EXECUTION COPY
INDENTURE
between
KEYCORP STUDENT LOAN TRUST 2001-A,
as Issuer
and
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
Dated as of September 1, 2001
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Usage
SECTION 1.01. Definitions and Usage........................................3
SECTION 1.02. Incorporation by Reference of Trust Indenture Act............3
ARTICLE II
The Notes
SECTION 2.01. Form.........................................................4
SECTION 2.02. Execution, Authentication and Delivery.......................4
SECTION 2.03. Temporary Notes..............................................5
SECTION 2.04. Registration; Registration of Transfer and Exchange..........5
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes...................6
SECTION 2.06. Persons Deemed Owner.........................................7
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest;
Noteholders' Interest Index Carryover......................8
SECTION 2.08. Cancellation.................................................9
SECTION 2.09. Release of Collateral.......................................10
SECTION 2.10. Book-Entry Notes............................................10
SECTION 2.11. Notices to Clearing Agency..................................11
SECTION 2.12. Definitive Notes............................................11
ARTICLE III
Covenants
SECTION 3.01. Payment to Noteholders......................................11
SECTION 3.02. Maintenance of Office or Agency.............................12
SECTION 3.03. Money for Payments To Be Held in Trust......................12
SECTION 3.04. Existence...................................................14
SECTION 3.05. Protection of Indenture Trust Estate........................14
SECTION 3.06. Opinions as to Indenture Trust Estate.......................14
SECTION 3.07. Performance of Obligations; Master Servicing of Financed
Student Loans.............................................15
SECTION 3.08. Negative Covenants..........................................18
SECTION 3.09. Annual Statement as to Compliance...........................19
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.........19
SECTION 3.11. Successor or Transferee.....................................21
SECTION 3.12. No Other Business...........................................21
SECTION 3.13. No Borrowing................................................21
SECTION 3.14. Obligations of Master Servicer and Administrator............21
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities...........22
SECTION 3.16. Capital Expenditures........................................22
SECTION 3.17. Restricted Payments.........................................22
SECTION 3.18. Notice of Events of Default.................................22
SECTION 3.19. Further Instruments and Acts................................22
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture.....................23
SECTION 4.02. Application of Trust Money..................................24
SECTION 4.03. Repayment of Moneys Held by Paying Agent....................24
SECTION 4.04. Auction of Financed Student Loans...........................24
ARTICLE V
Remedies
SECTION 5.01. Events of Default...........................................27
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment..........28
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee......................................29
SECTION 5.04. Remedies; Priorities........................................32
SECTION 5.05. Optional Preservation of the Financed Student Loans.........41
SECTION 5.06. Limitation of Suits.........................................42
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest..............................................43
SECTION 5.08. Restoration of Rights and Remedies..........................43
SECTION 5.09. Rights and Remedies Cumulative..............................43
SECTION 5.10. Delay or Omission Not a Waiver..............................43
SECTION 5.11. Control by Noteholders......................................44
SECTION 5.12. Waiver of Past Defaults.....................................44
SECTION 5.13. Undertaking for Costs.......................................45
SECTION 5.14. Waiver of Stay or Extension Laws............................45
SECTION 5.15. Action on Notes.............................................45
SECTION 5.16. Performance and Enforcement of Certain Obligations..........46
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee.................................47
SECTION 6.02. Rights of Indenture Trustee.................................48
SECTION 6.03. Individual Rights of Indenture Trustee......................49
SECTION 6.04. Indenture Trustee's Disclaimer..............................49
SECTION 6.05. Notice of Defaults..........................................49
SECTION 6.06. Reports by Indenture Trustee to Noteholders.................49
SECTION 6.07. Compensation and Indemnity..................................50
SECTION 6.08. Replacement of Indenture Trustee............................50
SECTION 6.09. Successor Indenture Trustee by Merger.......................51
SECTION 6.10. Appointment of Co-Trustee or Separate Trustee...............52
SECTION 6.11. Eligibility; Disqualification...............................53
SECTION 6.12. Preferential Collection of Claims Against Issuer............53
SECTION 6.13. Set-Off Rights..............................................53
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders............................................54
SECTION 7.02. Preservation of Information; Communications to Noteholders..54
SECTION 7.03. Reports by Issuer...........................................54
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money.........................................55
SECTION 8.02. Trust Accounts..............................................55
SECTION 8.03. General Provisions Regarding Accounts.......................57
SECTION 8.04. Release of Indenture Trust Estate...........................58
SECTION 8.05. Opinion of Counsel..........................................59
SECTION 8.06. Demands under the Group II Notes Guaranty Insurance Policy..59
ARTICLE VIII-A
The Group II Notes Guaranty Insurance Policy
SECTION 8A.1. Claims Under the Group II Notes Guaranty Insurance Policy...60
SECTION 8A.2. [RESERVED]..................................................61
SECTION 8A.3. Surrender of the Group II Notes Guaranty Insurance Policy...61
SECTION 8A.4. Rights of the Securities Insure.............................61
SECTION 8A.5. Replacement Group II Notes Guaranty Insurance Policy........62
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures without Consent of Noteholders......63
SECTION 9.02. Supplemental Indentures with Consent of Noteholders.........64
SECTION 9.03. Execution of Supplemental Indentures........................66
SECTION 9.04. Effect of Supplemental Indenture............................66
SECTION 9.05. Conformity with Trust Indenture Act.........................67
SECTION 9.06. Reference in Notes to Supplemental Indentures...............67
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption..................................................67
SECTION 10.02. Form of Redemption Notice...................................68
SECTION 10.03. Notes Payable on Redemption Date............................68
ARTICLE X
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc...................68
SECTION 11.02. Form of Documents Delivered to Indenture Trustee............70
SECTION 11.03. Acts of Noteholders.........................................71
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer, Securities
Insurer and Rating Agencies...............................72
SECTION 11.05. Notices to Noteholders; Waiver..............................72
SECTION 11.06. Alternate Payment and Notice Provisions.....................73
SECTION 11.07. Conflict with Trust Indenture Act...........................73
SECTION 11.08. Effect of Headings and Table of Contents....................73
SECTION 11.09. Successors and Assigns......................................74
SECTION 11.10. Separability................................................74
SECTION 11.11. Benefits of Indenture.......................................74
SECTION 11.12. Legal Holidays..............................................74
SECTION 11.13. Governing Law...............................................74
SECTION 11.14. Counterparts................................................74
SECTION 11.15. Recording of Indenture......................................74
SECTION 11.16. Trust Obligations...........................................75
SECTION 11.17. No Petition.................................................75
SECTION 11.18. Inspection..................................................75
SECTION 11.19. Third-Party Beneficiaries...................................75
SECTION 11.20. Rights of the Securities Insurer to Exercise Rights
of Noteholders............................................76
APPENDIX A Definitions and Usage
SCHEDULE A Schedule of Initial Financed Student Loans
SCHEDULE B Schedule of Additional Student Loans
SCHEDULE C Location of Financed Student Loan Files
EXHIBIT A-1 Form of Class I-A-1 Note
EXHIBIT A-2 Form of Class I-A-2 Note
EXHIBIT A-3 Form of Class I-B Note
EXHIBIT A-4 Form of Class II-A-1 Note
EXHIBIT A-5 Form of Class II-A-2 Note
INDENTURE dated as of September 1, 2000, between KEYCORP STUDENT LOAN
TRUST 2001-A, a Delaware business trust (the "Issuer"), and THE CHASE MANHATTAN
BANK, a New York banking corporation, as trustee and not in its individual
capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Floating Rate
Class I-A-1 Asset Backed Notes (the "Class I-A-1 Notes"), Floating Rate Class
I-A-2 Asset Backed Notes (the "Class I-A-2 Notes"), Floating Rate Class I-B
Asset Backed Notes (the "Class I-B Notes"), Floating Rate Class II-A-1 Asset
Backed Notes (the "Class II-A-1 Notes"), and Floating Rate Class II-A-2 Asset
Backed Notes (the "Class II-A-2 Notes" and together with the Class I-A-1 Notes,
the Class I-A-2 Notes, the Class I-B Notes and the Class II-A-1 Notes, the
"Notes"):
GRANTING CLAUSE
The Issuer (and, with respect to the Financed Student Loans, the
Eligible Lender Trustee on behalf of the Issuer) hereby Grants to the Indenture
Trustee at the Closing Date, as trustee for the benefit of the holders of the
Group I and Group II Notes, the Securities Insurer and the Swap Counterparty, as
their interests may appear herein all the Issuer's right, title and interest in
and to the following:
(X) with respect to the Group I Notes:
(a) the Group I Student Loans, and all obligations of the Obligors
thereunder including all moneys paid thereunder on or after the Cutoff Date
(or, in the case of Additional Student Loans that are Group I Student
Loans, on or after the related Subsequent Cutoff Date);
(b) the Sale and Servicing Agreement, including the right of the
Issuer to cause the Depositor to repurchase or the Master Servicer to
purchase, Group I Student Loans from the Issuer under circumstances
described therein, and including all of the related Assigned Rights;
(c) each related Guarantee Agreement, including the right of the
Issuer to cause the related Guarantor to make Guarantee Payments in respect
of the Financed Group I Student Loans;
(d) all funds on deposit from time to time in the related Trust
Accounts (and subaccounts thereof), including the Group I Reserve Account
Initial Deposit and the Group I Pre-Funded Amount;
(e) all rights under the Group I Interest Rate Swap and all payments
due or received from the Swap Counterparty pursuant thereto;
(f) all rights under the Group I Cap Agreement and all payments due or
received from the Cap Provider pursuant thereto;
(g) all rights under the Group I Put Option Agreement and all payments
due or received from the Put Option Provider pursuant thereto; and
(h) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper,, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing (collectively, the "Group I Collateral").
(Y) with respect to the Group II Notes:
(a) the Group II Student Loans, and all obligations of the Obligors
thereunder including all moneys paid thereunder on or after the Cutoff Date
(or, in the case of Additional Student Loans that are Group II Student
Loans, on or after the related Subsequent Cutoff Date);
(b) the Sale and Servicing Agreement, including the right of the
Issuer to cause the Depositor to repurchase or the Master Servicer to
purchase, Group II Student Loans from the Issuer under circumstances
described therein, and including all of the related Assigned Rights;
(c) each related Guarantee Agreement, including the right of the
Issuer to cause the related Guarantor to make Guarantee Payments in respect
of the Group II Student Loans;
(d) all funds on deposit from time to time in the related Trust
Accounts (and subaccounts thereof), including the Group II Reserve Account
Initial Deposit and the Group II Pre-Funded Amount;
(e) all rights under the Group II Interest Rate Swap and all payments
due or received from the Swap Counterparty pursuant thereto;
(f) all rights under the Group II Cap Agreement and all payments due
or received from the Cap Provider pursuant thereto;
(g) all rights under the Group II Put Option Agreement and all
payments due or received from the Put Option Provider pursuant thereto;
(h) the Group II Notes Guaranty Insurance Policy and all payments from
the Securities Insurer received thereunder; and
(i) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or
under and all proceeds of every kind and nature whatsoever in respect of
any or all of the foregoing, including all proceeds of the conversion,
voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances,
chattel paper, checks, deposit accounts, insurance proceeds, condemnation
awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any
time constitute all or part of or are included in the proceeds of any of
the foregoing (collectively, the "Group II Collateral," and together with
the Group I Collateral, "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Group I Notes (with respect to the Group I Collateral) and the Group II Notes
(with respect to the Group II Collateral), within each group equally and
ratably, without prejudice, priority or distinction, to secure payment of all
amounts owing to the Securities Insurer and the Swap Counterparty, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the holders
of the Notes, the Swap Counterparty, and the Securities Insurer acknowledges
such Grant, accepts the trusts under this Indenture in accordance with the
provisions of this Indenture and agrees to perform its duties required in this
Indenture to the best of its ability to the end that the interests of the
holders of the Notes, the Securities Insurer and the Swap Counterparty may be
adequately and effectively protected.
ARTICLE I
DEFINITIONS AND USAGE
SECTION 1.01. DEFINITIONS AND USAGE. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
defined herein are defined in Appendix A hereto, which also contains rules as to
usage that shall be applicable herein.
SECTION 1.02. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a holder of the Notes.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee"
means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
ARTICLE II
THE NOTES
SECTION 2.01. FORM. The Class I-A-1 Notes, Class I-A-2 Notes, Class
I-B Notes, Class II-A-1 Notes and Class II-A-2 Notes together with the Indenture
Trustee's certificate of authentication, shall be in substantially the forms set
forth in Exhibits A-1 through A-5, respectively, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing the Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Class I-A-1 Notes, Class I-A-2 Notes, Class I-B Notes, Class II-A-1 Notes
and Class II-A-2 Notes set forth in Exhibits A-1 through A-5, respectively, are
part of the terms of this Indenture.
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Notes for original issue in an aggregate principal amount of $98,000,000 with
respect to the I-Class A-1 Notes, $241,500,000 with respect to the Class I-A-2
Notes, $10,500,000 with respect to the Class I-B Notes, $67,800,000 with respect
to the Class II-A-1 Notes, and $382,200,000 with respect to the Class II-A-2
Notes, except as provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.03. TEMPORARY NOTES. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the holder of the
Notes. Upon surrender for cancellation of any one or more temporary Notes, the
Issuer shall execute and the Indenture Trustee shall authenticate and deliver in
exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.04. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee and the
Securities Insurer prompt written notice of the appointment of such Note
Registrar and of the location, and any change in the location, of the Note
Register, and the Indenture Trustee and the Securities Insurer shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof, and the Indenture Trustee and the Securities Insurer shall have the
right to rely upon a certificate executed on behalf of the Note Registrar by an
Executive Officer thereof as to the names and addresses of the holders of the
Notes and the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the holder of the Notes shall
obtain from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations and a like
aggregate principal amount.
At the option of the holder of the Notes, Notes may be exchanged for
other Notes in any authorized denominations, a like class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, if the requirements
of Section 8-401(1) of the UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the holder of the Notes shall obtain
from the Indenture Trustee, the Notes which the holder of the Notes making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
The Issuer initially appoints The Depository Trust Company ("DTC") to
act as depositary (the "Depositary") with respect to the each Class of the
Notes.
The Issuer initially appoints the Indenture Trustee to act as
custodian with respect to the Notes.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by the
holder of the Notes thereof or such holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in Securities Transfer Agent's Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.
No service charge shall be made to a holder of the Notes for any
registration of transfer or exchange of Notes, but the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.06 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer, the Securities Insurer
and the Indenture Trustee harmless, then, in the absence of notice to the
Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, and provided that the requirements of Section
8-405 of the UCC are met, the Issuer shall execute and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Note, a replacement Note;
PROVIDED, HOWEVER, that if any such destroyed, lost or stolen Note, but not a
mutilated Note, shall have become or within 15 days shall be due and payable, or
shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the holder of the Notes thereof of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. PERSONS DEEMED OWNER. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Securities Insurer and any agent of the Issuer, the Securities Insurer or the
Indenture Trustee may treat the Person in whose name any Note is registered (as
of the day of determination) as the owner of such Note for the purpose of
receiving payments of principal of, interest (and any related Noteholders'
Interest Index Carryover and payments made under the Group I or Group II Cap
Agreement, as applicable, with respect to the related group of Notes and such
Class of Notes), if any, on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Indenture
Trustee nor any agent of the Issuer, the Securities Insurer or the Indenture
Trustee shall be affected by notice to the contrary.
SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST;
NOTEHOLDERS' INTEREST INDEX CARRYOVER. (a) The Class I-A-1 Notes, Class I-A-2
Notes, Class I-B Notes, Class II-A-1 Notes and Class II-A-2 Notes shall accrue
interest as provided in the forms of the Class I-A-1 Note, Class I-A-2 Note,
Class I-B Note, Class II-A-1 Note and Class II-A-2 Note set forth in Exhibits
A-1 through A-5, respectively, and such interest shall be payable on each
Distribution Date as specified therein, subject to Section 3.01. Any installment
of interest (and any related Noteholders' Interest Index Carryover with respect
to each Class of Notes) or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date by check mailed
first-class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a
Distribution Date or on the applicable Note Final Maturity Date which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.
(a) The principal of each Note shall be payable in installments on
each Distribution Date as provided in the form of Class I-A-1 Note, Class I-A-2
Note, Class I-B Note, Class II-A-1 Note and Class II-A-2 Note set forth in
Exhibits A-1 through A-5, respectively, to the extent the amount of funds
required and available to be distributed in respect of principal on such Class
of Notes pursuant to the Sale and Servicing Agreement; provided, HOWEVER, the
entire unpaid principal amount of each Class of Notes shall be due and payable
on its respective Final Maturity Date. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable, if not previously
paid, on the date on which an Event of Default shall have occurred and is
continuing, if the Indenture Trustee, or (with respect to the Group I Notes
only) the Group I Controlling Parties holding a majority of the Outstanding
Amount of the related Classes of Group I Notes, or (with respect to the Group II
Notes only) the Securities Insurer (provided that no Securities Insurer Default
shall have occurred and is continuing, then by the Group II Controlling
Noteholders holding a majority of the Outstanding Amount of the related Classes
of Group II Notes) have declared the related group of Notes to be immediately
due and payable in the manner provided in Section 5.02. All principal payments
on each Class of Notes shall be made pro rata to the holders of such Class of
Notes entitled thereto. The Indenture Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date preceding
the Distribution Date on which the Issuer expects that the final installment of
principal of and interest (and any related Noteholders' Interest Index Carryover
with respect to such Class of Notes) on such Note will be paid. Such notice
shall be mailed or transmitted by facsimile prior to such final Distribution
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment. Notices
in connection with redemptions of Notes shall be mailed to the holders of the
Notes as provided in Section 10.02.
(b) If the Issuer defaults in a payment of interest on any Class of
the Notes, the Issuer shall pay defaulted interest (plus interest on such
defaulted interest to the extent lawful) at the applicable Note Interest Rate in
any lawful manner. The Issuer may pay such defaulted interest to the persons who
are holders of such Class or Classes of Notes on a subsequent special record
date, which date shall be at least three Business Days prior to the payment
date. The Issuer shall fix or cause to be fixed any such special record date and
payment date, and, at least 15 days before any such special record date, the
Issuer shall mail to each holder of the affected Class or Classes of Notes a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
(c) The Noteholders' Interest Index Carryover with respect to the
Group I or Group II Class A Notes, as applicable, for each Distribution Date
(including all unpaid Noteholders' Interest Index Carryover for such Group I or
Group II Class A Notes, as applicable, for prior Distribution Dates and interest
accrued thereon at the applicable Note Interest Rate for each applicable
Interest Period) shall be payable to the Group I or Group II Class A Notes, pro
rata based on the amount of related Noteholders' Interest Index Carryover then
owing on each such Group I or Group II Class A Notes, as applicable, on each
Distribution Date solely to the extent of funds required and available
(including any Group I or Group II Cap Funds, as applicable) to be distributed
to the holders of the Group I or Group II Class A Notes by the Indenture Trustee
pursuant to Section 5.05(c)(X)(8) with respect to the Group I Notes, Section
5.05(c)(Y)(10) with respect to the Group II Notes, or 5.06(d) of the Sale and
Servicing Agreement. The Noteholders' Interest Index Carryover with respect to
the Class I-B Notes for each Distribution Date (including all unpaid
Noteholders' Interest Index Carryover for such Class I-B Notes for prior
Distribution Dates and interest accrued thereon at the applicable Note Interest
Rate for each applicable Interest Period) shall be payable to the Class I-B
Notes, on each Distribution Date solely to the extent of funds required and
available (including any Class I-B Cap Payment actually available for
distribution to the Class I-B Notes on such Distribution Date) to be distributed
to the holders of such Class of Notes by the Indenture Trustee pursuant to
Section 5.05(c)(X)(9) or 5.06(d) of the Sale and Servicing Agreement. Any
Noteholders' Interest Index Carryover payable on any Distribution Date shall be
paid to the Person in whose name such Note (or one or more Predecessor Notes) is
registered on the applicable Record Date by check mailed first-class postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date, except that, unless Definitive Notes have been issued pursuant to
Section 2.12, with respect to the Notes registered on the Record Date in the
name of the nominee of the Clearing Agency (initially, such nominee to be Cede &
Co.), payment will be made by wire transfer in immediately available funds to
the account designated by such nominee. The funds represented by any such checks
returned undelivered shall be held in accordance with Section 3.03.
SECTION 2.08. CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time, unless the Issuer shall direct by an Issuer Order that
they be returned to it and so long as such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
SECTION 2.09. RELEASE OF COLLATERAL. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officers' Certificate of the Issuer, an Opinion of Counsel and Independent
Certificates in accordance with TIA xx.xx. 314(c) and 314(d)(l) or an Opinion of
Counsel in lieu of such Independent Certificates to the effect that the TIA does
not require any such Independent Certificates.
SECTION 2.10. BOOK-ENTRY NOTES. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. Such Notes shall initially be
registered on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner will receive a Definitive Note (as
defined below) representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.12:
(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee may deal with the
Clearing Agency for all purposes (including the payment of principal of and
interest and other amounts on the Notes) as the authorized representative
of the Note Owners;
(iii) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreements.
Unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest and other amounts on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of the holders of the Notes
evidencing a specified percentage of the Outstanding Amount of the Notes,
the Clearing Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect from Note
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
SECTION 2.11. NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the holders of the Notes is required under this Indenture,
unless and until Definitive Notes shall have been issued to Note Owners pursuant
to Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to the holders of the Notes to the
Clearing Agency.
SECTION 2.12. DEFINITIVE NOTES. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes, and
the Administrator is unable to locate a qualified successor, (ii) the
Administrator at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, a Master Servicer Default or an
Administrator Default, Note Owners representing beneficial interests aggregating
at least a majority of the Outstanding Amount of such Class of Notes advise the
Clearing Agency (which shall then notify the Indenture Trustee) in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of the Note Owners of such Class of Notes, then the
Indenture Trustee will cause the Clearing Agency to notify all Note Owners of
such Class of Notes, through the Clearing Agency, of the occurrence of any such
event and of the availability of Definitive Notes to such Note Owners requesting
the same. Upon surrender to the Indenture Trustee of the typewritten Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Indenture Trustee
shall authenticate the Definitive Notes in accordance with the instructions of
the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
holders of the Definitive Notes as the Noteholders for such Class of Notes.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT TO NOTEHOLDERS. The Issuer will duly and
punctually pay the principal of, interest, if any, on and any unpaid
Noteholders' Interest Index Carryover (but only to the extent provided in
Sections 2.07(d) and 8.02(c)) with respect to each Class of Notes in accordance
with the terms of such Notes and this Indenture. Without limiting the foregoing,
subject to Section 8.02(c), the Issuer will cause to be distributed to the
holders of the each Class of Notes in each group of Notes that portion of the
amounts on deposit in the Trust Accounts related to such group of Notes on a
Distribution Date, to which the holders of each Class of Notes are entitled to
receive pursuant to the Sale and Servicing Agreement. Amounts properly withheld
under the Code by any Person from a payment to any holder of the Notes of
interest (including any Noteholders' Interest Index Carryover) and/or principal
shall be considered as having been paid by the Issuer to such holder of the
Notes for all purposes of this Indenture. The Notes will be non-recourse
obligations of the Issuer and shall be limited in right of payment to amounts
available from the Indenture Trust Estate as provided in this Indenture and the
Issuer shall not be otherwise liable on the Notes.
SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange. The
Issuer hereby initially appoints the Indenture Trustee to serve as its agent for
the foregoing purposes. The Issuer will give prompt written notice to the
Indenture Trustee of the location, and of any change in the location, of any
such office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the address
thereof, such surrenders may be made or served at the Corporate Trust Office,
and the Issuer hereby appoints the Indenture Trustee as its agent to receive all
such surrenders in respect of the Notes.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect to
any Notes that are to be made from amounts distributed from the applicable
subaccount of the Collection Account or any other Trust Account pursuant to
Section 8.02(c) shall be made on behalf of the Issuer by the Indenture Trustee
or by another Paying Agent, and no amounts so distributed from the applicable
subaccount of the Collection Account for payments of Group I or Group II Notes,
as applicable, shall be paid over to the Issuer except as provided in this
Section. The Indenture Trustee is hereby appointed as the initial "Paying Agent"
hereunder and the Indenture Trustee hereby accepts such appointment.
On or before the Business Day next preceding each Distribution Date
and Redemption Date, the Issuer shall distribute or cause to be distributed to
the Indenture Trustee (or any other Paying Agent) an aggregate sum sufficient to
pay the amounts then becoming due under each Class of the Notes, such sum to be
held in trust for the benefit of the Persons entitled thereto and (unless the
Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee, the Securities Insurer and the Swap Counterparty of its action or
failure so to act.
The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to each Class of the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as herein
provided;
(ii) give the Indenture Trustee, the Securities Insurer and the Swap
Counterparty notice of any default by the Issuer of which it has actual
knowledge (or any other obligor upon the Notes) in the making of any
payment required to be made with respect to any Class of Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of each
applicable Class of Notes if at any time it ceases to meet the standards
required to be met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Class of the Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the holder of such Notes
thereof shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof (but only to the extent of the amounts so paid to the
Issuer), and all liability of the Indenture Trustee or such Paying Agent with
respect to such trust money shall thereupon cease; PROVIDED, HOWEVER, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense and direction of the Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense of the Issuer,
any other reasonable means of notification of such repayment (including mailing
notice of such repayment to the holders of the Notes whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such holder of the Notes).
SECTION 3.04. EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.05. PROTECTION OF INDENTURE TRUST ESTATE. The Issuer will
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust Estate and the
rights of the Indenture Trustee, and the holders of the Notes, the Swap
Counterparty and the Securities Insurer in such Indenture Trust Estate
against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
SECTION 3.06. OPINIONS AS TO INDENTURE TRUST ESTATE. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee, the Securities
Insurer and the Swap Counterparty an Opinion of Counsel either stating that, in
the opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto, and
any other requisite documents, and with respect to the execution and filing of
any financing statements and continuation statements, as are necessary to
perfect and make effective the lien and security interest of this Indenture and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) On or before April 30 in each calendar year, beginning in 2002,
the Issuer shall furnish to the Indenture Trustee, the Securities Insurer and
the Swap Counterparty an Opinion of Counsel either stating that, in the opinion
of such counsel, such action has been taken with respect to the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and any other requisite documents and with respect to the execution and
filing of any financing statements and continuation statements as is necessary
to maintain the lien and security interest created by this Indenture and
reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest.
Such Opinion of Counsel shall also describe the recording, filing, re-recording
and refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until April 30 in
the following calendar year.
SECTION 3.07. PERFORMANCE OF OBLIGATIONS; MASTER SERVICING OF FINANCED
STUDENT LOANS. (a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Indenture Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture, the Sale and
Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee, the Securities Insurer and the
Swap Counterparty in an Officers' Certificate of the Issuer shall be deemed to
be action taken by the Issuer. Initially, the Issuer has contracted with the
Master Servicer and the Administrator to assist the Issuer in performing its
duties under this Indenture.
(c) The Issuer will punctually perform and observe all its obligations
and agreements contained in this Indenture, the other Basic Documents and in the
instruments and agreements included in the Indenture Trust Estate, including
filing or causing to be filed all UCC financing statements and continuation
statements required to be filed by the terms of this Indenture and the Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein. Except as otherwise expressly provided therein, the Issuer
shall not waive, amend, modify, supplement or terminate any Basic Document or
any provision thereof without the consent of the Indenture Trustee, (with
respect to the Group I Notes only) the Group I Controlling Parties holding a
majority of the Outstanding Amount of the related Classes of Group I Notes, and
(with respect to the Group II Notes only) the Securities Insurer (provided that
no Securities Insurer Default shall have occurred and is continuing, then by the
Group II Controlling Noteholders holding a majority of the Outstanding Amount of
the related Classes of Group II Notes).
(d) If the Issuer shall have knowledge of the occurrence of a Master
Servicer Default or an Administrator Default under the Sale and Servicing
Agreement, the Issuer shall promptly notify the Indenture Trustee, the Group I
Controlling Noteholders (with respect to Master Servicer Defaults only), the
Securities Insurer (or if a Securities Insurer Default has occurred and is
continuing, and with respect to the Master Servicer Defaults only, the Group II
Controlling Noteholders), the Swap Counterparty and the Rating Agencies thereof,
and shall specify in such notice the action, if any, the Issuer is taking with
respect to such default. If a Master Servicer Default shall arise from the
failure of the Master Servicer to perform any of its duties or obligations under
the Sale and Servicing Agreement, or an Administrator Default shall arise from
the failure of the Administrator to perform any of its duties or obligations
under the Sale and Servicing Agreement or the Administration Agreement, as the
case may be, with respect to the Financed Student Loans, the Issuer shall take
all reasonable steps available to it to enforce its rights under the Basic
Documents in respect of such failure.
(e) As promptly as possible after the giving of notice of a partial or
complete termination to the Master Servicer of the Master Servicer's rights and
powers with respect to either or both of the Group I or Group II Student Loans,
or to the Administrator of the Administrator's rights and powers, pursuant to
Section 8.01 of the Sale and Servicing Agreement, the Issuer shall appoint, with
the consent of the Securities Insurer (with respect to the Group II Student
Loans only and provided that a Securities Insurer Default has not occurred and
is continuing), a successor master servicer (the "Successor Master Servicer"),
or, with the consent of the Securities Insurer (provided that a Securities
Insurer Default has not occurred and is continuing), a successor administrator
(the "Successor Administrator"), and such Successor Master Servicer or
Administrator, as the case may be, shall accept its appointment by a written
assumption in a form acceptable to the Indenture Trustee. In the event that a
Successor Master Servicer or Administrator has not been appointed and accepted
its appointment at the time when the Master Servicer or Administrator, as the
case may be, ceases to act as Master Servicer or Administrator, as the case may
be, the Indenture Trustee without further action shall automatically be
appointed a Successor Master Servicer or Administrator, as the case may be. The
Indenture Trustee may resign as the Master Servicer or the Administrator
pursuant to the terms of the Sale and Servicing Agreement by giving written
notice of such resignation to the Issuer, the Securities Insurer and the Swap
Counterparty, and in such event will be released from such duties and
obligations, such release not to be effective until the date a new master
servicer or a new administrator enters into an agreement with the Issuer as
provided below; PROVIDED, HOWEVER, that nothing herein shall require or permit
the Indenture Trustee to act as Master Servicer, or otherwise master service
Financed Student Loans, in violation of the Higher Education Act. Upon delivery
of any such notice to the Issuer, the Issuer shall obtain a new master servicer
or a new administrator as a Successor Master Servicer or Administrator under the
Sale and Servicing Agreement, with the consent of the Securities Insurer (so
long as no Securities Insurer Default has occurred and is continuing). Any
Successor Master Servicer or Administrator, as the case may be, other than the
Indenture Trustee shall (i) be an established institution (A) that satisfies any
requirements of the Higher Education Act applicable to servicers and (B) whose
regular business includes the servicing or administration of student loans and
(ii) enter into a master servicing agreement or an administration agreement with
the Issuer having substantially the same provisions as the provisions of the
Sale and Servicing Agreement applicable to the predecessor Master Servicer or
the provisions of the Sale and Servicing Agreement and the Administration
Agreement applicable to the Administrator and, in any case, approved by the
Securities Insurer (provided that no Securities Insurer Default has occurred and
is continuing). If within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such a new master servicer or
administrator, as the case may be, the Indenture Trustee may appoint, or may
petition a court of competent jurisdiction to appoint, in each case, so long as
no Securities Insurer Default has occurred and is continuing, with the consent
of the Securities Insurer, which consent will not be unreasonably withheld, a
Successor Master Servicer or Administrator; PROVIDED, HOWEVER, that such right
to appoint or to petition for the appointment of any such successor 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. In connection with any such appointment, the Indenture Trustee may
make such arrangements for the compensation of such successor as the Indenture
Trustee, the Securities Insurer and such successor shall agree, subject to the
limitations set forth below and in the Sale and Servicing Agreement, and in
accordance with Section 8.02 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing or
administration of the Financed Student Loans (such agreement to be in form and
substance satisfactory to the Indenture Trustee and the Securities Insurer). If
the Indenture Trustee shall succeed as provided herein to the Master Servicer's
duties with respect to Financed Student Loans or the Administrator's duties with
respect to the Issuer and the Financed Student Loans, as the case may be, it
shall do so in its individual capacity and not in its capacity as Indenture
Trustee and, accordingly, the provisions of Article VI hereof shall be
inapplicable to the Indenture Trustee in its duties as the successor to the
Master Servicer or the Administrator, as the case may be, and the servicing or
administration of the Financed Student Loans. In case the Indenture Trustee
shall become successor to the Master Servicer or the Administrator, as the case
may be, under the Sale and Servicing Agreement, the Indenture Trustee shall be
entitled to appoint as Master Servicer or as Administrator, as the case may be,
any one of its affiliates or agents, provided that such appointment shall not
affect or alter in any way the liability of the Indenture Trustee as a successor
for the performance of the duties and obligations of the Master Servicer or the
Administrator in accordance with the terms hereof.
(f) Upon any partial or complete termination of the Master Servicer's
rights and powers pursuant to the Sale and Servicing Agreement, or any
termination of the Administrator's rights and powers pursuant to the Sale and
Servicing Agreement, as the case may be, the Issuer shall promptly notify the
Indenture Trustee, the Swap Counterparty and the Securities Insurer. As soon as
a Successor Master Servicer or a Successor Administrator is appointed, the
Issuer shall notify the Indenture Trustee and the Securities Insurer of such
appointment, specifying in such notice the name and address of such Successor
Master Servicer or such Successor Administrator.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it will not, without the
prior written consent of the Indenture Trustee, (with respect to amendments
affecting the Group I Notes) the Group I Controlling Parties holding a majority
of the Outstanding Amount of the related Classes of Group I Notes, and (with
respect to amendments affecting the Group II Notes) the Securities Insurer
(provided that no Securities Insurer Default shall have occurred and is
continuing, then by the Group II Controlling Noteholders holding a majority of
the Outstanding Amount of the related Classes of Group II Notes), amend, modify,
waive, supplement, terminate or surrender, or agree to any amendment,
modification, supplement, termination, waiver or surrender of, the terms of any
Collateral or the Basic Documents, except to the extent otherwise provided
therein, or waive timely performance or observance by the Master Servicer, the
Administrator, the Depositor, the Issuer or the Eligible Lender Trustee under
the Sale and Servicing Agreement; PROVIDED, HOWEVER, that no such amendment
shall (a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments with respect to Group I or Group II
Student Loans or distributions that shall be required to be made for the benefit
of the holders of Group I or Group II Notes, (b) amend the aforesaid percentage
of the Outstanding Amount of the related Class or Classes of Notes, which are
required to consent to any such amendment, without the consent of all
outstanding holders of all Classes of Notes affected by such amendment
(notwithstanding anything to the contrary contained herein or in the Trust
Agreement, such rights of consent granted to the holders of the Notes contained
in clauses (a) and (b) of this proviso shall not be exercisable by the Group I
Controlling Parties on behalf of all of the Group I Noteholders or by the
Securities Insurer on behalf of all of the Group II Noteholders), (c) amend any
rights of the Securities Insurer, without the consent of the Securities Insurer,
or (d) amend any rights of the Swap Counterparty, without the consent of the
Swap Counterparty. If any such amendment, modification, supplement or waiver
shall be so consented to by the Indenture Trustee and the Securities Insurer
(provided that no Securities Insurer Default has occurred and is continuing) or
such holders of the Notes, the Issuer agrees, promptly following a request by
the Indenture Trustee, the Securities Insurer or the Swap Counterparty to do so,
to execute and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee, the
Securities Insurer or the Swap Counterparty may deem necessary or appropriate in
the circumstances.
(h) Notwithstanding the foregoing, in the event that the Master
Servicer is being replaced by a Successor Master Servicer with respect to only
one group of Financed Student Loans, pursuant to Section 8.01(a) of the Sale and
Servicing Agreement, the Indenture Trustee shall continue to recognize KBUSA as
Master Servicer, and KBUSA shall be permitted continue in its role of Master
Servicer, with respect to the other group of Student Loans and the foregoing
provisions shall only apply to the Successor Master Servicer in its capacity as
Master Servicer of one group of Student Loans.
SECTION 3.08. NEGATIVE COVENANTS. So long as any Notes are Outstanding
or any amounts are owing to the Securities Insurer or the Swap Counterparty, the
Issuer shall not:
(i) except as expressly permitted by this Indenture or any other Basic
Document, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the
Indenture Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal or
interest (including any Noteholders' Interest Index Carryover) payable in
respect of, the Notes (other than amounts properly withheld from such
payments under the Code or applicable state law) or assert any claim
against any present or former holder of the Notes by reason of the payment
of the taxes levied or assessed upon any part of the Indenture Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance
(other than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Indenture Trust Estate or any part
thereof or any interest therein or the proceeds thereof (other than tax
liens and other liens that arise by operation of law, in each case arising
solely as a result of an action or omission of the related Obligor, and
other than as expressly permitted by the Basic Documents) or (C) permit the
lien of this Indenture not to constitute a valid first priority (other than
with respect to any such tax or other lien) security interest in the
Indenture Trust Estate.
SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will
deliver to the Indenture Trustee, the Securities Insurer and the Swap
Counterparty, within 120 days after the end of each fiscal year of the Issuer
(commencing with the fiscal year 2001), an Officers' Certificate of the Issuer
stating that:
(i) a review of the activities of the Issuer during such year and of
performance under this Indenture has been made under such Authorized
Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of any such condition or covenant, specifying each such default
known to such Authorized Officers and the nature and status thereof.
SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. (a)
The Issuer shall not consolidate or merge with or into any other Person, without
the prior written consent of the Securities Insurer (provided that no Securities
Insurer Default has occurred and is continuing) and unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, the Indenture Trustee, the Securities Insurer and the
Swap Counterparty, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of, interest on and any Noteholders'
Interest Index Carryover, if any, with respect to all Notes and the
performance or observance of every agreement and covenant of this Indenture
on the part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee, the Securities
Insurer and the Swap Counterparty) to the effect that such transaction will
not have any material adverse Federal or Pennsylvania state tax consequence
to the Issuer, any holder of the Notes or any holder of the Certificates;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee, the
Securities Insurer and the Swap Counterparty an Officers' Certificate of
the Issuer and an Opinion of Counsel each stating that such consolidation
or merger and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all
its properties or assets, including those included in the Indenture Trust
Estate, to any Person without the prior written consent of the Securities
Insurer (provided that no Securities Insurer Default has occurred and is
continuing) and, unless:
(i) the Person that acquires by conveyance or transfer the properties
and assets of the Issuer the conveyance or transfer of which is hereby
restricted shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, the Securities Insurer and the Swap
Counterparty, in form satisfactory to the Indenture Trustee and the
Securities Insurer, the due and punctual payment of the principal of,
interest on and Noteholders' Interest Index Carryover, if any, with respect
to all Notes, all amounts then due and owing to the Securities Insurer and
the Swap Counterparty, and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agrees by means of such
supplemental indenture that all right, title and interest so conveyed or
transferred shall be subject and subordinate to the rights of holders of
the Notes, the Securities Insurer and the Swap Counterparty(D) unless
otherwise provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the
Notes and (E) expressly agrees by means of such supplemental indenture that
such Person (or if a group of Persons, then one specified Person) shall
make all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee, the Securities
Insurer and the Swap Counterparty) to the effect that such transaction will
not have any material adverse Federal or Pennsylvania state tax consequence
to the Issuer, any holder of the Notes or any holder of the Certificates;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee, the
Securities Insurer and the Swap Counterparty an Officers' Certificate of
the Issuer and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and
that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by the
Exchange Act).
SECTION 3.11. SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), KeyCorp Student Loan Trust 2001-A will
be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery by the Issuer of written notice to the Indenture Trustee
stating that KeyCorp Student Loan Trust 2001-A is to be so released.
SECTION 3.12. NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Financed Student Loans and making Additional Fundings in the manner contemplated
by this Indenture and the other Basic Documents and activities incidental
thereto.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14. OBLIGATIONS OF MASTER SERVICER AND ADMINISTRATOR. The
Issuer shall cause the Master Servicer to comply with Sections 4.08(a), 4.09,
4.10 and 4.11 of the Sale and Servicing Agreement and the Administrator to
comply with Sections 4.08(b) and (c), 4.09, 4.10 and 5.07 thereof.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Eligible Lender Trustee or any owner of a beneficial interest in
the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Depositor, the Master Servicer or the
Administrator, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; PROVIDED, HOWEVER, that the Issuer
may make, or cause to be made, distributions to the Depositor, the Master
Servicer, the Eligible Lender Trustee, the Indenture Trustee, the Securities
Insurer, the Swap Counterparty, the holders of the Certificates, the holders of
the Notes, the Administrator and either of the Sellers as contemplated by, and
to the extent funds are available for such purpose under, the Sale and Servicing
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the other Basic Documents.
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee, the Group I Controlling Parties, the Group II Controlling
Parties, the Swap Counterparty and the Rating Agencies prompt written notice of
each Event of Default hereunder and each default on the part of the Depositor of
its obligations under the Sale and Servicing Agreement, or the Master Servicer
of its obligations under the Sale and Servicing Agreement or the Administrator
of its obligations under the Sale and Servicing Agreement or the Administration
Agreement. In addition, the Issuer shall deliver to the Indenture Trustee, the
Securities Insurer and the Swap Counterparty, within five days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
the Issuer of any event which with the giving of notice and the lapse of time
would become an Event of Default under Section 5.01(iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of holders of the Notes to receive
payments of principal thereof and interest (including any Noteholders' Interest
Index Carryover) thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and
3.13, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.07 and
the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights
of holders of the Notes, as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when:
(A) a period of 367 days has expired after either
(1) all Group I and Group II Notes theretofore authenticated and
delivered (other than (i) Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section 2.05
and (ii) Notes for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in
Section 3.03) have been delivered to the Indenture Trustee for
cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
(i) have become due and payable,
(ii) will become due and payable at the Class I-A-1 Final
Maturity Date, the Class I-A-2 Final Maturity Date, the Class I-B
Final Maturity Date, the Class II-A-1 Final Maturity Date or the
Class II-A-2 Final Maturity Date as the case may be, within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior to
the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to the Class I-A-1 Final Maturity Date, the
Class I-A-2 Final Maturity Date, the Class I-B Final Maturity Date,
the Class II-A-1 Final Maturity Date or the Class II-A-2 Final
Maturity Date as the case may be;
(B) a period of 367 days has expired after the later of (i) the
date on which no Group I or Group II Notes are outstanding or (ii) the
date on which the Issuer has paid or caused to be paid all other sums
due to the Securities Insurer and the Swap Counterparty or otherwise
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee, the
Securities Insurer and the Swap Counterparty an Officers' Certificate
of the Issuer, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements
of Section 11.01(a) and, subject to Section 11.02, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
SECTION 4.02. APPLICATION OF TRUST MONEY. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Group I and Group II
Notes and this Indenture, to the payment, either directly or through any Paying
Agent, as the Indenture Trustee may determine, to the holders of the particular
Group I or Group II Notes for the payment or redemption of which such moneys
have been deposited with the Indenture Trustee, of all sums due and to become
due thereon for principal and interest (including any related Noteholders'
Interest Index Carryover), to the Swap Counterparty of all amounts due to the
Swap Counterparty under the Group I or Group II Interest Rate Swap, as
applicable, and the Securities Insurer for all amounts due under the Insurance
Agreement; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.03. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
SECTION 4.04. PUT OPTIONS AND AUCTION OF FINANCED STUDENT LOANS.
(a)(i) With respect to each of the Put Options, on or before the Distribution
Date that is three months prior to the Put Option Exercise Date, the Indenture
Trustee (or the Administrator acting on its behalf) shall solicit exercise
instructions from the Group I and Group II Controlling Noteholders regarding the
Group I and Group II Put Option, respectively. The Indenture Trustee (or the
Administrator acting on its behalf) shall provide a description of the Group I
or Group II Put Option, as applicable, and copies of such other related
documents as it deems advisable, in its sole judgment (or as is reasonably
requested by any Noteholder), to assist the applicable Noteholders in
determining whether to direct the exercise of the Group I or Group II Put
Option, as the case may be. If a majority in interest (based on then respective
Outstanding Amounts) of the Group I or Group II Controlling Noteholders direct
the Indenture Trustee, in writing, within 5 Business Days of the Put Option
Exercise Date, to exercise the Group I or Group II Put Option, as the case may
be, then the Indenture Trustee shall exercise the Group I or Group II Put
Option, as applicable, on the Put Option Exercise Date, in accordance with the
procedures set forth in the Group I or Group II Put Option Agreement, as
applicable.
(ii) Notwithstanding the provisions of clause (a)(i) above, the
Indenture Trustee shall not exercise the Group I or Group II Put Option, as
applicable, on the Put Option Exercise Date if the related Put Option Exercise
Price to be received from the Put Option Provider (plus all amounts then on
deposit in the Group I or Group II Reserve Account, as applicable) would be less
than the related Minimum Acceptable Put Exercise Option Price.
(iii) In the event that the Indenture Trustee is not directed by a
majority in interest of the Group I or Group II Controlling Noteholders, as
applicable, to exercise the Group I or Group II Put Option, respectively, all
distributions on the Group I or Group II Notes, respectively, will continue to
be made on each succeeding Distribution Date in the manner provided in Section
5.05(c) of the Sale and Servicing Agreement, and the provisions of Section
4.04(b) below shall not be applicable.
(iv) In the event that the Indenture Trustee is directed to exercise
the Group I or Group II Put Option, as the case may be, by a majority in
interest of the Group I or Group II Controlling Noteholders, respectively, but
is unable to comply with such directions due to the conditions set forth in
clause (a)(ii) above being applicable, the Specified Collateral Balance for the
Group I or Group II Notes, as applicable, shall be reduced to zero for all
subsequent Distribution Dates and distributions on the Group I or Group II
Notes, respectively, will continue to be made on each succeeding Distribution
Date in the manner provided in Section 5.05(c) above, and the provisions of
Section 4.04(b) below shall be applicable.
(b) (i) In the event that (x) the Group I or Group II Put Option is
exercised and the Put Option Provider defaults on its obligations with respect
to the Group I or Group II Put Option Agreement, as the case may be, or (y) the
Indenture Trustee is directed in writing to exercise the Group I or Group II Put
Option, as the case may be, by a majority in interest the Group I or Group II
Controlling Noteholders, respectively, but is unable to comply with such
directions due to the conditions set forth in clause (a)(ii) above being
applicable, any related Group I or Group II Student Loans, as applicable,
remaining as part of the Trust Estate as of the end of the Collection Period
immediately preceding the September 2011 Distribution Date will be offered (and
shall be offered again at the end of each or any subsequent Collection Period if
so instructed in writing by a majority of the Group I or Group II Controlling
Noteholders, as the case may be, with respect to the Group I or Group II Student
Loans, respectively) for sale by the Indenture Trustee as both a single pool
relating to both groups of Financed Student Loans (but only in the event that
both groups of Financed Student Loans are affected by sub-clause (x) or (y)
above) (a "Single Pool Sale") and in two separate pools, one relating to each
group of Financed Student Loans (but only in the event that such group of
Financed Student Loans is affected by sub-clause (x) or (y) above) (a "Two Pool
Sale"). Notwithstanding the foregoing, that if a Coordination Agreement requires
the offering of the Access Loans to PHEAA, XXXX and/or LAI, the Indenture
Trustee shall, in accordance with Section 10.06(a) of the Sale and Servicing
Agreement, separately offer for sale the Financed Student Loans that are Access
Loans as one or two separate sub-pools and shall combine the bids received with
respect to such sub-pool or sub-pools with the bids received with respect to the
other related group or groups of Financed Student Loans in determining whether
the related Minimum Purchase Amount requirement has been met.
(ii) If at least two bids are received, with respect to a Single Pool
Sale, the Indenture Trustee will solicit and resolicit bids from all
participating bidders until only one bid remains for all related Financed
Student Loans or until the remaining bidders decline to resubmit bids; and, with
respect to a Two Pool Sale, if at least two bids are received for either pool of
Group I or Group II Student Loans, as applicable, the Indenture Trustee will
solicit and resolicit bids from all participating bidders until only one bid
remains with respect to each such pool of Group I or Group II Student Loans, as
applicable, or until the remaining bidders decline to resubmit bids.
(iii) At the conclusion of the bidding process, the Indenture Trustee
shall accept the higher of the results produced from a Single Pool Sale or from
a combination of two bids from a Two Pool Sale; PROVIDED, HOWEVER, that in
either case, no such bid or bids shall be accepted unless such single bid or
combination of two bids meets or exceeds the related Minimum Purchase Amount;
and PROVIDED, FURTHER, that with respect to a Two Pool Sale, if the related
Minimum Purchase Amount is met or exceeded with respect to either, but not both,
of the Group I and Group II Student Loans, the Indenture Trustee shall accept
the bid and consummate the sale of the Group I or Group II Student Loans, as
applicable, that at least meets the related Minimum Purchase Amount, and reject
the bid and not consummate a sale of the Group I or Group II Student Loans, as
applicable, with respect to the bid that does not at least meet the related
Minimum Purchase Amount.
(iv) In connection with the determination of the related Minimum
Purchase Amount, the Indenture Trustee may consult, and, at the direction of a
majority in interest of the Group I or Group II Controlling Noteholders, as
applicable, shall consult, with a financial advisor (which may be the
Administrator) to determine if the fair market value of the Financed Student
Loans has been offered. The proceeds of any such sale with respect to the Group
I or Group II Student Loans will be applied in the order of priority set forth
in Section 5.04(b)(X)or (Y) hereof, as applicable. If a sale of either the Group
I or Group II Student Loans is not consummated in accordance with the foregoing,
the Indenture Trustee may, (or shall, at the written direction of the Group I or
Group II Controlling Noteholders, as applicable), solicit bids to purchase the
Group I or Group II Student Loans, as the case may be, on future Distribution
Dates upon terms similar to those described above. In addition, the Indenture
Trustee, the Securities Insurer, the Swap Counterparty, the Eligible Lender
Trustee and each Rating Agency shall be provided with an Opinion of Counsel that
any such sale of the Financed Student Loans would not constitute a fraudulent
conveyance.
(v) In the event of any auction of Group I or Group II Student Loans,
neither KeyCorp nor any of its Affiliates (including, without limitation, KBUSA,
the Depositor and the Put Option Provider) may offer bids to purchase any such
Financed Student Loans.
ARTICLE V
REMEDIES
SECTION 5.01. EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body);
provided, however, that an Event of Default that occurs with respect to any
specific Class or Classes of Notes in either group of Notes (as set forth in
clauses (i) or (ii) below) will not be an event of Event with respect to any
Class of Notes in the other group of Notes, and the remedies exercisable by the
affected Noteholders will not be exercisable by the other group of Noteholders:
(i) default in the payment of any interest (including, subject to the
limitations of Sections 2.07(c) and 8.02(c), any Noteholders' Interest
Index Carryover, but excluding any interest due on but not paid to the
holders of the Class I-B Notes as the result of the existence of a
Subordinate Note Interest Trigger on any Distribution Date), on any Group I
or Group II Note when the same becomes due and payable, and such default
shall continue for a period of three (3) Business Days (provided, however,
so long as the Group I Senior Notes are outstanding, each holder of any
Class I-B Note or the Note Owner of any such Class I-B Note, by such
holder's acceptance of such Class I-B Note or beneficial interest therein,
as the case may be, shall be deemed to have consented to the delay in
payment of interest on such Class I-B Note and to have waived its right to
institute suit for enforcement of any such payment); or;
(ii) default in the payment of the principal of any Note (x) when the
same becomes due and payable (but only to the extent there exists
sufficient Group I or Group II Available Funds, as applicable, therefor),
or (y)on the Final Maturity Date with respect thereto; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture or any other Basic Document
(other than a covenant or agreement, a default in the observance or
performance of which is elsewhere in this Section specifically dealt with),
or any representation or warranty of the Issuer made in this Indenture or
any other Basic Document or in any certificate or other writing delivered
pursuant hereto or in connection herewith proving to have been incorrect in
any material respect as of the time when the same shall have been made, and
such default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a period
of 30 days after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by (x) with respect to defaults hereunder affecting the
Group I Notes, the Group I Controlling Parties, representing not less than
25% of the Outstanding Amount of the related Group I Notes, and (y) with
respect to defaults hereunder affecting the Group II Notes, the Securities
Insurer (unless a Securities Insurer Default shall have occurred and is
continuing, and then by the holders of Group II Notes, representing not
less than 25% of the Outstanding Amount of the Group II Notes); a written
notice specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice of
Default hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Indenture Trust Estate 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 of the Issuer or for
any substantial part of the Indenture Trust Estate, or ordering the
winding-up or liquidation of the Issuer's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer 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 the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Indenture Trust Estate, or
the making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
SECTION 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If
an Event of Default with respect to either group of Notes should occur and be
continuing, then and in every such case the Indenture Trustee at the direction
of (x) with respect to the Group I Notes, the Group I Controlling Parties,
representing not less than 25% of the Outstanding Amount of the related Group I
Notes, and (y) with respect to the Group II Notes, the Securities Insurer
(unless a Securities Insurer Default shall have occurred and is continuing, and
then by the holders of Group II Notes, representing not less than 25% of the
Outstanding Amount of the Group II Notes), shall declare all the Group I or
Group II Notes, as applicable, to be immediately due and payable, by a notice in
writing to the Issuer, the Swap Counterparty and the Securities Insurer (and to
the Indenture Trustee if given by the holders of the Notes), and upon any such
declaration the unpaid principal amount of such group of Notes (but not the
other group of Notes), together with accrued and unpaid interest thereon through
the date of acceleration, shall become immediately due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, (x)
with respect to the Group I Notes, the Group I Controlling Parties, representing
not less than 25% of the Outstanding Amount of the related Group I Notes, and
(y) with respect to the Group II Notes, the Securities Insurer (unless a
Securities Insurer Default shall have occurred and is continuing, and then by
the holders of Group II Notes, representing not less than 25% of the Outstanding
Amount of the Group II Notes), by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on all Group I or
Group II Notes, as applicable, and all other amounts that would then
be due hereunder or upon such Group I or Group II Notes, respectively,
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal
of the Group I or Group II Notes, as the case may be, that have become due
solely by such acceleration, have been cured or waived as provided in
Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. (a) The Issuer covenants that if (i) default is made in the
payment of any interest (including, subject to the limitations of Sections
2.07(c) and 8.02(c), any unpaid related Noteholders' Interest Index Carryover)
on any Group I or Group II Note, as applicable, when the same becomes due and
payable, and such default continues for a period of three Business Days, or (ii)
default is made in the payment of the principal of or any installment of the
principal on its Final Maturity Date or of any Group I or Group II Note, as
applicable, when the same becomes due and payable in accordance with Section
2.07(b), the Issuer will, upon demand of the Indenture Trustee or, with respect
to the Group II Notes only, the Securities Insurer if the Securities Insurer has
made an Insured Payment under the Group II Notes Guaranty Insurance Policy, pay
to the Indenture Trustee or the Securities Insurer, if applicable, for the
benefit of the holders of the Group I or Group II Notes, as the case may be, the
whole amount then due and payable on such Group I or Group II Notes, as
applicable, for principal and interest (and any unpaid related Noteholders'
Interest Index Carryover) with interest upon the overdue principal, and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest (and any unpaid related Noteholders' Interest
Index Carryover) at the rate specified in Section 2.07 and in addition thereto
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, the Securities Insurer, if applicable, and
its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may (with respect to the Group II Notes only) with the consent of the
Securities Insurer (provided that no Securities Insurer Default has occurred and
is continuing), or shall at the written direction of (x) with respect to the
Group I Notes, the Group I Controlling Parties, representing not less than a
majority of the Outstanding Amount of the related Group I Notes, and (y) with
respect to the Group II Notes, the Securities Insurer (unless a Securities
Insurer Default shall have occurred and is continuing, and then by the holders
of Group II Notes, representing not less than a majority of the Outstanding
Amount of the Group II Notes), institute a Proceeding for the collection of the
sums so due and unpaid, and prosecute such Proceeding to judgment or final
decree, and enforce the same against the Issuer or other obligor upon such Group
I or Group II Notes, as applicable, and collect in the manner provided by law
out of the property of the Issuer or other obligor upon such Group I or Group II
Notes, as applicable, wherever situated, the moneys adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, (with respect to the Group II Notes only) with the consent of the
Securities Insurer (provided that no Securities Insurer Default has occurred and
is continuing), or shall at the written direction of (x) with respect to the
Group I Notes, the Group I Controlling Parties, representing not less than a
majority of the Outstanding Amount of the related Group I Notes, and (y) with
respect to the Group II Notes, the Securities Insurer (unless a Securities
Insurer Default shall have occurred and is continuing, and then by the holders
of Group II Notes, representing not less than a majority of the Outstanding
Amount of the Group II Notes), as more particularly provided in Section 5.04, in
its discretion, proceed to protect and enforce its rights and the rights of the
holders of the Group I or Group II Notes, as applicable, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Group I or Group II Notes, as applicable, or any Person
having or claiming an ownership interest in the Indenture Trust Estate,
Proceedings under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or other similar law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Issuer or its property or such other obligor or Person, or in
case of any other comparable judicial Proceedings relative to the Issuer or
other obligor upon the Group I or Group II Notes, as applicable, or to the
creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Group I or Group II Notes,
as applicable, shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall (with
respect to the Group II Notes only) with the consent of the Securities Insurer
(provided that no Securities Insurer Default has occurred and is continuing), or
shall at the written direction of (x) with respect to the Group I Notes, the
Group I Controlling Parties, representing not less than a majority of the
Outstanding Amount of the related Group I Notes, and (y) with respect to the
Group II Notes, the Securities Insurer (unless a Securities Insurer Default
shall have occurred and is continuing, and then by the holders of Group II
Notes, representing not less than a majority of the Outstanding Amount of the
Group II Notes), be entitled and empowered, by intervention in such proceedings
or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest (including any unpaid related Noteholders' Interest
Index Carryover) owing and unpaid in respect of the Group I or Group II
Notes, as applicable, and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture Trustee
and each predecessor Indenture Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and
each predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the holders of the Group I or Group II Notes, as applicable,
allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Group I or Group II Notes, as applicable in
any election of a trustee, a standby trustee or Person performing similar
functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the holders of the Group I or Group II Notes, as
applicable, the Securities Insurer, if applicable, the Swap Counterparty
and of the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the holders of the Group I or Group II Notes, as the case may
be, allowed in any judicial proceedings relative to the Issuer, its
creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such holders of the Group I
or Group II Notes, as the case may be, to make payments to the Indenture
Trustee, and, in the event that the Indenture Trustee shall consent to the
making of payments directly to such holders of the Group I or Group II Notes, as
applicable, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any holder of the Group I or Group II Notes, as applicable, or the
Securities Insurer, if applicable, any plan of reorganization, arrangement,
adjustment or composition affecting the Group I or Group II Notes, as
applicable, or the rights of any holder of the Group I or Group II Notes, as
applicable, or the Securities Insurer, if applicable, thereof or to authorize
the Indenture Trustee to vote in respect of the claim of any holder of the Group
I or Group II Notes, as applicable, or the Securities Insurer, if applicable, in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Group I or Group II Notes, as applicable, may be enforced by
the Indenture Trustee without the possession of any of the Group I or Group II
Notes, as applicable, or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the holders of the Group I or Group II Notes, as applicable.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the holders of the Group I or Group II Notes, as
applicable, and it shall not be necessary to make any holder of the Group I or
Group II Notes, as applicable, a party to any such Proceedings.
SECTION 5.04. REMEDIES; PRIORITIES. (a) If an Event of Default with
respect to the Group I or Group II Notes, as the case may be, shall have
occurred and be continuing, the Indenture Trustee may (with respect to the Group
II Notes only) with the consent of the Securities Insurer (provided that no
Securities Insurer Default has occurred and is continuing), or shall at the
written direction of (x) with respect to the Group I Notes, the Group I
Controlling Parties, representing not less than a majority of the Outstanding
Amount of the related Group I Notes (or such different percentage as set forth
below), and (y) with respect to the Group II Notes, the Securities Insurer
(unless a Securities Insurer Default shall have occurred and is continuing, and
then by the holders of Group II Notes, representing not less than a majority of
the Outstanding Amount of the Group II Notes (or such different percentage as
set forth below)), do one or more of the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Group I or
Group II Notes, as applicable, or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon such Group
I or Group II Notes, as applicable, moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Indenture Trust
Estate securing the Group I and/or Group II Notes, as applicable;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the holders of the Group I or Group II Notes,
as applicable, the Securities Insurer, if applicable, and the Swap
Counterparty; and
(iv) sell the Indenture Trust Estate securing the Group I and/or Group
II Notes, as applicable, or any portion thereof or rights or interest
therein, at one or more public or private sales called and conducted in any
manner permitted by law;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate securing the Group I and/or Group II Notes,
as applicable, following an Event of Default, other than an Event of Default
described in Section 5.01(i) or (ii), unless (i) (x) with respect to the Group I
Notes, 100% of Group I Noteholders, or (y) with respect to the Group II Notes,
the Securities Insurer (unless a Securities Insurer Default shall have occurred
and is continuing, and then by 100% of the Group II Noteholders), consent to
such sale, (ii) the proceeds of such sale are sufficient to pay in full the
principal of and the accrued interest on the outstanding Group I or Group II
Notes, as applicable, plus (with respect to the Group II Notes only) all amounts
due and owing to the Securities Insurer under the Insurance Agreement, and all
amounts owed to the Swap Counterparty under the Group I or Group II Interest
Rate Swap, as applicable, at the date of such sale or (iii) the Indenture
Trustee determines that the collections on the Group I or Group II Student
Loans, as the case may be, would not be sufficient on an ongoing basis to make
all payments on the Group I or Group II Notes, respectively, as such payments
would have become due if such obligations had not been declared due and payable,
and the Indenture Trustee obtains the consent of (x) with respect to the Group I
Notes, not less than 66.67% of the Outstanding Amount of the Group I Notes, and
(y) with respect to the Group II Notes, the Securities Insurer (unless a
Securities Insurer Default shall have occurred and is continuing, and then by
the holders of Group II Notes, representing not less than a 66.67% of the
Outstanding Amount of the Group II Notes); PROVIDED FURTHER, that the Indenture
Trustee may not sell or otherwise liquidate that portion of the Indenture Trust
Estate related to the Group II Notes following an Event of Default, other than
an Event of Default with respect to the Group II Notes described in Section
5.01(i) or (ii), unless, in addition to the foregoing, the proceeds of the sale
or liquidation of the Trust Estate are sufficient to pay all amounts due and
owing to the Securities Insurer, plus interest thereon as provided in the
Insurance Agreement, unless the Securities Insurer consents thereto (provided
that a Securities Insurer Default has not occurred and is continuing). In
addition, notwithstanding anything herein to the contrary, the Indenture
Trustee's rights hereunder to sell the Group I or Group II Student Loans, as
applicable, shall be subject to the provisions of Section 10.06 of the Sale and
Servicing Agreement.
(b) (X) If the Indenture Trustee collects any money or property under
this Article V following the occurrence and during the continuation of an Event
of Default with respect to the Group I Notes and Sections 5.01(i), 5.01(ii),
5.01(iv) or 5.01(v) above or following the acceleration of the Group I Notes
pursuant to Section 5.02, it shall pay out the money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section 6.07
allocated to the Group I Notes, not to exceed $400,000 per annum;
SECOND: pro rata to the Master Servicer for due and unpaid Master
Servicing Fees with respect to the Group I Student Loans and to the
Administrator for due and unpaid Administration Fees allocated to the Group
I Notes;
THIRD: (x) to the holders of the Group I Class A Notes for amounts due
and unpaid on the Group I Class A Notes for interest (other than any
related Noteholders' Interest Index Carryover), ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Group I Class A Notes for interest; and (y) and to the Swap Counterparty,
the related Net Payment, if any, for such Distribution Date pursuant to the
Group I Interest Rate Swap, and the remainder of any related Termination
Payment resulting from an Event of Default (as defined in the Group I
Interest Rate Swap) to the extent that the Trust is the Defaulting Party
(as defined in the Group I Interest Rate Swap) (other than an Event of
Default specified in Section 5(a)(i) of the Group I Interest Rate Swap),
PRO RATA, based on the ratio of each such amount to the total of such
amounts;
FOURTH: to the holders of the Group I Class A Notes for amounts due
and unpaid on the Group I Class A Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Group I Class A Notes for principal, until the Outstanding
Amount of each such Class of Group I Class A Notes is zero;
FIFTH: to the holders of the Class I-B Notes for amounts due and
unpaid on the Class I-B Notes for interest (other than any related
Noteholders' Interest Index Carryover);
SIXTH: to the holders of the Class I-B Notes for amounts due and
unpaid on the Class I-B Notes for principal, until the Outstanding Amount
of the Class I-B Notes is zero;
SEVENTH: to the Indenture Trustee for all amounts due under Section
6.07, but only to the extent not paid pursuant to priority FIRST above;
EIGHTH: to the holders of the Group I Class A Notes for any unpaid
Noteholders' Interest Index Carryover with respect to the Group I Class A
Notes, ratably, without preference or priority of any kind, according to
the amount of related Noteholders' Interest Index Carryover attributable to
each such Group I Class A Note;
NINTH: to the holders of the Class I-B Notes for any unpaid
Noteholders' Interest Index Carryover with respect to the Class I-B Notes;
TENTH: to the Swap Counterparty, all Termination Payments and other
amounts due to the Swap Counterparty under the Group I Interest Rate Swap,
to the extent not paid pursuant to THIRD above;
ELEVENTH: to the Cap Provider all previously unreimbursed Class I-A-1
Cap Payments, Class I-A-2 Cap Payments, and Class I-B Cap Payments;
TWELFTH: after all payments shown above are made, any remaining
amounts: (x) for so long as the Group II Notes remain outstanding (or any
sums are owed to the Securities Insurer, the Swap Counterparty or the Cap
Provider with respect to the Group II Notes), such amounts will become
Group II Available Funds with respect to the related Distribution Date, as
provided in the definition of Group II Available Funds, or (y) after all of
the Group II Notes are no longer outstanding (and no other sums are owed to
the Securities Insurer, the Swap Counterparty or the Cap Provider with
respect to the Group II Notes), will be paid to the Eligible Lender Trustee
(on behalf of the Issuer), for distribution to the Certificateholders in
accordance with the terms of the Trust Agreement.
(Y) If the Indenture Trustee collects any money or property under this
Article V following the occurrence and during the continuation of an Event of
Default with respect to the Group II Notes and Sections 5.01(i), 5.01(ii),
5.01(iv) or 5.01(v) above or following the acceleration of the Group II Notes
pursuant to Section 5.02, it shall pay out the money or property in the
following order:
FIRST: to the Depositor (or at the Depositor's written instruction, to
the applicable Seller), any amounts on deposit in the Group II Collection
Account Subaccount which consist of Guarantee Payments made by XXXX in
excess of the Maximum XXXX Payments Amount;
SECOND: to the Indenture Trustee for amounts due under Section 6.07
allocated to the Group II Notes, not to exceed $50,000 per annum (provided
that, if a Securities Insurer Default has occurred and is continuing or the
Securities Insurer is removed pursuant to Section 8A.5, such $50,000 per
annum limitation shall not apply;
THIRD: pro rata to the Master Servicer for due and unpaid Master
Servicing Fees with respect to the Group II Student Loans and to the
Administrator for due and unpaid Administration Fees allocated to the Group
II Notes;
FOURTH: so long as no Securities Insurer Default has occurred and is
continuing, to the Securities Insurer for all Insurer Premiums due and
owing under the Insurance Agreement;
FIFTH: (x) to the holders of the Group II Class A Notes, the related
Noteholders' Interest Distribution Amount for the Class II-A-1 Notes and
Class II-A-2 Notes pursuant to Section 8.02(c)(i) of the Indenture, and (y)
and to the Swap Counterparty, the related Net Payment, if any, for such
Distribution Date pursuant to the Group II Interest Rate Swap, and the
remainder of any related Termination Payment resulting from an Event of
Default (as defined in the Group II Interest Rate Swap) to the extent that
the Trust is the Defaulting Party (as defined in the Group II Interest Rate
Swap) (other than an Event of Default specified in Section 5(a)(i) of the
Group II Interest Rate Swap), PRO RATA, based on the ratio of each --- ----
such amount to the total of such amounts;
SIXTH: to the holders of the Group II Class A Notes for amounts due
and unpaid on the Group II Class A Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Group II Class A Notes for principal;
SEVENTH: sequentially, in the following order, first to the Securities
Insurer for any and all amounts due and owing to the Securities Insurer
pursuant to the Insurance Agreement, and second, to the Indenture Trustee
for all amounts due under Section 6.07, but only to the extent not paid
pursuant to priority FIRST above;
EIGHTH: to the holders of the Group II Class A Notes for any unpaid
Noteholders' Interest Index Carryover with respect to the Group II Class A
Notes, ratably, without preference or priority of any kind, according to
the amount of related Noteholders' Interest Index Carryover attributable to
each such Group II Class A Note;
NINTH: to the Swap Counterparty, all Termination Payments and other
amounts due to the Swap Counterparty under the Group II Interest Rate Swap,
to the extent not paid pursuant to FIFTH above;
TENTH: to the Cap Provider all previously unreimbursed Class II-A-1
Cap Payments and Class II-A-2 Cap Payments;
ELEVENTH:to the extent Group I Available Funds on the related
Distribution Date are insufficient to pay the Noteholders' Interest
Distribution Amount to any Class of the Group I Notes pursuant to Section
5.05(c)(X)(3) and (5) of the Sale and Servicing Agreement, or priorities
THIRD AND FIFTH of Section 5.04(b)(X) above, to the applicable Group I
Noteholders, sequentially, first to the holders of the Group I Class A
Notes, pro rata based on their current Outstanding Amounts, and second to
the holders of the Class I-B Notes, in each case pursuant to Section
8.02(c)(X);
TWELFTH: to the extent Group I Available Funds on the related
Distribution Date are insufficient to make all required payments to the
Swap Counterparty and/or the Cap Provider owed to either of them for the
Group I Interest Rate Swap or the Group I Interest Rate Cap, as applicable,
to the Swap Counterparty and the Swap Provider, pro rata, up to the amount
of such deficiency; and
THIRTEENTH: to the Eligible Lender Trustee (on behalf of the Issuer),
for distribution to the Certificateholders in accordance with the terms of
the Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to the holders of the Group I or Group II Notes, as applicable, pursuant
to this Section. At least 15 days before such record date, the Issuer shall mail
to each holder of the Group I or Group II Notes, as applicable, the Securities
Insurer, and the Indenture Trustee a notice that states the record date, the
payment date and the amount to be paid.
(c) (X) If the Indenture Trustee collects any money or property under
this Article V following the occurrence and during the continuation of an Event
of Default with respect to the Group I Notes, other than with respect to Events
of Default under Sections 5.01(i), 5.01(ii), 5.01(iv) or 5.01(v) above or
following the acceleration of the Group I Notes pursuant to Section 5.02, it
shall pay out the money or property on the related Distribution Date in the
following order:
(1) to the Indenture Trustee for amounts due under Section 6.07
of this Indenture allocated to the Group I Notes, not to exceed
$400,000 per annum;
(2) to the Master Servicer, the Master Servicing Fee with respect
to the Group I Student Loans due on such Distribution Date and all
prior unpaid Master Servicing Fees allocated to the Group I Student
Loans;
(3) from the amount of Group I Available Funds remaining after
the application of clauses (1) and (2), to the Administrator, the
portion of the Administration Fee allocated to the Group I Notes and
all unpaid Administration Fees from prior Collection Periods allocated
to the Group I Notes;
(4) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (3), (x) to the holders of the
Group I Class A Notes, the Noteholders' Interest Distribution Amount
for the Group I Class A Notes pursuant to Section 8.02(c)(X)(i), and
(y) and to the Swap Counterparty, the Net Payment with respect to the
Group I Interest Rate Swap, if any, for such Distribution Date, and
the remainder of any related Termination Payment resulting from an
Event of Default (as defined in the Group I Interest Rate Swap) to the
extent that the Trust is the Defaulting Party (as defined in the Group
I Interest Rate Swap) (other than an Event of Default specified in
Section 5(a)(i) of the Group I Interest Rate Swap), PRO RATA, based on
the ratio of each such amount to the total of such amounts;
(5) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (4), to the Group I Reserve
Account, an amount, up to the amount, if any, necessary to reinstate
the balance of the Group I Reserve Account to the related Specified
Reserve Account Balance;
(6) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (5) and provided that a
Subordinate Note Interest Trigger is not in effect on such
Distribution Date, to the holders of the Class I-B Notes, the
Noteholders' Interest Distribution Amount for the Class I-B Notes, in
each case pursuant to Section 8.02(c)(X)(ii);
(7) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (6), to the holders of the
Group I Notes, the Group I Principal Distribution Amount pursuant to
Section 8.02(c)(X)(iii), in the following order of priority: (a) prior
to the Stepdown Date, or after the Stepdown Date if a Subordinate Note
Principal Trigger is in effect, the Group I Principal Distribution
Amount for the Group I Notes will be payable solely to the Group I
Senior Notes in sequential order beginning with the Class I-A-1 Notes
until paid in full, then to the Class I-A-2 Notes until paid in full,
and then to the Class I-B Notes; and (b) after the Stepdown Date and
so long as no Subordinate Note Principal Trigger is in effect, the
Senior Percentage of the Principal Distribution Amount for the Group I
Notes will be payable to the Group I Senior Notes (in the same order
of priority as described in the preceding sentence) and the
Subordinate Percentage of the Group I Principal Distribution Amount
will be payable to the Class I-B Notes;
(8) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (7) and in the event that a
Subordinate Note Interest Trigger is in effect with respect to such
Distribution Date, to the holders of the Class I-B Notes, the
Noteholders' Interest Distribution Amount for the Class I-B Notes
pursuant to Section 8.02(c)(X)(iv);
(9) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (8) to the Indenture Trustee
for all amounts due under Section 6.07, but only to the extent not
paid pursuant to clause (1) above;
(10) from (x) the amount of Group I Available Funds remaining
after the application of clauses (1) through (9), and (y) the Group I
Cap Funds, if any, to the holders of the Group I Class A Notes on a
pro rata basis based on the amount of any Noteholders' Interest Index
Carryover owing on each such Class of Group I Class A Notes, the
aggregate unpaid amount of such Noteholders' Interest Index Carryover,
if any, with respect to the Group I Class A Notes;
(11) from (x) the amount of Group I Available Funds remaining
after the application of clauses (1) through (10), and (y) the Group
II Cap Funds remaining after application of clause (10), if any, to
the to the holders of the Class I-B Notes, the aggregate unpaid amount
of Noteholders' Interest Index Carryover, if any, with respect to the
Class I-B Notes;
(12) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (11), to the Swap Counterparty,
all Termination Payments and all other unpaid amounts owed to the Swap
Counterparty under the Group II Interest Rate Swap not paid pursuant
to clause (4) above;
(13) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (12), to the Cap Provider, an
amount sufficient to reimburse the Cap Provider for all Class I-A-1
Cap Payments, Class I-A-2 Cap Payments, Class I-B Cap Payments, and
any other amounts due to the Cap Provider under the Group I Interest
Rate Cap and not previously reimbursed; and
(14) from the amount of Group I Available Funds remaining after
the application of clauses (1) through (13), after all payments shown
above are made, any remaining amounts: (x) for so long as the Group II
Notes remain outstanding (or any sums are owed to the Securities
Insurer, the Swap Counterparty or the Cap Provider with respect to the
Group II Notes), will become Group II Available Funds as provided in
the definition of Group II Available Funds, or (y) after all of the
Group II Notes are no longer outstanding (and no other sums are owed
to the Securities Insurer, the Swap Counterparty or the Cap Provider
with respect to the Group II Notes), will be paid to the Eligible
Lender Trustee (on behalf of the Issuer) for distribution to the
holder of the Certificates pursuant to the Trust Agreement.
(Y) If the Indenture Trustee collects any money or property under this
Article V following the occurrence and during the continuation of an Event of
Default with respect to the Group II Notes, other than with respect to Events of
Default under Sections 5.01(i), 5.01(ii), 5.01(iv) or 5.01(v) above or following
the acceleration of the Group II Notes pursuant to Section 5.02, it shall pay
out the money or property on the related Distribution Date in the following
order:
(1) to the Depositor (for distribution to the applicable Seller),
any amounts on deposit in the Group II Collection Account Subaccount
which consist of Guarantee Payments made by XXXX in excess of the
Maximum XXXX Payments Amount
(2) to the Indenture Trustee for amounts due under Section 6.07
of this Indenture allocated to the Group II Notes, not to exceed
$50,000 per annum (provided that, if a Securities Insurer Default has
occurred and is continuing or the Securities Insurer has been removed
pursuant to Section 8A.5, such $50,000 per annum limitation shall not
apply);
(3) from the amount of Group II Available Funds remaining after
the application of clauses (1) and (2), to the Master Servicer, the
Master Servicing Fee with respect to the Group II Student Loans due on
such Distribution Date and all prior unpaid Master Servicing Fees
allocated to the Group II Student Loans;
(4) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (3), to the Administrator, the
portion of the Administration Fee allocated to the Group II Notes and
all unpaid Administration Fees from prior Collection Periods allocated
to the Group II Notes;
(5) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (4), and provided that a
Securities Insurer Default has not occurred and is continuing, to the
Securities Insurer, the Insurer Premium and all unpaid Insurer
Premiums from prior collection periods;
(6) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (5), (x) to the holders of the
Group II Class A Notes, the Noteholders' Interest Distribution Amount
for the Group II Class A Notes pursuant to Section 8.02(c)(Y)(i)of the
Indenture, and (y) to the Swap Counterparty, the Net Payment with
respect to the Group II Interest Rate Swap, if any, for such
Distribution Date, and the remainder of any related Termination
Payment resulting from an Event of Default (as defined in the Group II
Interest Rate Swap) to the extent that the Trust is the Defaulting
Party (as defined in the Group II Interest Rate Swap) (other than an
Event of Default specified in Section 5(a)(i) of the Group II Interest
Rate Swap), PRO RATA, based on the ratio of each such amount to the
total of such amounts;
(7) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (6), to the Securities Insurer,
provided that a Securities Insurer Default has not occurred and is
continuing, reimbursement for all amounts owed pursuant to draws with
respect to any payments of interest under the Group II Notes Guaranty
Insurance Policy, plus interest thereon as determined in accordance
with the Insurance Agreement;
(8) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (7), to the Group II Reserve
Account, an amount, up to the amount, if any, necessary to reinstate
the balance of the Group II Reserve Account to the related Specified
Reserve Account Balance;
(9) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (8), sequentially in the
following order, first, to the holders of the Class II-A-1 Notes, the
applicable Noteholders' Principal Distribution Amount as set forth in
Section 8.02(c)(Y)(ii), until their outstanding principal balance has
been reduced to zero, second, to the Securities Insurer, provided that
a Securities Insurer Default has not occurred and is continuing,
reimbursement for all amounts owed pursuant to draws with respect to
any payments of principal under the Group II Notes Guaranty Insurance
Policy made to the holders of the Class II-A-1 Notes, plus interest
thereon determined in accordance with the Insurance Agreement, third,
to the holders of the Class II-A-2 Notes, the applicable Noteholders'
Principal Distribution Amount as set forth in Section 8.02(c)(Y)(ii),
until their outstanding principal balance has been reduced to zero,
and fourth, to the Securities Insurer, provided that a Securities
Insurer Default has not occurred and is continuing, reimbursement for
all amounts owed pursuant to draws with respect to any payments of
principal under the Group II Notes Guaranty Insurance Policy made to
the holders of the Class II-A-2 Notes, plus interest thereon
determined in accordance with the Insurance Agreement;
(10) sequentially, in the following order, first to the
Securities Insurer, from the amount of Group II Available Funds
remaining after application of clauses (1) through (9), an amount
equal to all unreimbursed Insured Payments made on prior Distribution
Dates, together with accrued interest thereon, to the extent not
previously reimbursed above, and all other amounts owed to the
Securities Insurer under the Insurance Agreement, and second, to the
Indenture Trustee for all amounts due under Section 6.07, but only to
the extent not paid pursuant to priority (2) above;
(11) from (x) the amount of Group II Available Funds remaining
after the application of clauses (1) through (10), and (y) the Group
II Cap Funds, if any, to the holders of the Group II Notes, on a pro
rata basis based on the amount of any Noteholders' Interest Index
Carryover owing on each such Class of Group II Notes, the aggregate
unpaid amount of Noteholders' Interest Index Carryover, if any, with
respect to the Group II Notes;
(12) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (11), to the Swap Counterparty,
all Termination Payments and all other unpaid amounts owed to the Swap
Counterparty under the Group II Interest Rate Swap not paid pursuant
to clause (6) above;
(13) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (12), to the Cap Provider, an
amount sufficient to reimburse the Cap Provider for all Class II-A-1
Cap Payments and Class II-A-2 Cap Payments and any other amounts due
to the Cap Provider under the Group II Interest Rate Cap and not
previously reimbursed;
(14) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (13), to the extent Group I
Available Funds are insufficient to pay the Noteholders' Interest
Distribution Amount to any Class of the Group I Notes pursuant to
Section 5.05(c)(X)(3) and (5) of the Sale and Servicing Agreement, or
priorities (4) and (6) of Section 5.04(b)(X) above, to the applicable
Group I Noteholders, sequentially, first to the holders of the Group I
Class A Notes, pro rata based on their current Outstanding Amounts,
and second to the holders of the Class I-B Notes, pursuant to Section
8.02(c)(X) of the Indenture;
(15) from the amount of Group II Available Funds remaining after
the application of clauses (1) through (14), to the extent Group I
Available Funds are insufficient to make all required payments to the
Swap Counterparty and/or the Cap Provider owed to either of them for
the Group I Interest Rate Swap or the Group I Interest Rate Cap, as
applicable, to the Swap Counterparty and the Swap Provider, pro rata,
up to the amount of such deficiency; and
(16) to the Eligible Lender Trustee (on behalf of the Issuer) for
distribution to the Certificateholder in accordance with the terms of
the Trust Agreement, the amount of Group II Available Funds remaining
after the application of clauses (1) through (15).
The Indenture Trustee may fix a record date and payment date for any
payment to the holders of the Group I or Group II Notes, as applicable, pursuant
to this Section. At least 15 days before such record date, the Issuer shall mail
to each holder of the Group I or Group II Notes, as applicable, the Securities
Insurer, and the Indenture Trustee a notice that states the record date, the
payment date and the amount to be paid.
SECTION 5.05. OPTIONAL PRESERVATION OF THE FINANCED STUDENT LOANS. If
either the Group I or Group II Notes have been declared to be due and payable
under Section 5.02 following an Event of Default with respect to the Group I
and/or Group II Notes and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, (with respect to the Group II
Notes only) with the written consent of the Securities Insurer (provided that no
Securities Insurer Default has occurred and is continuing), or shall at the
written direction of (x) with respect to the Group I Notes, the Group I
Controlling Parties, representing not less than a majority of the Outstanding
Amount of the related Group I Notes, and (y) with respect to the Group II Notes,
the Securities Insurer (unless a Securities Insurer Default shall have occurred
and is continuing, and then by the holders of Group II Notes, representing not
less than a majority of the Outstanding Amount of the Group II Notes), elect to
maintain possession of the related Indenture Trust Estate. It is the desire of
the parties hereto, the Securities Insurer, the Swap Counterparty and the
holders of the Group I and Group II Notes that there be at all times sufficient
funds for the payment of principal of and interest (including any unpaid
Noteholders' Interest Index Carryover) on the Group I and the Group II Notes,
and the Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Indenture Trust Estate. In
determining whether to maintain possession of the Indenture Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the
Indenture Trust Estate for such purpose.
SECTION 5.06. LIMITATION OF SUITS. No holder of the Group I or Group
II Notes shall have any right to institute any Proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless the following conditions
listed below are satisfied and, (with respect to the Group II notes only) so
long as a Securities Insurer Default has not occurred and is continuing, the
Securities Insurer has consented in writing thereto:
(i) such holder of the Group I or Group II Notes, as the case may be,
has previously given written notice to the Indenture Trustee of a
continuing Event of Default;
(ii) the holders of not less than 25% of the Outstanding Amount of the
Group I or the Group II Notes, as applicable and in each case, in the
aggregate, have made written request to the Indenture Trustee to institute
such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(iii) such holder of the Group I or Group II Notes, as applicable,
have offered to the Indenture Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceeding; and
(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the holders of a
majority of the Outstanding Amount of the Group I or Group II Notes, as
applicable and in each case, in the aggregate;
it being understood and intended that no one or more holders of the Group I or
Group II Notes, as the case may be, shall have any right in any manner whatever
by virtue of, or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other holders of the Group I or Group II
Notes, as applicable, or to obtain or to seek to obtain priority or preference
over any other holders of the Group I or Group II Notes, as applicable, or to
enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from (x) two or more groups of either the
Group I or Group II Noteholders, as the case may be, each representing less than
a majority of the Outstanding Amount of the Group I or Group II Notes,
respectively, or (y) two groups from both the Group I and Group II Noteholders,
each representing at least a majority of the Outstanding Amount of the Group I
or Group II Notes, respectively, the Indenture Trustee in its sole discretion
may determine what action, if any, shall be taken, notwithstanding any other
provisions of this Indenture.
SECTION 5.07. UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, any holder
of the any Class of Notes shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such holder of any such Class
of Notes.
SECTION 5.08. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any holder of the Group I or Group II Notes, as the case may be, has
instituted any Proceeding to enforce any right or remedy under this Indenture
and such Proceeding has been discontinued or abandoned for any reason or has
been determined adversely to the Indenture Trustee or to such holder of the
Group I or Group II Notes, as applicable, then and in every such case the
Issuer, the Indenture Trustee and the holders of the Group I or Group II Notes,
as applicable, shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the holders of
the Group I or Group II Notes, respectively, shall continue as though no such
Proceeding had been instituted.
SECTION 5.09. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the holders of
the Group I or Group II Notes, as the case may be, is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.10. DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee, the Securities Insurer or any holder of Group I or Group
II Notes, as the case may be, to exercise any right or remedy accruing upon any
Default shall impair any such right or remedy or constitute a waiver of any such
Default or an acquiescence therein. Every right and remedy given by this Article
V or by law to the Indenture Trustee, the Securities Insurer or to the holders
of the Group I or Group II Notes, as applicable, may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee, the
Securities Insurer or by the holders of the Group I or Group II Notes, as the
case may be.
SECTION 5.11. CONTROL BY NOTEHOLDERS. With respect to the Group I
Notes, the Group I Controlling Parties, representing not less than a majority of
the Outstanding Amount of the related Group I Notes, and (y) with respect to the
Group II Notes, the Securities Insurer (unless a Securities Insurer Default
shall have occurred and is continuing, and then by the holders of Group II
Notes, representing not less than a majority of the Outstanding Amount of the
Group II Notes) (or, in each case, if only one Class is affected thereby, a
majority of the Outstanding Amount of such Class) shall have the right to direct
the time, method and place of conducting any Proceeding for any remedy available
to the Indenture Trustee with respect to the Group I or Group II Notes, as
applicable, or exercising any trust or power conferred on the Indenture Trustee;
PROVIDED that:
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Indenture Trust Estate
relating to the Group I or Group II Notes, as the case may be, shall be by
the holders of not less than 100% of the Outstanding Amount of the Group I
or Group II Notes, respectively;
(iii) if the conditions set forth in Section 5.05 have been satisfied
and the Indenture Trustee elects to retain the Indenture Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
holders of less than 100% of the Outstanding Amount of the Group I or Group
II Notes, as the case may be, to sell or liquidate the Indenture Trust
Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
PROVIDED, HOWEVER, that, subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any holders of the Group I or Group II
Notes, as applicable, not consenting to such action.
SECTION 5.12. WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the Group I or Group II Notes, as applicable, as provided in
Section 5.02, (x) with respect to the Group I Notes, the Group I Controlling
Parties, representing not less than a majority of the Outstanding Amount of the
related Group I Notes, and (y) with respect to the Group II Notes, the
Securities Insurer (unless a Securities Insurer Default shall have occurred and
is continuing, and then by the holders of Group II Notes, representing not less
than a majority of the Outstanding Amount of the Group II Notes), may waive any
past Default and its consequences except a Default (a) in payment when due of
principal of or interest (including, subject to the limitations of Sections
2.07(c) and 8.02(c), any related Noteholders' Interest Index Carryover) on any
of the Group I or Group II Notes, as applicable, or (b) in respect of a covenant
or provision hereof which cannot be modified or amended without the consent of
each holder of the Group I or Group II Notes, as applicable. In the case of any
such waiver, the Issuer, the Securities Insurer, if applicable, the Indenture
Trustee and the holders of the Group I or Group II Notes, as applicable, shall
be restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
SECTION 5.13. UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each holder of the Group I or Group II Notes, respectively, by such
Group I or Group II Noteholder's acceptance of any Group I or Group II Note, as
the case may be, shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any holder of the Group I or
Group II Notes, as applicable, or group of holders of the Group I or Group II
Notes, as applicable, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Group I or Group II Notes, respectively, or (c) any
suit instituted by any holder of the Group I or Group II Notes, as applicable,
for the enforcement of the payment of principal of or interest (including any
unpaid related Noteholders' Interest Index Carryover)) on any Group I or Group
II Note, as applicable, on or after the respective due dates expressed in such
Group I or Group II Note, as the case may be, and in this Indenture (or, in the
case of any redemption, on or after the related Redemption Date).
SECTION 5.14. WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15. ACTION ON NOTES. The Indenture Trustee's right to seek
and recover judgment on the Group I or Group II Notes, as applicable, or under
this Indenture shall not be affected by the seeking, obtaining or application of
any other relief under or with respect to this Indenture. Neither the lien of
this Indenture nor any rights or remedies of the Indenture Trustee or the
holders of the Group I or Group II Notes, as applicable, shall be impaired by
the recovery of any judgment by the Indenture Trustee against the Issuer or by
the levy of any execution under such judgment upon any portion of the Indenture
Trust Estate or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.04(b).
SECTION 5.16. PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Securities Insurer or the Indenture
Trustee, and with the consent of the Securities Insurer (so long as a Securities
Insurer Default has not occurred and is continuing) and in each case subject to
the rights of the Securities Insurer hereunder and under the Sale and Servicing
Agreement, and at the Administrator's expense, the Issuer shall take all such
lawful action as the Indenture Trustee or Securities Insurer, as applicable, may
request to compel or secure the performance and observance by KBUSA, the
Depositor, the Swap Counterparty, the Administrator and the Master Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement (and with respect to the Administrator
only, the Administration Agreement, with respect to the Swap Counterparty only,
each of the Interest Rate Swaps, and with respect to the Cap Provider only, each
of the Cap Agreements and with respect to KBUSA only, under the KBUSA Student
Loan Transfer Agreement) in accordance with the terms thereof, and to exercise
any and all rights, remedies, powers and privileges lawfully available to the
Issuer under or in connection with the Sale and Servicing Agreement (and the
Administration Agreement, the Interest Rate Swaps, the KBUSA Student Loan
Transfer Agreement or the Cap Agreements, as applicable) to the extent and in
the manner directed by the Indenture Trustee or the Securities Insurer, as
applicable, including the transmission of notices of default on the part of the
Depositor, the Swap Counterparty, the Administrator or the Master Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Depositor, the Swap Counterparty, the
Administrator or the Master Servicer of each of their obligations under the Sale
and Servicing Agreement (and the Administration Agreement, the Interest Rate
Swaps, the KBUSA Student Loan Transfer Agreement or the Cap Agreements, as
applicable).
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall at the direction (which direction shall be in writing or
by telephone (confirmed in writing promptly thereafter)) of (x) with respect to
the Group I Notes, the Group I Controlling Parties, representing not less than a
66.67% of the Outstanding Amount of the related Group I Notes, and (y) with
respect to the Group II Notes, the Securities Insurer (unless a Securities
Insurer Default shall have occurred and is continuing, and then by the holders
of Group II Notes, representing not less than 66.67% of the Outstanding Amount
of the Group II Notes), exercise all rights, remedies, powers, privileges and
claims of the Issuer against KBUSA, the Depositor, the Administrator, the Master
Servicer, the Swap Counterparty or Cap Provider under or in connection with the
Sale and Servicing Agreement (and the Administration Agreement, Interest Rate
Swaps, the KBUSA Student Loan Transfer Agreement and Cap Agreements, as
applicable), including the right or power to take any action to compel or secure
performance or observance by KBUSA, the Depositor, the Administrator, the Master
Servicer, the Swap Counterparty and the Cap Provider of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement
(and the Administration Agreement, the Interest Rate Swaps, the KBUSA Student
Loan Transfer Agreement and the Cap Agreements) and any right of the Issuer to
take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and the Sale
and Servicing Agreement, and no implied covenants or obligations shall be
read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to a Responsible Officer of the Indenture Trustee and
conforming to the requirements of this Indenture; PROVIDED, HOWEVER, that
the Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.01.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity satisfactory to it against any loss,
liability or expense is not reasonably assured to it.
(h) Except as expressly provided in the Basic Documents, the Indenture
Trustee shall have no obligation to administer, service or collect the Financed
Student Loans or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Financed Student Loans.
(i) In the event that the Indenture Trustee is the Paying Agent or the
Note Registrar, the rights and protections afforded to the Indenture Trustee
pursuant to this Indenture shall also be afforded to the Indenture Trustee in
its capacity as Paying Agent or Note Registrar.
(j) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.01.
(k) Notwithstanding any other provision in this Indenture or the other
Basic Documents, nothing in this Indenture or the other Basic Documents shall be
construed to limit the legal responsibility of 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
Indenture Trustee pursuant to, or to otherwise comply with its obligations
under, the Higher Education Act or implementing regulations, it being expressly
understood that the Indenture Trustee has no obligation or duty pursuant to this
Section except in the event of Foreclosure or pursuant to Section 8.02 of the
Sale and Servicing Agreement as a successor Master Servicer.
SECTION 6.02. RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Indenture Trustee need not investigate any
fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officers' Certificate of the Issuer or an Opinion of Counsel. The
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) In the event that the Person acting as Indenture Trustee is also
acting as securities intermediary all the rights, powers, immunities and
indemnities afforded to the Indenture Trustee under the Basic Documents shall
also be afforded to the securities intermediary.
SECTION 6.03. INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04. INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default occurs and is
continuing and if it is either actually known or written notice of the existence
thereof has been delivered to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall immediately notify the Securities Insurer of the
Default and shall mail to each holder of the Notes, the Securities Insurer and
the Swap Counterparty notice of the Default within 90 days after it occurs.
Except in the case of a Default in payment of principal of or interest
(including any related Noteholders' Interest Index Carryover) on any Group I or
Group II Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice to the
holders of the Group I or Group II Notes, as applicable, if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of holders of the Group I or Group II Notes, as
applicable.
SECTION 6.06. REPORTS BY INDENTURE TRUSTEE TO NOTEHOLDERS. The
Indenture Trustee shall deliver to each holder of the Notes (and to each Person
who was a holder of the Notes at any time during the applicable calendar year)
such information as may be required to enable such holder to prepare its Federal
and state income tax returns. Within 60 days after each December 31 beginning
with the December 31 following the date of this Indenture, the Indenture Trustee
shall mail to each holder of the Notes a brief report as of such December 31
that complies with TIA ss. 313(a) if required by said section. The Indenture
Trustee shall also comply with TIA ss. 313(b). A copy of each such report
required pursuant to TIA xx.xx. 313(a) or (b) shall, at the time of such
transmission to holders of the Notes, be filed by the Indenture Trustee with the
Commission and with each securities exchange, if any, upon which the Notes are
listed, provided that the Issuer has previously notified the Indenture Trustee
of such listing.
SECTION 6.07. COMPENSATION AND INDEMNITY. The Issuer, pursuant to
Section 3 of the Administration Agreement, shall cause the Administrator to pay
to the Indenture Trustee reasonable compensation for its services in accordance
with a separate agreement between the Administrator and the Indenture Trustee
and shall cause the Administrator to reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it as provided in such
separate agreement. The Indenture Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuer shall cause
the Administrator to indemnify the Indenture Trustee against any and all loss,
liability or expense (including attorneys' fees and expenses) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder and under the other Basic Documents. The Indenture Trustee
shall notify the Issuer and the Administrator promptly of any claim for which it
may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and
the Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. The Issuer shall
cause the Administrator to defend the claim and the Administrator shall not be
liable for the legal fees and expenses of the Indenture Trustee after it has
assumed such defense; PROVIDED, HOWEVER, that, in the event that there may be a
conflict between the positions of the Indenture Trustee and the Administrator in
conducting the defense of such claim, the Indenture Trustee shall be entitled to
separate counsel the fees and expenses of which shall be paid by the
Administrator on behalf of the Issuer. Neither the Issuer nor the Administrator
need reimburse any expense or indemnify against any loss, liability or expense
incurred by the Indenture Trustee through the Indenture Trustee's own willful
misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture or the earlier
resignation or removal of the Indenture Trustee. When the Indenture Trustee
incurs expenses after the occurrence of a Default specified in Section 5.01(iv)
or (v) with respect to the Issuer, the expenses are intended to constitute
expenses of administration under Title 11 of the United States Code or any other
applicable Federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer, the Securities Insurer and
the Swap Counterparty. The Securities Insurer (provided that no Securities
Insurer Default has occurred and is continuing), or the holders of Notes of a
majority in Outstanding Amount of the Notes, with the consent of the Securities
Insurer (provided that no Securities Insurer Default has occurred and is
continuing), may remove the Indenture Trustee by so notifying the Indenture
Trustee and may appoint a successor Indenture Trustee. The Issuer shall remove
the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture Trustee;
(iii) a receiver or other public officer takes charge of the Indenture
Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee, with the consent of the
Securities Insurer which consent shall not be unreasonably withheld.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Securities Insurer, the
Swap Counterparty and the Issuer. Thereupon the resignation or removal of the
retiring Indenture Trustee shall become effective, and the successor Indenture
Trustee shall have all the rights, powers and duties of the Indenture Trustee
under this Indenture. The successor Indenture Trustee shall mail a notice of its
succession to the holders of the Notes. The retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee upon payment of all monies due and owing to the retiring
Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer, the Securities Insurer or the holders of a
majority in Outstanding Amount of the Notes may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any holder
of the Notes may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's and the Administrator's obligations under Section
6.07 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies, the Swap Counterparty and the Securities Insurer prior written notice
of any such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Indenture Trust Estate, and to vest
in such Person or Persons, in such capacity and for the benefit of the holders
of the Notes, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to holders of the Notes of the appointment of any co-trustee or separate
trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 310(a). The Indenture
Trustee shall have a combined capital and surplus of at least $50,000,000 as set
forth in its most recent published annual report of condition and it shall have
a long term debt rating of Baa3 or better by Moody's. The Indenture Trustee
shall comply with TIA ss. 310(b), including the optional provision permitted by
the second sentence of TIA ss. 310(b)(9); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA ss. 310(b)(1) are met.
SECTION 6.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
SECTION 6.13. SET-OFF RIGHTS. So long as no Securities Insurer
Default has occurred and is continuing nor has the Securities Insurer been
removed pursuant to Section 8A.5, the Indenture Trustee shall not have, and
hereby waives, any and all rights of set-off against the Trust Accounts or any
investments thereof.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES
OF NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the holders of the Notes as of such Record Date, (b) at such other times as
the Indenture Trustee may request in writing, within 30 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than 10 days prior to the time such list is furnished; PROVIDED,
HOWEVER, that so long as the Indenture Trustee is the Note Registrar, no such
list shall be required to be furnished.
SECTION 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the holders of the Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of the holders of the Notes received
by the Indenture Trustee in its capacity as Note Registrar. The Indenture
Trustee may destroy any list furnished to it as provided in such Section 7.01
upon receipt of a new list so furnished.
(b) Holders of the Notes may communicate pursuant to TIA ss. 312(b)
with other holders of the Notes with respect to their rights under this
Indenture or under the Notes. Upon receipt by the Indenture Trustee of any
request by a holder of the Notes to receive a copy of the current list of
holders of the Notes (whether or not made pursuant to TIA ss. 312(b)), the
Indenture Trustee shall promptly notify the Administrator thereof by providing
to the Administrator a copy of such request and a copy of the list of holders of
the Notes produced in response thereto.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA ss.312(c).
(d) The Indenture Trustee shall furnish to the holders of the Notes
promptly upon receipt of a written request therefor, duplicates or copies of all
reports, notices, requests, demands, certificates, financial statements and any
other instruments furnished to the Indenture Trustee under the Basic Documents.
SECTION 7.03. REPORTS BY ISSUER. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may from time to
time by rules and regulations prescribe) which the Issuer may be required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act;
(ii) file with the Indenture Trustee and the Commission in accordance
with rules and regulations prescribed from time to time by the Commission
such additional information, documents and reports with respect to
compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall
transmit by mail to all holders of the Notes described in TIA ss. 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.01. COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it on behalf of the holders of
the Group I and Group II Notes, as applicable, pursuant to the Sale and
Servicing Agreement and as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Indenture Trust Estate, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default under this Indenture and any right to
proceed thereafter as provided in Article V.
SECTION 8.02. TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Administrator to establish and maintain, in the name of
the Indenture Trustee, for the benefit of the holders of the Group I or Group II
Notes, as applicable, the applicable Trust Accounts as provided in Section 5.01
of the Sale and Servicing Agreement.
(b) On or before the Business Day preceding each Distribution Date,
all Available Funds with respect to the preceding Collection Period will be
deposited in the applicable subaccount of the Collection Account as provided in
the Sale and Servicing Agreement (except with respect to all Net Receipts with
respect to either the Group I or Group II Interest Rate Swap, as applicable),
which shall be deposited into the applicable subaccount of the Collection
Account on the date received) as provided in Section 5.02 of the Sale and
Servicing Agreement. The Indenture Trustee shall also remit to the Group II
Collection Account Subaccount all Insured Payments delivered to the Indenture
Trustee pursuant to a Group II Notes Guaranty Insurance Policy Notice on the
date of receipt thereof from the Securities Insurer. On or before each
Distribution Date, (i) the related Noteholders' Distribution Amount, (ii) any
related Noteholders' Interest Index Carryover, and (iii) with respect to the
Group II Notes only, any Insured Payments with respect to the preceding
Collection Period will be distributed from the applicable subaccount of the
Collection Account and any other Trust Account to the Indenture Trustee (or any
other Paying Agent) on behalf of the holders of the Group I or Group II Notes,
as applicable, as provided in Sections 5.04, 5.05, 5.06 and 5.08 of the Sale and
Servicing Agreement.
(c) (X) On each Distribution Date and any Redemption Date, the
Indenture Trustee (or any other Paying Agent) shall distribute all amounts
received by it on behalf of the holders of the Group I Notes, pursuant to
paragraph (b) above to the holders of the Group I Notes, to the extent of
amounts due and unpaid on the Group I Notes, for principal, interest and any
related Noteholders' Interest Index Carryover in the following amounts and in
the following order of priority (except as otherwise provided in Sections
5.04(b) and 5.04(c)):
(i) the Noteholders' Interest Distribution Amount with respect to the
Class I-A-1 and Class I-A-2 Notes, to the holders of the Class I-A-1 Notes
and the holders of the Class I-A-2 Notes in an amount equal to the accrued
and unpaid interest on the Group I Notes; provided that if there are not
sufficient funds received to pay the entire amount of accrued and unpaid
interest then due on such Group I Notes, the amounts so received shall be
applied to the payment of such interest on the Group I Notes on a pro rata
basis;
(ii) unless a Subordinate Notes Interest Trigger is in effect on such
Distribution Date, the Noteholders' Interest Distribution Amount with
respect to the Class I-B Notes, to the holders of the Class I-B Notes in an
amount equal to the accrued and unpaid interest on the Class I-B Notes;
(iii) with respect to any Distribution Date on which a Subordinate
Notes Interest Trigger is in effect, the applicable Noteholders' Principal
Distribution Amount to the holders of the Class I-A-1 Notes until the
Outstanding Amount of the Class I-A-1 Notes is reduced to zero, then to the
holders of the Class I-A-2 Notes until the Outstanding Amount of the Class
I-A-2 Notes is reduced to zero;
(iv) in the event a Subordinate Notes Interest Trigger is in effect on
such Distribution Date, the Noteholders' Interest Distribution Amount with
respect to the Class I-B Notes, to the holders of the Class I-B Notes in an
amount equal to the accrued and unpaid interest on the Class I-B Notes;
(v) the applicable Noteholders' Principal Distribution Amount, (a)
prior to the Stepdown Date, or after the Stepdown Date if a Subordinate
Note Principal Trigger is in effect, to the Group I Senior Notes in
sequential order beginning with the Class I-A-1 Notes until paid in full,
then to the Class I-A-2 Notes until paid in full, and then to the Class I-B
Notes; and (b) after the Stepdown Date and so long as no Subordinate Note
Principal Trigger is in effect, the applicable Senior Percentage of the
Group I Principal Distribution Amount to the Group I Senior Notes (in the
same order of priority as described in the preceding sentence) and the
applicable Subordinate Percentage of the Group I Principal Distribution
Amount to the Class I-B Notes;
(vi) the applicable Noteholders' Interest Index Carryover with respect
to the Group I Class A Notes, if any, to the holders of the Class I-A-1
Notes and the holders of the Class I-A-2 Notes; provided that if
insufficient funds are received to pay the entire Noteholders' Interest
Index Carryover with respect to the Group I Class A Notes then outstanding,
the amounts so received shall be applied to the payment of such
Noteholders' Interest Index Carryover on a pro rata basis; and
(vii) the applicable Noteholders' Interest Index Carryover with
respect to the Class I-B Notes, if any, to the holders of the Class I-B
Notes.
(Y) On each Distribution Date and any Redemption Date, the Indenture
Trustee (or any other Paying Agent) shall distribute all amounts received by it
on behalf of the holders of the Group II Notes, pursuant to paragraph (b) above
to the holders of the Group II Notes, to the extent of amounts due and unpaid on
the Group II Notes, for principal, interest and any related Noteholders'
Interest Index Carryover in the following amounts and in the following order of
priority (except as otherwise provided in Sections 5.04(b) and 5.04(c)):
(i) the Noteholders' Interest Distribution Amount with respect to the
Class II-A-1 and Class II-A-2 Notes, to the holders of the Class II-A-1
Notes and the holders of the Class II-A-2 Notes in an amount equal to the
accrued and unpaid interest on the Group II Notes; provided that if there
are not sufficient funds received to pay the entire amount of accrued and
unpaid interest then due on such Group II Notes, the amounts so received
shall be applied to the payment of such interest on the Group II Notes on a
pro rata basis;
(ii) the applicable Noteholders' Principal Distribution Amount, to the
holders of the Class II-A-1 Notes until the Outstanding Amount of the Class
II-A-1 Notes is reduced to zero, and then to the holders of the Class
II-A-2 Notes until the Outstanding Amount of the Class II-A-2 Notes is
reduced to zero; and
(iii) the applicable Noteholders' Interest Index Carryover with
respect to the Group II Class A Notes, if any, to the holders of the Class
II-A-1 Notes and the holders of the Class II-A-2 Notes; provided that if
insufficient funds are received to pay the entire Noteholders' Interest
Index Carryover with respect to the Group II Class A Notes then
outstanding, the amounts so received shall be applied to the payment of
such Noteholders' Interest Index Carryover on a pro rata basis.
SECTION 8.03. GENERAL PROVISIONS REGARDING ACCOUNTS. (a) So long as no
Default shall have occurred and be continuing, all or a portion of the funds in
the Trust Accounts shall be invested in Eligible Investments and reinvested by
the Indenture Trustee upon Issuer Order, subject to the provisions of Section
5.01(b) of the Sale and Servicing Agreement; provided, however, that any Insured
Payments received by the Indenture Trustee shall be held uninvested. All income
or other gain from investments of moneys deposited in the Trust Accounts shall
be deposited by the Indenture Trustee in the applicable subaccount of the
Collection Account, and any loss resulting from such investments shall be
charged to such Trust Account. The Issuer will not direct the Indenture Trustee
to make any investment of any funds or to sell any investment held in any of the
Trust Accounts unless the security interest granted and perfected in such
account will continue to be perfected in such investment or the proceeds of such
sale, in either case without any further action by any Person, and, in
connection with any direction to the Indenture Trustee to make any such
investment or sale, if requested by the Indenture Trustee, the Issuer shall
deliver to the Indenture Trustee, the Securities Insurer and the Swap
Counterparty an Opinion of Counsel, acceptable to the Indenture Trustee, to such
effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms.
(c) If (i) the Issuer shall have failed to give investment directions
for any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred
and be continuing with respect to the either the Group I or Group II Notes, as
the case may be, but the Group I or Group II Notes, respectively, shall not have
been declared due and payable pursuant to Section 5.02, or, if such Group I or
Group II Notes, as applicable, shall have been declared due and payable
following an Event of Default, amounts collected or receivable from the
Indenture Trust Estate are being applied in accordance with Section 5.04 as if
there had not been such a declaration; then the Indenture Trustee shall, to the
fullest extent practicable, invest and reinvest funds in the Trust Accounts in
one or more Eligible Investments.
SECTION 8.04. RELEASE OF INDENTURE TRUST ESTATE. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding, all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid and no amounts are due and owing to the Securities Insurer or the Swap
Counterparty, release any remaining portion of the Indenture Trust Estate that
secured the Group I and Group II Notes from the lien of this Indenture and
release to the Issuer or any other Person entitled thereto any funds then on
deposit in the Trust Accounts. The Indenture Trustee shall release property from
the lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of
an Issuer Request accompanied by an Officers' Certificate of the Issuer, an
Opinion of Counsel and (if required by TIA) Independent Certificates in
accordance with TIA xx.xx. 314(c) and 314(d)(1) and meeting the applicable
requirements of Section 11.01.
(c) Each holder of any Class of the Group I and Group II Notes, by the
acceptance of such Group I or Group Note, respectively, acknowledges that from
time to time during the Funding Period the Indenture Trustee shall release the
lien of this Indenture on those Group I or Group II Student Loans, respectively,
to be sold to the Depositor and as to which the Depositor will simultaneously
deposit the aggregate Purchase Amounts thereof into the Group I or Group II
Escrow Account, as applicable, in accordance with, and subject to the terms and
conditions of, Section 2.03 of the Sale and Servicing Agreement, and each holder
of each Class of the Group I and Group II Notes consents to such release.
SECTION 8.05. OPINION OF COUNSEL. The Indenture Trustee shall receive
at least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.04(c), as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with and such action will not materially and
adversely impair the security for the Group I or Group II Notes, as applicable
or the rights of the holders of the Group I and Group II Notes, as the case may
be, the Securities Insurer or the Swap Counterparty in contravention of the
provisions of this Indenture; PROVIDED, HOWEVER, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the
Indenture Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.
SECTION 8.06. DEMANDS UNDER THE GROUP II NOTES GUARANTY INSURANCE
POLICY. (a) In the event that the Servicer's Report with respect to any
Determination Date shall state that (x) Group II Available Funds (after giving
effect to all required distributions to be made pursuant to either Section
5.05(c)(Y)(1) through (5) of the Sale and Servicing Agreement, or Sections
5.04(b)(Y) FIRST through FIFTH or 5.04(c)(Y)(1) through (6) of this Indenture,
as applicable), plus all amounts permitted to be transferred from the Group II
Reserve Account, pursuant to Sections 5.06(b) and 5.08(d) of the Sale and
Servicing Agreement, respectively, on any Distribution Date, are insufficient to
provide for the Noteholders' Interest Distribution Amount for the Group II Notes
for such Distribution Date (the amount of such insufficiency, the "Interest
Deficiency Amount"), (y) on the Final Maturity Dates for the Class II-A-1 Notes
and the Class II-A-2 Notes, respectively, Group II Available Funds (after giving
effect to all required distributions to be made pursuant to either Section
5.05(c)(Y)(1) through (8) of the Sale and Servicing Agreement, or Sections
5.04(b)(Y) FIRST through SIXTH or 5.04(c)(Y)(1) through (9) of this Indenture,
as applicable), plus all amounts permitted to be transferred from the Group II
Reserve Account pursuant to Section 5.06(b) of the Sale and Servicing Agreement,
are insufficient to reduce the principal balance of the Class II-A-1 Notes or
the Class II-A-2 Notes, as applicable, to zero on such Final Maturity Date (the
amount of such insufficiency, the "Principal Deficiency Amount"), or (z) any
Group II Noteholders have been required by a court to return a Preference Amount
previously distributed to such Group II Noteholders, then after receipt of such
Servicer's Report, the Indenture Trustee shall promptly (and in any event not
later than 12:00 p.m. on the third Business Day prior to the Distribution Date)
deliver a completed Group II Notes Guaranty Insurance Policy Notice to the
Securities Insurer requesting payment in an amount equal to the Insured Payment
for such Distribution Date. The Administrator shall instruct the Indenture
Trustee to distribute, and the Indenture Trustee shall distribute, to the Group
II Noteholders any Insured Payment deposited into the Collection Account (x) to
the holders of the Class II-A-1 and Class II-A-2 Notes, pro rata (based on the
Noteholders' Interest Distribution Amount for each such Class and such
Distribution Date), the Interest Deficiency Amount, (y) on the Final Maturity
Date for the Class II-A-1 Notes or the Class II-A-2 Notes, as applicable, the
related Principal Deficiency Amount, and (z) the amount of any Preference
Amounts.
ARTICLE VIII-A
THE GROUP II NOTES GUARANTY INSURANCE POLICY
SECTION 8A.1. CLAIMS UNDER THE GROUP II NOTES GUARANTY INSURANCE
POLICY. (a) With respect to the Group II Notes only, in the event that the
Insured Payments for the related Distribution Date are greater than zero, the
Indenture Trustee shall furnish to the Securities Insurer (with a copy to the
Master Servicer) a completed Group II Notes Guaranty Insurance Policy Notice, in
the form provided and in accordance with the terms of the Group II Notes
Guaranty Insurance Policy, in the amount of the related Insured Payments.
Amounts paid by the Securities Insurer under the Group II Notes Guaranty
Insurance Policy shall be deposited by the Indenture Trustee into the Group II
Collection Account Subaccount for payment to related Group II Noteholders on the
related Distribution Date (or promptly following payment on a later date as set
forth in the Group II Notes Guaranty Insurance Policy).
(b) Any notice delivered by the Indenture Trustee to the Securities
Insurer pursuant to subsection 8A.1(a) shall specify the Interest Deficiency
Amount, the Principal Deficiency Amount and the Insured Payment claimed under
the Group II Notes Guaranty Insurance Policy. Any payment made by the Securities
Insurer under the Group II Notes Guaranty Insurance Policy shall be applied
solely to the payment of the related Noteholders' Interest Distribution Amount
with respect to the Group II Notes to the extent of any Interest Deficiency
Amount, or on the Final Maturity Date with respect to each Class of Group II
Notes, the related Noteholders' Principal Distribution Amount with respect to
such Class of Group II Notes to the extent of any Principal Deficiency Amount,
or in repayment of a required to be returned Preference Amount, and for no other
purpose. The Indenture Trustee shall return to the Securities Insurer any
portion of proceeds received under the Group II Notes Guaranty Insurance Policy
not applied as an Insured Payment.
(c) The Indenture Trustee shall (i) receive, as attorney-in-fact of
each Noteholder, any Insured Payment from the Securities Insurer and (ii)
deposit the same in the Group II Collection Account Subaccount for disbursement
to the related Noteholders as set forth in Section 5.05(d) of the Sale and
Servicing Agreement, and Section 8.02(d) of this Indenture. Any Insured Payment
disbursed by the Indenture Trustee from claims made under the Group II Notes
Guaranty Insurance Policy shall not be considered payment by the Issuer with
respect to such Group II Notes, and shall not discharge the obligations of the
Issuer with respect thereto. The Securities Insurer shall, to the extent it
makes any payment with respect to the Group II Notes, become subrogated to the
rights of the recipients of such payments to the extent of such payments.
Subject to and conditioned upon any payment with respect to the Group II Notes
by or on behalf of the Securities Insurer under the Group II Notes Guaranty
Insurance Policy, the Indenture Trustee shall assign to the Securities Insurer
all rights to the payment of interest or principal with respect to the Group II
Notes which are then due for payment to the extent of all payments made by the
Securities Insurer and the Securities Insurer may exercise any option, vote,
right, power or the like with respect to the Group II Class A Notes, to the
extent that it has made a payment of principal with respect thereto pursuant to
the Group II Notes Guaranty Insurance Policy. To evidence such subrogation, the
Note Registrar shall note the Securities Insurer's rights as subrogee upon the
register of Group II Noteholders upon receipt from the Securities Insurer of
proof of payment by the Securities Insurer of any Interest Deficiency Amount or
on or after the Final Maturity Date for the Class II-A-1 Notes or Class II-A-2
Notes, as applicable, any Principal Deficiency Amount.
(d) The Indenture Trustee shall be entitled to enforce on behalf of
the Group II Noteholders the obligations of the Securities Insurer under the
Group II Notes Guaranty Insurance Policy. Notwithstanding any other provision of
this Indenture, the Group II Noteholders are not entitled to make a claim
directly under either of the Group II Notes Guaranty Insurance Policy or
institute proceedings directly against the Securities Insurer.
(e) The Group II Notes Guaranty Insurance Policy is issued for the
benefit of the holders of the Group II Notes only, and no amounts due and owed
to the holders of the Group I Notes shall be payable by the Securities Insurer
from the Group II Notes Guaranty Insurance Policy or otherwise.
SECTION 8A.2. [RESERVED].
SECTION 8A.3. SURRENDER OF THE GROUP II NOTES GUARANTY INSURANCE
POLICY. The Indenture Trustee shall surrender the Group II Notes Guaranty
Insurance Policy to the Securities Insurer for cancellation upon the expiration
of such Group II Notes Guaranty Insurance Policy in accordance with the terms
thereof or in the event such policy is replaced pursuant to Section 8A.5.
SECTION 8A.4. RIGHTS OF THE SECURITIES INSURER. Each Group II
Noteholder by purchase of its Class of Group II Notes held by it acknowledges
that the Indenture Trustee on behalf of the Trust, as partial consideration of
the issuance of the Group II Notes Guaranty Insurance Policy, has agreed that
the Securities Insurer shall have certain rights hereunder for so long as no
Securities Insurer Default shall have occurred and is continuing.
Notwithstanding anything to the contrary contained herein, but subject to the
last sentence of this Section 8A.4, so long as a Securities Insurer Default has
occurred and is continuing, any provision giving the Securities Insurer the
right to direct, appoint or consent to, approve of, or take any action under
this Indenture or any of the Basic Documents, irrespective of whether such
rights have been either granted directly to the Securities Insurer or exercised
on behalf of the Group II Noteholders, shall be inoperative during the period of
such Securities Insurer Default and such right shall instead vest in the
Indenture Trustee acting at the written direction of Group II Controlling
Noteholders. The Securities Insurer may disclaim any of its rights and powers
under this Indenture (but not its duties and obligations under the Group II
Notes Guaranty Insurance Policy or the Insurance Agreement) upon delivery of a
written notice to the Indenture Trustee. The Securities Insurer may give or
withhold any consent hereunder in its reasonable discretion. In the event that
the Administrator substitutes one or more new guaranty insurance policies for
the Group II Notes Guaranty Insurance Policy pursuant to Section 8A.5, the new
securities insurer shall have all of the rights to direct, appoint or consent
to, approve of, or take any action under this Indenture vested in the Securities
Insurer immediately prior to the occurrence of a Rating Agency Downgrade as set
forth in Section 8A.5.
SECTION 8A.5. REPLACEMENT GROUP II NOTES GUARANTY INSURANCE POLICY. In
the event of a Rating Agency Downgrade, the Administrator shall be permitted,
but shall not be obligated, to substitute one or more new guaranty insurance
policies for the Group II Notes Guaranty Insurance Policy or may arrange for any
other form of credit enhancement in substitution for the Group II Notes Guaranty
Insurance Policy; PROVIDED, HOWEVER, that, in each case, such new securities
insurer shall have the highest rating available from each Rating Agency and
provided further that the Securities Insurer is reimbursed for all amounts due
under this Indenture and the Insurance Agreement. It shall be a condition to
substitution of any such new guaranty insurance policy or other form of credit
enhancement that there be delivered to the Indenture Trustee (i) an Officer's
Certificate by the Administrator stating that the conditions to such
substitution set forth in this Section 8A.5 (other than in clause (ii)) have
been satisfied and (ii) a legal opinion, acceptable in form to the Indenture
Trustee, from counsel to the provider of such guaranty insurance policy or other
form of credit enhancement with respect to the enforceability thereof and such
other matters as the Indenture Trustee may require. Upon receipt of written
notice of any such substitution from the Administrator and the taking of
physical possession of the replacement guaranty insurance policy or other form
of credit enhancement, the Indenture Trustee shall, within five (5) Business
Days following receipt of such notice and such taking of physical possession,
deliver the Group II Notes Guaranty Insurance Policy marked "Cancelled" to the
Securities Insurer, and the Securities Insurer will have no further liability
under the Group II Notes Guaranty Insurance Policy.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Swap Counterparty or any holders of the Notes but
with prior notice to the Rating Agencies, and the Swap Counterparty, the Issuer
and the Indenture Trustee, when authorized by an Issuer Order, at any time and
from time to time, may enter into one or more indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as in force at
the date of the execution thereof), but (unless any such proposed amendment does
not affect the Group II Student Loans or the Group II Notes or the Securities
Insurer as evidenced by an Opinion of Counsel of the Depositor (who shall not be
an employee of KBUSA or any of its Affiliates) regarding the lack of changes to
any legal rights and remedies of the Group II Noteholders or the Securities
Insurer, and a confirmation from each Rating Agency that such amendment will not
result in the downgrading of the then current ratings of any of the Group II
Notes (without regard to the Group II Notes Guaranty Insurance Policy), and
provided that no Securities Insurer Default has occurred and is continuing) with
the consent of the Securities Insurer (not to be unreasonably withheld), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided that such action shall
not materially adversely affect the interests of the holders of the Notes,
the Securities Insurer or the Swap Counterparty;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA;
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, and (unless any such
proposed amendment does not affect the Group II Student Loans or the Group II
Notes or the Securities Insurer as evidenced by an Opinion of Counsel of the
Depositor (who shall not be an employee of KBUSA or any of its Affiliates)
regarding the lack of changes to any legal rights and remedies of the Group II
Noteholders or the Securities Insurer, and a confirmation from each Rating
Agency that such amendment will not result in the downgrading of the then
current ratings of any of the Group II Notes (without regard to the Group II
Notes Guaranty Insurance Policy), and provided that no Securities Insurer
Default has occurred and is continuing) with the consent of the Securities
Insurer (not to be unreasonably withheld), when authorized by an Issuer Order,
may, also without the consent of the Swap Counterparty or any of the holders of
the Notes but with prior notice to the Swap Counterparty and the Rating
Agencies, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the holders of the Notes under this Indenture; PROVIDED, HOWEVER, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any holder of the Notes, the Securities
Insurer or the Swap Counterparty.
SECTION 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies, and with the consent of: (x) the Group
I Controlling Parties holding a majority of the Outstanding Amount of the
related Classes of Group I Notes, (unless any such proposed amendment does not
affect the Group I Student Loans or the Group I Notes as evidenced by an Opinion
of Counsel of the Depositor (who shall not be an employee of KBUSA or any of its
Affiliates) regarding the lack of changes to any legal rights and remedies of
the Group I Noteholders, and a confirmation from each Rating Agency that such
amendment will not result in the downgrading of the then current ratings of any
of the Group I Notes), and (y) the Securities Insurer, provided that no
Securities Insurer Default shall have occurred and is continuing, then by the
Group II Controlling Noteholders holding a majority of the Outstanding Amount of
the related Classes of Group II Notes (unless any such proposed amendment does
not affect the Group II Student Loans or the Group II Notes or the Securities
Insurer as evidenced by an Opinion of Counsel of the Depositor (who shall not be
an employee of KBUSA or any of its Affiliates) regarding the lack of changes to
any legal rights and remedies of the Group II Noteholders or the Securities
Insurer, and a confirmation from each Rating Agency that such amendment will not
result in the downgrading of the then current ratings of any of the Group II
Notes (without regard to the Group II Notes Guaranty Insurance Policy), may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
holders of the Group I or Group II Notes, as applicable, under this Indenture;
PROVIDED, HOWEVER, that no such supplemental indenture shall, without the
consent of the holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest (including any unpaid Noteholders' Interest Index Carryover) on
any Note, or reduce the principal amount thereof, the interest rate thereon
or the Redemption Price with respect thereto, change the provisions of this
Indenture relating to the application of payments received from the Cap
Provider with respect to the Cap Agreement, collections on, or the proceeds
of the sale of, the Indenture Trust Estate to payment of principal of or
interest (including any unpaid Noteholders' Interest Index Carryover) on
the Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in
Article V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the related
Group of Notes, the consent of the holders of the related Group of Notes of
which is required for any such supplemental indenture, or the consent of
the holders of the related Group of Notes of which is required for any
waiver of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the related
Group of Notes required to direct the Indenture Trustee to direct the
Issuer to sell or liquidate the Indenture Trust Estate pursuant to Section
5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the holder of each Outstanding
Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest
(including any Noteholders' Interest Index Carryover) or principal due on
any Note on any Distribution Date (including the calculation of any of the
individual components of such calculation) or to affect the rights of the
holders of the Notes to the benefit of any provisions for the mandatory
redemption of the Notes contained herein;
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Indenture
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive any holder of any Note of the security provided by the
lien of this Indenture; or
(viii) or change the definition of Group I Controlling Noteholders,
Group II Controlling Noteholders, Group I Controlling Parties or Group II
Controlling Parties, as the case may be.
Notwithstanding anything to the contrary contained in this Indenture, such
rights of consent granted to the holders of the Notes contained in clauses (i)
through (viii) of this proviso shall not be exercisable by the Group I
Controlling Noteholders on behalf of the all of the Group I Noteholders or by
the Securities Insurer on behalf of all of the Group II Noteholders.
It shall not be necessary for any Act of holders of the Notes under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Securities Insurer, the Swap Counterparty and to the holders
of the related group of Notes to which such amendment or supplemental indenture
relates a notice prepared by the Issuer setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.04. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the related group or groups of Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
holders of the Group I or Group II Notes, as applicable, shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.05. CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.06. REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. REDEMPTION. (a) (i) [Reserved]
(ii) In the event that on the Distribution Date on which the Group I
or Group II Funding Period, as the case may be, ends (or on the Distribution
Date immediately following the last day of the Group I or Group II Funding
Period, as applicable, if the Group I or Group II Funding Period, as applicable,
does not end on a Distribution Date) any amount remains on deposit in the Group
I or Group II Pre-Funding Account, respectively, after giving effect to the
making of all related Additional Fundings during the Group I or Group II Funding
Period, as applicable, including any such related Additional Fundings on such
Redemption Date, the Administrator shall instruct the Indenture Trustee to
withdraw such remaining amounts from the Group I or Group II Pre-Funding Account
as applicable, and deposit such amounts into the applicable subaccount of the
Collection Account and such funds will be considered collections with respect to
the Group I or Group II Student Loans, respectively, for the related collection
period.
(b) In the event that all or some of the assets of the Trust are sold
pursuant to Section 9.01 of the Sale and Servicing Agreement, that portion of
the amounts on deposit in the Trust Accounts to be distributed to the holders of
the Group I or Group II Notes, as applicable shall be paid to the holders of the
Group I or Group II Notes, respectively, up to the Outstanding Amount of the
Group I or Group II Notes, as the case may be, and all accrued and unpaid
interest thereon and any accrued and unpaid Noteholders' Interest Index
Carryover with respect thereto (but only to the extent provided by Sections
2.07(d) and 8.02(c)). If amounts are to be paid to holders of the Group I or
Group II Notes, as the case may be, pursuant to this Section 10.01(b), the
Master Servicer, the Administrator or the Issuer shall, to the extent
practicable, furnish notice of such event to the Indenture Trustee not later
than 25 days prior to the Redemption Date whereupon all such amounts shall be
payable on the Redemption Date.
SECTION 10.02. FORM OF REDEMPTION NOTICE. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each holder of the applicable Class or Classes of
Notes, as of the close of business on the Record Date preceding the applicable
Redemption Date, at such applicable Noteholder's address or facsimile number
appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02).
Notice of redemption of the Group I or Group II Notes, as applicable,
shall be given by the Indenture Trustee in the name and at the expense of the
Issuer. Failure to give notice of redemption, or any defect therein, to any
holder of any Group I or Group II Note, as the case may be, shall not impair or
affect the validity of the redemption of any other Group I or Group II Note, as
the case may be.
SECTION 10.03. NOTES PAYABLE ON REDEMPTION DATE. The Group I or Group
II Notes, as the case may be, or portions thereof to be redeemed shall on the
Redemption Date become due and payable at the Redemption Price and (unless the
Issuer shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee (with copies to
the Securities Insurer and the Swap Counterparty) to take any action under any
provision of this Indenture, the Issuer shall furnish to the Indenture Trustee
(i) an Officers' Certificate of the Issuer stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has
read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory,
such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee, the Swap
Counterparty and the Securities Insurer an Officers' Certificate of the Issuer
certifying or stating the opinion of each person signing such certificate as to
the fair value (within 90 days of such deposit) to the Issuer of the Collateral
or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee, the Swap Counterparty and the Securities Insurer an Officers'
Certificate of the Issuer certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer shall
also deliver to the Indenture Trustee and the Securities Insurer an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Group I or Group II
Notes, as applicable, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officers' Certificate is less than
$25,000 or less than one percent of the Outstanding Amount of the Group I
or Group II Notes, as applicable.
(iii) Other than any property released as contemplated by clause (v)
below, whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee,
the Swap Counterparty and the Securities Insurer an Officers' Certificate
of the Issuer certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such release) of the
property or securities proposed to be released and stating that in the
opinion of such person the proposed release will not impair the security
under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee, the Swap Counterparty and the Securities Insurer an Officers'
Certificate of the Issuer certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer shall
also furnish to the Indenture Trustee and the Securities Insurer an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property as
contemplated by clause (v) below, or securities released from the lien of
this Indenture since the commencement of the then-current calendar year, as
set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Group I or
Group II Notes, as applicable, but such certificate need not be furnished
in the case of any release of property or securities if the fair value
thereof as set forth in the related Officers' Certificate is less than
$25,000 or less than one percent of the then Outstanding Amount of the
Group I or Group II Notes, as applicable.
(v) Notwithstanding Section 2.09 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of Group I or Group II Student Loans, as the case may be, as and to
the extent permitted or required by the Basic Documents, (B) make cash
payments out of the Trust Accounts as and to the extent permitted or
required by the Basic Documents and (C) convey to the Depositor, in order
to allow the applicable Seller to make Consolidation Loans, those specified
Financed Student Loans as and to the extent permitted or required by and in
accordance with Section 8.04(c) hereof and Section 2.03 of the Sale and
Servicing Agreement, so long as the Issuer shall deliver to the Indenture
Trustee every six months, commencing March 1, 2002, an Officers'
Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (A), (B) or (C) above that occurred during the
immediately preceding six calendar months were in the ordinary course of
the Issuer's business and that the proceeds thereof were applied in
accordance with the Basic Documents.
SECTION 11.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Master Servicer, the Depositor, the Issuer or the Administrator, stating
that the information with respect to such factual matters is in the possession
of the Master Servicer, the Depositor, the Issuer or the Administrator, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.03. ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by holders of the Group I or Group II Notes,
as applicable, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such holders of the Group I or Group II
Notes, as applicable, in person or by agents duly appointed in writing; and
except as herein otherwise expressly provided such action shall become effective
when such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the holders of the Group I or Group II
Notes, as applicable, signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Group I or Group II Notes, as applicable, shall
be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the holder of any Group I or Group II Notes, as
applicable, shall bind the holder of every Group I or Group II Note,
respectively, issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Group I or Group II Note, as applicable.
SECTION 11.04. NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER, SECURITIES
INSURER AND RATING AGENCIES. Any request, demand, authorization, direction,
notice, consent, waiver or Act of holders of Group I or Group II Notes, as
applicable, or other documents provided or permitted by this Indenture shall be
in writing and if such request, demand, authorization, direction, notice,
consent, waiver or act of holders of Group I or Group II Notes, as applicable,
is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any holder of Group I or Group II Notes,
as applicable, or by the Issuer shall be sufficient for every purpose
hereunder if made, given, furnished or filed in writing to or with the
Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee or by any holder of Group I or
Group II Notes, as applicable, shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage prepaid, to the
Issuer addressed to: KeyCorp Student Loan Trust 2001-A, in care of Bank
One, National Association, 0 Xxxx Xxx Xxxxx, Xxxxx XX0-0000, Xxxxxxx,
Xxxxxxxx 00000, Attention: Corporate Trust Administration; with a copy to
the Administrator, 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxx
00000, Attention: KeyCorp Education Resources, KeyCorp Student Loan Trust
2000-B, or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer or the Administrator. The Issuer shall
promptly transmit any notice received by it from the holders of the Notes
to the Indenture Trustee.
Notices required to be given to the Securities Insurer, the Swap
Counterparty or the Rating Agencies by the Issuer, the Indenture Trustee or the
Eligible Lender Trustee shall be in writing, personally delivered or mailed by
certified mail, return receipt requested, to (i) in the case of Moody's, at the
following address: Xxxxx'x Investors Service, Inc., ABS Monitoring Department,
00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's Rating Services, 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance
Department; (iii) Fitch, Inc., Municipal Structured Finance Group, Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, 00000; (iv) in the case of the Securities
Insurer, at the following address: MBIA Insurance Corporation, 000 Xxxx Xxxxxx,
Xxxxxx, X.X. 00000, Attention: Insured Portfolio Management-SF; and (v) in the
case of the Swap Counterparty, at the address of the Administrator given above;
or as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 11.05. NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to holders of Group I or Group II Notes, as applicable, of
any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to
each holder of Group I or Group II Notes, as applicable, affected by such event,
at his address as it appears on the Note Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to holders of the Notes is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular holder of Group I or Group II Notes, as applicable, shall
affect the sufficiency of such notice with respect to other holders of Group I
or Group II Notes, as applicable, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by holders of the Group I or Group II Notes, as
applicable, shall be filed with the Indenture Trustee but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to holders of the Group I or Group II Notes, as
applicable, when such notice is required to be given pursuant to any provision
of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default.
SECTION 11.06. ALTERNATE PAYMENT AND NOTICE PROVISIONS.
Notwithstanding any provision of this Indenture or any of the Group I or Group
II Notes, as applicable, to the contrary, the Issuer may enter into any
agreement with any holder of the Group I or Group II Notes, as applicable,
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such holder of the Group I or Group II Notes, as applicable,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 11.07. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.09. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind the successors, co-trustees and agents (excluding any
legal representatives or accountants) of the Indenture Trustee.
SECTION 11.10. SEPARABILITY. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the holders of the Notes, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Indenture Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.12. LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE 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 11.14. COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the holders of the Group I or Group II
Notes, as the case may be, or any other Person secured hereunder or for the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
SECTION 11.16. TRUST OBLIGATIONS. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Depositor, the
Administrator, the Master Servicer, the Eligible Lender Trustee or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Depositor, the
Administrator, the Master Servicer, the Indenture Trustee or the Eligible Lender
Trustee in its individual capacity or (ii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Depositor, the Administrator,
the Master Servicer, the Indenture Trustee or the Eligible Lender Trustee in its
individual capacity, any holder or owner of a beneficial interest in the Issuer,
the Eligible Lender Trustee or the Indenture Trustee or of any successor or
assign of the Depositor, the Administrator, the Master Servicer, the Indenture
Trustee or the Eligible Lender Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Eligible Lender Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the
Eligible Lender Trustee shall be subject to, and entitled to the benefits of,
the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. NO PETITION. The Indenture Trustee, by entering into
this Indenture, and each holder of each Class of the Notes, by accepting a Note,
hereby covenant and agree that they will not at any time institute against a
Seller, the Depositor or the Issuer, or join in any institution against a
Seller, the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency, receivership or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the other Basic Documents.
SECTION 11.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, the Swap
Counterparty or the Securities Insurer, during the Issuer's normal business
hours, to examine all the books of account, records, reports, and other papers
of the Issuer, to make copies and extracts therefrom, to cause such books to be
audited by Independent certified public accountants, and to discuss the Issuer's
affairs, finances and accounts with the Issuer's officers, employees, and
Independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. The Indenture Trustee shall and shall
cause its representatives to hold in confidence all such information obtained
from such examination or inspection except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
SECTION 11.19. THIRD-PARTY BENEFICIARIES. This Indenture will inure to
the benefit of and be binding upon the parties hereto, the Noteholders, the Note
Owners, the Securities Insurer, the Swap Counterparty and their respective
successors and permitted assigns. Except as otherwise provided in this
Indenture, no other person will have any right or obligation hereunder.
SECTION 11.20. RIGHTS OF THE SECURITIES INSURER TO EXERCISE RIGHTS OF
GROUP II NOTEHOLDERS. (a) By accepting its Group II Note, each Group II
Noteholder agrees that unless a Securities Insurer Default has occurred and is
continuing, the Securities Insurer shall be deemed to be treated as the holder
of 100% of Group II Notes (except with respect to the right to direct the
Indenture Trustee to exercise the Group II Put Option, which shall be remain the
right of the Group II Controlling Noteholders, excluding for such purpose the
Securities Insurer), and shall have the right to exercise all rights of the
Group II Noteholders (including the rights of the Group II Controlling Parties)
as specified under this Indenture without any further consent of any of the
Group II Noteholders (unless otherwise specified herein). Any right conferred to
the Securities Insurer hereunder shall be suspended and shall run to the benefit
of the Group II Noteholders during any period in which a Securities Insurer
Default has occurred and is continuing; provided, however, that during the
continuance of a Securities Insurer Default, the consent of the Securities
Insurer must be obtained with respect to any amendments that may materially
adversely affect the Securities Insurer.
(b) Whenever the consent or approval of the Securities Insurer is
required under this Indenture, such consent or approval shall be reasonably
given, except for consents or approvals required under Article V of this
Indenture, where such consent or approval shall be given solely at the
discretion of the Securities Insurer.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
KEYCORP STUDENT LOAN TRUST 2001-A,
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee,
By: /S/ XXXXX X. XXXXXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Authorized Officer
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Indenture Trustee,
By: /S/ XXXXXXXX XXXXX
Name: Xxxxxxxx Xxxxx
Title: Vice President
Acknowledged and accepted as to
the Granting Clause as of the
day and year first above written:
BANK ONE, NATIONAL ASSOCIATION,
not in its individual
capacity but solely as
Eligible Lender Trustee,
By: /S/ XXXXX X. XXXXXXXXXX
-----------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Authorized Officer
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 14th day of September in the year 2001, before me, the undersigned,
personally appeared Xxxxx X. Xxxxxxxxxx, an Authorized Officer, of BANK ONE,
NATIONAL ASSOCIATION, as Eligible Lender Trustee of KEYCORP STUDENT LOAN TRUST
2001-A, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 14th day of September, 2001.
/S/ XXXXX X. XXXXXXXXXX
Notary Public in and for
the State of New York.
My commission expires: April 4, 0000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 14th day of September in the year 2001, before me, the undersigned,
personally appeared Xxxxxxxx Xxxxx, a Vice President of THE CHASE MANHATTAN
BANK, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 14th day of September, 2001.
/S/ XXXXX X. XXXXXXXXXX
Notary Public in and for
the State of New York.
My commission expires: April 4, 0000
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
On the 14th day of September in the year 2001, before me, the undersigned,
personally appeared Xxxxx X. Xxxxxxxxxx, an Authorized Officer, of BANK ONE,
NATIONAL ASSOCIATION, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 14th day of September, 2001.
/s/ XXXXX X. XXXXXXXXXX
Notary Public in and for
the State of New York.
My commission expires: April 4, 0000
XXXXXXXX A
[See Appendix A to the Sale and Servicing Agreement]
SCHEDULE A
TO THE INDENTURE
SCHEDULE OF GROUP I INITIAL FINANCED STUDENT LOANS
Delivered to the Indenture Trustee.
SCHEDULE OF GROUP II INITIAL FINANCED STUDENT LOANS
Delivered to the Indenture Trustee.
SCHEDULE B
TO THE INDENTURE
SCHEDULE OF OTHER STUDENT LOANS THAT ARE GROUP I STUDENT LOANS
To be included on Schedule A to each related Transfer Agreement.
SCHEDULE OF OTHER STUDENT LOANS THAT ARE GROUP I STUDENT LOANS
To be included on Schedule A to each related Transfer Agreement.
SCHEDULE C
TO THE INDENTURE
LOCATION OF FINANCED STUDENT LOAN FILES - PHEAA
Documents relating to the Financed Student Loans being sub-serviced by PHEAA on
behalf of the Master Servicer pursuant to the PHEAA Sub-Servicing Agreements
(including original notes) are stored at PHEAA's facility at 0000 Xxxxx 0xx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000.
LOCATION OF FINANCED STUDENT LOAN FILES - GREAT LAKES
Documents relating to the Financed Student Loans being sub-serviced by Great
Lakes on behalf of the Master Servicer pursuant to the Great Lakes Sub-Servicing
Agreement(including original notes) are stored at Great Lakes' facilities at
0000 Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx 00000, and, on behalf of Great
Lakes, at the offices of Datakeep Inc., 0000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx
00000.
EXHIBIT A-1
TO THE INDENTURE
[FORM OF CLASS I-A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 1/
No. I-A-1-___
KEYCORP STUDENT LOAN TRUST 2001-A
FLOATING RATE CLASS I-A-1 ASSET BACKED NOTES
KeyCorp Student Loan Trust 2001-A, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the June 2008 Distribution Date
(the "Final Maturity Date").
----------------
1 Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Class I-A-1 Note (this "Note") at
the rate per annum equal to the Note Interest Rate (as defined on the reverse
hereof) for this Note, on each Distribution Date until the principal of this
Note is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in Section 3.01 of the Indenture. Interest on this
Note will accrue for each Distribution Date from the most recent Distribution
Date on which interest has been paid to but excluding such Distribution Date or,
if no interest has yet been paid, from the Closing Date). Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 2001-A
By: BANK ONE, NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Eligible Lender Trustee
under the Trust Agreement,
By: _____________________________
Authorized Signatory
Date: September 14, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee, By:
By: ________________________________
Authorized Signatory
Date: September 14, 2001
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class I-A-1 Asset Backed Notes (herein also
called the "Class I-A-1 Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the holders of the Notes. The Class I-A-1 Notes are
subject to all terms of the Indenture. To the extent that any provisions of this
Note contradicts or is inconsistent with the provisions of the Indenture, the
provisions of the Indenture shall control and supersede such contradictory or
inconsistent provision herein. Capitalized but undefined terms shall have the
meanings set forth in the Indenture dated as of September 1, 2001 between
KeyCorp Student Loan Trust 2001-A and The Chase Manhattan Bank, as Trustee
including Appendix A to the Indenture.
The Class I-A-1 Notes and the Issuer's Floating Rate Class I-A-2 Asset
Backed Notes (the "Class I-A-2 Notes" and together with the Class I-A-1 Notes,
the "Group I Class A Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. THE RIGHTS
OF THE ISSUER'S FLOATING RATE CLASS I-B ASSET BACKED NOTES (THE "CLASS I-B
NOTES" AND TOGETHER WITH THE GROUP I CLASS A NOTES, THE "GROUP I NOTES") ARE AND
WILL BE SUBORDINATED TO THE RIGHTS OF THE GROUP I CLASS A NOTES AS PROVIDED IN
THE INDENTURE. At the same time, the Issuer will also issue its Class II-A-1
Notes and the Class II-A-2 Notes (the "Group II Notes" and together with the
Group I Notes, the "Notes") that will also be secured by other items of
collateral constituting the Trust Estate.
Principal of the Group I Notes will be payable on each Distribution
Date to the extent funds are available therefor set forth in the Sale and
Servicing Agreement and the Indenture. "Distribution Date" means the
twenty-seventh day of each March, June, September and December, or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
December 27, 2001.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Group I Notes shall be
due and payable on the date on which (i) an Event of Default with respect to the
Group I Notes shall have occurred and be continuing and (ii) the Indenture
Trustee at the written direction of the Group I Controlling Parties holding a
majority of the Outstanding Amount of the related Classes of Group I Notes shall
have declared the Group I Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Group I
Notes of the same Class shall be made pro rata to the holders of such Group I
Notes entitled thereto.
Interest on the Group I Notes will be payable on each Distribution
Date on the principal amount outstanding of each Class of Group I Notes until
the principal amount thereof is paid in full, at a rate per annum equal to the
Note Interest Rate for such Class of Group I Notes.
The "Note Interest Rate" means, with respect to any Interest Period
and the Class I-A-1 Notes, the interest rate per annum (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) Three-Month LIBOR plus 0.07% and (ii) the Student
Loan Rate for such Interest Period.
The "Student Loan Rate" means for any Class of Notes for any Interest
Period will equal 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 Group I
Student Loans for the Collection Period relating to such Interest Period, plus
any Net Trust Swap Receipt (with respect to the Group I Interest Rate Swap)
actually received by the Trust with respect to the related Collection Period,
less the sum of the related Master Servicing Fees, the Administration Fee
allocated to the Group I Notes payable on the related Distribution Date and any
related Master Servicing Fees paid on the two preceding Monthly Servicing
Payment Dates during the related Collection Period, minus any Net Trust Swap
Payment (with respect to the Group I Interest Rate Swap) due to the Swap
Counterparty for the related Collection Period, and (ii) the denominator of
which is the outstanding principal balance of the Group I Notes as of the first
day of such Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "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 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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. For purposes of calculating Three-Month LIBOR, a Business Day
is any day on which banks in London and New York City are open for the
transaction of business. Interest due for any Interest Period will be determined
based on the actual number of days in such Interest Period over a 360 day year.
"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.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding December 27, 2001. 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.
Any Noteholders' Interest Index Carryover with respect to the Group I
Class A Notes that may exist on any Distribution Date attributable shall be
payable to the holders of the Group I Class A Notes, on a pro rata basis based
on the amount of Noteholders' Interest Index Carryover then owing on the Group I
Class A Notes on that Distribution Date and any succeeding Distribution Dates
solely out of the funds available and required to be applied thereto pursuant to
the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Depositor, the Indenture Trustee on the Notes
or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Depositor, the Indenture Trustee or the
Eligible Lender Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Depositor, the Indenture Trustee or
the Eligible Lender Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Eligible Lender Trustee or
the Indenture Trustee, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Depositor, the Administrator, the
Master Servicer, KBUSA, the Noteholders and the Note Owners that, for purposes
of Federal and State income tax and any other tax measured in whole or in part
by income, this Note will qualify as indebtedness of KBUSA. The Noteholders and
the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of KBUSA.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Depositor, the Indenture Trustee, and any agent of the
Issuer, the Depositor or the Indenture Trustee, may treat the Person in whose
name this Group I Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the owner hereof for all
purposes whether or not this Group I Note be overdue, and none of the Issuer,
the Depositor, the Indenture Trustee, nor any such agent shall be affected by
notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE 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 AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, Bank One, National Association, in its individual capacity,
the Depositor, any owner of a beneficial interest in the Issuer or the
Depositor, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture; it being expressly understood that said covenants, obligations and
indemnifications have been made by the Eligible Lender Trustee for the sole
purposes of binding the interests of the Eligible Lender Trustee in the assets
of the Issuer. The holder of the Notes by the acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the holder of any Class of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the Indenture Trust Estate for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
EXHIBIT A-2
TO THE INDENTURE
[FORM OF CLASS I-A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 2/
No. I-A-2-___
KEYCORP STUDENT LOAN TRUST 2001-A
FLOATING RATE CLASS I-A-2 ASSET BACKED NOTES
KeyCorp Student Loan Trust 2001-A, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the June 2031 Distribution Date
(the "Final Maturity Date").
-----------------
2 Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Class I-A-2 Note (this "Note") at
the rate per annum equal to the Note Interest Rate (as defined on the reverse
hereof) for this Note, on each Distribution Date until the principal of this
Note is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in Section 3.01 of the Indenture. Interest on this
Note will accrue for each Distribution Date from the most recent Distribution
Date on which interest has been paid to but excluding such Distribution Date or,
if no interest has yet been paid, from the Closing Date). Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 2001-A
By: BANK ONE, NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Eligible Lender Trustee under the
Trust Agreement,
By: _____________________________
Authorized Signatory
Date: September 14, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee, By:
By: ________________________________
Authorized Signatory
Date: September 14, 2001
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class I-A-2 Asset Backed Notes (herein also
called the "Class I-A-2 Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the holders of the Notes. The Class I-A-2 Notes are
subject to all terms of the Indenture. To the extent that any provisions of this
Note contradicts or is inconsistent with the provisions of the Indenture, the
provisions of the Indenture shall control and supersede such contradictory or
inconsistent provision herein. Capitalized but undefined terms shall have the
meanings set forth in the Indenture dated as of September 1, 2001 between
KeyCorp Student Loan Trust 2001-A and The Chase Manhattan Bank, as Trustee
including Appendix A to the Indenture.
The Class I-A-2 Notes and the Issuer's Floating Rate Class I-A-1 Asset
Backed Notes (the "Class I-A-1 Notes" and together with the Class I-A-2 Notes,
the "Group I Class A Notes") are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. THE RIGHTS
OF THE ISSUER'S FLOATING RATE CLASS I-B ASSET BACKED NOTES (THE "CLASS I-B
NOTES" AND TOGETHER WITH THE GROUP I CLASS A NOTES, THE "GROUP I NOTES") ARE AND
WILL BE SUBORDINATED TO THE RIGHTS OF THE GROUP I CLASS A NOTES AS PROVIDED IN
THE INDENTURE. At the same time, the Issuer will also issue its Class II-A-1
Notes and the Class II-A-2 Notes (the "Group II Notes" and together with the
Group I Notes, the "Notes") that will also be secured by other items of
collateral constituting the Trust Estate.
Principal of the Group I Notes will be payable on each Distribution
Date to the extent funds are available therefor set forth in the Sale and
Servicing Agreement and the Indenture. "Distribution Date" means the
twenty-seventh day of each March, June, September and December, or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
December 27, 2001.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Group I Notes shall be
due and payable on the date on which (i) an Event of Default with respect to the
Group I Notes shall have occurred and be continuing and (ii) the Indenture
Trustee at the written direction of the Group I Controlling Parties holding a
majority of the Outstanding Amount of the related Classes of Group I Notes shall
have declared the Group I Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Group I
Notes of the same Class shall be made pro rata to the holders of such Group I
Notes entitled thereto.
Interest on the Group I Notes will be payable on each Distribution
Date on the principal amount outstanding of each Class of Group I Notes until
the principal amount thereof is paid in full, at a rate per annum equal to the
Note Interest Rate for such Class of Group I Notes.
The "Note Interest Rate" means, with respect to any Interest Period
and the Class I-A-2 Notes, the interest rate per annum (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) Three-Month LIBOR plus 0.15% and (ii) the Student
Loan Rate for such Interest Period.
The "Student Loan Rate" means for any Class of Notes for any Interest
Period will equal 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 Group I
Student Loans for the Collection Period relating to such Interest Period, plus
any Net Trust Swap Receipt (with respect to the Group I Interest Rate Swap)
actually received by the Trust with respect to the related Collection Period,
less the sum of the related Master Servicing Fees, the Administration Fee
allocated to the Group I Notes payable on the related Distribution Date and any
related Master Servicing Fees paid on the two preceding Monthly Servicing
Payment Dates during the related Collection Period, minus any Net Trust Swap
Payment (with respect to the Group I Interest Rate Swap) due to the Swap
Counterparty for the related Collection Period, and (ii) the denominator of
which is the outstanding principal balance of the Group I Notes as of the first
day of such Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "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 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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. For purposes of calculating Three-Month LIBOR, a Business Day
is any day on which banks in London and New York City are open for the
transaction of business. Interest due for any Interest Period will be determined
based on the actual number of days in such Interest Period over a 360 day year.
"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.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding December 27, 2001. 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.
Any Noteholders' Interest Index Carryover with respect to the Group I
Class A Notes that may exist on any Distribution Date attributable shall be
payable to the holders of the Group I Class A Notes, on a pro rata basis based
on the amount of Noteholders' Interest Index Carryover then owing on the Group I
Class A Notes on that Distribution Date and any succeeding Distribution Dates
solely out of the funds available and required to be applied thereto pursuant to
the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Depositor, the Indenture Trustee on the Notes
or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Depositor, the Indenture Trustee or the
Eligible Lender Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Depositor, the Indenture Trustee or
the Eligible Lender Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Eligible Lender Trustee or
the Indenture Trustee, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Depositor, the Administrator, the
Master Servicer, KBUSA, the Noteholders and the Note Owners that, for purposes
of Federal and State income tax and any other tax measured in whole or in part
by income, this Note will qualify as indebtedness of KBUSA. The Noteholders and
the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of KBUSA.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Depositor, the Indenture Trustee, and any agent of the
Issuer, the Depositor or the Indenture Trustee, may treat the Person in whose
name this Group I Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the owner hereof for all
purposes whether or not this Group I Note be overdue, and none of the Issuer,
the Depositor, the Indenture Trustee, nor any such agent shall be affected by
notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE 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 AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, Bank One, National Association, in its individual capacity,
the Depositor, any owner of a beneficial interest in the Issuer or the
Depositor, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture; it being expressly understood that said covenants, obligations and
indemnifications have been made by the Eligible Lender Trustee for the sole
purposes of binding the interests of the Eligible Lender Trustee in the assets
of the Issuer. The holder of the Notes by the acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the holder of any Class of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the Indenture Trust Estate for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
EXHIBIT A-3
TO THE INDENTURE
[FORM OF CLASS I-B NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 3/
No. I-B-___
KEYCORP STUDENT LOAN TRUST 2001-A
FLOATING RATE CLASS I-B ASSET BACKED NOTES
KeyCorp Student Loan Trust 2001-A, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the June 2037 Distribution Date
(the "Final Maturity Date").
----------------
3 Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Class I-B Note (this "Note") at
the rate per annum equal to the Note Interest Rate (as defined on the reverse
hereof) for this Note, on each Distribution Date until the principal of this
Note is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in Section 3.01 of the Indenture. Interest on this
Note will accrue for each Distribution Date from the most recent Distribution
Date on which interest has been paid to but excluding such Distribution Date or,
if no interest has yet been paid, from the Closing Date). Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 2001-A
By: BANK ONE, NATIONAL ASSOCIATION, not
in its individual capacity but solely
as Eligible Lender Trustee under
the Trust Agreement,
By: _____________________________
Authorized Signatory
Date: September 14, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee, By:
By: ________________________________
Authorized Signatory
Date: September 14, 2001
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class I-B Asset Backed Notes (herein also called
the "Class I-B Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Class I-B Notes are subject to all
terms of the Indenture. To the extent that any provisions of this Note
contradicts or is inconsistent with the provisions of the Indenture, the
provisions of the Indenture shall control and supersede such contradictory or
inconsistent provision herein. Capitalized but undefined terms shall have the
meanings set forth in the Indenture dated as of September 1, 2001 between
KeyCorp Student Loan Trust 2001-A and The Chase Manhattan Bank, as Trustee
including Appendix A to the Indenture.
The Class I-A-1 Notes (the "Class I-A-1 Notes") and the Issuer's
Floating Rate Class I-A-2 Asset Backed Notes (the "Class I-A-2 Notes" and
together with the Class I-A-1 Notes, the "Group I Class A Notes") are and will
be equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture. THE RIGHTS OF THE ISSUER'S FLOATING RATE CLASS I-B
ASSET BACKED NOTES (THE "CLASS I-B NOTES" AND TOGETHER WITH THE GROUP I CLASS A
NOTES, THE "GROUP I NOTES") ARE AND WILL BE SUBORDINATED TO THE RIGHTS OF THE
GROUP I CLASS A NOTES AS PROVIDED IN THE INDENTURE. At the same time, the Issuer
will also issue its Class II-A-1 Notes and the Class II-A-2 Notes (the "Group II
Notes" and together with the Group I Notes, the "Notes") that will also be
secured by other items of collateral constituting the Trust Estate.
Principal of the Group I Notes will be payable on each Distribution
Date to the extent funds are available therefor set forth in the Sale and
Servicing Agreement and the Indenture. "Distribution Date" means the
twenty-seventh day of each March, June, September and December, or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
December 27, 2001.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Group I Notes shall be
due and payable on the date on which (i) an Event of Default with respect to the
Group I Notes shall have occurred and be continuing and (ii) the Indenture
Trustee at the written direction of the Group I Controlling Parties holding a
majority of the Outstanding Amount of the related Classes of Group I Notes
(WHICH, UNTIL ALL OF THE GROUP I CLASS A NOTES HAVE BEEN PAID IN FULL, SHALL
EXCLUDE THE CLASS I-B NOTES) shall have declared the Group I Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Group I Notes of the same Class shall
be made pro rata to the holders of such Group I Notes entitled thereto.
Interest on the Group I Notes will be payable on each Distribution
Date on the principal amount outstanding of each Class of Group I Notes until
the principal amount thereof is paid in full, at a rate per annum equal to the
Note Interest Rate for such Class of Group I Notes.
The "Note Interest Rate" means, with respect to any Interest Period
and the Class I-B Notes, the interest rate per annum (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) Three-Month LIBOR plus 0.55% and (ii) the Student
Loan Rate for such Interest Period.
The "Student Loan Rate" means for any Class of Group I Notes for any
Interest Period will equal 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 Group I
Student Loans for the Collection Period relating to such Interest Period, plus
any Net Trust Swap Receipt (with respect to the Group I Interest Rate Swap)
actually received by the Trust with respect to the related Collection Period,
less the sum of the related Master Servicing Fees, the Administration Fee
allocated to the Group I Notes payable on the related Distribution Date and any
related Master Servicing Fees paid on the two preceding Monthly Servicing
Payment Dates during the related Collection Period, minus any Net Trust Swap
Payment (with respect to the Group I Interest Rate Swap) due to the Swap
Counterparty for the related Collection Period, and (ii) the denominator of
which is the outstanding principal balance of the Group I Notes as of the first
day of such Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "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 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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. For purposes of calculating Three-Month LIBOR, a Business Day
is any day on which banks in London and New York City are open for the
transaction of business. Interest due for any Interest Period will be determined
based on the actual number of days in such Interest Period over a 360 day year.
"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.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding December 27, 2001. 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.
Any Noteholders' Interest Index Carryover that may exist on any
Distribution Date attributable to the Class I-B Notes shall be payable to the
holders of the Class I-B Notes on that Distribution Date and any succeeding
Distribution Date solely out of the funds available and required to be applied
thereto pursuant to the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Depositor, the Indenture Trustee on the Notes
or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Depositor, the Indenture Trustee or the
Eligible Lender Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Depositor, the Indenture Trustee or
the Eligible Lender Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Eligible Lender Trustee or
the Indenture Trustee, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Depositor, the Administrator, the
Master Servicer, KBUSA, the Noteholders and the Note Owners that, for purposes
of Federal and State income tax and any other tax measured in whole or in part
by income, this Note will qualify as indebtedness of KBUSA. The Noteholders and
the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of KBUSA.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Depositor, the Indenture Trustee, and any agent of the
Issuer, the Depositor or the Indenture Trustee, may treat the Person in whose
name this Group I Note (as of the day of determination or as of such other date
as may be specified in the Indenture) is registered as the owner hereof for all
purposes whether or not this Group I Note be overdue, and none of the Issuer,
the Depositor, the Indenture Trustee, nor any such agent shall be affected by
notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE 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 AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, Bank One, National Association, in its individual capacity,
the Depositor, any owner of a beneficial interest in the Issuer or the
Depositor, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture; it being expressly understood that said covenants, obligations and
indemnifications have been made by the Eligible Lender Trustee for the sole
purposes of binding the interests of the Eligible Lender Trustee in the assets
of the Issuer. The holder of the Notes by the acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the holder of any Class of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the Indenture Trust Estate for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
DEFAULT IN THE PAYMENT OF INTEREST ON A CLASS I-B NOTE IS NOT AN EVENT
OF DEFAULT UNDER THE INDENTURE SO LONG AS ANY GROUP I CLASS A NOTES ARE
OUTSTANDING. BY ACCEPTANCE OF THIS CLASS I-B NOTE OR ANY BENEFICIAL INTEREST
HEREIN, YOU ARE DEEMED TO HAVE CONSENTED TO THE DELAY IN PAYMENT OF INTEREST ON
SUCH CLASS I-B NOTE AND WAIVED YOUR RIGHTS TO INSTITUTE SUIT FOR ENFORCEMENT OF
ANY SUCH PAYMENT TO THE EXTENT DESCRIBED IN THE INDENTURE.
EXHIBIT A-4
TO THE INDENTURE
[FORM OF CLASS II-A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 4/
No. II-A-1-___
KEYCORP STUDENT LOAN TRUST 2001-A
FLOATING RATE CLASS II-A-1 ASSET BACKED NOTES
KeyCorp Student Loan Trust 2001-A, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the June 2008 Distribution Date
(the "Final Maturity Date").
------------------
4 Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Class II-A-1 Note (this "Note")
at the rate per annum equal to the Note Interest Rate (as defined on the reverse
hereof) for this Note, on each Distribution Date until the principal of this
Note is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in Section 3.01 of the Indenture. Interest on this
Note will accrue for each Distribution Date from the most recent Distribution
Date on which interest has been paid to but excluding such Distribution Date or,
if no interest has yet been paid, from the Closing Date). Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 2001-A
By: BANK ONE, NATIONAL ASSOCIATION, not
in its individual capacity but solely
as Eligible Lender Trustee under
the Trust Agreement,
By: _____________________________
Authorized Signatory
Date: September 14, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee, By:
By: ________________________________
Authorized Signatory
Date: September 14, 2001
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class II-A-1 Asset Backed Notes (herein also
called the "Class II-A-1 Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the holders of the Notes. The Class II-A-1 Notes are
subject to all terms of the Indenture. To the extent that any provisions of this
Note contradicts or is inconsistent with the provisions of the Indenture, the
provisions of the Indenture shall control and supersede such contradictory or
inconsistent provision herein. Capitalized but undefined terms shall have the
meanings set forth in the Indenture dated as of September 1, 2001 between
KeyCorp Student Loan Trust 2001-A and The Chase Manhattan Bank, as Trustee
including Appendix A to the Indenture.
The Class II-A-1 Notes and the Issuer's Floating Rate Class II-A-2
Asset Backed Notes (the "Class II-A-2 Notes" and together with the Class II-A-1
Notes, the "Group II Class A Notes" or the "Group II Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture. At the same time, the Issuer will also issue its
Class I-A-1 Notes, Class I-A-2 Notes, and Class I-B Notes (collectively, the
"Group I Notes" and together with the Group II Notes, the "Notes") that will
also be secured by other items of collateral constituting the Trust Estate.
Principal of the Group II Notes will be payable on each Distribution
Date to the extent funds are available therefor set forth in the Sale and
Servicing Agreement and the Indenture. "Distribution Date" means the
twenty-seventh day of each March, June, September and December, or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
December 27, 2001.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Group II Notes shall be
due and payable on the date on which (i) an Event of Default with respect to the
Group II Notes shall have occurred and be continuing and (ii) the Indenture
Trustee at the written direction of the Securities Insurer (unless a Securities
Insurer Default shall have occurred and is continuing, then the holders of Group
II Notes representing not less than a majority of the Outstanding Amount of the
Group II Notes) shall have declared the Group II Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Group II Notes of the same Class shall be made pro rata to the
holders of such Notes entitled thereto.
Interest on the Group II Notes will be payable on each Distribution
Date on the principal amount outstanding of each Class of Notes until the
principal amount thereof is paid in full, at a rate per annum equal to the Note
Interest Rate for such Class of Notes.
The "Note Interest Rate" means, with respect to any Interest Period
and the Class II-A-1 Notes, the interest rate per annum (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) Three-Month LIBOR plus 0.15% and (ii) the
Student Loan Rate for such Interest Period.
The "Student Loan Rate" means for any Class of Notes for any Interest
Period will equal 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 Group II
Student Loans for the Collection Period relating to such Interest Period, plus
any Net Trust Swap Receipt (with respect to the Group II Interest Rate Swap)
actually received by the Trust with respect to the related Collection Period,
less the sum of the related Master Servicing Fees, the premiums due to the
Securities Insurer and the Administration Fee allocated to the Group II Notes
payable on the related Distribution Date and any related Master Servicing Fees
paid on the two preceding Monthly Servicing Payment Dates during the related
Collection Period, minus any Net Trust Swap Payment (with respect to the Group
II Interest Rate Swap) due to the Swap Counterparty for the related Collection
Period, and (ii) the denominator of which is the outstanding principal balance
of the Group II Notes as of the first day of such Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "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 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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. For purposes of calculating Three-Month LIBOR, a Business Day
is any day on which banks in London and New York City are open for the
transaction of business. Interest due for any Interest Period will be determined
based on the actual number of days in such Interest Period over a 360 day year.
"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.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding December 27, 2001. 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.
Any Noteholders' Interest Index Carryover with respect to the Group II
Class A Notes that may exist on any Distribution Date attributable shall be
payable to the holders of the Group II Class A Notes, on a pro rata basis based
on the amount of Noteholders' Interest Index Carryover then owing on the Group
II Class A Notes on that Distribution Date and any succeeding Distribution Dates
solely out of the funds available and required to be applied thereto pursuant to
the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Depositor, the Indenture Trustee on the Notes
or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Depositor, the Indenture Trustee or the
Eligible Lender Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Depositor, the Indenture Trustee or
the Eligible Lender Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Eligible Lender Trustee or
the Indenture Trustee, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Depositor, the Administrator, the
Master Servicer, KBUSA, the Noteholders and the Note Owners that, for purposes
of Federal and State income tax and any other tax measured in whole or in part
by income, this Note will qualify as indebtedness of KBUSA. The Noteholders and
the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of KBUSA.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee, the Securities Insurer and any agent of
the Issuer, the Securities Insurer or the Indenture Trustee, may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes whether or not this Note be overdue, and none of the
Issuer, the Depositor, the Indenture Trustee, the Securities Insurer nor any
such agent shall be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE 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 AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, Bank One, National Association, in its individual capacity,
the Depositor, any owner of a beneficial interest in the Issuer or the
Depositor, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture; it being expressly understood that said covenants, obligations and
indemnifications have been made by the Eligible Lender Trustee for the sole
purposes of binding the interests of the Eligible Lender Trustee in the assets
of the Issuer. The holder of the Notes by the acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the holder of any Class of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the Indenture Trust Estate for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
BY ACCEPTANCE OF THIS CLASS II-A-1 NOTE YOU ARE HEREBY DEEMED TO HAVE
AGREED, THAT FOR LONG AS NO SECURITIES INSURER DEFAULT HAS OCCURRED AND IS
CONTINUING, THE RIGHTS OF THE CLASS II-A-1 NOTEHOLDERS UNDER ANY OF THE BASIC
DOCUMENTS, WILL BE EXERCISABLE BY THE SECURITIES INSURER ON BEHALF OF THE CLASS
II-A-1 NOTEHOLDERS, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN THE
INDENTURE AND THE SALE AND SERVICING AGREEMENT.
STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at The Chase
Manhattan Bank in New York, New York:
OBLIGATIONS: $450,000,000 KeyCorp Student Loan Trust 2001-A,
Floating Rate, Asset-Backed Notes,
Class II-A-1 and Class II-A-2
The Insurer, in consideration of the payment of the premium and subject to
the terms of this Group II Note Guaranty Insurance Policy (this "Policy"),
hereby unconditionally and irrevocably guarantees to any Owner that an amount
equal to each full and complete Insured Payment will be received from the
Insurer by The Chase Manhattan Bank, or its successors, as trustee for the
Owners (the "Trustee"), on behalf of the Owners, for distribution by the Trustee
to each Owner of each Owner's proportionate share of the Insured Payment. The
Insurer's obligations hereunder with respect to a particular Insured Payment
shall be discharged to the extent funds equal to the applicable Insured Payment
are received by the Trustee, whether or not such funds are properly applied by
the Trustee. Insured Payments shall be made only at the time set forth in this
Policy, and no accelerated Insured Payments shall be made regardless of any
acceleration of the Obligations, unless such acceleration is at the sole option
of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Issuer, the Trust or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability). This Policy does not cover, and Insured Payments
shall not include, any related Noteholders' Interest Index Carryover.
THIS POLICY WILL ONLY COVER THE CLASS II-A-1 NOTES AND THE CLASS II-A-2
NOTES AND SHALL ONLY BE FOR THE BENEFIT THE GROUP II NOTEHOLDERS. THE HOLDERS OF
ANY CLASS OF THE GROUP I NOTES SHALL HAVE NO RIGHTS NOR BE ENTITLED TO ANY
BENEFITS OF THIS POLICY.
The Insurer will pay any Insured Payment that is a Preference Amount on the
Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of a
preference payment, (b) an opinion of counsel satisfactory to the Insurer that
such order is final and not subject to appeal, (c) an assignment in such form as
is reasonably required by the Insurer, irrevocably assigning to the Insurer all
rights and claims of the Owner relating to or arising under the Obligations
against the debtor which made such preference payment or otherwise with respect
to such preference payment and (d) appropriate instruments to effect the
appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than 12:00
noon, New York City time, on the later of the Distribution Date on which the
related Deficiency Amount is due or the third Business Day following receipt in
New York, New York on a Business Day by State Street Bank and Trust Company,
N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent appointed
by the Insurer (the "Fiscal Agent"), of a Notice (as described below), provided
that if such Notice is received after 12:00 noon, New York City time, on such
Business Day, it will be deemed to be received on the following Business Day. If
any such Notice received by the Fiscal Agent is not in proper form or is
otherwise insufficient for the purpose of making claim hereunder, it shall be
deemed not to have been received by the Fiscal Agent for purposes of this
paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall
promptly so advise the Trustee and the Trustee may submit an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer shall be subrogated to
the rights of each Owner to receive payments under the Obligations to the extent
of any payment by the Insurer hereunder.
As used herein, the following terms shall have the following meanings:
"AGREEMENT" means the Indenture dated as of September 1, 2001 among KeyCorp
Student Loan Trust 2001-A, as Issuer, and the Trustee, as trustee, without
regard to any amendment or supplement thereto, unless such amendment or
supplement has been approved in writing by the Insurer.
"BUSINESS DAY" means any day other than (a) a Saturday or a Sunday (b) a
day on which the Insurer is closed or (c) a day on which banking institutions in
New York City or in the city in which the corporate trust office of the Trustee
under the Agreement is located are authorized or obligated by law or executive
order to close.
"DEFICIENCY AMOUNT" means (a) as of any Distribution Date, the excess, if
any, of (1) the Noteholders' Interest Distribution Amount for the Group II Notes
on such Distribution Date, over (2) Group II Available Funds for such
Distribution Date after giving effect to the payment of the related Master
Servicing Fee, the Administration Fee allocated to the Group II Notes and all
amounts due to the Securities Insurer for such Distribution Date, plus the
application of any amounts available on such Distribution Date to cover such
payments from amounts on deposit in the Reserve Account and the Pre-Funding
Account, and (b) on either the Class II-A-1 Notes Final Maturity Date or the
Class II-A-2 Notes Final Maturity Date, the unpaid principal balance of the
Class II-A-1 Notes, in the case of the Class II-A-1 Notes Final Maturity Date,
or the unpaid principal balance of the Class II-A-2 Notes, in the case of the
Class II-A-2 Notes Final Maturity Date, in each case after giving effect to any
distributions on such date and the application of any amounts available on such
Distribution Date to cover such payments from amounts on deposit in the Group II
Reserve Account.
"INSURED PAYMENT" means (a) as of any Distribution Date, any Deficiency
Amount and (b) any Preference Amount.
"NOTICE" means the telephonic or telegraphic notice, promptly confirmed in
writing by facsimile substantially in the form of Exhibit A attached hereto, the
original of which is subsequently delivered by registered or certified mail,
from the Trustee specifying the Insured Payment which shall be due and owing on
the applicable Distribution Date.
"OWNER" means each Group II Noteholder (as defined in the Agreement (other
than the Issuer, the Trustee, the Eligible Lender Trustee, the Depositor, the
Administrator, the Master Servicer or any Sub-Servicer)) who, on the applicable
Distribution Date, is entitled under the terms of the applicable Group II Notes
to payment thereunder.
"PREFERENCE AMOUNT" means any amount previously distributed to an Owner on
the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be made
at the address listed below for the Fiscal Agent or such other address as the
Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 00 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE CONSTRUED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy is
not refundable for any reason, including payment, or provision being made for
payment, prior to maturity of the Obligations.
MBIA INSURANCE CORPORATION
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto _______________________________
----------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________
________________________________ */
Signature Guaranteed:
________________________________ */
------------------
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
EXHIBIT A-5
TO THE INDENTURE
[FORM OF CLASS II-A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH IN THE INDENTURE
AND THE SALE AND SERVICING AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. THIS NOTE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY.
REGISTERED CUSIP NO.
$__________ 5/
No. II-A-2-___
KEYCORP STUDENT LOAN TRUST 2001-A
FLOATING RATE CLASS II-A-2 ASSET BACKED NOTES
KeyCorp Student Loan Trust 2001-A, a trust organized and existing
under the laws of the State of Delaware (herein referred to as the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of DOLLARS no later than on the June 2031 Distribution Date
(the "Final Maturity Date").
-------------
5 Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
The Issuer will pay interest on this Class II-A-2 Note (this "Note")
at the rate per annum equal to the Note Interest Rate (as defined on the reverse
hereof) for this Note, on each Distribution Date until the principal of this
Note is paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in Section 3.01 of the Indenture. Interest on this
Note will accrue for each Distribution Date from the most recent Distribution
Date on which interest has been paid to but excluding such Distribution Date or,
if no interest has yet been paid, from the Closing Date). Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
KEYCORP STUDENT LOAN TRUST 2001-A
By: BANK ONE, NATIONAL ASSOCIATION, not in
its individual capacity but solely as
Eligible Lender Trustee under
the Trust Agreement,
By: _____________________________
Authorized Signatory
Date: September 14, 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee, By:
By: ________________________________
Authorized Signatory
Date: September 14, 2001
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class II-A-1 Asset Backed Notes (herein also
called the "Class II-A-2 Notes"), all issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the holders of the Notes. The Class II-A-2 Notes are
subject to all terms of the Indenture. To the extent that any provisions of this
Note contradicts or is inconsistent with the provisions of the Indenture, the
provisions of the Indenture shall control and supersede such contradictory or
inconsistent provision herein. Capitalized but undefined terms shall have the
meanings set forth in the Indenture dated as of September 1, 2001 between
KeyCorp Student Loan Trust 2001-A and The Chase Manhattan Bank, as Trustee
including Appendix A to the Indenture.
The Class II-A-2 Notes and the Issuer's Floating Rate Class II-A-1
Asset Backed Notes (the "Class II-A-1 Notes" and together with the Class II-A-2
Notes, the "Group II Class A Notes" or the "Group II Notes") are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture. At the same time, the Issuer will also issue its
Class I-A-1 Notes, Class I-A-2 Notes, and Class I-B Notes (collectively, the
"Group I Notes" and together with the Group II Notes, the "Notes") that will
also be secured by other items of collateral constituting the Trust Estate.
Principal of the Group II Notes will be payable on each Distribution
Date to the extent funds are available therefor set forth in the Sale and
Servicing Agreement and the Indenture. "Distribution Date" means the
twenty-seventh day of each March, June, September and December, or, if any such
date is not a Business Day, the next succeeding Business Day, commencing
December 27, 2001.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on its Final Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Group II Notes shall be
due and payable on the date on which (i) an Event of Default with respect to the
Group II Notes shall have occurred and be continuing and (ii) the Indenture
Trustee at the written direction of the Securities Insurer (unless a Securities
Insurer Default shall have occurred and is continuing, then the holders of Group
II Notes representing not less than a majority of the Outstanding Amount of the
Group II Notes) shall have declared the Group II Notes to be immediately due and
payable in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Group II Notes of the same Class shall be made pro rata to the
holders of such Notes entitled thereto.
Interest on the Group II Notes will be payable on each Distribution
Date on the principal amount outstanding of each Class of Notes until the
principal amount thereof is paid in full, at a rate per annum equal to the Note
Interest Rate for such Class of Notes.
The "Note Interest Rate" means, with respect to any Interest Period
and the Class II-A-2 Notes, the interest rate per annum (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) Three-Month LIBOR plus 0.27% and (ii) the
Student Loan Rate for such Interest Period.
The "Student Loan Rate" means for any Class of Notes for any Interest
Period will equal 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 Group II
Student Loans for the Collection Period relating to such Interest Period, plus
any Net Trust Swap Receipt (with respect to the Group II Interest Rate Swap)
actually received by the Trust with respect to the related Collection Period,
less the sum of the related Master Servicing Fees, the premiums due to the
Securities Insurer and the Administration Fee allocated to the Group II Notes
payable on the related Distribution Date and any related Master Servicing Fees
paid on the two preceding Monthly Servicing Payment Dates during the related
Collection Period, minus any Net Trust Swap Payment (with respect to the Group
II Interest Rate Swap) due to the Swap Counterparty for the related Collection
Period, and (ii) the denominator of which is the outstanding principal balance
of the Group II Notes as of the first day of such Interest Period.
Pursuant to the Sale and Servicing Agreement, the Administrator shall
determine the Three-Month LIBOR for purposes of calculating the Note Interest
Rates for each given Interest Period. "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 (or such comparable page on another
comparable service), as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750 (or such comparable
page on another comparable service), the rate for that day will be determined on
the basis of the rates at which deposits in U.S. dollars, having the Index
Maturity and in a principal amount of not less than U.S. $1,000,000, are offered
at approximately 11:00 a.m., London time, on such LIBOR Determination Date to
prime banks in the London interbank market by the Reference Banks. The
Administrator will request the principal London office of each of such Reference
Banks to provide a quotation of its rate. If at least two such quotations are
provided, the rate for that day will be the arithmetic mean of the quotations.
If fewer than two quotations are provided, the rate for that day will be the
arithmetic mean of the rates quoted by major banks in New York City, selected by
the Administrator, at approximately 11:00 a.m., New York City time, on such
LIBOR Determination Date for loans in the 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. For purposes of calculating Three-Month LIBOR, a Business Day
is any day on which banks in London and New York City are open for the
transaction of business. Interest due for any Interest Period will be determined
based on the actual number of days in such Interest Period over a 360 day year.
"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.
"LIBOR" Determination Date" means (x) with respect to each Interest
Period other than the initial Interest Period, the second Business Day prior to
the commencement of such Interest Period and (y) with respect to the initial
Interest Period, as determined pursuant to clause (x) for the period from the
Closing Date to but excluding December 27, 2001. 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.
Any Noteholders' Interest Index Carryover with respect to the Group II
Class A Notes that may exist on any Distribution Date attributable shall be
payable to the holders of the Group II Class A Notes, on a pro rata basis based
on the amount of Noteholders' Interest Index Carryover then owing on the Group
II Class A Notes on that Distribution Date and any succeeding Distribution Dates
solely out of the funds available and required to be applied thereto pursuant to
the Sale and Servicing Agreement.
Payments of interest on this Note due and payable on each Distribution
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register on the Record Date, except that with respect to
Notes registered on the Record Date in the name of the nominee of the Clearing
Agency, unless Definitive Notes have been issued (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Noteholder hereof as of the Record Date preceding such Distribution Date
by notice mailed no later than five days prior to such Distribution Date and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate for this Note to the extent lawful.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in the Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Depositor, the Indenture Trustee on the Notes
or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Depositor, the Indenture Trustee or the
Eligible Lender Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Depositor, the Indenture Trustee or
the Eligible Lender Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Depositor, the Eligible Lender Trustee or
the Indenture Trustee, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
It is the intent of the Issuer, the Depositor, the Administrator, the
Master Servicer, KBUSA, the Noteholders and the Note Owners that, for purposes
of Federal and State income tax and any other tax measured in whole or in part
by income, this Note will qualify as indebtedness of KBUSA. The Noteholders and
the Note Owners, by acceptance of this Note, agree to treat, and to take no
action inconsistent with the treatment of, this Note for such tax purposes as
indebtedness of KBUSA.
Each holder of the Notes or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that by accepting the benefits of the Indenture that such holder of the Notes or
Note Owner will not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the other Basic Documents.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee, the Securities Insurer and any agent of
the Issuer, the Securities Insurer or the Indenture Trustee, may treat the
Person in whose name this Note (as of the day of determination or as of such
other date as may be specified in the Indenture) is registered as the owner
hereof for all purposes whether or not this Note be overdue, and none of the
Issuer, the Depositor, the Indenture Trustee, the Securities Insurer nor any
such agent shall be affected by notice to the contrary.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and the
holders of the Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
THIS NOTE 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 AND THEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, Bank One, National Association, in its individual capacity,
the Depositor, any owner of a beneficial interest in the Issuer or the
Depositor, nor any of their respective partners, beneficiaries, agents,
officers, directors, employees or successors or assigns shall be personally
liable for, nor shall recourse be had to any of them for, the payment of
principal of or interest on, or performance of, or omission to perform, any of
the covenants, obligations or indemnifications contained in this Note or the
Indenture; it being expressly understood that said covenants, obligations and
indemnifications have been made by the Eligible Lender Trustee for the sole
purposes of binding the interests of the Eligible Lender Trustee in the assets
of the Issuer. The holder of the Notes by the acceptance hereof agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the holder of any Class of the Notes shall have no
claim against any of the foregoing for any deficiency, loss or claim therefrom;
PROVIDED, HOWEVER, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the Indenture Trust Estate for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
BY ACCEPTANCE OF THIS CLASS II-A-2 NOTE YOU ARE HEREBY DEEMED TO HAVE
AGREED, THAT FOR LONG AS NO SECURITIES INSURER DEFAULT HAS OCCURRED AND IS
CONTINUING, THE RIGHTS OF THE CLASS II-A-2 NOTEHOLDERS UNDER ANY OF THE BASIC
DOCUMENTS, WILL BE EXERCISABLE BY THE SECURITIES INSURER ON BEHALF OF THE CLASS
II-A-2 NOTEHOLDERS, EXCEPT IN THE LIMITED CIRCUMSTANCES SET FORTH IN THE
INDENTURE AND THE SALE AND SERVICING AGREEMENT.
STATEMENT OF INSURANCE
The MBIA Insurance Corporation (the "Insurer") has issued a policy
containing the following provisions, such policy being on file at The Chase
Manhattan Bank in New York, New York:
OBLIGATIONS: $450,000,000 KeyCorp Student Loan Trust 2001-A,
Floating Rate, Asset-Backed Notes,
Class II-A-1 and Class II-A-2
The Insurer, in consideration of the payment of the premium and subject to
the terms of this Group II Note Guaranty Insurance Policy (this "Policy"),
hereby unconditionally and irrevocably guarantees to any Owner that an amount
equal to each full and complete Insured Payment will be received from the
Insurer by The Chase Manhattan Bank, or its successors, as trustee for the
Owners (the "Trustee"), on behalf of the Owners, for distribution by the Trustee
to each Owner of each Owner's proportionate share of the Insured Payment. The
Insurer's obligations hereunder with respect to a particular Insured Payment
shall be discharged to the extent funds equal to the applicable Insured Payment
are received by the Trustee, whether or not such funds are properly applied by
the Trustee. Insured Payments shall be made only at the time set forth in this
Policy, and no accelerated Insured Payments shall be made regardless of any
acceleration of the Obligations, unless such acceleration is at the sole option
of the Insurer.
Notwithstanding the foregoing paragraph, this Policy does not cover
shortfalls, if any, attributable to the liability of the Issuer, the Trust or
the Trustee for withholding taxes, if any (including interest and penalties in
respect of any such liability). This Policy does not cover, and Insured Payments
shall not include, any related Noteholders' Interest Index Carryover.
THIS POLICY WILL ONLY COVER THE CLASS II-A-1 NOTES AND THE CLASS II-A-2
NOTES AND SHALL ONLY BE FOR THE BENEFIT THE GROUP II NOTEHOLDERS. THE HOLDERS OF
ANY CLASS OF THE GROUP I NOTES SHALL HAVE NO RIGHTS NOR BE ENTITLED TO ANY
BENEFITS OF THIS POLICY.
The Insurer will pay any Insured Payment that is a Preference Amount on the
Business Day following receipt on a Business Day by the Fiscal Agent (as
described below) of (a) a certified copy of the order requiring the return of a
preference payment, (b) an opinion of counsel satisfactory to the Insurer that
such order is final and not subject to appeal, (c) an assignment in such form as
is reasonably required by the Insurer, irrevocably assigning to the Insurer all
rights and claims of the Owner relating to or arising under the Obligations
against the debtor which made such preference payment or otherwise with respect
to such preference payment and (d) appropriate instruments to effect the
appointment of the Insurer as agent for such Owner in any legal proceeding
related to such preference payment, such instruments being in a form
satisfactory to the Insurer, provided that if such documents are received after
12:00 noon, New York City time, on such Business Day, they will be deemed to be
received on the following Business Day. Such payments shall be disbursed to the
receiver or trustee in bankruptcy named in the final order of the court
exercising jurisdiction on behalf of the Owner and not to any Owner directly
unless such Owner has returned principal or interest paid on the Obligations to
such receiver or trustee in bankruptcy, in which case such payment shall be
disbursed to such Owner.
The Insurer will pay any other amount payable hereunder no later than 12:00
noon, New York City time, on the later of the Distribution Date on which the
related Deficiency Amount is due or the third Business Day following receipt in
New York, New York on a Business Day by State Street Bank and Trust Company,
N.A., as Fiscal Agent for the Insurer, or any successor fiscal agent appointed
by the Insurer (the "Fiscal Agent"), of a Notice (as described below), provided
that if such Notice is received after 12:00 noon, New York City time, on such
Business Day, it will be deemed to be received on the following Business Day. If
any such Notice received by the Fiscal Agent is not in proper form or is
otherwise insufficient for the purpose of making claim hereunder, it shall be
deemed not to have been received by the Fiscal Agent for purposes of this
paragraph, and the Insurer or the Fiscal Agent, as the case may be, shall
promptly so advise the Trustee and the Trustee may submit an amended Notice.
Insured Payments due hereunder, unless otherwise stated herein, will be
disbursed by the Fiscal Agent to the Trustee on behalf of the Owners by wire
transfer of immediately available funds in the amount of the Insured Payment
less, in respect of Insured Payments related to Preference Amounts, any amount
held by the Trustee for the payment of such Insured Payment and legally
available therefor.
The Fiscal Agent is the agent of the Insurer only, and the Fiscal Agent
shall in no event be liable to Owners for any acts of the Fiscal Agent or any
failure of the Insurer to deposit, or cause to be deposited, sufficient funds to
make payments due under this Policy.
Subject to the terms of the Agreement, the Insurer shall be subrogated to
the rights of each Owner to receive payments under the Obligations to the extent
of any payment by the Insurer hereunder.
As used herein, the following terms shall have the following meanings:
"AGREEMENT" means the Indenture dated as of September 1, 2001 among KeyCorp
Student Loan Trust 2001-A, as Issuer, and the Trustee, as trustee, without
regard to any amendment or supplement thereto, unless such amendment or
supplement has been approved in writing by the Insurer.
"BUSINESS DAY" means any day other than (a) a Saturday or a Sunday (b) a
day on which the Insurer is closed or (c) a day on which banking institutions in
New York City or in the city in which the corporate trust office of the Trustee
under the Agreement is located are authorized or obligated by law or executive
order to close.
"DEFICIENCY AMOUNT" means (a) as of any Distribution Date, the excess, if
any, of (1) the Noteholders' Interest Distribution Amount for the Group II Notes
on such Distribution Date, over (2) Group II Available Funds for such
Distribution Date after giving effect to the payment of the related Master
Servicing Fee, the Administration Fee allocated to the Group II Notes and all
amounts due to the Securities Insurer for such Distribution Date, plus the
application of any amounts available on such Distribution Date to cover such
payments from amounts on deposit in the Reserve Account and the Pre-Funding
Account, and (b) on either the Class II-A-1 Notes Final Maturity Date or the
Class II-A-2 Notes Final Maturity Date, the unpaid principal balance of the
Class II-A-1 Notes, in the case of the Class II-A-1 Notes Final Maturity Date,
or the unpaid principal balance of the Class II-A-2 Notes, in the case of the
Class II-A-2 Notes Final Maturity Date, in each case after giving effect to any
distributions on such date and the application of any amounts available on such
Distribution Date to cover such payments from amounts on deposit in the Group II
Reserve Account.
"INSURED PAYMENT" means (a) as of any Distribution Date, any Deficiency
Amount and (b) any Preference Amount.
"NOTICE" means the telephonic or telegraphic notice, promptly confirmed in
writing by facsimile substantially in the form of Exhibit A attached hereto, the
original of which is subsequently delivered by registered or certified mail,
from the Trustee specifying the Insured Payment which shall be due and owing on
the applicable Distribution Date.
"OWNER" means each Group II Noteholder (as defined in the Agreement (other
than the Issuer, the Trustee, the Eligible Lender Trustee, the Depositor, the
Administrator, the Master Servicer or any Sub-Servicer)) who, on the applicable
Distribution Date, is entitled under the terms of the applicable Group II Notes
to payment thereunder.
"PREFERENCE AMOUNT" means any amount previously distributed to an Owner on
the Obligations that is recoverable and sought to be recovered as a voidable
preference by a trustee in bankruptcy pursuant to the United States Bankruptcy
Code (11 U.S.C.), as amended from time to time in accordance with a final
nonappealable order of a court having competent jurisdiction.
Capitalized terms used herein and not otherwise defined herein shall have
the respective meanings set forth in the Agreement as of the date of execution
of this Policy, without giving effect to any subsequent amendment to or
modification of the Agreement unless such amendment or modification has been
approved in writing by the Insurer.
Any notice hereunder or service of process on the Fiscal Agent may be made
at the address listed below for the Fiscal Agent or such other address as the
Insurer shall specify in writing to the Trustee.
The notice address of the Fiscal Agent is 15th Floor, 00 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Municipal Registrar and Paying Agency, or such
other address as the Fiscal Agent shall specify to the Trustee in writing.
THIS POLICY IS BEING ISSUED UNDER AND PURSUANT TO, AND SHALL BE CONSTRUED
UNDER, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF.
The insurance provided by this Policy is not covered by the
Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law.
This Policy is not cancelable for any reason. The premium on this Policy is
not refundable for any reason, including payment, or provision being made for
payment, prior to maturity of the Obligations.
MBIA INSURANCE CORPORATION
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________________________
----------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________
________________________________ */
Signature Guaranteed:
________________________________ */
------------------
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include
membership or participation in STAMP or such other "signature guarantee
program" as may be determined by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange Act
of 1934, as amended.
