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EXHIBIT 10.1
SALE AND SERVICING AGREEMENT
among
KEYCORP STUDENT LOAN TRUST 1999-A
as Issuer,
KEY BANK USA, NATIONAL ASSOCIATION
as Seller,
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY
as Servicer,
EFS SERVICES, INC.,
as Servicer,
THE FIRST NATIONAL BANK OF CHICAGO
not in its individual capacity but solely
as Eligible Lender Trustee,
AND
KEY BANK USA, NATIONAL ASSOCIATION
as Administrator
Dated as of January 1, 1999
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TABLE OF CONTENTS
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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 2.02A. Conveyance of Other Student Loans.................................................5
SECTION 2.03. Conveyance of Financed Federal Loans and Financed Private Loans by the
Eligible Lender Trustee to the Seller in Connection with Consolidation
Loans.............................................................................6
SECTION 2.04. Endorsement.......................................................................7
ARTICLE III The Financed Student Loans..................................................................7
SECTION 3.01. Representations and Warranties of Seller with Respect to the Financed
Student Loans.....................................................................7
SECTION 3.02. Repurchase upon Breach; Reimbursement............................................10
SECTION 3.03. Custody of Financed Student Loan Files...........................................11
SECTION 3.04. Duties of Servicer as Custodian..................................................12
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SECTION 3.05. Instructions; Authority To Act...................................................12
SECTION 3.06. Custodian's Indemnification......................................................12
SECTION 3.07. Effective Period and Termination.................................................13
SECTION 3.08. Schedule of Financed Student Loans...............................................13
ARTICLE IV Administration and Servicing of Financed Student Loans...............................................13
SECTION 4.01. Duties of Servicers..............................................................13
SECTION 4.02. Collection of Financed Student Loan Payments.....................................15
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SECTION 4.03. Realization upon Financed Student Loans..........................................17
SECTION 4.04. Computation of Note Interest Rate and Certificate Rate...........................17
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SECTION 4.05. No Impairment....................................................................17
SECTION 4.06. Purchase of Financed Student Loans; Reimbursement................................17
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SECTION 4.07. Servicing Fee; Excess Servicing Fee..............................................18
SECTION 4.08. Administrator's Certificate; Servicer's Report...................................18
SECTION 4.09. Annual Statement as to Compliance; Notice of Default.............................19
SECTION 4.10. Annual Independent Certified Public Accountants' Report..........................20
SECTION 4.11. Access to Certain Documentation and Information Regarding Financed
Student Loans....................................................................21
SECTION 4.12. Servicer and Administrator Expenses..............................................21
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SECTION 4.13. Appointment of Subservicer.......................................................21
SECTION 4.14. Special Programs.................................................................21
ARTICLE V Distributions; Reserve Account; Statements to Certificateholders and Noteholders...........22
SECTION 5.01. Establishment of Trust Accounts..................................................22
SECTION 5.02. Collections......................................................................24
SECTION 5.03. Application of Collections.......................................................24
SECTION 5.04. Additional Deposits..............................................................25
SECTION 5.05. Distributions....................................................................25
SECTION 5.06. Reserve Account..................................................................27
SECTION 5.07. Statements to Certificateholders and Noteholders.................................29
SECTION 5.08. Pre-Funding Account..............................................................31
SECTION 5.09. Negative Carry Initial Deposit...................................................34
ARTICLE VI The Seller and the Administrator.....................................................................34
SECTION 6.01. Representations of Seller and Administrator......................................34
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SECTION 6.02. Existence........................................................................36
SECTION 6.03. Liability of Seller; Indemnities.................................................36
SECTION 6.04. Liability of Administrator; Indemnities..........................................37
SECTION 6.05. Merger or Consolidation of, or Assumption of the Obligations of, Seller
or Administrator.................................................................38
SECTION 6.06. Limitation on Liability of Seller, Administrator and Others......................39
SECTION 6.07. Seller May Own Certificates or Notes.............................................40
SECTION 6.08. Key Bank USA, National Association Not To Resign as Administrator................40
ARTICLE VII The Servicer...............................................................................40
SECTION 7.01. Representations of Servicer......................................................40
SECTION 7.02. Indemnities of Servicer..........................................................42
SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer........43
SECTION 7.04. Limitation on Liability of Servicer and Others...................................43
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SECTION 7.05. Neither PHEAA Nor EFS To Resign as Servicer......................................44
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ARTICLE VIII Default....................................................................................44
SECTION 8.01. Servicer Default; Administrator Default..........................................44
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SECTION 8.02. Appointment of Successor.........................................................47
SECTION 8.03. Notification to Noteholders and Certificateholders...............................48
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SECTION 8.04. Waiver of Past Defaults..........................................................48
ARTICLE IX Termination................................................................................48
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SECTION 9.01. Termination......................................................................48
ARTICLE X [Reserved].............................................................................................51
ARTICLE XI Miscellaneous........................................................................................51
SECTION 11.01. Amendment........................................................................51
SECTION 11.02. Protection of Interests in Trust.................................................52
SECTION 11.03. Notices..........................................................................54
SECTION 11.04. Assignment.......................................................................55
SECTION 11.05. Limitations on Rights of Others..................................................55
SECTION 11.06. Severability.....................................................................55
SECTION 11.07. Separate Counterparts............................................................55
SECTION 11.08. Headings.........................................................................55
SECTION 11.09. Governing Law....................................................................55
SECTION 11.10. Assignment to Indenture Trustee..................................................55
SECTION 11.11 Nonpetition Covenants............................................................56
SECTION 11.12. Limitation of Liability of Eligible Lender Trustee and Indenture Trustee.........56
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Financed Student Loans
SCHEDULE B Schedule of Subsequent Pool Student Loans
SCHEDULE C Location of Financed Student Loan Files
SCHEDULE D Provisions to be Audited Regarding
Servicer and Administrator
EXHIBIT A Form of Report to Noteholders
EXHIBIT B Form of Report to Certificateholders
EXHIBIT C Form of Administrator's Certificate
EXHIBIT D Form of Assignment on Closing Date
EXHIBIT E Form of Transfer Agreement
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SALE AND SERVICING AGREEMENT dated as of January 1, 1999,
among KEYCORP STUDENT LOAN TRUST 1999-A, a New York trust (the "Issuer"), KEY
BANK USA, NATIONAL ASSOCIATION, a national banking association and successor in
interest to Society National Bank (the "Seller"), PENNSYLVANIA HIGHER EDUCATION
ASSISTANCE AGENCY, an agency of the Commonwealth of Pennsylvania, as servicer (a
"Servicer"), EFS SERVICES, INC., an Indiana corporation (a "Servicer"), THE
FIRST NATIONAL BANK OF CHICAGO, a national banking association, solely as
eligible lender trustee 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, on July 13, 1998, the Seller assigned to the Issuer
(formerly known as KeyCorp Student Loan Trust 1998-A) its rights in a portfolio
of law school, medical school, dental school, graduate business school and other
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; and
WHEREAS each Servicer and the Administrator are willing to
service the portion of such student loans it services and undertake certain
administrative functions with respect thereto.
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.
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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 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 (as defined below), 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
Financed Student Loans (other than the Additional Student Loans) (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 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, the
Pre Funded Amount and the Negative Carry Initial Deposit (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.
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(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 A
listing such Subsequent Pool Student Loans and/or the Other Subsequent
Student Loans, as applicable;
(ii) except for the Additional Student Loans transferred on
the Closing Date, 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
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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;
(xi) no Consolidation Loan will be transferred to the Issuer
unless at least one underlying student loan to be consolidated is a
Financed Student Loan already held by the Eligible Lender Trustee on
behalf of the Issuer; and
(xii) the Issuer may not purchase any Other Subsequent Student
Loans which are (a) Xxxxxxxx Loans, if after giving effect to such
purchase Xxxxxxxx Loans which are Other Subsequent Student Loans or
Other Student Loans in an aggregate principal amount of $________ have
been purchased by the Issuer, (b) Federal Consolidation Loans, if after
giving effect to such purchase Federal Consolidation Loans which are
Other Subsequent Student Loans or Other Student Loans in an aggregate
principal amount of $________ have been purchased by the Issuer, (c)
Private Consolidation Loans, if after giving effect to such purchase
Private Consolidation Loans which are Other Subsequent Student Loans or
Other Student Loans in an aggregate principal amount of $________ have
been purchased by the Issuer and (d) Private Loans, which are not
Private Consolidation Loans, if after giving effect to such purchase
Private Loans, which are not Private Consolidation Loans and are Other
Subsequent Student Loans or Other Student Loans, in an aggregate
principal amount of $________ have been purchased by the Issuer, in
each case without giving effect to any capitalized interest accrued
thereon;
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 $________ (less the Pre-Funded Amount thereof, if any, used by the
Trust to fund shortfalls in the payment of interest on the Notes and the
Certificates); 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
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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.
SECTION 2.02A. CONVEYANCE OF OTHER STUDENT LOANS. (a) Subject
to the conditions set forth in paragraph (b) below, in consideration of the
Issuer's delivery on the related 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 Other Student Loan, and all moneys received thereon, 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 after the Funding Period but on or prior to the Loan
Purchase Termination Date.
(b) The Seller shall transfer to the Issuer the Other 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 Transfer Agreement,
which shall include supplements to Schedule A, listing such Other
Student Loans;
(ii) 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
Other Student Loans;
(iii) the Seller shall, to the extent required by Section
5.02, have deposited in the Collection Account all collections in
respect of the Other 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) such Transfer Date shall occur on a date which is after
the termination of the Funding Period and on or prior to the Loan
Purchase Termination 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);
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(viii) the Seller shall have delivered (A) to the Rating
Agencies an Opinion of Counsel with respect to the transfer of the
Other 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 Other Student Loans;
(xi) no Consolidation Loan will be transferred to the Issuer
unless at least one underlying student loan to be consolidated is a
Financed Student Loan already held by the Eligible Lender Trustee on
behalf of the Issuer; and
(xii) the Issuer may not purchase any Other Student Loans
which are (a) Xxxxxxxx Loans, if after giving effect to such purchase
Xxxxxxxx Loans which are Other Subsequent Student Loans or Other
Student Loans in an aggregate principal amount of $________ have been
purchased by the Issuer, (b) Federal Consolidation Loans, if after
giving effect to such purchase Federal Consolidation Loans which are
Other Subsequent Student Loans or Other Student Loans in an aggregate
principal amount of $________ have been purchased by the Issuer, (c)
Private Consolidation Loans, if after giving effect to such purchase
Private Consolidation Loans which are Other Subsequent Student Loans or
Other Student Loans in an aggregate principal amount of $________ have
been purchased by the Issuer and (d) Private Loans, which are not
Private Consolidation Loans, if after giving effect to such purchase
Private Loans, which are not Private Consolidation Loans and are Other
Subsequent Student Loans or Other Student Loans in an aggregate
principal amount of $________ have been purchased by the Issuer, in
each case without giving effect to any capitalized interest accrued
thereon;
PROVIDED, HOWEVER, that the Seller shall not incur any liability as a result of
transferring Other 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.
SECTION 2.03. CONVEYANCE OF FINANCED FEDERAL LOANS AND
FINANCED PRIVATE LOANS BY THE ELIGIBLE LENDER TRUSTEE TO THE SELLER IN
CONNECTION WITH CONSOLIDATION LOANS. On any date (whether or not during the
Funding Period), upon receipt of written notice (or telephonic or facsimile
notice followed by written notice) from the Seller (or from the Servicer on
behalf of
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the Seller) by the Eligible Lender Trustee and the Indenture Trustee, the
Eligible Lender Trustee will convey to the Seller the Financed Federal Loans and
Financed Private Loans identified in such notice, which are to be repaid
pursuant to the Consolidation Loans to be made by the Seller. Simultaneously
with each such conveyance by the Eligible Lender Trustee and the making by the
Seller of each such Consolidation Loan prior to the Loan Purchase Termination
Date, the Seller shall deposit into the Escrow Account an amount equal to the
sum of the principal balances of such Financed Federal Loans and Financed
Private Loans thereby being consolidated plus accrued interest thereon to the
date of such consolidation.
With respect to each Consolidation Loan made by the Seller
after the Loan Purchase Termination Date, the Seller shall deposit,
simultaneously with each such conveyance by the Eligible Lender Trustee and the
making of each such Consolidation Loan, into the Collection Account in
accordance with Section 5.04 an amount equal to the aggregate unpaid principal
balance of, plus accrued interest on, each such Financed Federal Loan and
Financed Private Loan as payment for such conveyance of such Financed Federal
Loans and Financed Private Loans.
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, 2.02 and 2.02A. 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 and the Other Student Loans, but shall survive the
sale, transfer and assignment of the Financed Student Loans to the Eligible
Lender Trustee on behalf of the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture.
(i) CHARACTERISTICS OF FINANCED STUDENT LOANS. Each Financed
Student Loan (A) was originated in the United States of America, its
territories, its possessions or other
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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 Private Loan qualifies the holder thereof to receive
Guarantee Payments from the applicable Guarantor pursuant to the
applicable 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
applicable 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.
(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 the 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.
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(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 150 days
overdue as of the Cutoff Date or, with respect to the Other Subsequent
Student Loans and the Other Student Loans, more than 90 days overdue as
of the applicable Subsequent Cutoff Date, as the case may be, and,
except as permitted in this paragraph, no default, breach, violation or
event permitting acceleration under the terms of any Financed Student
Loan has occurred; and, except for payment defaults continuing for a
period of not more than 150 days or 90 days, as applicable, no
continuing condition that with notice or the lapse of time or both
would constitute a default, breach, violation or event permitting
acceleration under the terms of any Financed Student Loan has arisen;
and 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 January 1, 1999, is $________, and the
aggregate principal balance of the Subsequent Pool
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Student Loans, plus accrued interest to be capitalized with respect
thereto, as of January 1, 1999 is $____________.
(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 January 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) U.S. OBLIGORS. Less than 1% of the Financed Student
Loans are due from Persons not having a mailing address in the United
States of America.
(xv) 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.
(xvi) 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, any 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 any 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 such Financed Student Loan to the Eligible Lender
Trustee in accordance with the 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
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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 revocably appoints (x) PHEAA, in its
capacity as a Servicer and PHEAA 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 it services (as
set forth in Schedules A and B hereto) and (y) EFS, in its capacity as a
Servicer and EFS 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 it services (as set forth in
Schedules A and B hereto), in each case, which are hereby constructively
delivered to the Indenture Trustee, as pledgee of the Issuer (or, in the case of
the Additional Student Loans, will as of the applicable Transfer Date be
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 applicable 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.
Unless otherwise specified, all references to actions to be
taken by "the Servicer" as "custodian" under this Article III or any other
provision of this Agreement with respect to the Financed Student Loans or the
Financed Student Loan Files shall be deemed to refer to actions to be taken by
each Servicer with respect to the Financed Student Loans serviced by such
Servicer, as specified on Schedules A and B hereto, or with respect to the
Financed Student Loan Files held by such Servicer. Consistent with the
foregoing, but only insofar as the context so permits, this Article III is to be
read with respect to each custodian as if such custodian alone was holding its
respective Financed Student Loans hereunder.
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SECTION 3.04. DUTIES OF SERVICER AS CUSTODIAN. (a)
SAFEKEEPING. The Servicer, as custodian, shall 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 Servicer shall act with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the student loan files relating to all comparable
student loans that the 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 Servicer shall 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 Servicer's record keeping. The Servicer shall promptly report to
the Issuer and the Indenture Trustee any failure on its part 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 Servicer, as
custodian, shall maintain each Financed Student Loan File at one of its offices
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
Servicer shall 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 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 Servicer, as custodian, shall 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 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 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 Servicer as
custodian of the Financed Student Loan Files where the final determination that
any such improper act or
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omission by the 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 Servicer; PROVIDED, HOWEVER, that the 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 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. This provision, as it relates to PHEAA, shall not be
construed to limit the sovereign immunity of the Commonwealth of Pennsylvania or
the Servicer's or any other party's rights, obligations, liabilities, claims or
defenses which arise as a matter of law or pursuant to any other provision of
this Agreement.
SECTION 3.07. EFFECTIVE PERIOD AND TERMINATION. Each of
PHEAA's and EFS's appointment as custodian shall become effective as of the
Closing Date and shall continue in full force and effect for so long as PHEAA
and EFS, respectively, shall remain a Servicer hereunder. If PHEAA, EFS or any
successor Servicer shall resign as Servicer in accordance with the provisions of
this Agreement or if all the rights and obligations of PHEAA, EFS or any such
successor Servicer shall have been terminated under Section 8.01, the
appointment of PHEAA, EFS or such successor 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) 30 Business Days, with respect to the remaining portion of the Financed
Student Loan Files it holds), such Servicer shall 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 the Servicer whose obligation it is to
service each Financed Student Loan set forth on each such schedule. Such
indication shall be conclusive evidence of the applicable Servicer's obligation
to service such Financed Student Loans absent manifest error.
ARTICLE IV
ADMINISTRATION AND SERVICING OF FINANCED STUDENT LOANS
SECTION 4.01. DUTIES OF SERVICERS. Unless otherwise specified,
all references to actions to be taken by "the Servicer" under this Article IV or
any other provision of this Agreement with respect to a Financed Student Loan or
Financed Student Loans or with respect to a Financed Student Loan File or
Financed Student Loan Files shall be deemed to refer to actions to be taken by
each Servicer with respect to a Financed Student Loan or Financed Student Loans
serviced by such Servicer, as specified on Schedules A and B hereto, or with
respect to a Financed Student Loan File or Financed Student Loan Files held by
such Servicer. In addition, unless otherwise specified, all references to
actions previously taken by "the Servicer" under this Article IV or any other
provision of this Agreement with respect to a Financed Student Loan or Financed
Student Loans or with respect to a Financed Student Loan File or Financed
Student Loan Files shall be deemed to refer to actions previously taken by the
related Servicer with respect to such Financed Student Loan or
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Financed Student Loans or with respect to a Financed Student Loan File or
Financed Student Loan Files. Further, unless otherwise specified, all references
to actions to be taken by "the Servicer" under this Article IV or any other
provision of this Agreement with respect to a Trust Account or the preparation
or delivery of any report or Officers' Certificate shall be deemed to refer to
actions to be taken by each Servicer with respect to such Trust Account or
preparation or delivery of such report or Officers' Certificate, and all
references to actions previously taken by "the Servicer" under this Article IV
or any other provision of this Agreement with respect to a Trust Account or the
preparation or delivery of any report or Officers' Certificate shall be deemed
to refer to actions previously taken by the related Servicer with respect to
such Trust Account or preparation or delivery of such report or Officers'
Certificate. Consistent with the foregoing, but only insofar as the context so
permits, this Article IV is to be read with respect to each Servicer as if such
Servicer alone were servicing and administering its respective Financed Student
Loans hereunder. Further still, unless otherwise specified, all references to
"the Servicer" under this Article IV or any other provision of this Agreement
with respect to representations, warranties or covenants of the Servicer shall
be deemed to refer to representations, warranties or covenants made by each
Servicer, except that representations, warranties or covenants with respect to
the Financed Student Loans are hereby made by each Servicer only with respect to
the Financed Student Loans it services. Further still, unless otherwise
specified, all references to "the Servicer" in Sections 7.01, 7.02, 7.03, 7.04,
8.01 and 11.02 shall be references to each Servicer as if each Servicer was
referred to alone.
The Servicer, for the benefit of the Issuer (to the extent
provided herein), shall manage, service, administer and make collections on the
Financed Student Loans with reasonable care, using that degree of skill and
attention that the 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 Servicer shall 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 all the Financed Student 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 Student Loans for
receipt of Guarantee Payments or would have an adverse effect on the holders of
Certificates or the holders of Notes. In addition, without limiting the
generality of the foregoing, the Servicer shall service the Financed Student
Loans in accordance with the provisions of the Supplemental Sale and Servicing
Agreement. The Servicer also hereby acknowledges that its obligation to service
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
Sections 2.02 and 2.02A and the related Transfer Agreement, a copy of which
shall be delivered to the Servicer by the
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Seller promptly upon execution thereof; PROVIDED that any failure by the Seller
to so deliver a Transfer Agreement shall not affect the Servicer's obligations
hereunder to service all the Financed Student Loans.
The Servicer's duties 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 Servicer shall follow its customary standards, policies and
procedures in performing its duties as Servicer. Without limiting the generality
of the foregoing, the Servicer is authorized and empowered 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 Servicer agrees that it will
not (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 Servicer shall not 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 each Servicer to
maintain any and all collection procedures with respect to the Financed Student
Loans it 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
Servicer or the Administrator furnish the Servicer or the Administrator with any
other powers of attorney and other documents reasonably necessary or appropriate
to enable the Servicer or the Administrator to carry out their servicing and
administrative duties hereunder.
SECTION 4.02. COLLECTION OF FINANCED STUDENT LOAN PAYMENTS.
(a) The Servicer shall 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
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shall follow such collection procedures as it follows with respect to all
comparable student loans that it services. The Servicer shall 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 Servicer may in its discretion waive any late payment charge
or any other fees that may be collected in the ordinary course of servicing a
Financed Student Loan.
(b) The Servicer shall 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 Student 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 Servicer is hereby authorized and
empowered to convey to any Guarantor the note and the related Financed Student
Loan File representing any Financed Student 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
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using such common lender identification number as a result of amounts
(including, but not limited to, Consolidation Fees) 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 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 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 Servicer shall 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 Guarantee Agreement in
its 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 Servicer shall not 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 Servicer or the Eligible Lender Trustee 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 Servicer's election, the last day of the first month
following such discovery), the Servicer shall purchase any Financed Student Loan
in which the interests of the holders of
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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 Servicer
takes any action or fails to take any action 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 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 Servicer shall remit the Purchase Amount in the manner
specified in Section 5.04. In addition, if any such breach by the Servicer 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 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 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 repurchase of
any Financed Student Loan or the reimbursement for any interest penalty pursuant
to this Section 4.06.
SECTION 4.07. SERVICING FEE; EXCESS SERVICING FEE. The
Servicing Fee for each calendar month payable on each Monthly Servicing Payment
Date and any Excess Servicing Fees payable on any Distribution Date shall be
equal to the amounts determined by reference to the schedule of fees as set
forth in the PHEAA Fee Schedule and the EFS Fee Schedule (The "PHEAA Fee
Schedule" and the "EFS Fee Schedule" shall be the respective fee schedules
delivered to the Eligible Lender Trustee. Notwithstanding anything to the
contrary contained herein or in any other Basic Document, the Servicer shall
only be entitled to receive any Excess Servicing Fee on any Distribution Date if
and to the extent that sufficient funds are available pursuant to Section
5.05(c)(viii).
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 Servicer shall 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 Servicer shall
deliver to the Administrator a Servicer's
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Report with respect to the preceding calendar month containing all information
necessary for the Administrator's preparation of the Administrator's Officers'
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 Servicer the 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. Financed Student Loans to be repurchased by
the Seller (whether pursuant to Section 2.03 or 3.02), purchased by the Servicer
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 Servicer and the Administrator shall deliver to the
Seller, the Eligible Lender Trustee, the and the Indenture Trustee, on or before
March 30 of each year beginning March 30, 2000, an Officers' Certificate of the
Servicer or the Administrator, as the case may be, dated as of December 31 of
the preceding year, stating that (i) a review of the activities of the Servicer
or the Administrator, 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
has been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Servicer or the Administrator, as
the case may be, has fulfilled all its obligations under this Agreement, or
under this Agreement and the Administration Agreement, respectively, 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
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the Eligible Lender Trustee a list of holders of Notes as of the date specified
by the Eligible Lender Trustee.
(b) The 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 such Servicer of any
event which with the giving of notice or lapse of time, or both, would become a
Servicer Default with respect to such Servicer under Section 8.01(a)(1) or (2).
(c) The Administrator shall deliver to the Eligible Lender
Trustee, the Indenture Trustee, the 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 Servicer and the Administrator shall cause a firm of
independent certified public accountants, which may also render other services
to the Servicer or the Administrator, as the case may be, 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, (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, 1999) with the Servicer's computer reports that were the source of
such amounts and a report with regard to the assertions by the Servicer's
management about the Servicer's compliance with this Agreement during the
preceding calendar year (or, in the case of the first such report, the period
from the Closing Date to December 31, 1999) and (b) a report addressed to the
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 Servicer's management about the Servicer's compliance with
this 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, 1999) 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.
Such report will also indicate that the firm is independent of
the Servicer or the Administrator, as the case may be, within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants.
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SECTION 4.11. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION
REGARDING FINANCED STUDENT Loans. Upon reasonable prior notice, the Servicer
shall 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
Servicer in its 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 Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
SECTION 4.12. SERVICER AND ADMINISTRATOR EXPENSES. Each
Servicer and the Administrator shall be severally required to pay all expenses
incurred by it in connection with its activities hereunder, including fees and
disbursements of independent accountants, taxes imposed on such 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 SUBSERVICER. Each Servicer may at
any time, upon the written consent of the Administrator, appoint a subservicer
to perform all or any portion of its obligations as Servicer hereunder;
PROVIDED, HOWEVER, that the Rating Agency Condition shall have been satisfied in
connection therewith; PROVIDED FURTHER that each 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 it services, as specified on
Schedules A and B hereto in accordance with the provisions hereof without
diminution of such obligation and liability by virtue of the appointment of such
subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Financed Student Loans
it services. The fees and expenses of the subservicer shall be as agreed between
the applicable Servicer and its subservicer 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.
SECTION 4.14. SPECIAL PROGRAMS. The Servicer shall offer
borrowers of the Financed Student Loans all 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 not required by the Higher Education Act 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.
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ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
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.
(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.
(b) Funds on deposit in the Collection Account, the Reserve
Account, the Pre-Funding 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
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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 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
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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 Servicers, 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 Servicer shall 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 Servicer shall 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) that portion of such amounts received by it that is equal to the
Servicing Fee payable on such date and (ii) Guarantee Payments made by XXXX in
excess of the Maximum XXXX Payments Amount. 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 Servicer in
accordance with its customary practice by allocating to interest (i) any late
payment charge or any similar fee received with respect to such Financed Student
Loan and (ii) the
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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 Servicer shall deposit or cause to be deposited in the Collection Account
the aggregate Purchase Amount with respect to Purchased Student Loans and all
other amounts to be paid by the 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 Servicer 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.
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 and the
amounts to be distributed therefrom on the related Monthly Servicing Payment
Date or Distribution Date.
(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 Servicers by 11:00 a.m. (New York time), from and to the
extent of the Available Funds on deposit in the Collection Account the Servicing
Fee due with respect to the preceding calendar month and all unpaid Servicing
Fees from prior months and (ii) 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 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
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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 Servicers, the Servicing Fee due with respect to
the preceding calendar month and all unpaid 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 Notes, from the amount of Available
Funds remaining after the application of clauses (i), (ii) and (iii),
the Noteholders' Interest Distribution Amount for such Notes pursuant
to Section 8.02(c)(i) of the Indenture;
(v) 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), (ii), (iii) and (iv), the
Certificateholders' Interest Distribution Amount;
(vi) to the Reserve Account from the amount of Available Funds
remaining after the application of clauses (i) through (v), an amount,
up to the amount, if any, necessary to reinstate the balance of the
Reserve Account up to the Specified Reserve Account Balance;
(vii) to the holders of the Notes, from the amount of
Available Funds remaining after the application of clauses (i) through
(vi), the Noteholders' Principal Distribution Amount to be allocated
pursuant to Section 8.02(c)(ii) of the Indenture;
(viii) 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 (vii), the Certificateholders' Principal Distribution Amount;
(ix) to the Servicers, from the amount of Available Funds
remaining after the application of clauses (i) through (viii), the
aggregate unpaid amount, if any, of the Excess Servicing Fee;
(x) to the holders of the Notes on a pro rata basis, based on
the amount of Noteholders' Interest Index Carryover owing on each class
of Notes, from the amount of
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Available Funds remaining after the application of clauses (i) through
(x), the aggregate unpaid amount of Noteholders' Interest Index
Carryover, if any;
(xi) 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 (x), the aggregate unpaid amount
of the Certificateholders' Interest Index Carryover, if any;
(xii) to the Seller, the amount of Available Funds remaining
after the application of clauses (i) through (xi).
Notwithstanding anything to the contrary contained in this
Section 5.05(c), if 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) (vi) above) is in excess of the
Note Collateralization Amount, the holders of the Notes shall receive
the Noteholder's Priority Principal Distribution Amount prior to any
payment to the holders of the Certificates of the Certificateholders'
Interest Distribution Amount pursuant to Section 5.05(c) (iv) above.
(d) On each Transfer Date which occurs during the period which
begins after the Funding Period and ends on the Loan Purchase Termination Date,
the Administrator shall instruct the Indenture Trustee to make withdrawals from
the Escrow Account, until all amounts deposited therein during the calendar
month immediately preceding such Transfer Date have been exhausted (provided
however, that no funds on deposit in the Escrow Account may be used to acquire
Subsequent Pool Student Loans), and then from the Collection Account up to the
amount of Available Loan Purchase Funds for such Transfer Date on deposit
therein, (i) an amount equal to 100% of the sum of (A) the principal balance of,
plus (B) to the extent capitalized or to be capitalized, accrued interest on,
the Other Student Loans (such sum, a "Transferred Balance") and transferred to
the Eligible Lender Trustee on behalf of the Issuer on such Transfer Date and to
distribute such amount to or upon the order of the Seller upon satisfaction of
the conditions set forth in Section 2.02A(b) with respect to such transfer, and
to distribute such amount to or upon the order of the Seller and (ii) on each
such Transfer Date on which Guarantee Fee Advances are to be conveyed to the
Eligible Lender Trustee on behalf of the Issuer, 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 2.02A(b) with respect to such transfer of Guarantee Fee Advances.
SECTION 5.06. RESERVE ACCOUNT. (a) On the Closing Date, the
Seller shall deposit the Reserve Account Initial Deposit into the Reserve
Account.
(b) (i) In the event that the Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date exceeds the amount distributed to
the Servicer pursuant to Sections 5.05(b) and 5.05(c) on such Monthly Servicing
Payment Date or Distribution Date, the Administrator shall instruct the
Indenture Trustee to withdraw from the Reserve Account on such
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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 Servicers; PROVIDED, HOWEVER, that, amounts on deposit in the Reserve
Account will not be available to cover any unpaid Excess Servicing Fees to the
Servicers.
(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)(ii) 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 for a Distribution Date exceeds the amount distributed to the
holders of Notes 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 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)(iii); PROVIDED,
HOWEVER, that, amounts on deposit in the Reserve Account will not be
available to cover any unpaid Noteholders' Interest Index Carryover.
(vi) 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)(iv)
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, 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) and (b)(v) 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)(iv); PROVIDED,
HOWEVER, that amounts on deposit in the Reserve Account will not be
available to cover any unpaid Certificateholders' Interest Index
Carryover.
(vii) 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)(vi), the Administrator shall instruct the Indenture Trustee on
such date to withdraw from the
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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) and (b)(vi) 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)(vi).
(viii) 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)(vi), 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) and
(b)(vii) 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)(vi).
(ix) 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)(vii), 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)(vi), (b)(vii) and (b)(viii) 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)(vii).
(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 Servicer or the
Administrator (including any Excess Servicing Fees, 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
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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 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 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 the distribution, if any, allocable to any
Noteholders' Interest Index Carryover 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 Servicing Fee and any Excess Servicing
Fee paid to the Servicers and the amount of the Administration Fee paid
to the Administrator, respectively, with respect to such Collection
Period, and the amount, if any, of the Excess Servicing Fee remaining
unpaid after giving effect to any such payment;
(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;
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(viii) the balance of the Reserve Account on such Distribution
Date, after giving effect to changes therein 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 $________ (including
$___________ representing the Negative Carry Initial Deposit) 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 $________ (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 Negative Carry Initial
Deposit will be credited on the Closing Date to the Subsequent Pool Pre-Funding
Subaccount. The remainder of the amount on deposit in the Pre-Funding Account
equal to $________ 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 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 ____% 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
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
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___% 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
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 ____% of the Transferred Balance of such
Subsequent Pool Student Loans, first from the Subsequent 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 and to deposit
such amount into the Reserve Account 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 or Section 5.05(d), as applicable, 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 and Class A-2 Notes
on a pro rata basis, based on the initial principal amount of the Class A-1
Notes and the Class A-2 Notes, as a payment of principal in the same manner as
the Noteholders' Principal Distribution Amount is distributed, 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.
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(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.
(d) (i) In the event that the Servicing Fee for any Monthly
Servicing Payment Date or Distribution Date during the Funding Period
exceeds the amount distributed to the Servicer pursuant to Sections
5.05(b), 5.05(c)(i) 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 Servicers; PROVIDED,
HOWEVER, that, amounts on deposit in the Other Additional Pre-Funding
Subaccount will not be available to cover any unpaid Excess Servicing
Fees to the Servicers.
(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)(ii) 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 for a Distribution Date during the Funding Period exceeds the
amount distributed to the holders of Notes pursuant to Sections
5.05(c)(iii) 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)(iii).
(iv) In the event that (x) the Certificateholders' Interest
Distribution Amount for the Certificates for a Distribution Date
exceeds the amount distributed to the holders of Certificates pursuant
to Sections 5.05(c)(iv) 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 Notes (after giving effect to
distributions on the Notes, on such Distribution Date), the
Administrator shall instruct the Indenture Trustee on such
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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 Certificates entitled
thereto, in the same order and priority as is set forth in Section
5.05(c)(iv).
SECTION 5.09. NEGATIVE CARRY INITIAL DEPOSIT. On the Closing
Date, the Seller will deposit in the Subsequent Pool Pre-Funding Subaccount the
Negative Carry Initial Deposit from the net proceeds of the sale of the Notes
and the Certificates. On the Final Subsequent Transfer Date, the Administrator
will instruct the Indenture Trustee to withdraw from the Subsequent Pool
Pre-Funding Subaccount and deposit into the Collection Account all or a portion
of the Negative Carry Initial Deposit equal to the difference (if positive)
between (i) the product of (a) a fraction the numerator of which is the actual
number of days from the Cutoff Date to the Subsequent Cutoff Date relating to
the Student Loans transferred on the Final Subsequent Transfer Date, and the
denominator of which is 365, (b) the current weighted average of the Note
Interest Rates and the Certificate Interest Rate, each as measured for the
period of time commencing on the Closing Date and ending on the Final Subsequent
Pool Transfer Date, and (c) the Subsequent Pool Pre-Funded Amount as of the
Final Transfer Date minus (ii) the investment earnings on the Subsequent Pool
Pre-Funded Amount and Negative Carry Initial Deposit from the Closing Date to
the Final Subsequent Transfer Date. Any amounts remaining in the Negative Carry
Account after making such deposit to the Collection Account shall be released by
the Indenture Trustee to the Seller.
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
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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 affect on the condition of Key Bank USA, National
Association, financial or otherwise, or adversely effect 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,
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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 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 Indenture Trustee, the holders of
Certificates and the holders of
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Notes and the officers, directors, employees and agents of the Issuer, the
Eligible Lender Trustee and the Indenture Trustee 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 and its
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 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, (ii) shall arise from any
breach by the Eligible Lender Trustee of its covenants under any of the Basic
Documents; 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 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 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,
the Supplemental Sale and Servicing Agreement or the Administration Agreement.
The Administrator shall indemnify, defend and hold harmless
the Issuer, the Eligible Lender Trustee, the Indenture Trustee, the Servicers,
the holders of Certificates and the holders of Notes and any of the officers,
directors, employees and agents of the Issuer, the
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Eligible Lender Trustee, the Indenture Trustee and the Servicers 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, the Supplemental Sale and Servicing 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 or the Indenture Trustee
or the termination of this Agreement, the Supplemental Sale and Servicing
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
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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) 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
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.
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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
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 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 SERVICER
SECTION 7.01. REPRESENTATIONS OF SERVICER. The 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 Servicer as 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
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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 Servicer, in the case
of PHEAA, is duly organized and validly existing as an agency of the
Commonwealth of Pennsylvania and in the case of EFS, is duly organized and
validly existing as a corporation in the State of Indiana, in each case in good
standing under the laws of the state of its incorporation, 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 service the
Financed Student Loans and to hold the Financed Student Loan Files as custodian.
(b) DUE QUALIFICATION. The 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 servicing of the Financed Student Loans as required by
this Agreement) shall require such qualifications.
(c) POWER AND AUTHORITY. The Servicer has the 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 Servicer by all necessary action. No registration with or
approval of any governmental agency (except, in the case of PHEAA, for the
approval as to form and legality by the Deputy Attorney General for the
Commonwealth of Pennsylvania, which approval is evidenced by the approval
memorandum attached hereto) is required for the due execution and delivery by,
and enforceability against, the Servicer of this Agreement.
(d) BINDING OBLIGATION. This Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance with its
terms.
(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,
its enabling legislation, any applicable articles of incorporation or by-laws of
the Servicer, or any indenture, agreement or other instrument to which the
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); nor
violate any law or, to the best of the Servicer's knowledge, any order, rule or
regulation applicable to the Servicer of any court or of any Federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or, to the Servicer's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its
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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 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 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 Servicer specified in Schedule
C hereto, or at such other office specified in accordance with Section 3.04(b).
SECTION 7.02. INDEMNITIES OF SERVICER. The Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement.
The 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 Servicer in the performance of its obligations and duties under this
Agreement or the Supplemental Sale and Servicing Agreement or by reason of the
reckless disregard of its obligations and duties under this Agreement or the
Supplemental Sale and Servicing 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 Servicer is established by a court of law, by an
arbitrator or by way of settlement agreed to by the Servicer. Notwithstanding
the foregoing, if the 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 or the Supplemental Sale and Servicing Agreement, the 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
Servicer remains unable to perform such obligation as a result of such event.
This provision shall not be construed to limit the sovereign immunity of the
Commonwealth of Pennsylvania (in the case of PHEAA) or the
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Servicer's or any other party's rights, obligations, liabilities, claims or
defenses which arise as a matter of law or pursuant to any other provision of
this Agreement.
For purposes of this Section, in the event of the termination
of the rights and obligations of PHEAA or EFS (or any successor thereto pursuant
to Section 7.03) as Servicer pursuant to Section 8.01(a), or a resignation by
such Servicer pursuant to this Agreement, such Servicer shall be deemed to be
the Servicer pending appointment of a successor Servicer pursuant to Section
8.02.
Liability of the 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 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 Servicer, without interest.
SECTION 7.03. MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, SERVICER. The Servicer hereby agrees that, upon (a) any merger
or consolidation of the Servicer into another Person, (b) any merger or
consolidation to which the Servicer shall be a party resulting in the creation
of another Person or (c) any Person succeeding to the properties and assets of
the Servicer substantially as a whole, the Servicer shall (i) cause such Person
(if other than the Servicer) to execute an agreement of assumption to perform
every obligation of the Servicer hereunder and under the Supplemental Sale and
Servicing Agreement, (ii) deliver to the Eligible Lender Trustee and 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 provided for in this
Agreement relating to such transaction have been complied with, (iii) cause the
Rating Agency Condition to have been satisfied with respect to such transaction
and (iv) cure any existing Servicer Default or any continuing event which, after
notice or lapse of time or both, would become a Servicer Default. Upon
compliance with the foregoing requirements, such Person shall be the successor
to the Servicer under this Agreement without further act on the part of any of
the parties to this Agreement.
SECTION 7.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS.
Neither the Servicer nor any of the directors, officers, employees or agents of
the Servicer shall be under any liability to the Issuer, the holders of Notes or
the holders of Certificates, except as provided under this Agreement or the
Supplemental Sale and Servicing Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement or the
Supplemental Sale and Servicing Agreement or for errors in judgment; PROVIDED,
HOWEVER, that this provision shall not protect the 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 or the
Supplemental Sale and Servicing Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any person
respecting any matters arising under this Agreement.
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Except as provided in this Agreement, the 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 the Supplemental Sale and Servicing
Agreement, and that in its opinion may involve it in any expense or liability;
PROVIDED, HOWEVER, that the 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. NEITHER PHEAA NOR EFS TO RESIGN AS SERVICER.
Subject to the provisions of Section 7.03, neither PHEAA nor EFS shall resign
from the obligations and duties hereby imposed on it as Servicer under this
Agreement and the Supplemental Sale and Servicing Agreement except upon
determination that the performance of its duties under this Agreement and the
Supplemental Sale and Servicing Agreement shall no longer be permissible under
applicable law. Notice of any such determination permitting the resignation of
PHEAA or EFS 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 Servicer shall have
assumed the responsibilities and obligations of PHEAA or EFS in accordance with
Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. SERVICER DEFAULT; ADMINISTRATOR DEFAULT. (a)
SERVICER DEFAULT. If any one of the following events (a "Servicer Default")
shall occur and be continuing:
(1) any failure by the Servicer (i) to deliver 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 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 Servicer from the Eligible Lender Trustee, the
Indenture Trustee or the Administrator or after discovery of such failure by an
officer of the Servicer; or
(2) any failure by the Servicer duly to observe or to perform
in any material respect any other covenants or agreements of the Servicer set
forth in this Agreement or any other Basic Document, which failure shall (i)
materially and adversely affect the rights of the
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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 Servicer by
the Indenture Trustee, the Eligible Lender Trustee, the other Servicer or the
Administrator or (B) to the 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 Servicer;
or
(4) any failure by the Servicer to comply with any
requirements under the Higher Education Act resulting in a loss of its
eligibility as a third-party servicer;
then, and in each and every case, so long as the 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 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
Servicer under this Agreement and the Supplemental Sale and Servicing Agreement.
On or after the receipt by the Servicer of such written notice, all authority
and power of the Servicer under this Agreement and the Supplemental Sale and
Servicing 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 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 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
Servicer shall cooperate with the successor Servicer, the Indenture Trustee and
the Eligible Lender Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement and the Supplemental
Sale and Servicing Agreement, including the transfer to the successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the predecessor 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 Servicer and amending this Agreement and any other
Basic Documents to reflect such succession as Servicer pursuant to this Section
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses. Upon receipt of notice of the
occurrence of a Servicer Default, the Eligible Lender Trustee shall give notice
thereof to the Rating Agencies.
(b) ADMINISTRATOR DEFAULT. If any one of the following events
(an "Administrator Default") shall occur and be continuing:
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(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, the Supplemental Sale and
Servicing 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, the Supplemental Sale and Servicing
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, the Supplemental Sale and Servicing Agreement and the Administration
Agreement. All reasonable costs and expenses (including attorneys' fees)
incurred in connection
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with amending this Agreement, the Supplemental Sale and Servicing 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 a
Servicer or the Administrator, as the case may be, of notice of termination
pursuant to Section 8.01, or the resignation by a Servicer or the Administrator,
as the case may be, in accordance with the terms of this Agreement, the
predecessor Servicer or Administrator, as the case may be, shall continue to
perform its functions as 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 Servicer or Administrator, as the case may be, shall
become unable to act as 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 Servicer or the Administrator, as
the case may be, the Issuer shall appoint a successor Servicer or Administrator,
as the case may be, acceptable to the Indenture Trustee, and the successor
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 Servicer or Administrator, as the case may be, has not been
appointed at the time when the predecessor Servicer or Administrator, as the
case may be, has ceased to act as Servicer or Administrator in accordance with
this Section, the Indenture Trustee without further action shall automatically
be appointed the successor Servicer or Administrator, as the case may be, and
the Indenture Trustee shall be entitled to the applicable portion of the
Servicing Fee and the applicable portion of any Excess Servicing Fees, 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 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
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 Servicer or Administrator,
as the case may be (including the Indenture Trustee acting as successor Servicer
or Administrator, as the case may be), shall be the successor in all respects to
the predecessor Servicer or Administrator, as the case may be, and shall be
subject to all the responsibilities, duties and liabilities placed on the
predecessor 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 Servicer or Administrator
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(which shall not exceed the applicable portion of the Servicing Fee and the
applicable portion of any Excess Servicing Fees, 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 Servicer or Administrator, as the case may be,
by the terms and provisions of this Agreement.
(c) Neither the 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 Servicer or Administrator pursuant hereto and thereto, shall
be entitled to resign to the extent a qualified successor Servicer or
Administrator has been appointed and has assumed all the obligations of the
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, a
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 holders of Notes
evidencing not less than a majority of the Outstanding Amount of the 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 Notes) may, on behalf
of all the holders of Notes and the holders of Certificates, waive in writing
any default by the 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 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
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of which the sum of the then outstanding Pool Balance is 5% or less of the
Initial Pool Balance, the Seller shall have the option to purchase the Trust
Estate, other than the Trust Accounts; PROVIDED, HOWEVER, that, unless Moody's
agrees otherwise, the Seller may not effect any such purchase so long as the
rating on its long-term debt obligations is less than Baa3 by Moody's, 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) INSOLVENCY OF THE SELLER. Upon any sale of the assets of
the Trust pursuant to Section 9.02 of the Trust Agreement, the Administrator
shall instruct the Indenture Trustee to deposit the net proceeds from such sale
after all payments and reserves therefrom (including the expenses of such sale)
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Distribution Date, or, if such proceeds are not so deposited on a Distribution
Date, on the first Distribution Date following the date on which the Insolvency
Proceeds are deposited in the Collection Account, the Administrator shall
instruct the Indenture Trustee to make the following distributions (after the
application on such Distribution Date of the amount of Available Funds and
amounts on deposit in the Reserve Account pursuant to Sections 5.05 and 5.06)
from the Insolvency Proceeds and any funds remaining on deposit in the Reserve
Account (including the proceeds of any sale of investments therein as described
in the following sentence):
(i) to the holders of the Notes, any unpaid Noteholders'
Interest Distribution Amount for such Distribution Date;
(ii) to the holders of the Notes, the outstanding principal
balance of the Notes;
(iii) to the holders of the Certificates, any unpaid
Certificateholders' Interest Distribution Amount for such Distribution
Date;
(iv) to the holders of the Certificates, the Certificate
Balance;
(v) to the Servicers, any unpaid Excess Servicing Fees;
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(vi) to the holders of the Notes, any unpaid Noteholders'
Interest Index Carryover; and
(vii) to the holders of the Certificates, any unpaid
Certificateholders' Interest Index Carryover.
Any investments on deposit in the Reserve Account which will not mature on or
before such Distribution Date shall be sold by the Indenture Trustee at such
time as will result in the Indenture Trustee receiving the proceeds from such
sale not later than the Business Day preceding such Distribution Date. Any
Insolvency Proceeds related to Financial Student Loans remaining after the
deposits described above shall be paid to the Seller.
(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 December 2008 Distribution Date will be offered for sale by the
Indenture Trustee. KeyCorp, its affiliates (other than the Seller), PHEAA, XXXX
and unrelated third parties may offer bids to purchase such Financed Student
Loans on such Distribution Date; provided, however, that KeyCorp and its
affiliates may not bid more than an amount determined by KeyCorp in good faith
to be equal to the fair market value of such Financed Student Loans as of the
end of the Collection Period immediately preceding such Distribution Date. If at
least two bids are received, the Indenture Trustee will solicit and resolicit
bids from all participating bidders until only one bid remains or the remaining
bidders decline to resubmit bids. The Indenture Trustee shall accept the highest
of such remaining bids if it is equal to or in excess of the Minimum Purchase
Amount. If at least two bids are not received or the highest bid 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, and assume the obligations of, the Indenture Trustee
pursuant to this Agreement and any other Basic Documents.
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ARTICLE X
[Reserved]
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. AMENDMENT. This Agreement may be amended by the
Seller, the Servicers, 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; PROVIDED, FURTHER, any such amendment which affects only
one Servicer shall be deemed to be agreed to by the unaffected Servicer and such
unaffected Servicer hereby agrees to execute appropriate instruments to document
such agreement.
This Agreement may also be amended from time to time by the
Seller, the Servicers, the Administrator and the Eligible Lender Trustee, with
the consent of the Indenture Trustee, the consent of the holders of Notes
evidencing not less than a majority of the Outstanding Amount of the 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 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 Notes and the Certificate Balance, holders of Notes or
the holders of Certificates of which are required to consent to any such
amendment, without the consent of all outstanding holders of Notes and holders
of Certificates; PROVIDED, FURTHER, any such amendment which affects only one
Servicer shall be deemed to be agreed to by the unaffected Servicer and such
unaffected Servicer hereby agrees to execute appropriate instruments to document
such agreement.
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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 Servicer shall 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 appropriate amendments to all previously filed financing
statements or continuation statements.
(c) The Seller and the Servicer shall have an obligation 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 any such
amendment. Each Servicer shall 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 Servicer shall maintain accounts and records as to
each Financed Student Loan it services, as specified on Schedules A and B,
accurately and in sufficient detail to
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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 it services, as specified on
Schedules A and B and the amounts from time to time deposited in the Collection
Account in respect of such Financed Student Loan.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of sale under this Agreement of the Financed Student
Loans it services, the 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 a 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 Servicer shall 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 Servicer shall permit the
Indenture Trustee and its agents at any time during normal business hours to
inspect, audit (subject to the timing limitations imposed by paragraph 3 of the
Supplemental Sale and Servicing Agreement) and make copies of and abstracts from
such Servicer's records regarding any Financed Student Loan it services.
(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 Servicer shall 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.
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(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
beginning with the first calendar year beginning more than three months after
the Cutoff Date, 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
Servicers, 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 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-A (telephone: (000) 000-0000; facsimile: (216)
828-9301), (b) in the case of PHEAA, as Servicer, to Pennsylvania Higher
Education Assistance Agency, 0000 Xxxxx 0xx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000-0000, Attention: Senior Vice President, Marketing and Client Affairs
(telephone: (000) 000-0000; facsimile: (000) 000-0000), (c) in the case of EFS,
to EFS Services, Inc., ______________________; (d) in the case of the Issuer or
the Eligible Lender Trustee, at the
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Corporate Trust Office of the Eligible Lender Trustee, (e) in the case of the
Indenture Trustee, at its Corporate Trust Office, (f) 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), and (g) 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) 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 a
Servicer or the Administrator, this Agreement may not be assigned by the Seller,
the Administrator or any 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 Servicers, 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
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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 Servicers, 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 Servicers 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 The First National Bank of
Chicago not in its individual capacity but solely in its capacity as Eligible
Lender Trustee of the Issuer and, subject to the succeeding paragraph, in no
event shall The First National Bank of Chicago 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) Except as provided in subsection (d) of this section,
notwithstanding anything contained herein to the contrary, this Agreement has
been signed by The First National Bank of Chicago not in its individual capacity
but solely in its capacity as Eligible Lender Trustee of the Issuer and in no
event shall The First National Bank of Chicago 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, covenant,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto as to all of which
recourse shall be had solely to the assets of the Issuer.
(c) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by Bankers Trust Company not in its individual
capacity but solely as
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Indenture Trustee and in no event shall Bankers Trust Company have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder or in any of the certificates, notices or agreements
delivered pursuant hereto, as to all of which recourse shall be had solely to
the assets of the Issuer.
(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 obligation under the
Higher Education Act or implementing regulations.
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-A,
By: THE FIRST NATIONAL BANK OF
CHICAGO, not in its individual
capacity but solely as Eligible
Lender Trustee on behalf of the Trust,
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
KEY BANK USA, NATIONAL ASSOCIATION,
Seller,
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
PENNSYLVANIA HIGHER EDUCATION ASSISTANCE
AGENCY, Servicer,
By:
----------------------------------
Name:
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Title:
Approved as to form and legality:
-------------------------------
PHEAA Chief Counsel
Approved as to form and legality:
--------------------------------
Deputy Attorney General
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EFS SERVICES, INC., Servicer,
By:
--------------------------
Name: ___________________
Title: ___________________
THE FIRST NATIONAL BANK OF
Chicago, not in its
individual capacity but
solely as Eligible Lender
Trustee,
By:
--------------------------
Name:
Title:
KEY BANK USA, NATIONAL ASSOCIATION,
Administrator,
By:
--------------------------
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
BANKERS TRUST COMPANY, not
in its individual capacity
but solely as Indenture Trustee,
By:
------------------------
Name:
Title:
Acknowledged and accepted
as of the day and year
first above written:
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BANKERS TRUST COMPANY, not in its
individual capacity but solely
in its capacity as securities
intermediary under Section 5.01,
By:
------------------------
Name:
Title:
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{Form of PHEAA Approval Memo
to be supplied by PHEAA}
66
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.
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67
(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
"ACCRUED EXPECTED EXPENSE PAYMENT" means for any Transfer Date
on which Other Student Loans are transferred to the Trust an amount equal to (x)
the product of (i) the applicable Expected Rate multiplied by (ii) the sum of
principal balances of the Notes and Certificates as of such Transfer Date
divided by (y) a fraction the numerator of which is the number of days between
such Transfer Date and the last day of the preceding Collection Period and the
denominator of which is 365 (or 366 in the case of a leap year).
"ACT" has the meaning specified in Section 11.03(a) of the
Indenture.
"ADDITIONAL FUNDING" means those expenditures made on behalf
of the Issuer from the Pre-Funding Account and the Escrow Account and made with
Available Loan Purchase Funds on Transfer Dates during the Funding Period and
from the Escrow Account and Available Loan Purchase Funds on Transfer Dates
during the period which begins on the day following the end of the Funding
Period and ends on the Loan Purchase Termination Date, in each case consisting
of amounts paid to the Seller to acquire Additional Student Loans as of the
applicable Subsequent Cutoff Dates and to pay Guarantee Fee Advances.
"ADDITIONAL STUDENT LOANS" means the Subsequent Pool Student
Loans, the Other Subsequent Student Loans and the Other Student Loans.
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"ADMINISTRATION AGREEMENT" means the Administration Agreement
dated as of January 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, substantially in the form of Exhibit C thereto.
"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.
"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 Company National Association), (ii) the Security Agreement dated as
of January 28, 1992, between XXXX and the Seller (as successor to Ameritrust
Company National Association), (iii) the Letter Agreement dated as of January
28, 1992, between LSAS and the Seller (as successor to Ameritrust Company
National Association), (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,
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69
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) Consolidated
Deposit Agreement and Consolidated Security Agreement each dated November 1,
1995 between XXXX and Society National Bank, (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 National Bank and Seller, respectively; and (ix) Pledged
Collateral Account Control Agreement dated ____________ among XXXX, Seller and
McDonald Investments Inc., A KeyCorp Company, 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 (x) 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
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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) and (iv) with
respect to the Servicer, any officer of the Servicer who is authorized to act
for the Servicer in matters relating to or to be acted upon by the Servicer
pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Servicer to the Indenture Trustee 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 Servicers 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, and (y) 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 a
Servicer under an obligation which arose during the elapsed portion of
such Collection Period;
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(v) the aggregate amounts, if any, received from the Seller or
a Servicer, 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 first Distribution Date, the portion
of the Negative Carry Initial Deposit transferred from the Subsequent
Pool Pre-Funding Subaccount to the Collection Account;
(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 (A) 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 and (B) following the end of the
Funding Period and prior to the Loan Purchase Termination Date, amounts
withdrawn from the Collection Account to purchase Other Student Loans
or pay Guarantee Fee Advances pursuant to Sections 2.02A and 5.05(d) of
the Sale and Servicing Agreement during the period following the
preceding Distribution Date and ending on or prior to such Distribution
Date; provided, further, that if on any Distribution Date there would
not be sufficient funds, after application of Available Funds and
amounts available
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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 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, in the case of
clause (1) above such items and in the case of clause (2) above such
Certificateholders' Interest Distribution Amount, and the Available
Funds for such succeeding Distribution Date will be adjusted
accordingly.
"AVAILABLE LOAN PURCHASE FUNDS" means with respect to any
Collection Period and any Transfer Date after the Funding Period, the excess of
Available Funds (without giving effect to the second proviso thereof) for the
Collection Period relating to the Distribution Date next succeeding such
Transfer Date that are on deposit in the Collection Account on such Transfer
Date (before giving effect to any application thereof) over the Accrued Expected
Expense Payment for such Distribution Date.
"BASIC DOCUMENTS" means the Trust Agreement, the Indenture,
the Sale and Servicing Agreement, the Supplemental Sale and Servicing Agreement,
the Administration Agreement, the Certificate Depository Agreement, the Note
Depository Agreement, the Guarantee Agreements 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
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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.
"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 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 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 [(computed on the basis of the actual number of days
elapsed in such Interest Period over a
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year of 365 days (or 366 in a leap year)] [(computed on the basis of the actual
number of days elapsed in the related Interest Period divided by 360)] equal to
the lesser of (i) [the weighted average of the T-Xxxx Rates within such Interest
Period] [Three-Month LIBOR for such Interest Period] plus ___% and (ii) the
Student Loan Rate for such Interest Period.
"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 January ___, 1999 between the Seller and the
Underwriters.
"CERTIFICATEHOLDER" means a Person in whose name a Certificate
is registered in the Certificate Register.
"CERTIFICATEHOLDERS' AVAILABLE INTEREST DISTRIBUTION AMOUNT"
means for the Certificates on any Distribution Date, an amount equal to (x) the
sum of (1) Available Funds for such Distribution Date, (2) the amount, if any,
withdrawn from the Pre-Funding Account pursuant to Section 5.08(d) of the Sale
and Servicing Agreement on such Distribution Date, and (3) the amounts withdrawn
from the Reserve Account pursuant to Section 5.06(b)(vi) of the Sale and
Servicing Agreement on such Distribution Date minus (y) the amount required to
be distributed pursuant to clauses (i) through (iii) of Section 5.05(c) of the
Sale and Servicing Agreement, including any Noteholders' Priority Principal
Distribution Amount actually distributed.
"CERTIFICATEHOLDERS' AVAILABLE PRINCIPAL DISTRIBUTION AMOUNT"
means on the Final Maturity Date for the Certificates, an amount equal to (x)
the sum of (1) the Available Funds for such Distribution Date, and (2) the
amounts withdrawn from the Reserve Account pursuant to Section 5.06(b)(ix) of
the Sale and Servicing Agreement minus (y) the amounts required to be
distributed pursuant to clauses (i) through (vii) of Section 5.05(c) of the Sale
and Servicing Agreement.
"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
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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 applicable 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 applicable 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]); PROVIDED,
HOWEVER, that, on the Final Maturity Date, the Certificateholders' Interest
Index Carryover will be equal to the lesser of (i) the Certificateholders'
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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)(x) 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 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.
"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.
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"CLOSING DATE" means February ___, 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 and ending on May 31,
1999 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.
"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 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
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 Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, Attention: Corporate Trust Administration (telephone: (000) 000-0000;
facsimile: (000) 000-0000); or at such other address as the
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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).
"CUTOFF DATE" means January 1, 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
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(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:
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(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"
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(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-seventh day of each March, June, September and December or,
if such day is not a Business Day, the immediately following Business Day,
commencing on June 28, 1999.
"DTC" means the Depository Trust Company, a New York
Corporation.
"ECMC" means Educational Credit Management Corporation.
"EFS" means EFS Services, Inc., a wholly-owned subsidiary of
EFS, Inc. of Indiana.
"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
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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 Xxxxx'x, or any
other long-term, short-term or certificate of deposit rating acceptable to the
Rating Agencies and (ii) 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 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
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is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from
Xxxxx'x in the highest investment category granted thereby and, if
rated by Fitch, in the highest investment category granted by Fitch;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from Xxxxx'x in the
highest investment category granted thereby and, if rated by Fitch, in
the highest investment category granted by Fitch;
(d) investments in money market funds (including funds for
which the Indenture Trustee or the Eligible Lender Trustee or any of
their respective Affiliates or any of Seller's Affiliates is an
investment manager or advisor) having a rating from Xxxxx'x of Aaa and
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;
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 The First National Bank of
Chicago, 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.
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"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.
"EXCESS SERVICING FEE" has the meaning specified in Schedule C
to the Sale and Servicing Agreement.
"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.
"EXPECTED RATE" means with respect to any Transfer Dates after
the end of the Funding Period on which Other Student Loans are transferred to
the Trust, the sum of the weighted average of the Note Interest Rates and the
Certificate Rate for the Notes and Certificates, respectively, as of the first
day of the related Collection Period plus ____%.
"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
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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, but prior to October 1, 1998 equal to 1.05% per
annum and (y) on or after October 1, 1998 equal to .62% per annum, in each case
on the outstanding balance of such Federal Consolidation Loan.
"FEDERAL GUARANTOR" means PHEAA, ASA, ECMC and NSLP.
"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
_______ ______ Distribution Date, (ii) for the Class A-2 Notes the _______
______ Distribution Date and (iii) for the Certificates, the _______ ______
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.
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"FINANCED FEDERAL LOANS" means those Financed Student Loans
that are guaranteed as to the payment of principal and interest by PHEAA, ASA,
ECMC or NSLP and are reinsured by the Department and are listed on Schedule A to
the Sale and Servicing Agreement, as such Schedule may be supplemented from time
to time.
"FINANCED 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 and are
listed on Schedule A to the Sale and Servicing Agreement, as such Schedule may
be supplemented from time to time.
"FINANCED STUDENT LOAN" means any law school, medical school,
dental school, graduate business school or other graduate school student loan
listed on Schedule A of the Sale and Servicing Agreement as such Schedule may be
supplemented from time to time.
"FINANCED STUDENT LOAN FILES" means the documents specified in
Section 3.03 of the Sale and Servicing Agreement.
"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 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 March
2001 Distribution Date.
"GRADUATE LOAN PROGRAMS" means [TO COME FROM KEY BANK].
["GRADUATE SCHOOL LOAN" means a Graduate [School] Loan made by
the Seller to an eligible borrower pursuant to the 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.
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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.
"GUARANTEE AGREEMENTS" means (i) in the case of PHEAA, the
National Guaranty Agreement and the Lender Participation Agreement for
Consolidation Loans, in each case dated as of June 13, 1998, 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 13, 1998, between ASA and the
Eligible Lender Trustee on behalf of the Issuer, (iii) in the case of ECMC, the
Holder Agreement for Payment on Guarantee dated as of the Closing Date, between
ECMC and the Eligible Lender Trustee on behalf of the Issuer, (iv) in the case
of NSLP, the Lender Agreement for Guaranteed Educational Loans With Federal
Reinsurance and the Lender Agreement for Guarantee of Federal Consolidation
Loans with Federal Reinsurance, each dated as of July 13, 1998 between NSLP and
the Eligible Lender Trustee on behalf of the Issuer, (v) in the case of XXXX,
the Guarantee Agreement dated as of July 13, 1998, among XXXX, the Seller and
the Eligible Lender Trustee on behalf of the Issuer and (vi) in the case of
HICA, the Endorsement to Alternative Dental Educational Assistance Loan Surety
Bond Numbers 1994-A, 1994-B, 1995-A and 1996-A dated as of July 13, 1998 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.
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"GUARANTEE PAYMENT" means any payment made by a Guarantor
pursuant to a Guarantee Agreement in respect of a Financed Student Loan.
"GUARANTORS" means PHEAA, ASA, ECMC, NSLP, XXXX and HICA.
"HICA" means HEMAR Insurance Company of America, a South
Dakota corporation.
"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 January 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
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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 $__________.
"INITIAL FINANCED STUDENT LOANS" has the meaning specified in
Section 2.01 of the Sale and Servicing Agreement.
"INITIAL POOL BALANCE" means, the sum of the Pool Balance as
of the Cutoff Date, which is $________, 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.
"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
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pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"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.
"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-A (formerly
named KeyCorp Student Loan Trust 1998-A) until a successor replaces it and,
thereafter, means the successor.
"ISSUER ORDER" and "ISSUER REQUEST" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
["LAW LOAN" means a Law School Loan made by the Seller to an
eligible borrower pursuant to the Programs.]
"LIBOR DETERMINATION DATE" means the second Business Day prior
to the commencement of each Interest Period. 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 _______________.
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"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 Servicer which services such Financed Student Loan (which
shall not include any Financed Student Loan on which Guarantee Payments are
received) or which such Servicer 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, net of the sum of any amounts expended by the Servicer
which serviced such Liquidated Student Loan in connection with such liquidation
and any amounts required by law to be remitted to the borrower on such
Liquidated Student Loan.
"LOAN PURCHASE TERMINATION DATE" means the first to occur of
(i) the date on which an Event of Default occurs under the Indenture, a Servicer
Default occurs under the Sale and Servicing Agreement or an Administrator
Default occurs under the Sale and Servicing Agreement or the Administration
Agreement, (ii) the date on which an Insolvency Event with respect to the Seller
occurs, or (iii) the last day of the Collection Period preceding the March 2002
Distribution Date.
"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.
"MAXIMUM XXXX PAYMENTS AMOUNT" means an amount equal to 19% of
the 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
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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-seventh day
of each calendar month, or, if such day is not a Business Day, the immediately
following Business Day, commencing on March 1, 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.
"NEGATIVE CARRY INITIAL DEPOSIT" means $____________.
"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.
"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, (iii) the amount on deposit in the Reserve Account after
giving effect to distributions on such Distribution Date, and (iv) 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 the Class A-1 Notes, the interest rate per annum
[(computed on the basis of the actual number of days elapsed in such Interest
Period over a year of 365 days (or 366 in a leap year)] [(computed on the basis
of the actual number of days elapsed in the related Interest Period
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divided by 360)] equal to the lesser of (i) [the weighted average of the T-Xxxx
Rates within such Interest Period] [Three-Month LIBOR] plus ___% and (ii) the
Student Loan Rate for such Interest Period, (x) in the case of the Class A-2
Notes, the interest rate per annum [(computed on the basis of the actual number
of days elapsed in such Interest Period over a year of 365 days (or 366 in a
leap year)] [(computed on the basis of the actual number of days elapsed in the
related Interest Period divided by 360)] equal to the lesser of (i) [the
weighted average of the T-Xxxx Rates within such Interest Period] [Three-Month
LIBOR] plus ___% and (ii) the Student Loan Rate for such 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 January __, 1999 between the Seller and the Underwriters.
"NOTEHOLDER" means the Person in whose name a Note is
registered in the Note Register.
"NOTEHOLDERS' AVAILABLE INTEREST DISTRIBUTION AMOUNT" means on
any Distribution Date, an amount equal to (x) the sum of (1) Available Funds for
such Distribution Date, (2) the amounts withdrawn from the Pre-Funding Account
pursuant to Section 5.08(d) of the Sale and Servicing Agreement on such
Distribution Date, and (3) the amounts withdrawn from the Reserve Account
pursuant to Section 5.06(b)(v) of the Sale and Servicing Agreement on such
Distribution Date minus (y) the amount required to be distributed pursuant to
clauses (i) and (ii) of Section 5.05(c) of the Sale and Servicing Agreement,
including any Noteholders' Priority Principal Distribution Amount actually
distributed.
"NOTEHOLDERS' AVAILABLE PRINCIPAL DISTRIBUTION AMOUNT" means
on the Final Maturity Date for each class of Notes, an
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amount equal to (x) the sum of (1) the Available Funds for such Distribution
Date and (2) the amount, if any, withdrawn from the Reserve Account pursuant to
Sections 5.06(b)(vii) or (viii) of the Sale and Servicing Agreement minus (y)
the amounts required to be distributed pursuant to clauses (i) through (v) of
Section 5.05(c) of the Sale and Servicing Agreement, including the Noteholders'
Priority Principal Distribution Amount for such class of Notes actually
distributed.
"NOTEHOLDERS' DISTRIBUTION AMOUNT" means, with respect to any
Distribution Date, the sum of the Noteholders' Interest Distribution Amount 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 the weighted
average of the Note Interest Rates for the Notes from such preceding
Distribution Date to the current Distribution Date.
"NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" means, with
respect to any Distribution Date, 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 each class of Notes on the
immediately preceding Distribution Date after giving effect to all principal
distributions to 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 Distribution Date; provided, that the Noteholders'
Interest Distribution Amount will not include any Noteholders' Interest Index
Carryover.
"NOTEHOLDERS' INTEREST INDEX CARRYOVER" means, with respect to
any Distribution Date as to which the Note Interest Rate for the 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 Notes that would have
accrued in respect of the related Interest Period had interest been
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calculated based on [the T-Xxxx Rate, if such Notes are T-Xxxx Indexed
Securities] or [Three-Month LIBOR if such Notes are LIBOR Indexed Securities],
over (b) the amount of interest on such 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]); PROVIDED, HOWEVER, that on the
Final Maturity Date for such Notes, the Noteholders' Interest Index Carryover
for such Notes will be equal to the lesser of (i) the Noteholders' 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 for
such Notes on such date pursuant to Sections 5.05(c)(ix) and 5.06(e) of 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
Notes 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 will include the
amount required to reduce the outstanding principal balance of the Class A-2
Notes to zero. In the event that 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.
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"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 and Class A-2 Notes.
"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 and (iii) in the case of the Servicer, a
certificate signed by any two Authorized Officers of the 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 satisfactory 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 and (ii) with
respect to the Seller, the Administrator or a Servicer, one or more written
opinions of counsel who may be an employee of or counsel to the Seller, the
Administrator or such Servicer, which counsel shall be acceptable to the
Indenture Trustee, the Eligible Lender Trustee or the Rating Agencies, as
applicable.
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"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 STUDENT LOANS" means the Serial Loans (including
Consolidation Loans) 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 period which begins after the Funding Period and ends on the
Loan Purchase Termination Date pursuant to Section 2.02A of the Sale and
Servicing Agreement, each of which shall be identified on Schedule A, to the
related Transfer Agreement which Schedule A may be in the form of microfiche or
computer tape.
"OTHER SUBSEQUENT STUDENT LOANS" means the Serial Loans
(including Consolidation Loans but not including Subsequent Pool Student Loans)
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 Schedule A may be in the form of microfiche or computer tape.
"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
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(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.
"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.
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"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 Servicers, (iii) all Additional
Fundings made from the applicable Escrow Account and the applicable Pre-Funding
Account or the Available Loan Purchase Funds 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 and (iii) 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.
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"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, 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.
"PROCEEDING" means any suit in equity, action at law or other
judicial or administrative proceeding.
"PROGRAMS" means the Graduate 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, ________% of the amount required to prepay in
full the respective Financed Student Loan, if it is an Initial Financed Student
Loan, ________% 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 or an Other Student Loan, in each case under the
terms thereof including all
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accrued interest thereon and any lost Interest Subsidy Payments and Special
Allowance Payments with respect thereto.
"PURCHASE PRICE" means, with respect to any Financed Student
Loan, (i) in the case of any Initial Financed Student Loan, an amount equal to
________% of the aggregate principal balance of such Initial Financed Student
Loan as of the Cutoff Date (ii) in the case of any Student Loan in the
Subsequent Pool, an amount equal to ________% of the aggregate principal balance
of such Student Loan as of the related Subsequent Cutoff Date, and (iii) in the
case of any Other Subsequent Student Loan or Other Student Loan, 100% of the
aggregate principal balance thereof as the related Subsequent Cutoff Date. For
purposes of the foregoing calculation, the aggregate principal balance of each
Financed Student Loan includes accrued interest thereon from the date of
origination to, with respect to each Initial Financed Student Loan, the Cutoff
Date, and to, with respect to each Additional Student Loan, the related
Subsequent Cutoff Date, in each case expected to be capitalized upon repayment.
"PURCHASED STUDENT LOAN" means a Financed Student Loan
purchased as of the close of business on the last day of a Collection Period by
a Servicer 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 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 and the 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 Servicers, 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.
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"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-sixth 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 Servicer 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.
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"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 $_________.
"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.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing
Agreement dated as of January 1, 1999 among the Issuer, the Seller, the
Administrator, the Eligible Lender Trustee and the Servicers.
"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), 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 and
the Certificates.
"SELLER" means Key Bank USA, National Association, a national
banking association.
"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 Initial Financed Student Loan or Subsequent Pool
Student Loan.
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"SERVICER" means PHEAA, in its capacity as servicer of the
Financed Student Loans it services or EFS, as servicer of the Financed Student
Loans it services, as applicable.
"SERVICER DEFAULT" means an event specified in Section 8.01(a)
of the Sale and Servicing Agreement.
"SERVICER'S REPORT" means any report of a Servicer delivered
pursuant to Section 4.08(a) or (b) of the Sale and Servicing Agreement,
substantially in the form acceptable to the Administrator.
"SERVICING FEE" has the meaning specified in Schedule C to the
Sale and Servicing Agreement.
"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.
"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 June 15, 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 March 2009 Distribution Date, the Specified Collateral Balance will be zero.
"SPECIFIED RESERVE ACCOUNT BALANCE" means _________.
"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.
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"STATE" means any one of the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx
Xxxxxxx or the District of Columbia.
"STATISTICAL CUTOFF DATE" means January 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 Servicing Fees and
the Administration Fee payable on the related Distribution Date and any
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 as of which principal
and interest accruing with respect to an Additional Student Loan are transferred
to the Eligible Lender Trustee on behalf of the Issuer pursuant to Section 2.02
and 2.02A 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 other than the Negative Carry Initial Deposit or any portion thereof.
"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 any law school, medical
school, dental school, graduate business school and other graduate school
student loans listed on the Schedule of Subsequent Pool Student Loans on the
Closing Date as set forth in Schedule B to the Sale and Servicing Agreement
(which Schedules may be in the form of microfiche), 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.
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"SUCCESSOR ADMINISTRATOR" has the meaning specified in Section
3.07(e) of the Indenture.
"SUCCESSOR SERVICER" has the meaning specified in Section
3.07(e) of the Indenture.
"SUPPLEMENTAL SALE AND SERVICING AGREEMENT" means the
Supplemental Sale and Servicing Agreement dated as of January 1, 1999, among the
Seller, the Administrator, the Trust, the Eligible Lender Trustee, the Indenture
Trustee and the Servicers.
"T-XXXX INDEXED SECURITIES" means __________________.
"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 Dow Xxxxx Telerate Service (or such other page as may replace that page on
that service for the purpose of displaying comparable rates or prices).
"XXXX" means The Education Resources Institute, Inc., a
Massachusetts non-profit corporation.
"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
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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 prior to the Loan Purchase Termination Date pursuant to Section 2.02 or
2.02A of the Sale and Servicing Agreement.
"TRANSFERRED BALANCE" has the meaning assigned to such term in
Sections 5.05(d) and 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.
"TRUST" means the Issuer, established pursuant to the Trust
Agreement.
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"TRUST ACCOUNTS" means the Collection Account, the Escrow
Account, the Pre-Funding Account and the Reserve Account.
"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 AGREEMENT" means the Amended and Restated Trust
Agreement dated as of January 1, 1999, 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, the Supplemental 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.
"UNDERWRITERS" shall mean Credit Suisse First Boston
Corporation and McDonald Investments Inc., a KeyCorp company.
"UNDERWRITING AGREEMENT" shall mean the Note Underwriting
Agreement or the Certificate Underwriting Agreement, as applicable.
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SCHEDULE A
TO THE
SALE AND SERVICING AGREEMENT
SCHEDULE OF INITIAL FINANCED STUDENT LOANS
[Set forth name of Servicer servicing each Initial Financed Student Loan]
Delivered to Indenture Trustee.
110
SCHEDULE B
TO THE
SALE AND SERVICING AGREEMENT
SCHEDULE OF SUBSEQUENT POOL STUDENT LOANS
[Set forth name of Servicer servicing each Subsequent Pool Student Loan]
Delivered to Indenture Trustee
111
SCHEDULE C
TO THE
SALE AND SERVICING AGREEMENT
LOCATION OF FINANCED STUDENT LOAN FILES - PHEAA
Documents relating to the Financed Student Loans being
serviced by PHEAA (including original notes) are stored at PHEAA's facility at
0000 Xxxxx 0xx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
LOCATION OF FINANCED STUDENT LOAN FILES - EFS
[To come]
112
SCHEDULE D
TO THE
SALE AND SERVICING AGREEMENT
SERVICING PROVISIONS TO BE AUDITED
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.
ADMINISTRATIVE PROVISIONS TO BE AUDITED
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.
113
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 $1,000 original principal amount of
Class A-2 Notes)
(iii) Amount of interest being paid or distributed in respect of the
Class A-1 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-1 Notes)
(iv) Amount of interest being paid or distributed in respect of the
Class A-2 Notes:___________ ($_______ per $1,000 original principal amount of
Class A-2 Notes)
(v) Amount of Noteholders' Interest Index Carryover being paid or
distributed (if any) and amount remaining (if any):
(1) Distributed to Class A-1 Noteholders: _______($_______ per
$1,000 original principal amount of Class A-1 Notes)
(2) Distributed to Class A-2 Noteholders: _______($_______ per
$1,000 original principal amount of Class A-2 Notes)
(3) Balance on Class A-1 Notes:__________ ($_______ per $1,000
original principal amount of Class A-1 Notes)
(4) Balance on Class A-2 Notes:__________ ($_______ per $1,000
original principal amount of Class A-2 Notes)
114
(vi) Pool Balance at the end of the related Collection
Period:________
(vii) After giving effect to distributions on this
Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:____________
(2) Pool Factor for the Class A-1 Notes:_______
(b) (1) outstanding principal amount of Class A-2
Notes:____________
(2) Pool Factor for the Class A-2 Notes:_______
(c) (1) Certificate Balance:________________
(2) Pool Factor for the Certificates:_________
(viii) Note Interest Rate for the Class A-1 Notes:
(a) In general:
[(1) T-Xxxx Rate for the period from the previous
Distribution Date to this Distribution Date was _____%;][1]
or
[(1) Three-Month LIBOR for the period from the
previous Distribution Date to this Distribution Date was ___%
and] [2]
[(2)] the Student Loan Rate was _____%. [1][2]
(b) Note Interest Rate for the Class A-2 Notes:______% (based
on [T-Xxxx Rate][Three-Month LIBOR][Student Loan Rate])
(ix) Note Interest Rate for the Class A-2 Notes:
(a) In general:
________________
[ 1 This Calculation not required unless the T-Xxxx Rate for such Interest
Period is 100 basis points greater than the T-Xxxx Rate of the preceding
Determination Date or the 52 Week Treasury Xxxx Rate is 100 basis points less
than the T-Xxxx Rate as of such Determination Date.]
[2 This Calculation not required unless Three-Month LIBOR for such Interest
Period is 100 basis points greater than Three-Month LIBOR of the preceding
Determination Date.]
115
[(1) T-Xxxx Rate for the period from the previous
Distribution Date to this Distribution Date was __%][1]
or
[(1) Three-Month LIBOR for the period from the
previous Distribution Date to this Distribution Date was ___%
and] [2}
(2) the Student Loan Rate was __% [1][2}
(b) Note Interest Rate for the Class A-2 Notes __% (based on
[T-xxxx Rate] [Three-Month LIBOR][Student Loan Rate]
(x) (a) Amount of Servicing Fee for related Collection
Period:____________ ($_______ per $1,000 original principal amount ________ of
Class A-1 Notes, $_________ per $1,000 original principal balance of
Class A-2 Notes;
(b) Amount of Excess Servicing Fee being distributed and
remaining balance (if any):
(1) Distributed: $____________ ($_______ per $1,000
original principal amount of Class A-1 Notes, and $_________
per $1,000 original principal balance of Class A-2 Notes;
(2) Balance owed to the holders of Notes: $__________
($_____ per $1,000 original principal amount of Class A-1
Notes, and $_____________ per $1,000 original principal
balance of Class A-2 Notes)
(xi) Amount of Administration Fee for related Collection
Period:____________ ($_______ per $1,000 original principal amount of Class A-1
Notes, and $_________ per $1,000 original principal balance of Class A-2 Notes;
(xii) (a) Aggregate amount of Realized Losses (if any) for the related
Collection Period:
(b) Balance of Financed Student Loans that are delinquent in
each delinquency period as of the end of the related Collection Period: _______
[(xiii) Amount in the Pre-Funding Account:_________](3)
-----------------------------
(3) To be included for each Distribution Date during the Funding Period.
116
[(xiv) (a) Amount remaining in the Subsequent Pool Pre-Funding
Subaccount not used to acquire Subsequent Pool Student Loans: ______;
(b) Amount of (a) to be paid to the holders of the Class A-1
Notes: __________](4)
(c) Amount of (a) to be paid to the holders of the Class A-2
Notes: ________; and
[(xv) Amount in the Pre-Funding Account at the end of the
Funding Period to be distributed as a payment of principal in respect
of the Notes:__________](5)
-------------------------
(4) To be included for First Distribution Date only.
(5) To be included for the Distribution Date on or immediately following the
end of the Funding Period.
117
EXHIBIT B
TO THE
SALE AND SERVICING AGREEMENT
Form of Certificateholders' Statement
pursuant to Section 5.07(b) of Sale
and Servicing Agreement (capitalized
terms used herein are defined in
Appendix A thereto)
---------------------------------------
Distribution Date:___________________
(i) Amount of principal being paid or distributed in respect of the
Certificates:___________ ($_______ per $1,000 original principal amount of the
Certificates)(6)
(ii) Amount of interest being paid or distributed in respect of the
Certificates:______________ ($_______ 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 $1,000 original
principal amount of Certificates)
(iv) Pool Balance at the end of related Collection Period:
(v) After giving effect to distributions on this Distribution Date:
(a) (1) outstanding principal amount of Class A-1
Notes:____________
(2) Pool Factor for Class A-1 Notes:____________
(b) (1) outstanding principal amount of Class A-2
Notes:____________
(2) Pool Factor for Class A-2 Notes:____________
------------------
(6) Only after the Notes have been paid in full.
118
(c) (1) Certificate Balance:______________
(2) Certificate Pool Factor:____________
(vi) Certificate Rate:
(a) In general:
[(1) T-Xxxx Rate for the period from the previous
Distribution Date to this Distribution Date was _____%;][1]
[(2) Three-Month LIBOR for the period from the
previous Distribution Date to this Distribution Date was __%
and][2]
(3) the Student Loan Rate was _____%.[1][2]
(b) Certificate Rate:______% (based on [T-Xxxx Rate]
[Three-Month LIBOR][Student Loan Rate])
(vii) (a) Amount of Servicing Fee for the related Collection Period:
____________ ($_______ per $1,000 original principal amount of
Certificates):___________
(b) Amount of Excess Servicing Fee being distributed and
remaining balance (if any):
(1) Distributed: $______________ ($_______ per $1,000
original principal amount of Certificates).
(2) Balance owed to the holders of the Certificates:
$______________ ($_______ per $1,000 original
principal amount of Certificates).
(viii) Amount of Administration Fee for the related Collection Period:
____________ ($_______ per $1,000 original principal amount of Certificates)
(ix) (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:__________
(x) Amount in the Reserve Account:____________
119
(xi) Amount in the Pre-Funding Account:_________(7)
(xii) (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:
________(8)
------------------
7/ To be included for each Distribution Date during the Funding Period.
8/ To be included for First Distribution Date only.
120
EXHIBIT C
TO THE
SALE AND SERVICING AGREEMENT
FORM OF ADMINISTRATOR'S CERTIFICATE
[To be provided]
121
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 January 1, 1999,
among the undersigned, as seller (the "Seller") and as administrator (the
"Administrator"), KeyCorp Student Loan Trust 1999-A (the "Trust"), The First
National Bank of Chicago, not in its individual capacity but solely as Eligible
Lender Trustee (the "Eligible Lender Trustee"), Pennsylvania Higher Education
Assistance Agency, as servicer ("Servicer")and EFS Services, Inc., as servicer
("Servicer"), 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 Initial Financed
Student Loans and all obligations of the Obligors thereunder including all
monies 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, the Negative Carry Initial Deposit and the
Pre-Funded Amounts and in all investments and proceeds thereof (including all
income thereon) and (iv) the proceeds of any and all of the foregoing (including
proceeds derived from the voluntary or involuntary conversion of any of the
Initial Financed Student Loans into cash or other liquidated property, such as
proceeds from the applicable Guarantee Agreement. The foregoing sale does not
constitute and is not intended to result in any assumption by the Eligible
Lender Trustee or the Trust of any obligation of the Seller to the Obligor 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 _____________ __, 1999.
122
KEY BANK USA, NATIONAL
ASSOCIATION, as Seller
By:
----------------------
Name:
Title:
123
EXHIBIT E
TO THE
SALE AND SERVICING AGREEMENT
TRANSFER AGREEMENT
TRANSFER No. ____ OF ADDITIONAL STUDENT LOANS dated as of
_________, 1999, among KEYCORP STUDENT LOAN TRUST 1999-A, a New York trust (the
"Issuer"), KEY BANK USA, NATIONAL ASSOCIATION, a national banking association,
as seller (the "Seller"), THE FIRST NATIONAL BANK OF CHICAGO, a national banking
association, as seller, 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 Administrator and the Servicers (as defined in the Appendix A to the Sale
and Servicing Agreement) are parties to the Sale and Servicing Agreement dated
as of January 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
January 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.
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"TRANSFER DATE" means, with respect to the Additional Student
Loans, ______________, 199_.
2. SCHEDULES OF FINANCED STUDENT LOANS. Attached hereto as
Schedule A is a supplement to Schedule A 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.
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(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 affect 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:
126
(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)] [2.02A(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-A,
by THE FIRST NATIONAL BANK
127
OF CHICAGO, not in its
individual capacity but solely
as Eligible Lender Trustee,
By:
-------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF
CHICAGO, 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:
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:
128
SCHEDULE A
TO THE
TRANSFER AGREEMENT NO. ___
[List of Additional Student Loans and their related Subsequent Cutoff
Dates and the name of the Servicer servicing such Additional Student Loans]
129
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 January 1, 1999,
among the undersigned, as seller (the "Seller") and as administrator (the
"Administrator"), KeyCorp Student Loan Trust 1999-A (the "Trust"), The First
National Bank of Chicago, not in its individual capacity but solely as Eligible
Lender Trustee (the "Eligible Lender Trustee"), Pennsylvania Higher Education
Assistance Agency, as servicer ("Servicer"), and EFS Services, Inc., as servicer
("Servicer"), and the Transfer Agreement No. _____ dated as of ____________,
199_, (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 monies 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
to be duly executed as of _______________, 199_.
130
KEY BANK USA, NATIONAL ASSOCIATION,
as Seller
By:
-------------------------------------
Name:
Title:
