: (i) asserting
the invalidity of this Agreement, the Indenture, any of the other Basic
Documents, the Notes, (ii) seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this Agreement, the
Indenture or any of the other Basic Documents, (iii) seeking any determination
or ruling that could reasonably be expected to have a material and adverse
effect on the performance by the Master Servicer of its obligations under, or
the validity or enforceability of, this Agreement, the Indenture, any of the
other Basic Documents or the Notes or (iv) relating to the Master Servicer and
which might adversely affect the Federal or state income tax attributes of the
Notes.
(g) NO AMENDMENT OR WAIVER. No provision of a Financed Student Loan
has been waived, altered or modified in any respect, except pursuant to a
document, instrument or writing included in the Financed Student Loan File, and
no such amendment, waiver, alteration or modification causes such Financed
Student Loan not to conform to the other warranties contained in this Section or
those of the Depositor or the Master Servicer, as applicable, contained in
Section 3.01.
(h) COLLECTION PRACTICES. The servicing and collection practices used
by the Master Servicer (or each Sub-Servicer on its behalf) with respect to the
Financed Student Loan have been in all respects in compliance with Accepted
Servicing Procedures, and all applicable laws and regulations.
(i) LOCATION OF FINANCED STUDENT LOAN FILES. The Financed Student Loan
Files are kept in the offices of the applicable Sub-Servicer on behalf of the
Master Servicer specified in Schedule C hereto, or at such other office
specified in accordance with Section 3.04(b), and all Financed Student Loan
Files have been delivered to and are in the possession of the applicable
Sub-Servicer.
SECTION 7.02. INDEMNITIES OF MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Master Servicer under this Agreement.
The Master Servicer shall pay for any loss, liability or expense,
including reasonable attorney's fees, that may be imposed on, incurred by or
asserted against the Issuer, the Depositor, the Eligible Lender Trustee, the
Indenture Trustee, the Securities Insurer, the Swap Counterparty, the
Administrator or the holders of Notes or any of the officers, directors,
employees and agents of the Issuer, the Depositor, the Eligible Lender Trustee,
the Indenture Trustee, the Securities Insurer, the Swap Counterparty or the
Administrator to the extent that such loss, liability or expense arose out of,
or was imposed upon any such Person through, the negligence, willful misfeasance
or bad faith of the Master Servicer (or any Sub-Servicer acting on its behalf)
in the performance of its obligations and duties under this Agreement or by
reason of the reckless disregard of its obligations and duties (of those of any
Sub-Servicer acting on its behalf) under this Agreement, where the final
determination that any such loss, liability or expense arose out of, or was
imposed upon any such Person through, any such negligence, willful misfeasance,
bad faith or recklessness on the part of the Master Servicer (or such
Sub-Servicer acting on its behalf) is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Master Servicer.
Notwithstanding the foregoing, if the Master Servicer is rendered unable, in
whole or in part, by a force outside the control of the parties hereto
(including acts of God, acts of war, fires, earthquakes and other disasters) to
satisfy its obligations under this Agreement, the Master Servicer shall not be
deemed to have breached any such obligation upon delivery of written notice of
such event to the other parties hereto, for so long as the Master Servicer
remains unable to perform such obligation as a result of such event.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Master Servicer (or any successor thereto pursuant
to Section 7.03) as Master Servicer pursuant to Section 8.01(a), or a
resignation by such Master Servicer pursuant to this Agreement, the Master
Servicer shall be deemed to be the Master Servicer pending appointment of a
successor Master Servicer pursuant to Section 8.02.
Liability of the Master Servicer under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
or the termination of this Agreement. If the Master Servicer shall have made any
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter collects any of such amounts from others, such
Person shall promptly repay such amounts to the Master Servicer, without
interest.
SECTION 7.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, MASTER SERVICER. Any Person (a) into which the Master Servicer
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Master Servicer shall be a party or (c) which may
succeed to the properties and assets of the Master Servicer substantially as a
whole, shall be the successor to the Master Servicer without the execution or
filing of any document or any further act by any of the parties to this
Agreement; PROVIDED, however, that the Master Servicer hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Master Servicer, if other than Key Bank USA,
National Association (or affiliate thereof), executes an agreement of assumption
to perform every obligation of the Master Servicer under this Agreement, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.01 shall have been breached and no event
that, after notice or lapse of time, or both, would become a Master Servicer
Default shall have occurred and be continuing, (iii) the surviving Master
Servicer, if other than Key Bank USA, National Association (or affiliate
thereof), shall have delivered to the Eligible Lender Trustee, the Depositor,
the Securities Insurer, the Swap Counterparty and the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section and that all conditions precedent, if any, provided for in this
Agreement relating to such transaction have been complied with, and that the
Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Master Servicer shall have a consolidated net
worth at least equal to that of the predecessor Master Servicer, (v) unless Key
Bank USA, National Association (or affiliate thereof) is the surviving entity,
such transaction will not result in a material adverse Federal or state tax
consequence to the Issuer or the holders of Notes and (vi) unless Key Bank USA,
National Association (or affiliate thereof) is the surviving entity, the Master
Servicer shall have delivered to the Eligible Lender Trustee, the Depositor, the
Securities Insurer, the Swap Counterparty, and the Indenture Trustee an Opinion
of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Eligible Lender Trustee and Indenture Trustee, respectively, in
the Financed Student Loans and reciting the details of such filings, or (B)
stating that, in the opinion of such counsel, no such action shall be necessary
to preserve and protect such interests.
SECTION 7.04. LIMITATION ON LIABILITY OF MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
Depositor, the Securities Insurer, the Swap Counterparty or the holders of
Notes, except as provided under this Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; PROVIDED, HOWEVER, that this provision shall not protect the
Master Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Master Servicer and any director, officer,
employee or agent of the Master Servicer may rely in good faith on the advice of
counsel or on any document of any kind prima facie properly executed and
submitted by any person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Master Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Financed Student Loans in
accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, that the Master Servicer may undertake
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the holders
of Notes under the Indenture.
SECTION 7.05. KEY BANK USA, NATIONAL ASSOCIATION, NOT TO RESIGN AS
MASTER SERVICER. Subject to the provisions of Section 7.03, Key Bank USA,
National Association, shall not resign from the obligations and duties hereby
imposed on it as Master Servicer under this Agreement except upon determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of Key Bank USA, National Association, as Master Servicer shall
be communicated to the Eligible Lender Trustee, the Depositor, the Securities
Insurer and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Eligible Lender Trustee, the Depositor,
the Securities Insurer, the Swap Counterparty and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a Successor Master Servicer
shall have assumed the responsibilities and obligations of Key Bank USA,
National Association, as Master Servicer in accordance with Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. MASTER SERVICER DEFAULT; ADMINISTRATOR DEFAULT. (a)
MASTER SERVICER DEFAULT. If any one of the following events (a "Master Servicer
Default") shall occur and be continuing:
(1) any failure by the Master Servicer to deliver (or cause to be
delivered) to the Administrator or the Indenture Trustee, as applicable, for
deposit in any of the Trust Accounts any payment required by the Basic
Documents, which failure continues unremedied for three Business Days after
written notice of such failure is received by the Master Servicer from the
Eligible Lender Trustee, the Indenture Trustee, the Securities Insurer or the
Administrator or after discovery of such failure by an officer of the Master
Servicer; or
(2) any failure by the Master Servicer duly to observe or to perform
(or to cause to be observed or performed) in any material respect any other
covenants or agreements of the Master Servicer set forth in this Agreement or
any other Basic Document, which failure shall (i) materially and adversely
affect the rights of the holders of either the Group I or Group II Notes or
(with respect to the Group II Student Loans or Group II Notes only, and provided
that no Securities Insurer Default has occurred and is continuing) the
Securities Insurer (with respect to the Group II Student Loans or Group II Notes
only, in each case as determined by the Securities Insurer) and (ii) continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A) to
the Master Servicer by the Indenture Trustee, the Eligible Lender Trustee, or
the Administrator or (B) to the Master Servicer, and to the Indenture Trustee
and the Eligible Lender Trustee (x) with respect to the Group I Notes, by the
Group I Controlling Parties, representing not less than 25% of the Outstanding
Amount of the related Group I Notes, and (y) with respect to the Group II Notes,
by the Securities Insurer (unless a Securities Insurer Default shall have
occurred and is continuing, and then by the holders of Group II Notes,
representing not less than 25% of the Outstanding Amount of the Group II Notes);
(3) an Insolvency Event occurs with respect to the Master Servicer; or
(4) any failure by the Master Servicer to comply with any applicable
requirements under the Higher Education Act resulting in a loss of its
eligibility, if applicable, as a third-party servicer (or the failure of the
Master Servicer to replace promptly any Sub-Servicer that has lost its
eligibility as a third-party servicer);
then, and in each and every case, so long as the Master Servicer Default shall
not have been remedied, either (A) the Indenture Trustee (and with respect to
the Group II Notes only, with the consent of the Securities Insurer (provided no
Securities Insurer Default has occurred and is continuing)), or (B) (x) with
respect to the Group I Student Loans and the Group I Notes, the Group I
Controlling Parties, representing not less than 25% of the Outstanding Amount of
the related Group I Notes, or (y) with respect to the Group II Student Loans and
the Group II Notes, the Securities Insurer (unless a Securities Insurer Default
shall have occurred and is continuing, and then by the holders of Group II
Notes, representing not less than 25% of the Outstanding Amount of the Group II
Notes), by notice then given in writing to the Master Servicer (and to the
Indenture Trustee and the Eligible Lender Trustee if given by the Securities
Insurer or the requisite holders of the related group of Notes) may terminate
all the rights and obligations (other than the obligations set forth in Section
7.02 and Section 3.07 hereof) of the Master Servicer with respect to either (a)
the Group I or Group II Student Loans, or (y) the Group I or Group II Notes, as
the case may be, under this Agreement. On or after the receipt by the Master
Servicer of such written notice, all authority and power of the Master Servicer
under this Agreement, whether with respect to the Group I or Group II Student
Loans, as applicable, and the Group I or Group II Notes, as applicable, or
otherwise, shall, without further action, pass to and be vested in the Indenture
Trustee or such successor Master Servicer as may be appointed under Section
8.02; and, without limitation, the Indenture Trustee and the Eligible Lender
Trustee are hereby authorized and empowered to execute and deliver, for the
benefit of the predecessor Master Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other
acts or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of the Group I or
Group II Student Loans, as applicable, and related documents, or otherwise. The
predecessor Master Servicer shall cooperate with the successor Master Servicer,
the Indenture Trustee and the Eligible Lender Trustee in effecting the
termination of the responsibilities and rights of the predecessor Master
Servicer under this Agreement and all Sub-Servicing Agreements, including the
transfer to the successor Master Servicer of its rights under all existing and
related Sub-Servicing Agreements and for administration by it of all cash
amounts that shall at the time be held by the predecessor Master Servicer for
deposit, or shall thereafter be received by it with respect to a Group I or
Group II Student Loan, as applicable. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with transferring the related
Financed Student Loan Files to the successor Master Servicer and amending this
Agreement, the related Sub-Servicing Agreements and any other Basic Documents to
reflect such succession as Master Servicer pursuant to this Section shall be
paid by the predecessor Master Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Master Servicer Default, the Eligible Lender Trustee shall give
notice thereof to the Rating Agencies, the Indenture Trustee, the Swap
Counterparty, the Depositor, the Group I and Group II Noteholders and the
Securities Insurer. Notwithstanding the foregoing, the successor Master Servicer
shall have the option to assume the rights of the predecessor Master Servicer
under each related Sub-Servicing Agreement, or to enter into new Sub-Servicing
Agreements with the existing or other replacement Sub-Servicers; PROVIDED,
HOWEVER, that unless the existing Sub-Servicer is in breach of its Sub-Servicing
Agreement, any and all contractual damages, costs and expenses owed to any
Sub-Servicer under the existing Sub-Servicing Agreements by reason of such
cancellation, shall be borne by the successor Master Servicer.
Notwithstanding the foregoing, in the event of the occurrence and
continuance of a Master Servicer Default with respect to one group of Financed
Student Loans and not the other group, (a) the requisite Group I Controlling
Parties may only replace the Master Servicer with respect to the Group I Student
Loans, and (b) the Securities Insurer (or the requisite Group II Noteholders in
the event of the occurrence and continuance of a Securities Insurer Default) may
only replace the Master Servicer with respect to the Group II Student Loans.
Neither the Securities Insurer nor any one group of Noteholders may replace the
Master Servicer with respect to the Financed Student Loans comprising the other
group of Financed Student Loans; provided, however, that the Indenture Trustee
may replace with Master Servicer with respect to either or both groups of
Financed Student Loans (but only with the consent of the Securities Insurer
(provided that a Securities Insurer Default has not occurred and is continuing)
with respect to the Group II Student Loans). If in the event that either (x) the
Master Servicer is terminated with respect to only the Group I Student Loans and
the Group I Notes, the Master Servicer shall remain liable under this Agreement
for all of its obligations hereunder with respect to the Group II Student Loans
and the Group II Notes, or (y) the Master Servicer is terminated with respect to
only the Group II Student Loans and the Group II Notes, the Master Servicer
shall remain liable under this Agreement for all of its obligations hereunder
with respect to the Group I Student Loans and the Group I Notes. Any successor
Master Servicer shall only succeed to the rights and obligations with respect to
which the Master Servicer has been terminated. In the event that there are two
Master Servicers, both Master Servicers shall master service its respective
group of student loans and notes in the manner set forth in this Agreement and
shall cooperate with the other Master Servicer to the extent necessary for each
Master Servicer to fulfill its respective obligations hereunder.
In addition, in the event that the senior long term debt rating of the
Master Servicer is lowered below "A" or its equivalent by any Rating Agency, the
Securities Insurer (provided that a Securities Insurer Default has not occurred
and is continuing), shall have the right to remove the Master Servicer with
respect to the Group II Student Loans only; provided, however, that KBUSA shall
have the right upon written notification of such removal to transfer its master
servicing obligations to an Affiliate with a long term senior debt rating of "A"
or above from each Rating Agency, and such Affiliate shall be the successor
Master Servicer with respect to the Group II Student Loans.
Notwithstanding the foregoing, all repurchase obligations of KBUSA,
with respect to the QSPE Student Loans, in its capacity as Master Servicer,
under Section 3.02 of this Agreement shall survive any termination of KBUSA as
Master Servicer.
(b) ADMINISTRATOR DEFAULT. If any one of the following events (an
"Administrator Default") shall occur and be continuing:
(1) any failure by the Administrator to direct the Indenture Trustee
in writing to make the required transfers of amounts on deposit in any of the
Trust Accounts to the Collection Account, on or before the Business Day
immediately preceding any Monthly Servicing Payment Date or Distribution Date,
as applicable, or any failure by the Administrator to direct the Indenture
Trustee in writing to make any required distributions from the Collection
Account on any Monthly Servicing Payment Date or Distribution Date, as
applicable, which failure continues unremedied for three Business Days after
written notice of such failure is received by the Administrator from the
Indenture Trustee, the Securities Insurer or the Eligible Lender Trustee or
after discovery of such failure by an officer of the Administrator; or
(2) any failure by the Administrator duly to observe or to perform in
any material respect any other covenants or agreements of the Administrator set
forth in this Agreement, the Administration Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect the rights of
the holders of Notes or the Securities Insurer (in each case (provided that no
Securities Insurer Default has occurred and is continuing), as determined by the
Securities Insurer) and (ii) continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to be
remedied, shall have been given (A) to the Administrator by the Indenture
Trustee or the Eligible Lender Trustee or (B) to the Administrator and to the
Indenture Trustee and the Eligible Lender Trustee by the Securities Insurer
(unless a Securities Insurer Default shall have occurred and is continuing, and
then by the Group I or Group II Controlling Noteholders, representing not less
than 25% of the Outstanding Amount of the related Classes of Group I or Group II
Notes, as applicable); or
(3) an Insolvency Event occurs with respect to the Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee with the consent of the
Securities Insurer (provided that no Securities Insurer Default has occurred and
is continuing), or the Securities Insurer (unless a Securities Insurer Default
shall have occurred and is continuing, and then the Group I or Group II
Controlling Noteholders, representing not less than 25% of the Outstanding
Amount of the related Classes of Group I or Group II Notes, as applicable), by
notice then given in writing to the Administrator (and to the Indenture Trustee,
the Securities Insurer, the Swap Counterparty and the Eligible Lender Trustee if
given by the holders of Notes) may terminate all the rights and obligations
(other than the obligations set forth in Section 6.04 hereof) of the
Administrator under this Agreement and the Administration Agreement. On or after
the receipt by the Administrator of such written notice, all authority and power
of the Administrator under this Agreement and the Administration Agreement,
whether with respect to Notes or the Financed Student Loans or otherwise, shall,
without further action, pass to and be vested in the Indenture Trustee or such
successor Administrator as may be appointed under Section 8.02; and, without
limitation, the Indenture Trustee and the Eligible Lender Trustee are hereby
authorized and empowered to execute and deliver, for the benefit of the
predecessor Administrator, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination. The predecessor Administrator shall cooperate with the successor
Administrator, the Indenture Trustee and the Eligible Lender Trustee in
effecting the termination of the responsibilities and rights of the predecessor
Administrator under this Agreement and the Administration Agreement. All
reasonable costs and expenses (including attorneys' fees) incurred in connection
with amending this Agreement and the Administration Agreement to reflect such
succession as Administrator pursuant to this Section shall be paid by the
predecessor Administrator upon presentation of reasonable documentation of such
costs and expenses. Upon receipt of notice of the occurrence of a Administrator
Default, the Eligible Lender Trustee shall give notice thereof to the Rating
Agencies, the Securities Insurer and the Swap Counterparty.
SECTION 8.02. APPOINTMENT OF SUCCESSOR. (a) Upon receipt by the Master
Servicer or the Administrator, as the case may be, of notice of termination (or,
with respect to the Master Servicer of partial termination) pursuant to Section
8.01, or the resignation by the Master Servicer or the Administrator, as the
case may be, in accordance with the terms of this Agreement, the predecessor
Master Servicer or Administrator, as the case may be, shall continue to perform
its functions as Master Servicer or Administrator, as the case may be, under
this Agreement or under this Agreement and the Administration Agreement, as the
case may be, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of
(x) the date 120 days from the delivery to the Eligible Lender Trustee and the
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (y) the date
upon which the predecessor Master Servicer or Administrator, as the case may be,
shall become unable to act as Master Servicer or Administrator, as the case may
be, as specified in the notice of resignation and accompanying Opinion of
Counsel. In the event of the termination (or, with respect to the Master
Servicer of partial termination) hereunder of a Master Servicer or the
Administrator, as the case may be, the Issuer shall appoint, (x) with respect to
the Group I Notes, provided that the Rating Agency Condition is satisfied, or
(y) with respect to the Group II Notes, with the consent of the Securities
Insurer (provided that no Securities Insurer Default has occurred and is
continuing), a successor Master Servicer (with respect to the affected group or
groups of Financed Student Loans) or Administrator, as the case may be,
acceptable to the Indenture Trustee, and the successor Master Servicer or
Administrator, as the case may be, shall accept its appointment by a written
assumption in form acceptable to the Indenture Trustee. In the event that a
successor Master Servicer or Administrator, as the case may be, has not been
appointed at the time when the predecessor Master Servicer or Administrator, as
the case may be, has ceased to act as Master Servicer or Administrator in
accordance with this Section, the Indenture Trustee without further action shall
automatically be appointed the successor Master Servicer or Administrator, as
the case may be, and the Indenture Trustee shall be entitled to the applicable
portion of the Master Servicing Fee or the Administration Fee, as the case may
be. Notwithstanding the above, the Indenture Trustee shall, if it shall be
unwilling or legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint, in each case with the consent of the Securities Insurer
which consent shall not be unreasonably withheld, any established institution
whose regular business shall include the servicing of student loans, as the
successor to a Master Servicer under this Agreement or to the Administrator
under this Agreement and the Administration Agreement; PROVIDED, HOWEVER, that
such right to appoint or to petition for the appointment of any such successor
Master Servicer shall in no event relieve the Indenture Trustee from any
obligations otherwise imposed on it under the Basic Documents until such
successor has in fact assumed such appointment.
(b) Upon appointment, the successor Master Servicer or Administrator,
as the case may be (including the Indenture Trustee acting as successor Master
Servicer or Administrator, as the case may be), shall be the successor in all
respects to the predecessor Master Servicer (but only with respect to the group
of Financed Student Loans with respect to which it is replacing the Master
Servicer) or Administrator, as the case may be, and shall be subject to all the
responsibilities, duties and liabilities placed on the predecessor Master
Servicer or Administrator, as the case may be, that arise thereafter or are
related thereto and shall be entitled to an amount agreed to by such successor
Master Servicer or Administrator (which shall not exceed the applicable portion
of the Master Servicing Fee or the Administration Fee, as the case may be,
unless such compensation arrangements have been consented to by the Securities
Insurer (with respect to the Group II Student Loans and Group II Notes only and
provided that no Securities Insurer Default has occurred and is continuing) will
not result in a downgrading of the related Group of Notes by any Rating Agency)
and all the rights granted to the predecessor Master Servicer or Administrator,
as the case may be, by the terms and provisions of this Agreement.
(c) Neither the Master Servicer nor the Administrator may resign
unless it is prohibited from serving as such by law as evidenced by an Opinion
of Counsel to such effect delivered to the Indenture Trustee, the Securities
Insurer, the Swap Counterparty and the Eligible Lender Trustee. Notwithstanding
the foregoing or anything to the contrary herein or in the other Basic
Documents, the Indenture Trustee, to the extent it is acting as successor Master
Servicer or Administrator pursuant hereto and thereto, shall be entitled to
resign to the extent a qualified successor Master Servicer or Administrator has
been appointed and has assumed all the obligations of the Master Servicer or the
Administrator, as the case may be, in accordance with the terms of this
Agreement and the other Basic Documents.
SECTION 8.03. NOTIFICATION TO NOTEHOLDERS. Upon any termination of, or
appointment of a successor to, the Master Servicer or the Administrator, as the
case may be, pursuant to this Article VIII, the Indenture Trustee shall give
prompt written notice thereof to holders of the related group of Notes, the
Securities Insurer, the Depositor and the Rating Agencies (which, in the case of
any such appointment of a successor, shall consist of prior written notice
thereof to the Depositor, the Securities Insurer and the Rating Agencies).
SECTION 8.04. WAIVER OF PAST DEFAULTS. (A) With respect to all Master
Servicer Defaults, (x) with respect to the Group I Student Loans and the Group I
Notes, the Group I Controlling Parties, representing not less than 25% of the
Outstanding Amount of the related Group I Notes, or (y) with respect to the
Group II Student Loans and the Group II Notes, the Securities Insurer (unless a
Securities Insurer Default shall have occurred and is continuing, and then the
holders of Group II Notes, representing not less than 25% of the Outstanding
Amount of the Group II Notes), may waive in writing any default by the Master
Servicer in the performance of its obligations hereunder, but only with respect
to the related group of Financed Student Loans, and (B) with respect to all
Administrator Defaults, the Securities Insurer (unless a Securities Insurer
Default shall have occurred and is continuing, and then the Group I and Group II
Controlling Noteholders, representing, in the aggregate, not less than 25% of
the Outstanding Amount of all of the related Group I and Group II Notes), may
waive in writing any default by the Administrator in the performance of its
obligations hereunder and under the Administration Agreement, and any
consequences thereof, except a default in making any required deposits to or
payments from any of the Trust Accounts (or giving instructions regarding the
same) in accordance with this Agreement. Upon any such waiver of a past default,
such default shall cease to exist, and any Master Servicer Default or
Administrator Default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement and the Administration Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION. (a) OPTIONAL PURCHASE OF ALL FINANCED
STUDENT LOANS BY THE MASTER SERVICER. As of the last day of any Collection
Period immediately preceding a Distribution Date as of which the sum of the then
outstanding Pool Balance is 10% or less of the Initial Financed Student Loan
Pool Balance, the Master Servicer shall have the option to purchase the Trust
Estate, other than the Trust Accounts; provided, however, that, unless each
Rating Agency agrees otherwise, the Master Servicer may not effect any such
purchase so long as the rating on its long-term debt obligations is less than
Baa3 by Xxxxx'x, BBB by S&P and, if rated by Fitch, BBB by Fitch, unless the
Administrator shall have given notice to each of the Rating Agencies and the
Eligible Lender Trustee, the Securities Insurer, the Swap Counterparty and the
Indenture Trustee shall have received an Opinion of Counsel to the effect that
such purchase would not constitute a fraudulent conveyance. To exercise such
option, the Master Servicer shall deposit pursuant to Section 5.04 in each
subaccount of the Collection Account an amount equal to the aggregate Purchase
Amount for the Group I and Group II Student Loans and the related rights with
respect thereto, plus the appraised value of any such other property held by the
Trust other than the Trust Accounts, such value to be determined by an appraiser
mutually agreed upon by the Master Servicer and the Eligible Lender Trustee, and
shall succeed to all interests in and to the Trust; PROVIDED, HOWEVER, that the
Master Servicer may not effect such purchase if the aggregate Purchase Amount to
be so deposited in the Collection Account does not equal or exceed an amount
equal to the sum of (i) the unpaid principal amount of all the Notes then
outstanding plus accrued and unpaid interest thereon at the applicable Note
Interest Rates to the date of exercise including the amount of unpaid all
Noteholders' Interest Index Carryover with respect thereto, (ii) all amounts
then owed to each of the Securities Insurer, the Swap Counterparty and the Cap
Provider, if any.
(b) THE PUT OPTIONS. (i) With respect to each of the Put Options, on
or before the Distribution Date that is three months prior to the Put Option
Exercise Date, the Indenture Trustee (or the Administrator acting on its behalf)
shall solicit exercise instructions from the Group I and Group II Controlling
Noteholders regarding the Group I and Group II Put Option, respectively. The
Indenture Trustee (or the Administrator acting on its behalf) shall provide a
description of the Group I or Group II Put Option, as applicable, and copies of
such other related documents as it deems advisable, in its sole judgment (or as
is reasonably requested by any Noteholder), to assist the applicable Noteholders
in determining whether to direct the exercise of the Group I or Group II Put
Option, as the case may be. If a majority in interest (based on then respective
Outstanding Amounts) of the Group I or Group II Controlling Noteholders direct
the Indenture Trustee, in writing, within 5 Business Days of the Put Option
Exercise Date, to exercise the Group I or Group II Put Option, as the case may
be, then the Indenture Trustee shall exercise the Group I or Group II Put
Option, as applicable, on the Put Option Exercise Date, in accordance with the
procedures set forth in the Group I or Group II Put Option Agreement, as
applicable.
(ii) Notwithstanding the provisions of clause (b)(i) above, the
Indenture Trustee shall not exercise the Group I or Group II Put Option, as
applicable, on the Put Option Exercise Date if it has been advised by the
Administrator (in its capacity as calculation agent under the Group I or Group
II Put Option Agreement, as applicable), that the related Put Option Exercise
Price to be received from the Put Option Provider would be less than the related
Minimum Acceptable Put Exercise Option Price (plus all amounts then on deposit
in the Group I or Group II Reserve Account, as applicable).
(iii) In the event that the Indenture Trustee is not directed by a
majority in interest of the Group I or Group II Controlling Noteholders, as
applicable, to exercise the Group I or Group II Put Option, respectively, all
distributions on the Group I or Group II Notes, respectively, will continue to
be made on each succeeding Distribution Date in the manner provided in Section
5.05(c) above, and the provisions of Section 9.01(c) below shall not be
applicable.
(iv) In the event that the Indenture Trustee is directed to exercise
the Group I or Group II Put Option, as the case may be, by a majority in
interest of the Group I or Group II Controlling Noteholders, respectively, but
is unable to comply with such directions due to the conditions set forth in
clause (b)(ii) above being applicable, the Specified Collateral Balance for the
Group I or Group II Notes, as applicable, shall be reduced to zero for all
subsequent Distribution Dates and distributions on the Group I or Group II
Notes, respectively, will continue to be made on each succeeding Distribution
Date in the manner provided in Section 5.05(c) above, and the provisions of
Section 9.01(c) below shall be applicable.
(c) AUCTIONS OF FINANCED STUDENT LOANS. (i) In the event that (x) the
Group I or Group II Put Option is exercised and the Put Option Provider defaults
on its obligations with respect to the Group I or Group II Put Option Agreement,
as the case may be, or (y) the Indenture Trustee is directed to exercise the
Group I or Group II Put Option, as the case may be, by a majority in interest
the Group I or Group II Controlling Noteholders, respectively, but is unable to
comply with such directions due to the conditions set forth in clause (b)(ii)
above being applicable, any related Group I or Group II Student Loans, as
applicable, remaining in the Trust as of the end of the Collection Period
immediately preceding the September 2011 Distribution Date will be offered (and
shall be offered again at the end of each or any subsequent Collection Period if
so instructed in writing by a majority of the Group I or Group II Controlling
Noteholders, as the case may be, with respect to the Group I or Group II Student
Loans, respectively) for sale by the Indenture Trustee as both a single pool
relating to both groups of Financed Student Loans (but only in the event that
both groups of Financed Student Loans are affected by sub-clause (x) or (y)
above) (a "Single Pool Sale") and in two separate pools, one relating to each
group of Financed Student Loans (but only in the event that such group of
Financed Student Loans is affected by sub-clause (x) or (y) above) (a "Two Pool
Sale"). Notwithstanding the foregoing, that if a Coordination Agreement requires
the offering of the Access Loans to PHEAA, XXXX and/or LAI, the Indenture
Trustee shall, in accordance with Section 10.06(a) of this Agreement, separately
offer for sale the Financed Student Loans that are Access Loans as one or two
separate sub-pools and shall combine the bids received with respect to such
sub-pool or sub-pools with the bids received with respect to the other related
group or groups of Financed Student Loans in determining whether the related
Minimum Purchase Amount requirement has been met.
(ii) If at least two bids are received, with respect to a Single Pool
Sale, the Indenture Trustee will solicit and resolicit bids from all
participating bidders until only one bid remains for all related Financed
Student Loans or until the remaining bidders decline to resubmit bids; and,
with respect to a Two Pool Sale, if at least two bids are received for
either pool of Group I or Group II Student Loans, as applicable, the
Indenture Trustee will solicit and resolicit bids from all participating
bidders until only one bid remains with respect to each such pool of Group
I or Group II Student Loans, as applicable, or until the remaining bidders
decline to resubmit bids.
(iii) At the conclusion of the bidding process, the Indenture Trustee
shall accept the higher of the results produced from a Single Pool Sale or
from a combination of two bids from a Two Pool Sale; PROVIDED, HOWEVER,
that in either case, no such bid or bids shall be accepted unless such
single bid or combination of two bids meets or exceeds the related Minimum
Purchase Amount; and PROVIDED, FURTHER, that with respect to a Two Pool
Sale, if the related Minimum Purchase Amount is met or exceeded with
respect to either, but not both, of the Group I and Group II Student Loans,
the Indenture Trustee shall accept the bid and consummate the sale of the
Group I or Group II Student Loans, as applicable, that at least meets the
related Minimum Purchase Amount, and reject the bid and not consummate a
sale of the Group I or Group II Student Loans, as applicable, with respect
to the bid that does not at least meet the related Minimum Purchase Amount.
(iv) In connection with the determination of the related Minimum
Purchase Amount, the Indenture Trustee may consult, and, at the direction
of a majority in interest of the Group I or Group II Controlling
Noteholders, as applicable, shall consult, with a financial advisor (which
may be the Administrator) to determine if the fair market value of the
Financed Student Loans has been offered. The proceeds of any such sale with
respect to the Group I or Group II Student Loans will be applied in the
order of priority set forth in Section 5.04(b)(X)or (Y), as applicable, of
the Indenture. If a sale of either the Group I or Group II Student Loans is
not consummated in accordance with the foregoing, the Indenture Trustee
may, (or shall, at the written direction of the Group I or Group II
Controlling Noteholders, as applicable), solicit bids to purchase the Group
I or Group II Student Loans, as the case may be, on future Distribution
Dates upon terms similar to those described above. In addition, the
Indenture Trustee, the Securities Insurer, the Swap Counterparty, the
Eligible Lender Trustee and each Rating Agency shall be provided with an
Opinion of Counsel that any such sale of the Financed Student Loans would
not constitute a fraudulent conveyance.
(v) In the event of any auction of Group I or Group II Student Loans,
neither KeyCorp nor any of its Affiliates (including, without limitation,
KBUSA, the Depositor and the Put Option Provider) may offer bids to
purchase any such Financed Student Loans.
(d) NOTICE. As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to the
Eligible Lender Trustee, the Securities Insurer and the Indenture Trustee as
soon as practicable after the Administrator has received notice thereof.
(e) SUCCESSION. Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the Notes,
and all amounts due and owing to the Securities Insurer and the Swap
Counterparty, the holders of Certificates will succeed to the rights of the
holders of Notes hereunder and the Eligible Lender Trustee will succeed to the
rights of (except for the rights of the Indenture Trustee which have accrued
prior to the satisfaction and discharge of the Indenture and the payment in full
of the principal of an interest on the Notes), and assume the obligations of,
the Indenture Trustee pursuant to this Agreement and any other Basic Documents.
ARTICLE X
ADDITIONAL PROVISIONS REGARDING FINANCED STUDENT LOANS
SECTION 10.01. PERIODIC REPORTS. No later than the fifteenth day of
each month, and for so long as the Eligible Lender Trustee on behalf of the
Trust shall own the Financed Student Loans, the Trust shall furnish to LAI or
cause to be furnished in an electronic form suitable to LAI, a record of all
Financed Student Loans which are Access Loans (the "Record"), as of the last day
of the preceding month. The Master Servicer shall (or shall cause the applicable
Sub-Servicers to) furnish the Record to LAI on behalf of the Trust (or on behalf
of the Indenture Trustee in the event that the Indenture Trustee becomes the
owner of the Financed Student Loans) as required by this Section 10.01. The
Master Servicer, acting on behalf of the Trust, shall honor LAI's reasonable
request for additional Records, at LAI's expense. The Record shall be on a
borrower level, by loan, and shall include, but need not be limited to, the
information required to be delivered by KBUSA to LAI pursuant to the second
paragraph of Section 10.7 of the 1996-1998 Coordination Agreement. The Master
Servicer acknowledges and agrees that the costs and expenses to produce and
distribute (or to cause the applicable Sub-Servicers to produce and distribute)
the Record are part of the data transfer fee payable to it pursuant to the
Servicing Fee Schedule, attached as Schedule E to this Agreement and agrees that
no additional fees will be payable by the Trust or the Administrator to produce
and deliver the Record.
In addition to the foregoing Record, the parties hereto acknowledge
and agree that LAI may obtain from the Master Servicer (or the applicable
Sub-Servicers) at the sole cost and expense of LAI such additional information
as LAI may reasonably request concerning the Financed Student Loans which are
Access Loans, including, but not limited to, information on defaults, average
principal balance, and complaints. Any such request shall be made in writing to
the Administrator, with a copy to the Eligible Lender Trustee and the Master
Servicer. The Trust shall not be obligated to incur or pay any costs or expenses
associated with the production or delivery of such additional information,
except that, if the additional information requested by LAI is contained in any
monthly or other periodic report produced by the Master Servicer (or a
Sub-Servicer acting on its behalf) and delivered to the Trust (or to the
Administrator on behalf of the Trust) pursuant to this Agreement, the Trust
shall provide a copy of such report, or excerpts therefrom, to LAI and the
Administrator shall bear all photocopying and postage charges for producing and
mailing such copy.
The Indenture Trustee agrees to assume and perform the obligations of
the Trust under this Section 10.01 in the event that the Indenture Trustee
forecloses upon its security interest in and becomes the owner of the Financed
Student Loans.
SECTION 10.02. COOPERATION. With regard to the Financed Student Loans
which are Access Loans, the Trust, the Indenture Trustee, the Eligible Lender
Trustee, the Master Servicer and the Administrator each agree to cooperate with
each other, with each applicable Sub-Servicer and LAI, with the other parties to
the Coordination Agreements and with each of their internal or external
auditors, or governmental examiners, at the expense of the party requesting such
cooperation, and to provide any information regarding origination, disbursement,
servicing, and data collection relating to such loans as reasonably requested by
the other parties, their auditors, or governmental examiners as necessary or
desirable for the performance of an audit or examination. In that regard, each
party shall make available any necessary supporting records to each other party
and shall resolve any discrepancy claimed to exist in such records to the
reasonable satisfaction of the other party within 30 days of the date that the
other party has claimed that a discrepancy exists. Notwithstanding the
foregoing, the parties acknowledge that audit reviews conducted during heavy
processing periods may disrupt such operations. Accordingly, unless a party has
reason to believe that another party is in material breach of the performance of
its obligations under this Agreement, the Administration Agreement, the Trust
Agreement or the Indenture, reviews by internal or external auditors shall only
be scheduled during the months of January, February, April, May, June,
September, October, November or December.
SECTION 10.03. CONFIDENTIALITY. Each party to this Agreement and the
Indenture Trustee agrees to maintain the confidentiality of all data, materials
and information relating to The Access GroupSM Loan Program and the Financed
Student Loans entrusted to it by another party hereto or any party to any of the
Coordination Agreements. Each party also agrees not to use such data, materials
and information for any purpose other than the limited purpose of performing its
obligations under this Agreement, the Administration Agreement, the Indenture,
the Trust Agreement or the Coordination Agreements. This section shall not be
deemed to preclude the disclosure of (i) information relating to the historical
performance of the Financed Student Loans (including, but not limited to,
statistical information relating to defaults, prepayments, consolidations,
deferrals and forbearances) by KBUSA or the Administrator or, with the consent
of the Administrator, by the Eligible Lender Trustee or Indenture Trustee, (ii)
such information as in any of the Master Servicer's (or any Sub-Servicer's
acting on behalf of the Master Servicer), Administrator's, Eligible Lender
Trustee's or Indenture Trustee's discretion may be required under any of this
Agreement, the Trust Agreement, the Indenture or the Administration Agreement to
be disclosed to holders of the Notes, (iii) such information as may be required
to be disclosed under applicable laws, rules, regulations or governmental
orders, (iv) information obtained by the Indenture Trustee in the performance of
its obligations as Indenture Trustee, provided that the Indenture Trustee shall
maintain the confidentiality of all account level and borrower level
information, including without limitation, the borrower's name, address and
social security number and the account balance and account history or (v)
disclosure by LAI of information in the Record or other information received by
LAI pursuant to Section 10.01 of this Agreement.
SECTION 10.04. FUTURE PURCHASES. The Trust, the Eligible Lender
Trustee and the Indenture Trustee each hereby agree that, in the event of any
sale or other transfer of any Financed Student Loans that are Access Loans to
any third party, the Trust, the Eligible Lender Trustee or the Indenture
Trustee, as the case may be, as seller, or the Administrator acting on their
behalf, (i) shall use reasonable efforts to obtain from the purchaser or
transferee of such Access Loans an agreement in form and substance satisfactory
to LAI pursuant to which such purchaser or transferee agrees to observe and
comply with the obligations of the parties to this Agreement under Sections
10.02 and 10.03 hereof and the obligations of the Trust, the Eligible Lender
Trustee or the Indenture Trustee, as the case may be, as seller, or the
Administrator acting on its behalf, under this clause (i) of Section 10.04
hereof and (ii) shall obtain from any such purchaser or transferee an agreement
to provide LAI with prior notice of any future sale of such Access Loans, or
portion thereof, acquired by such purchaser or transferee and an agreement to
comply with the obligations of the Trust under Section 10.01 and the obligations
of the seller under this clause (ii) of Section 10.04 and under the last
sentence of Section 10.06(a) of this Agreement (provided, however, that if the
purchaser or transferee does not retain the Master Servicer (or the related
Sub-Servicer) as servicer, the obligation to deliver "Reports" shall be
construed as an obligation to deliver reports containing information
substantially similar to the information contained in Reports).
SECTION 10.05. PRIVATE GUARANTEE FEE. Each of the Depositor and KBUSA
acknowledges and agrees that, with respect to the Access Loans that are
"Privately Guaranteed Loans" (as defined in the 1992, 1993-1995 and 1996-1998
Coordination Agreements) that have not yet entered repayment and are Financed
Student Loans, KBUSA retains the obligation, pursuant to Section 9.2 of the
1992, 1993-1995 and 1996-1998 Coordination Agreements, to advance to the
borrower an additional private guarantee fee equal to 2% of the original
principal amount of any such Privately Guaranteed Loan made to a student since
the commencement of the 1992-1993 Law Access(R) Program through the 1995-1996
Access Group Loan Program, and, commencing with the 1996-1998 Access Group Loan
Program a fee of 4% of the original principal amount of each LAL Loan, 3% of
each GAL Loan and BEL Loan and 2% for each MAL Loan, DAL Loan and REL Loan (each
such term as defined in the 1992, 1993-1995 and 1996-1998 Coordination
Agreements). The proceeds of such advances shall be remitted in accordance with
the 1992, 1993-1995 and 1996-1998 Coordination Agreements and Assigned
Agreements.
SECTION 10.06. BIDS/FIRST REFUSAL RIGHTS. (a) If required pursuant to
a Coordination Agreement (and only to the extent required thereunder), in
connection with any contemplated sale of any Financed Student Loans pursuant to
Section 9.01(c) of this Agreement, the Indenture Trustee, on behalf of the
Trust, shall notify PHEAA, ASA, LAI and XXXX of any proposed solicitation of
bids or offers to purchase the pool of Access Loans offered for sale as part of
Two Pool Sale, such notice to be delivered not less than thirty (30) days prior
to the date upon which bids or offers are to be received by the Indenture
Trustee. Each of PHEAA, XXXX and LAI shall be given an opportunity to submit a
bid or offer to purchase all such Access Loans being offered for sale within
such thirty (30) day period and if no other bid exceeds PHEAA's, TERI's or LAI's
bid and if PHEAA's, TERI's or LAI's bid, in combination with the highest bid for
the other pool of Financed Student Loans being sold, is equal to or in excess of
the Minimum Purchase Amount the Indenture Trustee, on behalf of the Trust, shall
convey such pool of Access Loans offered for sale to whichever of PHEAA, XXXX or
XXX, as the case may be, submitted the highest bid. If no combination of bids
that are received pursuant to any solicitation process in connection with a Two
Pool Sale are equal to or in excess of the Minimum Purchase Amount, the
Indenture Trustee will not consummate a sale of such Financed Student Loans. The
Indenture Trustee, on behalf of the Trust, shall require any purchaser or
transferee who acquires Financed Student Loans that are Access Loans to acquire
all Financed Student Loans of a borrower owned by the Trust and not in default,
except that, with regard thereto, the Indenture Trustee, on behalf of the Trust,
may sell or transfer to a purchaser or transferee all Financed Federal Loans of
a borrower and sell or transfer to a different purchaser or transferee all
Financed Guaranteed Private Loans of the same borrower.
(b) The provisions of this Section 10.06 shall not apply to any sale
or other transfer of any Financed Student Loans to the Put Option Provider
pursuant to the exercise of the Group I or Group II Put Option, or to KBUSA, the
Administrator or the Master Servicer (or a Sub-Servicer acting in its stead) as
may be required or permitted under this Agreement or any Guarantor in connection
with the enforcement of any applicable Guarantee Agreement. KBUSA, acknowledges
that if any Financed Student Loan that is an Access Loan is reacquired by it,
such Financed Student Loan shall from the time of such reacquisition become
subject to the restrictions and requirements on sale or transfer of loans by
KBUSA, under the applicable Coordination Agreement.
SECTION 10.07. CONSOLIDATION LOANS. The parties to this Agreement, to
the extent applicable, hereby acknowledge and agree that, solely for purposes of
allocating consolidation loans that relate to Access Loans among lenders,
pursuant to Section 8.1 of the 1996-1998 Coordination Agreement, Section 8.1 of
the 1993-1995 Coordination Agreement, Section 8.1 of the 1992 Coordination
Agreement and any similar provision in any similar Coordination Agreement with
respect to subsequent academic years, KBUSA, shall be deemed to be the owner of,
and lender on, all Financed Student Loans.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENT. This Agreement may be amended by the
Depositor, the Master Servicer, the Administrator and the Eligible Lender
Trustee, with the consent of the Indenture Trustee and (unless any such proposed
amendment does not affect the Group II Student Loans or the Group II Notes or
the Securities Insurer as evidenced by an Opinion of Counsel of the Depositor
(who shall not be an employee of KBUSA or any of its Affiliates) regarding the
lack of changes to any legal rights and remedies of the Group II Noteholders or
the Securities Insurer, and a confirmation from each Rating Agency that such
amendment will not result in the downgrading of the then current ratings of any
of the Group II Notes (without regard to the Group II Notes Guaranty Insurance
Policy), the Securities Insurer, but without the consent of the Swap
Counterparty or any of the holders of Notes, to cure any ambiguity, to correct
or supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the holders of Notes;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Eligible Lender Trustee, the Securities Insurer, the
Swap Counterparty and the Indenture Trustee, adversely affect in any material
respect the interests of any holder of Notes, the Securities Insurer or the Swap
Counterparty.
This Agreement may also be amended from time to time by the Depositor,
the Master Servicer, the Administrator and the Eligible Lender Trustee, with the
consent of the Indenture Trustee, the consent of a majority in interest of the
Group I Controlling Parties (unless any such proposed amendment does not affect
the Group I Student Loans or the Group I Notes as evidenced by an Opinion of
Counsel of the Depositor (who shall not be an employee of KBUSA or any of its
Affiliates) regarding the lack of changes to any legal rights and remedies of
the Group I Noteholders, and a confirmation from each Rating Agency that such
amendment will not result in the downgrading of the then current ratings of any
of the Group I Notes, a majority in interest of the Group II Controlling Parties
(unless any such proposed amendment does not affect the Group II Student Loans
or the Group II Notes or the Securities Insurer as evidenced by an Opinion of
Counsel of the Depositor (who shall not be an employee of KBUSA or any of its
Affiliates) regarding the lack of changes to any legal rights and remedies of
the Group II Noteholders or the Securities Insurer, and a confirmation from each
Rating Agency that such amendment will not result in the downgrading of the then
current ratings of any of the Group II Notes (without regard to the Group II
Notes Guaranty Insurance Policy) and the Swap Counterparty (which shall not be
unreasonably withheld), for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the holders of any Class of Notes;
PROVIDED, HOWEVER, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments with respect to Group I or Group II Student Loans or distributions that
shall be required to be made for the benefit of the holders of Group I or Group
II Notes or (b) amend the aforesaid percentage of the Outstanding Amount of the
related Class or Classes of Notes, which are required to consent to any such
amendment, without the consent of all outstanding holders of all Classes of
Notes affected by such amendment (notwithstanding anything to the contrary
contained in the Indenture or the Trust Agreement, such rights of consent
granted to the holders of the Notes contained in clauses (a) and (b) of this
proviso shall not be exercisable by the Group I Controlling Noteholders on
behalf of all of the Group I Noteholders or by the Securities Insurer on behalf
of all of the Group II Noteholders).
Promptly after the execution of any such amendment or consent (or, in
the case of the Rating Agencies, five Business Days prior thereto), the Eligible
Lender Trustee shall furnish written notification of the substance of such
amendment or consent to the Depositor, each holder of Certificates (if not the
Depositor), the Indenture Trustee, the Securities Insurer, the Swap Counterparty
and each of the Rating Agencies.
It shall not be necessary for the consent of holders of Notes pursuant
to this Section to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall be entitled to receive
and rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 11.02(i)(1). The Eligible Lender Trustee and the Indenture Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
SECTION 11.02. PROTECTION OF INTERESTS IN TRUST. (a) The Depositor
shall execute and file such financing statements and cause to be executed and
filed such continuation statements, all in such manner and in such places as may
be required by law fully to preserve, maintain, and protect the interest of the
Issuer, the Eligible Lender Trustee, the Securities Insurer, the Swap
Counterparty and the Indenture Trustee in the Group I and/or Group Student
Loans, as applicable, and in the proceeds thereof. The Depositor shall deliver
(or cause to be delivered) to the Eligible Lender Trustee, the Securities
Insurer, the Swap Counterparty and the Indenture Trustee file-stamped copies of,
or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) Neither the Depositor nor the Master Servicer shall (nor shall the
Master Servicer permit a Sub-Servicer to) change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given the Eligible Lender Trustee, the Securities Insurer, the Swap
Counterparty and the Indenture Trustee at least five days' prior written notice
thereof and shall have promptly filed (or cause to be filed) appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Depositor and the Master Servicer shall have an obligation
(and the Master Servicer shall cause each Sub-Servicer) to give the Eligible
Lender Trustee, the Securities Insurer, the Swap Counterparty and the Indenture
Trustee at least 60 days' prior written notice of any relocation of its
principal executive office or change in its jurisdiction of organization, if, as
a result of such relocation or change, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly file
(or cause to be filed) any such amendment. The Master Servicer shall (and shall
cause each Sub-Servicer to) at all times maintain each office from which it
shall service Financed Student Loans, and its principal executive office, and
its jurisdiction of organization within the United States of America.
(d) The Master Servicer shall (and shall cause the applicable
Sub-Servicer to) maintain accounts and records as to each Financed Student Loan
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Financed Student Loan, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Financed Student Loan and the amounts from time to time deposited in the
applicable subaccount of the Collection Account in respect of such Financed
Student Loan.
(e) The Master Servicer shall (and shall cause the applicable
Sub-Servicer to) maintain its computer systems so that, from and after the time
of sale under this Agreement of the Financed Student Loans, the Master
Servicer's (or the related Sub-Servicer's) master computer records (including
any backup archives) that refer to a Financed Student Loan shall indicate
clearly the interest of the Issuer, the Eligible Lender Trustee and the
Indenture Trustee in such Financed Student Loan and that such Financed Student
Loan is owned by the Eligible Lender Trustee on behalf of the Issuer and has
been pledged to the Indenture Trustee for the benefit of the related group of
Noteholders, the Swap Counterparty and the Securities Insurer (with respect to
the Group II Student Loans only). Indication of the Issuer's, the Eligible
Lender Trustee's and the Indenture Trustee's interest in a Financed Student Loan
shall be deleted from or modified on the Master Servicer's (or the related
Sub-Servicer's) computer systems when, and only when, the related Financed
Student Loan shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Administrator shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
student loans to any prospective purchaser, lender or other transferee, the
Master Servicer shall (or shall cause the applicable Sub-Servicer to) give to
such prospective purchaser, lender or other transferee computer tapes, records
or printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Financed Student Loan, shall indicate
clearly that such Financed Student Loan has been sold and is owned by the
Eligible Lender Trustee on behalf of the Issuer and has been pledged to the
Indenture Trustee for the benefit of the related group of Noteholders, the Swap
Counterparty and the Securities Insurer (with respect to the Group II Student
Loans only).
(g) Upon reasonable notice, the Master Servicer shall (and shall cause
the applicable Sub-Servicer to) permit the Indenture Trustee and the Securities
Insurer, the Swap Counterparty and their agents at any time during normal
business hours to inspect, audit (subject to Section 10.02 with respect to
Financed Student Loans that are Access Loans) and make copies of and abstracts
from the Master Servicer's (or the related Sub-Servicer's) records regarding any
Financed Student Loan.
(h) Upon request at any time the Eligible Lender Trustee or the
Indenture Trustee shall have reasonable grounds to believe that such request
would be necessary in connection with its performance of its duties under the
Basic Documents, or (with respect to Group II Student Loans only and provided
that no Securities Insurer Default has occurred and is continuing) upon request
of the Securities Insurer, the Master Servicer shall (or shall cause the
applicable Sub-Servicer to) furnish to the Eligible Lender Trustee or to the
Indenture Trustee and the Securities Insurer (in each case, with a copy to the
Administrator), within five Business Days, a list of all Group I and/or Group II
Student Loans, as applicable (by borrower social security number, type of loan
and date of issuance), then held as part of the Trust, and the Administrator
shall furnish to the Eligible Lender Trustee or to the Indenture Trustee and the
Securities Insurer, within 20 Business Days thereafter, a comparison of such
list to the list of Initial Financed Student Loans set forth in Schedules A-1
and A-2 as of the Closing Date, and, for each Financed Student Loan that has
been added to or removed from the pool of loans held by the Eligible Lender
Trustee on behalf of the Issuer, information as to the date as of which and
circumstances under which each such Financed Student Loan was so added or
removed.
(i) The Depositor shall deliver to the Eligible Lender Trustee, the
Securities Insurer, the Swap Counterparty and the Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement and of
each amendment thereto and on each Subsequent Transfer Date, an Opinion of
Counsel either (A) stating that, in the opinion of such counsel, all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Eligible Lender
Trustee and the Indenture Trustee in the Financed Student Loans, and reciting
the details of such filings or referring to prior Opinions of Counsel in which
such details are given, or (B) stating that, in the opinion of such counsel, no
such action shall be necessary to preserve and protect such interest; and
(2) within 120 days after the beginning of each calendar year
commencing April 30, 2002, an Opinion of Counsel, dated as of a date during such
120-day period, either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and the Indenture Trustee in the Financed Student Loans, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest; PROVIDED that a single Opinion of Counsel may be delivered in
satisfaction of the foregoing requirement and that of Section 3.06(b) of the
Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify (as of the date of such opinion and given all applicable laws as in
effect on such date) any action necessary to be taken in the following year to
preserve and protect such interest.
(j) The Depositor shall, to the extent required by applicable law,
cause the Notes to be registered with the Commission pursuant to Section 12(b)
or Section 12(g) of the Exchange Act within the time periods specified in such
sections.
SECTION 11.03. NOTICES. All demands, notices, instructions, directions
and communications upon or to the Depositor, the Administrator, the Master
Servicer, the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
Securities Insurer or the Rating Agencies under this Agreement shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, (or in the form of telex or facsimile notice, followed by written
notice delivered as aforesaid) and shall be deemed to have been duly given upon
receipt (a) in the case of the Master Servicer, the Swap Counterparty, the Cap
Provider or the Administrator, to Key Bank USA, National Association, 000
Xxxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Key Education
Resources, KeyCorp Student Loan Trust 2000-B (telephone: (000) 000-0000;
facsimile: (000) 000-0000), (b) in the case of the Issuer or the Eligible Lender
Trustee, at the Corporate Trust Office of the Eligible Lender Trustee, (c) in
the case of the Indenture Trustee, at its Corporate Trust Office, (d) in the
case of the Securities Insurer, to MBIA Insurance Corporation, 000 Xxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000, Attention: Insured Portfolio Management-SF (telephone:
(000) 000-0000; facsimile: (000) 000-0000), (e) in the case of Moody's, to
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: ABS Monitoring Department (telephone: (000) 000-0000; facsimile:
(000) 000-0000), (f) in the case of Fitch, to Fitch, Inc., Xxx Xxxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, (telephone: (000) 000-0000; facsimile: (212)
480-4435), (g) in the case of S&P to Standard & Poor's, 00 Xxxxx Xxxxxx,
Xxxxxxxxx: Asset Backed Surveillance Department (telephone (000) 000-0000;
facsimile (000) 000-0000), and (h) in the case of the Depositor to Key Consumer
Receivables LLC, c/o Key Bank USA, National Association, 000 Xxxxxxxx Xxxxxx,
Xxxxxx Xxxxx, Xxxxxxxxx, Xxxx 00000, Attention: Key Education Resources, KeyCorp
Student Loan Trust 2000-B (telephone: (000) 000-0000; facsimile: (216)
828-9301), as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 11.04. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.05 and 7.03 and as provided
in the provisions of this Agreement concerning the resignation of the Master
Servicer or the Administrator, this Agreement may not be assigned by the
Depositor, the Administrator or the Master Servicer. This Agreement may only be
assigned by the Eligible Lender Trustee to its permitted successor pursuant to
the Trust Agreement.
SECTION 11.05. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Depositor, the Master Servicer, the
Issuer and the Eligible Lender Trustee, the Indenture Trustee, the Securities
Insurer and the holders of Notes, as third party beneficiaries, and nothing in
this Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.06. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.07. SEPARATE COUNTERPARTS. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.08. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10. ASSIGNMENT TO INDENTURE TRUSTEE. The Depositor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
holders of the Notes of a security interest in all right, title and interest of
the Issuer in, to and under the Financed Student Loans and/or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 11.11. NONPETITION COVENANTS. (a) Notwithstanding any prior
termination of this Agreement, the Depositor, the Master Servicer, the
Administrator, and the Eligible Lender Trustee shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Depositor or the Issuer, acquiesce, petition or otherwise invoke
or cause the Issuer to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Issuer under any
Federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Issuer or any substantial part of its property, or ordering the winding
up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Eligible Lender Trustee, the Master Servicer or any successor Master Servicer
shall not, prior to the date which is one year and one day after the termination
of this Agreement with respect to the Depositor, acquiesce, petition or
otherwise invoke or cause the Depositor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Depositor under any insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the Depositor or any substantial part of its property, or ordering the
winding up or liquidation of the affairs of the Depositor.
SECTION 11.12. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND
INDENTURE TRUSTEE. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been signed by Bank One, National Association, not
in its individual capacity but solely in its capacity as Eligible Lender Trustee
of the Issuer and, subject to paragraph (d) below, in no event shall Bank One,
National Association, in its individual capacity or, except as expressly
provided in the Trust Agreement, as beneficial owner of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto as to all of which recourse shall be had
solely to the assets of the Issuer.
(b) [RESERVED]
(c) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank not in its individual
capacity but solely as Indenture Trustee and, except as provided in paragraph
(d) below, in no event shall The Chase Manhattan Bank have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
(d) Notwithstanding any other provision in this Agreement or the other
Basic Documents, nothing in this Agreement or the other Basic Documents shall be
construed to limit the legal responsibility of the Eligible Lender Trustee or
the Indenture Trustee to the U.S. Secretary of Education or a Guarantor for any
violations of statutory or regulatory requirements that may occur with respect
to loans held by the Eligible Lender Trustee or the Indenture Trustee, pursuant
to, or to otherwise comply with their obligations under, the Higher Education
Act or implementing regulations, it being expressly understood that the
Indenture Trustee has no obligation or duty pursuant to this Section except in
the event of Foreclosure or pursuant to Section 8.01 as a successor Master
Servicer.
SECTION 11.13. CONSENT OF THE SECURITIES INSURER. Whenever the consent
or approval of the Securities Insurer is required under this Agreement, the
Great Lakes Sub-Servicing Agreement and the PHEAA Sub-Servicing Agreement, such
consent or approval shall be reasonably given, except for consents or approvals
required under Article VIII hereof with respect to which the consent or approval
of the Securities Insurer shall be given at the sole discretion of the
Securities Insurer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
KEYCORP STUDENT LOAN TRUST 2001-A,
as Issuer,
By: BANK ONE, NATIONAL ASSOCIATION, not
in its individual capacity but
solely as Eligible Lender Trustee
on behalf of the Trust,
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Authorized Officer
KEY CONSUMER RECEIVABLES LLC,
as Depositor
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: President
KEY BANK USA, NATIONAL ASSOCIATION,
as Master Servicer,
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
as Administrator,
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee,
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Authorized Officer
Acknowledged, accepted, and with
respect to Sections 2.06, 4.01, 6.04, 6.08,
10.03, 10.05, 10.06, and 10.07,
agreed to, as of the day and year
first above written:
KEY BANK USA, NATIONAL
ASSOCIATION,
By: /s/ Xxxxx X. Xxxxx
-------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
Acknowledged, accepted, and with
respect to Article II, agreed to, as of
the day and year first above written:
BANK ONE, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Depositor Eligible
Lender Trustee
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Authorized Officer
Acknowledged, accepted, and with
respect to Article X, agreed to,
as of the day and year
first above written:
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Indenture Trustee,
By: /s/ Xxxxxxxx Xxxxx
-------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
Acknowledged and accepted
as of the day and year
first above written:
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely in its capacity as
securities intermediary
under Section 5.01,
By: /s/ Xxxxxxxx Xxxxx
-------------------------
Name: Xxxxxxxx Xxxxx
Title: Vice President
Schedule A-1-1
APPENDIX A
DEFINITIONS AND USAGE
USAGE
The following rules of construction and usage shall be applicable to
any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant thereto unless otherwise defined therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in an instrument refer to such instrument as a whole and not to
any particular provision or subdivision thereof; references in an instrument to
"Article," "Section" or another subdivision or to an attachment are, unless the
context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument; and the term "including" means "including without
limitation."
(d) The definitions contained in this Appendix are equally applicable
to both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below
or in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
(f) References to "Group I and Group II" and/or "Group I or Group II"
followed by a defined term shall mean such defined term as limited to the Group
I Notes or Group I Student Loans, and the Group II Notes or Group II Student
Loans (in each case, as applicable) to the exclusion of the other group of Notes
or Financed Student Loans, as the case may be.
DEFINITIONS
"ACCEPTED SERVICING PROCEDURES" means that the Master Servicer shall
(or shall cause the applicable Sub-Servicer to) manage, service, administer and
make collections on the Financed Student Loans with reasonable care, using that
degree of skill and attention that the Master Servicer (or such Sub-Servicer)
exercises with respect to all comparable student loans that it services but, in
any event, in accordance with customary and usual standards of practice of
prudent lenders and loan servicers administering similar student loans. The
Master Servicer shall (or shall cause the applicable Sub-Servicer to) manage,
service, administer and make collections with respect to the Financed Student
Loans in accordance with, and otherwise comply with, all applicable Federal and
state laws, including all applicable standards, guidelines and requirements of
the Higher Education Act (in the case of the Financed Federal Loans) and any
applicable Guarantee Agreement (in the case of the Financed Guaranteed Loans).
These procedures shall include collection and posting of all payments,
responding to inquiries of borrowers on such Financed Student Loans, monitoring
borrowers' status, making required disclosures to borrowers, investigating
delinquencies, sending payment coupons to borrowers and otherwise establishing
repayment terms, reporting tax information to borrowers, if applicable,
accounting for collections and furnishing monthly and annual statements with
respect thereto to the Administrator (and upon request the Administrator shall
provide copies thereof to the Securities Insurer). The Master Servicer shall (or
shall cause the applicable Sub-Servicer to) follow its customary standards,
policies and procedures in performing its duties as Master Servicer (or
Sub-Servicer, as the case may be).
"ACCESS LOANS" means those Financed Student Loans that were originated
under The Law Access(R) Program or The Access GroupSM Loan Program as
administered by LSAS or LAI.
"ACT" has the meaning specified in Section 11.03(a) of the Indenture.
"ADDITIONAL FUNDINGS" means the moneys transferred from the Group I or
Group II Pre-Funding Account, as applicable, and the Group I or Group II Escrow
Account, as applicable, on Subsequent Transfer Dates during the Funding Period,
and shall consist of amounts paid to the Depositor and by the Depositor to the
applicable Seller to acquire Other Student Loans (that become Group I or Group
II Student Loans, as applicable) as of the applicable Subsequent Cut-off Dates,
to pay capitalized interest on the Group I or Group II Student Loans, as
applicable, and to pay Guarantee Fee Advances, if applicable, as provided in
Section 5.08(a) of the Sale and Servicing Agreement.
"ADDITIONAL GROUP I STUDENT LOANS" means those Additional Student
Loans that are also Group I Student Loans.
"ADDITIONAL GROUP II STUDENT LOANS" means those Additional Student
Loans that are also Group II Student Loans.
"ADDITIONAL STUDENT LOANS" means the collective reference to the Other
Student Loans, Guarantee Fee Advances and the fundings of accrued interest to be
capitalized.
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of September 1, 2001, among the Issuer, the Indenture Trustee and the
Administrator.
"ADMINISTRATION FEE" has the meaning specified in Section 3 of the
Administration Agreement.
"ADMINISTRATOR" means Key Bank USA, National Association, a national
banking association, in its capacity as administrator of the Issuer and the
Financed Student Loans.
"ADMINISTRATOR DEFAULT" has the meaning specified in Section 8.01(b)
of the Sale and Servicing Agreement.
"ADMINISTRATOR'S CERTIFICATE" means an Officers' Certificate of the
Administrator delivered pursuant to Section 4.08(c) of the Sale and Servicing
Agreement and containing the information required by Section 4.08(c).
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AMERITRUST" means Ameritrust Company National Association,
predecessor in interest to Society.
"APPLICABLE INDEX" means with respect to each Class of the Notes,
Three-Month LIBOR.
"APPLICABLE NOTE MARGIN" means: 0.07% for the Class I-A-1 Notes, 0.15%
for the Class I-A-2 Notes, 0.55 % for the Class I-B Notes, 0.15% for the Class
II-A-1 Notes, and 0.27% for the Class II-A-2 Notes.
"ASA" means the Massachusetts Higher Education Assistance Corporation
now doing business as American Student Assistance Corporation, a Massachusetts
non-profit corporation.
"ASSIGNED AGREEMENTS" means the following agreements, as the same may
be amended and restated from time to time, (i) the Deposit Agreement dated as of
January 28, 1992, between XXXX and KBUSA (as successor to Ameritrust), (ii) the
Security Agreement dated as of January 28, 1992, between XXXX and KBUSA (as
successor to Ameritrust), (iii) the Letter Agreement dated as of January 28,
1992, between LSAS and KBUSA (as successor to Ameritrust), (iv) the Trust
Agreement dated as of July 14, 1992 and restated as of July 1, 1994, among
KBUSA, LSAS and First Bank (N.A.), Milwaukee, Wisconsin, as trustee, (v) the
LAL/BEL Guarantee Agreements dated as of January 28, 1992 and December 21, 1992,
between KBUSA and XXXX, and (vi) the Private Guarantee Agreement dated as of
March 23, 1995, among KBUSA, XXXX, Society National Bank, Indiana, and
Wilmington Trust Company, (vii) the Consolidated Deposit Agreement and
Consolidated Security Agreement each dated November 1, 1995 between XXXX and
Society, and (viii) Alternative DEAL Surety Bond Numbers 1994-A, 1994-B, 1995-A
and 1996-A, dated February 23, 1994, October 4, 1994, July 1, 1995 and July 1,
1996, respectively, issued by HICA to KeyBank of Maine, Society, Society and
KBUSA, respectively; and (ix) the Pledged Collateral Account Control Agreement
dated as of January 1, 1999, among XXXX, KBUSA and McDonald Investments Inc., a
wholly-owned subsidiary of KeyCorp, all to the extent necessary to permit the
Trust to realize its rights and benefits under the assignment of the agreements
referred to in clauses (i) through (ix) above.
"ASSIGNED RIGHTS" has the meaning specified in Section 2.01 of the
Sale and Servicing Agreement.
"AUCTION PURCHASE AMOUNT" with respect to the Group I or Group II
Student Loans, as applicable, means the aggregate unpaid principal balance owed
by the applicable borrowers thereon plus accrued interest thereon to the date of
purchase less the amount on deposit in the Group I or Group II Reserve Account,
respectively, as of such date.
"AUTHORIZED OFFICER" means (i) with respect to the Issuer, any officer
of the Eligible Lender Trustee who is authorized to act for the Eligible Lender
Trustee in matters relating to the Issuer pursuant to the Basic Documents and
who is identified on the list of Authorized Officers delivered by the Eligible
Lender Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (ii) with respect to the
Administrator, any officer of the Administrator or any of its Affiliates who is
authorized to act for the Administrator in matters relating to itself or to the
Issuer and to be acted upon by the Administrator pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (iii) with respect to
the Depositor, any officer of the Depositor or any of its Affiliates who is
authorized to act for the Depositor in matters relating to or to be acted upon
by the Depositor pursuant to the Basic Documents and who is identified on the
list of Authorized Officers delivered by the Depositor to the Indenture Trustee
on the Closing Date (as such list may be modified or supplemented from time to
time thereafter), (iv) with respect to KBUSA, any officer of KBUSA or any of its
Affiliates who is authorized to act for KBUSA in matters relating to or to be
acted upon by KBUSA pursuant to the Basic Documents and who is identified on the
list of Authorized Officers delivered by KBUSA to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter), (v) with respect to the Master Servicer, any officer of the Master
Servicer or any of its Affiliates who is authorized to act for the Master
Servicer in matters relating to or to be acted upon by the Master Servicer
pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Master Servicer to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter), and (vi) with respect to any Sub-Servicer, any officer of the
Sub-Servicer or any of its Affiliates who is authorized to act for such
Sub-Servicer in matters relating to or to be acted upon by the Sub-Servicer,
pursuant to the applicable Sub-Servicing Agreement, and who is identified on the
list of Authorized Officers delivered by such Sub-Servicer to the Master
Servicer on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"AVAILABLE FUNDS" means, collectively, the Group I and Group II
Available Funds.
"BASIC DOCUMENTS" means the Trust Agreement, the Indenture, the Sale
and Servicing Agreement, the Administration Agreement, the KBUSA Student Loan
Transfer Agreement, the QSPE Student Loan Transfer Agreement, the Note
Depository Agreement, the Guarantee Agreements, the Group I Cap Agreement, the
Group II Cap Agreement, the Group I Interest Rate Swap, the Group II Interest
Rate Swap, the Group I Put Option Agreement, the Group II Put Option Agreement,
the Insurance Agreement and other documents and certificates delivered in
connection with any thereof.
"BAR EXAM LOAN" means a Bar Examination Loan made by KBUSA to an
eligible borrower pursuant to the Programs.
"BENEFIT PLAN" has the meaning specified in Section 3.04 of the Trust
Agreement.
"BOOK-ENTRY NOTE" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10 of the Indenture.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in New York, New York or
Cleveland, Ohio, are authorized or obligated by law, regulation or executive
order to remain closed.
"CALCULATED POOL BALANCE" means, at any time and with respect to
either Group of Student Loans or all the Financed Student Loans, as applicable,
the aggregate principal balance of the Group I and/or Group II Student Loans, as
applicable, or specified subset thereof, at the Cutoff Date, Subsequent Cutoff
Date or Statistical Cutoff Date, as specified (including accrued interest
thereon at such date to the extent such interest will be capitalized upon
commencement of repayment).
"CAP ACCOUNTS" means the Group I Cap Account and the Group II Cap
Account.
"CAP AGREEMENTS" means the Group I Cap Agreement and the Group II Cap
Agreement.
"CAP PROVIDER" means Key Bank USA, National Association in its
capacity as a party to the Cap Agreements.
"CERTIFICATE" means the Trust Certificate issued pursuant to the Trust
Agreement, substantially in the form of Exhibit A thereto.
"CERTIFICATE PAYING AGENT" means any paying agent or co-paying agent
appointed pursuant to Section 3.09 of the Trust Agreement, which shall initially
be the Eligible Lender Trustee.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" means the register
mentioned and the registrar appointed pursuant to Section 3.04 of the Trust
Agreement.
"CERTIFICATEHOLDER" means the Person in whose name the Certificate is
registered in the Certificate Register.
"CLASS" means reference to any of the Class I-A-1, Class I-A-2, Class
I-B, Class II-A-1 or Class II-A-2 Notes, as applicable.
"CLASS I-A-1 CAP PAYMENT" means with respect to any Distribution Date
prior to the termination of the Group I Cap Agreement, an amount equal to (x)
the positive difference, if any, between (1) the amount, if any, by which the
amount of interest calculated at the Formula Rate for the related Interest
Period exceeds the amount of interest calculated at the Student Loan Rate for
such Interest Period for the Class I-A-1 Notes minus (2) the amount of Group I
Available Funds, if any, remaining to pay the Noteholders' Interest Index
Carryover with respect to the Class I-A-1 Notes on such Distribution Date
pursuant to Section 5.05(c)(X)(8)(x) of the Sale and Servicing Agreement for the
Class I-A-1 Notes for such Interest Period, plus (y) interest calculated at the
Formula Rate for the Class I-A-1 Notes on any amounts due but unpaid by the Cap
Provider under clause (x) above.
"CLASS I-A-2 CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Group I Cap Agreement, an amount equal to (x)
the positive difference, if any, between (1) the amount, if any, by which the
amount of interest calculated at the Formula Rate for the related Interest
Period exceeds the amount of interest calculated at the Student Loan Rate for
such Interest Period for the Class I-A-2 Notes minus (2) the amount of Group I
Available Funds, if any, remaining to pay the Noteholders' Interest Index
Carryover with respect to the Class I-A-2 Notes on such Distribution Date
pursuant to Section 5.05(c)(X)(8)(x) of the Sale and Servicing Agreement, plus
(y) interest calculated at the Formula Rate for the Class I-A-2 Notes due but
unpaid by the Cap Provider under clause (x) above.
"CLASS I-B CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Group I Cap Agreement, an amount equal to (x)
the positive difference, if any, between (1) the amount, if any, by which the
amount of interest calculated at the Formula Rate for the related Interest
Period exceeds the amount of interest calculated at the Student Loan Rate for
such Interest Period for the Class I-B Notes minus (2) the amount of Group I
Available Funds, if any, remaining to pay the Noteholders' Interest Index
Carryover with respect to the Class I-B Notes on such Distribution Date pursuant
to Section 5.05(c)(X)(9)(x) of the Sale and Servicing Agreement, plus (y)
interest calculated at the Formula Rate for the Class I-B Notes due but unpaid
by the Cap Provider under clause (x) above.
"CLASS II-A-1 CAP PAYMENT" means with respect to any Distribution Date
prior to the termination of the Group II Cap Agreement, an amount equal to (x)
the positive difference, if any, between (1) the amount, if any, by which the
amount of interest calculated at the Formula Rate for the related Interest
Period exceeds the amount of interest calculated at the Student Loan Rate for
such Interest Period for the Class II-A-1 Notes minus (2) the amount of Group II
Available Funds, if any, remaining to pay the Noteholders' Interest Index
Carryover with respect to the Class II-A-1 Notes on such Distribution Date
pursuant to Section 5.05(c)(Y)(10)(x) of the Sale and Servicing Agreement for
the Class II-A-1 Notes for such Interest Period, plus (y) interest calculated at
the Formula Rate for the Class II-A-1 Notes on any amounts due but unpaid by the
Cap Provider under clause (x) above.
"CLASS II-A-2 CAP PAYMENT" means, with respect to any Distribution
Date prior to the termination of the Group II Cap Agreement, an amount equal to
(x) the positive difference, if any, between (1) the amount, if any, by which
the amount of interest calculated at the Formula Rate for the related Interest
Period exceeds the amount of interest calculated at the Student Loan Rate for
such Interest Period for the Class II-A-2 Notes minus (2) the amount of Group II
Available Funds, if any, remaining to pay the Noteholders' Interest Index
Carryover with respect to the Class II-A-2 Notes on such Distribution Date
pursuant to Section 5.05(c)(Y)(10)(x) of the Sale and Servicing Agreement, plus
(y) interest calculated at the Formula Rate for the Class II-A-2 Notes due but
unpaid by the Cap Provider under clause (x) above.
"CLASS I-A-1 NOTE" means a Floating Rate Class I-A-1 Asset Backed Note
issued pursuant to the Indenture, substantially in the form of Exhibit A-1
thereto.
"CLASS I-A-2 NOTE" means a Floating Rate Class I-A-2 Asset Backed Note
issued pursuant to the Indenture, substantially in the form of Exhibit A-2
thereto.
"CLASS I-B NOTE" means a Floating Rate Class I-B Asset Backed Note
issued pursuant to the Indenture, substantially in the form of Exhibit A-3
thereto.
"CLASS II-A-1 NOTE" means a Floating Rate Class II-A-1 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit A-4
thereto.
"CLASS II-A-2 NOTE" means a Floating Rate Class II-A-2 Asset Backed
Note issued pursuant to the Indenture, substantially in the form of Exhibit A-5
thereto.
"CLASS A NOTES" means the Group I Class A Notes and the Group II Class
A Notes.
"CAP FUNDS" means, collectively, the Group I Cap Funds and the Group
II Cap Funds.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means September 14, 2001.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"COHORT DEFAULT RATE" means the percentage of an educational
institution's borrowers who enter repayment on certain Federal Family Education
Loan Program and/or Xxxxxxx X. Xxxx Federal Direct Loan Program loans during a
particular fiscal year and default or meet other specified conditions before the
end of the next fiscal year, as is more specifically described in 34 C.F.R. Part
668 (including the definition of terms set forth herein).
"COLLATERAL" has the meaning specified in the Granting Clause of the
Indenture.
"COLLECTION ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 5.01(a)(i) of the Sale and Servicing
Agreement (including the Group I Collection Account Subaccount, and the Group II
Collection Account Subaccount created in connection therewith).
"COLLECTION PERIOD" means, with respect to the first Distribution
Date, the period beginning on the Cutoff Date with respect to the Initial
Financed Student Loans and ending on November 30, 2001 and with respect to each
subsequent Distribution Date, the Collection Period means the three calendar
months immediately following the end of the previous Collection Period.
"COMMERCIAL PAPER RATE" means the 90-day AA Financial Commercial Paper
rate posted in the Federal Reserve Release entitled "Commercial Paper Rates and
Outstandings" (converted, if necessary, from a discount basis to a bond
equivalent yield).
"COMMERCIAL PAPER RATE LOANS" means the Group I Student Loans, with an
aggregate unpaid principal balance as of the Statistical Cut-off Date of
$135,511,335 that bear interest at the Commercial Paper Rate. Interest on each
Commercial Paper Rate Loan is calculated for each calendar month using the
Commercial Paper Rate for the last business day of the prior calendar month.
"COMMISSION" means the Securities and Exchange Commission.
"CONSOLIDATION LOANS" means Federal Consolidation Loans and Private
Consolidation Loans, collectively.
"COORDINATION AGREEMENTS" means the following agreements, as the same
may be amended and restated from time to time, (i) the Coordination Agreement,
dated as of February 15, 1990, as amended, by and among LAI (as successor to
LSAS), PHEAA, ASA, XXXX and Society (as successor by merger to Ameritrust) (the
"1990 Coordination Agreement"); (ii) the Coordination Agreement, dated as of
January 4, 1991, as amended, by and among LAI (as successor to LSAS), PHEAA,
ASA, XXXX and Society (as successor by merger to Ameritrust) (the "1991
Coordination Agreement"); (iii) the Coordination Agreement, dated as of January
28, 1992, as amended, by and among LAI (as successor to LSAS), PHEAA, ASA, ELSI,
XXXX and Society (as successor by merger to Ameritrust) (the "1992 Coordination
Agreement"); (iv) the Coordination Agreement, dated as of December 21, 1992, as
amended, by and among LAI (as successor to LSAS), PHEAA, ASA, ELSI, XXXX and
Society (the "1993-1995 Coordination Agreement"); and (v) the Coordination
Agreement, dated as of March 23, 1995, as amended, by and among LAI, PHEAA, ASA,
XXXX and Society (the "1996-1998 Coordination Agreement").
"CORPORATE TRUST OFFICE" means (i) with respect to the Indenture
Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
at the Closing Date is located at 000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Structured Finance Institution Trust Service
(facsimile: (000) 000-0000) or at such other address as the Indenture Trustee
may designate from time to time by notice to the Noteholders, the Securities
Insurer, the Swap Counterparty, the Administrator, the Put Option Provider and
the Depositor, or the principal corporate trust office of any successor
Indenture Trustee (the address of which the successor Indenture Trustee will
notify the Noteholders, the Securities Insurer, the Swap Counterparty, the
Administrator, Put Option Provider and the Depositor) and (ii) with respect to
the Eligible Lender Trustee, the principal corporate trust office of the
Eligible Lender Trustee located at 0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Administration (telephone: (312)
000-0000; facsimile: (000) 000-0000); or at such other address as the Eligible
Lender Trustee may designate by notice to the Certificateholder, the Securities
Insurer, the Swap Counterparty, the Administrator, Put Option Provider and the
Depositor, or the principal corporate trust office of any successor Eligible
Lender Trustee (the address of which the successor Eligible Lender Trustee will
notify the Certificateholder, the Securities Insurer, the Swap Counterparty, the
Administrator, Put Option Provider and the Depositor).
"CSAC" means the California Student Aid Commission, an agency of the
State of California.
"CSLF" means the Connecticut Student Loan Foundation.
"CUMULATIVE DEFAULT RATIO" means, with respect to the Group I Student
Loans only, the ratio of the aggregate principal balance of Group I Student
Loans with respect to which default claims have been filed, to the aggregate
principal balance of Group I Student Loans ever included as part of the Group I
Student Loans, at the respective times such Group I Student Loans enter
repayment.
"CUTOFF DATE" means with respect to the Initial Pool Student Loans,
September 1, 2001.
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFICIENCY AMOUNT" shall have the meaning given to such term in the
Group II Notes Guaranty Insurance Policy.
"DEFINITIVE NOTES" has the meaning specified in Section 2.10 of the
Indenture.
"DELIVERY" or "DELIVER" when used with respect to Trust Account
Property means the following and such additional or alternative procedures as
may hereafter become appropriate to effect the complete transfer of ownership of
any such Collateral to the Indenture Trustee, free and clear of any adverse
claims, consistent with changes in applicable law or regulations or the
interpretation thereof:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute instruments and
are susceptible of physical delivery ("Physical Property"):
(b) transfer of possession thereof to the Indenture Trustee endorsed to, or
with respect to a certificated security:
(i) delivery thereof in bearer form to the Indenture Trustee; or
(ii) delivery thereof in registered form to the Indenture Trustee and
(A) the certificate is endorsed to the Indenture Trustee or in
blank by effective endorsement; or
(B) the certificate is registered in the name of the Indenture
Trustee, upon original issue or registration of transfer by the
issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the Indenture
Trustee; or
(ii) the issuer has agreed that it will comply with instructions
originated by the Indenture Trustee, without further consent by the
registered owner;
(d) with respect to any security issued by the U.S. Treasury, the Federal
Home Loan Mortgage Corporation or by the Federal National Mortgage Association
that is a book-entry security held through the Federal Reserve System pursuant
to Federal book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the book-entry
security to the securities account (as defined in 31 CFR Part 357) of a
participant (as defined in 31 CFR Part 357) which is also a securities
intermediary; and
(ii) the participant indicates by book entry that the book-entry
security has been credited to the Indenture Trustee's securities account,
as applicable;
(e) with respect to a security entitlement:
(i) the Indenture Trustee, becomes the entitlement holder; or
(ii) the securities intermediary has agreed that it will comply with
entitlement orders originated by the Indenture Trustee;
(f) without further consent by the entitlement holder for the purpose of
clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Indenture Trustee, acquires possession thereof;
(B) another person (other than a securities intermediary) either
acquires possession thereof on behalf of the Indenture Trustee or,
having previously acquired possession thereof, acknowledges that it
holds for the Indenture Trustee; or
(C) a securities intermediary acting on behalf of the Indenture
Trustee acquires possession of thereof, only if the certificate is in
registered form and has been specially endorsed to the Indenture
Trustee by an effective endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture Trustee as the registered
owner, upon original issue or registration of transfer; or
(B) another person (other than a securities intermediary) either
becomes the registered owner thereof on behalf of the Indenture
Trustee, or, having previously become the registered owner,
acknowledges that it holds for the Indenture Trustee;
(g) for purposes of this definition, except as otherwise indicated, the
following terms shall have the meaning assigned to each such term in the UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture Trustee
shall make appropriate notations on its records, and shall cause same to be made
of the records of its nominees, indicating that securities are held in trust
pursuant to and as provided in this Agreement.
"DEPARTMENT" means the United States Department of Education, an
agency of the Federal government.
"DEPOSITOR" means Key Consumer Receivables LLC, a Delaware limited
liability company, and its successors in interest.
"DEPOSITOR ELIGIBLE LENDER TRUSTEE" means Bank One, National
Association, in its capacity as eligible lender trustee on behalf of the
Depositor.
"DEPOSITOR OPTIONAL DEPOSIT" has the meaning specified in Section 5.09
of the Sale and Servicing Agreement.
"DEPOSITORY" has the meaning specified in Section 2.04 of the
Indenture.
"DETERMINATION DATE" means, with respect to any Monthly Servicing
Payment Date or Distribution Date, as the case may be, the third Business Day
preceding such Monthly Servicing Payment Date or Distribution Date.
"DISTRIBUTION DATE" means, with respect to each Collection Period, the
twenty-seventh day of each March, June, September and December or, if such day
is not a Business Day, the immediately following Business Day, commencing on
December 27, 2001.
"DTC" means the Depository Trust Company, a New York corporation.
"ECMC" means Educational Credit Management Corporation, a Minnesota
corporation.
"XXXX" means Education Loan Services, Inc., a Massachusetts
corporation.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with
an Eligible Institution, (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the States (or any domestic branch of a foreign
bank), having corporate trust powers and acting as trustee for funds deposited
in such account, so long as any of the securities of such depository institution
have a credit rating from at least two nationally recognized Rating Agencies in
one of their respective generic rating categories which signifies investment
grade and is acceptable to the Securities Insurer, (c) an account or accounts
maintained with KeyBank National Association, so long as KeyBank National
Association's long-term unsecured debt rating shall be at least "A" from S&P,
"A1" from Xxxxx'x and "A+" from Fitch and KeyBank National Association's
short-term deposit or short-term unsecured debt rating shall be at least "A-1"
from S&P, "P-1" from Xxxxx'x and "F-1" from Fitch, or (d) any other account that
is acceptable to the Rating Agencies (as evidenced by written confirmation to
the Indenture Trustee from each Rating Agency that the use of such account
satisfies the Rating Agency Condition) and the Securities Insurer.
"ELIGIBLE INSTITUTION" means a depository institution (which may be,
without limitation, KBUSA or any Affiliate of KBUSA (but only if all rights of
set-off have been waived), the Eligible Lender Trustee or any Affiliate of the
Eligible Lender Trustee, or the Indenture Trustee or any Affiliate of the
Indenture Trustee) organized under the banking laws of the United States of
America or any one of the States (or any domestic branch of a foreign bank), (a)
which has (i) a short-term senior unsecured debt rating of P-1 or better by
Xxxxx'x, (ii) either (A) a long term senior unsecured debt rating of AAA by S&P
or (B) a short-term senior unsecured debt rating A-1+ by S&P, and (iii) if rated
by Fitch (A) a long term senior unsecured debt rating of AAA by Fitch and (B)
short-term senior of F-1+ by Fitch, or any other long-term, short-term or
certificate of deposit rating acceptable to the Rating Agencies and the
Securities Insurer, and (b) whose deposits are insured by the FDIC. If so
qualified, KBUSA or any Affiliate of KBUSA, the Eligible Lender Trustee or any
Affiliate of the Eligible Lender Trustee, or Indenture Trustee or any Affiliate
of the Indenture Trustee, may be considered an Eligible Institution.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign
bank) and subject to supervision and examination by Federal or state
banking or depository institution authorities (including depository
receipts issued by any such institution or trust company as custodian with
respect to any obligation referred to in clause (a) above or portion of
such obligation for the benefit of the holders of such depository
receipts); PROVIDED, HOWEVER, that (i) each such investment has an original
maturity of less than 365 days and (ii) at the time of the investment or
contractual commitment to invest therein (which shall be deemed to be made
again each time funds are reinvested following each Distribution Date, as
the case may be), the commercial paper or other short-term senior unsecured
debt obligations (other than such obligations the rating of which is based
on the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from Xxxxx'x and S&P in the
highest investment category granted thereby and, if rated by Fitch, in the
highest investment category granted by Fitch;
(c) commercial paper having an original maturity of less than 365 days
and having, at the time of the investment or contractual commitment to
invest therein, a rating from Xxxxx'x and S&P in the highest investment
category granted thereby and, if rated by Fitch, in the highest investment
category granted by Fitch;
(d) investments in money market funds (including funds for which the
Indenture Trustee or the Eligible Lender Trustee or any of their respective
Affiliates or any of KBUSA's Affiliates is an investment manager or
advisor) that (i) maintain a stable $1.00 net asset value per share, (ii)
are freely transferable on a daily basis, (iii) invests only in other
Eligible Investments, and (iv) have a rating from Xxxxx'x and S&P in the
highest investment category granted thereby and, if rated by Fitch, in the
highest investment category granted by Fitch;
(e) bankers' acceptances having an original maturity of less than 365
days and issued by any depository institution or trust company referred to
in clause (b) above;
(f) investments in the money market fund known as "The Victory Fund
U.S. Government Obligations Fund" or any comparable or successor money
market fund provided that (i) KBUSA or one of its Affiliates is the
investment manager or advisor of such money market fund, (ii) such money
market fund seeks to maintain a stable $1.00 net asset value, per share,
(iii) the shares of such money market fund are freely transferable, (iv)
such money market fund invests only in Eligible Investments, and (v) such
money market fund otherwise satisfies the requirements of Rule 2a-7 of the
Investment Company Act of 1940, as amended; and
(g) any other investment permitted by each of the Rating Agencies and
(provided that no Securities Insurer Default has occurred and is
continuing) the Securities Insurer as set forth in writing delivered to the
Indenture Trustee.
"ELIGIBLE LENDER TRUSTEE" means Bank One, National Association, a
national banking association, not in its individual capacity but solely as
eligible lender trustee under the Trust Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW ACCOUNTS" means the Group I Escrow Account and the Group II
Escrow Account.
"EVENT OF DEFAULT" has the meaning specified in Section 5.01 of the
Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Executive Vice President, any Senior Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"EXPECTED INTEREST COLLECTIONS" means, with respect to the each group
of Financed Student Loans and any Collection Period, the sum of (i) the amount
of interest accrued (and with respect to the Group I Student Loans, net of
amounts required by the Higher Education Act to be paid to the Department or to
be repaid to borrowers), for such Collection Period (whether or not such
interest is actually paid), (ii) all Interest Subsidy Payments and Special
Allowance Payments expected to be received by the Eligible Lender Trustee for
such Collection Period (whether or not actually received) with respect to the
Group I Student Loans and (iii) Investment Earnings for such Collection Period.
"EXPENSES" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Eligible Lender Trustee or any of its officers, directors
or agents in any way relating to or arising out of the Trust Agreement, the
other Basic Documents, the Trust Estate, the administration of the Trust Estate
or the action or inaction of the Eligible Lender Trustee under the Trust
Agreement or the other Basic Documents.
"FAIR MARKET VALUE" means the fair market value of the Group I Student
Loans or the Group II Student Loans, as the case may be, as determined by the
Administrator (acting as calculation agent) pursuant to Section 5 of each of the
Group I and Group II Put Option Agreement, as applicable.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEDERAL CONSOLIDATION LOAN" means a loan made by KBUSA to an eligible
borrower that represents the refinancing of Financed Federal Loans of such
borrower in accordance with the applicable terms and conditions of the Program
and the Higher Education Act.
"FEDERAL CONSOLIDATION LOAN REBATE" means the monthly fee payable to
the Department by the holder of Federal Consolidation Loans made (x) on or after
October 1, 1993, equal to 1.05% per annum, but (y) with respect to Federal
Consolidation Loans for which applications were received on or after October 1,
1998 but before February 1, 1999, equal to 0.62% per annum, in each case on the
outstanding balance of such Federal Consolidation Loan.
"FEDERAL GUARANTORS" means, collectively, ASA, CSAC, CSLF, ECMC,
GLHEC, MHEAA, NSLP, NYHESC, PHEAA, TSAC and USAF.
"FEDERAL ORIGINATION FEE" means the origination fee payable to the
Department by the lender with respect to any Financed Federal Loan (including
Federal Consolidation Loans) made on or after October 1, 1993, equal to 0.50% of
the initial principal balance of such loan.
"FINAL MATURITY DATE" means: (i) for the Class I-A-1 Notes, the June
2008 Distribution Date, (ii) for the Class I-A-2 Notes the July 2031
Distribution Date, (iii) for the Class I-B Notes, the June 2037 Distribution
Date, (iv) for the Class II-A-1 Notes, the June 2008 Distribution Date, and (v)
for the Class II-A-2 Notes, the June 2031 Distribution Date.
"FINANCED FEDERAL LOANS" means those Group I Student Loans that are
guaranteed as to the payment of principal and interest by any of the Federal
Guarantors and are reinsured by the Department.
"FINANCED GUARANTEED LOANS" means the collective reference to the
Financed Federal Loans and the Financed Guaranteed Private Loans.
"FINANCED GUARANTEED PRIVATE LOANS" means those Group II Student Loans
that are guaranteed as to the payment of principal and interest by XXXX or HICA
and are not reinsured by the Department or any other governmental entity.
"FINANCED PRIVATE LOANS" means the collective reference to Financed
Guaranteed Private Loans and Financed Unguaranteed Private Loans.
"FINANCED STUDENT LOANS" means the collective reference to the Initial
Financed Student Loans and the Additional Student Loans.
"FINANCED STUDENT LOAN FILES" means the documents specified in Section
3.03 of the Sale and Servicing Agreement.
"FINANCED UNGUARANTEED PRIVATE LOANS" means those Group II Student
Loans that are not guaranteed as to the payment of principal or interest by any
federal or private guarantor, or by any other party or governmental agency,
including, without limitation, the Depositor or the applicable Seller.
"FORMULA RATE" means for any Interest Period with respect to each
Class of Notes, the Applicable Index plus the Applicable Note Margin.
"FITCH" means Fitch, Inc.
"FUNDING PERIOD" means, with respect to each of the Group I and Group
II Notes, the period beginning on the Closing Date and ending, in each case, on
the first to occur of (a) the date on which an Event of Default, a Master
Servicer Default or an Administrator Default occurs, (b) the date on which an
Insolvency Event occurs with respect to the Depositor, QSPE, or KBUSA, (c) the
first date on which the amounts on deposit in the Group I or Group II
Pre-Funding Account, as applicable, is zero, and (d) the close of business on
the last day of the Collection Period preceding the September 2003 Distribution
Date.
"GLHESC" means Great Lakes Higher Education Guaranty Corporation, a
Wisconsin corporation.
"GRADUATE LOAN PROGRAMS" means the loan programs, under which KBUSA
made loans to students enrolled in or recently graduated from approved or
accredited law schools, medical schools, dental schools, graduate business
schools or other graduate level certificate or degree programs.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"GREAT LAKES" means Great Lakes Educational Loan Services, Inc. a
Wisconsin corporation.
"GREAT LAKES SUB-SERVICING AGREEMENT" means the Subservicing
Agreement, dated as of September 1, 2001, between Great Lakes and the Master
Servicer.
"GREAT LAKES TRUST RECEIPT" means the Trust Receipt, dated September
14, 2001, from Great Lakes acknowledging the receipt and possession of the
Financed Student Loan Files relating to the Financed Student Loans being
sub-serviced by Great Lakes.
"GROUP I AVAILABLE FUNDS" and "GROUP II AVAILABLE FUNDS" means, with
respect to the Group I Notes and the Group II Notes, respectively, and any
Distribution Date or any Monthly Servicing Payment Date, the sum of the
following amounts received with respect to the then elapsed portion of the
related Collection Period to the extent not previously distributed:
(i) all collections received by the Master Servicer (or any
Sub-Servicer acting on its behalf) on the Group I or Group II Student
Loans, as applicable (including any Guarantee Payments received with
respect to such Group I or Group II Student Loans, as the case may be), but
net of (x), with respect to Group I Student Loans only, any Federal
Origination Fee and Federal Consolidation Loan Rebate payable to the
Department on Federal Consolidation Loans disbursed after October 1, 1993,
(y) any applicable administrative fees, late fees or similar fees received
from a borrower, and (z) any collections in respect of principal on the
Group I or Group II Student Loans, as applicable, applied by the Trust to
repurchase guaranteed loans from the Guarantors in accordance with the
Guarantee Agreements;
(ii) with respect to the Group I Student Loans only, any Interest
Subsidy Payments and Special Allowance Payments received by the Eligible
Lender Trustee during the then elapsed portion of such Collection Period;
(iii) with respect to the Group I and Group II Student Loans, as
applicable, all Liquidation Proceeds and all Recoveries in respect of
Liquidated Student Loans which were written off in prior Collection Periods
or prior months of such Collection Period;
(iv) with respect to the Group I and Group II Student Loans, as
applicable, the aggregate Purchase Amounts received for those Group I or
Group II Student Loans, as the case may be, repurchased by the Depositor
(or KBUSA, as the applicable Seller, acting on its behalf) with respect to
the KBUSA Student Loans, or purchased by the Master Servicer (or any
Sub-Servicer acting on its behalf) with respect to the breach of a
representation or warranty with respect to the QSPE Student Loans, or under
an obligation which arose during the elapsed portion of such Collection
Period;
(v) with respect to the Group I Student Loans only, the aggregate
amounts, if any, received from the applicable Seller or the Master Servicer
(or any Sub-Servicer acting on its behalf), as the case may be, as
reimbursement of non-guaranteed interest amounts, or, lost Interest Subsidy
Payments and Special Allowance Payments, with respect to the Financed
Federal Student Loans pursuant to Section 3.02 or 4.06, respectively of the
Sale and Servicing Agreement;
(vi) with respect to the Group I and Group II Student Loans, as
applicable, amounts deposited by the Depositor (or the applicable Seller
acting on its behalf) into the applicable subaccount of the Collection
Account in connection with the making of Consolidation Loans pursuant to
Section 2.03 of the Sale and Servicing Agreement;
(vii) with respect to the Group I and Group II Student Loans, as
applicable, and with respect to the initial Distribution Date, the amount
deposited in the applicable subaccount of the Collection Account on the
Closing Date pursuant to Section 5.01(a)(i) of the Sale and Servicing
Agreement;
(viii) with respect to the Group I and Group II Student Loans, as
applicable, Investment Earnings for such Distribution Date;
(ix) with respect to the Group I and Group II Student Loans, as
applicable, amounts withdrawn from the Group I or Group II Reserve Account,
as applicable, in excess of the Group I or Group II Specified Reserve
Account Balance, as applicable, and deposited into the applicable
subaccount of the Collection Account;
(x) with respect to the Group I and Group II Student Loans, as
applicable, amounts withdrawn from the Group I or Group II Escrow Account
and deposited into the applicable subaccount of the Collection Account;
(xi) with respect to the Group I and Group II Student Loans, as
applicable, with respect to the Distribution Date on or immediately after
the end of the Funding Period, the amount transferred from the Group I or
Group II Pre-Funding Account, as applicable, to the applicable subaccount
of the Collection Account;
(xii) with respect to the Group I or Group II Interest Rate Swap, (a)
any Net Receipt received from the Swap Counterparty with respect to the
related Interest Period and the Group I or Group II Interest Rate Swap, as
applicable, and (b) any Termination Payment received from the Swap
Counterparty with respect to a Termination Event under the Group I or Group
II Interest Rate Swap, as applicable, to the extent not paid to a
substitute Swap Counterparty in accordance with the Group I or Group II
Interest Rate Swap, as applicable;
(xiii) with respect to the Group II Notes only, for so long as the
Group II Notes remain outstanding (or any amounts remain due and owing to
the Securities Insurer, the Swap Counterparty or the Cap Provider with
respect to the Group II Notes), after all payments required to be made with
respect to the Group I Available Funds set forth in Section 5.05(c)(X) of
the Sale and Servicing Agreement are made, any remaining Group I Available
Funds will become part of the Group II Available Funds for such
Distribution Date;
(xiv) with respect to the Group I and Group II Student Loans, as
applicable, any proceeds received in connection with the sale of the Group
I or Group II Student Loans, as applicable, pursuant to Section 9.01 of the
Sale and Servicing Agreement, or sums collected by the Indenture Trustee
pursuant to Sections 5.03 or 5.04(a) of the Indenture; PROVIDED, HOWEVER,
that Group I and Group II Available Funds will exclude all payments and
proceeds (including Liquidation Proceeds) of any Group I or Group II
Student Loans, the related Purchase Amount of which has been included in
Group I or Group II Available Funds, as applicable, for a prior
Distribution Date; provided, further, that if on any Distribution Date
there would not be sufficient funds, after application of Group I or Group
II Available Funds, as applicable, and amounts available from the Group I
or Group II Reserve Account, as the case may be, and the Group I or Group
II Pre-Funding Account, as applicable, to pay any of the items specified in
clauses (1) through (2) of Section 5.05(c)(X), with respect to the Group I
Notes, or clauses (1) through (4) of Section 5.05(c)(Y), with respect to
the Group II Notes, of the Sale and Servicing Agreement for such
Distribution Date, then Group I or Group II Available Funds, as applicable,
for such Distribution Date will include, in addition to the Group I or
Group II Available Funds, as the case may be, amounts being held by the
Administrator pursuant to Section 5.02 of the Sale and Servicing Agreement,
or on deposit in the Group I Collection Account Subaccount, with respect to
Group I Available Funds, or Group II Collection Account Subaccount, with
respect to Group II Available Funds relating to such Distribution Date
which would have constituted Group I or Group II Available Funds, as the
case may be, for the Distribution Date succeeding such Distribution Date,
up to the amount necessary to pay the items specified in clause (1) through
(2) of Section 5.05(c)(X), with respect to the Group I Notes, or clause (1)
through (4) of Section 5.05(c)(Y), with respect to the Group II Notes, of
the Sale and Servicing Agreement, and the Group I or Group II Available
Funds, as applicable, for such succeeding Distribution Date will be
adjusted accordingly.
(xv) with respect to the Group II Notes only, funds released from the
Group I Reserve Account pursuant to Section 506(d) of the Sale and
Servicing Agreement.
"GROUP I CAP ACCOUNT" and "GROUP II CAP ACCOUNT" means each of the two
accounts designated as such, established and maintained pursuant to Section
5.01(a)(v) of the Sale and Servicing Agreement.
"GROUP I CAP AGREEMENT" and "GROUP II CAP AGREEMENT" means each of
those two certain interest rate protection agreements, each between the Trust
and the Cap Provider as documented according to a 1992 ISDA Master Agreement
(Multicurrency--Cross Border), including the related sole confirmation and the
related schedule, each dated as of September 14, 2001, and each modified to
reflect the terms of the Group I or Group II Notes, as applicable, and the Basic
Documents.
"GROUP I CAP FUNDS" means, with respect to any Distribution Date the
lesser of (x) the sum of the Class I-A-1 Cap Payment, the Class I-A-2 Cap
Payment and the Class I-B Cap Payment relating to such Distribution Date and (y)
the amount of funds on deposit in the Group I Cap Account on such Distribution
Date.
"GROUP II CAP FUNDS" means, with respect to any Distribution Date the
lesser of (x) the sum of the Class II-A-1 Cap Payment and the Class II-A-2 Cap
Payment relating to such Distribution Date and (y) the amount of funds on
deposit in the Group II Cap Account on such Distribution Date.
"GROUP I CLASS A NOTES" means the Class I-A-1 Notes and Class I-A-2
Notes.
"GROUP II CLASS A NOTES" means the Class II-A-1 Notes and Class II-A-2
Notes.
"GROUP I COLLATERAL" has the meaning specified in the Granting Clause
of the Indenture.
"GROUP II COLLATERAL" has the meaning specified in the Granting Clause
of the Indenture.
"GROUP I COLLECTION ACCOUNT SUBACCOUNT" and "GROUP II COLLECTION
ACCOUNT SUBACCOUNT" means the two subaccounts of the Collection Account each as
established and maintained pursuant to Section 5.01(a)(i) of the Sale and
Servicing Agreement.
"GROUP I CONTROLLING NOTEHOLDERS" means the Group I Senior Noteholders
(until such time as all Group I Senior Notes have been paid in full, and then
the Group I Subordinate Noteholders. Notwithstanding the foregoing, any Group I
Notes owned by KBUSA, the Depositor or any of their respective Affiliates, shall
be not voted by such entity nor considered in determining any specified voting
percentage of the Group I Controlling Noteholders, unless otherwise set forth in
the Indenture or the Sale and Servicing Agreement, as applicable.
"GROUP II CONTROLLING NOTEHOLDERS" means the Group II Noteholders.
Notwithstanding the foregoing, any Group II Notes owned by KBUSA, the Depositor
or any of their respective Affiliates, shall be not voted by such entity nor
considered in determining any specified voting percentage of the Group II
Controlling Noteholders unless otherwise set forth in the Indenture or the Sale
and Servicing Agreement, as applicable.
"GROUP I CONTROLLING PARTIES" means, with respect to the Group I
Notes, the Group I Controlling Noteholders The Group I Controlling Parties shall
possess certain rights on behalf of all the Group I Noteholders under the
Indenture and the Sale and Servicing Agreement.
"GROUP II CONTROLLING PARTIES" means the Securities Insurer, as the
deemed holder of 100% of the Group II Notes under the Indenture (unless a
Securities Insurer Default has occurred and is continuing, and then the Group II
Noteholders). The Group II Controlling Parties shall possess certain rights on
behalf of all the Group II Noteholders under the Indenture and the Sale and
Servicing Agreement.
"GROUP I ESCROW ACCOUNT" and "GROUP II ESCROW ACCOUNT" means each of
the two accounts (one with respect to the Group I Notes and the other with
respect to the Group II Notes) designated as such, established and maintained
pursuant to Section 5.01(a)(iv) of the Sale and Servicing Agreement.
"GROUP I INITIAL FINANCED STUDENT LOAN POOL BALANCE" means, at any
time, the Calculated Pool Balance of the Group I Student Loans, or specified
subset thereof, as of the related Cutoff Date (in the case of the Group I
Initial Financed Student Loans, or specified subset thereof) or the related
Subsequent Cutoff Date (with respect to Additional Student Loans or specified
subset thereof).
"GROUP II INITIAL FINANCED STUDENT LOAN POOL BALANCE" means, at any
time, the Calculated Pool Balance of the Group II Student Loans, or specified
subset thereof, as of the related Cutoff Date (in the case of the Group II
Initial Financed Student Loans, or specified subset thereof) or the related
Subsequent Cutoff Date (with respect to Additional Student Loans or specified
subset thereof).
"GROUP I INITIAL FINANCED STUDENT LOANS" and "GROUP II INITIAL
FINANCED STUDENT LOANS" means the Group I Initial Pool Student Loans and the
Group II Initial Pool Student Loans, respectively.
"GROUP I INITIAL POOL STUDENT LOANS" means any graduate or
undergraduate student loans listed on the Schedule of Group I Initial Pool
Student Loans on the Closing Date as set forth in Schedule A-1 to the Sale and
Servicing Agreement (which Schedule may be in the form of microfiche or computer
tape), which student loans the Depositor shall transfer to the Eligible Lender
Trustee on behalf of the Issuer pursuant to the Sale and Servicing Agreement on
the Closing Date.
"GROUP II INITIAL POOL STUDENT LOANS" means any graduate or
undergraduate student loans listed on the Schedule of Group II Initial Pool
Student Loans on the Closing Date as set forth in Schedule A-2 to the Sale and
Servicing Agreement (which Schedule may be in the form of microfiche or computer
tape), which student loans the Depositor shall transfer to the Eligible Lender
Trustee on behalf of the Issuer pursuant to the Sale and Servicing Agreement on
the Closing Date.
"GROUP I INTEREST RATE SWAP" and "GROUP II INTEREST RATE SWAP" means
those two certain interest rate swap agreements, each between the Trust and the
Swap Counterparty as documented on a 1992 ISDA Master Agreement
(Multicurrency--Cross Border), including the related sole confirmation and the
related schedule, each dated as of September 14, 2001, and each modified to
reflect the terms of the Group I or Group II Notes, as applicable, and the Basic
Documents.
"GROUP I NOTEHOLDERS" means each Person in whose name a Group I Note
is registered in the Note Register of the Group I Notes.
"GROUP II NOTEHOLDERS" means each Person in whose name a Group II Note
is registered in the Note Register of the Group II Notes.
"GROUP I NOTES" means collectively, the Class I-A-1 Notes, the Class
I-A-2 Notes and the Class I-B Notes.
"GROUP II NOTES" means collectively, the Class II-A-1 Notes and the
Class II-A-2 Notes.
"GROUP II NOTES GUARANTY INSURANCE POLICY" means the unconditional,
irrevocable note guaranty insurance policy, number 36130, substantially in the
form attached to the Indenture as part of Exhibits A-4 and A-5.
"GROUP II NOTES GUARANTY INSURANCE POLICY NOTICE" means the "Notice,"
as defined in the Group II Notes Guaranty Insurance Policy, to be provided by
the Indenture Trustee to the Securities Insurer with respect to an Insured
Payment.
"GROUP I PARITY DATE" means the Distribution Date on which the
aggregate principal balance of the Group I Notes (after giving effect to all
distributions pursuant to Section 5.05(c)(X) of the Sale and Servicing
Agreement) equals the sum of the Group I Pool Balance and amounts on deposit in
the Group I Pre-Funding Account as of the last day of the related Collection
Period.
"GROUP II PARITY DATE" means the Distribution Date on which the
aggregate principal balance of the Group II Notes (after giving effect to all
distributions pursuant to Section 5.05(c)(Y) of the Sale and Servicing
Agreement) equals the sum of the Group II Pool Balance and amounts on deposit in
the Group II Pre-Funding Account as of the last day of the related Collection
Period.
"GROUP I POOL BALANCE" and "GROUP II POOL BALANCE" means, at any time,
the aggregate principal balance of the Group I or Group II Student Loans,
respectively, at the end of the preceding Collection Period (including accrued
interest thereon for such Collection Period to the extent such interest will be
capitalized upon commencement of repayment or during deferment or forbearance),
after giving effect to the following without duplication: (i) all payments
received by the Trust related to the Group I or Group II Student Loans, as
applicable, during such Collection Period from or on behalf of borrowers,
Guarantors and the Department, as applicable, (ii) all Purchase Amounts received
by the Trust related to the Group I or Group II Student Loans, as the case may
be, for such Collection Period from the Depositor (or KBUSA acting on its
behalf) or the Master Servicer (or any Sub-Servicer acting on its behalf), (iii)
all Additional Fundings made from the Group I or Group II Escrow Account, as
applicable, and the Group I or Group II Pre-Funding Account, as applicable, with
respect to such Collection Period and (iv) all losses realized on Group I or
Group II Student Loans, as applicable, liquidated during such Collection Period.
"GROUP I PRE-FUNDED AMOUNT" and "GROUP II PRE-FUNDED AMOUNT" means,
with respect to any Distribution Date, the amount on deposit in the Group I
Pre-Funding Account or the Group II Pre-Funding Account, respectively.
"GROUP I PRE-FUNDING ACCOUNT" and "GROUP II PRE-FUNDING ACCOUNT" means
the two accounts designated as such, established and maintained pursuant to
Section 5.01(a)(iii) of the Sale and Servicing Agreement (including, any
subaccounts related thereto).
"GROUP I PRINCIPAL DISTRIBUTION AMOUNT" and "GROUP II PRINCIPAL
DISTRIBUTION AMOUNT" means, with respect to the Group I Notes and the Group II
Notes, respectively, and any Distribution Date, the amount by which the sum of
the outstanding principal balance of the Group I Notes or the Group II Notes, as
applicable, exceeds the related Specified Collateral Balance for such
Distribution Date.
"GROUP I PUT OPTION" means the option to sell the Group I Student
Loans to the Put Option Provider on the Put Option Exercise Date, for the
related Put Option Exercise Price, created pursuant to the terms of the Group I
Put Option Agreement.
"GROUP II PUT OPTION" means the option to sell the Group II Student
Loans to the Put Option Provider on the Put Option Exercise Date, for the
related Put Option Exercise Price, created pursuant to the terms of the Group II
Put Option Agreement.
"GROUP I PUT OPTION AGREEMENT" and "GROUP II PUT OPTION AGREEMENT"
means each of those two certain put option agreements, one with respect to the
Group I Student Loans and the other with respect to the Group II Student Loans,
and each among the Trust, the Indenture Trustee, the Put Option Provider and the
Administrator (as calculation agent).
"GROUP I RESERVE ACCOUNT" and "GROUP II RESERVE ACCOUNT" means the two
accounts, one with respect to the Group I Notes and the other with respect to
the Group II Notes, designated as such, established and maintained pursuant to
Section 5.01(a)(ii) of the Sale and Servicing Agreement.
"GROUP I RESERVE ACCOUNT INITIAL DEPOSIT" means $875,000.
"GROUP II RESERVE ACCOUNT INITIAL DEPOSIT" means $13,500,000.
"GROUP I SENIOR NOTEHOLDERS" means, collectively, each Person in whose
name a Group I Senior Note is registered in the Note Register.
"GROUP I SENIOR NOTES" means the Class I-A-1 Notes and the Class I-A-2
Notes.
"GROUP I STUDENT LOANS" means any graduate or undergraduate student
loans listed on the Schedule of Group I Student Loans on the Closing Date as set
forth in Schedule A-1 to the Sale and Servicing Agreement (which Schedule may be
in the form of microfiche or computer tape), which student loans the Depositor
shall transfer to the Eligible Lender Trustee on behalf of the Issuer pursuant
to the Sale and Servicing Agreement on the Closing Date, and any Additional
Student Loans added to the pool of Group I Student Loans. Such Additional
Student Loans are to be listed on Schedule B-1 to the Sale and Servicing
Agreement.
"GROUP II STUDENT LOANS" means any graduate or undergraduate student
loans listed on the Schedule of Group II Student Loans on the Closing Date as
set forth in Schedule A-2 to the Sale and Servicing Agreement (which Schedule
may be in the form of microfiche or computer tape), which student loans the
Depositor shall transfer to the Eligible Lender Trustee on behalf of the Issuer
pursuant to the Sale and Servicing Agreement on the Closing Date, and any
Additional Student Loans added to the pool of Group II Student Loans. Such
Additional Student Loans are to be listed on Schedule B-2 to the Sale and
Servicing Agreement.
"GROUP I SUBORDINATE NOTEHOLDERS" means, collectively, each Person in
whose name a Group I Subordinate Note is registered in the Note Register.
"GROUP I SUBORDINATE NOTES" means the Class I-B Notes.
"GUARANTEE AGREEMENTS" means (i) in the case of PHEAA, the Lender
Agreement for Guarantee of Student Loans With Federal Reinsurance and the Lender
Participation Agreement for Consolidation Loans, in each case dated as of April
26, 2000, between PHEAA and the Eligible Lender Trustee on behalf of the Issuer,
(ii) in the case of ASA, the Holder Guarantee Agreement dated as of April 26,
2000, between ASA and the Eligible Lender Trustee on behalf of the Issuer, (iii)
in the case of CSAC, the Agreement dated as of April 26, 2000, between CSAC and
the Eligible Lender Trustee on behalf of the Issuer, (iv) in the case of CSLF,
the Agreement dated as of August 28, 2000, between CSLF and the Eligible Lender
Trustee on behalf of the Issuer (v) in the case of NYHESC, the Loan Guarantee
Agreement dated as of April 26, 2000, between NYHESC and the Eligible Lender
Trustee on behalf of the Issuer, (vi) in the case of MHEAA, the Agreement to
Guarantee Loans, dated as of April 26, 2000, between MHEAA and the Eligible
Lender Trustee on behalf of the Issuer, (vii) in the case of NSLP, the Lender
Agreement for Guarantee of Student Loans With Federal Reinsurance and the Lender
Agreement for Guarantee of Federal Consolidation Loans with Federal Reinsurance,
each dated as of April 26, 2000 between NSLP and the Eligible Lender Trustee on
behalf of the Issuer, (viii) in the case of USAF, the USA Group Agreement to
Guarantee Loans dated as of May 3, 2000, between USAF and the Eligible Lender
Trustee on behalf of the Issuer, (ix) in the case of XXXX, the Second Amended
and Restated Guarantee Agreement dated as of April 26, 2000, among XXXX, KBUSA
and the Eligible Lender Trustee on behalf of the Issuer, (x) in the case of
HICA, the Fourth Endorsement to Alternative Dental Educational Assistance Loan
Surety Bond Numbers 1994-A, 1994-B, 1995-A and 1996-A dated as of August 28,
2000 and executed by HICA, relative to such Surety Bonds which were assigned by
KBUSA to the Eligible Lender Trustee on behalf of the Issuer, (xi) in the case
of ECMC, the Holder Agreement, dated as of April 16, 2000, between ECMC and the
Eligible Lender Trustee on behalf of the Issuer, (xii) in the case of GLHESC,
the Student Loan Guaranty, dated as of April 26, 2000, between GLHESC and the
Eligible Lender Trustee on behalf of the Issuer, and (xiii) in the case of TSAC,
the Memorandum of Understanding, dated as of September 14, 2001, between TSAC
and the Eligible Lender Trustee on behalf of the Issuer.
"GUARANTEE FEE ADVANCE" means a loan made by KBUSA to a borrower of a
Financed Private Loan, at the borrower's option, at the time such borrower
commences repayment of such Financed Private Loan to finance the cost of the fee
imposed with respect to such loan at such time.
"GUARANTEE PAYMENT" means any payment made by a Guarantor pursuant to
a Guarantee Agreement in respect of a Financed Student Loan. "GUARANTORS" means,
collectively, ASA, CSAC, CSLF, ECMC, GLHESC, MHEAA, NSLP, NYHESC, PHEAA, TSAC,
USAF, XXXX and HICA.
"HICA" means HEMAR Insurance Corporation of America, a South Dakota
corporation.
"HICA TRIGGER EVENT" means, on any Distribution Date, when the
cumulative Realized Losses on any of the Guaranteed Private Loans that are
guaranteed by HICA exceeds 17% of the Group II Initial Financed Student Loan
Pool Balance consisting of all Guaranteed Private Loans that are guaranteed by
HICA; provided, however, that a HICA Trigger Event shall not have occurred if
HICA is continuing to pay claims with respect to all Guaranteed Private Loans
guaranteed by HICA.
"HIGHER EDUCATION ACT" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations thereunder.
"INDENTURE" means the Indenture dated as of September 1, 2001, between
the Issuer and the Indenture Trustee.
"INDENTURE TRUSTEE" means The Chase Manhattan Bank, a New York banking
corporation, not in its individual capacity but solely as Indenture Trustee
under the Indenture.
"INDENTURE TRUST ESTATE" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders (including
all property and interests granted to the Indenture Trustee), including all
proceeds thereof.
"INDEPENDENT" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Depositor, KBUSA and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the
Depositor, KBUSA or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Depositor, KBUSA or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"INDEX MATURITY" shall have the meaning set forth in the definition of
"Three-Month LIBOR".
"INITIAL FINANCED STUDENT LOANS" means the collective reference to the
Group I and Group II Initial Financed Student Loans.
"INITIAL FINANCED STUDENT LOAN POOL BALANCE" means, the collective
reference to the Group I Initial Financed Student Loan Pool Balance and the
Group II Initial Financed Student Loan Pool Balance.
"INITIAL POOL STUDENT LOANS" means the collective reference to the
Group I and Group II Initial Pool Student Loans.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing; or (c) in the case of the
Securities Insurer, a court of competent jurisdiction, the New York Department
of Insurance or other competent regulatory authority shall have entered a final
and nonappealable order, judgment or decree (i) appointing a custodian, trustee,
agent or receiver of the Securities Insurer or (ii) the taking of possession of
all or any material portion of the property of the Securities Insurer.
"INSURANCE AGREEMENT" means the Insurance Agreement, dated as of
September 1, 2001, among KBUSA, the Master Servicer, the Administrator, the
Depositor, the Issuer, the Eligible Lender Trustee, the Indenture Trustee and
the Securities Insurer.
"INSURED PAYMENT" means, with respect to any Distribution Date, the
sum of the Deficiency Amount and any Preference Amount.
"INSURER PREMIUM" means the premium due to the Securities Insurer on
each Distribution Date, which amount shall be equal to the product of the
Insurer Premium Rate and the Outstanding Amount of the Group II Notes
immediately prior to such Distribution Date.
"INSURER PREMIUM RATE" means the "Premium Percentage" as defined in
the Insurance Agreement.
"INTEREST AND EXPENSE DRAW" means any withdrawals from the Group I or
Group II Reserve Account, as applicable, pursuant to Sections 5.06(b)(i) through
(b)(v) of the Sale and Servicing Agreement.
"INTEREST COLLECTIONS" shall have the meaning specified in Section
5.03 of the Sale and Servicing Agreement.
"INTEREST PERIOD" means, with respect to a Distribution Date, the
period from and including the Closing Date or the most recent Distribution Date
on which interest on the Notes has been distributed to but excluding the current
Distribution Date. In the case of the Notes and the initial Interest Period,
interest will accrue for the period from the Closing Date to but excluding
December 27, 2001 (computed on the basis of the actual number of days elapsed in
a year of 360 days) based on Three Month LIBOR as determined on the initial
LIBOR Determination Date.
"INTEREST RATE SWAPS" means the Group I Interest Rate Swap and the
Group II Interest Rate Swap.
"INTEREST SUBSIDY PAYMENTS" means, with respect to the Group I Student
Loans, payments, designated as such, consisting of interest subsidies by the
Department in respect of the Financed Federal Loans to the Eligible Lender
Trustee on behalf of the Trust in accordance with the Higher Education Act.
"INVESTMENT EARNINGS" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the applicable subaccount of
the Collection Account on or prior to such Distribution Date pursuant to Section
5.01(b) of the Sale and Servicing Agreement.
"ISSUER" means KeyCorp Student Loan Trust 2001-A until a successor
replaces it and, thereafter, means the successor.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"KBUSA" means Key Bank USA, National Association, and its successors
in interest.
"KBUSA STUDENT LOANS" means those Financed Student Loans transferred
to the Depositor, from time to time, pursuant to the KBUSA Student Loan Transfer
Agreement, as set forth on Schedules A and B thereto.
"KBUSA STUDENT LOAN TRANSFER AGREEMENT" means the agreement, dated as
of September 1, 2001, among KBUSA, as seller, the Depositor, as purchaser, and
the Depositor Eligible Lender Trustee, whereunder the KBUSA Student Loans are
sold to the Depositor.
"LAI" means Law Access, Inc., a non-stock corporation organized under
the laws of the State of Delaware, and the successor in interest to LSAS.
"LAW LOAN" means a Law School Loan made by KBUSA to an eligible
borrower pursuant to the Programs.
"LIBOR DETERMINATION DATE" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of each Interest Period and (y) with respect to the initial
Interest Period, the Closing Date.
"LIBOR INDEXED SECURITIES" means each Class of Notes.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any, which
attach to the respective Financed Student Loan by operation of law as a result
of any act or omission by the related Obligor.
"LIQUIDATED STUDENT LOAN" means any defaulted Group I or Group II
Student Loan, as applicable, liquidated by the Master Servicer (or any
Sub-Servicer acting on its behalf) or which the Master Servicer (or any
Sub-Servicer acting on its behalf) has, after using all reasonable efforts to
realize upon such Group I or Group II Student Loan, as the case may be,
determined to charge off.
"LIQUIDATION PROCEEDS" means, with respect to any Liquidated Student
Loan, the moneys collected in respect thereof from whatever source, other than
Recoveries or Guarantee Payments received, net of the sum of any amounts
expended by the Master Servicer (or any Sub-Servicer acting on its behalf) in
connection with such liquidation and any amounts required by law to be remitted
to the borrower on such Liquidated Student Loan.
"LSAS" means the Law School Admission Services, Inc.
"MASTER NOTE" means a Master Promissory Note in the form mandated by
Section 432(m)(1)(D) of the Higher Education Act, as added by Pub. L.
105-244,ss. 427, 112 Stat. 1702 (1998), 20 X.X.X.xx. 1082(m)(1)(D).
"MASTER SERVICER" means Key Bank USA, National Association, a national
banking association, and its successors in interest.
"MASTER SERVICER DEFAULT" means an event specified in Section 8.01(a)
of the Sale and Servicing Agreement.
"MASTER SERVICING FEE" has the meaning specified in the Servicing Fee
Schedule attached to the Sale and Servicing Agreement as Schedule E.
"MAXIMUM XXXX PAYMENTS AMOUNT" means an amount equal to 19% of the
Group II Initial Financed Student Loan Pool Balance as of the Cutoff Date.
"MHEAA" means the Michigan Higher Education Assistance Agency, an
agency of the State of Michigan.
"MINIMUM ACCEPTABLE PUT OPTION EXERCISE PRICE" means, with respect to
the Group I or Group II Put Option, as the case may be, the aggregate
outstanding principal balance of the Group I or Group II Notes as of the
September 2011 Distribution Date (plus accrued and unpaid interest thereon
payable on such Distribution Date including any related Noteholders' Interest
Index Carryover), respectively, plus any amounts then owed to the Swap
Counterparty, the Cap Provider or the Securities Insurer, with respect to the
Group I or Group II Notes, respectively.
"MINIMUM PURCHASE AMOUNT" means, with respect to the Group I and Group
II Student Loans, as the case may be, the greatest of (i) the related Auction
Purchase Amount, (ii) the fair market value of the Group I or Group II Student
Loans, as applicable, as of the end of the Collection Period immediately
preceding such Distribution Date, and (iii) the sum of (a) the aggregate unpaid
principal amount of the Group I or Group II Notes, as applicable, plus, accrued
and unpaid interest thereon on the related Distribution Date, (b) any amounts to
be paid pursuant to Section 5.04(b)(x) FIRST and SECOND of the Indenture with
respect to the Group I Notes or Section 5.04(b)(y) FIRST, SECOND and THIRD with
respect to Group II Notes, (c) with respect to the Group II Student Loans only,
all amounts due and owing to the Securities Insurer under the Insurance
Agreement and accrued interest thereon, (d) any unpaid Group I or Group II
Noteholders' Interest Index Carryover, as applicable, (e) all amounts owed by
the Trust to the Swap Counterparty under the Group I or Group II Interest Rate
Swap, as applicable (including any related and unreimbursed Termination
Payments), and (f) all amounts owed by the Trust to the Cap Provider under the
Group I or Group II Cap Agreement, as applicable for (x) unreimbursed Class
I-A-1 Cap Payments, Class I-A-2 Cap Payments and Class I-B Cap Payments with
respect to the Group I Cap Agreement, or (y) unreimbursed Class II-A-1 Cap
Payments and Class II-A-2 Cap Payments with respect to the Group II Cap
Agreement.
"MONTHLY PERIOD" means each calendar month in a Collection Period
commencing with the calendar month of September 2001.
"MONTHLY SERVICING PAYMENT DATE" means the twenty-fifth day of each
calendar month, or, if such day is not a Business Day, the immediately following
Business Day, commencing on October 27, 2001.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MPN HOLDER" means the holder of an original Master Note.
"MPN LOAN" means a loan originated pursuant to the Federal Family
Education Loan Program and the Higher Education Act and evidenced by a Master
Note.
"MPN LOAN HOLDER" means any holder of an MPN Loan as shown on the
records of the MPN Holder.
"NET PAYMENT" as defined in Section 5.04(c) of the Sale and Servicing
Agreement.
"NET RECEIPT" as defined in Section 5.04(c) of the Sale and Servicing
Agreement.
"NET TRUST SWAP PAYMENT" means, with respect to each of the Group I
and Group II Interest Rate Swaps (to be calculated separately) and each
Distribution Date, the amount the Trust will owe the Swap Counterparty under the
Group I or Group II Interest Rate Swap, as applicable (without regard to any
related Net Trust Swap Payment Carryover Shortfalls or related Termination
Payments), equal to the sum of the following amounts for each of the Monthly
Periods in the related Collection Period, beginning with the Monthly Period
commencing September 1, 2001:
the product of:
(1) (X) with respect to the Group I Interest Rate Swap, the Commercial
Paper Rate as determined as of the first day of the related Monthly Period,
or (Y) with respect to the Group II Interest Rate Swap, the Prime Rate as
determined as of the first day of the related Monthly Period;
(2) (X) with respect to the Group I Interest Rate Swap, the aggregate
principal balance of Commercial Paper Rate Loans as determined as of the
first day of the related Monthly Period; or (Y) with respect to the Group
II Interest Rate Swap, the aggregate principal balance of the Prime Rate
Loans as determined as of the first day of the related Monthly Period; and
(3) a fraction, the numerator of which is the actual number of days in
the related Monthly Period and the denominator of which is 360.
"NET TRUST SWAP PAYMENT CARRYOVER SHORTFALL" means, with respect to
each of the Group I and Group II Interest Rate Swaps (to be calculated
separately) and any Distribution Date with respect to which there shall be an
amount owed by the Trust to the Swap Counterparty under the Group I or Group II
Interest Rate Swap, as applicable, the excess of (i) the related Trust Swap
Payment Amount with respect to the Group I or Group II Interest Rate Swap, as
the case may be, on the preceding Distribution Date over (ii) the amount
actually paid to the Swap Counterparty (with respect to the Group I or Group II
Interest Rate Swap, as the case may be) on such preceding Distribution Date,
plus interest on such excess from such preceding Distribution Date to the
current Distribution Date at the rate of Three Month LIBOR for the related
Interest Period.
"NET TRUST SWAP RECEIPT" means, with respect to each of the Group I
and Group II Interest Rate Swaps (to be calculated separately) and each
Distribution Date, the amount the Swap Counterparty will owe the Trust under the
Group I or Group II Interest Rate Swap, as applicable (without regard to any
related Net Trust Swap Receipt Carryover Shortfalls or related Termination
Payments), equal to the sum of the following amounts for each of the monthly
periods in the related Collection Period, beginning with the monthly period
commencing September 1, 2001:
the product of:
(1) (X) with respect to the Group I Interest Rate Swap, Three-Month
LIBOR less 0.15%, or (Y) with respect to the Group II Interest Rate Swap,
Three-Month LIBOR plus 2.60%, in each instance using Three-Month LIBOR
calculated in the same manner and on such dates as such index is calculated
for the LIBOR Indexed Securities for the related Interest Period;
(2) (X) with respect to the Group I Interest Rate Swap, the principal
balance of the Commercial Paper Rate Loans as determined as of the first of
the related Monthly Period, and (Y) with respect to the Group II Interest
Rate Swap, the principal balance of the Prime Rate Loans as determined as
of the first of the related Monthly Period; and
(3) a fraction, the numerator of which is the actual number of days in
the related Monthly Period and the denominator of which is 360.
"NET TRUST SWAP RECEIPT CARRYOVER SHORTFALL" means, with respect to
each of the Group I and Group II Interest Rate Swaps (to be calculated
separately) and any Distribution Date with respect to which there shall be an
amount owed by the Swap Counterparty to the Trust under the Group I or Group II
Interest Rate Swap, as applicable, the excess of (i) the related Trust Swap
Receipt Amount on the preceding Distribution Date over (ii) the amount actually
paid by the Swap Counterparty to the Trust with respect to the Group I or Group
II Interest Rate Swap, as the case may be, on such preceding Distribution Date,
plus interest on such excess from such preceding Distribution Date to the
current Distribution Date at the rate of Three Month LIBOR for the related
Interest Period.
"91-DAY TREASURY BILLS" means direct obligations of the United States
with a maturity of thirteen weeks.
"NON-GUARANTEED GRADUATE PRIVATE LOANS" means the Financed
Unguaranteed Private Loans that have been made to graduate students.
"NON-GUARANTEED PRIVATE GRADUATE LOAN TRIGGER EVENT" means, on any
Distribution Date, when the cumulative Realized Losses on the Non-Guaranteed
Graduate Private Loans exceeds 17% of the Group II Initial Financed Student Loan
Pool Balance consisting of all Non-Guaranteed Graduate Private Loans.
"NON-GUARANTEED PRIVATE UNDERGRADUATE LOAN TRIGGER EVENT" means, on
any Distribution Date, when cumulative Realized Losses net of subsequent
Recoveries with respect to the Non-Guaranteed Undergraduate Private Loans
exceeds 17% of the Group II Initial Financed Student Loan Pool Balance with
respect to all Non-Guaranteed Undergraduate Private Loans.
"NON-GUARANTEED UNDERGRADUATE PRIVATE LOANS" means the Financed
Unguaranteed Private Loans that have been made to undergraduate students.
"NOTE DEPOSITORY AGREEMENT" means the agreement dated as of the
Closing Date relating to the Notes, among the Issuer, the Indenture Trustee, the
Administrator and The Depository Trust Company, as the initial Clearing Agency.
"NOTE INTEREST RATE" means, with respect to any Interest Period, (w)
in the case of any Class of Notes, the interest rate per annum equal to the
lesser of (i) the sum of (x) Three-Month LIBOR plus (y) the Applicable Note
Margin and (ii) the Student Loan Rate for such Interest Period. The interest
rate per annum for each Class of Notes will be computed on the basis of the
actual number of days elapsed in the related Interest Period divided by 360.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in Section 2.04 of the Indenture.
"NOTE UNDERWRITING AGREEMENT" means the Note Underwriting Agreement
dated as of September 6, 2001 among KBUSA, the Depositor and Deutsche Banc Alex.
Xxxxx Inc., as Representative of the several Underwriters named therein.
"NOTEHOLDER" means the Person in whose name a Note is registered in
the Note Register.
"NOTEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date and the Group I and the Group II Notes, as the case may be,
the sum of the aggregate related Noteholders' Interest Distribution Amount with
respect to each Class of Group I or Group II Notes, as applicable, and the
related Noteholders' Principal Distribution Amount with respect the Group I or
Group II Notes, as applicable, for such Distribution Date.
"NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date and the Group I and the Group II Notes, as the case may be,
the excess of (i) the sum of the related Noteholders' Interest Distribution
Amount with respect to each Class of Group I or Group II Notes, as applicable,
on the preceding Distribution Date over (ii) the amount of interest actually
distributed to the holders of the Group I or Group II Notes, as the case may be,
on such preceding Distribution Date, plus interest on the amount of such excess
interest due to the holders of the Group I or Group II Notes, as applicable, to
the extent permitted by law, at (1) the weighted average of the applicable Note
Interest Rates, in the case of the Class A Notes of each group of Notes, and (2)
the Note Interest Rate for the Class I-B Notes, in the case of the Class I-B
Notes, in each case from such preceding Distribution Date to the current
Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date and any Class of Notes, the sum of (i) the aggregate amount of
interest accrued at the applicable Note Interest Rate for the related Interest
Period on the outstanding principal balance of such Class of Notes on the
immediately preceding Distribution Date after giving effect to all principal
distributions to such Noteholders of such Class on such date (or, in the case of
the first Distribution Date, on the Closing Date) and (ii) the Noteholders'
Interest Carryover Shortfall for such Class and such Distribution Date;
provided, that the Noteholders' Interest Distribution Amount will not include
any Noteholders' Interest Index Carryover for such Class.
"NOTEHOLDERS' INTEREST INDEX CARRYOVER" means, with respect to any
Distribution Date and any Class of Notes as to which the Note Interest Rate for
such Class of Notes for such Distribution Date is based on the Student Loan
Rate, the amount equal to the excess, if any, of (a) the amount of interest on
such Class of Notes that would have accrued in respect of the related Interest
Period had interest been calculated based on Three-Month LIBOR, plus the
Applicable Note Margin, over (b) the amount of interest on such Class of Notes
actually accrued in respect of such Interest Period based on the Student Loan
Rate, together with the unpaid portion of any such excess from prior
Distribution Dates (and interest accrued thereon, to the extent permitted by
law, at the applicable rate calculated based on Three-Month LIBOR, plus the
Applicable Note Margin); PROVIDED, HOWEVER, that on the Final Maturity Date for
such Class of Notes, the Noteholders' Interest Index Carryover for such Class of
Notes will be equal to the lesser of (i) the Noteholders' Interest Index
Carryover for such Class of Notes on such date determined as described above and
(ii) the amount of funds, if any, required and available to be distributed to
the holders for such Class of Notes on such date pursuant to the Sale and
Servicing Agreement.
"NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to
the Group I or Group II Notes, as the case may be, and any Distribution Date,
the Group I Principal Distribution Amount with respect to the Group I Notes and
the Group II Principal Distribution Amount with respect to the Group II Notes,
as applicable, on such Distribution Date; provided, however, that the
Noteholders' Principal Distribution Amount for the Group I or Group II Notes, as
applicable, will not exceed the outstanding principal balance of the Group I or
Group II Notes, respectively. In addition, (a) on the Final Maturity Date for
each related Class of Notes, the principal required to be distributed to such
Class of Notes will include the amount required to reduce the outstanding
principal balance of such Class of Notes to zero, and (b) on the related
Distribution Date following either an exercise of the Group I Put Option or the
Group II Put Option, as applicable, or, upon a default by the Put Option
Provider, a sale of the related Group I or Group II Student Loans, as
applicable, in each case pursuant to Section 9.01 of the Sale and Servicing
Agreement, the principal required to be distributed to the holders of the Group
I or Group II Notes, as applicable, will include the amount required to reduce
the outstanding principal balance of all outstanding Group I or Group II Notes,
as applicable to zero.
"NOTES" means the Group I Notes and the Group II Notes.
"NSLP" means the Nebraska Student Loan Program, a Nebraska
corporation.
"NYHESC" means the New York State Higher Education Services
Corporation, an educational corporation created by an act of the Legislature of
the State of New York.
"OBLIGOR" on a Financed Student Loan means the borrower or
co-borrowers of such Financed Student Loan and any other Person who owes
payments in respect of such Financed Student Loan, including the Guarantor
thereof and, with respect to any Interest Subsidy Payment or Special Allowance
Payment, if any, thereon, the Department.
"OFFICERS' CERTIFICATE" means (i) in the case of the Issuer, a
certificate signed by any two Authorized Officers of the Eligible Lender
Trustee, under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 11.01 of the Indenture, and delivered to the
Indenture Trustee, (ii) in the case of the Depositor, KBUSA, QSPE, or the
Administrator, a certificate signed by any two Authorized Officers of the
Depositor, the applicable Seller, the Put Option Provider or the Administrator,
as appropriate, (iii) in the case of the Master Servicer, a certificate signed
by any two Authorized Officers of the Master Servicer and (iv) in the case of
any Sub-Servicer, a certificate signed by any two Authorized Officers of such
Sub-Servicer.
"OFFICIAL MPN COPY" means, with respect to each Transferred MPN Loan,
the copy of the Master Note evidencing such Transferred MPN Loans and marked as
provided in Section 2.06(A) of the Sale and Servicing Agreement.
"OPINION OF COUNSEL" means (i) with respect to the Issuer, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Indenture, be employees of or counsel to the Issuer and who shall be
acceptable to the Indenture Trustee and (provided that no Securities Insurer
Default has occurred and is continuing) the Securities Insurer, and which
opinion or opinions shall be addressed to the Indenture Trustee as Indenture
Trustee and (provided that no Securities Insurer Default has occurred and is
continuing) the Securities Insurer, shall comply with any applicable
requirements of Section 11.01 of the Indenture, and shall be in form and
substance satisfactory to the Indenture Trustee and (provided that no Securities
Insurer Default has occurred and is continuing) the Securities Insurer, (ii)
with respect to the Depositor, KBUSA, the Administrator or the Master Servicer,
one or more written opinions of counsel who may be an employee of or counsel to
KBUSA, the Administrator or the Master Servicer, which counsel shall be
acceptable to the Indenture Trustee, the Eligible Lender Trustee or the Rating
Agencies, as applicable, and (provided that no Securities Insurer Default has
occurred and is continuing) the Securities Insurer and (iii) with respect to the
a Sub-Servicer, one or more written opinions of counsel who may be an employee
of or counsel to Sub-Servicer, which counsel shall be acceptable to the Master
Servicer and the Securities Insurer.
"OTHER STUDENT LOANS" means the Serial Loans (including Consolidation
Loans), Guarantee Fees Advances and the funding of accrued interest to be
capitalized made by KBUSA to an eligible borrower who has one or more existing
loans under the Programs that are Financed Student Loans and are transferred or
to be transferred to the Depositor pursuant to the applicable Student Loan
Transfer Agreement and the related Subsequent Transfer Agreement, and then by
the Depositor to Eligible Lender Trustee on behalf of the Issuer during the
Funding Period, pursuant to Section 2.02 of the Sale and Servicing Agreement,
each of which shall be identified on Schedule A to the related Subsequent
Transfer Agreement (which may be in the form of microfiche or computer tape) and
each such Schedule A shall also be deemed to be a supplement to part II of
Schedule B to each of the related Student Loan Transfer Agreement and the Sale
and Servicing Agreement. All Other Student Loans that are Financed Federal Loans
will become Group I Student Loans, and all Other Student Loans that are Financed
Private Loans will become Group II Student Loans.
"OUTSTANDING" means, as of the date of determination, all Group I
and/or Group II Notes, as applicable, theretofore authenticated and delivered
under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Noteholders thereof (PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
PROVIDED that in determining whether the Group I and/or Noteholders, as
applicable, of the requisite Outstanding Amount of the Notes have given any
request, demand, authorization, direction, notice, consent or waiver hereunder
or under any other Basic Document, Notes owned by the Issuer, any other obligor
upon the Notes, KBUSA, the Depositor, the Administrator, the Swap Counterparty,
the Cap Provider, the Put Option Provider, the Master Servicer, any Sub-Servicer
or any Affiliate of any of the foregoing Persons shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Indenture Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible Officer of
the Indenture Trustee either actually knows to be so owned or has received
written notice thereof shall be so disregarded. Notes so owned that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Indenture Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other obligor
upon the Notes, KBUSA, the Depositor, the Administrator, the Swap Counterparty,
the Cap Provider, the Put Option Provider, the Master Servicer, any Sub-Servicer
or any Affiliate of any of the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Group
I and/or Group II Notes, as applicable, Outstanding at the date of
determination.
"PAYING AGENT" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of the Indenture and is authorized by the Issuer to make the payments to
and distributions from the Collection Account and payments of principal of and
interest and any other amounts owing on the Notes on behalf of the Issuer.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PHEAA" means the Pennsylvania Higher Education Assistance Agency, an
agency of the Commonwealth of Pennsylvania.
"PHEAA SUB-SERVICING AGREEMENTS" means the collective reference to the
two certain Subservicing Agreements (one with respect to the Group I Student
Loans and the other with respect to the Group II Student Loans), each dated as
of September 1, 2001, and each between PHEAA and the Master Servicer.
"PHEAA TRUST RECEIPT" means the two Trust Receipts, each dated
September 14, 2001, from PHEAA acknowledging the receipt and possession of the
Financed Student Loan Files relating to the Financed Student Loans being
sub-serviced by PHEAA.
"PHYSICAL PROPERTY" has the meaning assigned to such term in the
definition of "Delivery" above.
"POOL BALANCE" means the collective reference to the Group I Pool
Balance and the Group II Pool Balance.
"POOL FACTOR" means as of the close of business on a Distribution Date
and for each Class of Notes, a seven-digit decimal figure equal to the
outstanding principal balance of such Class of Notes divided by the original
outstanding principal balance of such Class of Notes. The Pool Factor for each
Class of Notes will be 1.0000000 as of the Closing Date; thereafter, the Pool
Factor for each Class of Notes will decrease to reflect reductions in the
outstanding principal balance of such Classes of Notes.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture and in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PREFERENCE AMOUNT" shall having the meaning given to such term in the
Group II Notes Guaranty Insurance Policy.
"PRE-FUNDING ACCOUNTS" means the Group I Pre-Funding Account and the
Group II Pre-Funding Account.
"PRIME RATE" means the rate published as the Prime Rate in The Wall
Street Journal in its Money Rates section, or if more than one Prime Rate is
published by The Wall Street Journal, the highest of such rates.
"PRIME RATE LOANS" means the Group II Student Loans, with an aggregate
unpaid principal balance as of the Statistical Cut-off Date of $71,185,523, that
bear interest at the Prime Rate. Interest on each Prime Rate Loan is calculated
for each calendar month using the Prime Rate for the last business day of the
prior calendar month.
"PRIVATE CONSOLIDATION GUARANTEE FEE" means, with respect to each
Private Consolidation Loan that is guaranteed, a fee charged to the borrower to
discharge the underlying Financed Private Loans and included in the original
principal amount of such Private Consolidation Loan.
"PRIVATE CONSOLIDATION LOAN" means a loan made by KBUSA to an eligible
borrower that represents the refinancing of Financed Private Loans of such
borrower in accordance with the terms of the Programs.
"PRIVATE GRADUATE LOAN TRIGGER EVENT" means, on any Distribution Date,
when: (1) a XXXX Trigger Event, (2) a HICA Trigger Event, or (3) a
Non-Guaranteed Private Graduate Loan Trigger Event shall have occurred.
"PRIVATE GUARANTORS" means, collectively, HICA and XXXX.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PROGRAMS" means the Graduate Loan Programs and Undergraduate Loan
Programs, as in effect from time to time.
"PURCHASE AMOUNT" means, as of the close of business on the last day
of a Collection Period, 102.5% of the amount required to prepay in full the
respective Group I Student Loan, and 100% of the amount required to prepay in
full the respective Group II Student Loan, in each case under the terms thereof
including all accrued interest thereon expected to be capitalized upon entry
into repayment and any lost Interest Subsidy Payments and Special Allowance
Payments (with respect to the Group I Student Loans only) with respect thereto.
"PURCHASE PRICE" means the purchase price of each Additional Student
Loan in an amount equal to 101%, with respect to each of the Group I Student
Loans, or 100%, with respect to each of the Group II Student Loans,
respectively, of the aggregate principal balance thereof as of its related
Subsequent Cutoff Date. For purposes of the foregoing calculations, the
aggregate principal balance of each Financed Student Loan includes accrued
interest thereon from the date of origination to the related Subsequent Cutoff
Date, in each case expected to be capitalized upon entry into repayment and any
lost Interest Subsidy Payments and Special Allowance Payments (with respect to
Group One Student Loans only) with respect thereto.
"PURCHASED STUDENT LOAN" means a Financed Student Loan purchased as of
the close of business on the last day of a Collection Period by the Master
Servicer (or any Sub-Servicer acting on its behalf) pursuant to Section 4.06 of
the Sale and Servicing Agreement or repurchased by the Depositor (or KBUSA
acting on its behalf) with respect to the KBUSA Student Loans, or purchased by
the Master Servicer with respect to the QSPE Student Loans, in each case
pursuant to Section 3.02 of the Sale and Servicing Agreement.
"PUT OPTION AGREEMENTS" means the Group I Put Option Agreement and the
Group II Put Option Agreement.
"PUT OPTIONS" means the Group I Put Option and the Group II Put
Option.
"PUT OPTION EXERCISE DATE" means, with respect to the Group I Put
Option and the Group II Put Option, the Distribution Date in September 2011.
"PUT OPTION EXERCISE PRICE" means, with respect to the Group I Put
Option or the Group II Put Option, as the case may be, an amount equal to the
Fair Market Value of the Group I or Group II Student Loans, as applicable, on
the Group I or Group II Put Option Exercise Date, as applicable, plus accrued
interest thereon.
"PUT OPTION PROVIDER" means KeyBank National Association, and its
successors in interest.
"QSPE" means Key Consumer QSPE LLC, and its successors in interest.
"QSPE STUDENT LOANS" means those Financed Student Loans transferred to
the Depositor, from time to time, pursuant to the QSPE Student Loan Transfer
Agreement, as set forth on the applicable Schedule thereto.
"QSPE STUDENT LOAN TRANSFER AGREEMENT" means the agreement, dated as
of September 1, 2001, among QSPE, as seller, the Depositor, as purchaser, Bank
One, National Association, as eligible lender trustee for QSPE and the Depositor
Eligible Lender Trustee, whereunder the QSPE Student Loans are sold to the
Depositor.
"RATING AGENCY" means each of Xxxxx'x, S&P and Fitch. If any such
organization or successor is no longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable Person
designated by the Depositor and, (provided that no Securities Insurer Default
has occurred and is continuing) with respect to the Group II Notes only,
approved by the Securities Insurer, notice of which designation shall be given
to the Indenture Trustee, the Eligible Lender Trustee, the Master Servicer and
each Sub-Servicer.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified the Depositor, KBUSA, the Master
Servicer, the Eligible Lender Trustee, the Securities Insurer, the Swap
Counterparty and the Indenture Trustee in writing that such action will in and
of itself result in a reduction or withdrawal of the then current rating of the
Group I and/or Group II Notes, as applicable (and with respect to the Group II
Notes only, without regard to the Group II Notes Guaranty Insurance Policy).
"RATING AGENCY DOWNGRADE" means, with respect to the Securities
Insurer, that the ratings of the Securities Insurer have been withdrawn,
suspended or reduced below A3, A- and A- by Xxxxx'x, Fitch and S&P,
respectively.
"REALIZED LOSS AMOUNT" means with respect to the Group I Student Loans
and the Group II Student Loans, respectively, (1) with respect to any
Distribution Date prior to the Group I or Group II Parity Date, as applicable,
an amount equal to the positive difference of any of (x) the sum of the Group I
or Group II Pool Balance, as applicable, and amounts on deposit in the Group I
or Group II Pre-Funding Account, as applicable, as of the last day of the second
preceding Collection Period (or, in the case of the first Distribution Date, as
of the Cutoff Date), minus the sum of the Group I or Group II Pool Balance,
respectively, and amounts on deposit in the Group I or Group II Pre-Funding
Account, respectively, as of the last day of the related Collection Period,
minus (y) the amount of Group I or Group II Available Funds, as the case may be,
remaining to be distributed as the related Noteholders' Principal Distribution
Amount for the Group I or Group II Notes, respectively, on such Distribution
Date pursuant to Sections 5.05(c)(X)(6) or 5.05(c)(Y)(8), respectively, of the
Sale and Servicing Agreement and (2) with respect to any Distribution Date on
and after the Group I or Group II Parity Date, respectively, an amount equal to
(A) the related Noteholders' Principal Distribution Amount for the Group I or
Group II Notes, respectively, for such Distribution Date minus (B) the amount of
Group I or Group II Available Funds, respectively, remaining to be distributed
as the related Noteholders' Principal Distribution Amount for the Group I or
Group II Notes, respectively, on such Distribution Date pursuant to Sections
5.05(c)(X)(6) or 5.05(c)(Y)(8), respectively, of the Sale and Servicing
Agreement.
"REALIZED LOSS DRAW" means with respect to any Distribution Date, the
amount of any withdrawal from the Group I or Group II Reserve Account, as the
case may be, on such Distribution Date pursuant to Section 5.06(b)(vi) of the
Sale and Servicing Agreement.
"REALIZED LOSSES" means the excess of the aggregate principal balance
of any Liquidated Student Loan plus accrued but unpaid interest thereon over the
related Liquidation Proceeds to the extent allocable to principal.
"RECORD DATE" means, with respect to a Distribution Date or Redemption
Date, the close of business on the twenty-fourth day of the calendar month in
which such Distribution Date or Redemption Date occurs.
"RECOVERIES" means, with respect to any Liquidated Student Loan,
moneys collected in respect thereof, from whatever source, during any Collection
Period following the Collection Period in which such Group I or Group II Student
Loan, as applicable, became a Liquidated Student Loan, net of the sum of any
amounts expended by the Master Servicer (or any Sub-Servicer acting on its
behalf) for the account of any Obligor and any amounts required by law to be
remitted to the Obligor.
"REDEMPTION DATE" means (a) in the case of a partial redemption of
Group I or Group II Notes, as applicable, pursuant to Section 10.01(a) of the
Indenture, the Distribution Date on which the Funding Period with respect to the
Group I or Group II Notes, respectively, ends (or the Distribution Date on or
immediately following the last day of the Funding Period with respect to the
Group I or Group II Notes, as applicable, if such Funding Period does not end on
a Distribution Date) or (b) in the case of a payment to the Group I or Group II
Noteholders, as the case may be, pursuant to Section 10.01(b) of the Indenture,
the Distribution Date specified by the Administrator or the Issuer pursuant to
Section 10.01(b) of the Indenture.
"REDEMPTION PRICE" means (a) in the case of a redemption of the Group
I or Group II Notes, as applicable, pursuant to Section 10.01(a) of the
Indenture, an amount equal to the unpaid principal amount of the Group I or
Group II Notes, as applicable, plus accrued and unpaid interest thereon at the
applicable Note Interest Rate for each affected Class of Notes, to but excluding
the Redemption Date and the amount of the Group I or Group II Noteholders'
Interest Index Carryover, as applicable, with respect thereto, or (b) in the
case of a payment made to the Group I or Group II Noteholders pursuant to
Section 10.01(b) of the Indenture, the amount to be so paid, but not in excess
of the amount specified in clause (a) above.
"REFERENCE BANK" means a leading bank (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not
controlling, controlled by or under common control with the Administrator and
(iii) having an established place of business in London.
"REMOTE TIME-SHARING SERVICES PROGRAM" means the various services and
programs made available by PHEAA to KBUSA pursuant to the Society RT-SS
Agreement.
"REPRESENTATIVE" means Deutsche Banc Alex. Xxxxx Inc., as
representative of the several Underwriters under the Underwriting Agreement.
"RESERVE ACCOUNTS" means collective reference to the Group I Reserve
Account and the Group II Reserve Account.
"RESPONSIBLE OFFICER" means, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary, or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers,
with direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"S&P" means Standard and Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of September 1, 2001 among the Issuer, the Depositor, the
Administrator, the Eligible Lender Trustee and the Master Servicer.
"SCHEDULES OF FINANCED STUDENT LOANS" means the listing of the
Financed Student Loans set forth in Schedules A and B to the Sale and Servicing
Agreement and to the Indenture (which Schedules may be in the form of microfiche
or computer tape), as amended or supplemented on each Subsequent Transfer Date
to reflect the sale to the Eligible Lender Trustee on behalf of the Trust of the
Additional Student Loans.
"SECURITIES" means the Notes.
"SECURITIES INSURER" means MBIA Insurance Corporation.
"SECURITIES INSURER DEFAULT" means (i) the failure of the Securities
Insurer to make a payment in accordance with the terms of the Group II Notes
Guaranty Insurance Policy, or (ii) if an Insolvency Event with respect to the
Securities Insurer occurs.
"SELLER" means either KBUSA or QSPE, as applicable.
"SENIOR PERCENTAGE" means, with respect to the Group I Notes only, the
percentage equivalent of a fraction, the numerator of which is the aggregate
principal balance of the Group I Senior Notes, and the denominator of which is
the sum of the aggregate principal balance of all the Group I Notes.
"SERIAL LOANS" means additional student loans, including Consolidation
Loans, which are made under the Programs to a borrower who is also a borrower
under at least one Financed Student Loan.
"SERVICER'S REPORT" means any report of the Master Servicer (or any
Sub-Servicer acting at the direction of the Master Servicer) delivered pursuant
to Section 4.08(a) or (b) of the Sale and Servicing Agreement, substantially in
the form acceptable to the Administrator and, with respect to the Group II Notes
(provided that no Securities Insurer Default has occurred and is continuing) the
Securities Insurer.
"SLS LOAN" means a Financed Federal Loan designated as such that is
made under the Federal Supplemental Loans for Students Program pursuant to the
Higher Education Act.
"SOCIETY" means Society National Bank, predecessor in interest to
KBUSA and successor in interest to Ameritrust.
"SOCIETY/PHEAA SERVICING AGREEMENT" means (i) the Servicing Agreement,
dated March 23, 1995, by and between PHEAA and KBUSA, as amended from time to
time and including all servicing schedules and other exhibits, or (ii) after the
expiration of the agreement described in clause (i), the then current service
agreement (including all servicing schedules) between KBUSA and PHEAA pursuant
to which PHEAA services student loans owned by KBUSA or if no such service
agreement exists, the last such service agreement to be in existence, and any
references to specific sections of the Society/PHEAA Servicing Agreement shall
mean the sections of the agreement described in clause (i) of this definition or
the substantially similar provisions of the relevant agreement described in
clause (ii) of this definition
"SOCIETY RT-SS AGREEMENT" means (i) the Remote Time-Sharing Services
Agreement, dated January 28, 1992, by and between PHEAA and Society, as amended
from time to time, relating to certain Financed Student Loans, or (ii) after the
expiration of the agreement described in clause (i), the then current agreement
relating to the provision of remote time-sharing services between PHEAA and
KBUSA, or if no such agreement exists, the last such agreement to be in
existence; and any references to specific sections of the Society RT-SS
Agreement shall mean the sections of the agreement described in clause (i) of
this definition or the substantially similar provisions of the relevant
agreement described in clause (ii) of this definition.
"SPECIAL ALLOWANCE PAYMENTS" means payments, designated as such,
consisting of effective interest subsidies by the Department in respect of the
Financed Federal Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"SPECIFIED COLLATERAL BALANCE" "means, with respect to the Group I
Student Loans or the Group II Student Loans and any Distribution Date, the sum
of (a) the Group I or Group II Pool Balance, respectively, as of the last day of
the related Collection Period plus (b) the Group I or Group II Pre-Funded
Amount, respectively, as of the last day of the related Collection Period for
such Distribution Date; provided, however, in the event that (1) there is a
decision by the Group I or Group II Controlling Noteholders, as the case may be,
to exercise the Group I or Group II Put Option, as applicable, followed by (x)
an inability of the Indenture Trustee to exercise the related Put Option due to
the Minimum Acceptable Put Option Exercise Price being greater than the Put
Option Exercise Price (plus all amounts then on the deposit in the Group I or
Group II Reserve Account, as applicable), or (y) the Put Option Provider
defaults and the Group I or Group II Student Loans, as applicable, are not sold
pursuant to Section 9.01(c) of the Sale and Servicing Agreement with respect to
the Group I or Group II Student Loans, as the case may be, any Distribution Date
occurring on or after the Put Option Exercise Date, or (2) with respect to the
Group II Student Loans only, a Trigger Event has occurred and is continuing, the
Specified Collateral Balance will be zero.
"SPECIFIED RESERVE ACCOUNT BALANCE" means, with respect to any
Distribution Date: (1) with respect to the Group I Reserve Account, an amount
equal to the greater of (x) 0.25% of the aggregate Outstanding Amount of the
Group I Notes on such Distribution Date before giving effect to any distribution
on such Distribution Date, and (y) $500,000; and (2) with respect to the Group
II Reserve Account, an amount equal to the greater of (x) 3.00% of the aggregate
Outstanding Amount of the Group II Notes on such Distribution Date before giving
effect to any distribution on such Distribution Date, and (y) $2,500,000;
provided, however, in each case, in no event will such balance exceed the
Outstanding Amount of the Group I or Group II Notes, as applicable.
"XXXXXXXX LOAN" means a Financed Federal Loan designated as such that
is made under the Federal Xxxxxxxx Loan Program in accordance with the Higher
Education Act.
"STATE" means any one of the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx Xxxxxxx
or the District of Columbia.
"STATISTICAL CUTOFF DATE" means, August 1, 2001, with respect to the
Initial Financed Student Loans.
"STEPDOWN DATE" means, with respect to the Group I Notes only, the
earlier of (i) the first date on which no Group I Senior Notes remain
outstanding or (ii) the fifth anniversary of the Closing Date.
"STUDENT LOAN RATE" means for any Class of Group I or Group II Notes
and for any Interest Period a rate equal to the product of (a) the quotient
obtained by dividing (i) 365 (or 366 in a leap year) by (ii) the actual number
of days elapsed in such Interest Period and (b) the percentage equivalent of a
fraction, (i) the numerator of which is equal to Expected Interest Collections
for the Collection Period relating to such Interest Period, plus any related Net
Trust Swap Receipt actually received by the Trust with respect to the Group I
Interest Rate Swap or the Group II Interest Rate Swap, respectively, and the
related Collection Period, less the sum of the related Master Servicing Fees,
the premiums due to the Securities Insurer (with respect to the Group II Notes
only) and the Administration Fee (allocated to each group of Notes) payable on
the related Distribution Date and any related Master Servicing Fees paid on the
two preceding Monthly Servicing Payment Dates during the related Collection
Period, minus any Net Trust Swap Payment due to the Swap Counterparty with
respect to the Group I Interest Rate Swap or the Group II Interest Rate Swap,
respectively, for the related Collection Period, and (ii) the denominator of
which is the outstanding principal balance of the Group I or Group II Notes,
respectively, as of the first day of such Interest Period.
"STUDENT LOAN RATE CALCULATION TRIGGER" will be triggered with respect
to the related Distribution Date if Three-Month LIBOR, as determined on the
related LIBOR Determination Date, exceeds the average of the T-Xxxx Rates, in
effect on the related and the prior two LIBOR Determination Dates, by 100 basis
points or more.
"STUDENT LOAN TRANSFER AGREEMENTS" means the collective reference to
the KBUSA Student Loan Transfer Agreement and the QSPE Student Loan Transfer
Agreement.
"SUBORDINATE NOTE INTEREST TRIGGER" means, with respect to the Group I
Notes only, that on the last day of any Collection Period the outstanding
principal amount of the Group I Senior Notes exceeds the sum of the Group I Pool
Balance, plus the balance of the Group I Pre-Funding Account and the Group I
Reserve Account. A Subordinate Note Interest Trigger will remain in effect for
so long as the Outstanding Amount of the Group I Senior Notes exceeds the sum of
the Group I Pool Balance plus the balance of the Group I Pre-Funding Account and
the Group I Reserve Account.
"SUBORDINATE NOTE PRINCIPAL TRIGGER" means, with respect to the Group
I Subordinate Notes, that either a Subordinate Note Interest Trigger occurs and
is continuing or the Cumulative Default Ratio for the Group I Student Loans
exceeds 25% as of the end of the related Collection Period; provided, however,
if on a subsequent Distribution Date, a Subordinate Note Interest Trigger is no
longer in effect and the Cumulative Default Ratio for the Group I Student Loans
does not exceed 25%, then a Subordinate Note Principal Trigger will no longer be
in effect.
"SUBORDINATE PERCENTAGE" means, with respect to the Group I Notes
only, 100% minus the Senior Percentage of the Group I Notes.
"SUBSEQUENT CUTOFF DATE" means the day specified in the related
Subsequent Transfer Agreement as of which principal and interest accruing with
respect to an Additional Student Loan is to be transferred to the Eligible
Lender Trustee on behalf of the Issuer pursuant to Section 2.02 of the Sale and
Servicing Agreement.
"SUBSEQUENT TRANSFER AGREEMENTS" has the meaning specified in Section
2.02(b) of the Sale and Servicing Agreement.
"SUBSEQUENT TRANSFER DATE" means the fifteenth day (or, if such day is
not a Business Day, the next succeeding Business Day) of any month or any other
date designated by the applicable Seller as a date on which Additional Student
Loans will be conveyed to the Depositor pursuant to the applicable Student Loan
Transfer Agreement, and then from the Depositor to the Eligible Lender Trustee
on behalf of the Trust pursuant to Section 2.02 of the Sale and Servicing
Agreement.
"SUB-SERVICER" initially means each of PHEAA, in its capacity as
sub-servicer of the Financed Student Loans it services on behalf of the Master
Servicer pursuant to the PHEAA Sub-Servicing Agreements, and Great Lakes, as
sub-servicer of the Financed Student Loans it services on behalf of the Master
Servicer pursuant to the Great Lakes Sub-Servicing Agreement, as applicable, and
such other Sub-Servicers as may, from time to time, be appointed by the Master
Servicer as Sub-Servicers in accordance with the provisions of Section 4.13 of
the Sale and Servicing Agreement.
"SUCCESSOR ADMINISTRATOR" has the meaning specified in Section 3.07(e)
of the Indenture.
"SUCCESSOR MASTER SERVICER" has the meaning specified in Section
3.07(e) of the Indenture.
"SWAP COUNTERPARTY" means Key Bank USA, National Association in its
capacity as the swap counterparty under the Interest Rate Swaps, and any
replacement swap counterparty, that satisfies the Rating Agency Condition, with
respect to the Group I Interest Rate Swap, or is acceptable to the Securities
Insurer (provided that no Securities Insurer Default has occurred and is
continuing) with respect to the Group II Interest Rate Swap and appointed in
accordance with the terms of the Group I or Group II Interest Rate Swap, as
applicable.
"T-XXXX RATE" means, the weighted average per annum discount rate
(expressed on a bond equivalent basis and applied on a daily basis) for 91-day
Treasury Bills sold at the most recent 91-day Treasury Xxxx auction (or a
comparable obligation of the United States in the event 91-day Treasury Bills
are discontinued or suspended) prior to such date as reported by the U.S.
Treasury Department. In the event that the results of the auctions of 91-day
Treasury Bills (or comparable obligation) cease to be published or reported as
provided above, or that no such auction is held in a particular week, then the
"T-Xxxx Rate" in effect as a result of the last such publication or report shall
remain in effect until such time, if any, as the results of auctions of 91-day
Treasury shall again be so published or reported or such auction is held, as the
case may be.
"TELERATE PAGE 3750" means the display page so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices) or such
comparable page on a comparable service.
"XXXX" means The Education Resources Institute, Inc., a Massachusetts
non-profit corporation.
"XXXX TRIGGER EVENT" means, on any Distribution Date, when the
cumulative Realized Losses on any of the Guaranteed Private Loans that are
guaranteed by XXXX exceeds 17% of the Group II Initial Financed Student Loan
Pool Balance consisting of all Guaranteed Private Loans that are guaranteed by
XXXX; provided, however, that a XXXX Trigger Event shall not have occurred if
XXXX is continuing to pay claims with respect to all Guaranteed Private Loans
guaranteed by XXXX.
"TERMINATION EVENT" has the meaning specified in each of the Interest
Rate Swaps.
"TERMINATION PAYMENT" has the meaning specified in each of the
Interest Rate Swaps.
"THREE-MONTH LIBOR" means (i) for the first Interest Period 3.14875%,
and (ii) for all other periods the London interbank offered rate for deposits in
U.S. dollars having a maturity of three months commencing on the related LIBOR
Determination Date (the "Index Maturity") which appears on Telerate Page 3750 as
of 11:00 a.m., London time, on such LIBOR Determination Date. If such rate does
not appear on Telerate Page 3750, the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in U.S. dollars to leading European banks
having the Index Maturity and in a principal amount equal to an amount of not
less than U.S. $1,000,000; provided that if the banks selected as aforesaid are
not quoting as mentioned in this sentence, Three-Month LIBOR in effect for the
applicable Interest Period will be Three-Month LIBOR in effect for the previous
Interest Period.
"TIA" means the Trust Indenture Act of 1939, as amended.
"TSAC" means Tennessee Student Assistance Corporation, a Tennessee
corporation.
"TRANSFERRED BALANCE" has the meaning assigned to such term in Section
5.08 of the Sale and Servicing Agreement.
"TRANSFERRED MPN LOANS" means those Financed Student Loans that are
MPN Loans.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"TRIGGER EVENT" means, with respect to the Group II Notes only and on
any Distribution Date, when: (1) a Non-Guaranteed Private Undergraduate Loan
Trigger Event has occurred, or (2) a Private Graduate Loan Trigger Event has
occurred; provided, however, that if all three Ratings Agencies and the
Securities Insurer consent in writing, no Trigger Event shall have occurred with
respect to such Distribution Date.
"TRUST" means the Issuer, established pursuant to the Trust Agreement.
"TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Group I and Group II Reserve Account
Initial Deposits and the Group I and Group II Pre-Funded Amounts and all
proceeds of the foregoing.
"TRUST ACCOUNTS" has the meaning specified in Section 5.01 of the Sale
and Servicing Agreement.
"TRUST AGREEMENT" means the Trust Agreement, dated as of August 20,
2001, as amended and restated by the Amended and Restated Trust Agreement, dated
as of September 1, 2001, each between the Depositor and the Eligible Lender
Trustee.
"TRUST CERTIFICATE" means a Certificate.
"TRUST ESTATE" means all right, title and interest of the Trust (or
the Eligible Lender Trustee on behalf of the Trust) in and to the property and
rights assigned to the Trust pursuant to Article II of the Sale and Servicing
Agreement, all funds on deposit from time to time in the Trust Accounts and all
other property of the Trust from time to time, including any rights of the
Eligible Lender Trustee and the Trust pursuant to the Sale and Servicing
Agreement and the Administration Agreement.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"TRUST RECEIPTS" means the collective reference to the Great Lakes
Trust Receipt and the PHEAA Trust Receipt.
"TRUST SWAP PAYMENT AMOUNT" means, with respect to the Group I and
Group II Interest Rate Swaps and any Distribution Date, the sum of (i) the
related Net Trust Swap Payment for the Group I and Group II Interest Rate Swap,
respectively, for such Distribution Date and (ii) the related Net Trust Swap
Payment Carryover Shortfall for the Group I and Group II Interest Rate Swap,
respectively, for such Distribution Date; PROVIDED, HOWEVER, that any related
Termination Payments (other than the portion thereof consisting of amounts in
clauses (i) and (ii) above) shall not be deemed to be part of the related Trust
Swap Payment Amount.
"TRUST SWAP RECEIPT AMOUNT" means, with respect to the Group I and
Group II Interest Rate Swaps and any Distribution Date, the sum of (i) the
related Net Trust Swap Receipt for the Group I and Group II Interest Rate Swap,
respectively, for such Distribution Date and (ii) the related Net Trust Swap
Receipt Carryover Shortfall for the Group I and Group II Interest Rate Swap,
respectively, for such Distribution Date.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"UNDERGRADUATE LOAN PROGRAMS" means the "Key Alternative Loan
Program," pursuant to which KBUSA made loans to students enrolled in approved or
accredited undergraduate institutions.
"UNDERWRITERS" shall mean Deutsche Banc Alex. Xxxxx Inc. and McDonald
Investments Inc., a wholly-owned subsidiary of KeyCorp.
"UNDERWRITING AGREEMENT" shall mean the Note Underwriting Agreement.
"UNDERWRITER INFORMATION" shall have the meaning given to such term in
Section 2(b) of the Underwriting Agreement.
"USAF" means United Student Aid Fund, Inc., an Indiana corporation.
SCHEDULE A-1
TO THE
SALE AND SERVICING AGREEMENT
Schedule of Group I Initial Financed Student Loans
Delivered to the Indenture Trustee.
SCHEDULE A-2
TO THE
SALE AND SERVICING AGREEMENT
Schedule of Group II Initial Financed Student Loans
Delivered to the Indenture Trustee.
SCHEDULE B-1
TO THE
SALE AND SERVICING AGREEMENT
Schedule of Additional Group I Student Loans
To be included on Schedule A to each related
Subsequent Transfer Agreement
SCHEDULE B-2
TO THE
SALE AND SERVICING AGREEMENT
Schedule of Additional Group II Student Loans
To be included on Schedule A to each related
Subsequent Transfer Agreement
SCHEDULE C
TO THE
SALE AND SERVICING AGREEMENT
Location of Financed Student Loan Files - PHEAA
Documents relating to the Financed Student Loans being sub-serviced by
PHEAA on behalf of the Master Servicer pursuant to the PHEAA Sub-Servicing
Agreements (including original notes) are stored at PHEAA's facility at 0000
Xxxxx 0xx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
Location of Financed Student Loan Files - Great Lakes
Documents relating to the Financed Student Loans being sub-serviced by
Great Lakes on behalf of the Master Servicer pursuant to the Great Lakes
Sub-Servicing Agreement(including original notes) are stored at Great Lakes'
facilities at 0000 Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx 00000, and, on behalf
of Great Lakes, at the offices of Datakeep Inc., 0000 Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxx 00000.
SCHEDULE D
TO THE
SALE AND SERVICING AGREEMENT
[Reserved]
SCHEDULE E
TO THE
SALE AND SERVICING AGREEMENT
1. FEES. The Master Servicing Fee payable to the Master Servicer on
each Monthly Servicing Payment Date in accordance with Sections 4.07 and
5.05(b)(ii) and (c)(ii) of the Sale and Servicing Agreement shall be equal to
0.0416666% (0.50% on an annualized basis) (the "Master Servicing Fee
Percentage") of the Group I and Group II Pool Balance, respectively, as of the
last day of the preceding calendar month (the "Master Servicing Fee").
2. ADJUSTMENTS. If a demonstrable and significant increase occurs in
the costs incurred by the Master Servicer in providing and/or arranging for the
services to be provided under the Sale and Servicing Agreement, whether due to
changes in applicable governmental regulations, guarantor program requirements
or regulations, United States Postal Service postage rates or some other
identifiable cost increasing event, the Depositor, the Eligible Lender Trustee
on behalf of the Trust and the Master Servicer shall negotiate in good faith a
reasonable increase in the Master Servicing Fee Percentage to reflect the
increased costs of the Master Servicer provided that, such increase shall be
approved by the Securities Insurer (provided that no Securities Insurer Default
has occurred and is continuing) and such consent will not be unreasonably
withheld.
EXHIBIT A
TO THE
SALE AND SERVICING AGREEMENT
Form of Noteholders' Statement
pursuant to Section 5.07 of Sale
and Servicing Agreement (capitalized
terms used herein are defined in
Appendix A thereto)
Distribution Date:___________________
(i) Amount of principal being paid or distributed in respect of the Class
I-A-1 Notes:___________ ($_______ per $1,000 original principal amount of Class
I-A-1 Notes)
(ii) Amount of principal being paid or distributed in respect of the Class
II-A-2 Notes:___________ ($_______ per $1,000 original principal amount of Class
II-A-2 Notes)
(iii) Amount of principal being paid or distributed in respect of the Class
I-B Notes: _________ ($________ per $1,000 original principal amount of Class
I-B Notes)
(iv) Amount of principal being paid or distributed in respect of the Class
II-A-1 Notes: _________ ($________ per $1,000 original principal amount of Class
II-A-1 Notes)
(v) Amount of principal being paid or distributed in respect of the Class
II-A-2 Notes: _________ ($________ per $1,000 original principal amount of Class
II-A-2 Notes)
(vi) Amount of interest being paid or distributed in respect of the Class
I-A-1 Notes:___________ ($_______ per $1,000 original principal amount of Class
I-A-1 Notes)
(vii) Amount of interest being paid or distributed in respect of the Class
I-A-2 Notes:___________ ($_______ per $1,000 original principal amount of Class
I-A-2 Notes)
(viii) Amount of interest being paid or distributed in respect of the Class
I-B Notes: ___________ ($____________ per $1,000 original principal amount of
Class I-B Notes)
(ix) Amount of interest being paid or distributed in respect of the Class
II-A-1 Notes: ___________ ($____________ per $1,000 original principal amount of
Class II-A-1 Notes)
(x) Amount of interest being paid or distributed in respect of the Class
II-A-2 Notes: ___________ ($____________ per $1,000 original principal amount of
Class II-A-2 Notes)
(xi) Amount of Noteholders' Interest Index Carryover being paid or
distributed (if any) and amount remaining (if any):
(1) Distributed to Class I-A-1 Noteholders: _______ ($_______ per
$1,000 original principal amount of Class I-A-1 Notes)
(2) Distributed to Class I-A-2 Noteholders: _______ ($_______ per
$1,000 original principal amount of Class I-A-2 Notes)
(3) Distributed to Class I-B Noteholders: _________________
($___________ per $1,000 original principal amount of Class I-B Notes)
(4) Distributed to Class II-A-1 Noteholders: _________________
($___________ per $1,000 original principal amount of Class II-A-1 Notes)
(5) Distributed to Class II-A-2 Noteholders: _________________
($___________ per $1,000 original principal amount of Class II-A-2 Notes)
(6) Balance on Class I-A-1 Notes:__________ ($_______ per $1,000
original principal amount of Class I-A-1 Notes)
(7) Balance on Class I-A-2 Notes:__________ ($_______ per $1,000
original principal amount of Class I-A-2 Notes)
(8) Balance on Class I-B Notes: ______________ ($___________ per
$1,000 original principal amount of Class I-B Notes)
(9) Balance on Class II-A-1 Notes: ______________ ($___________ per
$1,000 original principal amount of Class II-A-1 Notes)
(10) Balance on Class II-A-2 Notes: ______________ ($___________ per
$1,000 original principal amount of Class II-A-2 Notes)
(xii) (X) Payments made under the Group I Cap Agreement on such date:
_______________ ($______________ with respect to the Class I-A-1 Notes,
$___________ with respect to Class I-A-2 Notes, and $_________ with respect to
Class I-B Notes), and (Y) payments made under the Group II Cap Agreement on such
date: $________________ ($_______________ with respect to Class II-A-1 Notes and
$__________ with respect to the Class II-A-2 Notes); and the total outstanding
amount owed to the Cap Provider: $________________ with respect to the Group I
Cap Agreement and $________________ with respect to the Group II Cap Agreement.
(xiii) (X) Group I Pool Balance at the end of the related Collection
Period:________ and (Y) Group II Pool Balance at the end of the related
Collection Period:________.
(xiv) After giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class I-A-1
Notes:____________
(2) Pool Factor for the Class I-A-1 Notes:____________
(b) (1) outstanding principal amount of Class I-A-2
Notes:____________
(2) Pool Factor for the Class I-A-2 Notes:____________
(c) (1) outstanding principal amount of Class I-B
Notes:______________
(2) Pool Factor for the Class I-B Notes:______________
(d) (1) outstanding principal amount of Class II-A-1
Notes:____________
(2) Pool Factor for the Class II-A-1 Notes:____________
(e) (1) outstanding principal amount of Class II-A-2
Notes:____________
(2) Pool Factor for the Class II-A-2 Notes:____________
(xv) Note Interest Rate for the Notes:
(a) In general:
(1) Three-Month LIBOR for the period from the previous
Distribution Date to this Distribution Date was ___% [in the case
of the initial Interest Period Three-Month LIBOR was _____% for
the period from the Closing Date to but excluding December 27,
2001 and]
(2)] the Student Loan Rate was _____%.[1][2]
(b) Note Interest Rate for the Class I-A-1 Notes: ______% (based on
[Three-Month LIBOR][Student Loan Rate])
(c) Note Interest Rate for the Class I-A-2 Notes (based on
[Three-Month LIBOR][Student Loan Rate])
(d) Note Interest Rate for the Class I-B Notes __% (based on
[Three-Month LIBOR][Student Loan Rate])
(e) Note Interest Rate for the Class II-A-1 Notes (based on
[Three-Month LIBOR][Student Loan Rate])
(f) Note Interest Rate for the Class II-A-2 Notes __% (based on
[Three-Month LIBOR][Student Loan Rate])
(xvi) Amount of Master Servicing Fee for related Collection Period:
$____________ with respect to the Group I Student Loans and $_________ with
respect to the Group II Student Loans ($_______ per $1,000 original principal
amount of Class I-A-1 Notes, $_________ per $1,000 original principal balance of
Class I-A-2 Notes $___________ per $1,000 original principal balance of Class
I-B Notes, $____________ per $1,000 original principal balance of Class II-A-1
Notes and $____________ per $1,000 original principal balance of Class II-A-2
Notes);
(xvii) Amount of Administration Fee for related Collection Period: with
respect to the Group I Notes and $_________ with respect to the Group II Notes
($_______ per $1,000 original principal amount of Class I-A-1 Notes, $_________
per $1,000 original principal balance of Class I-A-2 Notes $___________ per
$1,000 original principal balance of Class I-B Notes, $____________ per $1,000
original principal balance of Class II-A-1 Notes and $____________ per $1,000
original principal balance of Class II-A-2 Notes);
(xviii) (a) Aggregate amount of Realized Losses (if any) for the related
Collection Period: $____________ with respect to the Group I Student Loans and
$_________ with respect to the Group II Student Loans
(b) Balance of Financed Student Loans that are delinquent in each
delinquency period as of the end of the related Collection Period: $____________
with respect to the Group I Student Loans and $_________ with respect to the
Group II Student Loans.
[(xiii) Amount in the Group I Pre-Funding Account:_________]1
_______________
1 To be included for each Distribution Date during the Funding Period.
[(xiv) Amount in the Group II Pre-Funding Account:________]2
_______________
2 To be included for each Distribution Date during the Funding Period.
[(xv) Amount in the Group I Pre-Funding Account at the end of the
Funding Period to be distributed as a payment of principal in respect of the
Notes:__________]3
_______________
3 To be included for the Distribution Date on or immediately following the
end of the Funding Period.
(xvi) Amount in the Group II Pre-Funding Account at the end of the
Funding Period to be distributed as a payment of principal in respect of the
Notes:__________]4
_______________
4 To be included for the Distribution Date on or immediately following the
end of the Funding Period.
(xvii) Amount of the Insurer Premium paid to the Securities Insurer on
such Distribution Date $___________.
(xviii) Amount received from the Securities Insurer with respect to
the Group II Notes Guaranty Insurance Policy $_____________.
(xix) Amount paid to the Securities Insurer in reimbursement of all
Insured Payments made pursuant to the Group II Notes Guaranty Insurance
Policy $_____________.
(xx) (A) with respect to the Group I Interest Rate Swap: the Trust
Swap Payment Amount paid to the Swap Counterparty on such Distribution Date:
$___________; the amount of any Net Trust Swap Payment Carryover Shortfall for
such Distribution Date: $___________; the Trust Swap Receipt Amount paid to the
Trust on such Distribution Date: $___________; the Net Trust Swap Receipt
Carryover Shortfall for such Distribution Date: $___________; and the amount of
any Termination Payment either paid by or made to the Trust on such Distribution
Date: $___________; and (B) with respect to the Group II Interest Rate Swap: the
Trust Swap Payment Amount paid to the Swap Counterparty on such Distribution
Date: $___________; the amount of any Net Trust Swap Payment Carryover Shortfall
for such Distribution Date: $___________; the Trust Swap Receipt Amount paid to
the Trust on such Distribution Date: $___________; the Net Trust Swap Receipt
Carryover Shortfall for such Distribution Date: $___________; and the amount of
any Termination Payment either paid by or made to the Trust on such Distribution
Date: $___________;
(xxi) the Class I-A-1 Cap Payment paid to the Cap Provider on such
Distribution Date: $____________; the Class I-A-2 Cap Payment paid to the Cap
Provider on such Distribution Date: $__________; Class I-B Cap Payment paid to
the Cap Provider on such Distribution Date: $_________; Class II-A-1 Cap Payment
paid to the Cap Provider on such Distribution Date; and Class II-A-2 Cap Payment
paid to the Cap Provider on such Distribution Date: $___________.
EXHIBIT B
TO THE
SALE AND SERVICING AGREEMENT
[RESERVED]
EXHIBIT C
TO THE
SALE AND SERVICING AGREEMENT
[RESERVED]
EXHIBIT D
TO THE
SALE AND SERVICING AGREEMENT
ASSIGNMENT
For value received, in accordance with the Sale and Servicing
Agreement (the "Sale and Servicing Agreement") dated as of September 1, 2001,
among Key Consumer Receivables LLC, as depositor (the "Depositor"), Key Bank
USA, National Association, as master servicer (the "Master Servicer") and as
administrator (the "Administrator"), KeyCorp Student Loan Trust 2001-A (the
"Trust"), and Bank One, National Association, not in its individual capacity but
solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), the
undersigned (the Depositor, as beneficial owner, and Bank One, National
Association, as eligible lender trustee on behalf of the Depositor) does hereby
sell, assign, transfer and otherwise convey unto the Eligible Lender Trustee on
behalf of the Trust, without recourse (subject to the obligations set forth in
the Sale and Servicing Agreement), all right, title and interest of the
undersigned in and to (i) the Initial Financed Student Loans and all obligations
of the Obligors thereunder including all moneys paid thereunder on or after the
Cutoff Date, (ii) the Assigned Rights, (iii) all funds on deposit from time to
time in the Trust Accounts, including the Group I and Group II Reserve Account
Initial Deposits and the Group I and Group II Pre-Funded Amounts and in all
investments and proceeds thereof (including all income thereon) and (iv) the
proceeds of any and all of the foregoing (including proceeds derived from the
voluntary or involuntary conversion of any of the Initial Financed Student Loans
into cash or other liquidated property, such as proceeds from the applicable
Guarantee Agreement. The foregoing sale does not constitute and is not intended
to result in any assumption by the Eligible Lender Trustee or the Trust of any
obligation of the Depositor to the Obligors with respect to Initial Financed
Student Loans or any other person in connection with the Initial Financed
Student Loans or any agreement or instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Initial Financed Student Loan
described in Schedules A-1 and A-2 to the Sale and Servicing Agreement in favor
of the Eligible Lender Trustee on behalf of the Trust, without recourse (subject
to the obligations set forth in the Sale and Servicing Agreement) against the
undersigned. This endorsement may be effected by attaching a facsimile hereof to
each or any of such promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Sale
and Servicing Agreement and is to be governed by the Sale and Servicing
Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in Appendix A to the Sale and Servicing Agreement, which also
contains rules as to usage that shall be applicable herein.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of September 15, 2000.
KEY CONSUMER RECEIVABLES LLC,
as Depositor
By:
-----------------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, as
Depositor Eligible Lender Trustee
By:
-----------------------------------
Name:
Title:
EXHIBIT E
TO THE
SALE AND SERVICING AGREEMENT
SUBSEQUENT TRANSFER AGREEMENT
TRANSFER No. ____ OF ADDITIONAL STUDENT LOANS dated as of ________
___, 20___ among KEYCORP STUDENT LOAN TRUST 200-A, a Delaware statutory business
trust (the "Issuer"), KEY CONSUMER RECEIVABLES LLC, as depositor (the
"Depositor"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking
association, as master servicer (the "Master Servicer"), BANK ONE, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity but
solely as Eligible Lender Trustee of the Issuer (the "Eligible Lender Trustee"),
and KEY BANK USA, NATIONAL ASSOCIATION, a national banking association, as
administrator (the "Administrator").
W I T N E S S E T H:
WHEREAS the Issuer, the Depositor, the Eligible Lender Trustee, the
Master Servicer and the Administrator are parties to the Sale and Servicing
Agreement dated as of September 1, 2001 (as amended or supplemented, the "Sale
and Servicing Agreement");
WHEREAS the Depositor, and the Eligible Lender Trustee are parties to
the Amended and Restated Trust Agreement dated as of September 1, 2001 (as
amended or supplemented, the "Trust Agreement");
WHEREAS pursuant to the Sale and Servicing Agreement, the Depositor
wishes to convey the Additional Student Loans referred to in Section 2 of this
Agreement (the "Additional Student Loans") to the Eligible Lender Trustee on
behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are willing to
accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS AND USAGE. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in Appendix A to the
Sale and Servicing Agreement, which also contains rules of construction and
usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"SUBSEQUENT CUTOFF DATE" means, with respect to each Additional
Student Loan, the date specified as such on Schedule A hereto.
"SUBSEQUENT TRANSFER DATE" means, with respect to the Additional
Student Loans, ______________, ____.
2. SCHEDULES OF FINANCED STUDENT LOANS. Attached hereto as Schedule A
is a supplements to Schedules B-1 and B-2 to the Sale and Servicing Agreement
listing the Additional Student Loans to be conveyed on the Subsequent Transfer
Date to the Eligible Lender Trustee on behalf of the Issuer pursuant to this
Agreement.
3. CONVEYANCE OF ADDITIONAL STUDENT LOANS. In consideration of the
Issuer's delivery to or upon the order of the Depositor of $__________ with
respect to the Group I Student Loans, and $________ with respect to the Group II
Student Loans, the Depositor does hereby sell, transfer, assign, set over and
otherwise convey, without recourse (except as expressly provided in the Sale and
Servicing Agreement), to the Eligible Lender Trustee on behalf of the Issuer:
(a) all right, title and interest of the Depositor (and with respect
to legal title, the Depositor Eligible Lender Trustee on behalf of the
Depositor) in and to each Additional Student Loan, and all moneys received
thereon, on and after the related Subsequent Cutoff Date; and
(b) the proceeds of any and all of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR . The Depositor
hereby represents and warrants to the Issuer as of the date of this Agreement
and as of the Subsequent Transfer Date that:
(a) ORGANIZATION AND GOOD STANDING. The Depositor is duly organized
and validly existing as a limited liability company in good standing under
the laws of the State of Delaware, with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the power, authority and legal right to acquire and own the
Additional Student Loans.
(b) POWER AND AUTHORITY. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
the Depositor has full corporate power and corporate authority to sell and
assign the property to be sold and assigned to and deposited with the
Issuer (or with the Eligible Lender Trustee on behalf of the Issuer) and
the Depositor has duly authorized such sale and assignment to the Issuer
(or to the Eligible Lender Trustee on behalf of the Issuer) by all
necessary corporate action; and the execution, delivery and performance of
this Agreement have been duly authorized by the Depositor by all necessary
corporate action.
(c) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Depositor enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and
similar laws relating to creditors' rights generally and subject to general
principles of equity.
(d) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time or both) a default
under, limited liability company agreement and the organization documents,
or any indenture, agreement or other instrument to which the Depositor is a
party or by which it shall be bound which breach or default would
reasonably be expected to have a material adverse effect on the condition
of the Depositor, financial or otherwise, or adversely affect the
transactions contemplated by this Agreement or any other Basic Document;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the knowledge of the Depositor, any order, rule or regulation
applicable to the Depositor of any court or of any Federal or State
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
(e) NO PROCEEDINGS. There are no proceedings or to its best knowledge
investigations pending against the Depositor or, to its best knowledge,
threatened against the Depositor, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (i) asserting the
invalidity of this Agreement, the Indenture or any of the other Basic
Documents or the Notes, (ii) seeking to prevent the issuance of the Notes
or the consummation of any of the transactions contemplated by this
Agreement, the Indenture or any of the other Basic Documents, (iii) seeking
any determination or ruling that could reasonably be expected to have a
material and adverse effect on the performance by the Depositor of its
obligations under, or the validity or enforceability of, this Agreement,
the Indenture, any of the other Basic Documents or the Notes or (iv)
seeking to affect adversely the Federal or State income tax attributes of
the Issuer, the Notes.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Depositor in connection with the
execution and delivery by the Depositor of this Agreement and the
performance by the Depositor of the transactions contemplated by this
Agreement have been duly obtained, effected or given and are in full force
and effect.
(g) PRINCIPAL BALANCE. The aggregate principal balance of the
Additional Student Loans listed on Schedule A attached hereto and conveyed
to the Eligible Lender Trustee on behalf of the Issuer pursuant to this
Agreement as of their respective Subsequent Cutoff Dates is $___________
with respect to Group I Student Loans and $________ with respect to Group
II Student Loans.
5. CONDITIONS PRECEDENT. The obligation of the Issuer to acquire the
Additional Student Loans hereunder is subject to the satisfaction, on or prior
to the Subsequent Transfer Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Depositor in Section 4 of this Agreement and by the
Depositor and the Master Servicer in Section 3.01 of the Sale and Servicing
Agreement shall be true and correct as of the date of this Agreement and as
of the Subsequent Transfer Date.
(b) SALE AND SERVICING AGREEMENT CONDITIONS. Each of the conditions
set forth in Section 2.02(b) of the Sale and Servicing Agreement shall have
been satisfied.
(c) DELIVERY OF ASSIGNMENT. The Depositor shall have delivered an
Assignment substantially in the form of Annex A hereto.
(d) ADDITIONAL INFORMATION. The Depositor and the Master Servicer, as
applicable, shall have delivered to the Issuer such information as was
reasonably requested by the Issuer to satisfy itself as to (i) the accuracy
of the representations and warranties set forth in Section 4 of this
Agreement and in Section 3.01 of the Sale and Servicing Agreement and (ii)
the satisfaction of the conditions set forth in this Section 5.
6. RATIFICATION OF AGREEMENT. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
7. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
9. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
KEYCORP STUDENT LOAN TRUST
2001-A, by BANK ONE, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Eligible Lender
Trustee,
By:
-----------------------------------
Name:
Title:
KEY CONSUMER RECEIVABLES LLC,
as Depositor
By:
-----------------------------------
Name:
Title:
KEY BANK USA, NATIONAL ASSOCIATION, as
Master Servicer and Administrator
By:
-----------------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, not in
its individual capacity, but solely as
Eligible Lender Trustee
By:
-----------------------------------
Name:
Title:
Acknowledged and accepted as
of the date first above written:
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee,
By:
-------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Depositor Eligible Lender Trustee,
By:
-------------------------
Name:
Title:
SCHEDULE A
TO THE
SUBSEQUENT TRANSFER AGREEMENT NO. ___
[List of Additional Group I Student Loans and Additional Group II Student
Loans and their related Subsequent Cutoff Dates]
ANNEX A
TO THE SUBSEQUENT TRANSFER AGREEMENT
ASSIGNMENT
For value received, in accordance with the Sale and Servicing
Agreement (the "Sale and Servicing Agreement") dated as of September 1, 2001,
among Key Consumer Receivables LLC, as depositor (the "Depositor"), Key Bank
USA, National Association, as master servicer (the "Master Servicer") and as
administrator (the "Administrator"), KeyCorp Student Loan Trust 2001-A (the
"Trust"), and Bank One, National Association, not in its individual capacity but
solely as Eligible Lender Trustee (the "Eligible Lender Trustee"), and the
Subsequent Transfer Agreement No. dated as of ___, 20___ (the "Subsequent
Transfer Agreement") among the Depositor, the Administrator, the Master
Servicer, the Trust and the Eligible Lender Trustee, the undersigned (the
Depositor, as beneficial owner, and Bank One, National Association, as eligible
lender trustee on behalf of the Depositor) does hereby sell, assign, transfer
and otherwise convey unto the Eligible Lender Trustee on behalf of the Trust, ,
without recourse (subject to the obligations set forth in the Sale and Servicing
Agreement), all right, title and interest of the undersigned in and to (i) the
Additional Student Loans (as such term is defined in the Subsequent Transfer
Agreement) and all moneys received thereon, on and after each applicable
Subsequent Cutoff Date (as such term is defined in the Subsequent Transfer
Agreement) and (ii) the proceeds of any and all of the foregoing (including but
not limited to proceeds derived from the voluntary or involuntary conversion of
any of the Additional Student Loans into cash or other liquidated property, such
as proceeds from the applicable Guarantee Agreement (as such term is defined in
the Subsequent Transfer Agreement)). The foregoing sale does not constitute and
is not intended to result in any assumption by the Eligible Lender Trustee or
the Trust of any obligation of the Depositor to the borrowers of such Additional
Student Loans or any other person in connection with the Additional Student
Loans or any agreement or instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Additional Student Loan described
in Schedule A to the Subsequent Transfer Agreement in favor of the Eligible
Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Sale and Servicing Agreement) against the
undersigned. This endorsement may be effected by attaching a facsimile hereof to
each or any of such promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Sale
and Servicing Agreement and the Subsequent Transfer Agreement and is to be
governed by the Sale and Servicing Agreement and the Subsequent Transfer
Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in the Subsequent Transfer Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of ___, 20___.
KEY CONSUMER RECEIVABLES LLC,
as Depositor
By:
-----------------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
as Depositor Eligible Lender Trustee By:
By:
-----------------------------------
Name:
Title:
