EXECUTION COPY
SALE AND SERVICING AGREEMENT
among
KEYCORP STUDENT LOAN TRUST 1999-B
as Issuer,
KEY BANK USA, NATIONAL ASSOCIATION
as Seller,
KEY BANK USA, NATIONAL ASSOCIATION
as Master Servicer,
BANK ONE, NATIONAL ASSOCIATION
not in its individual capacity but solely
as Eligible Lender Trustee,
and
KEY BANK USA, NATIONAL ASSOCIATION
as Administrator
Dated as of September 1, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I Definitions and Usage..........................................1
ARTICLE II Conveyance of Financed Student Loans...........................2
SECTION 2.01. Conveyance of Initial Financed Student Loans...............2
SECTION 2.02. Conveyance of Subsequent Pool Student Loans and Other
Subsequent Student Loans...................................2
SECTION 2.03. Conveyance of Financed Student Loans by the Eligible
Lender Trustee to the Seller in Connection with
Consolidation Loans........................................4
SECTION 2.04. Endorsement................................................5
ARTICLE III The Financed Student Loans.....................................5
SECTION 3.01. Representations and Warranties of Seller with
Respect to the Financed Student Loans......................5
SECTION 3.02. Repurchase upon Breach; Reimbursement......................8
SECTION 3.03. Custody of Financed Student Loan Files.....................9
SECTION 3.04. Duties of Master Servicer as Custodian.....................10
SECTION 3.05. Instructions; Authority To Act.............................10
SECTION 3.06. Custodian's Indemnification................................11
SECTION 3.07. Effective Period and Termination...........................11
SECTION 3.08. Schedule of Financed Student Loans.........................11
ARTICLE IV Administration and Servicing of Financed Student Loans.........12
SECTION 4.01. Duties of Master Servicer..................................12
SECTION 4.02. Collection of Financed Student Loan Payments...............13
SECTION 4.03. Realization upon Financed Student Loans....................15
SECTION 4.04. Computation of Note InterestRate and Certificate Rate......15
SECTION 4.05. No Impairment..............................................15
SECTION 4.06. Purchase of Financed StudentLoans; Reimbursement...........16
SECTION 4.07. Master Servicing Fee.......................................16
SECTION 4.08. Administrator's Certificate; Servicer's Report.............17
SECTION 4.09. Annual Statement as to Compliance; Notice of Default.......17
SECTION 4.10. Annual Independent Certified Public Accountants' Report....18
SECTION 4.11. Access to Certain Documentation and Information
Regarding Financed Student Loans...........................19
SECTION 4.12. Master Servicer and Administrator Expenses.................19
SECTION 4.13. Appointment of Sub-Servicers...............................20
SECTION 4.14. Special Programs...........................................20
ARTICLE V Distributions; Accounts; Statements to Certificateholders
and Noteholders................................................21
SECTION 5.01. Establishment of Trust Accounts............................21
SECTION 5.02. Collections................................................23
SECTION 5.03. Application of Collections.................................24
SECTION 5.04. Additional Deposits........................................24
SECTION 5.05. Distributions..............................................25
SECTION 5.06. Reserve Account............................................28
SECTION 5.07. Statements to Certificateholders and Noteholders...........30
SECTION 5.08. Pre-Funding Account........................................32
SECTION 5.09. Seller Optional Deposit....................................35
ARTICLE VI The Seller and the Administrator...............................35
SECTION 6.01. Representations of Seller and Administrator................35
SECTION 6.02. Existence..................................................37
SECTION 6.03. Liability of Seller; Indemnities...........................37
SECTION 6.04. Liability of Administrator; Indemnities....................39
SECTION 6.05. Merger or Consolidation of, or Assumption of the
Obligations of, Seller or Administrator....................39
SECTION 6.06. Limitation on Liability of Seller, Administrator
and Others.................................................40
SECTION 6.07. Seller May Own Certificates or Notes.......................41
SECTION 6.08. Key Bank USA, National Association Not To
Resign as Administrator....................................41
ARTICLE VII The Master Servicer............................................42
SECTION 7.01. Representations of Master Servicer.........................42
SECTION 7.02. Indemnities of Master Servicer.............................43
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Master Servicer............................44
SECTION 7.04. Limitation on Liability of Master Servicer and Others......45
SECTION 7.05. Key Bank USA, National Association, Not To Resign
as Master Servicer.........................................46
ARTICLE VIII Default........................................................46
SECTION 8.01. Master Servicer Default; Administrator Default.............46
SECTION 8.02. Appointment of Successor...................................49
SECTION 8.03. Notification to Noteholders and Certificateholders..........50
SECTION 8.04. Waiver of Past Defaults....................................50
ARTICLE IX Termination....................................................51
SECTION 9.01. Termination................................................51
ARTICLE X Additional Provisions Regarding Financed Student Loans.........52
SECTION 10.01. Periodic Reports...........................................52
SECTION 10.02. Cooperation................................................53
SECTION 10.03. Confidentiality............................................53
SECTION 10.04. Future Purchases...........................................53
SECTION 10.05. Private Guarantee Fee......................................53
SECTION 10.06. Bids/First Refusal Rights..................................54
SECTION 10.07. Consolidation Loans........................................55
ARTICLE XI Miscellaneous..................................................55
SECTION 11.01. Amendment..................................................55
SECTION 11.02. Protection of Interests in Trust...........................56
SECTION 11.03. Notices....................................................58
SECTION 11.04. Assignment.................................................59
SECTION 11.05. Limitations on Rights of Others............................59
SECTION 11.06. Severability...............................................59
SECTION 11.07. Separate Counterparts......................................59
SECTION 11.08. Headings...................................................59
SECTION 11.09. Governing Law..............................................59
SECTION 11.10. Assignment to Indenture Trustee............................59
SECTION 11.11 Nonpetition Covenants......................................60
SECTION 11.12. Limitation of Liability of Eligible Lender Trustee and
Indenture Trustee..........................................60
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Initial Financed Student Loans
SCHEDULE B Schedule of Additional Student Loans
SCHEDULE C Location of Financed Student Loan Files
SCHEDULE D Provisions to be Audited Regarding
Master Servicer (Sub-Servicers) and Administrator
SCHEDULE E Servicing Fees Schedule
EXHIBIT A Form of Report to Noteholders
EXHIBIT B Form of Report to Certificateholders
EXHIBIT C [RESERVED]
EXHIBIT D Form of Assignment on Closing Date
EXHIBIT E Form of Transfer Agreement
SALE AND SERVICING AGREEMENT dated as of September 1, 1999, among
KEYCORP STUDENT LOAN TRUST 1999-B, a Delaware statutory business trust (the
"Issuer"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking association
and successor in interest to Society National Bank (the "Seller"), KEY BANK USA,
NATIONAL ASSOCIATION, a national banking association, as master servicer (the
"Master Servicer"), BANK ONE, NATIONAL ASSOCIATION, a national banking
association, solely as eligible lender trustee on behalf of the Issuer and not
in its individual capacity (the "Eligible Lender Trustee"), and KEY BANK USA,
NATIONAL ASSOCIATION, a national banking association, as administrator (the
"Administrator").
WHEREAS, the Seller intends to assign to the Issuer its rights in a
portfolio of undergraduate and graduate school student loans originated in the
ordinary course of business by the Seller or its predecessors, subject to
revocation by the Seller;
WHEREAS, the Seller intends to assign to the Issuer during a limited
period additional student loans it currently owns and student loans it may
originate or acquire in the future;
WHEREAS, the Issuer desires to purchase, and the Seller is willing to
sell to the Issuer, such student loans;
WHEREAS, the Eligible Lender Trustee is willing to hold legal title
to, and serve as eligible lender trustee with respect to, such student loans on
behalf of the Issuer;
WHEREAS, the Master Servicer is willing to master service such student
loans; and
WHEREAS, the Administrator is willing to undertake certain
administrative functions with respect to such student loans.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Capitalized terms used but not defined herein are defined in Appendix
A hereto, which also contains rules as to usage and construction that shall be
applicable herein.
ARTICLE II
CONVEYANCE OF FINANCED STUDENT LOANS
SECTION 2.01. CONVEYANCE OF INITIAL FINANCED STUDENT LOANS. In
consideration of the Issuer's delivery to or upon the order of the Seller on the
Closing Date of the net proceeds from the sale of the Notes and the Certificates
and the other amounts to be distributed from time to time to the Seller in
accordance with the terms of this Agreement, the Seller (or, in the case of the
Initial Financed Student Loans, Bank One, National Association, as eligible
lender trustee, on behalf of the Seller) does hereby, as evidenced by a duly
executed written assignment in the form of Exhibit D, sell, transfer, assign,
set over and otherwise convey to the Issuer (or, in the case of the Initial
Financed Student Loans, to the Eligible Lender Trustee on behalf of the Issuer),
without recourse (subject to the obligations herein):
(i) all right, title and interest of the Seller in and to the Initial
Financed Student Loans and all obligations of the Obligors thereunder,
including all moneys paid thereunder, and all written communications
received by the Seller with respect thereto (including borrower
correspondence, notices of death, disability or bankruptcy and requests for
deferrals or forbearances), on or after the Cutoff Date;
(ii) all right, title and interest of the Seller under the Assigned
Agreements insofar as they relate to the Financed Guaranteed Private Loans
but not with respect to any other loans covered thereby (the "Assigned
Rights");
(iii) all right, title and interest of the Seller in and to all funds
on deposit from time to time in the Trust Accounts, including, but not
limited to, the Reserve Account Initial Deposit and the Pre-Funded Amount
(including all income thereon); and
(iv) the proceeds of any and all of the foregoing.
SECTION 2.02. CONVEYANCE OF SUBSEQUENT POOL STUDENT LOANS AND OTHER
SUBSEQUENT STUDENT LOANS. (a) Subject to the conditions set forth in paragraph
(b) below, in consideration of the Issuer's delivery on the related Transfer
Date to or upon the order of the Seller of the amount described in Section
5.08(a) to be delivered to the Seller, the Seller does hereby sell, transfer,
assign, set over and otherwise convey to the Eligible Lender Trustee on behalf
of the Issuer, without recourse (subject to the obligations herein) all right,
title and interest of the Seller in and to each Subsequent Pool Student Loan and
each Other Subsequent Student Loan, and all obligations of the Obligors
thereunder including all moneys paid thereunder, and all written communications
received by the Seller with respect thereto (including borrower correspondence,
notices of death, disability or bankruptcy and requests for deferrals or
forbearances), on and after the related Subsequent Cutoff Date, made from time
to time during the Funding Period.
(b) The Seller shall transfer to the Eligible Lender Trustee on behalf
of the Issuer the Subsequent Pool Student Loans and/or the Other Subsequent
Student Loans for a given Transfer Date and the other property and rights
related thereto described in paragraph (a) above only upon the satisfaction of
each of the following conditions on or prior to such Transfer Date:
(i) the Seller shall have delivered to the Eligible Lender Trustee and
the Indenture Trustee a duly executed written assignment (including an
acceptance by the Eligible Lender Trustee and the Indenture Trustee) in
substantially the form of Exhibit E (each, a "Transfer Agreement"), which
shall include supplements to Schedule B listing such Subsequent Pool
Student Loans and/or the Other Subsequent Student Loans, as applicable;
(ii) except any of the Additional Student loans transferred on the
Closing Date or the day immediately following, the Seller shall have
delivered, at least two days prior to such Transfer Date, notice of such
transfer to the Eligible Lender Trustee, the Indenture Trustee and the
Rating Agencies, including a listing of the designation and the aggregate
principal balance of such Subsequent Pool Student Loans or Other Subsequent
Student Loans, as the case may be;
(iii) the Seller shall, to the extent required by Section 5.02, have
deposited in the Collection Account all collections in respect of the
Subsequent Pool Student Loans and/or Other Subsequent Student Loans on and
after each applicable Subsequent Cutoff Date;
(iv) as of each Transfer Date, the Seller was not insolvent nor will
it have been made insolvent by such transfer nor is it aware of any pending
insolvency;
(v) such addition will not result in a material adverse Federal or
State tax consequence to the Issuer, the holders of Notes or the holders of
Certificates;
(vi) the Funding Period shall not have terminated and, with respect to
Subsequent Pool Student Loans, the Transfer Date is on or prior to the
Special Determination Date;
(vii) the Seller shall have delivered to the Indenture Trustee and the
Eligible Lender Trustee an Officers' Certificate confirming the
satisfaction of each condition precedent specified in this paragraph (b);
(viii) the Seller shall have delivered (A) to the Rating Agencies an
Opinion of Counsel with respect to the transfer of the Subsequent Pool
Student Loans and/or Other Subsequent Student Loans transferred on such
Transfer Date, substantially in the form of the Opinion of Counsel
delivered to the Rating Agencies on the Closing Date, and (B) to the
Eligible Lender Trustee and the Indenture Trustee the Opinion of Counsel
required by Section 11.02(i)(1);
(ix) the Seller shall have taken any action required to maintain the
first perfected ownership interest of the Issuer in the Trust Estate and
the first perfected security interest of the Indenture Trustee in the
Collateral;
(x) no selection procedures believed by the Seller to be adverse to
the interests of the holders of Certificates or the holders of Notes shall
have been utilized in selecting the Subsequent Pool Student Loans or the
Other Subsequent Student Loans; and
(xi) no Consolidation Loan will be transferred to the Issuer unless at
least one underlying student loan to be consolidated is a Financed Student
Loan already held by the Eligible Lender Trustee on behalf of the Issuer.
PROVIDED, HOWEVER, that the Seller shall not incur any liability as a result of
transferring Subsequent Pool Student Loans or Other Subsequent Student Loans on
any Transfer Date at a time when the condition set forth in clause (v) was not
satisfied, if at the time of such transfer the Authorized Officers of the
Seller, after reasonable inquiry of in-house counsel to the Seller, were not
aware of any fact that would reasonably suggest that such condition would not be
satisfied as of such date.
(c) The Seller covenants to transfer during the Funding Period to the
Eligible Lender Trustee on behalf of the Issuer pursuant to paragraph (a) above
Other Subsequent Student Loans with an aggregate principal balance of not less
than $60,000,000.00 (less amounts withdrawn from the Other Additional
Pre-Funding Subaccount pursuant to Section 5.08(d) of this Agreement and, in
addition, on the Closing Date, $332,308.29 shall be paid to the Seller, from the
Other Additional Pre-Funding Subaccount, representing the difference between the
Calculated Pool Balance relating to Initial Pool 2 Student Loans as of the
Cutoff Date and the Calculated Pool Balance relating to the Initial Pool 2
Student Loans as of the Statistical Cutoff Date.); PROVIDED, HOWEVER, that the
Seller shall have no liability for a breach of the foregoing covenant as a
result of the Seller not having made or owned prior to the date hereof Other
Subsequent Student Loans equal to the amount specified above during the Funding
Period, the Seller not being able to transfer Other Subsequent Student Loans
because of Section 2.02(b)(xii) or there being insufficient funds available in
the Escrow Account and the Pre-Funding Account for the Eligible Lender Trustee
to consummate such acquisitions on behalf of the Issuer.
SECTION 2.03. CONVEYANCE OF FINANCED STUDENT LOANS BY THE ELIGIBLE
LENDER TRUSTEE TO THE SELLER IN CONNECTION WITH CONSOLIDATION LOANS. On any
date, upon receipt of written notice (or telephonic or facsimile notice followed
by written notice) from the Seller (or from the Master Servicer (or a
Sub-Servicer) on behalf of the Seller) by the Eligible Lender Trustee and the
Indenture Trustee, the Eligible Lender Trustee, on behalf of the Issuer, will
convey to the Seller the Financed Student Loans identified in such notice, which
are to be repaid pursuant to the Consolidation Loans to be made by the Seller.
SECTION 2.04. ENDORSEMENT. The Seller hereby appoints each of the
Eligible Lender Trustee and the Indenture Trustee as the Seller's true and
lawful attorney-in-fact with full power of substitution to endorse the Seller's
name on any promissory note evidencing the Initial Financed Student Loans and
any Additional Student Loans transferred to the Eligible Lender Trustee on
behalf of the Trust pursuant to Sections 2.01 and 2.02. The Seller acknowledges
and agrees that this power of attorney shall be construed as a power coupled
with an interest, shall be irrevocable as long as the Trust Agreement remains in
effect and shall continue in effect until the Trust Agreement terminates.
ARTICLE III
THE FINANCED STUDENT LOANS
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO
THE FINANCED STUDENT LOANS. The Seller makes the following representations and
warranties as to the Financed Student Loans on which the Issuer is deemed to
have relied in acquiring (through the Eligible Lender Trustee) the Financed
Student Loans. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Initial Financed Student Loans and the Subsequent Pool Student Loans, and as of
the applicable Transfer Date, in the case of the Other Subsequent Student Loans,
but shall survive the sale, transfer and assignment of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) CHARACTERISTICS OF FINANCED STUDENT LOANS. Each Financed Student
Loan (A) was originated in the United States of America, its territories,
its possessions or other areas subject to its jurisdiction by the Seller in
the ordinary course of its business to an eligible borrower under
applicable law and agreements and was fully and properly executed by the
parties thereto and (B) provides or, when the payment schedule with respect
thereto is determined, will provide for payments on a periodic basis that
fully amortize the principal amount of such Financed Student Loan by its
maturity and yield interest at the rate applicable thereto, as such
maturity may be modified in accordance with any applicable deferral or
forbearance periods granted in accordance with applicable laws and
restrictions, including those of the Higher Education Act, any Guarantee
Agreement or the Programs. Each Financed Student Loan that is a Financed
Federal Loan qualifies the holder thereof to receive Interest Subsidy
Payments (other than SLS Loans, unsubsidized 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 Financed Student Loan that is a Financed Guaranteed
Private Loan qualifies the holder thereof to receive Guarantee Payments
from the applicable Guarantor pursuant to the related Guarantee Agreement.
(ii) SCHEDULES OF FINANCED STUDENT LOANS. The information set forth in
Schedules A and B to this Agreement and Schedule A to the related Transfer
Agreement is true and correct in all material respects as of the opening of
business on the Cutoff Date (with respect to Schedules A and B to this
Agreement) or each applicable Subsequent Cutoff Date, as applicable, and no
selection procedures believed to be adverse to the holders of Notes or the
holders of Certificates were utilized in selecting the Initial Financed
Student Loans or the Additional Student Loans, as applicable. The computer
tape regarding the Initial Financed Student Loans and the Subsequent Pool
Student Loans made available to the Issuer and its assigns is true and
correct in all respects as of the Cutoff Date. There will be no material
changes made to either Schedule A or Schedule B to this Agreement (with
respect to the Initial Financed Student Loans or the Subsequent Pool
Student Loans) prior to the Special Determination Date without the
acknowledgement of the Rating Agencies that such material change will not
affect the ratings assigned to any Class of the Notes or the Certificates.
(iii) COMPLIANCE WITH LAW. Each Financed Student Loan complied at the
time it was originated or made and at the execution of this Agreement or
the applicable Transfer Agreement, as the case may be, complies, and the
Seller and its agents, with respect to each such Financed Student Loan,
have at all times complied, in all material respects with all requirements
of applicable Federal, state and local laws and regulations thereunder,
including the Higher Education Act, usury law, the Federal Truth-in-Lending
Act, the Equal Credit Opportunity Act, the Federal Reserve Board's
Regulation B and other consumer credit laws and equal credit opportunity
and disclosure laws and all applicable requirements of any Guarantee
Agreements.
(iv) BINDING OBLIGATION. Each Financed Student Loan represents the
genuine, legal, valid and binding payment obligation in writing of the
borrower thereof, enforceable by or on behalf of the holder thereof in
accordance with its terms, and no Financed Student Loan has been satisfied,
subordinated or rescinded, subject to clause (xiii) below.
(v) NO DEFENSES. No right of rescission, setoff, counterclaim or
defense has been asserted or threatened or exists with respect to any
Financed Student Loan.
(vi) NO DEFAULT. No Initial Financed Student Loan or Subsequent Pool
Student Loan has a payment that is more than 180 days overdue as of the
Cutoff Date or, with respect to the Other Subsequent Student Loans, more
than 90 days overdue as of the applicable Subsequent Cutoff Date, as the
case may be, and, except as permitted in this paragraph, no default,
breach, violation or event permitting acceleration under the terms of any
Financed Student Loan has occurred; and, except for payment defaults
continuing for a period of not more than 150 days or 90 days, as
applicable, no continuing condition that with notice or the lapse of time
or both would constitute a default, breach, violation or event permitting
acceleration under the terms of any Financed Student Loan has arisen; and
the Seller has not waived and shall not waive any of the foregoing other
than as permitted by the Basic Documents.
(vii) TITLE. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Financed Student
Loans from the Seller to the Eligible Lender Trustee on behalf of the
Issuer and that the beneficial interest in and title to such Financed
Student Loans not be part of the debtor's estate in the event of the
appointment of a receiver with respect to the Seller. No Financed Student
Loan has been sold, transferred, assigned or pledged by the Seller to any
Person other than the Eligible Lender Trustee on behalf of the Issuer.
Immediately prior to the transfer and assignment herein contemplated, the
Seller had good title to each Financed Student Loan, free and clear of all
Liens and, immediately upon the transfer thereof, the Eligible Lender
Trustee on behalf of the Issuer shall have good title to each such Financed
Student Loan, free and clear of all Liens or the transfer shall have been
perfected under the UCC.
(viii) LAWFUL ASSIGNMENT. No Financed Student Loan has been originated
in, or is subject to the laws of, any jurisdiction under which the sale,
transfer and assignment of such Financed Student Loan or any Financed
Student Loan under this Agreement, each Transfer Agreement or the Indenture
is unlawful, void or voidable.
(ix) SECURITY INTEREST PERFECTED. All filings (including UCC filings)
and/or delivery requirements necessary in any jurisdiction to give the
Eligible Lender Trustee on behalf of the Issuer a first perfected ownership
interest in the Financed Student Loans, and to give the Indenture Trustee a
first perfected security interest therein, have been made or satisfied, as
the case may be.
(x) ONE ORIGINAL. There is only one original executed copy of the
promissory note evidencing each Financed Student Loan.
(xi) PRINCIPAL BALANCE. The aggregate principal balance of the Initial
Financed Student Loans, plus accrued interest to be capitalized with
respect thereto, as of the Statistical Cutoff Date, is $742,794,276.40, and
the aggregate principal balance of the Subsequent Pool Student Loans, plus
accrued interest to be capitalized with respect thereto, as of the
Statistical Cutoff Date, $175,202,524.95.
(xii) NO CLAIMS. As of the Cutoff Date, no claim for payment with
respect to an Initial Financed Student Loan has been made to a Guarantor,
and as of the related Subsequent Cutoff Date no claim for payment with
respect to an Additional Student Loan will have been made.
(xiii) NO BANKRUPTCIES OR DEATHS. No borrower of any Financed Student
Loan as of September 1, 1999 (in the case of the Initial Financed Student
Loans), or the applicable Subsequent Cutoff Date (in the case of Additional
Student Loans) was noted in the related Financed Student Loan File as being
currently involved in a bankruptcy proceeding or as having died.
(xiv) INTEREST ACCRUING. Each Financed Student Loan is accruing
interest (whether or not such interest is being paid currently, by the
borrower or by the Department, or is being capitalized), except as
otherwise expressly permitted by the Basic Documents.
(xv) SELLER'S REPRESENTATIONS. The representations and warranties of
the Seller contained in Section 6.01 are true and correct.
SECTION 3.02. REPURCHASE UPON BREACH; REIMBURSEMENT. The Seller, the
Master Servicer or the Eligible Lender Trustee, as the case may be, shall inform
the other parties to this Agreement and the Indenture Trustee promptly, in
writing, upon the discovery of any breach of the Seller's representations and
warranties made pursuant to Section 3.01 or Section 6.01. Unless any such breach
shall have been cured within 60 days following the discovery thereof by the
Eligible Lender Trustee or receipt by the Eligible Lender Trustee of written
notice from the Seller or the Master Servicer of such breach, the Seller shall
be obligated to repurchase any Financed Student Loan in which the interests of
the holders of Notes or the holders of Certificates are materially and adversely
affected by any such breach as of the first day succeeding the end of such
60-day period that is the last day of a Collection Period; provided that it is
understood that any such breach that does not affect any Guarantor's obligation
to guarantee payment of each Financed Student Loan that is a Financed Guaranteed
Loan to the Eligible Lender Trustee in accordance with the related Guarantee
Agreements will not be considered to have a material adverse effect for this
purpose. In consideration of and simultaneously with the repurchase of the
Financed Student Loan, the Seller shall remit the Purchase Amount, in the manner
specified in Section 5.04, and the Issuer shall execute such assignments and
other documents reasonably requested by the Seller in order to effect such
transfer. Upon any such transfer of a Financed Student Loan, legal title to, and
beneficial ownership and control of, the related Financed Student Loan File will
thereafter belong to the Seller. In addition, if any such breach by the Seller
does not trigger such a repurchase obligation but does result in the refusal by
a Federal Guarantor to guarantee all or a portion of the accrued interest, or
the loss (including any obligation of the Issuer to repay to the Department) of
certain Interest Subsidy Payments and Special Allowance Payments, with respect
to a Financed Federal Loan, then, unless such breach, if curable, is cured
within 60 days, the Seller shall reimburse the Issuer by remitting an amount
equal to the sum of all such non-guaranteed interest amounts and such forfeited
Interest Subsidy Payments and Special Allowance Payments in the manner specified
in Section 5.04. Subject to the provisions of Section 6.03, the sole remedy of
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the holders of
Notes or the holders of Certificates with respect to a breach of representations
and warranties pursuant to Section 3.01 and the agreement contained in this
Section shall be to require the Seller to repurchase Financed Student Loans or
to reimburse the Issuer as provided above pursuant to this Section, subject to
the conditions contained herein.
SECTION 3.03. CUSTODY OF FINANCED STUDENT LOAN FILES. To assure
uniform quality in servicing the Financed Student Loans and to reduce
administrative costs, the Issuer hereby appoints the Master Servicer, and the
Master Servicer hereby accepts such appointment, to act for the benefit of the
Issuer and the Indenture Trustee as custodian of the following documents or
instruments related to the Financed Student Loans (as set forth in Schedules A
and B hereto), which are also hereby constructively delivered to the Indenture
Trustee, as pledgee of the Issuer (or, in the case of the Additional Student
Loans, will be, as of the applicable Transfer Date, constructively delivered to
the Indenture Trustee, as pledgee of the Issuer) with respect to each Financed
Student Loan:
(a) the original fully executed copy of the note evidencing the
Financed Student Loan;
(b) the original loan application fully executed by the borrower; and
(c) any and all other documents and computerized records that any of
the Master Servicer (or a Sub-Servicer on behalf of the Master Servicer), the
Administrator or the Seller shall keep on file, in accordance with its customary
procedures, relating to such Financed Student Loan or any Obligor with respect
thereto.
Notwithstanding the foregoing, and without releasing the Master
Servicer from its duties and obligations hereunder, for so long as Key Bank USA,
National Association, or an affiliate thereof, is the Master Servicer hereunder,
the Master Servicer shall (and in all other cases, may) appoint one or more
Sub-Servicers to act as "custodian" on behalf of the Issuer and the Indenture
Trustee (but at the direction of the Master Servicer) with respect to the
Financed Student Loans such Sub-Servicer is servicing, in each case consistent
with the terms of this Article III, and all references to the Master Servicer
shall be read to apply to such Sub-Servicer acting at the direction of the
Master Servicer; and, provided, further, that if Key Bank USA, National
Association is the Master Servicer, the Master Servicer shall not replace such
Sub-Servicer unless and until a successor Sub-Servicer assumes the role of
"custodian" on behalf of the Issuer and the Indenture Trustee with respect to
all the Financed Student Loans it will be servicing.
The appointment of the Master Servicer as custodian hereunder is for
administrative purposes only and does not, and is not intended to, transfer any
of the Issuer's or the Indenture Trustee's right, title or interest in or to the
Initial Financed Student Loans (or Additional Student Loans) to the Master
Servicer and the Master Servicer hereby acknowledges that it has not and will
not obtain any such right, title or interest in or to such Initial Financed
Student Loans (or Additional Student Loans).
SECTION 3.04. DUTIES OF MASTER SERVICER AS CUSTODIAN. (a) SAFEKEEPING.
The Master Servicer, as custodian, shall (or shall cause the applicable
Sub-Servicers to) hold the Financed Student Loan Files for the benefit of the
Issuer and the Indenture Trustee and maintain such accurate and complete
accounts, records and computer systems pertaining to each Financed Student Loan
File as shall enable the Issuer to comply with this Agreement. In performing its
duties as custodian the Master Servicer shall (or shall cause the applicable
Sub-Servicers to) act with reasonable care, using that degree of skill and
attention that the Master Servicer (or such Sub-Servicer) exercises with respect
to the student loan files relating to all comparable student loans that the
Master Servicer (or such Sub-Servicer) services and shall ensure that it
complies fully and completely with all applicable Federal and State laws,
including the Higher Education Act, with respect thereto. The Master Servicer
shall (or shall cause the applicable Sub-Servicers to) conduct, or cause to be
conducted, periodic audits of the Financed Student Loan Files held by it under
this Agreement and of the related accounts, records and computer systems, in
such a manner as shall enable the Issuer or the Indenture Trustee to verify the
accuracy of the Master Servicer's (or such Sub-Servicer's) record keeping. The
Master Servicer shall (or shall cause the applicable Sub-Servicers to) promptly
report to the Issuer and the Indenture Trustee any failure on its part (or on
the part of a Sub-Servicer) to hold the Financed Student Loan Files and maintain
its accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed to
require an initial review or any periodic review by the Issuer, the Eligible
Lender Trustee or the Indenture Trustee of the Financed Student Loan Files.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Master Servicer, as
custodian, shall (or shall cause the applicable Sub-Servicers to) maintain each
Financed Student Loan File at one of its offices (or the offices of the
applicable Sub-Servicer) specified in Schedule C to this Agreement or at such
other office as shall be specified by written notice to the Issuer and the
Indenture Trustee not later than 90 days after any change in location. Upon
reasonable prior notice, the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) make available to the Issuer and the Indenture
Trustee or their respective duly authorized representatives, attorneys or
auditors a list of locations of the Financed Student Loan Files and the related
accounts, records and computer systems maintained by the Master Servicer (or
such Sub-Servicer) at such times during normal business hours as the Issuer or
the Indenture Trustee shall instruct.
(c) RELEASE OF DOCUMENTS. Upon instruction from the Indenture Trustee,
the Master Servicer, as custodian, shall (or shall cause the applicable
Sub-Servicers to) release any Financed Student Loan File to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable.
SECTION 3.05. INSTRUCTIONS; AUTHORITY TO ACT. The Master Servicer, as
custodian, shall be deemed to have received proper instructions with respect to
the Financed Student Loan Files upon its receipt of written instructions signed
by a Responsible Officer of the Indenture Trustee.
SECTION 3.06. CUSTODIAN'S INDEMNIFICATION. The Master Servicer as
custodian shall pay for any loss, liability or expense, including reasonable
attorney's fees, that may be imposed on, incurred by or asserted against the
Issuer, the Eligible Lender Trustee or the Indenture Trustee or any of their
officers, directors, employees and agents as the result of any improper act or
omission in any way relating to the maintenance and custody by the Master
Servicer (or any Sub-Servicer) as custodian of the Financed Student Loan Files
where the final determination that any such improper act or omission by the
Master Servicer resulted in such loss, liability or expense is established by a
court of law, by an arbitrator or by way of settlement agreed to by the Master
Servicer; PROVIDED, HOWEVER, that the Master Servicer shall not be liable to the
Eligible Lender Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Eligible Lender Trustee and
the Master Servicer shall not be liable to the Indenture Trustee for any portion
of any such amount resulting from the willful misfeasance, bad faith or
negligence of the Indenture Trustee.
SECTION 3.07. EFFECTIVE PERIOD AND TERMINATION. The appointment of the
Master Servicer as custodian shall become effective as of the Closing Date and
shall continue in full force and effect for so long as the Master Servicer shall
remain the Master Servicer hereunder, subject to the requirements of Section
3.03 hereof. If the Master Servicer or any successor Master Servicer shall
resign as Master Servicer in accordance with the provisions of this Agreement or
if all the rights and obligations of the Master Servicer or any such successor
Master Servicer shall have been terminated under Section 8.01, the appointment
of the Master Servicer or such successor Master Servicer as custodian shall be
terminated simultaneously with the effectiveness of such termination. As soon as
practicable on or after any termination of such appointment (and in any event
within (i) 10 Business Days, with respect to that portion of the Financed
Student Loan Files it holds consisting of electronic records and information,
and (ii) 40 Business Days, with respect to the remaining portion of the Financed
Student Loan Files it holds), the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) deliver the Financed Student Loan Files it holds to
the Indenture Trustee or the Indenture Trustee's agent at such place or places
as the Indenture Trustee may reasonably designate.
SECTION 3.08. SCHEDULE OF FINANCED STUDENT LOANS. Schedules A and B
hereto shall indicate by name any Sub-Servicer who has been appointed by the
Master Servicer to service, on behalf of the Master Servicer, each Financed
Student Loan. Such indication may be amended by the Master Servicer, from time
to time, to replace the name of the applicable Sub-Servicer, in accordance with
the provisions of this Agreement relating to the servicing of the Financed
Student Loans.
ARTICLE IV
ADMINISTRATION AND SERVICING OF FINANCED STUDENT LOANS
SECTION 4.01. DUTIES OF MASTER SERVICER. The Master Servicer, for the
benefit of the Issuer (to the extent provided herein), shall (or shall cause the
applicable Sub-Servicer to) manage, service, administer and make collections on
the Financed Student Loans with reasonable care, using that degree of skill and
attention that the Master Servicer (or such Sub-Servicer) exercises with respect
to all comparable student loans that it services. Without limiting the
generality of the foregoing or of any other provision set forth in this
Agreement and notwithstanding any other provision to the contrary set forth
herein, the Master Servicer shall (or shall cause the applicable Sub-Servicer
to) manage, service, administer and make collections with respect to the
Financed Student Loans (other than collection of any Interest Subsidy Payments
and Special Allowance Payments, which the Eligible Lender Trustee will perform
on behalf of the Trust) in accordance with, and otherwise comply with, all
applicable Federal and state laws, including all applicable standards,
guidelines and requirements of the Higher Education Act (in the case of the
Financed Federal Loans) and any Guarantee Agreement (in the case of the Financed
Guaranteed Loans), the failure to comply with which would adversely affect the
eligibility of one or more of the Financed Federal Loans for federal reinsurance
or Interest Subsidy Payments or Special Allowance Payments or one or more of the
Financed Guaranteed Loans for receipt of Guarantee Payments or would have an
adverse effect on the holders of Certificates or the holders of Notes. The
Master Servicer also hereby acknowledges that its obligation to service (or to
cause the applicable Sub-Servicer to sub-service on its behalf) the Financed
Student Loans includes those Additional Student Loans conveyed by the Seller to
the Eligible Lender Trustee on behalf of the Trust pursuant to Section 2.02 and
the related Transfer Agreement, a copy of which shall be delivered to the Master
Servicer by the Seller promptly upon execution thereof; PROVIDED that any
failure by the Seller to so deliver a Transfer Agreement shall not affect the
Master Servicer's obligations hereunder to service (or to cause the applicable
Sub-Servicer to sub-service on its behalf) all the Financed Student Loans.
The Master Servicer's duties (or the duties of the applicable
Sub-Servicers on behalf of the Master Servicer) shall include collection and
posting of all payments, responding to inquiries of borrowers on such Financed
Student Loans, monitoring borrowers' status, making required disclosures to
borrowers, investigating delinquencies, sending payment coupons to borrowers and
otherwise establishing repayment terms, reporting tax information to borrowers,
if applicable, accounting for collections and furnishing monthly and annual
statements with respect thereto to the Administrator. Subject to the provisions
of Section 4.02, the Master Servicer shall (or shall cause the applicable
Sub-Servicer to) follow its customary standards, policies and procedures in
performing its duties as Master Servicer (or Sub-Servicer, as the case may be).
Without limiting the generality of the foregoing, the Master Servicer is
authorized and empowered to execute and deliver (and may cause the applicable
Sub-Servicer to execute and deliver), on behalf of itself, the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the holders of Certificates and
the holders of Notes or any of them, instruments of satisfaction or
cancellation, or partial or full release or discharge, and all other comparable
instruments, with respect to such Financed Student Loans; PROVIDED, HOWEVER,
that the Master Servicer agrees that it will not (nor will it permit a
Sub-Servicer to) (a) permit any rescission or cancellation of a Financed Student
Loan except as ordered by a court of competent jurisdiction or governmental
authority or as otherwise consented to in writing by the Eligible Lender Trustee
and the Indenture Trustee or (b) reschedule, revise, defer or otherwise
compromise with respect to payments due on any Financed Student Loan except
pursuant to any applicable deferral or forbearance periods or otherwise in
accordance with all applicable standards, guidelines and requirements of the
Higher Education Act, any Guarantee Agreement or the Programs with respect to
the servicing of the Financed Student Loans and except as otherwise permitted in
accordance with Section 4.14; PROVIDED FURTHER, HOWEVER, that the Master
Servicer shall not agree (nor shall it permit any Sub-Servicer to agree) to any
decrease of the interest rate on, or the principal amount payable with respect
to, any Financed Student Loan except in accordance with the applicable
standards, guidelines and requirements of the Higher Education Act, any
Guarantee Agreement or the Programs and as otherwise permitted in accordance
with Section 4.14. The Eligible Lender Trustee on behalf of the Issuer hereby
grants a power of attorney and all necessary authorization to the Master
Servicer to (or to cause the applicable Sub-Servicer to) maintain any and all
collection procedures with respect to the Financed Student Loans it services (or
sub-services), including filing, pursuing and recovering claims against the
Guarantors for Guarantee Payments and taking any steps to enforce such Financed
Student Loan such as commencing a legal proceeding to enforce a Financed Student
Loan in the name of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee, the holders of Certificates or the holders of Notes. The Eligible
Lender Trustee or the Indenture Trustee shall upon the written request of the
Master Servicer or the Administrator furnish the Master Servicer or the
Administrator (or at written the direction of the Master Servicer or the
Administrator, the related Sub-Servicer) with any other powers of attorney and
other documents reasonably necessary or appropriate to enable the Master
Servicer or the Administrator (or related Sub-Servicer) to carry out their
servicing and administrative duties hereunder (or under the related
Sub-Servicing Agreement).
Notwithstanding the foregoing, and without releasing the Master
Servicer from its duties and obligations hereunder, the Master Servicer may
appoint one or more of the Sub-Servicers to act as "sub-servicer" on its behalf
with respect to the Financed Student Loans such Sub-Servicer is sub-servicing,
in each case consistent with the terms of this Article IV and any other
provision of this Agreement, and all references to the Master Servicer shall be
read to apply to such Sub-Servicer acting on behalf of the Master Servicer.
SECTION 4.02. COLLECTION OF FINANCED STUDENT LOAN PAYMENTS. (a) The
Master Servicer shall (or shall cause the applicable Sub-Servicer to) make
reasonable efforts (including all efforts that may be specified under the Higher
Education Act or any Guarantee Agreement) to collect all payments called for
under the terms and provisions of the Financed Student Loans as and when the
same shall become due and shall follow such collection procedures as it follows
with respect to all comparable student loans that it services. The Master
Servicer shall (or shall cause the applicable Sub-Servicer to) allocate
collections with respect to the Financed Student Loans between principal and
interest in accordance with Section 5.03. With the written consent of the
Administrator, the Master Servicer (or at the direction of the Master Servicer,
the related Sub-Servicer) may in its discretion waive any charge or any other
fee that may be collected in the ordinary course of servicing a Financed Student
Loan.
(b) The Master Servicer shall (or shall cause the applicable
Sub-Servicer to) make reasonable efforts to claim, pursue and collect all
Guarantee Payments from the Guarantors pursuant to the Guarantee Agreements with
respect to any of the Financed Guaranteed Loans as and when the same shall
become due and payable, shall comply with all applicable laws and agreements
with respect to claiming, pursuing and collecting such payments and shall follow
such practices and procedures as it follows with respect to all comparable
guarantee agreements and student loans that it services. In connection
therewith, the Master Servicer is hereby authorized and empowered (or at the
direction of the Master Servicer, the related Sub-Servicer is authorized and
empowered) to convey to any Guarantor the note and the related Financed Student
Loan File representing any Financed Guaranteed Loan in connection with
submitting a claim to such Guarantor for a Guarantee Payment in accordance with
the terms of the applicable Guarantee Agreement.
(c) The Eligible Lender Trustee shall, with the assistance of the
Administrator as set forth below and on behalf of the Issuer, make reasonable
efforts to claim, pursue and collect all Interest Subsidy Payments and Special
Allowance Payments from the Department with respect to any of the Financed
Federal Loans as and when the same shall become due and payable, shall comply
with all applicable laws and agreements with respect to claiming, pursuing and
collecting such payments and shall follow such practices and procedures as the
Administrator follows with respect to its own student loans. All amounts so
collected by the Eligible Lender Trustee shall constitute Available Funds for
the applicable Collection Period and shall be deposited into the Collection
Account in accordance with Section 5.02. In connection therewith, the
Administrator shall prepare and file with the Department on a timely basis all
claims forms and other documents and filings necessary or appropriate in
connection with the claiming of Interest Subsidy Payments and Special Allowance
Payments on behalf of the Eligible Lender Trustee and shall otherwise assist the
Eligible Lender Trustee in pursuing and collecting such Interest Subsidy
Payments and Special Allowance Payments from the Department. The Eligible Lender
Trustee shall upon the written request of the Administrator furnish the
Administrator with any power of attorney and other documents reasonably
necessary or appropriate to enable the Administrator to prepare and file such
claims forms and other documents and filings.
The Eligible Lender Trustee may permit trusts, other than the Trust,
established by the Seller to securitize student loans to use the Department
lender identification number applicable to the Trust. In such event, the
Eligible Lender Trustee may claim and collect Interest Subsidy Payments and
Special Allowance Payments with respect to Financed Student Loans in the Trust
and student loans in such other trusts using such common lender identification
number. Notwithstanding anything herein or in the Basic Documents to the
contrary, any amounts assessed against payments (including, but not limited to,
Interest Subsidy Payments and Special Allowance Payments) due from the
Department or any Federal Guarantor to any such other trust using such common
lender identification number as a result of amounts (including, but not limited
to, the Federal Consolidation Loan Rebate) owing to the Department or any
Federal Guarantor from the Trust will be deemed for all purposes hereof and of
the Basic Documents (including for purposes of determining amounts paid by the
Department or any Federal Guarantor with respect to the student loans in the
Trust and such other trust) to have been assessed against the Trust and shall be
deducted by the Eligible Lender Trustee or the Master Servicer and paid to such
other trust from any collections made by them which would otherwise have been
payable to the Collection Account, for the Trust. If so specified in the
servicing agreement applicable to any such other trust, any amounts assessed
against payments due from the Department or any Federal Guarantor to the Trust
as a result of amounts owing to the Department or any Federal Guarantor from
such other trust using such common lender identification number will be deemed
to have been assessed against such other trust and will be deducted by the
Eligible Lender Trustee or the Master Servicer from any collections made by them
which would otherwise be payable to the collection account for such other trust
and paid to the Trust.
SECTION 4.03. REALIZATION UPON FINANCED STUDENT LOANS. For the benefit
of the Issuer, the Master Servicer shall (or shall cause the applicable
Sub-Servicer to) use reasonable efforts consistent with its customary servicing
practices and procedures and including all efforts that may be specified under
the Higher Education Act or any applicable Guarantee Agreement in its servicing
(or sub-servicing) of any delinquent Financed Student Loans.
SECTION 4.04. COMPUTATION OF NOTE INTEREST RATE AND CERTIFICATE RATE.
Prior to each Determination Date, the Administrator shall determine each Note
Interest Rate and the Certificate Rate that will be applicable to the
Distribution Date following such Determination Date, in compliance with its
obligation to prepare and deliver an Administrator's Certificate on such
Determination Date pursuant to Section 4.08. In connection therewith, the
Administrator shall calculate the T-Xxxx Rate in accordance with the definition
thereof calculate Three-Month LIBOR in accordance with the definition thereof
and shall also determine the Student Loan Rate with respect to such Distribution
Date; provided, however, that no such calculation of the Student Loan Rate shall
be required to be made unless the T-Xxxx Rate or Three-Month LIBOR for such
Interest Period is 100 basis points greater than the T-Xxxx Rate of the
preceding Determination Date or Three-Month LIBOR of the preceding Determination
Date, respectively, or with respect to T-Xxxx Indexed Securities only, the 52
Week Treasury Xxxx Rate is 100 basis points less than the T-Xxxx Rate as of such
Determination Date.
SECTION 4.05. NO IMPAIRMENT. The Master Servicer shall not (nor shall
it permit the applicable Sub-Servicer to) impair the rights of the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the holders of Certificates or
the holders of Notes in such Financed Student Loans.
SECTION 4.06. PURCHASE OF FINANCED STUDENT LOANS; REIMBURSEMENT. The
Eligible Lender Trustee or the Master Servicer (or the applicable Sub-Servicer
on its behalf) shall inform the other party as well as the Indenture Trustee and
the Seller promptly, in writing, upon the discovery of any breach pursuant to
Section 4.01, 4.02, 4.03 or 4.05. Unless the breach shall have been cured within
60 days following such discovery (or, at the Master Servicer's election, the
last day of the first month following such discovery), the Master Servicer shall
purchase any Financed Student Loan in which the interests of the holders of
Notes or the holders of Certificates are materially and adversely affected by
such breach as of the first day succeeding the end of such 60-day period that is
the last day of a Collection Period (it being understood that any such breach
that does not affect any Guarantor's obligation to guarantee payment of such
Financed Student Loan in accordance with Guarantee Agreements will not be
considered to have a material adverse effect for this purpose). If the Master
Servicer takes any action or fails to take any action (including, without
limitation, all actions taken or not taken by a Sub-Servicer on its behalf)
during any Collection Period pursuant to the sections referred to above that
impairs the rights of the Issuer, the Indenture Trustee, the Eligible Lender
Trustee, the holders of Certificates or the holders of Notes in any Financed
Student Loan or otherwise than as provided in such sections, the Master Servicer
shall purchase such Financed Student Loan as of the last day of such Collection
Period. In consideration of the purchase of any such Financed Student Loan
pursuant to either of the two preceding sentences, the Master Servicer shall
remit the Purchase Amount in the manner specified in Section 5.04. In addition,
if any such breach by the Master Servicer (or a Sub-Servicer acting on its
behalf) does not trigger such a purchase obligation but does result in the
refusal by a Federal Guarantor to guarantee all or a portion of the accrued
interest, or the loss (including any obligation of the Issuer to repay to the
Department) of certain Interest Subsidy Payments and Special Allowance Payments,
with respect to a Financed Federal Loan, then, unless such breach, if curable,
is cured within 60 days, the Master Servicer shall reimburse the Issuer by
remitting an amount equal to the sum of all such non-guaranteed interest amounts
and such forfeited Interest Subsidy Payments and Special Allowance Payments in
the manner specified in Section 5.04. Subject to Section 7.02, the sole remedy
of the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the holders
of Certificates and the holders of Notes with respect to a breach pursuant to
Section 4.01, 4.02, 4.03 or 4.05 shall be to require the Master Servicer to
purchase Financed Student Loans or to reimburse the Issuer as provided above
pursuant to this Section. The Eligible Lender Trustee shall have no duty to
conduct any affirmative investigation as to the occurrence of any condition
requiring the purchase of any Financed Student Loan or the reimbursement for any
interest penalty pursuant to this Section 4.06. Notwithstanding the foregoing,
the Master Servicer, at its option, may permit or cause a Sub-Servicer to
purchase a Financed Student Loan from the Trust in its stead, in the manner and
for the reasons set forth above.
SECTION 4.07. MASTER SERVICING FEE; The Master Servicing Fee for
each calendar month payable on each Monthly Servicing Payment Date shall be
equal to the amounts determined by reference to the schedule of fees as set
forth in the Servicing Fee Schedule, attached hereto as Schedule E.
SECTION 4.08. ADMINISTRATOR'S CERTIFICATE; SERVICER'S REPORT. (a) On
or before (i) the seventh day of each month (or, if any such day is not a
Business Day, on the next succeeding Business Day), the Master Servicer shall
(or shall cause each Sub-Servicer to) deliver to the Seller a Servicer's Report
with respect to the preceding calendar month containing all information
necessary for the preparation of the applicable Transfer Agreement (including
Schedule A), and (ii) the Closing Date or the fifteenth day of each month (or,
if any such day is not a Business Day, on the next succeeding Business Day) or
any other Transfer Date, the Master Servicer shall (or shall cause each
Sub-Servicer to) deliver to the Administrator a Servicer's Report with respect
to the preceding calendar month containing all information necessary for the
Administrator's preparation of the Administrator's Officer's Certificate and the
Administrator's Certificate covering such calendar month referred to in
paragraphs (b) and (c) below.
(b) On each Determination Date prior to a Monthly Servicing Payment
Date that is not a Distribution Date, the Administrator shall deliver to the
Eligible Lender Trustee, the Indenture Trustee and (if the Seller is not the
Administrator) the Seller, an Officer's Certificate of the Administrator
containing all information necessary to pay the Master Servicer the Master
Servicing Fee due on such Monthly Servicing Payment Date pursuant to Sections
5.05(b) and 5.06. In addition, on the Business Day preceding each Transfer Date
during the Funding Period, the Administrator shall deliver to the Eligible
Lender Trustee, the Indenture Trustee, and (if the Seller is not the
Administrator) the Seller, an Officer's Certificate of the Administrator
containing all information necessary to make the transfers from the Escrow
Account and the Pre-Funding Account on such Transfer Date pursuant to Section
5.08.
(c) On each Determination Date prior to a Distribution Date, the
Administrator shall deliver to the Eligible Lender Trustee, the Indenture
Trustee and (if the Seller is not the Administrator) the Seller, with a copy to
the Rating Agencies, an Administrator's Certificate containing all information
necessary to make the distributions pursuant to Sections 5.05, 5.06 and
5.08(c)(i) and (ii), if applicable, for the Collection Period preceding the date
of such Administrator's Certificate as well as the amount of any Class A-1 Cap
Payment, Class A-2 Cap Payment, Class M Cap Payment and Certificate Cap Payment
for such Distribution Date. Financed Student Loans to be repurchased by the
Seller (whether pursuant to Section 2.03 or 3.02), purchased by the Master
Servicer (or a Sub-Servicer on its behalf) or acquired by any Guarantor shall be
identified by the Administrator by type of loan and borrower social security
number with respect to such Financed Student Loan (as specified in Schedule A).
SECTION 4.09. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) Each of the Administrator and the Master Servicer shall (and the Master
Servicer shall cause each Sub-Servicer to) deliver to the Seller, the Eligible
Lender Trustee and the Indenture Trustee, on or before March 30 of each year
beginning March 30, 2000, an Officers' Certificate of the Administrator or
Master Servicer (and each Sub-Servicer) as the case may be, dated as of December
31 of the preceding year, stating that (i) a review of the activities of the
Administrator or the Master Servicer (and each Sub-Servicer on its behalf), as
the case may be, during the preceding 12-month period (or, in the case of the
first such certificate, during the period from the Closing Date to December 31,
1999) and of its performance under this Agreement (or the related Sub-Servicing
Agreement, as applicable) has been made under such officers' supervision and
(ii) to the best of such officers' knowledge, based on such review, the
Administrator or the Master Servicer (or such Sub-Servicer), as the case may be,
has fulfilled all its obligations under this Agreement and the Administration
Agreement (or the related Sub-Servicing Agreement), as applicable, throughout
such year or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof. The Indenture Trustee shall send a copy of each such
Officers' Certificate and each report referred to in Section 4.10 to the Rating
Agencies. A copy of each such Officers' Certificate and each report referred to
in Section 4.10 may be obtained by any holder of Certificates, Certificate
Owner, holder of Notes or Note Owner by a request in writing to the Eligible
Lender Trustee addressed to its Corporate Trust Office, together with evidence
satisfactory to the Eligible Lender Trustee that such Person is one of the
foregoing parties. Upon the telephone request of the Eligible Lender Trustee,
the Indenture Trustee will promptly furnish the Eligible Lender Trustee a list
of holders of Notes as of the date specified by the Eligible Lender Trustee.
(b) The Master Servicer shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Seller, and the Rating Agencies, promptly after
having obtained knowledge thereof, but in no event later than five Business Days
thereafter, written notice in an Officers' Certificate of the Master Servicer of
any event which with the giving of notice or lapse of time, or both, would
become a Master Servicer Default under Section 8.01(a)(1) or (2) or would cause
Key Bank USA, National Association, to fail to meet any Rating Agency Condition
pursuant to Section 5.02(iii).
(c) The Administrator shall deliver to the Eligible Lender Trustee,
the Indenture Trustee, the Master Servicer and the Rating Agencies, promptly
after having obtained knowledge thereof, but in no event later than five
Business Days thereafter, written notice in an Officers' Certificate of the
Administrator of any event which with the giving of notice or lapse of time, or
both, would become an Administrator Default under Section 8.01(b)(1) or (2) or
would cause Key Bank USA, National Association, to fail to meet any Rating
Agency Condition pursuant to Section 5.02(iii).
SECTION 4.10. ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT.
Each of the Administrator and the Master Servicer shall (or the Master Servicer
shall cause each Sub-Servicer to) cause a firm of independent certified public
accountants, which may also render other services to the Administrator or the
Master Servicer (or such Sub-Servicer), as the case may be, to deliver to the
Seller, the Eligible Lender Trustee and the Indenture Trustee on or before March
31 of each year beginning March 31, 2001, (a) a report expressing a summary of
findings based upon a comparison of the mathematical calculations of certain
amounts set forth in the Servicer's Reports during the preceding calendar year
(or, in the case of the first such report, the period from the Closing Date to
December 31, 2000) with the Master Servicer's (or such Sub-Servicer's) computer
reports that were the source of such amounts and a report with regard to the
assertions by the Master Servicer's (or such Sub-Servicer's) management about
the Master Servicer's (or such Sub-Servicer's) compliance with the provisions of
this Agreement set forth on Schedule D hereto during the preceding calendar year
(or, in the case of the first such report, the period from the Closing Date to
December 31, 2000) and (b) a report addressed to the Master Servicer (and the
related Sub-Servicer), the Seller, the Eligible Lender Trustee, the Indenture
Trustee and each Rating Agency to the effect that (i) such accountants have
relied upon the assertions by the Master Servicer's (or such Sub-Servicer's)
management about the Master Servicer's (or such Sub-Servicer's) compliance with
this Agreement (or the related Sub-Servicing Agreement) during the preceding
calendar year (or, in the case of the first such report, during the period from
the Closing Date to December 31, 2000) and (ii) in such accountants' opinion,
such assertions are fairly stated in all material respects, except for such
exceptions as such firm shall believe to be immaterial and such other exceptions
as shall be set forth in such report. In the event such firm requires the
Indenture Trustee and the Eligible Lender Trustee to agree to the procedures
performed by such firm, the Master Servicer shall direct the Indenture Trustee
in writing to so agree; it being understood and agreed that the Indenture
Trustee and the Eligible Lender Trustee will deliver such letter of agreement in
conclusive reliance upon the direction of the Master Servicer, and the Indenture
Trustee and the Eligible Lender Trustee make no independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures.
Such report will also indicate that the firm is independent of the
Administrator or the Master Servicer (or such Sub-Servicer), as the case may be,
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 4.11. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING FINANCED STUDENT Loans. Upon reasonable prior notice, the Master
Servicer shall (or shall cause the Sub-Servicers to) provide to the holders of
Certificates and the holders of Notes access to the Financed Student Loan Files
in such cases where the holders of Certificates or the holders of Notes shall be
required by applicable statutes or regulations to review such documentation, as
demonstrated by evidence satisfactory to the Master Servicer (and the applicable
Sub-Servicer under the related Sub-Servicing Agreement) in its (or their)
reasonable judgment. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Master Servicer (or the applicable Sub-Servicer). Nothing in this
Section shall affect the obligation of the Master Servicer (or the applicable
Sub-Servicer on its behalf) to observe any applicable law prohibiting disclosure
of information regarding the Obligors and the failure of the Master Servicer (or
the applicable Sub-Servicer) to provide access to information as a result of
such obligation shall not constitute a breach of this Section.
SECTION 4.12. MASTER SERVICER AND ADMINISTRATOR EXPENSES. The Master
Servicer and the Administrator shall be severally required to pay or cause to be
paid all expenses incurred by it (or its agents acting on its behalf) in
connection with its activities hereunder, including fees and disbursements of
independent accountants, taxes imposed on the Master Servicer or the
Administrator, as the case may be, and expenses incurred in connection with
distributions and reports to the Administrator or to the holders of Certificates
and the holders of Notes, as the case may be.
SECTION 4.13. APPOINTMENT OF SUB-SERVICERS. The Master Servicer may at
any time, (i) upon the written consent of the Administrator, appoint one or more
Sub-Servicers to perform all or any portion of its obligations as Master
Servicer hereunder, provided, that the Rating Agency Condition shall have been
satisfied in connection therewith, and (ii) without notice or consent, delegate
specific duties to sub-contractors who are in the business of performing such
duties; PROVIDED, HOWEVER, that the Master Servicer shall remain obligated and
be liable to the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the
holders of Certificates and the holders of Notes for the servicing and
administering of the Financed Student Loans, in accordance with the provisions
hereof without diminution of such obligation and liability by virtue of the
appointment of such Sub-Servicer or other delegation of such duties and to the
same extent and under the same terms and conditions as if the Master Servicer
alone were servicing and administering the Financed Student Loans. The fees and
expenses of each Sub-Servicer (and any such sub-contractors) shall be as agreed
between the Master Servicer and the applicable Sub-Servicer or a sub-contractor
from time to time and none of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee, the holders of Certificates or the holders of Notes shall
have any responsibility therefor. The parties hereto hereby acknowledge and
consent to the appointment of PHEAA and Great Lakes as the initial Sub-Servicers
(and custodians of the Financed Student Loans each such Sub-Servicer is
servicing) pursuant to the PHEAA Sub-Servicing Agreement and the Great Lakes
Sub-Servicing Agreement, respectively, and acknowledge that the requirements of
this Section 4.13 are deemed to have been met with respect to PHEAA and Great
Lakes.
SECTION 4.14. SPECIAL PROGRAMS. The Master Servicer may at its option,
but is under no obligation to, offer (and may permit the Sub-Servicers to offer)
borrowers of the Financed Student Loans certain special incentive programs,
whether or not in existence as of the date of this Agreement, generally offered
to the obligors of comparable loans owned by the Seller; PROVIDED, HOWEVER, that
to the extent such programs are: (a) not in existence as of the date of this
Agreement and are not required by the Higher Education Act (in the case of the
Financed Federal Loans), or (b) not part of the special incentive program
designated as the "Keys2Repay Program" by the Seller, and have the effect of
reducing the yield on the Financed Student Loans (either by reducing borrower
payments or reducing principal balance), such special programs shall be applied
to borrowers of Financed Student Loans only if and to the extent the Issuer
receives payment from the Seller in an amount sufficient to offset such
reduction of yield netted against any payments owed by the Trust to the Seller
pursuant to this Agreement.
ARTICLE V
DISTRIBUTIONS; ACCOUNTS;
STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS
SECTION 5.01. ESTABLISHMENT OF TRUST ACCOUNTS. (a) (i) The
Administrator, for the benefit of the Issuer, shall establish and maintain
in the name of the Indenture Trustee an Eligible Deposit Account (the
"Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Issuer. The
Collection Account will initially be established as a segregated trust
account at KeyBank National Association in the name of the Indenture
Trustee. The Seller will make an initial deposit into the Collection
Account on the Closing Date of cash or certain Eligible Investments equal
to $12,803,198.65.
(ii) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Reserve Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Issuer.
The Reserve Account will initially be established as a segregated trust
account at KeyBank National Association in the name of the Indenture
Trustee.
(iii) The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Pre-Funding Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Issuer. The Pre-Funding Account will initially be established as a
segregated trust account at KeyBank National Association in the name of the
Indenture Trustee.
(iv) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Escrow Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Issuer.
The Escrow Account will initially be established as a segregated trust
account at KeyBank National Association in the name of the Indenture
Trustee.
(v) The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Cap Account"), bearing a designation clearly indicating that
the funds deposited therein are held for the benefit of the Issuer. The Cap
Account will initially be established as a segregated trust account at
KeyBank National Association in the name of the Indenture Trustee.
(b) Funds on deposit in the Collection Account, the Reserve Account,
the Pre-Funding Account, the Cap Account and the Escrow Account (collectively,
the "Trust Accounts") shall be invested by the Indenture Trustee (or any
custodian or designated agent with respect to any amounts on deposit in such
accounts) in Eligible Investments pursuant to written instructions by the
Administrator; PROVIDED, HOWEVER, it is understood and agreed that neither the
Administrator nor the Indenture Trustee shall be liable for any loss arising
from such investment in Eligible Investments. All such Eligible Investments
shall be held by (or by any custodian on behalf of) the Indenture Trustee for
the benefit of the Issuer; provided that on the Business Day preceding each
Distribution Date all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Available
Funds for such Distribution Date. Other than as described in the following
proviso or as otherwise permitted by the Rating Agencies, funds on deposit in
the Trust Accounts shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the Business Day
preceding the following Distribution Date; PROVIDED, HOWEVER, that funds on
deposit in Trust Accounts may, and all funds on deposit in the Cap Account
shall, be invested in Eligible Investments of the Indenture Trustee which may
mature so that such funds will be available on such Distribution Date. Funds
deposited in a Trust Account on a Business Day which immediately precedes a
Distribution Date upon the maturity of any Eligible Investments are not required
to be invested overnight.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon) and all such
funds, investments, proceeds and income shall be part of the Trust Estate.
Subject to the Administrator's power to instruct the Indenture Trustee
pursuant to paragraph (b) above and paragraph (c)(iii) below, the Trust
Accounts shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Issuer. If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee
(or the Administrator on its behalf) agrees, by its acceptance hereto, that
it shall within 10 Business Days (or such longer period, not to exceed 30
calendar days, as to which each Rating Agency may consent) establish a new
Trust Account as an Eligible Deposit Account and shall transfer any cash
and/or any investments to such new Trust Account. In connection with the
foregoing, the Administrator agrees that, in the event that any of the
Trust Accounts are not accounts with the Indenture Trustee, the
Administrator shall notify the Indenture Trustee in writing promptly upon
any of such Trust Accounts ceasing to be an Eligible Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit accounts shall
be held solely in Eligible Deposit Accounts, subject to the last sentence of
Section 5.01(c)(i); and, subject to Section 5.01(b), each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the Indenture
Trustee, and the Indenture Trustee shall have sole signature authority with
respect thereto;
(B) any Trust Account Property shall be Delivered to the Indenture
Trustee in accordance with the definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the Indenture Trustee or such other
Person acting solely for the Indenture Trustee as required for Delivery;
(C) In the event that the Indenture Trustee, in its capacity as
securities intermediary has or subsequently obtains by agreement, operation of
law or otherwise a security interest in the Trust Accounts or any security
entitlement credited thereto, the Indenture Trustee, in its capacity as
securities intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Indenture Trustee. The financial
assets and other items deposited to the Trust Accounts will not be subject to
deduction, set-off, banker's lien, or any other right in favor of any person
other than the Indenture Trustee (except that the Indenture Trustee, in its
capacity as securities intermediary may set off (i) all amounts due to it in
respect of its customary fees and expenses for the routine maintenance and
operation of the Trust Accounts, and (ii) the face amount of any checks which
have been credited to the Trust Accounts but are subsequently returned unpaid
because of uncollected or insufficient funds).
(iii) The Administrator shall have the power, revocable for cause or
upon the occurrence and during the continuance of an Administrator Default
by the Indenture Trustee or by the Eligible Lender Trustee with the consent
of the Indenture Trustee, to instruct the Indenture Trustee to make
withdrawals and payments from the Trust Accounts for the purpose of
permitting the Master Servicer, the Administrator or the Eligible Lender
Trustee to carry out its respective duties hereunder or permitting the
Indenture Trustee to carry out its duties under the Indenture.
SECTION 5.02. COLLECTIONS. The Master Servicer shall (or shall cause
the applicable Sub-Servicers to) remit within two Business Days of receipt
thereof to the Collection Account all payments by or on behalf of the Obligors
with respect to the Financed Student Loans (other than Purchased Student Loans),
and all Liquidation Proceeds, as collected during the Collection Period.
Notwithstanding the foregoing, for so long as (i) Key Bank USA, National
Association remains the Administrator, (ii) no Administrator Default shall have
occurred and be continuing and (iii) prior to ceasing daily remittances to the
Collection Account, the Rating Agency Condition shall have been satisfied (and
any conditions or limitations imposed by the Rating Agencies in connection
therewith are complied with), the Master Servicer shall (or shall cause the
applicable Sub-Servicers to) remit such collections within two Business Days of
receipt thereof to the Administrator, and the Administrator need not deposit
such collections into the Collection Account until one Business Day immediately
prior to the next following Distribution Date; PROVIDED, HOWEVER, that,
notwithstanding the foregoing, on or before the Business Day preceding each
Monthly Servicing Payment Date that is not a Distribution Date, the
Administrator shall deposit into the Collection Account (i) Guarantee Payments
made by XXXX in excess of the Maximum XXXX Payments Amount and (ii) that portion
of such amounts received by it that is equal to the Master Servicing Fee payable
on such date. In the event that any of the foregoing conditions for ceasing
daily remittances shall no longer be satisfied, then the Administrator shall
deposit all collections held by it into the Collection Account within five
Business Days thereof. For purposes of this Article V, the phrase "payments by
or on behalf of Obligors" shall mean payments made with respect to the Financed
Student Loans by or on behalf of borrowers thereof and the Guarantors (but
excluding the Department).
SECTION 5.03. APPLICATION OF COLLECTIONS. (a) With respect to each
Financed Student Loan, all collections (including all Guarantee Payments, but
subject to the Maximum 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 Financed Student Loan by the Master Servicer (or
the applicable Sub-Servicer on its behalf) in accordance with its customary
practice by allocating to interest the portion of such collection equal to the
product of (A) the applicable interest rate on such Financed Student Loan, (B)
the unpaid principal balance of such Financed Student Loan and (C) the period of
time elapsed since the preceding payment of interest on such Financed Student
Loan was made (over the actual number of days in a year) ("Interest
Collections") and by allocating the remainder of such collection to principal.
(b) All Liquidation Proceeds shall be applied to the related Financed
Student Loan.
SECTION 5.04. ADDITIONAL DEPOSITS. (a) Within two Business Days after
receipt thereof, the Eligible Lender Trustee shall deposit in the Collection
Account the aggregate amount of Interest Subsidy Payments and Special Allowance
Payments received by it with respect to the Financed Federal Loans. The Master
Servicer shall (or shall cause the applicable Sub-Servicers to) deposit in the
Collection Account the aggregate Purchase Amount with respect to Purchased
Student Loans and all other amounts to be paid by the Master Servicer under
Section 4.06 when such amounts are due, and the Seller shall deposit or cause to
be deposited therein the aggregate Purchase Amount with respect to Purchased
Student Loans and all other amounts to be paid by the Seller under Sections 3.02
and 9.01 when such amounts are due.
(b) Notwithstanding anything to the contrary set forth in paragraph
(a) above, if daily deposits to the Collection Account are not required pursuant
to Section 5.02, the Eligible Lender Trustee, the Seller and the Master Servicer
(or the Sub-Servicers on its behalf) shall pay the amounts referred to in
paragraph (a) above that would otherwise be deposited into the Collection
Account to the Administrator. The Administrator shall not be required to deposit
such amounts into the Collection Account until the Business Day preceding each
Distribution Date.
(c) On the Determination Date preceding each Distribution Date prior
to the termination of the Cap Agreement, the Administrator, in its capacity as
calculation agent under the Cap Agreement, shall determine the amount, if any,
of the Class A-1 Cap Payment, Class A-2 Cap Payment, Class M Cap Payment and
Certificate Cap Payment for such Distribution Date and shall instruct the Cap
Provider to deposit such amounts into the Cap Account on the Business Day prior
to such Distribution Date. In addition, upon the occurrence of an event of
default under the Cap Agreement or an early termination of the Cap Agreement,
the Administrator shall instruct the Cap Provider to deposit the amount of any
termination payment into the Cap Account.
SECTION 5.05. DISTRIBUTIONS. (a) On each Determination Date, the
Administrator shall calculate all amounts required to determine the amounts to
be deposited in the Collection Account from the other Trust Accounts, the
amounts to be distributed therefrom on the related Monthly Servicing Payment
Date or Distribution Date and the Class A-1 Cap Payment, Class A-2 Cap Payment,
Class M Cap Payment, Certificate Cap Payment, Class A Cap Funds, Class M Cap
Funds and Certificate Cap Funds. The Administrator, in its capacity as
calculation agent under the Administration Agreement, shall instruct the
Indenture Trustee (based on the information contained in the Administrator's
Certificate delivered pursuant to Section 4.08(a)), to withdraw from the Cap
Account the amount of any Class A Cap Funds, Class M Cap Funds and Certificate
Cap Funds and to distribute such amounts to the Noteholders and
Certificateholders on the related Distribution Date as provided in Section
5.05(c).
(b) On each Monthly Servicing Payment Date that is not a Distribution
Date, the Administrator shall instruct the Indenture Trustee (based on the
information contained in the Administrator's Officer's Certificate and each
related Servicer's Report delivered pursuant to Section 4.08(a) and (b)) to
distribute (i) to the Seller any amounts on deposit in the Collection Account
which consist of Guarantee Payments made by 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 Available Funds on deposit in the Collection
Account the Master Servicing Fee due with respect to the preceding calendar
month and all unpaid Master Servicing Fees from prior months, and the Indenture
Trustee shall comply with such instructions.
(c) On each Distribution Date, the Administrator shall instruct the
Indenture Trustee (based on the information contained in the Administrator's
Certificate and each related Servicer's Report delivered pursuant to Section
4.08(a) and (c)) to make the following deposits and distributions to the Persons
or to the account specified below by 11:00 a.m. (New York time), to the extent
of the amount of Available Funds in the Collection Account, in the following
order of priority and the Indenture Trustee shall comply with such instructions:
(i) to the Seller, any amounts on deposit in the Collection Account
which consist of Guarantee Payments made by XXXX in excess of the Maximum
XXXX Payments Amount;
(ii) to the Master Servicer, the Master Servicing Fee due with respect
to the preceding calendar month and all unpaid Master Servicing Fees from
prior months;
(iii) to the Administrator, from the amount of Available Funds
remaining after the application of clauses (i) and (ii), the Administration
Fee and all unpaid Administration Fees from prior Collection Periods;
(iv) to the holders of the Class A Notes, from the amount of Available
Funds remaining after the application of clauses (i), (ii) and (iii), the
Noteholders' Interest Distribution Amount for the Class A-1 Notes and Class
A-2 Notes pursuant to Section 8.02(c)(i) of the Indenture;
(v) to the holders of the Class M Notes, from the amount of Available
Funds remaining after the application of clauses (i) through (iv),
Noteholders' Interest Distribution Amount for the Class M Notes pursuant to
Section 8.02(c)(ii) of the Indenture;
(vi) to the Eligible Lender Trustee on behalf of the holders of the
Certificates, from the amount of Available Funds remaining after the
application of clauses (i) through (v), the Certificateholders' Interest
Distribution Amount;
(vii) to the Reserve Account from the amount of Available Funds
remaining after the application of clauses (i) through (vi), an amount, up
to the amount, if any, necessary to reinstate the balance of the Reserve
Account up to the Specified Reserve Account Balance;
(viii) to the holders of the Notes, from the amount of Available Funds
remaining after the application of clauses (i) through (vii), the
Noteholders' Principal Distribution Amount to be allocated pursuant to
Section 8.02(c)(iii) of the Indenture;
(ix) on each Distribution Date on and after the date on which the
Notes have been paid in full, to the Eligible Lender Trustee on behalf of
the holders of the related Certificates, from the amount of Available Funds
remaining after the application of clauses (i) through (viii), the
Certificateholders' Principal Distribution Amount;
(x) to the holders of the Class A Notes on a pro rata basis, based on
the amount of Noteholders' Interest Index Carryover owing on each class of
Class A Notes, from (1) the amount of Available Funds remaining after the
application of clauses (i) through (ix) and (2) the Class A Cap Funds, if
any, the aggregate unpaid amount of Noteholders' Interest Index Carryover,
if any, with respect to the Class A Notes;
(xi) to the holders of the Class M Notes, from (1) the amount of
Available Funds remaining after application of clauses (i) through (x), and
(2) the Class M Cap Funds, if any, the aggregate amount of Noteholders'
Interest Index Carryover, if any, with respect to the Class M Notes;
(xii) to the Eligible Lender Trustee on behalf of the holders of the
Certificates, from (1) the amount of Available Funds remaining after the
application of clauses (i) through (xi) and (2) the Certificate Cap Funds,
the aggregate unpaid amount of the Certificateholders' Interest Index
Carryover, if any;
(xiii) to the Cap Provider, an amount sufficient to reimburse the Cap
Provider for all previous Class A-1 Cap Payments, Class A-2 Cap Payments,
Class M Cap Payments and Certificate Cap Payments made by the Cap Provider
under the Cap Agreement and not previously reimbursed pursuant to this
clause (xiii); and
(xiv) to or upon the order of the Seller, the amount of Available
Funds remaining after the application of clauses (i) through (xiii).
Notwithstanding anything to the contrary contained in this Section
5.05(c), (1) on the second consecutive Distribution Date that the
outstanding principal balance of the Notes (after giving effect to any
amounts to be distributed to the holders of the Notes pursuant to Section
5.05(c) (viii) above) is in excess of the Note Collateralization Amount,
the holders of the Notes shall receive the Noteholders' Priority Principal
Distribution Amount in the order of priority specified in Section
8.02(c)(iii) of the Indenture prior to any payment to the holders of the
Certificates of the Certificateholders' Interest Distribution Amount on
such Distribution Date pursuant to Section 5.05(c) (vi) above and (2) on
the second consecutive Distribution Date that the outstanding principal
balance of the Class A Notes (after giving effect to any amounts to be
distributed to the holders of the Class A Notes pursuant to Section
5.05(c)(vii) above) is in excess of the Note Collateralization Amount, the
holders of the Class A Notes shall receive the Noteholders' Priority
Principal Distribution Amount in the order of priority specified in Section
8.02(c)(iii) of the Indenture prior to any payment to the holders of the
Class M Notes of the Noteholders' Interest Distribution Amount for the
Class M Notes on such Distribution Date pursuant to Section 5.05(c)(v)
above. In the event that any Class of Notes receives a payment in respect
of the Noteholders' Priority Distribution Amount, the Administrator, on
behalf of the Trust, shall give notice to each Rating Agency of such
payment.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default specified in Section 5.01(i), 5.01(ii),
5.01(iv), and 5.01(v) of the Indenture and the acceleration of the Notes
pursuant to Section 5.02 of the Indenture, no amounts will be distributed
to the Certificateholders until the Noteholders have received all accrued
and unpaid interest on the Notes (other than any Noteholders' Interest
Index Carryover) and the outstanding principal balance of the Notes has
been reduced to zero as provided in Section 5.04(b) of the Indenture. The
Administrator, on behalf of the Trust, shall give notice to each Rating
Agency of the occurrence of any such Event of Default.
SECTION 5.06. RESERVE ACCOUNT. (a) On the Closing Date, the Seller
shall deposit the Reserve Account Initial Deposit into the Reserve Account. On
the Closing Date, the Reserve Account Initial Deposit will equal the Specified
Reserve Account Balance as of the Closing Date.
(b) (i) In the event that the Master Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date exceeds the amount distributed to
the Master Servicer pursuant to Sections 5.05(b)(ii) and 5.05(c)(ii) on such
Monthly Servicing Payment Date or Distribution Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on such
Monthly Servicing Payment Date or Distribution Date an amount equal to such
excess, to the extent of funds available therein, and to distribute such amount
to the Master Servicer.
(ii) In the event that the Administration Fee for any Distribution
Date exceeds the amount distributed to the Administrator pursuant to
Section 5.05(c)(iii) on such Distribution Date, the Administrator shall
instruct the Indenture Trustee to withdraw from the Reserve Account on each
Distribution Date an amount equal to such excess, to the extent of funds
available therein after giving effect to paragraph (b)(i) above, and to
distribute such amount to the Administrator.
(iii) [Reserved]
(iv) [Reserved]
(v) In the event that the Noteholders' Interest Distribution Amount
with respect to the Class A Notes for a Distribution Date exceeds the
amount distributed to the holders of the Class A Notes pursuant to Section
5.05(c)(iv) on such Distribution Date, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account on such Distribution
Date an amount equal to such excess, to the extent of funds available
therein after giving effect to paragraph (b)(i) and (b)(ii) above, and to
distribute such amount to the holders of Notes entitled thereto, in the
same order and priority as is set forth in Section 5.05(c)(iv); PROVIDED,
HOWEVER, that, amounts on deposit in the Reserve Account will not be
available to cover any unpaid Noteholders' Interest Index Carryover with
respect to the Class A Notes.
(vi) In the event that (A) the Noteholders' Interest Distribution
Amount with respect to the Class M Notes for a Distribution Date exceeds
the amount distributed to holders of Class M Notes pursuant to Section
5.05(c)(v) on such Distribution Date and (B) the Note Collateralization
Amount is equal to or greater than the outstanding principal balance of the
Class A Notes (after giving effect to distributions on the Notes on such
Distribution Date) for the second consecutive Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing on such
Distribution Date to withdraw from the Reserve Account on such Distribution
Date an amount equal to the excess described in clause (A) above, to the
extent of funds available therein after giving effect to paragraphs (b)(i),
(b)(ii) and (b)(v) above, and to distribute such amount to the holders of
Class M Notes entitled thereto, in the same order and priority as is set
forth in Section 5.05(c)(v); PROVIDED, HOWEVER, that amounts on deposit in
the Reserve Account will not be available to cover any unpaid Noteholders'
Interest Index Carryover with respect to the Class M Notes.
(vii) In the event that (A) the Certificateholders' Interest
Distribution Amount for a Distribution Date exceeds the amount distributed
to holders of Certificates pursuant to Section 5.05(c)(vi) on such
Distribution Date and (B) the Note Collateralization Amount is equal to or
greater than the outstanding principal balance of the Notes (after giving
effect to distributions on the Notes on such Distribution Date) for the
second consecutive Distribution Date, the Administrator shall instruct the
Indenture Trustee on such Distribution Date to withdraw from the Reserve
Account on such Distribution Date an amount equal to the excess described
in clause (A) above, to the extent of funds available therein after giving
effect to paragraphs (b)(i), (b)(ii), (b)(v) and (b)(vi) above, and to
distribute such amount to the holders of Certificates entitled thereto, in
the same order and priority as is set forth in Section 5.05(c)(vi);
PROVIDED, HOWEVER, that amounts on deposit in the Reserve Account will not
be available to cover any unpaid Certificateholders' Interest Index
Carryover.
(viii) In the event and to the extent that on any Distribution Date,
there is a Realized Loss Amount, the Administrator shall instruct the
Indenture Trustee on such date to withdraw from the Reserve Account on such
date an amount equal to such Realized Loss Amount, to the extent of funds
available therein, after giving effect to paragraphs (b)(i), (b)(ii),
(b)(v), (b)(vi) and (b)(vii) above, and to distribute such amounts first,
in the order of priority set forth in Section 5.05(c)(viii) and, after the
outstanding principal balance of the Notes have been paid in full, in the
order of priority set forth in Section 5.05(c)(ix).
(ix) In the event that on the Final Maturity Date for the Class A-1
Notes, the outstanding principal balance of the Class A-1 Notes (prior to
giving effect to any distribution of principal thereon on such date)
exceeds the amount of principal distributed to the holders of the Class A-1
Notes on such date pursuant to Section 5.05(c)(viii), the Administrator
shall instruct the Indenture Trustee on such date to withdraw from the
Reserve Account on such date an amount equal to such excess, to the extent
of funds available therein, after giving effect to paragraphs (b)(i),
(b)(ii), (b)(v), (b)(vi), (b)(vii) and (b)(viii) above and to distribute
such amount to the holders of the Class A-1 Notes, in the same order and
priority as is set forth in Section 5.05(c)(viii).
(x) In the event that on the Final Maturity Date for the Class A-2
Notes the outstanding principal balance of the Class A-2 Notes (prior to
giving effect to any distribution of principal thereon on such date),
exceeds the amount of principal distributed to the holders of the Class A-2
Notes on such date pursuant to Section 5.05(c)(viii), the Administrator
shall instruct the Indenture Trustee on such date to withdraw from the
Reserve Account on such date an amount equal to such excess, to the extent
of funds available therein, after giving effect to paragraphs (b)(i),
(b)(ii), (b)(v), (b)(vi), (b)(vii), (b)(viii) and (b)(ix) above, and to
distribute such amount to the holders of the Class A-2 Notes, in the same
order and priority as set forth in Section 5.05 (c)(viii).
(xi) In the event that on the Final Maturity Date for the Class M
Notes the Noteholders' Principal Distribution Amount exceeds the amount
distributed to the holders of the Class M Notes pursuant to Section
5.05(c)(viii), the Administrator shall instruct the Indenture Trustee on
such date to withdraw from the Reserve Account on such date an amount equal
to such excess, to the extent of funds available therein after giving
effect to paragraphs (b)(i), (b)(ii), (b)(v), (b)(vi), (b)(vii), (b)(viii),
(b)(ix) and (b)(x) above, and to distribute such amount to the holders of
Certificates entitled thereto, in the same order and priority as is set
forth in Section 5.05(c)(viii).
(xii) In the event that on the Final Maturity Date for the
Certificates the Certificateholders' Principal Distribution Amount exceeds
the amount distributed to the holders of the Certificates pursuant to
Section 5.05(c)(ix), the Administrator shall instruct the Indenture Trustee
on such date to withdraw from the Reserve Account on such date an amount
equal to such excess, to the extent of funds available therein after giving
effect to paragraphs (b)(i), (b)(ii), (b)(v), (b)(vi), (b)(vii), (b)(viii),
(b)(ix), (b)(x) and (b)(xi) above, and to distribute such amount to the
holders of Certificates entitled thereto, in the same order and priority as
is set forth in Section 5.05 (c)(ix).
(c) [Reserved]
(d) If the amount on deposit in the Reserve Account on any
Distribution Date (without giving effect to all deposits or withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve
Account Balance for such Distribution Date, the Administrator shall instruct the
Indenture Trustee to deposit the amount of such excess into the Collection
Account for distribution on such Distribution Date.
(e) Following the payment in full of the aggregate outstanding
principal balance of the Notes and the Certificate Balance and of all other
amounts owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to holders of Notes and Certificates, the Master Servicer or the
Administrator (including any Noteholders' Interest Index Carryover and
Certificateholders' Interest Index Carryover) and the termination of the Trust,
any amount remaining on deposit in the Reserve Account shall be distributed to
the Seller. The Seller shall in no event be required to refund any amounts
properly distributed pursuant to this Section 5.06(e).
SECTION 5.07. STATEMENTS TO CERTIFICATEHOLDERS AND NOTEHOLDERS. On
each Determination Date preceding a Distribution Date, the Administrator shall
provide to the Indenture Trustee (with a copy to the Rating Agencies) for the
Indenture Trustee to forward on such succeeding Distribution Date to each holder
of record of the Notes and to the Eligible Lender Trustee for the Eligible
Lender Trustee to forward on such succeeding Distribution Date to each holder of
record of the Certificates a statement substantially in the form of Exhibits A
and B, respectively, setting forth at least the following information as to the
Notes and the Certificates, to the extent applicable:
(i) the amount of the distribution allocable to principal of each of
the Class A-1 Notes, the Class A-2 Notes, the Class M Notes and the
Certificates;
(ii) the amount of the distribution allocable to interest on each of
the Class A-1 Notes, the Class A-2 Notes, the Class M Notes and the
Certificates together with the interest rates applicable with respect
thereto (indicating whether such interest rates are based on (x) the T-Xxxx
Rate, in the case of T-Xxxx Indexed Securities or Three-Month LIBOR in the
case of LIBOR Indexed Securities or (y) the Student Loan Rate and
specifying what each such interest rate would have been if it had been
calculated using the alternate basis; provided that no such calculation of
the Student Loan Rate will be required to be made unless the T-Xxxx Rate or
Three-Month LIBOR for such Interest Period is 100 basis points greater than
the T-Xxxx Rate of the preceding Determination Date or Three-Month LIBOR,
of the preceding Determination Date, respectively, or with respect to
T-Xxxx Indexed Securities only, the 52 Week Treasury Xxxx Rate is 100 basis
points less than the T-Xxxx Rate as of such Determination Date);
(iii) the amount of (A) any Class A-1 Cap Payment, Class A-2 Cap
Payment, Class M Cap Payment and Certificate Cap Payment on such
Distribution Date and (B) the distribution, if any, allocable to any
Noteholders' Interest Index Carryover with respect to each Class of Notes
and any Certificateholders' Interest Index Carryover together with the
outstanding amount, if any, of each thereof after giving effect to any such
distribution;
(iv) the Pool Balance as of the close of business on the last day of
the preceding Collection Period, after giving effect to payments allocated
to principal reported as described in clause (i) above;
(v) the aggregate outstanding principal balance of each class of
Notes, the Certificate Balance and each Pool Factor as of such Distribution
Date, after giving effect to payments allocated to principal reported under
clause (i) above;
(vi) the amount of the Master Servicing Fee paid to the Master
Servicer and the amount of the Administration Fee paid to the
Administrator, respectively, with respect to such Collection Period;
(vii) the amount of the aggregate Realized Losses, if any, for such
Collection Period and the balance of Financed Student Loans that are
delinquent in each delinquency period as of the end of such Collection
Period;
(viii) the balance of the Reserve Account on such Distribution Date,
after giving effect to changes therein on such Distribution Date and the
amount of any Interest and Expense Draw and Realized Loss Draw on such
Distribution Date;
(ix) for Distribution Dates during the Funding Period, the remaining
Pre-Funded Amount on such Distribution Date, after giving effect to changes
therein during the related Collection Period;
(x) for the first Distribution Date, the Subsequent Pool Pre-Funded
Amount, if any, remaining in the Subsequent Pool Pre-Funding Subaccount
that has not been used to acquire Subsequent Pool Student Loans and is
being paid out to the holders of the Notes and holders of the Certificates;
and
(xi) for the first Distribution Date on or following the end of the
Funding Period, the amount of any remaining Pre-Funded Amount that has not
been used to make Additional Fundings and is being paid out to the holders
of the Notes.
Each amount set forth pursuant to clauses (i), (ii), (iii), (v) and (vi) above
shall be expressed as a dollar amount per $1,000 of original principal balance
of a Certificate or Note, as applicable. A copy of the statements referred to
above may be obtained by any Certificate Owner or Note Owner by a written
request to the Eligible Lender Trustee or the Indenture Trustee, respectively,
addressed to the respective Corporate Trust Office.
SECTION 5.08. PRE-FUNDING ACCOUNT. (a) On the Closing Date, the Seller
will deposit in the Pre-Funding Account $235,202,524.95 from the net proceeds of
the sale of the Notes and the Certificates. A portion of the amount on deposit
in the Pre-Funding Account equal to $175,202,524.95 (the "Subsequent Pool
Pre-Funded Amount") will be credited on the Closing Date to a designated
subaccount maintained by the Indenture Trustee within the Pre-Funding Account
(the "Subsequent Pool Pre-Funding Subaccount"). The remainder of the amount on
deposit in the Pre-Funding Account equal to $60,000,000.00 will be credited on
the Closing Date to a designated subaccount maintained by the Indenture Trustee
within the Pre-Funding Account (the "Other Additional Pre-Funding Subaccount").
No funds in the Other Additional Pre-Funding Subaccount may be used to purchase
Subsequent Pool Student Loans until the Subsequent Pool Pre-Funded Amount has
been reduced to zero. On each Transfer Date during the Funding Period on which
Subsequent Pool Student Loans are to be conveyed to the Eligible Lender Trustee
on behalf of the Issuer, the Administrator shall instruct the Indenture Trustee
to withdraw an amount equal to 100% of the sum of (x) the principal balance of,
plus (y) to the extent capitalized or to be capitalized, accrued interest on,
such Subsequent Pool Student Loans, first from the Subsequent Pool Pre-Funding
Subaccount until the Subsequent Pool Pre-Funded Amount has been reduced to zero
and then any remainder from the Other Additional Pre-Funding Subaccount. On each
Transfer Date during the Funding Period on which Other Subsequent Student Loans
are to be conveyed to the Eligible Lender Trustee on behalf of the Issuer, the
Administrator shall instruct the Indenture Trustee to withdraw an amount equal
to 100.00% of the sum of (x) the principal balance of, plus (y) to the extent
capitalized or to be capitalized, accrued interest on, such Other Subsequent
Student Loans (each sum of clauses (x) and (y) set forth in this sentence and
the previous sentence being, a "Transferred Balance"), first from the Escrow
Account until all amounts deposited therein during the calendar month
immediately preceding the Transfer Date have been reduced to zero and then any
remainder from the Other Additional Pre-Funding Subaccount. The Administrator
shall instruct the Indenture Trustee to distribute any Transferred Balance to or
upon the order of the Seller upon satisfaction of the conditions set forth in
Section 2.02(b) with respect to such transfer. On each Transfer Date on which
Guarantee Fee Advances are to be conveyed to the Eligible Lender Trustee on
behalf of the Issuer, the Administrator shall instruct the Indenture Trustee to
withdraw from the Other Additional Pre-Funding Subaccount an amount equal to the
principal balance of such Guarantee Fee Advances and to distribute such amount
to or upon the order of the Seller upon satisfaction of the conditions set forth
in Section 2.02(b) with respect to such transfer of Guarantee Fee Advances.
(b) In the event that any funds deposited in the Escrow Account during
the calendar month immediately preceding any Transfer Date remain on deposit
therein on such Transfer Date, after giving effect to all Additional Fundings to
be made with respect to such Transfer Date pursuant to paragraph (a) above, the
Indenture Trustee shall transfer such remaining funds from the Escrow Account to
the Collection Account and such funds shall be considered collections with
respect to the Financed Student Loans.
(c) (i) If as of the Special Determination Date (after giving effect
to all Additional Fundings on such date) the Subsequent Pool Pre-Funded
Amount has not been reduced to zero, the Administrator shall instruct the
Indenture Trustee pursuant to Section 4.08(c) to withdraw from the
Subsequent Pool Pre-Funding Subaccount on the first Distribution Date the
remaining Subsequent Pool Pre-Funded Amount on deposit in such subaccount
and, (x) if such amount is greater than $10,000,000, distribute the
applicable Noteholders' Percentage of such amount to the holders of Class
A-1 Notes, Class A-2 and Class M Notes, on a pro rata basis based on the
aggregate initial principal amounts of the Class A-1 Notes, the Class A-2
Notes and the Class M Notes, as a payment of principal, and distribute the
Certificateholders' Percentage of such amount to the holders of
Certificates as a payment of principal in the same manner as the
Certificateholders' Principal Distribution Amount is distributed, and (y)
if such amount is $10,000,000 or less, distribute such amount to the
holders of Class A-1 Notes as a payment of principal in the same manner as
the Noteholders' Principal Distribution Amount is distributed.
(ii) If (x) the Pre-Funded Amount has not been reduced to zero on the
Distribution Date on which the Funding Period ends (or, if the Funding
Period does not end on a Distribution Date, on the first Distribution Date
following the end of the Funding Period) after giving effect to any
reductions in the Pre-Funded Amount on such Distribution Date pursuant to
paragraph (a) above, the Administrator shall instruct the Indenture Trustee
pursuant to Section 4.08(c) to withdraw from the Pre-Funding Account on
such Distribution Date an amount equal to the Pre-Funded Amount and shall
transfer such remaining funds from the Pre-Funding Account to the
Collection Account and such funds shall be considered collections with
respect to the Financed Student Loans for the related Collection Period.
(d) (i) In the event that the Master Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date during the Funding Period
exceeds the amount distributed to the Master Servicer pursuant to Sections
5.05(b)(ii), 5.05(c)(ii) and 5.06(b)(i) on such Monthly Servicing Payment
Date or Distribution Date, the Administrator shall instruct the Indenture
Trustee to withdraw from the Other Additional Pre-Funding Subaccount on
such Monthly Servicing Payment Date or Distribution Date an amount equal to
such excess, to the extent of funds available therein, and to distribute
such amount to the Master Servicer.
(ii) In the event that the Administration Fee for any Distribution
Date during the Funding Period exceeds the amount distributed to the
Administrator pursuant to Sections 5.05(c)(iii) and 5.06(b)(ii) on such
Distribution Date, the Administrator shall instruct the Indenture Trustee
to withdraw from the Other Additional Pre-Funding Subaccount on each
Distribution Date an amount equal to such excess, to the extent of funds
available therein after giving effect to paragraph (d)(i) above, and to
distribute such amount to the Administrator.
(iii) In the event that the Noteholders' Interest Distribution Amount
with respect to the Class A Notes for a Distribution Date during the
Funding Period exceeds the amount distributed to the holders of Notes
pursuant to Sections 5.05(c)(iv) and 5.06(b)(v) on such Distribution Date,
the Administrator shall instruct the Indenture Trustee to withdraw from the
Other Additional Pre-Funding Subaccount on such Distribution Date an amount
equal to such excess, to the extent of funds available therein after giving
effect to paragraph (d)(i) and (d)(ii) above, and to distribute such amount
to the holders of Notes entitled thereto, in the same order and priority as
is set forth in Section 5.05(c)(iv).
(iv) In the event that (x) the Noteholders' Interest Distribution
Amount with respect to the Class M Notes for a Distribution Date exceeds
the amount distributed to the holders of Class M Notes pursuant to Sections
5.05(c)(v) and 5.06(b)(vi) on such Distribution Date and (y) the Note
Collateralization Amount is equal to or greater than the outstanding
principal balance of the Class A Notes (after giving effect to
distributions on the Notes, on such Distribution Date), the Administrator
shall instruct the Indenture Trustee on such Distribution Date to withdraw
from the Other Additional Pre-Funding Subaccount on such Distribution Date
to withdraw from the Other Additional Pre-Funding Subaccount on such
Distribution Date an amount equal to the excess described in clause (x)
above, to the extent of funds available therein after giving effect to
paragraphs (d)(i), (d)(ii) and (d)(iii) above, and to distribute such
amount to the holders of Class M Notes entitled thereto, in the same order
and priority as is set forth in Section 5.05(c)(v).
(v) In the event that (x) the Certificateholders' Interest
Distribution Amount for a Distribution Date exceeds the amount distributed
to the holders of Certificates pursuant to Sections 5.05(c)(vi) and
5.06(b)(vii) on such Distribution Date and (y) the Note Collateralization
Amount is equal to or greater than the outstanding principal balance of the
Notes (after giving effect to distributions on the Notes, on such
Distribution Date), the Administrator shall instruct the Indenture Trustee
on such Distribution Date to withdraw from the Other Additional Pre-Funding
Subaccount on such Distribution Date an amount equal to the excess
described in clause (x) above, to the extent of funds available therein
after giving effect to paragraphs (d)(i), (d)(ii), (d)(iii) and (d)(iv)
above, and to distribute such amount to the holders of Certificates
entitled thereto, in the same order and priority as is set forth in Section
5.05(c)(vi).
(vi) In the event the Realized Loss Amount for any Distribution Date
exceeds the amount withdrawn from the Reserve Account pursuant to Section
5.06(b)(viii), the Administrator shall instruct the Indenture Trustee on
such Distribution Date to withdraw from the Other Additional Pre-Funding
Subaccount or such Distribution Date an amount equal to such excess to the
extent of funds available therein after giving effect to paragraphs (d)(i),
(d)(ii), (d)(iii), (d)(iv) and (d)(vi) above, and to distribute such amount
in the same order of priority as if such amount had been withdrawn from the
Reserve Account pursuant to Section 5.06(b)(viii) on such Distribution
Date.
SECTION 5.09. SELLER OPTIONAL DEPOSIT. On or prior to any Distribution
Date, the Seller may, but shall not be obligated to, make an optional deposit
(each, a "Seller Optional Deposit") to the Reserve Account from funds to be
released to the Seller pursuant to Section 5.05(c)(xiv) on such Distribution
Date or otherwise. Any Seller Optional Deposit shall be applied on the related
Distribution Date in the same manner as other funds on deposit in the Reserve
Account on the related Distribution Date in accordance with Section 5.06.
ARTICLE VI
THE SELLER AND THE ADMINISTRATOR
SECTION 6.01. REPRESENTATIONS OF SELLER AND ADMINISTRATOR. Key Bank
USA, National Association, as Seller and Administrator, makes the following
representations on which the Issuer is deemed to have relied in acquiring the
Financed Student Loans. The representations speak as of the execution and
delivery of this Agreement and the Administration Agreement and as of the
Closing Date, in the case of the Initial Financed Student Loans, and as of the
applicable Transfer Date, in the case of the Additional Student Loans, and shall
survive the sale of the Financed Student Loans to the Eligible Lender Trustee on
behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to
the Indenture. As used below, references to Key Bank USA, National Association
shall mean Key Bank USA, National Association in its capacity as both the Seller
and the Administrator.
(a) ORGANIZATION AND GOOD STANDING. Key Bank USA, National Association
is duly organized and validly existing as a national banking association in good
standing under the laws of the United States of America, with the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to acquire and own
the Financed Student Loans.
(b) POWER AND AUTHORITY OF THE SELLER. The Seller has the corporate
power and authority to execute and deliver this Agreement and to carry out its
terms; the Seller has full corporate power and authority to sell and assign the
property to be sold and assigned to and deposited with the Issuer (or with the
Eligible Lender Trustee on behalf of the Issuer) and the Seller has duly
authorized such sale and assignment to the Issuer (or to the Eligible Lender
Trustee on behalf of the Issuer) by all necessary corporate action; and the
execution, delivery and performance of this Agreement have been duly authorized
by the Seller by all necessary corporate action.
(c) POWER AND AUTHORITY OF THE ADMINISTRATOR. The Administrator has
the corporate power and authority to execute and deliver this Agreement and the
Administration Agreement and to carry out their terms, and the execution,
delivery and performance of this Agreement and the Administration Agreement have
been duly authorized by the Administrator by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of Key Bank USA, National Association and the Administration
Agreement constitutes a legal, valid and binding obligation of the
Administrator, in each case enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and similar laws relating to
creditors' rights generally or the rights of creditors of banks the deposit
accounts of which are insured by the FDIC and subject to general principles of
equity.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement or the Administration Agreement and the fulfillment of the terms
hereof or thereof do not conflict with, result in any breach of any of the terms
and provisions of, nor constitute (with or without notice or lapse of time or
both) a default under, the articles of association or by-laws of Key Bank USA,
National Association, or any indenture, agreement or other instrument to which
Key Bank USA, National Association is a party or by which it shall be bound,
which breach or default would reasonably be expected to have a material adverse
effect on the condition of Key Bank USA, National Association, financial or
otherwise, or adversely affect the transactions contemplated by this Agreement
or the Administration Agreement; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the knowledge of Key Bank USA, National Association, any
order, rule or regulation applicable to Key Bank USA, National Association of
any court or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over Key Bank USA,
National Association or its properties.
(f) NO PROCEEDINGS. There are no proceedings or, to its best
knowledge, investigations pending against Key Bank USA, National Association or,
to its best knowledge, threatened against Key Bank USA, National Association
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Key Bank USA, National Association or
its properties: (i) asserting the invalidity of this Agreement, the Indenture or
any of the other Basic Documents, the Notes or the Certificates, (ii) seeking to
prevent the issuance of the Notes or the Certificates or the consummation of any
of the transactions contemplated by this Agreement, the Indenture or any of the
other Basic Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the performance
by Key Bank USA, National Association of its obligations under, or the validity
or enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) seeking to affect adversely the
Federal or state income tax attributes of the Issuer, the Notes or the
Certificates.
(g) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body, administrative
agency or other government instrumentality required to be obtained, effected or
given by Key Bank USA, National Association in connection with the execution and
delivery by Key Bank USA, National Association of this Agreement and the
performance by Key Bank USA, National Association of the transactions
contemplated by this Agreement, and in connection with the execution and
delivery by the Administrator of the Administration Agreement and the
performance by the Administrator of its duties thereunder, have in each case
been duly obtained, effected or given and are in full force and effect.
SECTION 6.02. EXISTENCE. During the term of this Agreement, the Seller
will keep in full force and effect its existence, rights and franchises as a
national banking association under the laws of the jurisdiction of its
organization, subject, however, to Section 6.05 hereof.
SECTION 6.03. LIABILITY OF SELLER; INDEMNITIES. The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement.
(a) The Seller shall indemnify, defend and hold harmless the Issuer,
the Eligible Lender Trustee, the Delaware Trustee and the Indenture Trustee and
their officers, directors, employees and agents from and against any taxes that
may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Basic Documents (except any
such income taxes arising out of fees paid to the Eligible Lender Trustee or the
Indenture Trustee), including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes (but, in the case of the
Issuer, not including any taxes asserted with respect to, and as of the date of,
the sale of the Financed Student Loans to the Eligible Lender Trustee on behalf
of the Issuer or the issuance and original sale of the Certificates and the
Notes, or asserted with respect to ownership of the Financed Student Loans or
Federal or other income taxes arising out of distributions on the Certificates
and the Notes) and costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend and hold harmless the Issuer,
the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee, the
Master Servicer, the holders of Certificates and the holders of Notes and the
officers, directors, employees and agents of the Issuer, the Eligible Lender
Trustee, the Delaware Trustee, the Indenture Trustee and the Master Servicer
from and against any and all costs, expenses, losses, claims, damages and
liabilities arising out of, or imposed upon such Person through, (i) the
Seller's willful misfeasance, bad faith or negligence in the performance of its
duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement and (ii) the Seller's or the
Issuer's violation of Federal or state securities laws in connection with the
offering and sale of the Notes and the Certificates.
(c) The Seller shall be liable as primary obligor for, and shall
indemnify, defend and hold harmless the Eligible Lender Trustee, the Delaware
Trustee and their respective officers, directors, employees and agents from and
against, all costs, expenses, losses, claims, damages, obligations and
liabilities arising out of, incurred in connection with or relating to the Trust
Agreement, the other Basic Documents, the Trust Estate, the acceptance or
performance of the trusts and duties set forth herein and in the Trust Agreement
or the action or the inaction of the Eligible Lender Trustee hereunder and of
the Eligible Lender Trustee and the Delaware Trustee under the Trust Agreement,
except to the extent that such cost, expense, loss, claim, damage, obligation or
liability: (i) shall be due to the willful misfeasance, bad faith or negligence
(except for errors in judgment) of the Eligible Lender Trustee or the Delaware
Trustee, as applicable, (ii) shall arise from any breach by the Eligible Lender
Trustee of its covenants under any of the Basic Documents or the Delaware
Trustee under the Trust Agreement; or (iii) shall arise from the breach by the
Eligible Lender Trustee of any of its representations or warranties set forth in
Section 7.03 of the Trust Agreement. In the event of any claim, action or
proceeding for which indemnity will be sought pursuant to this paragraph, the
Eligible Lender Trustee's or the Delaware Trustee's, as applicable, choice of
legal counsel shall be subject to the approval of the Seller, which approval
shall not be unreasonably withheld.
(d) The Seller shall pay any and all taxes levied or assessed upon all
or any part of the Trust Estate (other than those taxes expressly excluded from
the Seller's responsibilities pursuant to Section 6.03(a) above).
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee, Delaware Trustee or the Indenture
Trustee and the termination of this Agreement or the Indenture or the Trust
Agreement, as applicable, and shall include reasonable fees and expenses of
counsel and expenses of litigation. If the Seller shall have made any indemnity
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter shall collect any of such amounts from others, such
Person shall promptly repay such amounts to the Seller, without interest.
SECTION 6.04. LIABILITY OF ADMINISTRATOR; INDEMNITIES. The
Administrator shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Administrator under this Agreement or
the Administration Agreement.
The Administrator shall indemnify, defend and hold harmless the
Issuer, the Eligible Lender Trustee, the Delaware Trustee, the Indenture
Trustee, the Master Servicer, the holders of Certificates and the holders of
Notes and any of the officers, directors, employees and agents of the Issuer,
the Eligible Lender Trustee, the Delaware Trustee, the Indenture Trustee and the
Master Servicer from and against any and all costs, expenses, losses, claims,
damages and liabilities to the extent that such cost, expense, loss, claim,
damage or liability arose out of, or was imposed upon any such Person through,
the negligence, willful misfeasance or bad faith of the Administrator in the
performance of its duties under this Agreement or the Administration Agreement
or by reason of reckless disregard of its obligations and duties hereunder or
thereunder.
The Administrator shall pay reasonable compensation to the Indenture
Trustee and shall reimburse the Indenture Trustee for all reasonable expenses,
disbursements and advances, and indemnify, defend and hold harmless the
Indenture Trustee and its officers, directors, employees and agents from and
against all costs, expenses, losses, claims, damages and liabilities, to the
extent and in the manner provided in, and subject to the limitations of, Section
6.07 of the Indenture.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Administrator (or any successor thereto pursuant
to Section 6.05) as Administrator pursuant to Section 8.01(b), or a resignation
by such Administrator pursuant to this Agreement, such Administrator shall be
deemed to be the Administrator pending appointment of a successor Administrator
pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Eligible Lender Trustee, Delaware Trustee or the Indenture
Trustee or the termination of this Agreement and the Administration Agreement
and shall include reasonable fees and expenses of counsel and expenses of
litigation. If the Administrator shall have made any indemnity payments pursuant
to this Section and the Person to or on behalf of whom such payments are made
thereafter collects any of such amounts from others, such Person shall promptly
repay such amounts to the Administrator, without interest.
SECTION 6.05. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SELLER OR ADMINISTRATOR. Any Person (a) into which the Seller or
the Administrator, as the case may be, may be merged or consolidated, (b) which
may result from any merger or consolidation to which the Seller or the
Administrator, as the case may be, shall be a party or (c) which may succeed to
the properties and assets of the Seller or the Administrator, as the case may
be, substantially as a whole, shall be the successor to the Seller or the
Administrator, as the case may be, without the execution or filing of any
document or any further act by any of the parties to this Agreement or to the
Administration Agreement; PROVIDED, HOWEVER, that each of the Seller and the
Administrator hereby covenant that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving Seller
or Administrator, as the case may be, if other than Key Bank USA, National
Association (or affiliate thereof), executes an agreement of assumption to
perform every obligation of the Seller under this Agreement or the Administrator
under this Agreement and the Administration Agreement, as the case may be, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.01 or 6.01 shall have been breached and no
Administrator Default, and no event that, after notice or lapse of time, or
both, would become an Administrator Default shall have occurred and be
continuing, (iii) the surviving Seller or Administrator, as the case may be, if
other than Key Bank USA, National Association (or affiliate thereof), shall have
delivered to the Eligible Lender Trustee and the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Seller or Administrator, as the case may be, shall have a consolidated
net worth at least equal to that of the predecessor Seller or Administrator, as
the case may be, (v) such transaction will not result in a material adverse
Federal or state tax consequence to the Issuer, the holders of Notes or the
holders of Certificates and (vi) unless Key Bank USA, National Association (or
affiliate thereof) is the surviving entity, the Seller or the Administrator, as
the case may be, shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and Indenture
Trustee, respectively, in the Financed Student Loans and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests.
SECTION 6.06. LIMITATION ON LIABILITY OF SELLER, ADMINISTRATOR AND
OTHERS. (a) The Seller and any director or officer or employee or agent of the
Seller may rely in good faith on the advice of counsel or on any document of any
kind, prima facie properly executed and submitted by any Person respecting any
matters arising hereunder (provided that such reliance shall not limit in any
way the Seller's obligations under Section 3.02). The Seller shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability.
(b) Neither the Administrator nor any of its directors, officers,
employees or agents shall be under any liability to the Issuer, the holders of
Notes or the holders of Certificates, the Indenture Trustee or the Eligible
Lender Trustee except as provided under this Agreement or the Administration
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or the Administration Agreement or for errors in
judgment; PROVIDED, HOWEVER, that this provision shall not protect the
Administrator or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement or under the Administration Agreement. The
Administrator and any of its directors, officers, employees or agents may rely
in good faith on the advice of counsel or on any document of any kind, prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder or under the Administration Agreement.
Except as provided in this Agreement or the Administration Agreement,
the Administrator shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its duties to administer
the Financed Student Loans and the Trust in accordance with this Agreement and
the Administration Agreement, and that in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, that the Administrator may undertake
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the holders
of Certificates under this Agreement and the holders of Notes under the
Indenture.
SECTION 6.07. SELLER MAY OWN CERTIFICATES OR NOTES. The Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not the Seller or an Affiliate thereof, except as expressly provided herein
or in any other Basic Document.
SECTION 6.08. KEY BANK USA, NATIONAL ASSOCIATION NOT TO RESIGN AS
ADMINISTRATOR. Subject to the provisions of Section 6.05, Key Bank USA, National
Association shall not resign from the obligations and duties imposed on it as
Administrator under this Agreement and under the Administration Agreement except
upon determination that the performance of its duties under this Agreement and
under the Administration Agreement shall no longer be permissible under
applicable law or shall violate any final order of a court or administrative
agency with jurisdiction over Key Bank USA, National Association or its
properties. Notice of any such determination permitting the resignation of Key
Bank USA, National Association shall be communicated to the Eligible Lender
Trustee and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Eligible Lender Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Administrator shall have assumed the responsibilities and obligations of Key
Bank USA, National Association in accordance with Section 8.02.
ARTICLE VII
THE MASTER SERVICER
SECTION 7.01. REPRESENTATIONS OF MASTER SERVICER. The Master Servicer
makes the following representations on which the Issuer is deemed to have relied
in acquiring (through the Eligible Lender Trustee) the Financed Student Loans
and appointing the Master Servicer as master servicer hereunder. The
representations speak as of the execution and delivery of this Agreement and as
of the Closing Date, in the case of the Initial Financed Student Loans, and as
of the applicable Transfer Date, in the case of the Additional Student Loans,
but shall survive the sale, transfer and assignment of the Financed Student
Loans to the Eligible Lender Trustee on behalf of the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. The Master Servicer is duly
organized and validly existing as a national banking association in good
standing under the laws of the United States of America, with the power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to master service
the Financed Student Loans and to hold the Financed Student Loan Files as
custodian.
(b) DUE QUALIFICATION. The Master Servicer is duly qualified to do
business and has obtained all necessary licenses and approvals in all
jurisdictions in which the ownership or lease of property or the conduct of its
business (including the master servicing of the Financed Student Loans as
required by this Agreement) shall require such qualifications.
(c) POWER AND AUTHORITY OF THE MASTER SERVICER. The Master Servicer
has the corporate power and authority to execute and deliver this Agreement and
to carry out its terms; and the execution, delivery and performance of this
Agreement have been duly authorized by the Master Servicer by all necessary
corporate action.
(d) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Master Servicer enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally or the rights of creditors of banks
the deposit accounts of which are insured by the FDIC and subject to general
principles of equity.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under the articles of
association or by-laws of the Master Servicer, or any indenture, agreement or
other instrument to which the Master Servicer is a party or by which it shall be
bound nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than this Agreement); which breach or default would reasonably
be expected to have a material adverse effect on the condition of the Master
Servicer, financial or otherwise, or adversely affect the transactions
contemplated by this Agreement; nor violate any law or, to the knowledge of the
Master Servicer, any order, rule or regulation applicable to the Master Servicer
of any court or of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Master
Servicer or its properties.
(f) NO PROCEEDINGS. There are no proceedings, or, to the Master
Servicer's best knowledge, investigations pending, or, to the Master Servicer's
best knowledge, threatened against the Master Servicer, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Master Servicer or its properties: (i) asserting
the invalidity of this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance
of the Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that could reasonably be
expected to have a material and adverse effect on the performance by the Master
Servicer of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates or (iv) relating to the Master Servicer and which might adversely
affect the Federal or state income tax attributes of the Notes or the
Certificates.
(g) NO AMENDMENT OR WAIVER. No provision of a Financed Student Loan
has been waived, altered or modified in any respect, except pursuant to a
document, instrument or writing included in the Financed Student Loan File, and
no such amendment, waiver, alteration or modification causes such Financed
Student Loan not to conform to the other warranties contained in this Section or
those of the Seller contained in Section 3.01.
(h) LOCATION OF FINANCED STUDENT LOAN FILES. The Financed Student Loan
Files are kept in the offices of the Master Servicer (or applicable Sub-Servicer
on its behalf) specified in Schedule C hereto, or at such other office specified
in accordance with Section 3.04(b).
SECTION 7.02. INDEMNITIES OF MASTER SERVICER. The Master Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Master Servicer under this Agreement.
The Master Servicer shall pay for any loss, liability or expense,
including reasonable attorney's fees, that may be imposed on, incurred by or
asserted against the Issuer, the Eligible Lender Trustee, the Indenture Trustee,
the Seller, the Administrator, the holders of Certificates or the holders of
Notes or any of the officers, directors, employees and agents of the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, the Administrator or the Seller
to the extent that such loss, liability or expense arose out of, or was imposed
upon any such Person through, the negligence, willful misfeasance or bad faith
of the Master Servicer (or any Sub-Servicer acting on its behalf) in the
performance of its obligations and duties under this Agreement or by reason of
the reckless disregard of its obligations and duties (of those of any
Sub-Servicer acting on its behalf) under this Agreement, where the final
determination that any such loss, liability or expense arose out of, or was
imposed upon any such Person through, any such negligence, willful misfeasance,
bad faith or recklessness on the part of the Master Servicer (or such
Sub-Servicer acting on its behalf) is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Master Servicer.
Notwithstanding the foregoing, if the Master Servicer is rendered unable, in
whole or in part, by a force outside the control of the parties hereto
(including acts of God, acts of war, fires, earthquakes and other disasters) to
satisfy its obligations under this Agreement, the Master Servicer shall not be
deemed to have breached any such obligation upon delivery of written notice of
such event to the other parties hereto, for so long as the Master Servicer
remains unable to perform such obligation as a result of such event.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Master Servicer (or any successor thereto pursuant
to Section 7.03) as Master Servicer pursuant to Section 8.01(a), or a
resignation by such Master Servicer pursuant to this Agreement, the Master
Servicer shall be deemed to be the Master Servicer pending appointment of a
successor Master Servicer pursuant to Section 8.02.
Liability of the Master Servicer under this Section shall survive the
resignation or removal of the Eligible Lender Trustee or the Indenture Trustee
or the termination of this Agreement. If the Master Servicer shall have made any
payments pursuant to this Section and the Person to or on behalf of whom such
payments are made thereafter collects any of such amounts from others, such
Person shall promptly repay such amounts to the Master Servicer, without
interest.
SECTION 7.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, MASTER Servicer. Any Person (a) into which the Master Servicer
may be merged or consolidated, (b) which may result from any merger or
consolidation to which the Master Servicer shall be a party or (c) which may
succeed to the properties and assets of the Master Servicer substantially as a
whole, shall be the successor to the Master Servicer without the execution or
filing of any document or any further act by any of the parties to this
Agreement; PROVIDED, HOWEVER, that the Master Servicer hereby covenants that it
will not consummate any of the foregoing transactions except upon satisfaction
of the following: (i) the surviving Master Servicer, if other than Key Bank USA,
National Association (or affiliate thereof), executes an agreement of assumption
to perform every obligation of the Master Servicer under this Agreement, (ii)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 7.01 shall have been breached and no event
that, after notice or lapse of time, or both, would become a Master Servicer
Default shall have occurred and be continuing, (iii) the surviving Master
Servicer, if other than Key Bank USA, National Association (or affiliate
thereof), shall have delivered to the Eligible Lender Trustee and the Indenture
Trustee an Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Master Servicer shall have a consolidated net
worth at least equal to that of the predecessor Master Servicer, (v) unless Key
Bank USA, National Association (or affiliate thereof) is the surviving entity,
such transaction will not result in a material adverse Federal or state tax
consequence to the Issuer, the holders of Notes or the holders of Certificates
and (vi) unless Key Bank USA, National Association (or affiliate thereof) is the
surviving entity, the Master Servicer shall have delivered to the Eligible
Lender Trustee and the Indenture Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Eligible Lender
Trustee and Indenture Trustee, respectively, in the Financed Student Loans and
reciting the details of such filings, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interests.
SECTION 7.04. LIMITATION ON LIABILITY OF MASTER SERVICER AND OTHERS.
Neither the Master Servicer nor any of the directors, officers, employees or
agents of the Master Servicer shall be under any liability to the Issuer, the
holders of Notes or the holders of Certificates, except as provided under this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or for errors in judgment; PROVIDED, HOWEVER, that
this provision shall not protect the Master Servicer or any such person against
any liability that would otherwise be imposed by reason of willful misfeasance,
bad faith or negligence in the performance of duties or by reason of reckless
disregard of obligations and duties under this Agreement. The Master Servicer
and any director, officer, employee or agent of the Master Servicer may rely in
good faith on the advice of counsel or on any document of any kind prima facie
properly executed and submitted by any person respecting any matters arising
under this Agreement.
Except as provided in this Agreement, the Master Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its duties to service the Financed Student Loans in
accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; PROVIDED, HOWEVER, that the Master Servicer may undertake
any reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the holders
of Certificates under this Agreement and the holders of Notes under the
Indenture.
SECTION 7.05. KEY BANK USA, NATIONAL ASSOCIATION, NOT TO RESIGN AS
MASTER SERVICER. Subject to the provisions of Section 7.03, Key Bank USA,
National Association, shall not resign from the obligations and duties hereby
imposed on it as Master Servicer under this Agreement except upon determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of Key Bank USA, National Association, as Master Servicer shall
be communicated to the Eligible Lender Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently
with or promptly after such notice. No such resignation shall become effective
until the Indenture Trustee or a Successor Master Servicer shall have assumed
the responsibilities and obligations of Key Bank USA, National Association, as
Master Servicer in accordance with Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. MASTER SERVICER DEFAULT; ADMINISTRATOR DEFAULT. (a)
MASTER SERVICER DEFAULT. If any one of the following events (a "Master Servicer
Default") shall occur and be continuing:
(1) any failure by the Master Servicer (i) to deliver (or cause to be
delivered) to the Indenture Trustee for deposit in any of the Trust Accounts any
payment required by the Basic Documents or (ii) in the event that daily deposits
into the Collection Account are not required, to deliver (or cause to be
delivered) to the Administrator any payment required by the Basic Documents,
which failure in case of either clause (i) or (ii) continues unremedied for
three Business Days after written notice of such failure is received by the
Master Servicer from the Eligible Lender Trustee, the Indenture Trustee or the
Administrator or after discovery of such failure by an officer of the Master
Servicer; or
(2) any failure by the Master Servicer duly to observe or to perform
(or to cause to be observed or performed) in any material respect any other
covenants or agreements of the Master Servicer set forth in this Agreement or
any other Basic Document, which failure shall (i) materially and adversely
affect the rights of the holders of Notes or the holders of Certificates and
(ii) continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given (A) to the Master Servicer by the Indenture Trustee, the Eligible
Lender Trustee, or the Administrator or (B) to the Master Servicer, and to the
Indenture Trustee and the Eligible Lender Trustee by the holders of Notes or the
holders of Certificates, as applicable, representing not less than 25% of the
Outstanding Amount of the Notes or 25% of the outstanding Certificate Balance;
(3) an Insolvency Event occurs with respect to the Master Servicer; or
(4) any failure by the Master Servicer to comply with any applicable
requirements under the Higher Education Act resulting in a loss of its
eligibility, if applicable, as a third-party servicer (or the failure of the
Master Servicer to replace promptly any Sub-Servicer that has lost its
eligibility as a third-party servicer);
then, and in each and every case, so long as the Master Servicer Default shall
not have been remedied, either the Indenture Trustee, or the holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Master Servicer (and to the Indenture Trustee and
the Eligible Lender Trustee if given by the holders of Notes) may terminate all
the rights and obligations (other than the obligations set forth in Section 7.02
hereof) of the Master Servicer under this Agreement. On or after the receipt by
the Master Servicer of such written notice, all authority and power of the
Master Servicer under this Agreement, whether with respect to the Notes, the
Certificates or the Financed Student Loans or otherwise, shall, without further
action, pass to and be vested in the Indenture Trustee or such successor Master
Servicer as may be appointed under Section 8.02; and, without limitation, the
Indenture Trustee and the Eligible Lender Trustee are hereby authorized and
empowered to execute and deliver, for the benefit of the predecessor Master
Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Financed Student Loans and related
documents, or otherwise. The predecessor Master Servicer shall cooperate with
the successor Master Servicer, the Indenture Trustee and the Eligible Lender
Trustee in effecting the termination of the responsibilities and rights of the
predecessor Master Servicer under this Agreement and all Sub-Servicing
Agreements, including the transfer to the successor Master Servicer of its
rights under all existing Sub-Servicing Agreements and for administration by it
of all cash amounts that shall at the time be held by the predecessor Master
Servicer for deposit, or shall thereafter be received by it with respect to a
Financed Student Loan. All reasonable costs and expenses (including attorneys'
fees) incurred in connection with transferring the Financed Student Loan Files
to the successor Master Servicer and amending this Agreement, the Sub-Servicing
Agreements and any other Basic Documents to reflect such succession as Master
Servicer pursuant to this Section shall be paid by the predecessor Master
Servicer upon presentation of reasonable documentation of such costs and
expenses. Upon receipt of notice of the occurrence of a Master Servicer Default,
the Eligible Lender Trustee shall give notice thereof to the Rating Agencies.
Notwithstanding the foregoing, the successor Master Servicer shall have the
option to assume the rights of the predecessor Master Servicer under each
Sub-Servicing Agreement, or to enter into new Sub-Servicing Agreements with the
existing or other replacement Sub-Servicers; PROVIDED, HOWEVER, that unless the
existing Sub-Servicer is in breach of its Sub-Servicing Agreement, any and all
contractual damages, costs and expenses owed to any Sub-Servicer under the
existing Sub-Servicing Agreements by reason of such cancellation, shall be borne
by the successor Master Servicer.
(b) ADMINISTRATOR DEFAULT. If any one of the following events (an
"Administrator Default") shall occur and be continuing:
(1) (i) in the event that daily deposits into the Collection Account
are not required, any failure by the Administrator to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts any Available Funds required to
be paid on or before the Business Day immediately preceding any Monthly
Servicing Payment Date or Distribution Date, as applicable, or (ii) any failure
by the Administrator to direct the Indenture Trustee to make any required
distributions from any of the Trust Accounts, which failure in case of either
clause (i) or (ii) continues unremedied for three Business Days after written
notice of such failure is received by the Administrator from the Indenture
Trustee or the Eligible Lender Trustee or after discovery of such failure by an
officer of the Administrator; or
(2) any failure by the Administrator duly to observe or to perform in
any material respect any other covenants or agreements of the Administrator set
forth in this Agreement, the Administration Agreement or any other Basic
Document, which failure shall (i) materially and adversely affect the rights of
the holders of Notes or the holders of Certificates and (ii) continues
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A) to
the Administrator by the Indenture Trustee or the Eligible Lender Trustee or (B)
to the Administrator and to the Indenture Trustee and the Eligible Lender
Trustee by the holders of Notes or the holders of Certificates, as applicable,
representing not less than 25% of the Outstanding Amount of the Notes or 25% of
the outstanding Certificate Balance; or
(3) an Insolvency Event occurs with respect to the Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee, or the holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by notice
then given in writing to the Administrator (and to the Indenture Trustee and the
Eligible Lender Trustee if given by the holders of Notes) may terminate all the
rights and obligations (other than the obligations set forth in Section 6.04
hereof) of the Administrator under this Agreement and the Administration
Agreement. On or after the receipt by the Administrator of such written notice,
all authority and power of the Administrator under this Agreement and the
Administration Agreement, whether with respect to Notes, the Certificates or the
Financed Student Loans or otherwise, shall, without further action, pass to and
be vested in the Indenture Trustee or such successor Administrator as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee and
the Eligible Lender Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator, the Indenture Trustee and the
Eligible Lender Trustee in effecting the termination of the responsibilities and
rights of the predecessor Administrator under this Agreement and the
Administration Agreement. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with amending this Agreement and the
Administration Agreement to reflect such succession as Administrator pursuant to
this Section shall be paid by the predecessor Administrator upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice of
the occurrence of a Administrator Default, the Eligible Lender Trustee shall
give notice thereof to the Rating Agencies.
SECTION 8.02. APPOINTMENT OF SUCCESSOR. (a) Upon receipt by the Master
Servicer or the Administrator, as the case may be, of notice of termination
pursuant to Section 8.01, or the resignation by the Master Servicer or the
Administrator, as the case may be, in accordance with the terms of this
Agreement, the predecessor Master Servicer or Administrator, as the case may be,
shall continue to perform its functions as Master Servicer or Administrator, as
the case may be, under this Agreement or under this Agreement and the
Administration Agreement, as the case may be, in the case of termination, only
until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in the
case of resignation, until the later of (x) the date 120 days from the delivery
to the Eligible Lender Trustee and the Indenture Trustee of written notice of
such resignation (or written confirmation of such notice) in accordance with the
terms of this Agreement and (y) the date upon which the predecessor Master
Servicer or Administrator, as the case may be, shall become unable to act as
Master Servicer or Administrator, as the case may be, as specified in the notice
of resignation and accompanying Opinion of Counsel. In the event of the
termination hereunder of a Master Servicer or the Administrator, as the case may
be, the Issuer shall appoint a successor Master Servicer or Administrator, as
the case may be, acceptable to the Indenture Trustee, and the successor Master
Servicer or Administrator, as the case may be, shall accept its appointment by a
written assumption in form acceptable to the Indenture Trustee. In the event
that a successor Master Servicer or Administrator, as the case may be, has not
been appointed at the time when the predecessor Master Servicer or
Administrator, as the case may be, has ceased to act as Master Servicer or
Administrator in accordance with this Section, the Indenture Trustee without
further action shall automatically be appointed the successor Master Servicer or
Administrator, as the case may be, and the Indenture Trustee shall be entitled
to the applicable portion of the Master Servicing Fee or the Administration Fee,
as the case may be. Notwithstanding the above, the Indenture Trustee shall, if
it shall be unwilling or legally unable so to act, appoint or petition a court
of competent jurisdiction to appoint any established institution whose regular
business shall include the servicing of student loans, as the successor to a
Master Servicer under this Agreement or to the Administrator under this
Agreement and the Administration Agreement; PROVIDED, HOWEVER, that such right
to appoint or to petition for the appointment of any such successor Master
Servicer shall in no event relieve the Indenture Trustee from any obligations
otherwise imposed on it under the Basic Documents until such successor has in
fact assumed such appointment.
(b) Upon appointment, the successor Master Servicer or Administrator,
as the case may be (including the Indenture Trustee acting as successor Master
Servicer or Administrator, as the case may be), shall be the successor in all
respects to the predecessor Master Servicer or Administrator, as the case may
be, and shall be subject to all the responsibilities, duties and liabilities
placed on the predecessor Master Servicer or Administrator, as the case may be,
that arise thereafter or are related thereto and shall be entitled to an amount
agreed to by such successor Master Servicer or Administrator (which shall not
exceed the applicable portion of the Master Servicing Fee or the Administration
Fee, as the case may be, unless such compensation arrangements will not result
in a downgrading of Notes or the Certificates by any Rating Agency) and all the
rights granted to the predecessor Master Servicer or Administrator, as the case
may be, by the terms and provisions of this Agreement.
(c) Neither the Master Servicer nor the Administrator may resign
unless it is prohibited from serving as such by law as evidenced by an Opinion
of Counsel to such effect delivered to the Indenture Trustee and the Eligible
Lender Trustee. Notwithstanding the foregoing or anything to the contrary herein
or in the other Basic Documents, the Indenture Trustee, to the extent it is
acting as successor Master Servicer or Administrator pursuant hereto and
thereto, shall be entitled to resign to the extent a qualified successor Master
Servicer or Administrator has been appointed and has assumed all the obligations
of the Master Servicer or the Administrator, as the case may be, in accordance
with the terms of this Agreement and the other Basic Documents.
SECTION 8.03. NOTIFICATION TO NOTEHOLDERS AND CERTIFICATEHOLDERS. Upon
any termination of, or appointment of a successor to, the Master Servicer or the
Administrator, as the case may be, pursuant to this Article VIII, the Eligible
Lender Trustee shall give prompt written notice thereof to the holders of
Certificates and the Indenture Trustee shall give prompt written notice thereof
to holders of Notes and the Rating Agencies (which, in the case of any such
appointment of a successor, shall consist of prior written notice thereof to the
Rating Agencies).
SECTION 8.04. WAIVER OF PAST DEFAULTS. The Controlling Noteholders
evidencing not less than a majority of the Outstanding Amount of the Controlling
Notes (or the holders of Certificates evidencing not less than a majority of the
outstanding Certificate Balance, in the case of any default which does not
adversely affect the Indenture Trustee or the holders of any Class of Notes)
may, on behalf of all the holders of Notes and the holders of Certificates,
waive in writing any default by the Master Servicer in the performance of its
obligations hereunder, and any default by the Administrator in the performance
of its obligations hereunder and under the Administration Agreement, and any
consequences thereof, except a default in making any required deposits to or
payments from any of the Trust Accounts (or giving instructions regarding the
same) in accordance with this Agreement. Upon any such waiver of a past default,
such default shall cease to exist, and any Master Servicer Default or
Administrator Default arising therefrom shall be deemed to have been remedied
for every purpose of this Agreement and the Administration Agreement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereto.
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION. (a) OPTIONAL PURCHASE OF ALL FINANCED
STUDENT LOANS. As of the last day of any Collection Period immediately preceding
a Distribution Date as of which the sum of the then outstanding Pool Balance is
5% or less of the Adjusted Initial Pool Balance, the Seller shall have the
option to purchase the Trust Estate, other than the Trust Accounts; PROVIDED,
HOWEVER, that, unless Xxxxx'x agrees otherwise, the Seller may not effect any
such purchase so long as the rating on its long-term debt obligations is less
than Baa3 by Xxxxx'x and BBB by S&P, unless the Eligible Lender Trustee and the
Indenture Trustee shall have given notice to each of the Rating Agencies and
shall have received an Opinion of Counsel to the effect that such purchase would
not constitute a fraudulent conveyance. To exercise such option, the Seller
shall deposit pursuant to Section 5.04 in the Collection Account an amount equal
to the aggregate Purchase Amount for the Financed Student Loans and the related
rights with respect thereto, plus the appraised value of any such other property
held by the Trust other than the Trust Accounts, such value to be determined by
an appraiser mutually agreed upon by the Seller and the Eligible Lender Trustee,
and shall succeed to all interests in and to the Trust; PROVIDED, HOWEVER, that
the Seller may not effect such purchase if the aggregate Purchase Amount to be
so deposited in the Collection Account does not equal or exceed an amount equal
to the sum of (i) the unpaid principal amount of the Notes then outstanding plus
accrued and unpaid interest thereon at the applicable Note Interest Rates to the
date of exercise and the amount of unpaid Noteholders' Interest Index Carryover
with respect thereto and (ii) the unpaid Certificate Balance, plus accrued and
unpaid interest thereon at the Certificate Rate to the date of exercise and the
amount of unpaid Certificateholders' Interest Index Carryover with respect
thereto.
(b) [RESERVED]
(c) AUCTION OF FINANCED STUDENT LOANS. Any Financed Student Loans
remaining in the Trust as of the end of the Collection Period immediately
preceding the November 2009 Distribution Date will be offered for sale in the
aggregate by the Indenture Trustee as either a single pool (a "Single Pool
Sale") or in two separate pools (a "Two Pool Sale") as determined by the
Administrator in its sole discretion; provided, however, that if a Coordination
Agreement requires the offering of the Access Loans to PHEAA, XXXX and/or LAI,
the Indenture Trustee shall, in accordance with Section 10.06(a) of this
Agreement, offer for sale the Financed Student Loans that are Access Loans as a
single pool as part of a Two Pool Sale. KeyCorp, its affiliates, and unrelated
third parties may offer bids to purchase such Financed Student Loans on such
Distribution Date. If at least two bids are received, with respect to a Single
Pool Sale, the Indenture Trustee will solicit and resolicit bids from all
participating bidders until only one bid remains for such Financed Student Loans
or the remaining bidders decline to resubmit bids and, with respect to a Two
Pool Sale, if at least two bids are received for either pool of Financed Student
Loans, the Indenture Trustee will solicit and resolicit bids from all
participating bidders until only one bid remains with respect to each pool of
Financed Student Loans, or the remaining bidders decline to resubmit bids. The
Indenture Trustee shall, with respect to a Single Pool Sale, accept the highest
of such remaining bids from a single bidder if it is equal to or in excess of
the Minimum Purchase Amount, and with respect to a Two Pool Sale, accept the
highest of such remaining bids for each pool of Financed Student Loans, if the
sum of the such two bids is equal to or in excess of the Minimum Purchase
Amount. If (i) at least two bids are not received with respect to a Single Pool
Sale (or at least two bids for each pool of Financed Student Loans with respect
to a Two Pool Sale), or (ii) the highest bid (with respect to a Single Pool
Sale) or the combination of the highest two bids (with respect to a Two Pool
Sale), as the case may be, after the resolicitation process is completed is not
equal to or in excess of the Minimum Purchase Amount, the Indenture Trustee will
not consummate such sale. In connection with the determination of the Minimum
Purchase Amount, the Indenture Trustee may consult, and, at the direction of the
Seller, shall consult, with a financial advisor (which may be the Administrator)
to determine if the fair market value of the Financed Student Loans has been
offered. The proceeds of any such sale will be applied in the order of priority
set forth in Section 5.04(b) of the Indenture. If the sale is not consummated in
accordance with the foregoing, the Indenture Trustee may, but shall not be under
any obligation to, solicit bids to purchase the Financed Student Loans on future
Distribution Dates upon terms similar to those described above.
(d) NOTICE. As described in Article IX of the Trust Agreement, notice
of any termination of the Trust shall be given by the Administrator to the
Eligible Lender Trustee and the Indenture Trustee as soon as practicable after
the Administrator has received notice thereof.
(e) SUCCESSION. Following the satisfaction and discharge of the
Indenture and the payment in full of the principal of and interest on the Notes,
the holders of Certificates will succeed to the rights of the holders of Notes
hereunder other than Section 5.06(b) and the Eligible Lender Trustee will
succeed to the rights of (except for the rights of the Indenture Trustee which
have accrued prior to the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes), and assume the
obligations of, the Indenture Trustee pursuant to this Agreement and any other
Basic Documents.
ARTICLE X
ADDITIONAL PROVISIONS REGARDING FINANCED STUDENT LOANS
SECTION 10.01. PERIODIC REPORTS. No later than the fifteenth day of
each month, and for so long as the Eligible Lender Trustee on behalf of the
Trust shall own the Financed Student Loans, the Trust shall furnish to LAI or
cause to be furnished in an electronic form suitable to LAI, a record of all
Financed Student Loans which are Access Loans (the "Record"), as of the last day
of the preceding month. The Master Servicer shall (or shall cause the applicable
Sub-Servicers to) furnish the Record to LAI on behalf of the Trust (or on behalf
of the Indenture Trustee in the event that the Indenture Trustee becomes the
owner of the Financed Student Loans) as required by this Section 10.01. The
Master Servicer, acting on behalf of the Trust, shall honor LAI's reasonable
request for additional Records, at LAI's expense. The Record shall be on a
borrower level, by loan, and shall include, but need not be limited to, the
information required to be delivered by the Seller to LAI pursuant to the second
paragraph of Section 10.7 of the 1996-1998 Coordination Agreement. The Master
Servicer acknowledges and agrees that the costs and expenses to produce and
distribute (or to cause the applicable Sub-Servicers to produce and distribute)
the Record are part of the data transfer fee payable to it pursuant to the
Servicing Fee Schedule, attached as Schedule E to this Agreement and agrees that
no additional fees will be payable by the Trust or the Administrator to produce
and deliver the Record.
In addition to the foregoing Record, the parties hereto acknowledge
and agree that LAI may obtain from the Master Servicer (or the applicable
Sub-Servicers) at the sole cost and expense of LAI such additional information
as LAI may reasonably request concerning the Financed Student Loans which are
Access Loans, including, but not limited to, information on defaults, average
principal balance, and complaints. Any such request shall be made in writing to
the Administrator, with a copy to the Eligible Lender Trustee and the Master
Servicer. The Trust shall not be obligated to incur or pay any costs or expenses
associated with the production or delivery of such additional information,
except that, if the additional information requested by LAI is contained in any
monthly or other periodic report produced by the Master Servicer (or a
Sub-Servicer acting on its behalf) and delivered to the Trust (or to the
Administrator on behalf of the Trust) pursuant to this Agreement, the Trust
shall provide a copy of such report, or excerpts therefrom, to LAI and the
Administrator shall bear all photocopying and postage charges for producing and
mailing such copy.
The Indenture Trustee agrees to assume and perform the obligations of
the Trust under this Section 10.01 in the event that the Indenture Trustee
forecloses upon its security interest in and becomes the owner of the Financed
Student Loans.
SECTION 10.02. COOPERATION. With regard to the Financed Student Loans
which are Access Loans, the Trust, the Indenture Trustee, the Eligible Lender
Trustee, the Master Servicer and the Administrator each agree to cooperate with
each other, with each applicable Sub-Servicer and LAI, with the other parties to
the Coordination Agreements and with each of their internal or external
auditors, or governmental examiners, at the expense of the party requesting such
cooperation, and to provide any information regarding origination, disbursement,
servicing, and data collection relating to such loans as reasonably requested by
the other parties, their auditors, or governmental examiners as necessary or
desirable for the performance of an audit or examination. In that regard, each
party shall make available any necessary supporting records to each other party
and shall resolve any discrepancy claimed to exist in such records to the
reasonable satisfaction of the other party within 30 days of the date that the
other party has claimed that a discrepancy exists. Notwithstanding the
foregoing, the parties acknowledge that audit reviews conducted during heavy
processing periods may disrupt such operations. Accordingly, unless a party has
reason to believe that another party is in material breach of the performance of
its obligations under this Agreement, the Administration Agreement, the Trust
Agreement or the Indenture, reviews by internal or external auditors shall only
be scheduled during the months of January, February, April, May, June,
September, October, November or December.
SECTION 10.03. CONFIDENTIALITY. Each party to this Agreement and the
Indenture Trustee agrees to maintain the confidentiality of all data, materials
and information relating to The Access Group SM Loan Program and the Financed
Student Loans entrusted to it by another party hereto or any party to any of the
Coordination Agreements. Each party also agrees not to use such data, materials
and information for any purpose other than the limited purpose of performing its
obligations under this Agreement, the Administration Agreement, the Indenture,
the Trust Agreement or the Coordination Agreements. This section shall not be
deemed to preclude the disclosure of (i) information relating to the historical
performance of the Financed Student Loans (including, but not limited to,
statistical information relating to defaults, prepayments, consolidations,
deferrals and forbearances) by the Seller or the Administrator or, with the
consent of the Administrator, by the Eligible Lender Trustee or Indenture
Trustee, (ii) such information as in any of the Master Servicer's (or any
Sub-Servicer's acting on behalf of the Master Servicer), Administrator's,
Eligible Lender Trustee's or Indenture Trustee's discretion may be required
under any of this Agreement, the Trust Agreement, the Indenture or the
Administration Agreement to be disclosed to holders of the Notes or
Certificates, (iii) such information as may be required to be disclosed under
applicable laws, rules, regulations or governmental orders, (iv) information
obtained by the Indenture Trustee in the performance of its obligations as
Indenture Trustee, provided that the Indenture Trustee shall maintain the
confidentiality of all account level and borrower level information, including
without limitation, the borrower's name, address and social security number and
the account balance and account history or (v) disclosure by LAI of information
in the Record or other information received by LAI pursuant to Section 10.01 of
this Agreement.
SECTION 10.04. FUTURE PURCHASES. The Trust, the Eligible Lender
Trustee and the Indenture Trustee each hereby agree that, in the event of any
sale or other transfer of any Financed Student Loans that are Access Loans to
any third party, the Trust, the Eligible Lender Trustee or the Indenture
Trustee, as the case may be, as seller, or the Administrator acting on their
behalf, (i) shall use reasonable efforts to obtain from the purchaser or
transferee of such Access Loans an agreement in form and substance satisfactory
to LAI pursuant to which such purchaser or transferee agrees to observe and
comply with the obligations of the parties to this Agreement under Sections
10.02 and 10.03 hereof and the obligations of the Trust, the Eligible Lender
Trustee or the Indenture Trustee, as the case may be, as seller, or the
Administrator acting on its behalf, under this clause (i) of Section 10.04
hereof and (ii) shall obtain from any such purchaser or transferee an agreement
to provide LAI with prior notice of any future sale of such Access Loans, or
portion thereof, acquired by such purchaser or transferee and an agreement to
comply with the obligations of the Trust under Section 10.01 and the obligations
of the seller under this clause (ii) of Section 10.04 and under the last
sentence of Section 10.06(a) of this Agreement (provided, however, that if the
purchaser or transferee does not retain the Master Servicer (or the related
Sub-Servicer) as servicer, the obligation to deliver "Reports" shall be
construed as an obligation to deliver reports containing information
substantially similar to the information contained in Reports).
SECTION 10.05. PRIVATE GUARANTEE FEE. The Seller acknowledges and
agrees that, with respect to the Access Loans that are "Privately Guaranteed
Loans" (as defined in the 1992, 1993-1995 and 1996-1998 Coordination Agreements)
that have not yet entered repayment and are Financed Student Loans, the Seller
retains the obligation, pursuant to Section 9.2 of the 1992, 1993-1995 and
1996-1998 Coordination Agreements, to advance to the borrower an additional
private guarantee fee equal to 2% of the original principal amount of any such
Privately Guaranteed Loan made to a student since the commencement of the
1992-1993 Law Access(R) Program through the 1995-1996 Access Group Loan Program,
and, commencing with the 1996-1998 Access Group Loan Program a fee of 4% of the
original principal amount of each LAL Loan, 3% of each GAL Loan and BEL Loan and
2% for each MAL Loan, DAL Loan and REL Loan (each such term as defined in the
1992, 1993-1995 and 1996-1998 Coordination Agreements). The proceeds of such
advances shall be remitted in accordance with the 1992, 1993-1995 and 1996-1998
Coordination Agreements and Assigned Agreements.
SECTION 10.06. BIDS/FIRST REFUSAL RIGHTS. (a) If required pursuant to
a Coordination Agreement (and only to the extent required thereunder), in
connection with any contemplated sale of any Financed Student Loans pursuant to
Section 9.02(c) of this Agreement, the Indenture Trustee, on behalf of the
Trust, shall notify PHEAA, ASA, LAI and 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 Seller, the Administrator
or the Master Servicer (or a Sub-Servicer acting in its stead) as may be
required or permitted under this Agreement or any Guarantor in connection with
the enforcement of any applicable Guarantee Agreement. Key Bank USA, National
Association, acknowledges that if any Financed Student Loan that is an Access
Loan is reacquired by it, such Financed Student Loan shall from the time of such
reacquisition become subject to the restrictions and requirements on sale or
transfer of loans by Key Bank USA, National Association, under the applicable
Coordination Agreement.
SECTION 10.07. CONSOLIDATION LOANS. The parties to this Agreement, to
the extent applicable, hereby acknowledge and agree that, solely for purposes of
allocating consolidation loans that relate to Access Loans among lenders,
pursuant to Section 8.1 of the 1996-1998 Coordination Agreement, Section 8.1 of
the 1993-1995 Coordination Agreement, Section 8.1 of the 1992 Coordination
Agreement and any similar provision in any similar Coordination Agreement with
respect to subsequent academic years, Key Bank USA, National Association, shall
be deemed to be the owner of, and lender on, all Financed Student Loans.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENT. This Agreement may be amended by the Seller,
the Master Servicer, the Administrator and the Eligible Lender Trustee, with the
consent of the Indenture Trustee, but without the consent of any of the holders
of Notes or the holders of Certificates (which shall not be unreasonably
withheld), to cure any ambiguity, to correct or supplement any provisions in
this Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of modifying in
any manner the rights of the holders of Notes or the holders of Certificates;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Eligible Lender Trustee and the Indenture Trustee,
adversely affect in any material respect the interests of any holder of Notes or
holder of Certificates.
This Agreement may also be amended from time to time by the Seller,
the Master Servicer, the Administrator and the Eligible Lender Trustee, with the
consent of the Indenture Trustee, the consent of the Controlling Noteholders
evidencing not less than a majority of the Outstanding Amount of the Controlling
Notes, the consent of the holders of Certificates evidencing not less than a
majority of the Certificate Balance for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the holders of any Class of Notes or
the holders of Certificates; PROVIDED, HOWEVER, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments with respect to Financed Student Loans or
distributions that shall be required to be made for the benefit of the holders
of Notes or the holders of Certificates or (b) reduce the aforesaid percentage
of the Outstanding Amount of the Controlling Notes and the Certificate Balance,
holders of Controlling Notes or the holders of Certificates of which are
required to consent to any such amendment, without the consent of all
outstanding holders of all Classes of Notes and holders of Certificates.
Promptly after the execution of any such amendment or consent (or, in
the case of the Rating Agencies, five Business Days prior thereto), the Eligible
Lender Trustee shall furnish written notification of the substance of such
amendment or consent to each holder of Certificates, the Indenture Trustee and
each of the Rating Agencies.
It shall not be necessary for the consent of holders of Certificates
or holders of Notes pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof.
Prior to the execution of any amendment to this Agreement, the
Eligible Lender Trustee and the Indenture Trustee shall be entitled to receive
and rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 11.02(i)(1). The Eligible Lender Trustee and the Indenture Trustee
may, but shall not be obligated to, enter into any such amendment which affects
the Eligible Lender Trustee's or the Indenture Trustee's, as applicable, own
rights, duties or immunities under this Agreement or otherwise.
SECTION 11.02. PROTECTION OF INTERESTS IN TRUST. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Issuer, the Eligible Lender Trustee and the Indenture Trustee in the Financed
Student Loans and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Eligible Lender Trustee and the Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the Master Servicer shall (nor shall the
Master Servicer permit a Sub-Servicer to) change its name, identity or corporate
structure in any manner that would, could or might make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) of the UCC, unless it shall
have given the Eligible Lender Trustee and the Indenture Trustee at least five
days' prior written notice thereof and shall have promptly filed (or cause to be
filed) appropriate amendments to all previously filed financing statements or
continuation statements.
(c) The Seller and the Master Servicer shall have an obligation (and
the Master Servicer shall cause each Sub-Servicer) to give the Eligible Lender
Trustee and the Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall promptly file (or cause to be filed) any such
amendment. The Master Servicer shall (and shall cause each Sub-Servicer to) at
all times maintain each office from which it shall service Financed Student
Loans, and its principal executive office, within the United States of America.
(d) The Master Servicer shall (and shall cause the applicable
Sub-Servicer to) maintain accounts and records as to each Financed Student Loan
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Financed Student Loan, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Financed Student Loan and the amounts from time to time deposited in the
Collection Account in respect of such Financed Student Loan.
(e) The Master Servicer shall (and shall cause the applicable
Sub-Servicer to) maintain its computer systems so that, from and after the time
of sale under this Agreement of the Financed Student Loans, the Master
Servicer's (or the related Sub-Servicer's) master computer records (including
any backup archives) that refer to a Financed Student Loan shall indicate
clearly the interest of the Issuer, the Eligible Lender Trustee and the
Indenture Trustee in such Financed Student Loan and that such Financed Student
Loan is owned by the Eligible Lender Trustee on behalf of the Issuer and has
been pledged to the Indenture Trustee. Indication of the Issuer's, the Eligible
Lender Trustee's and the Indenture Trustee's interest in a Financed Student Loan
shall be deleted from or modified on the Master Servicer's (or the related
Sub-Servicer's) computer systems when, and only when, the related Financed
Student Loan shall have been paid in full or repurchased.
(f) If at any time the Seller or the Administrator shall propose to
sell, grant a security interest in, or otherwise transfer any interest in
student loans to any prospective purchaser, lender or other transferee, the
Master Servicer shall (or shall cause the applicable Sub-Servicer to) give to
such prospective purchaser, lender or other transferee computer tapes, records
or printouts (including any restored from backup archives) that, if they shall
refer in any manner whatsoever to any Financed Student Loan, shall indicate
clearly that such Financed Student Loan has been sold and is owned by the
Eligible Lender Trustee on behalf of the Issuer and has been pledged to the
Indenture Trustee.
(g) Upon reasonable notice, the Master Servicer shall (and shall cause
the applicable Sub-Servicer to) permit the Indenture Trustee and its agents at
any time during normal business hours to inspect, audit (subject to Section
10.02 with respect to Financed Student Loans that are Access Loans) and make
copies of and abstracts from the Master Servicer's (or the related
Sub-Servicer's) records regarding any Financed Student Loan.
(h) Upon request at any time the Eligible Lender Trustee or the
Indenture Trustee shall have reasonable grounds to believe that such request
would be necessary in connection with its performance of its duties under the
Basic Documents, the Master Servicer shall (or shall cause the applicable
Sub-Servicer to) furnish to the Eligible Lender Trustee or to the Indenture
Trustee (in each case, with a copy to the Administrator), within five Business
Days, a list of all Financed Student Loans (by borrower social security number,
type of loan and date of issuance) then held as part of the Trust, and the
Administrator shall furnish to the Eligible Lender Trustee or to the Indenture
Trustee, within 20 Business Days thereafter, a comparison of such list to the
list of Initial Financed Student Loans set forth in Schedule A as of the Closing
Date, and, for each Financed Student Loan that has been added to or removed from
the pool of loans held by the Eligible Lender Trustee on behalf of the Issuer,
information as to the date as of which and circumstances under which each such
Financed Student Loan was so added or removed.
(i) The Seller shall deliver to the Eligible Lender Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement and of
each amendment thereto and on each Transfer Date, an Opinion of Counsel either
(A) stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and the
Indenture Trustee in the Financed Student Loans, and reciting the details of
such filings or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such counsel, no such action shall
be necessary to preserve and protect such interest; and
(2) within 120 days after the beginning of each calendar year
commencing April 30, 2000, an Opinion of Counsel, dated as of a date during such
120-day period, either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and the Indenture Trustee in the Financed Student Loans, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest; PROVIDED that a single Opinion of Counsel may be delivered in
satisfaction of the foregoing requirement and that of Section 3.06(b) of the
Indenture.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify (as of the date of such opinion and given all applicable laws as in
effect on such date) any action necessary to be taken in the following year to
preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause
the Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 11.03. NOTICES. All demands, notices, instructions, directions
and communications upon or to the Seller, the Administrator, the Master
Servicer, the Issuer, the Eligible Lender Trustee, the Indenture Trustee or the
Rating Agencies under this Agreement shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, (or in the form of telex
or facsimile notice, followed by written notice delivered as aforesaid) and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller, the Master Servicer or the Administrator, to Key Bank USA, National
Association, 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxx 00000,
Attention: Key Education Resources, KeyCorp Student Loan Trust 1999-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 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),
(e) in the case of Fitch, to Fitch IBCA, Inc., Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, (telephone: (000) 000-0000; facsimile: (000) 000-0000), and (f)
in the case of S&P to Standard & Poor's, 00 Xxxxx Xxxxxx, Xxxxxxxxx: Asset
Backed Surveillance Department (telephone (000) 000-0000; facsimile (212)
438-2649), as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 11.04. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.05 and 7.03 and as provided
in the provisions of this Agreement concerning the resignation of the Master
Servicer or the Administrator, this Agreement may not be assigned by the Seller,
the Administrator or the Master Servicer. This Agreement may only be assigned by
the Eligible Lender Trustee to its permitted successor pursuant to the Trust
Agreement.
SECTION 11.05. LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Seller, the Master Servicer, the
Issuer and the Eligible Lender Trustee and for the benefit of the holders of
Certificates, the Indenture Trustee and the holders of Notes, as third party
beneficiaries, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy or
claim in the Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 11.06. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.07. SEPARATE COUNTERPARTS. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.08. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.09. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.10. ASSIGNMENT TO INDENTURE TRUSTEE. The Seller hereby
acknowledges and consents to any mortgage, pledge, assignment and grant by the
Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the
holders of the Notes of a security interest in all right, title and interest of
the Issuer in, to and under the Financed Student Loans and/or the assignment of
any or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 11.11. NONPETITION COVENANTS. (a) Notwithstanding any prior
termination of this Agreement, the Master Servicer, the Administrator and the
Seller shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Issuer, acquiesce, petition or
otherwise invoke or cause the Issuer to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuer under any Federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Master Servicer or any successor Master Servicer shall not, prior to the date
which is one year and one day after the termination of this Agreement with
respect to the Seller, acquiesce, petition or otherwise invoke or cause the
Seller to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Seller under any
insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Seller or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Seller.
SECTION 11.12. LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND
INDENTURE TRUSTEE. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been signed by Bank One, National Association, not
in its individual capacity but solely in its capacity as Eligible Lender Trustee
of the Issuer and, subject to paragraph (d) below, in no event shall Bank One,
National Association, in its individual capacity or, except as expressly
provided in the Trust Agreement, as beneficial owner of the Issuer have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto as to all of which recourse shall be had
solely to the assets of the Issuer.
(b) [RESERVED]
(c) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and, except as provided in paragraph
(d) below, in no event shall Bankers Trust Company have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
(d) Notwithstanding any other provision in this Agreement or the other
Basic Documents, nothing in this Agreement or the other Basic Documents shall be
construed to limit the legal responsibility of the Eligible Lender Trustee or
the Indenture Trustee to the U.S. Secretary of Education or a Guarantor for any
violations of statutory or regulatory requirements that may occur with respect
to loans held by the Eligible Lender Trustee or the Indenture Trustee, pursuant
to, or to otherwise comply with their obligations under, the Higher Education
Act or implementing regulations, it being expressly understood that the
Indenture Trustee has no obligation or duty pursuant to this Section except in
the event of Foreclosure or pursuant to Section 8.01 as a successor Master
Servicer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.
KEYCORP STUDENT LOAN TRUST 1999-B,
as Issuer,
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee on behalf of
the Trust,
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
as Seller,
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
as Master Servicer,
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
KEY BANK USA, NATIONAL ASSOCIATION,
as Administrator,
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx
Title: Senior Vice President
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee,
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Acknowledged, accepted, and with
respect to Article X, agreed to,
as of the day and year
first above written:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely as Indenture Trustee,
By: /s/ Xxxxxxxxxxx X. Xxx
-------------------------
Name: Xxxxxxxxxxx X. Xxx
Title: Assistant Treasurer
Acknowledged and accepted
as of the day and year
first above written:
BANKERS TRUST COMPANY,
not in its individual capacity
but solely in its capacity as
securities intermediary
under Section 5.01,
By: /s/ Xxxxxxxxxxx X. Xxx
---------------------------
Name: Xxxxxxxxxxx X. Xxx
Title: Assistant Treasurer
APPENDIX A
DEFINITIONS AND USAGE
USAGE
The following rules of construction and usage shall be applicable to
any instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant thereto unless otherwise defined therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in an instrument refer to such instrument as a whole and not to
any particular provision or subdivision thereof; references in an instrument to
"Article," "Section" or another subdivision or to an attachment are, unless the
context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument; and the term "including" means "including without
limitation."
(d) The definitions contained in this Appendix are equally applicable
to both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below
or in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
DEFINITIONS
"ACCESS LOANS" means those Financed Student Loans that were originated
under The Law Access(R) Program or The Access GroupSM Loan Program as
administered by LSAS or LAI.
"ACT" has the meaning specified in Section 11.03(a) of the Indenture.
"ADDITIONAL STUDENT LOANS" means the Subsequent Pool Student Loans,
the Other Subsequent Student Loans, Guarantee Fee Advances and the fundings of
accrued interest to be capitalized.
"ADJUSTED INITIAL POOL BALANCE" means, the sum of the Pool Balance as
of the Cutoff Date, which is $742,794,276.40, plus as of each Subsequent Cutoff
Date the principal balance of each Subsequent Pool Student Loan sold to the
Eligible Lender Trustee on behalf of the Issuer on each Transfer Date during the
Funding Period (but no later than the Special Determination Date).
"ADMINISTRATION AGREEMENT" means the Administration Agreement dated as
of September 1, 1999, among the Issuer, the Indenture Trustee and the
Administrator.
"ADMINISTRATION FEE" has the meaning specified in Section 3 of the
Administration Agreement.
"ADMINISTRATOR" means Key Bank USA, National Association, a national
banking association, in its capacity as administrator of the Issuer and the
Financed Student Loans.
"ADMINISTRATOR DEFAULT" has the meaning specified in Section 8.01(b)
of the Sale and Servicing Agreement.
"ADMINISTRATOR'S CERTIFICATE" means an Officers' Certificate of the
Administrator delivered pursuant to Section 4.08(c) of the Sale and Servicing
Agreement and containing the information required by Section 4.08(c).
"AFFILIATE" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AMERITRUST" means Ameritrust Company National Association,
predecessor in interest to Society.
"APPLICABLE INDEX" means (1) with respect to LIBOR Indexed Securities,
Three-Month LIBOR and (2) with respect to Treasury Indexed Securities, the
T-Xxxx Rate.
"APPLICABLE NOTE MARGIN" means with respect to the Class A-1 Notes,
0.28%, with respect to the Class A-2 Notes, 0.43% and with respect to the Class
M Notes, 0.70%.
"ASA" means the Massachusetts Higher Education Assistance Corporation
now doing business as American Student Assistance Corporation, a Massachusetts
non-profit corporation.
"ASSIGNED AGREEMENTS" means the following agreements, as the same may
be amended and restated from time to time, (i) the Deposit Agreement dated as of
January 28, 1992, between XXXX and the Seller (as successor to Ameritrust), (ii)
the Security Agreement dated as of January 28, 1992, between XXXX and the Seller
(as successor to Ameritrust), (iii) the Letter Agreement dated as of January 28,
1992, between LSAS and the Seller (as successor to Ameritrust), (iv) the Trust
Agreement dated as of July 14, 1992 and restated as of July 1, 1994, among the
Seller, LSAS and First Bank (N.A.), Milwaukee, Wisconsin, as trustee, (v) the
LAL/BEL Guarantee Agreements dated as of January 28, 1992 and December 21, 1992,
between the Seller and XXXX, and (vi) the Private Guarantee Agreement dated as
of March 23, 1995, among the Seller, 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, (viii) Alternative DEAL Surety Bond Numbers 1994-A, 1994-B, 1995-A and
1996-A, dated February 23, 1994, October 4, 1994, July 1, 1995 and July 1, 1996,
respectively, issued by HICA to KeyBank of Maine, Society, Society and Seller,
respectively; and (ix) the Pledged Collateral Account Control Agreement dated as
of January 1, 1999, among XXXX, Seller and McDonald Investments Inc., a
wholly-owned subsidiary of KeyCorp, all to the extent necessary to permit the
Trust to realize its rights and benefits under the assignment of the agreements
referred to in clauses (i) through (ix) above.
"ASSIGNED RIGHTS" has the meaning specified in Section 2.01 of the
Sale and Servicing Agreement.
"AUCTION PURCHASE AMOUNT" with respect to the Financed Student Loans
means the aggregate unpaid principal balance owed by the applicable borrowers
thereon plus accrued interest thereon to the date of purchase less the amount on
deposit in the Reserve Account as of such date.
"AUTHORIZED OFFICER" means (i) with respect to the Issuer, any officer
of the Eligible Lender Trustee who is authorized to act for the Eligible Lender
Trustee in matters relating to the Issuer pursuant to the Basic Documents and
who is identified on the list of Authorized Officers delivered by the Eligible
Lender Trustee to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (ii) with respect to the
Administrator, any officer of the Administrator or any of its Affiliates who is
authorized to act for the Administrator in matters relating to itself or to the
Issuer and to be acted upon by the Administrator pursuant to the Basic Documents
and who is identified on the list of Authorized Officers delivered by the
Administrator to the Indenture Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter), (iii) with respect to
the Seller, any officer of the Seller or any of its Affiliates who is authorized
to act for the Seller in matters relating to or to be acted upon by the Seller
pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Seller to the Indenture Trustee on the Closing Date
(as such list may be modified or supplemented from time to time thereafter),
(iv) with respect to the Master Servicer, any officer of the Master Servicer or
any of its Affiliates who is authorized to act for the Master Servicer in
matters relating to or to be acted upon by the Master Servicer pursuant to the
Basic Documents and who is identified on the list of Authorized Officers
delivered by the Master Servicer to the Indenture Trustee on the Closing Date
(as such list may be modified or supplemented from time to time thereafter), and
(v) with respect to any Sub-Servicer, any officer of the Sub-Servicer or any of
its Affiliates who is authorized to act for such Sub-Servicer in matters
relating to or to be acted upon by the Sub-Servicer, pursuant to the applicable
Sub-Servicing Agreement, and who is identified on the list of Authorized
Officers delivered by such Sub-Servicer to the Master Servicer on the Closing
Date (as such list may be modified or supplemented from time to time
thereafter).
"AVAILABLE FUNDS" means, with respect to a Distribution Date or any
Monthly Servicing Payment Date, the sum of the following amounts received with
respect to the then elapsed portion of the related Collection Period to the
extent not previously distributed:
(i) all collections received by the Master Servicer (or any
Sub-Servicer acting on its behalf) on the Financed Student Loans (including
any Guarantee Payments received with respect to such Financed Student
Loans), but net of (x), any Federal Origination Fee and Federal
Consolidation Loan Rebate payable to the Department on Federal
Consolidation Loans disbursed after October 1, 1993, (y) any applicable
administrative fees, late fees or similar fees received from a borrower,
and (z) any collections in respect of principal on the Financed Student
Loans applied by the Trust to repurchase guaranteed loans from the
Guarantors in accordance with the Guarantee Agreements;
(ii) any Interest Subsidy Payments and Special Allowance Payments
received by the Eligible Lender Trustee during the then elapsed portion of
such Collection Period with respect to the Financed Federal Loans;
(iii) all Liquidation Proceeds and all Recoveries in respect of
Liquidated Student Loans which were written off in prior Collection Periods
or prior months of such Collection Period;
(iv) the aggregate Purchase Amounts received for those Financed
Student Loans repurchased by the Seller or purchased by the Master Servicer
(or any Sub-Servicer acting on its behalf) under an obligation which arose
during the elapsed portion of such Collection Period;
(v) the aggregate amounts, if any, received from the Seller or the
Master Servicer (or any Sub-Servicer acting on its behalf), as the case may
be, as reimbursement of non-guaranteed interest amounts, or, lost Interest
Subsidy Payments and Special Allowance Payments, with respect to the
Financed Federal Student Loans pursuant to Section 3.02 or 4.06,
respectively of the Sale and Servicing Agreement;
(vi) amounts deposited by the Seller into the Collection Account in
connection with the making of Consolidation Loans pursuant to Section 2.03
of the Sale and Servicing Agreement;
(vii) with respect to the initial Distribution Date, the amount
deposited in the Collection Account on the Closing Date pursuant to Section
5.01(a)(i) of the Sale and Servicing Agreement;
(viii) Investment Earnings for such Distribution Date;
(ix) amounts withdrawn from the Reserve Account in excess of the
Specified Reserve Account Balance and deposited into the Collection
Account;
(x) amounts withdrawn from the Escrow Account and deposited into the
Collection Account; and
(xi) with respect to the Distribution Date on or immediately after the
end of the Funding Period, the amount transferred from the Pre-Funding
Account to the Collection Account.
PROVIDED, HOWEVER, that Available Funds will exclude all payments and
proceeds (including Liquidation Proceeds) of any Financed Student Loans,
the Purchase Amount of which has been included in Available Funds for a
prior Distribution Date; provided, further, that if on any Distribution
Date there would not be sufficient funds, after application of Available
Funds and amounts available from the Reserve Account and the Pre-Funding
Account (1) to pay any of the items specified in clauses (i) through (iii)
of Section 5.05(c) of the Sale and Servicing Agreement for such
Distribution Date and (2) if the principal balance of the Class M Notes
(after giving effect to any distributions thereon on such Distribution
Date) is less than or equal to the Note Collateralization Amount, to pay
the Noteholders' Interest Distribution Amount with respect to the Class M
Notes for such Distribution Date, and (3) if the principal balance of the
Notes (after giving effect to any distributions thereon on such
Distribution Date) is less than or equal to the Note Collateralization
Amount, to pay the Certificateholders' Interest Distribution Amount for
such Distribution Date, then Available Funds for such Distribution Date
will include, in addition to the Available Funds amounts on deposit in the
Collection Account on the Determination Date relating to such Distribution
Date which would have constituted Available Funds for the Distribution Date
succeeding such Distribution Date up to the amount necessary to pay, (A) in
the case of clause (1) above such items, (B) in the case of clause (2)
above, such Noteholders' Interest Distribution Amount and (C) in the case
of clause (3) above such Certificateholders' Interest Distribution Amount,
and the Available Funds for such succeeding Distribution Date will be
adjusted accordingly.
"BASIC DOCUMENTS" means the Trust Agreement, the Indenture, the Sale
and Servicing Agreement, the Administration Agreement, the Certificate
Depository Agreement, the Note Depository Agreement, the Guarantee Agreements,
the Cap Agreement, and other documents and certificates delivered in connection
with any thereof.
"BAR EXAM LOAN" means a Bar Examination Loan made by the Seller to an
eligible borrower pursuant to the Programs.
"BENEFIT PLAN" has the meaning specified in Section 3.04 of the Trust
Agreement.
"BOOK-ENTRY CERTIFICATE" means a beneficial interest in the
Certificates, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 3.11 of the Trust
Agreement.
"BOOK-ENTRY NOTE" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10 of the Indenture.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in New York, New York or
Cleveland, Ohio, are authorized or obligated by law, regulation or executive
order to remain closed.
"CALCULATED POOL BALANCE" means, at any time, the aggregate principal
balance of the Financed Student Loans, or specified subset thereof, at the
Cutoff Date, Subsequent Cutoff Date or Statistical Cutoff Date, as specified
(including accrued interest thereon at such date to the extent such interest
will be capitalized upon commencement of repayment).
"CAP ACCOUNT" means the account designated as such, established and
maintained pursuant to Section 5.01 of the Sale and Servicing Agreement.
"CAP AGREEMENT" means that certain interest rate protection agreement,
dated as of September 30, 1999, between the Trust and the Cap Provider as
documented according to a 1992 ISDA Master Agreement (Multicurrency--Cross
Border), modified to reflect the terms of the Notes, the Certificates, the Basic
Documents and the related confirmation.
"CAP PROVIDER" means Key Bank USA, National Association in its
capacity as a party to the Cap Agreement.
"CERTIFICATE" means a Floating Rate Asset Backed Certificate issued
pursuant to the Trust Agreement, substantially in the form of Exhibit A thereto.
"CERTIFICATE BALANCE" means as of the Closing Date the Initial
Certificate Balance for the Certificates and, thereafter, the Initial
Certificate Balance for the Certificates, reduced by all amounts allocable to
principal previously distributed to the holders of the Certificates.
"CERTIFICATE CAP FUNDS" means, with respect to any Distribution Date
the lesser of (x) the Certificate Cap Payment relating to such Distribution Date
and (y) the amount of funds remaining on deposit in the Cap Account on such
Distribution Date after giving effect to the application of such funds pursuant
to Sections 5.05(c)(x) and 5.05(c)(xi) of the Sale and Servicing Agreement on
such Distribution Date.
"CERTIFICATE CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal to (x) the
positive difference, if any, between (1) the amount, if any, by which the amount
of interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Certificates minus (2) the amount of Available Funds, if any,
remaining to pay the Certificateholders' Interest Index Carryover on such
Distribution Date pursuant to Section 5.05(c)(xii) of the Sale and Servicing
Agreement plus (y) interest calculated at the Formula Rate for the Certificates
due but unpaid by the Cap Provider under clause (x).
"CERTIFICATE DEPOSITORY AGREEMENT" means the agreement dated as of the
Closing Date among the Trust, the Eligible Lender Trustee, the Administrator and
The Depository Trust Company, as the initial Clearing Agency, substantially in
the form of Exhibit B to the Trust Agreement.
"CERTIFICATE MARGIN" means 0.90%.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"CERTIFICATE PAYING AGENT" means any paying agent or co-paying agent
appointed pursuant to Section 3.09 of the Trust Agreement, which shall initially
be the Eligible Lender Trustee.
"CERTIFICATE RATE" means, with respect to any Interest Period, the
interest rate per annum equal to the lesser of (i) the sum of (x) in the case of
any Certificates that are T-Xxxx Indexed Securities, the weighted average of the
T-Xxxx Rates within such Interest Period and in the case of any Certificates
that are LIBOR Indexed Securities, Three-Month LIBOR for such Interest Period
plus (y) the Certificate Margin and (ii) the Student Loan Rate for such Interest
Period. The interest rate per annum for any Certificates that are T-Xxxx Indexed
Securities will be computed on the basis of the actual number of days elapsed in
such Interest Period over a period of 365 days (or 366 in a leap year) and in
the case of any Certificates that are LIBOR Indexed Securities will be computed
on the basis of the actual number of days elapsed in the related Interest Period
divided by 360.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" means the register
mentioned and the registrar appointed pursuant to Section 3.04 of the Trust
Agreement.
"CERTIFICATE UNDERWRITING AGREEMENT" means the Certificate
Underwriting Agreement dated as of September 30, 1999 between the Seller and the
Underwriters.
"CERTIFICATEHOLDER" means a Person in whose name a Certificate is
registered in the Certificate Register.
"CERTIFICATEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the Certificateholders' Interest Distribution Amount for such
Distribution Date plus, for each Distribution Date on and after which the Notes
have been paid in full, the Certificateholders' Principal Distribution Amount
for such Distribution Date.
"CERTIFICATEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect
to any Distribution Date, the excess of (i) the Certificateholders' Interest
Distribution Amount on the preceding Distribution Date over (ii) the amount of
interest actually distributed to the holders of the Certificates on such
preceding Distribution Date, plus interest on the amount of such excess interest
due to the holders of the Certificates, to the extent permitted by law, at the
Certificate Rate from such preceding Distribution Date to the current
Distribution Date.
"CERTIFICATEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect
to any Distribution Date, the sum of (i) the amount of interest accrued at the
Certificate Rate for the related Interest Period on the outstanding Certificate
Balance on the immediately preceding Distribution Date, after giving effect to
all distributions of principal to holders of the Certificates on such
Distribution Date (or, in the case of the first Distribution Date, on the
Closing Date) and (ii) the Certificateholders' Interest Carryover Shortfall for
such Distribution Date; PROVIDED, HOWEVER, that the Certificateholders' Interest
Distribution Amount will not include any Certificateholders' Interest Index
Carryover.
"CERTIFICATEHOLDERS' INTEREST INDEX CARRYOVER" means, with respect to
any Distribution Date as to which the Certificate Rate for such Distribution
Date is based on the Student Loan Rate, the amount equal to the excess, if any,
of (a) the amount of interest on the Certificates that would have accrued in
respect of the related Interest Period had interest been calculated based on the
T-Xxxx Rate, if such Certificates are T-Xxxx Indexed Securities and/or
Three-Month LIBOR if such Certificates are LIBOR Indexed Securities over (b) the
amount of interest on such Certificates actually accrued in respect of such
Interest Period based on the Student Loan Rate, together with the unpaid portion
of any such excess from prior Distribution Dates (and interest accrued thereon,
to the extent permitted by law, calculated based on the T-Xxxx Rate in the case
of T-Xxxx Indexed Securities or Three-Month LIBOR, in the case of LIBOR Indexed
Securities plus the Certificate Margin); PROVIDED, HOWEVER, that, on the Final
Maturity Date, the Certificateholders' Interest Index Carryover will be equal to
the lesser of (i) the Certificateholders' Interest Index Carryover on such date
determined as described above and (ii) the amount of funds, if any, required and
available to be distributed to the holders of the Certificates on such date
pursuant to Sections 5.05(c)(xii) of the Sale and Servicing Agreement.
"CERTIFICATEHOLDERS' PERCENTAGE" means, a fraction, expressed as a
percentage, the numerator of which is the principal balance of the Certificates
issued on the Closing Date and the denominator of which is the sum of the
principal amount of the Notes issued on the Closing Date and the principal
balance of the Certificates issued on the Closing Date.
"CERTIFICATEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, on each
Distribution Date on and after which the principal balance of the Notes has been
paid in full, the Principal Distribution Amount for such Distribution Date (or,
in the case of the Distribution Date on which the principal balance of the Notes
is paid in full, any remaining Principal Distribution Amount not otherwise
distributed to the holders of such Notes on such Distribution Date); PROVIDED,
HOWEVER, that the Certificateholders' Principal Distribution Amount for the
Certificates will in no event exceed the Certificate Balance for the
Certificates. In addition, on the Final Maturity Date for the Certificates, the
principal required to be distributed to the holders of the Certificates will
include the amount required to reduce the outstanding principal balance of the
Certificates to zero.
"CLASS" means reference to any of the Class A-1, Class A-2 or Class M
Notes, or the Certificates, as applicable.
"CLASS A CAP FUNDS" means, with respect to any Distribution Date the
lesser of (x) the sum of the Class A-1 Cap Payment and the Class A-2 Cap Payment
relating to such Distribution Date and (y) the amount of funds on deposit in the
Cap Account on such Distribution Date.
"CLASS A-1 CAP PAYMENT" means with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal to (x) the
positive difference, if any, between (1) the amount, if any, by which the amount
of interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Class A-1 Notes minus (2) the amount of Available Funds, if any,
remaining to pay the Noteholders' Interest Index Carryover with respect to the
Class A-1 Notes on such Distribution Date pursuant to Section 5.05(c)(x)(1) of
the Sale and Servicing Agreement for the Class A-1 Notes for such Interest
Period plus (y) interest calculated at the Formula Rate for the Class A-1 Notes
on any amounts due but unpaid by the Cap Provider under clause (x).
"CLASS A-2 CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal to (x) the
positive difference, if any, between (1) the amount, if any, by which the amount
of interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Class A-2 Notes minus(2) the amount of Available Funds, if any,
remaining to pay the Noteholders' Interest Index Carryover with respect to the
Class A-2 Notes on such Distribution Date pursuant to Section 5.05(c)(x)(1) of
the Sale and Servicing Agreement plus (y) interest calculated at the Formula
Rate for the Class A-2 Notes due but unpaid by the Cap Provider under clause
(x).
"CLASS M CAP FUNDS" means with respect to any Distribution Date the
lesser of (x) the Class M Cap Payment relating to such Distribution Date and (y)
the amount of funds remaining on deposit in the Cap Account on such Distribution
Date after giving effect to the application of such funds pursuant to Sections
5.05(c)(x) of the Sale and Servicing Agreement on such Distribution Date.
"CLASS M CAP PAYMENT" means, with respect to any Distribution Date
prior to the termination of the Cap Agreement, an amount equal (x) the positive
difference, if any, between (1) the amount, if any, by which the amount of
interest calculated at the Student Loan Rate for the related Interest Period
exceeds the amount of interest calculated at the Formula Rate for such Interest
Period for the Class M Notes minus (2) the amount of Available Funds, if any,
remaining to pay the Noteholders' Interest Index Carryover with respect to the
Class M Notes on such Distribution Date pursuant to Section 5.05(c)(xi)(1) of
the Sale and Servicing Agreement plus (y) interest calculated at the Formula
Rate for the Class M Certificates due but unpaid by the Cap Provider under
clause (x).
"CLASS A NOTES" means the Class A-1 Notes and Class A-2 Notes.
"CLASS A-1 NOTE" means a Floating Rate Class A-1 Asset Backed Note
issued pursuant to the Indenture, substantially in the form of Exhibit A-1
thereto.
"CLASS A-2 NOTE" means a Floating Rate Class A-2 Asset Backed Note
issued pursuant to the Indenture, substantially in the form of Exhibit A-2
thereto.
"CLASS M INTEREST SUBORDINATION EVENT" means the second consecutive
Distribution Date that the outstanding principal balance of the Class A Notes
(after giving effect to any amounts to be distributed on such Distribution Date
to the holders of the Class A Notes pursuant to either Section 5.05(c) (viii) of
the Sale and Servicing Agreement or Section 5.04(c) (viii) of the Indenture, as
applicable) is in excess of the Note Collateralization Amount.
"CLASS M NOTE" means a Floating Rate Class M Note issued pursuant to
the Indenture, substantially in the form of Exhibit A-3 thereto.
"CLEARING AGENCY" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"CLOSING DATE" means September 30, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"COLLATERAL" has the meaning specified in the Granting Clause of the
Indenture.
"COLLECTION ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 5.01 of the Sale and Servicing Agreement.
"COLLECTION PERIOD" means, with respect to the first Distribution
Date, the period beginning on the Cutoff Date with respect to the Initial
Financed Student Loans, or the Subsequent Cutoff Date with respect to Subsequent
Pool Student Loans, as applicable, and ending on January 31, 2000 and with
respect to each subsequent Distribution Date, the Collection Period means the
three calendar months immediately following the end of the previous Collection
Period.
"COMMISSION" means the Securities and Exchange Commission.
"CONSOLIDATION LOANS" means Federal Consolidation Loans and Private
Consolidation Loans, collectively.
"CONTROLLING NOTES" means the Class A Notes, or if the Class A Notes
have been paid in full, the Class M Notes.
"CONTROLLING NOTEHOLDERS" means the holders of the Class A Notes or if
the Class A Notes have been paid in full, the holders of the Class M Notes.
"COORDINATION AGREEMENTS" means the following agreements, as the same
may be amended and restated from time to time, (i) the Coordination Agreement,
dated as of February 15, 1990, as amended, by and among LAI (as successor to
LSAS), PHEAA, ASA, 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 Four Albany Street, 10th Floor, New York, New
York 10006, Attention: Corporate Trust and Agency Group, Structured Finance Team
(telephone: (000) 000-0000; facsimile: (000) 000-0000) or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Seller, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders and the Seller) and (ii) with respect to the
Eligible Lender Trustee, the principal corporate trust office of the Eligible
Lender Trustee located at 0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trust Administration (telephone: (000) 000-0000;
facsimile: (000) 000-0000); or at such other address as the Eligible Lender
Trustee may designate by notice to the Certificateholders and the Seller, or the
principal corporate trust office of any successor Eligible Lender Trustee (the
address of which the successor Eligible Lender Trustee will notify the
Certificateholders and the Seller).
"CSAC means the California Student Aid Commission, an agency of the
State of California.
"CUTOFF DATE" means (i) with respect to the Initial Pool 1 Student
Loans, September 1, 1999, and (ii) with respect to the Initial Pool 2 Student
Loans, September 27, 1999.
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFINITIVE CERTIFICATES" has the meaning specified in Section 3.11 of
the Trust Agreement.
"DEFINITIVE NOTES" has the meaning specified in Section 2.10 of the
Indenture.
"DELIVERY" or "DELIVER" when used with respect to Trust Account
Property means the following and such additional or alternative procedures as
may hereafter become appropriate to effect the complete transfer of ownership of
any such Collateral to the Indenture Trustee, free and clear of any adverse
claims, consistent with changes in applicable law or regulations or the
interpretation thereof:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute instruments and
are susceptible of physical delivery ("Physical Property"):
(i) transfer of possession thereof to the Indenture Trustee
endorsed to, or registered in the name of, the Indenture Trustee, or
its nominee or endorsed in blank;
(b) with respect to a certificated security:
(i) delivery thereof in bearer form to the Indenture Trustee; or
(ii) delivery thereof in registered form to the Indenture Trustee
and
(A) the certificate is endorsed to the Indenture Trustee or
in blank by effective endorsement; or
(B) the certificate is registered in the name of the
Indenture Trustee, upon original issue or registration of transfer by
the issuer;
(c) with respect to an uncertificated security:
(i) the delivery of the uncertificated security to the Indenture
Trustee; or
(ii) the issuer has agreed that it will comply with instructions
originated by the Indenture Trustee, without further consent by the
registered owner;
(d) with respect to any security issued by the U.S. Treasury, the
Federal Home Loan Mortgage Corporation or by the Federal National Mortgage
Association that is a book-entry security held through the Federal Reserve
System pursuant to Federal book-entry regulations:
(i) a Federal Reserve Bank by book entry credits the book-entry
security to the securities account (as defined in 31 CFR Part 357) of
a participant (as defined in 31 CFR Part 357) which is also a
securities intermediary; and
(ii) the participant indicates by book entry that the book-entry
security has been credited to the Indenture Trustee's securities
account, as applicable;
(e) with respect to a security entitlement:
(i) the Indenture Trustee, becomes the entitlement holder; or
(ii) the securities intermediary has agreed that it will comply
with entitlement orders originated by the Indenture Trustee;
(f) without further consent by the entitlement holder for the purpose
of clauses (b) and (c) hereof "delivery" means:
(i) with respect to a certificated security:
(A) the Indenture Trustee, acquires possession thereof;
(B) another person (other than a securities intermediary)
either acquires possession thereof on behalf of the Indenture Trustee
or, having previously acquired possession thereof, acknowledges that
it holds for the Indenture Trustee; or
(C) a securities intermediary acting on behalf of the
Indenture Trustee acquires possession of thereof, only if the
certificate is in registered form and has been specially endorsed to
the Indenture Trustee by an effective endorsement;
(ii) with respect to an uncertificated security:
(A) the issuer registers the Indenture Trustee as the
registered owner, upon original issue or registration of transfer; or
(B) another person (other than a securities intermediary)
either becomes the registered owner thereof on behalf of the Indenture
Trustee, or, having previously become the registered owner,
acknowledges that it holds for the Indenture Trustee;
(g) for purposes of this definition, except as otherwise indicated,
the following terms shall have the meaning assigned to each such term in the
UCC:
(i) "certificated security"
(ii) "effective endorsement"
(iii) "entitlement holder"
(iv) "instrument"
(v) "securities account"
(vi) "securities entitlement"
(vii) "securities intermediary"
(viii) "uncertificated security"
(h) in each case of Delivery contemplated herein, the Indenture
Trustee shall make appropriate notations on its records, and shall cause same to
be made of the records of its nominees, indicating that securities are held in
trust pursuant to and as provided in this Agreement.
"DEPARTMENT" means the United States Department of Education, an
agency of the Federal government.
"DEPOSITOR" means the Seller in its capacity as Depositor under the
Trust Agreement.
"DEPOSITORY" has the meaning specified in Section 2.04 of the
Indenture.
"DETERMINATION DATE" means, with respect to any Monthly Servicing
Payment Date or Distribution Date, as the case may be, the third Business Day
preceding such Monthly Servicing Payment Date or Distribution Date.
"DISTRIBUTION DATE" means, with respect to each Collection Period, the
twenty-fifth day of each February, May, August and November or, if such day is
not a Business Day, the immediately following Business Day, commencing on
February 25, 2000.
"DTC" means the Depository Trust Company, a New York corporation.
"ECMC" means Educational Credit Management Corporation, a Minnesota
corporation.
"XXXX" means Education Loan Services, Inc., a Massachusetts
corporation.
"ELIGIBLE DEPOSIT ACCOUNT" means either (a) a segregated account with
an Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the States (or any domestic branch of a
foreign bank), having corporate trust powers and acting as trustee for funds
deposited in such account, so long as any of the securities of such depository
institution have a credit rating from at least two nationally recognized Rating
Agencies in one of their respective generic rating categories which signifies
investment grade.
"ELIGIBLE INSTITUTION" means a depository institution (which may be
the Seller (or any Affiliate of the Seller), the Eligible Lender Trustee (or any
Affiliate of the Eligible Lender Trustee) or the Indenture Trustee) organized
under the laws of the United States of America or any one of the States (or any
domestic branch of a foreign bank), (a) which has (i) a short-term senior
unsecured debt rating of P-1 or better by Moody's, (ii) either (A) a long term
senior unsecured debt rating of AAA by S&P or (B) a short-term senior unsecured
debt rating A-1+ by S&P, and (iii) if rated by Fitch (A) a long term senior
unsecured debt rating of AAA by Fitch and (B) short-term senior of F-1+ by
Fitch, or any other long-term, short-term or certificate of deposit rating
acceptable to the Rating Agencies, and (b) whose deposits are insured by the
FDIC. If so qualified, the Seller, any Affiliate of the Seller, the Eligible
Lender Trustee, or any Affiliate of the Eligible Lender Trustee or Indenture
Trustee may be considered an Eligible Institution.
"ELIGIBLE INVESTMENTS" mean book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(a) direct obligations of, and obligations fully guaranteed as to
timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign
bank) and subject to supervision and examination by Federal or state
banking or depository institution authorities (including depository
receipts issued by any such institution or trust company as custodian with
respect to any obligation referred to in clause (a) above or portion of
such obligation for the benefit of the holders of such depository
receipts); PROVIDED, HOWEVER, that at the time of the investment or
contractual commitment to invest therein (which shall be deemed to be made
again each time funds are reinvested following each Distribution Date, as
the case may be), the commercial paper or other short-term senior unsecured
debt obligations (other than such obligations the rating of which is based
on the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from Moody's in the highest
investment category granted thereby and, if rated by S&P and/or Fitch, in
the highest investment category granted by S&P and/or Fitch, respectively;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Moody's in the
highest investment category granted thereby and, if rated by S&P and/or
Fitch, in the highest investment category granted by S&P and/or Fitch,
respectively;
(d) investments in money market funds (including funds for which the
Indenture Trustee or the Eligible Lender Trustee or any of their respective
Affiliates or any of Seller's Affiliates is an investment manager or
advisor) having a rating from Moody's of Aaa, if rated by S&P from S&P of
AAAm or AAAm-G, or if rated by Fitch from Fitch of AAA;
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of America
or any agency or instrumentality thereof the obligations of which are
backed by the full faith and credit of the United States of America, in
either case entered into with (i) a depository institution or trust company
(acting as principal) described in clause (b) above, PROVIDED, HOWEVER,
that notice of investment in such repurchase obligations, setting forth the
amount and type of each such repurchase obligation, shall be given to each
Rating Agency; and
(g) any other investment permitted by each of the Rating Agencies as
set forth in writing delivered to the Indenture Trustee.
"ELIGIBLE LENDER TRUSTEE" means Bank One, National Association, a
national banking association, not in its individual capacity but solely as
eligible lender trustee under the Trust Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW ACCOUNT" means the account designated as such, established and
maintained pursuant to Section 5.01 of the Sale and Servicing Agreement.
"EVENT OF DEFAULT" has the meaning specified in Section 5.01 of the
Indenture.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXECUTIVE OFFICER" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Executive Vice President, any Senior Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"EXPECTED INTEREST COLLECTIONS" means, with respect to any Collection
Period, the sum of (i) the amount of interest accrued, net of amounts required
by the Higher Education Act to be paid to the Department or to be repaid to
borrowers, with respect to the Financed Student Loans for such Collection Period
(whether or not such interest is actually paid), (ii) all Interest Subsidy
Payments and Special Allowance Payments expected to be received by the Eligible
Lender Trustee for such Collection Period (whether or not actually received)
with respect to the Financed Student Loans and (iii) Investment Earnings for
such Collection Period.
"EXPENSES" means any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever which may at any time be imposed on, incurred by, or
asserted against the Eligible Lender Trustee or any of its officers, directors
or agents in any way relating to or arising out of the Trust Agreement, the
other Basic Documents, the Trust Estate, the administration of the Trust Estate
or the action or inaction of the Eligible Lender Trustee under the Trust
Agreement or the other Basic Documents.
"FDIC" means the Federal Deposit Insurance Corporation.
"FEDERAL CONSOLIDATION LOAN" means a loan made by the Seller to an
eligible borrower that represents the refinancing of Financed Federal Loans of
such borrower in accordance with the applicable terms and conditions of the
Program and the Higher Education Act.
"FEDERAL CONSOLIDATION LOAN REBATE" means the monthly fee payable to
the Department by the holder of Federal Consolidation Loans made (x) on or after
October 1, 1993, equal to 1.05% per annum, but (y) with respect to Federal
Consolidation Loans for which applications were received on or after October 1,
1998 but before February 1, 1999, equal to 0.62% per annum, in each case on the
outstanding balance of such Federal Consolidation Loan.
"FEDERAL GUARANTOR" means, collectively, PHEAA, ASA, CSAC, ECMC, HESC,
NSLP and USAF.
"FEDERAL ORIGINATION FEE" means the origination fee payable to the
Department by the lender with respect to any Financed Federal Loan (including
Federal Consolidation Loans) made on or after October 1, 1993, equal to 0.50% of
the initial principal balance of such loan.
"52 WEEK T-XXXX RATE" means, on any date of determination, the bond
equivalent rate of 52-week Treasury bills auctioned at the final auction held
prior to the preceding June 1.
"FINAL MATURITY DATE" means (i) for the Class A-1 Notes, the August
2007 Distribution Date, (ii) for the Class A-2 Notes the August 2027
Distribution Date, (iii) for the Class M Notes, the August 2029 Distribution
Date, and (iv) for the Certificates, the November 2036 Distribution Date.
"FINAL SUBSEQUENT TRANSFER DATE" means the last Transfer Date on which
Subsequent Pool Student Loans are transferred to the Trust but no later than the
Special Determination Date.
"FINANCED FEDERAL LOANS" means those Financed Student Loans that are
guaranteed as to the payment of principal and interest by PHEAA, ASA, CSAC,
ECMC, HESC, NSLP or USAF and are reinsured by the Department.
"FINANCED GUARANTEED LOANS" means the collective reference to the
Financed Federal Loans and the Financed Guaranteed Private Loans.
"FINANCED GUARANTEED PRIVATE LOANS" means those Financed Student Loans
that are guaranteed as to the payment of principal and interest by 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 LOAN" means the collective reference to the Initial
Financed Student Loans and the Additional Student Loans.
"FINANCED STUDENT LOAN FILES" means the documents specified in Section
3.03 of the Sale and Servicing Agreement.
"FINANCED UNGUARANTEED PRIVATE LOANS" means those Financed Student
Loans that are not guaranteed as to the payment of principal or interest by any
federal or private guarantor, or by any other party or governmental agency,
including, without limitation, the Seller.
"FORMULA RATE" means for any Interest Period (1) with respect to the
Class A-1 Notes, the Applicable Index plus the Applicable Note Margin, (2) with
respect to the Class A-2 Notes, the Applicable Index plus the Applicable Note
Margin, (3) with respect to the Class M Notes, the Applicable Index plus the
Applicable Note Margin and (4) with respect to the Certificates, the Applicable
Index plus the Certificate Margin.
"FITCH" means Fitch IBCA, Inc.
"FUNDING PERIOD" means the period beginning on the Closing Date and
ending on the first to occur of (a) the date on which an Event of Default, a
Master Servicer Default or an Administrator Default occurs, (b) the date on
which an Insolvency Event occurs with respect to the Seller, (c) the first date
on which the amounts on deposit in each Pre-Funding Account is zero, and (d) the
close of business on the last day of the Collection Period preceding the
November 2001 Distribution Date.
"GRADUATE LOAN PROGRAMS" means the loan programs, under which the
Seller made loans to students enrolled in or recently graduated from approved or
accredited law schools, medical schools, dental schools, graduate business
schools or other graduate level certificate or degree programs.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and 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, 1999, between Great Lakes and the Master
Servicer.
"GUARANTEE AGREEMENTS" means (i) in the case of PHEAA, the Lender
Agreement for Guarantee of Student Loans With Federal Reinsurance and the Lender
Participation Agreement for Consolidation Loans, in each case dated as of July
28, 1999, between PHEAA and the Eligible Lender Trustee on behalf of the Issuer,
(ii) in the case of ASA, the Holder Guarantee Agreement dated as of July 28,
1999, between ASA and the Eligible Lender Trustee on behalf of the Issuer, (iii)
in the case of CSAC, the Agreement dated as of July 28, 1999, between CSAC and
the Eligible Lender Trustee on behalf of the Issuer, (iv) in the case of ECMC,
the Agreement dated as of July 28, 1999, between ECMC and the Eligible Lender
Trustee on behalf of the Issuer, (v) in the case of HESC, the Loan Guarantee
Agreement dated as of July 28, 1999, between HESC and the Eligible Lender
Trustee on behalf of the Issuer, (vi) in the case of NSLP, the Lender Agreement
for Guarantee of Student Loans With Federal Reinsurance and the Lender Agreement
for Guarantee of Federal Consolidation Loans with Federal Reinsurance, each
dated as of July 28, 1999 between NSLP and the Eligible Lender Trustee on behalf
of the Issuer, (vii) in the case of USAF, the USA Group Master Loan Agreement
dated as of July 28, 1999, between USAF and the Eligible Lender Trustee on
behalf of the Issuer, (viii) in the case of XXXX, the Guarantee Agreement dated
as of July 28, 1999, among XXXX, the Seller and the Eligible Lender Trustee on
behalf of the Issuer and (ix) in the case of HICA, the Second Endorsement to
Alternative Dental Educational Assistance Loan Surety Bond Numbers 1994-A,
1994-B, 1995-A and 1996-A dated as of July 28, 1999 and executed by HICA,
relative to such Surety Bonds which were assigned by the Seller to the Eligible
Lender Trustee on behalf of the Issuer.
"GUARANTEE FEE ADVANCE" means a loan made by the Seller to a borrower
of a Financed Private Loan, at the borrower's option, at the time such borrower
commences repayment of such Financed Private Loan to finance the cost of the fee
imposed with respect to such loan at such time.
"GUARANTEE PAYMENT" means any payment made by a Guarantor pursuant to
a Guarantee Agreement in respect of a Financed Student Loan.
"GUARANTORS" means, collectively, PHEAA, ASA, CSAC, HESC, ECMC, NSLP,
USAF, XXXX and HICA.
"HESC" means the New York State Higher Education Services Corporation,
an educational corporation created by an act of the Legislature of the State of
New York.
"HICA" means HEMAR Insurance Company of America, a South Dakota
corporation.
"HICA TRIGGER EVENT" means, on any Distribution Date, when the
cumulative Realized Losses on any of the Guaranteed Private Loans that are
guaranteed by HICA exceeds 20% of the Initial Financed Student Loan Pool Balance
consisting of all Guaranteed Private Loans that are guaranteed by HICA;
provided, however, that a HICA Trigger Event shall not have occurred if HICA is
continuing to pay claims with respect to all Guaranteed Private Loans guaranteed
by HICA.
"HIGHER EDUCATION ACT" means the Higher Education Act of 1965, as
amended, together with any rules, regulations and interpretations thereunder.
"INDENTURE" means the Indenture dated as of September 1, 1999, between
the Issuer and the Indenture Trustee.
"INDENTURE TRUSTEE" means Bankers Trust Company, a New York banking
corporation, not in its individual capacity but solely as Indenture Trustee
under the Indenture.
"INDENTURE TRUST ESTATE" means all money, instruments, rights and
other property that are subject or intended to be subject to the lien and
security interest of the Indenture for the benefit of the Noteholders (including
all property and interests granted to the Indenture Trustee), including all
proceeds thereof.
"INDEPENDENT" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in the Indenture and that the signer is Independent
within the meaning thereof.
"INDEX MATURITY" shall have the meaning set forth in the definition of
"Three-Month LIBOR".
"INITIAL CERTIFICATE BALANCE" means $65,000,000.
"INITIAL FINANCED STUDENT LOANS" means collectively, the Initial Pool
1 Student Loans and Initial Pool 2 Student Loans.
"INITIAL FINANCED STUDENT LOAN POOL BALANCE" means, at any time, the
Calculated Pool Balance of the Financed Student Loans, or specified subset
thereof, as of the related Cutoff Date (in the case of the Initial Financed
Student Loans, or specified subset thereof) or the related Subsequent Cutoff
Date (with respect to Additional Student Loans or specified subset thereof).
"INITIAL POOL 1 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of Initial Pool 1 Student Loans on the
Closing Date as set forth in part I of Schedule A to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape),
which student loans the Seller shall transfer to the Eligible Lender Trustee on
behalf of the Issuer pursuant to the Sale and Servicing Agreement on the Closing
Date.
"INITIAL POOL 2 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of Initial Pool 2 Student Loans on the
Closing Date as set forth in part II of Schedule A to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape),
which student loans the Seller shall transfer to the Eligible Lender Trustee on
behalf of the Issuer pursuant to the Sale and Servicing Agreement on the Closing
Date.
"INSOLVENCY EVENT" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or (b)
the commencement by such Person of a voluntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or the consent by such Person to the entry of an order for relief in an
involuntary case under any such law, or the consent by such Person to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for such Person or for any
substantial part of its property, or the making by such Person of any general
assignment for the benefit of creditors, or the failure by such Person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"INTEREST AND EXPENSE DRAW" means any withdrawals from the Reserve
Account pursuant to Sections 5.06(b)(i) through (b)(vii) of the Sale and
Servicing Agreement.
"INTEREST COLLECTIONS" shall have the meaning specified in Section
5.03 of the Sale and Servicing Agreement.
"INTEREST PERIOD" means, with respect to a Distribution Date, the
period from and including the Closing Date or the most recent Distribution Date
on which interest on the Notes or the Certificates, as the case may be, has been
distributed to but excluding the current Distribution Date. In the case of any
LIBOR Indexed Securities and the initial Interest Period, interest will accrue
for the period from the Closing Date to but excluding November 26, 1999
(computed on the basis of the actual number of days elapsed in a year of 360
days) based on Three Month LIBOR as determined on the initial LIBOR
Determination Date, and interest will accrue for the period from November 26,
1999 to but excluding February 25, 2000 (computed on the basis of the actual
number of days elapsed in a year of 360 days) based on Three Month LIBOR as
determined on the initial LIBOR Determination Date.
"INTEREST SUBSIDY PAYMENTS" means payments, designated as such,
consisting of interest subsidies by the Department in respect of the Financed
Federal Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"INVESTMENT EARNINGS" means, with respect to any Distribution Date,
the investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on or
prior to such Distribution Date pursuant to Section 5.01(b) of the Sale and
Servicing Agreement.
"ISSUER" means KeyCorp Student Loan Trust 1999-B until a successor
replaces it and, thereafter, means the successor.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"LAI" means Law Access, Inc., a non-stock corporation organized under
the laws of the State of Delaware, and the successor in interest to LSAS.
"LAW LOAN" means a Law School Loan made by the Seller to an eligible
borrower pursuant to the Programs.
"LIBOR DETERMINATION DATE" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of each Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding November 26, 1999, and as determined on the second
Business Day prior to November 26, 1999 for the period from November 26, 1999 to
but excluding February 25, 2000. For purposes of this definition a "Business
Day" is any day on which banks in London and New York City are open for the
transaction of business.
"LIBOR INDEXED SECURITIES" means the Class A-1 Notes, the Class A-2
Notes, the Class M Notes and the Certificates.
"LIEN" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any, which
attach to the respective Financed Student Loan by operation of law as a result
of any act or omission by the related Obligor.
"LIQUIDATED STUDENT LOAN" means any defaulted Financed Student Loan
liquidated by the Master Servicer (or any Sub-Servicer acting on its behalf) or
which the Master Servicer (or any Sub-Servicer acting on its behalf) has, after
using all reasonable efforts to realize upon such Financed Student Loan,
determined to charge off.
"LIQUIDATION PROCEEDS" means, with respect to any Liquidated Student
Loan, the moneys collected in respect thereof from whatever source, other than
Recoveries or Guarantee Payments received, net of the sum of any amounts
expended by the Master Servicer (or any Sub-Servicer acting on its behalf) in
connection with such liquidation and any amounts required by law to be remitted
to the borrower on such Liquidated Student Loan.
"LOCK-IN PERIOD" means the period of days preceding any Distribution
Date during which the Note Interest Rates or Certificate Rates, as applicable,
in effect on the first day of such period shall remain in effect until the end
of the Interest Period related to such Distribution Date.
"LSAS" means the Law School Admission Services, Inc.
"MASTER SERVICER" means Key Bank USA, National Association, a national
banking association.
"MASTER SERVICER DEFAULT" means an event specified in Section 8.01(a)
of the Sale and Servicing Agreement.
"MASTER SERVICING FEE" has the meaning specified in the Servicing Fee
Schedule attached to the Sale and Servicing Agreement as Schedule E.
"MAXIMUM XXXX PAYMENTS AMOUNT" means an amount equal to 19% of the
Adjusted Initial Pool Balance.
"MINIMUM PURCHASE AMOUNT" means the greatest of (i) the Auction
Purchase Amount, (ii) the fair market value of the Financed Student Loans as of
the end of the Collection Period immediately preceding such Distribution Date,
and (iii) the aggregate unpaid principal amount of the Notes and unpaid
principal balance of the Certificates plus, in each case, accrued and unpaid
interest thereon on the related Distribution Date and any amount to be paid
pursuant to Section 5.04(b) FIRST and SECOND of the Indenture.
"MONTHLY SERVICING PAYMENT DATE" means the twenty-fifth day of each
calendar month, or, if such day is not a Business Day, the immediately following
Business Day, commencing on October 25, 1999.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"91-DAY TREASURY BILLS" means direct obligations of the United States
with a maturity of thirteen weeks.
"NET GOVERNMENT RECEIVABLE" means, with respect to any Distribution
Date, the sum of the amount of Interest Subsidy Payments and Special Allowance
Payments due from the Department less the amount owed to the Department for
Federal Origination Fee and Federal Consolidation Loan Rebate as of the end of
the related Collection Period.
"NON-GUARANTEED GRADUATE PRIVATE LOANS" means the Non-Guaranteed
Private Loans that have been made to graduate students.
"NON-GUARANTEED PRIVATE GRADUATE LOAN TRIGGER EVENT" means, on any
Distribution Date, when the cumulative Realized Losses on the Non-Guaranteed
Graduate Private Loans exceeds 20% of the Initial Financed Student Loan Pool
Balance consisting of all Non-Guaranteed Graduate Private Loans.
"NON-GUARANTEED PRIVATE UNDERGRADUATE LOAN TRIGGER EVENT" means, on
any Distribution Date, when cumulative Realized Losses net of subsequent
Recoveries with respect to the Non-Guaranteed Undergraduate Private Loans
exceeds 15% of the Initial Financed Student Loan Pool Balance with respect to
all Non-Guaranteed Undergraduate Private Loans.
"NON-GUARANTEED UNDERGRADUATE PRIVATE LOANS" means the Non-Guaranteed
Private Loans that have been made to undergraduate students.
"NOTE COLLATERALIZATION AMOUNT" means, with respect to any
Distribution Date, the sum of (i) the Pool Balance as of the end of the related
Collection Period, (ii) the Pre-Funded Amount as of the end of the related
Collection Period, and (iii) the Net Government Receivable.
"NOTE DEPOSITORY AGREEMENT" means the agreement dated as of the
Closing Date relating to the Notes, substantially in the form of Exhibit B to
the Indenture, among the Issuer, the Indenture Trustee, the Administrator and
The Depository Trust Company, as the initial Clearing Agency.
"NOTE INTEREST RATE" means, with respect to any Interest Period, (w)
in the case of any Class of Notes, the interest rate per annum equal to the
lesser of (i) the sum of (x) in the case of any Class of Notes that are T-Xxxx
Indexed Securities, the weighted average of the T-Xxxx Rates within such
Interest Period and in the case of any Class of Notes that are LIBOR Indexed
Securities, Three-Month LIBOR plus (y) the Applicable Note Margin and (ii) the
Student Loan Rate for such Interest Period. The interest rate per annum for any
Class of Notes that are T-Xxxx Indexed Securities will be computed on the basis
of the actual number of days elapsed in such Interest Period over a period of
365 days (or 366 in a leap year) and in the case of any Class of Notes that are
LIBOR Indexed Securities, will be computed on the basis of the actual number of
days elapsed in the related Interest Period divided by 360. In the case of any
LIBOR Indexed Securities and the initial Interest Period, the Note Interest Rate
will equal the interest rate per annum equal to the lesser of (i) the weighted
average of (x) Three-Month LIBOR for the period from the Closing Date to but
excluding November 26, 1999 (computed on the basis of the actual number of days
elapsed in such period divided by 360) as determined on the initial LIBOR
Determination Date and (y) Three-Month LIBOR for the period from November 26,
1999 to but excluding February 25, 2000 (computed on the basis of the actual
number of days elapsed in such period divided by 360) as determined on the LIBOR
Determination Date in November 1999, in each case plus the Applicable Note
Margin and (ii) the Student Loan Rate for the initial Interest Period.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"NOTE REGISTER" and "NOTE REGISTRAR" have the respective meanings
specified in Section 2.04 of the Indenture.
"NOTE UNDERWRITING AGREEMENT" means the Note Underwriting Agreement
dated as of September 30, 1999 between the Seller and the Underwriters.
"NOTEHOLDER" means the Person in whose name a Note is registered in
the Note Register.
"NOTEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of the aggregate Noteholders' Interest Distribution
Amount with respect to each Class of Notes and the Noteholders' Principal
Distribution Amount for such Distribution Date.
"NOTEHOLDERS' INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess of (i) the sum of the Noteholders' Interest
Distribution Amount on the preceding Distribution Date over (ii) the amount of
interest actually distributed to the holders of the Notes on such preceding
Distribution Date, plus interest on the amount of such excess interest due to
the holders of the Notes, to the extent permitted by law, at (1) the weighted
average of the Note Interest Rates for the Class A Notes and (2) the Note
Interest Rate for the Class M Notes, in the case of the Class M Notes, in each
case, from such preceding Distribution Date to the current Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date and any Class of Notes, the sum of (i) the aggregate amount of
interest accrued at the applicable Note Interest Rate for the related Interest
Period on the outstanding principal balance of such Class of Notes on the
immediately preceding Distribution Date after giving effect to all principal
distributions to such Noteholders of such class on such date (or, in the case of
the first Distribution Date, on the Closing Date) and (ii) the Noteholders'
Interest Carryover Shortfall for such class and such Distribution Date;
provided, that the Noteholders' Interest Distribution Amount will not include
any Noteholders' Interest Index Carryover for such class.
"NOTEHOLDERS' INTEREST INDEX CARRYOVER" means, with respect to any
Distribution Date and any Class of Notes as to which the Note Interest Rate for
such Class of Notes for such Distribution Date is based on the Student Loan
Rate, the amount equal to the excess, if any, of (a) the amount of interest on
such Class of Notes that would have accrued in respect of the related Interest
Period had interest been calculated based on the T-Xxxx Rate, if such Class of
Notes are T-Xxxx Indexed Securities or Three-Month LIBOR if such Notes are LIBOR
Indexed Securities, in each case, plus the Applicable Note Margin, over (b) the
amount of interest on such Class of Notes actually accrued in respect of such
Interest Period based on the Student Loan Rate, together with the unpaid portion
of any such excess from prior Distribution Dates (and interest accrued thereon,
to the extent permitted by law, at the applicable rate calculated based on the
T-Xxxx Rate, in the case of T-Xxxx Indexed Securities or Three-Month LIBOR, in
the case of LIBOR Indexed Securities plus the Applicable Note Margin); PROVIDED,
HOWEVER, that on the Final Maturity Date for such Class of Notes, the
Noteholders' Interest Index Carryover for such Class of Notes will be equal to
the lesser of (i) the Noteholders' Interest Index Carryover for such Class of
Notes on such date determined as described above and (ii) the amount of funds,
if any, required and available to be distributed to the holders for such Class
of Notes on such date pursuant to the Sale and Servicing Agreement.
"NOTEHOLDERS' PERCENTAGE" means a fraction, expressed as a percentage,
the numerator of which is the principal amount of the Notes issued on the
Closing Date and the denominator of which is the sum of the principal amount of
the Notes issued on the Closing Date and the principal balance of the
Certificates issued on the Closing Date.
"NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to
any Distribution Date, the Principal Distribution Amount for such Distribution
Date; PROVIDED, HOWEVER, that the Noteholders' Principal Distribution Amount for
the Notes will not exceed the outstanding principal balance of the Notes. In
addition, (i) on the Final Maturity Date for each related Class of Notes, the
principal required to be distributed to such Class of Notes will include the
amount required to reduce the outstanding principal balance of such Class of
Notes to zero, and (ii) on the related Distribution Date following a sale of the
Financed Student Loans pursuant to Section 9.01(a) or (c) of the Sale and
Servicing Agreement, the principal required to be distributed to the holders of
Class A-2 Notes and Class M Notes will include the amount required to reduce the
outstanding principal balance of the Class A-2 Notes and Class M Notes to zero.
In the event that on two consecutive Distribution Dates the outstanding balance
of the Notes is in excess of the Note Collateralization Amount, the Noteholders'
Principal Distribution Amount will be reduced by the amount of any Noteholders'
Priority Principal Distribution Amount.
"NOTEHOLDERS' PRIORITY PRINCIPAL DISTRIBUTION AMOUNT" means, with
respect to any Distribution Date, the excess of (i) the aggregate outstanding
principal balance of the Notes (after giving effect to any distributions on such
Distribution Date) over (ii) the Note Collateralization Amount.
"NOTES" means the Class A-1 Notes, Class A-2 Notes and Class M Notes.
"NSLP" means the Nebraska Student Loan Program, a Nebraska
corporation.
"OBLIGOR" on a Financed Student Loan means the borrower or
co-borrowers of such Financed Student Loan and any other Person who owes
payments in respect of such Financed Student Loan, including the Guarantor
thereof and, with respect to any Interest Subsidy Payment or Special Allowance
Payment, if any, thereon, the Department.
"OFFICERS' CERTIFICATE" means (i) in the case of the Issuer, a
certificate signed by any two Authorized Officers of the Eligible Lender
Trustee, under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 11.01 of the Indenture, and delivered to the
Indenture Trustee, (ii) in the case of the Seller or the Administrator, a
certificate signed by any two Authorized Officers of the Seller or the
Administrator, as appropriate, (iii) in the case of the Master Servicer, a
certificate signed by any two Authorized Officers of the Master Servicer and
(iv) in the case of any Sub-Servicer, a certificate signed by any two Authorized
Officers of such Sub-Servicer.
"OPINION OF COUNSEL" means (i) with respect to the Issuer, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Indenture, be employees of or counsel to the Issuer and who shall be
acceptable to the Indenture Trustee, and which opinion or opinions shall be
addressed to the Indenture Trustee as Indenture Trustee, shall comply with any
applicable requirements of Section 11.01 of the Indenture, and shall be in form
and substance satisfactory to the Indenture Trustee, (ii) with respect to the
Seller, the Administrator or the Master Servicer, one or more written opinions
of counsel who may be an employee of or counsel to the Seller, the Administrator
or the Master Servicer, which counsel shall be acceptable to the Indenture
Trustee, the Eligible Lender Trustee or the Rating Agencies, as applicable, and
(iii) with respect to the a Sub-Servicer, one or more written opinions of
counsel who may be an employee of or counsel to Sub-Servicer, which counsel
shall be acceptable to the Master Servicer.
"OTHER ADDITIONAL PRE-FUNDED AMOUNT" means, with respect to any
Distribution Date, the amount on deposit in the Other Additional Pre-Funding
Subaccount.
"OTHER ADDITIONAL PRE-FUNDING SUBACCOUNT" has the meaning set forth in
Section 5.08 of the Sale and Servicing Agreement.
"OTHER SUBSEQUENT STUDENT LOANS" means the Serial Loans (including
Consolidation Loans but not including Subsequent Pool Student Loans), Guarantee
Fees Advances and the funding of accrued interest to be capitalized made by the
Seller to an eligible borrower who has one or more existing loans under the
Programs that are Financed Student Loans and are transferred or to be
transferred to the Eligible Lender Trustee on behalf of the Issuer during the
Funding Period, pursuant to Section 2.02 of the Sale and Servicing Agreement,
each of which shall be identified on Schedule A to the related Transfer
Agreement (which may be in the form of microfiche or computer tape) and each
such Schedule A shall also be deemed to be a supplement to part III of Schedule
B to the Sale and Servicing Agreement.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Noteholders thereof (PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to the Indenture); and
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
PROVIDED that in determining whether the Noteholders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Seller or any Affiliate of any of the foregoing Persons shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Indenture
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any of
the foregoing Persons.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
Outstanding at the date of determination.
"PARITY DATE" means the Distribution Date on which the aggregate
principal balance of the Notes and Certificates (after giving effect to all
distributions pursuant to Section 5.05(c) of the Sale and Servicing Agreement)
equals the sum of the Pool Balance and amounts on deposit in the Pre-Funding
Account as of the last day of the related Collection Period.
"PAYING AGENT" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 of the Indenture and is authorized by the Issuer to make the payments to
and distributions from the Collection Account and payments of principal of and
interest and any other amounts owing on the Notes on behalf of the Issuer.
"PERSON" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PHEAA" means the Pennsylvania Higher Education Assistance Agency, an
agency of the Commonwealth of Pennsylvania.
"PHEAA SUB-SERVICING AGREEMENT" means the Subservicing Agreement,
dated as of September 1, 1999, between PHEAA and the Master Servicer.
"PHYSICAL PROPERTY" has the meaning assigned to such term in the
definition of "Delivery" above.
"POOL BALANCE" means, at any time, the aggregate principal balance of
the Financed Student Loans at the end of the preceding Collection Period
(including accrued interest thereon for such Collection Period to the extent
such interest will be capitalized upon commencement of repayment), after giving
effect to the following without duplication: (i) all payments received by the
Trust related to the Financed Student Loans during such Collection Period from
or on behalf of borrowers, Guarantors and the Department, (ii) all Purchase
Amounts received by the Trust related to the Financed Student Loans for such
Collection Period from the Seller or the Master Servicer (or any Sub-Servicer
acting on its behalf), (iii) all Additional Fundings made from the Escrow
Account and the Pre-Funding Account with respect to such Collection Period and
(iv) all losses realized on Financed Student Loans liquidated during such
Collection Period.
"POOL FACTOR" means as of the close of business on a Distribution Date
(i) for the Class A-1 Notes, a seven-digit decimal figure equal to the
outstanding principal balance of the Class A-1 Notes divided by the original
outstanding principal balance of the Class A-1 Notes, (ii) for the Class A-2
Notes, a seven-digit decimal figure equal to the outstanding principal balance
of the Class A-2 Notes divided by the original outstanding principal balance of
the Class A-2 Notes, (iii) for the Class M Notes, a seven-digit decimal figure
equal to the outstanding principal balance of the Class M Notes divided by the
original outstanding principal balance of the Class M Notes, and (iv) for the
Certificates, a seven-digit decimal figure equal to the Certificate Balance of
the Certificates divided by the Initial Certificate Balance of the Certificates.
The Pool Factor for each Class of Securities will be 1.0000000 as of the Closing
Date; thereafter, the Pool Factor for each Class of Securities will decrease to
reflect reductions in the outstanding principal balance of such classes of
Securities.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture and in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PRE-FUNDED AMOUNT" means, with respect to any Distribution Date, the
amount on deposit in the Pre-Funding Account.
"PRE-FUNDING ACCOUNT" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement (including, unless otherwise expressly stated, the Subsequent Pool
Pre-Funding Subaccount and the Other Additional Pre-Funding Subaccount).
"PRINCIPAL DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the amount by which the sum of the outstanding principal
balance of the Notes and the Certificates exceeds the Specified Collateral
Balance for such Distribution Date.
"PRIVATE CONSOLIDATION GUARANTEE FEE" means, with respect to each
Private Consolidation Loan that is guaranteed, a fee charged to the borrower to
discharge the underlying Financed Private Loans and included in the original
principal amount of such Private Consolidation Loan.
"PRIVATE CONSOLIDATION LOAN" means a loan made by the Seller to an
eligible borrower that represents the refinancing of Private Financed Loans of
such borrower in accordance with the terms of the Programs.
"PRIVATE GRADUATE LOAN TRIGGER EVENT" means, on any Distribution Date,
when: (1) a XXXX Trigger Event, (2) a HICA Trigger Event, or (3) a
Non-Guaranteed Private Graduate Loan Trigger Event shall have occurred.
"PRIVATE GUARANTOR" means, collectively, HICA and 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, 100% of the amount required to prepay in full the
respective Financed Student Loan, if it is an Initial Financed Student Loan,
100% of the amount required to prepay in full the respective Financed Student
Loan, if it is a Subsequent Pool Student Loan and 100% of the amount required to
prepay in full the respective Financed Student Loan if it is an Other Subsequent
Student Loan, in each case under the terms thereof including all accrued
interest thereon expected to be capitalized upon entry into repayment and any
lost Interest Subsidy Payments and Special Allowance Payments with respect
thereto.
"PURCHASED STUDENT LOAN" means a Financed Student Loan purchased as of
the close of business on the last day of a Collection Period by the Master
Servicer (or any Sub-Servicer acting on its behalf) pursuant to Section 4.06 of
the Sale and Servicing Agreement or repurchased by the Seller pursuant to
Section 3.02 of the Sale and Servicing Agreement.
"RATING AGENCY" means each of 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 Seller, notice of which designation shall be given to the
Indenture Trustee, the Eligible Lender Trustee, the Master Servicer and each
Sub-Servicer.
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof (or such
shorter period as shall be acceptable to the Rating Agencies) and that none of
the Rating Agencies shall have notified the Seller, the Master Servicer, the
Eligible Lender Trustee and the Indenture Trustee in writing that such action
will in and of itself result in a reduction or withdrawal of the then current
rating of the Notes or the Certificates.
"REALIZED LOSS AMOUNT" means (1) with respect to any Distribution Date
prior to the Parity Date an amount equal to the positive difference of any of
(x) the sum of the Pool Balance and amounts on deposit in the Pre-Funding
Account as of the last day of the second preceding Collection Period (or, in the
case of the First Distribution Date, as of the Cutoff Date), minus the sum of
the Pool Balance and amounts on deposit in the Pre-Funding Account as of the
last day of the related Collection Period, minus (y) the amount of Available
Funds remaining to be distributed as Noteholders' Principal Distribution Amount
on such Distribution Date pursuant to Section 5.05(c)(viii) of the Sale and
Servicing Agreement or, if the outstanding principal balance of Notes has been
reduced to zero, Certificateholders' Principal Distribution Amount on such
Distribution Date pursuant to Section 5.05(c)(ix) of the Sale and Servicing
Agreement and (2) with respect to any Distribution Date on and after the Parity
Date, an amount equal to (A) the Noteholders' Principal Distribution Amount for
such Distribution Date or, if the outstanding principal balance of the Notes has
been reduced to zero, the Certificateholders' Principal Distribution Amount for
such Distribution Date minus (B) the amount of Available Funds remaining to be
distributed as Noteholders' Principal Distribution Amount on such Distribution
Date pursuant to Section 5.05(c)(viii) of the Sale and Servicing Agreement or,
if the outstanding principal balance of the Notes has been reduced to zero,
Certificateholders' Principal Distribution Amount on such Distribution Date
pursuant to Section 5.05(c)(ix) of the Sale and Servicing Agreement.
"REALIZED LOSS DRAW" means with respect to any Distribution Date, the
amount of any withdrawal from the Reserve Account on such Distribution Date
pursuant to Section 5.06(b)(viii) of the Sale and Servicing Agreement.
"REALIZED LOSSES" means the excess of the aggregate principal balance
of any Liquidated Student Loan plus accrued but unpaid interest thereon over
Liquidation Proceeds to the extent allocable to principal.
"RECORD DATE" means, with respect to a Distribution Date or Redemption
Date, the close of business on the twenty-fourth day of the calendar month in
which such Distribution Date or Redemption Date occurs.
"RECOVERIES" means, with respect to any Liquidated Student Loan,
moneys collected in respect thereof, from whatever source, during any Collection
Period following the Collection Period in which such Financed Student Loan
became a Liquidated Student Loan, net of the sum of any amounts expended by the
Master Servicer (or any Sub-Servicer acting on its behalf) for the account of
any Obligor and any amounts required by law to be remitted to the Obligor.
"REDEMPTION DATE" means (a) in the case of a redemption of Notes
pursuant to Section 10.01(a) of the Indenture, the Distribution Date on which
the Funding Period ends (or the Distribution Date on or immediately following
the last day of the Funding Period, if the Funding Period does not end on a
Distribution Date) or (b) in the case of a payment to Noteholders pursuant to
Section 10.01(b) of the Indenture, the Distribution Date specified by the
Administrator or the Issuer pursuant to Section 10.01(b) of the Indenture.
"REDEMPTION PRICE" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a) of the Indenture, an amount equal to the unpaid
principal amount of the Notes, plus accrued and unpaid interest thereon at the
applicable Note Interest Rate to but excluding the Redemption Date and the
amount of the Noteholders' Interest Index Carryover with respect thereto, or (b)
in the case of a payment made to Noteholders pursuant to Section 10.01(b) of the
Indenture, the amount to be so paid, but not in excess of the amount specified
in clause (a) above.
"REFERENCE BANK" means a leading bank (i) engaged in transactions in
Eurodollar deposits in the international Eurocurrency market, (ii) not
controlling, controlled by or under common control with the Administrator and
(iii) having an established place of business in London.
"REMOTE TIME-SHARING SERVICES PROGRAM" means the various services and
programs made available by PHEAA to the Seller pursuant to the Society RT-SS
Agreement.
"RESERVE ACCOUNT" means the account designated as such, established
and maintained pursuant to Section 5.01 of the Sale and Servicing Agreement.
"RESERVE ACCOUNT INITIAL DEPOSIT" means $17,500,000.00.
"RESPONSIBLE OFFICER" means, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary, or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers,
with direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"S&P" means Standard and Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement
dated as of September 1, 1999 among the Issuer, the Seller, the Administrator,
the Eligible Lender Trustee and the Master Servicer.
"SCHEDULES OF FINANCED STUDENT LOANS" means the listing of the
Financed Student Loans set forth in Schedules A and B to the Sale and Servicing
Agreement and to the Indenture (which Schedules may be in the form of microfiche
or computer tape), as amended or supplemented on each Transfer Date to reflect
the sale to the Eligible Lender Trustee on behalf of the Trust of the Additional
Student Loans.
"SECURITIES" means the Class A-1 Notes, Class A-2 Notes, Class M Notes
and the Certificates.
"SELLER" means Key Bank USA, National Association, a national banking
association.
"SELLER OPTIONAL DEPOSIT" has the meaning specified in Section 5.09 of
the Sale and Servicing Agreement.
"SERIAL LOANS" means additional student loans, including Consolidation
Loans, which are made under the Programs to a borrower who is also a borrower
under at least one Financed Student Loan.
"SERVICER'S REPORT" means any report of the Master Servicer (or any
Sub-Servicer acting at the direction of the Master Servicer) delivered pursuant
to Section 4.08(a) or (b) of the Sale and Servicing Agreement, substantially in
the form acceptable to the Administrator.
"SLS LOAN" means a Financed Federal Loan designated as such that is
made under the Federal Supplemental Loans for Students Program pursuant to the
Higher Education Act.
"SOCIETY" means Society National Bank, predecessor in interest to the
Seller and successor in interest to Ameritrust.
"SOCIETY/PHEAA SERVICING AGREEMENT" means (i) the Servicing Agreement,
dated March 23, 1995, by and between PHEAA and Seller, as amended from time to
time and including all servicing schedules and other exhibits, or (ii) after the
expiration of the agreement described in clause (i), the then current service
agreement (including all servicing schedules) between Seller and PHEAA pursuant
to which PHEAA services student loans owned by Seller, or if no such service
agreement exists, the last such service agreement to be in existence, and any
references to specific sections of the Society/PHEAA Servicing Agreement shall
mean the sections of the agreement described in clause (i) of this definition or
the substantially similar provisions of the relevant agreement described in
clause (ii) of this definition
"SOCIETY RT-SS AGREEMENT" means (i) the Remote Time-Sharing Services
Agreement, dated January 28, 1992, by and between PHEAA and Society, as amended
from time to time, relating to certain Financed Student Loans, or (ii) after the
expiration of the agreement described in clause (i), the then current agreement
relating to the provision of remote time-sharing services between PHEAA and the
Seller, or if no such agreement exists, the last such agreement to be in
existence; and any references to specific sections of the Society RT-SS
Agreement shall mean the sections of the agreement described in clause (i) of
this definition or the substantially similar provisions of the relevant
agreement described in clause (ii) of this definition.
"SPECIAL ALLOWANCE PAYMENTS" means payments, designated as such,
consisting of effective interest subsidies by the Department in respect of the
Financed Federal Loans to the Eligible Lender Trustee on behalf of the Trust in
accordance with the Higher Education Act.
"SPECIAL DETERMINATION DATE" means December 24, 1999.
"SPECIFIED COLLATERAL BALANCE" means, with respect to any Distribution
Date, the sum of (a) the Pool Balance as of the last day of the related
Collection Period plus (b) the Pre-Funded Amount, as of the last day of the
related Collection Period for such Distribution Date. In the event that the
Financed Student Loans are not sold pursuant to Section 9.01(c) of the Sale and
Servicing Agreement with respect to any Distribution Date occurring on or after
the November 2009 Distribution Date, the Specified Collateral Balance will be
zero. Following the occurrence and during the continuation of a Trigger Event,
the Specified Collateral Balance will be zero.
"SPECIFIED RESERVE ACCOUNT BALANCE" means with respect to any
Distribution Date an amount equal to the greater of (i) 1.75% of the aggregate
outstanding principal and (ii) $2 million; provided, however, that in no event
will such balance exceed the sum of the outstanding principal amount of the
Notes and the outstanding principal balance of the Certificates.
"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, with respect to the Initial Financed
Student Loans, September 1, 1999 and, with respect to the Subsequent Pool
Student Loans, August 1, 1999.
"STUDENT LOAN RATE" means for any Class of Securities for any Interest
Period a rate equal to the product of (a) the quotient obtained by dividing (i)
365 (or 366 in a leap year) by (ii) the actual number of days elapsed in such
Interest Period and (b) the percentage equivalent of a fraction, (i) the
numerator of which is equal to Expected Interest Collections for the Collection
Period relating to such Interest Period less the Master Servicing Fees and the
Administration Fee payable on the related Distribution Date and any Master
Servicing Fees paid on the two preceding Monthly Servicing Payment Dates during
the related Collection Period and (ii) the denominator of which is the
outstanding principal balance of the Securities as of the first day of such
Interest Period.
"SUBSEQUENT CUTOFF DATE" means the day specified in the related
Transfer Agreement as of which principal and interest accruing with respect to
an Additional Student Loan is to be transferred to the Eligible Lender Trustee
on behalf of the Issuer pursuant to Section 2.02 of the Sale and Servicing
Agreement.
"SUBSEQUENT POOL PRE-FUNDED AMOUNT" means, with respect to any
Distribution Date, the amount on deposit in the Subsequent Pool Pre-Funding
Subaccount.
"SUBSEQUENT POOL PRE-FUNDING SUBACCOUNT" has the meaning set forth in
Section 5.08 of the Sale and Servicing Agreement.
"SUBSEQUENT POOL STUDENT LOANS" means collectively, the Subsequent
Pool 1 Student Loans and the Subsequent Pool 2 Student Loans.
"SUBSEQUENT POOL 1 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of the Subsequent Pool 1 Student Loans on
the Closing Date as set forth in part I to Schedule B to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape), as
such schedule may be amended or supplemented, which student loans the Seller
intends to transfer to the Eligible Lender Trustee on behalf of the Issuer
pursuant to Section 2.02 of the Sale and Servicing Agreement, each of which
shall be identified on Schedule A to the related Transfer Agreement.
"SUBSEQUENT POOL 2 STUDENT LOANS" means any graduate or undergraduate
student loans listed on the Schedule of the Subsequent Pool 2 Student Loans on
the Closing Date as set forth in part II to Schedule B to the Sale and Servicing
Agreement (which Schedule may be in the form of microfiche or computer tape), as
such schedule may be amended or supplemented, which student loans the Seller
intends to transfer to the Eligible Lender Trustee on behalf of the Issuer
pursuant to Section 2.02 of the Sale and Servicing Agreement, each of which
shall be identified on Schedule A to the related Transfer Agreement.
"SUB-SERVICER" initially means each of PHEAA, in its capacity as
sub-servicer of the Financed Student Loans it services on behalf of the Master
Servicer pursuant to the PHEAA Sub-Servicing Agreement, and Great Lakes, as
sub-servicer of the Financed Student Loans it services on behalf of the Master
Servicer pursuant to the Great Lakes Sub-Servicing Agreement, as applicable, and
such other Sub-Servicers as may, from time to time, be appointed by the Master
Servicer as Sub-Servicers in accordance with the provisions of Section 4.13 of
the Sale and Servicing Agreement.
"SUCCESSOR ADMINISTRATOR" has the meaning specified in Section 3.07(e)
of the Indenture.
"SUCCESSOR MASTER SERVICER" has the meaning specified in Section
3.07(e) of the Indenture.
"T-XXXX INDEXED SECURITIES" means none.
"T-XXXX RATE" means, on any day, the weighted average per annum
discount rate (expressed on a bond equivalent basis and applied on a daily
basis) for 91-day Treasury Bills sold at the most recent 91-day Treasury Xxxx
auction prior to such date as reported by the U.S. Treasury Department. In the
event that the results of the auctions of 91-day Treasury Bills cease to be
published or reported as provided above, or that no such auction is held in a
particular week, then the "T-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 Bills shall again be so published or
reported or such an auction is held, as the case may be. The T-Xxxx Rate shall
be subject to a Lock-In Period of six Business Days.
"TELERATE PAGE 3750" means the display page so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices) or such
comparable page on a comparable service.
"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 20% of the 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.
"THREE-MONTH LIBOR" means the London interbank offered rate for
deposits in U.S. dollars having a maturity of three months commencing on the
related LIBOR Determination Date (the "Index Maturity") which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750, the rate for that day
will be determined on the basis of the rates at which deposits in U.S. dollars,
having the Index Maturity and in a principal amount of not less than U.S.
$1,000,000, are offered at approximately 11:00 a.m., London time, on such LIBOR
Determination Date to prime banks in the London interbank market by the
Reference Banks. The Administrator will request the principal London office of
each of such Reference Banks to provide a quotation of its rate. If at least two
such quotations are provided, the rate for that day will be the arithmetic mean
of the quotations. If fewer than two quotations are provided, the rate for that
day will be the arithmetic mean of the rates quoted by major banks in New York
City, selected by the Administrator, at approximately 11:00 a.m., New York City
time, on such LIBOR Determination Date for loans in U.S. dollars to leading
European banks having the Index Maturity and in a principal amount equal to an
amount of not less than U.S. $1,000,000; provided that if the banks selected as
aforesaid are not quoting as mentioned in this sentence, Three-Month LIBOR in
effect for the applicable Interest Period will be Three-Month LIBOR in effect
for the previous Interest Period.
"TIA" means the Trust Indenture Act of 1939, as amended.
"TRANSFER AGREEMENT" has the meaning specified in Section 2.02(b) of
the Sale and Servicing Agreement.
"TRANSFER DATE" means the Closing Date, the fifteenth day (or, if such
day is not a Business Day, the next succeeding Business Day) of any month or any
other date designated by the Seller as a date on which Additional Student Loans
will be conveyed to the Eligible Lender Trustee on behalf of the Trust pursuant
to Section 2.02 of the Sale and Servicing Agreement.
"TRANSFERRED BALANCE" has the meaning assigned to such term in Section
5.08 of the Sale and Servicing Agreement.
"TREASURY REGULATIONS" means regulations, including proposed or
temporary regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"TRIGGER EVENT" means, on any Distribution Date, when: (1) a
Non-Guaranteed Private Undergraduate Loan Trigger Event has occurred, or (2) a
Private Graduate Loan Trigger Event has occurred; provided, however, that if all
three Ratings Agencies consent in writing, no Trigger Event shall have occurred
with respect to such Distribution Date.
"TRUST" means the Issuer, established pursuant to the Trust Agreement.
"TRUST ACCOUNT PROPERTY" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), including the Reserve Account Initial Deposit and the
Pre-Funded Amount and all proceeds of the foregoing.
"TRUST ACCOUNTS" has the meaning specified in Section 5.01 of the Sale
and Servicing Agreement.
"TRUST AGREEMENT" means the Trust Agreement dated as of September 1,
1999 as amended and restated by the Amended and Restated Trust Agreement dated
as of September 1, 1999, each between the Depositor and the Eligible Lender
Trustee.
"TRUST CERTIFICATE" means a Certificate.
"TRUST ESTATE" means all right, title and interest of the Trust (or
the Eligible Lender Trustee on behalf of the Trust) in and to the property and
rights assigned to the Trust pursuant to Article II of the Sale and Servicing
Agreement, all funds on deposit from time to time in the Trust Accounts and all
other property of the Trust from time to time, including any rights of the
Eligible Lender Trustee and the Trust pursuant to the Sale and Servicing
Agreement and the Administration Agreement.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939
as in force on the date hereof, unless otherwise specifically provided.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
"UNDERGRADUATE LOAN PROGRAMS" means the "Key Alternative Loan
Program," pursuant to which the Seller made loans to students enrolled in
approved or accredited undergraduate institutions.
"USAF" means United Student Aid Fund, Inc., an Indiana corporation.
"UNDERWRITERS" shall mean Credit Suisse First Boston Corporation and
McDonald Investments Inc., a wholly-owned subsidiary of KeyCorp.
"UNDERWRITING AGREEMENT" shall mean the Note Underwriting Agreement or
the Certificate Underwriting Agreement, as applicable.
SCHEDULE A
TO THE
SALE AND SERVICING AGREEMENT
PART I
SCHEDULE OF INITIAL POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee.
PART II
SCHEDULE OF INITIAL POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
SCHEDULE B
TO THE
SALE AND SERVICING AGREEMENT
PART I
SCHEDULE OF SUBSEQUENT POOL 1 STUDENT LOANS
Delivered to the Indenture Trustee
PART II
SCHEDULE OF SUBSEQUENT POOL 2 STUDENT LOANS
Delivered to the Indenture Trustee
PART III
SCHEDULE OF OTHER SUBSEQUENT STUDENT LOANS
To be included on Schedule A to each related Transfer Agreement.
SCHEDULE C
TO THE
SALE AND SERVICING AGREEMENT
LOCATION OF FINANCED STUDENT LOAN FILES - PHEAA
Documents relating to the Financed Student Loans being sub-serviced by
PHEAA on behalf of the Master Servicer pursuant to the PHEAA Sub-Servicing
Agreement (including original notes) are stored at PHEAA's facility at 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
MASTER SERVICING OR SUB-SERVICING PROVISIONS TO BE AUDITED PURSUANT TO SECTION
4.10
Sections 3.03, 3.04, 4.01, 4.02, 4.03, 4.06, 4.08, 5.02 and 5.03 of the Sale and
Servicing Agreement (but only to the extent that the Master Servicer has
performed such duties) [otherwise to be included as part of the applicable
Sub-Servicer's audit report to be provided pursuant to Section 4.10 of this
Agreement and the related Sub-Servicing Agreement].
ADMINISTRATIVE PROVISIONS TO BE AUDITED PURSUANT TO SECTION 4.10
Sections 4.04, 4.08, 5.05, 5.06, 5.07 and 5.08 of the Sale and Servicing
Agreement.
Sections 1(a)(xx), 1(b)(iii), 2 and 3 of the Administration Agreement.
SCHEDULE E
TO THE
SALE AND SERVICING AGREEMENT
1. FEES. The Master Servicing Fee payable to the Master Servicer on
each Monthly Servicing Payment Date in accordance with Sections 4.07 and
5.05(b)(ii) and (c)(ii) of the Sale and Servicing Agreement shall be equal to
0.0416666% (0.50% on an annualized basis) (the "Master Servicing Fee
Percentage") of the Pool Balance as of the last day of the preceding calendar
month (the "Master Servicing Fee").
2. ADJUSTMENTS. If a demonstrable and significant increase occurs in
the costs incurred by the Master Servicer in providing and/or arranging for the
services to be provided under the Sale and Servicing Agreement, whether due to
changes in applicable governmental regulations, guarantor program requirements
or regulations, United States Postal Service postage rates or some other
identifiable cost increasing event, the Seller, the Eligible Lender Trustee on
behalf of the Trust and the Master Servicer shall negotiate in good faith a
reasonable increase in the Master Servicing Fee Percentage to reflect the
increased costs of the Master Servicer.
EXHIBIT A
TO THE
SALE AND SERVICING AGREEMENT
Form of Noteholders' Statement
pursuant to Section 5.07(b) of Sale
and Servicing Agreement (capitalized
terms used herein are defined in
APPENDIX A THERETO)
Distribution Date:___________________
(i) Amount of principal being paid or distributed in respect of the
Class A-1 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-1 Notes)
(ii) Amount of principal being paid or distributed in respect of the
Class A-2 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-2 Notes)
(iii) Amount of principal being paid or distributed in respect of the
Class M Notes:___________ ($_______ per $1,000 original principal amount of
Class M Notes)
(iv) Amount of interest being paid or distributed in respect of the
Class A-1 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-1 Notes)
(v) Amount of interest being paid or distributed in respect of the
Class A-2 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-2 Notes)
(vi) Amount of interest being paid or distributed in respect of the
Class M Notes:___________ ($_______ per $1,000 original principal amount of
Class M Notes)
(vii) Amount of Noteholders' Interest Index Carryover being paid or
distributed (if any) and amount remaining (if any):
(1) Distributed to Class A-1 Noteholders: _______($_______ per
$1,000 original principal amount of Class A-1 Notes)
(2) Distributed to Class A-2 Noteholders: _______($_______ per
$1,000 original principal amount of Class A-2 Notes)
(3) Distributed to Class M Noteholders: _______($_______ per
$1,000 original principal amount of Class M Notes)
(4) Balance on Class A-1 Notes:__________ ($_______ per $1,000
original principal amount of Class A-1 Notes)
(5) Balance on Class A-2 Notes:__________ ($_______ per $1,000
original principal amount of Class A-2 Notes)
(6) Balance on Class M Notes:__________ ($_______ per $1,000
original principal amount of Class M Notes)
(viii) Payments made under the Cap Agreement on such date:
_______________ ($______________ with respect to the Class A-1 Notes,
$___________ with respect to Class A-2 Notes, and $__________ with respect to
the Class M Notes); and the total outstanding amount owed to the Cap Provider:
$________________.
(ix) Pool Balance at the end of the related Collection Period:________
(x) After giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:____________
(2) Pool Factor for the Class A-1 Notes:____________
(b) (1) outstanding principal amount of Class A-2
Notes:____________
(2) Pool Factor for the Class A-2 Notes:____________
(c) (1) outstanding principal amount of Class M
Notes:____________
(2) Pool Factor for the Class M Notes:____________
(d) (1) Certificate Balance:________________
(2) Pool Factor for the Certificates:____________
(xi) Note Interest Rate for the Notes:
(a) In general:
[(1) T-Xxxx Rate for the period from the previous
Distribution Date to this Distribution Date was _____%;][1]
or
[(1) Three-Month LIBOR for the period from the previous
Distribution Date to this Distribution Date was ___% [in the case
of the initial Interest Period Three-Month LIBOR was _____% for
the period from the Closing Date to but excluding November 26,
1999 and _____% for the period from and including November 26,
1999 to but excluding February 25, 2000] and] [2]
[(2)] the Student Loan Rate was _____%.[1][2]
(b) Note Interest Rate for the Class A-1 Notes: ______% (based on
[T-Xxxx Rate] [Three-Month LIBOR] [Student Loan Rate])
(c) Note Interest Rate for the Class A-2 Notes __% (based on
[T-Xxxx Rate] [Three-Month LIBOR] [Student Loan Rate]
(d) Note Interest Rate for the Class M Notes __% (based on
[T-Xxxx Rate] [Three-Month LIBOR][Student Loan Rate]
(xii) Amount of Master Servicing Fee for related Collection Period:
____________ ($_______ per $1,000 original principal amount of Class A-1 Notes,
$_________ per $1,000 original principal balance of Class A-2 Notes, and
$_________ per $1,000 original principal balance of Class M Notes);
(xiii) Amount of Administration Fee for related Collection
Period:____________ ($_______ per $1,000 original principal amount of Class A-1
Notes, $_________ per $1,000 original principal balance of Class A-2 Notes, and
$_________ per $1,000 original principal balance of Class M Notes);
(xiv) (a) Aggregate amount of Realized Losses (if any) for the related
Collection Period:
(b) Balance of Financed Student Loans that are delinquent in each
delinquency period as of the end of the related Collection Period:
[(xv) Amount in the Pre-Funding Account:_________]3
[(xvi) (a) Amount remaining in the Subsequent Pool Pre-Funding
Subaccount not used to acquire Subsequent Pool Student Loans: ______;
(b) Amount of (a) to be paid to the holders of the Class A-1 Notes:
__________]4
(c) Amount of (a) to be paid to the holders of the Class A-2 Notes:
________; and
(d) Amount of (a) to be paid to the holders of the Class M Notes:
________; and
[(xvii) Amount in the Pre-Funding Account at the end of the Funding
Period to be distributed as a payment of principal in respect of the
Notes:__________]5
-------------------------
[1 This Calculation not required unless the T-Xxxx Rate for such Interest
Period is 100 basis points greater than the T-Xxxx Rate of the preceding
Determination Date or the 52 Week Treasury Xxxx Rate is 100 basis points
less than the T-Xxxx as of such Determination Date.]
2[ This calculation not required unless Three-Month LIBOR for such Interest
Period is 100 bais points greater than Three-Month LIBOR of the preceding
Determination Date.]
3 To be included for each Distribution Date during the Funding Period.
4 To be included for First Distribution Date only.
5 To be included for the Distribution Date on or immediately following the
end of the Funding Period.
EXHIBIT B
TO THE
SALE AND SERVICING AGREEMENT
Form of Certificateholders' Statement
pursuant to Section 5.07(b) of Sale
and Servicing Agreement (capitalized
terms used herein are defined in
APPENDIX A THERETO)
Distribution Date:___________________
(i) Amount of principal being paid or distributed in respect of the
Certificates:___________ ($_______ per $1,000 original principal amount of the
Certificates)1
(ii) Amount of interest being paid or distributed in respect of the
Certificates:______________ ($_______ per $1,000 original principal amount of
Certificates)
(iii) Amount of Certificateholders' Interest Index Carryover being
paid or distributed (if any) and amount remaining (if any):
(1) Distributed: ______________ ($_______ per $1,000 original
principal amount of Certificates)
(2) Balance: ______________ ($_______ per $1,000 original
principal amount of Certificates)
(iv) Payments made under the Cap Agreement on such date: _________
($_________ with respect to the Certificates and $________ with respect to the
Notes); and the total outstanding amount owed to the Cap Provider: $___________.
(v) Pool Balance at the end of related Collection Period:
(vi) After giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:____________
(2) Pool Factor for Class A-1 Notes:____________
(b) (1) outstanding principal amount of Class A-2 Notes:________
(2) Pool Factor for Class A-2 Notes:____________
(c) (1) outstanding principal amount of Class M Notes:__________
(2) Pool Factor for Class M Notes:____________
(d) (1) Certificate Balance:______________
(2) Certificate Pool Factor:____________
(vii) Certificate Rate:
(a) In general:
[(1) T-Xxxx Rate for the period from the previous
Distribution Date to this Distribution Date was _____%;][2]
[(2) Three-Month LIBOR for the period from the previous
Distribution Date to this Distribution Date was __% [in the
case of the initial Interest Period Three-Month LIBOR was
_____% for the period from the Closing Date to but excluding
November 26, 1999 and _____% for the period from and
including November 26, 1999 to but excluding February 25,
2000] and][3]. (3) the Student Loan Rate was _____%.[2][3]
(b) Certificate Rate: ______% (based on [T-Xxxx Rate]
[Three-Month LIBOR][Student Loan Rate])
(viii) Amount of Master Servicing Fee for the related Collection
Period: ____________ ($_______ per $1,000 original principal amount of
Certificates):___________
(ix) Amount of Administration Fee for the related Collection Period:
____________ ($_______ per $1,000 original principal amount of Certificates)
(x) (a) Aggregate amount of Realized Losses (if any) for the related
Collection Period:
(b) Balance of Financed Student Loans that are delinquent in each
delinquency period as of the end of the related Collection Period:__________
(xi) Amount in the Reserve Account:____________
(xii) Amount in the Pre-Funding Account:_________4
(xiii) (a) Amount remaining in the Subsequent Pool Pre-Funding
Subaccount not used to acquire Subsequent Pool Student Loans: ______;
(b) Amount of (a) to be paid to Certificateholders: ________5
---------------------------
1 Only after the Notes have been paid in full.
[2 This Calculation not required unless the T-Xxxx for such Interest Period is
basis points greater than the T-Xxxx of the preceding Determination Date or
the 52 Week Treasury Xxxx Rate is 100 basis points less than the T-Xxxx
Rate as of such Determination Date.]
[3 This Calculation not required unless Three-Month LIBOR for such Interest
Period is 100 basis points greater than Three-Month LIBOR of the Preceding
Determination Date.]
4 To be included for each Distribution Date during the Funding Period.
5 To be included for First Distribution Date only.
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, 1999,
among the undersigned, as seller (the "Seller"), as master servicer (the "Master
Servicer") and as administrator (the "Administrator"), KeyCorp Student Loan
Trust 1999-B (the "Trust"), and Bank One, National Association, not in its
individual capacity but solely as Eligible Lender Trustee (the "Eligible Lender
Trustee"), the undersigned (the Seller, as beneficial owner, and Bank One,
National Association, as eligible lender trustee on behalf of the Seller) does
hereby sell, assign, transfer and otherwise convey unto the Eligible Lender
Trustee on behalf of the Trust, without recourse (subject to the obligations set
forth in the Sale and Servicing Agreement), all right, title and interest of the
undersigned in and to (i) the Initial Financed Student Loans and all obligations
of the Obligors thereunder including all moneys paid thereunder on or after the
Cutoff Date, (ii) the Assigned Rights, (iii) all funds on deposit from time to
time in the Trust Accounts, including the Reserve Account Initial Deposit and
the Pre-Funded Amount and in all investments and proceeds thereof (including all
income thereon) and (iv) the proceeds of any and all of the foregoing (including
proceeds derived from the voluntary or involuntary conversion of any of the
Initial Financed Student Loans into cash or other liquidated property, such as
proceeds from the applicable Guarantee Agreement. The foregoing sale does not
constitute and is not intended to result in any assumption by the Eligible
Lender Trustee or the Trust of any obligation of the Seller to the Obligors with
respect to Initial Financed Student Loans or any other person in connection with
the Initial Financed Student Loans or any agreement or instrument relating to
any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Initial Financed Student Loan
described in Schedule A to the Sale and Servicing Agreement in favor of the
Eligible Lender Trustee on behalf of the Trust, without recourse (subject to the
obligations set forth in the Sale and Servicing Agreement) against the
undersigned. This endorsement may be effected by attaching a facsimile hereof to
each or any of such promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Sale
and Servicing Agreement and is to be governed by the Sale and Servicing
Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in Appendix A to the Sale and Servicing Agreement, which also
contains rules as to usage that shall be applicable herein.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of September 29, 1999.
KEY BANK USA, NATIONAL
ASSOCIATION, as Seller
By:
----------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, as
eligible lender trustee
By:
---------------------------------
Name:
Title:
EXHIBIT E
TO THE
SALE AND SERVICING AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. ____ OF ADDITIONAL STUDENT LOANS dated as of _________,
______, among KEYCORP STUDENT LOAN TRUST 1999-B, a Delaware statutory business
trust (the "Issuer"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking
association, as seller (the "Seller"), BANK ONE, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity but solely as
Eligible Lender Trustee of the Issuer (the "Eligible Lender Trustee"), and KEY
BANK USA, NATIONAL ASSOCIATION, a national banking association, as administrator
(the "Administrator").
W I T N E S S E T H:
WHEREAS the Issuer, the Seller, the Eligible Lender Trustee, the
Master Servicer and the Administrator are parties to the Sale and Servicing
Agreement dated as of September 1, 1999 (as amended or supplemented, the "Sale
and Servicing Agreement");
WHEREAS the Seller, as depositor, and the Eligible Lender Trustee are
parties to the Amended and Restated Trust Agreement dated as of September 1,
1999 (as amended or supplemented, the "Trust Agreement");
WHEREAS pursuant to the Sale and Servicing Agreement, the Seller
wishes to convey the Additional Student Loans referred to in Section 2 of this
Agreement (the "Additional Student Loans") to the Eligible Lender Trustee on
behalf of the Issuer; and
WHEREAS, the Eligible Lender Trustee and the Issuer are willing to
accept such conveyance subject to the terms and conditions hereof.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. DEFINITIONS AND USAGE. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to them in Appendix A to the
Sale and Servicing Agreement, which also contains rules of construction and
usage that shall be applicable herein.
In addition, the following terms have the following meanings:
"SUBSEQUENT CUTOFF DATE" means, with respect to each Additional
Student Loan, the date specified as such on Schedule A hereto.
"TRANSFER DATE" means, with respect to the Additional Student Loans,
______________, ____.
2. SCHEDULES OF FINANCED STUDENT LOANS. Attached hereto as Schedule A
is a supplement to Schedule B to the Sale and Servicing Agreement listing the
Additional Student Loans to be conveyed on the Transfer Date to the Eligible
Lender Trustee on behalf of the Issuer pursuant to this Agreement.
3. CONVEYANCE OF ADDITIONAL STUDENT LOANS. In consideration of the
Issuer's delivery to or upon the order of the Seller of $__________, the Seller
does hereby sell, transfer, assign, set over and otherwise convey, without
recourse (except as expressly provided in the Sale and Servicing Agreement), to
the Eligible Lender Trustee on behalf of the Issuer:
(a) all right, title and interest of the Seller in and to each
Additional Student Loan, and all moneys received thereon, on and after the
related Subsequent Cutoff Date; and
(b) the proceeds of any and all of the foregoing.
4. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller hereby
represents and warrants to the Issuer as of the date of this Agreement and as of
the Transfer Date that:
(a) ORGANIZATION AND GOOD STANDING. The Seller is duly organized and
validly existing as a national banking association in good standing under
the laws of the United States of America, with the power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and has, the power, authority and legal right to acquire
and own the Additional Student Loans.
(b) POWER AND AUTHORITY. The Seller has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
the Seller has full corporate power and corporate authority to sell and
assign the property to be sold and assigned to and deposited with the
Issuer (or with the Eligible Lender Trustee on behalf of the Issuer) and
the Seller has duly authorized such sale and assignment to the Issuer (or
to the Eligible Lender Trustee on behalf of the Issuer) by all necessary
corporate action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Seller by all necessary
corporate action.
(c) BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Seller enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally or the rights of creditors of
banks the deposit accounts of which are insured by the FDIC and subject to
general principles of equity.
(d) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, nor
constitute (with or without notice or lapse of time or both) a default
under, the articles of association or by-laws of the Seller, or any
indenture, agreement or other instrument to which the Seller is a party or
by which it shall be bound which breach or default would reasonably be
expected to have a material adverse effect on the condition of Key Bank
USA, National Association, financial or otherwise, or adversely affect the
transactions contemplated by this Agreement or any other Basic Document;
nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the knowledge of the Seller, any order, rule or regulation
applicable to the Seller of any court or of any Federal or State regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties.
(e) NO PROCEEDINGS. There are no proceedings or to its best knowledge
investigations pending against the Seller or, to its best knowledge,
threatened against the Seller, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture or any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of the
other Basic Documents, (iii) seeking any determination or ruling that could
reasonably be expected to have a material and adverse effect on the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates or (iv) seeking to affect
adversely the Federal or State income tax attributes of the Issuer, the
Notes or the Certificates.
(f) ALL CONSENTS. All authorizations, consents, orders or approvals of
or registrations or declarations with any court, regulatory body,
administrative agency or other government instrumentality required to be
obtained, effected or given by the Seller in connection with the execution
and delivery by the Seller of this Agreement and the performance by the
Seller of the transactions contemplated by this Agreement have been duly
obtained, effected or given and are in full force and effect.
(g) PRINCIPAL BALANCE. The aggregate principal balance of the
Additional Student Loans listed on Schedule A attached hereto and conveyed
to the Eligible Lender Trustee on behalf of the Issuer pursuant to this
Agreement as of their respective Subsequent Cutoff Dates is $___________.
5. CONDITIONS PRECEDENT. The obligation of the Issuer to acquire the
Additional Student Loans hereunder is subject to the satisfaction, on or prior
to the Transfer Date, of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Seller in Section 4 of this Agreement and in Section
3.01 of the Sale and Servicing Agreement shall be true and correct as of
the date of this Agreement and as of the Transfer Date.
(b) SALE AND SERVICING AGREEMENT CONDITIONS. Each of the conditions
set forth in Section 2.02(b) of the Sale and Servicing Agreement shall have
been satisfied.
(c) DELIVERY OF ASSIGNMENT. The Seller shall have delivered an
Assignment substantially in the form of Annex A hereto.
(d) ADDITIONAL INFORMATION. The Seller shall have delivered to the
Issuer such information as was reasonably requested by the Issuer to
satisfy itself as to (i) the accuracy of the representations and warranties
set forth in Section 4 of this Agreement and in Section 3.01 of the Sale
and Servicing Agreement and (ii) the satisfaction of the conditions set
forth in this Section 5.
6. RATIFICATION OF AGREEMENT. As supplemented by this Agreement, the
Sale and Servicing Agreement is in all respects ratified and confirmed and the
Sale and Servicing Agreement as so supplemented by this Agreement shall be read,
taken and construed as one and the same instrument.
7. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which together shall constitute but one and the same instrument.
8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
9. HEADINGS. The section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective duly authorized officers as
of the day and the year first above written.
KEYCORP STUDENT LOAN TRUST 1999-B,
by BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely
as Eligible Lender Trustee,
By: -----------------------------
Name:
Title:
KEY BANK USA, NATIONAL ASSOCIATION, Seller,
By: -----------------------------
Name:
Title:
KEY BANK USA, NATIONAL ASSOCIATION,
Administrator,
By: ----------------------------
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Eligible Lender Trustee,
By:
----------------------------
Name:
Title:
Acknowledged and accepted as
of the date first above written:
BANKERS TRUST COMPANY,
not in its individual
capacity but solely as
Indenture Trustee,
By:
-----------------------
Name:
Title:
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans and their related Subsequent Cutoff Dates]
ANNEX A
TO THE TRANSFER AGREEMENT
ASSIGNMENT
For value received, in accordance with the Sale and Servicing
Agreement (the "Sale and Servicing Agreement") dated as of September 1, 1999,
among the undersigned, as seller (the "Seller"), and as administrator (the
"Administrator"), KeyCorp Student Loan Trust 1999-B (the "Trust"), and Bank One,
National Association, not in its individual capacity but solely as Eligible
Lender Trustee (the "Eligible Lender Trustee"), and the Transfer Agreement No.
dated as of, ____, (the "Transfer Agreement") among the Seller, the
Administrator, the Trust and the Eligible Lender Trustee, the undersigned does
hereby sell, assign, transfer and otherwise convey unto the Eligible Lender
Trustee on behalf of the Trust, without recourse (subject to the obligations set
forth in the Sale and Servicing Agreement), all right, title and interest of the
undersigned in and to (i) the Additional Student Loans (as such term is defined
in the Transfer Agreement) and all moneys received thereon, on and after each
applicable Subsequent Cutoff Date (as such term is defined in the Transfer
Agreement) and (ii) the proceeds of any and all of the foregoing (including but
not limited to proceeds derived from the voluntary or involuntary conversion of
any of the Additional Student Loans into cash or other liquidated property, such
as proceeds from the applicable Guarantee Agreement (as such term is defined in
the Transfer Agreement)). The foregoing sale does not constitute and is not
intended to result in any assumption by the Eligible Lender Trustee or the Trust
of any obligation of the Seller to the borrowers of such Additional Student
Loans or any other person in connection with the Additional Student Loans or any
agreement or instrument relating to any of them.
In addition, the undersigned, by execution of this instrument, hereby
endorses the promissory notes evidencing each Additional Student Loan described
in Schedule A to the Transfer Agreement in favor of the Eligible Lender Trustee
on behalf of the Trust, without recourse (subject to the obligations set forth
in the Sale and Servicing Agreement) against the undersigned. This endorsement
may be effected by attaching a facsimile hereof to each or any of such
promissory notes.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the Sale
and Servicing Agreement and the Transfer Agreement and is to be governed by the
Sale and Servicing Agreement and the Transfer Agreement.
Capitalized terms used but not defined herein shall have the meaning
assigned to them in the Transfer Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be
duly executed as of, ____.
KEY BANK USA, NATIONAL ASSOCIATION,
as Seller
By:
------------------------
Name:
Title:
