EXHIBIT 4.2
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THIRD SUPPLEMENTAL INDENTURE OF TRUST
between
EDUCATION LOANS INCORPORATED
and
U.S. BANK NATIONAL ASSOCIATION
as Trustee
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Dated as of July 1, 2001
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TABLE OF CONTENTS
Page
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PARTIES......................................................................1
RECITALS.....................................................................1
Section 1. Definitions.....................................................1
Section 2. Authorization and Terms of Series 2001-1 Notes.................11
Section 3. Interest Payable on Series 2001-1 Notes........................13
Section 4. Determining the Series 2001-1 Note Auction Rate................16
Section 5. Determination of Payment Defaults and Payment of
Auction Agent and Broker-Dealer Fees...........................25
Section 6. Calculation of Maximum Auction Rate, All Hold
Rate, Net Loan Rate, One-Month LIBOR,Three-Month
LIBOR and Non-Payment Rate.....................................25
Section 7. Notification of Rates, Amounts and Payment Dates...............26
Section 8. Auction Agent..................................................27
Section 9. Broker-Dealers.................................................28
Section 10. Changes in Auction Period or Periods...........................28
Section 11. Changes in the Auction Date....................................29
Section 12. Additional Provisions Regarding the Series 2001-1
Note Interest Rate.............................................29
Section 13. Qualifications of Market Agent.................................30
Section 14. Purposes of Issuance of Series 2001-1 Notes....................31
Section 15. Deposit of Series 2001-1 Note Proceeds.........................31
Section 16. Redemption of Series 2001-1 Notes..............................31
Section 17. Book-Entry Series 2001-1 Notes.................................34
Section 18. Series 2001-1 Accounts and Subaccounts.........................36
Section 19. Series 2001-1 Capitalized Interest Account.....................37
Section 20. Purchase or Origination of Eligible Loans From Series
2001-1 Acquisition Account and Series 2001-1 Surplus
Subaccount.....................................................37
Section 21. Limitation on Costs of Issuance, Administrative Expenses
and Note Fees..................................................40
Section 22. Proceeds of Sales of Certain Student Loans To Be
Deposited in the Acquisition Fund..............................41
Section 23. Certain Findings, Determinations and Designations..............41
Section 24. Amendment of Granting Clause First of the Indenture............42
Section 25. Amendment of Section 5.04 of the Indenture.....................42
Section 26. Consent of Series 2001-1 Noteholders to Amendments
to Indenture...................................................43
Section 27. Governing Law..................................................43
Section 28. Section Headings; Table of Contents............................43
Section 29. Severability...................................................43
Section 30. Counterparts...................................................43
Section 31. Effect of Third Supplemental Indenture.........................43
SIGNATURES..................................................................45
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Exhibit A--Form of Series 2001-1 Senior Notes..............................A-1
Exhibit B--Form of Series 2001-1C Notes....................................B-1
Exhibit C--Form of Notice of A Payment Default.............................C-1
Exhibit D--Form of Notice of Cure of Payment Default.......................D-1
Exhibit E--Form of Notice of Proposed Auction Period Adjustment............E-1
Exhibit F--Form of Notice Establishing Auction Period Adjustment...........F-1
Exhibit G--Form of Notice of Change in Auction Date........................G-1
Exhibit H-1--List of EdLinc Student Loan Purchase Agreements ...........H-1-1
Exhibit H-2--List of GOAL Funding Student Loan Purchase Agreements .....H-2-1
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THIS THIRD SUPPLEMENTAL INDENTURE OF TRUST, dated as of July 1, 2001,
between EDUCATION LOANS INCORPORATED, a corporation duly organized and existing
under the laws of the State of Delaware (the "Corporation"), and U.S. BANK
NATIONAL ASSOCIATION, a national banking association duly established, existing
and authorized to accept and execute trusts of the character herein set out
under and by virtue of the laws of the United States (the "Trustee");
W I T N E S S E T H:
WHEREAS, the Corporation and the Trustee, as trustee, have heretofore
executed and delivered an Indenture of Trust (the "Original Indenture") and a
First Supplemental Indenture of Trust (the "First Supplemental Indenture"), each
dated as of December 1, 1999, and a Second Supplemental Indenture of Trust (the
"Second Supplemental Indenture"), dated as of December 1, 2000; and
WHEREAS, the Original Indenture prescribes the terms and conditions upon
which the Corporation may from time to time authorize and issue series of Notes
(as defined in the Original Indenture); and
WHEREAS, the Corporation has, by proper action of its Board, authorized and
determined to issue three series of Notes in the respective aggregate principal
amounts of $79,000,000 (the "Series 2001-1A Notes") and $79,000,000 (the "Series
2001-1B Notes"), each of which will be a series of Class A Notes, and
$23,800,000 (the "Series 2001-1C Notes," and, together with the Series 2001-1A
Notes and the Series 2001-1B Notes, the "Series 2001-1 Notes"), which will be a
series of Class B Notes; and
WHEREAS, the Corporation desires by this Third Supplemental Indenture to
prescribe the terms and provisions of the Series 2001-1 Notes, all as more fully
set forth herein; and
WHEREAS, the Corporation also desires, at this time, to amend certain
provisions of the Indenture in conjunction with the issuance of the Series
2001-1 Notes; and
WHEREAS, the execution and delivery of this Third Supplemental Indenture
and the issuance of the Series 2001-1 Notes have been in all respects duly and
validly authorized by the Corporation;
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:
Section 1. Definitions. In this Third Supplemental Indenture, the terms
defined in the Original Indenture, the First Supplemental Indenture and the
Second Supplemental Indenture shall, except as otherwise provided in this
Section 1, have the same meaning when used herein unless the context or use
thereof indicates another or different meaning or intent. In addition, the
following terms shall have the following respective meanings unless the context
hereof clearly requires otherwise:
"Administrative Cost and Note Fee Rate" shall mean a rate per annum equal
to the sum of (i) 1.05%, (ii) the Auction Agent Fee Rate and (iii) the
Broker-Dealer Fee Rate.
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"All Hold Rate" shall mean (i) for Auction Periods of thirty-five (35) days
or less, 85% of One-Month LIBOR, and (ii) for Auction Periods of greater than
thirty-five (35) days, 85% of Three-Month LIBOR.
"Alternative Loan Program" shall mean each of the following programs for
the making of Student Loans other than FFELP Loans the Alternative Loans under
which are eligible to be Financed under the Indenture: (i) the Great
Opportunities Academic Loan and Great Opportunities Academic Loan II Programs
offered by U.S. Bank National Association; (ii) the Choice Loan, Pathway,
Partner and MEFC Loan Programs offered by Marquette Bank, N.A.; (iii) the Quest
Loan, Independence, ▇▇▇▇▇▇ Education and BrainBucks Loan Programs offered by
Surety Loan Funding Company; and (iv) such other programs upon receipt by the
Trustee of written notice thereof by an Authorized Officer of the Corporation
and confirmation from each Rating Agency that financing of loans under such
programs under the Indenture will not cause the withdrawal or downgrade of any
rating of any series of Notes any of which are Outstanding.
"Auction" shall mean the implementation of the Auction Procedures on an
Auction Date.
"Auction Agent" shall mean the Initial Auction Agent under the Initial
Auction Agent Agreement unless and until a Substitute Auction Agent Agreement
becomes effective, after which "Auction Agent" shall mean the Substitute Auction
Agent.
"Auction Agent Agreement" shall mean the Initial Auction Agent Agreement
unless and until a Substitute Auction Agent Agreement is entered into, after
which "Auction Agent Agreement" shall mean such Substitute Auction Agent
Agreement.
"Auction Agent Fee" shall have the meaning ascribed to such term in the
Auction Agent Agreement.
"Auction Agent Fee Rate" shall have the meaning ascribed to such term in
the Auction Agent Agreement.
"Auction Date" shall mean, initially, (i) with respect to the Series
2001-1A Notes and the Series 2001-1C Notes, August 29, 2001, and (ii) with
respect to the Series 2001-1B Notes, September 5, 2001, and, thereafter, with
respect to each such series of Series 2001-1 Notes, the Business Day immediately
preceding the first day of each Auction Period for such series, other than:
(A) an Auction Period commencing after the ownership of such series is no
longer maintained in Book-Entry Form by the Securities Depository;
(B) an Auction Period commencing after and during the continuance of a
Payment Default; or
(C) an Auction Period commencing less than two (2) Business Days after the
cure of a Payment Default.
Notwithstanding the foregoing, the Auction Date for one or more Auction Periods
may be changed pursuant to Section 11 of this Third Supplemental Indenture.
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"Auction Period" shall mean the Interest Period applicable to the Series
2001-1A Notes, the Series 2001-1B Notes and the Series 2001-1C Notes, which
Auction Period (after the Initial Interest Period for each such series)
initially shall consist generally of twenty-eight (28) days, as the same may be
adjusted pursuant to Section 3 or Section 10 hereof.
"Auction Period Adjustment" shall mean an adjustment to the Auction Period
as provided in Section 10 hereof.
"Auction Procedures" shall mean the procedures set forth in Sections 4
through 11 hereof by which the Auction Rate is determined.
"Auction Rate" shall mean the rate of interest per annum that results from
implementation of the Auction Procedures and is determined as described in
Section 4(c)(ii) hereof.
"Authorized Denominations" shall mean, with respect to the Series 2001-1
Notes, $50,000 and any integral multiple thereof.
"Available Series 2001-1 Notes" shall have the meaning ascribed to such
term in Section 4(c)(i)(A) hereof.
"Bid" shall have the meaning ascribed to such term in Section 4(a)(i)
hereof.
"Bid Auction Rate" shall have the meaning ascribed to such term in Section
4(c)(i) hereof.
"Bidder" shall have the meaning ascribed to such term in Section 4(a)(i)
hereof.
"Book-Entry Form" or "Book-Entry System" shall mean a form or system under
which (i) the beneficial right to principal and interest may be transferred only
through a book entry, (ii) physical securities in registered form are issued
only to a Securities Depository or its nominee as registered holder, with the
securities "immobilized" to the custody of the Securities Depository, and (iii)
the book entry is the record that identifies the owners of beneficial interests
in that principal and interest.
"Broker-Dealer" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., or any other broker
or dealer (each as defined in the Securities Exchange Act of 1934, as amended),
commercial bank or other entity permitted by law to perform the functions
required of a Broker-Dealer set forth in the Auction Procedures that (a) is a
Participant (or an affiliate of a Participant), (b) has been appointed as such
by the Corporation pursuant to Section 9 hereof and (c) has entered into a
Broker-Dealer Agreement with respect to one or more series of the Series 2001-1
Notes that is in effect on the date of reference.
"Broker-Dealer Agreement" shall mean each agreement between the Auction
Agent and a Broker-Dealer, and approved by the Corporation, pursuant to which
the Broker-Dealer agrees to participate in Auctions as set forth in the Auction
Procedures, as from time to time amended or supplemented. Each Broker-Dealer
Agreement shall be in substantially the form of the Broker-
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Dealer Agreement, dated as of July 1, 2001, between Bankers Trust Company, as
Auction Agent, and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as Broker-Dealer.
"Broker-Dealer Fee" shall have the meaning ascribed to such term in the
Auction Agent Agreement.
"Broker-Dealer Fee Rate" shall have the meaning ascribed to such term in
the Auction Agent Agreement.
"Business Day" shall mean a day of the year on which (i) banks located in
the city in which the Principal Office of the Trustee is located are not
required or authorized to remain closed, (ii) banks located in the city in which
the Principal Office of the Auction Agent, as set forth in and for purposes of
the Auction Agent Agreement, is located are not required or authorized to remain
closed and (iii) The New York Stock Exchange is not closed. The Trustee shall
provide to the Auction Agent on the Closing Date, and on each December 1
thereafter, a list of all legal holidays in the state in which the Principal
Office of the Trustee is located during the ensuing twelve-month period.
"Carry-Over Amount" shall mean, with respect to a Series 2001-1 Note, the
excess, if any, of (a) the amount of interest on such Note that would have
accrued with respect to the related Interest Period at the lesser of the Auction
Rate and the Series 2001-1 Note Auction Rate Limitation over (b) the amount of
interest on such Note actually accrued with respect to such Interest Period
based on the Net Loan Rate, together with the unpaid portion of any such excess
from prior Interest Periods; provided that any reference to "principal" or
"interest" in this Third Supplemental Indenture, in the Indenture and in the
Series 2001-1 Notes shall not include, within the meanings of such words, any
Carry-Over Amount or any interest accrued on any Carry-Over Amount.
"Closing Cash Flow Projection" shall mean the Cash Flow Projection
delivered in conjunction with the issuance of the Series 2001-1 Notes.
"Closing Date" shall mean, with respect to the Series 2001-1 Notes, July
30, 2001, the date of initial issuance and delivery of the Series 2001-1 Notes
hereunder.
"Deposit Agent" shall mean, with respect to the Revenue Fund, ▇▇▇▇▇ Fargo
Bank South Dakota, N.A., and its successor or successors and any other bank or
banking association having trust powers or trust company at any time substituted
in its place pursuant to the Indenture.
"Effective Interest Rate" shall mean, with respect to any Financed Student
Loan, the interest rate per annum borne by such Financed Student Loan after
giving effect to all applicable interest subsidy payments, Special Allowance
Payments, rebate fees on Consolidation Loans and reductions pursuant to borrower
incentives. For this purpose, the Special Allowance Payment rate shall be
computed based upon the average of the bond equivalent rates of 91-day United
States Treasury Bills, or other appropriate rates, auctioned or otherwise
determined during that portion of the then current calendar quarter which ends
on the date as of which the "Effective Interest Rate" is determined.
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"Eligible Carry-Over Make-Up Amount" shall mean, with respect to each
Interest Period relating to a series of Series 2001-1 Notes as to which, as of
the first day of such Interest Period, there is any unpaid Carry-Over Amount, an
amount equal to the lesser of (a) interest computed on the principal balance of
such series in respect of such Interest Period at a per annum rate equal to the
excess, if any, of the Net Loan Rate over the Series 2001-1 Note Auction Rate,
and (b) the aggregate Carry-Over Amount remaining unpaid as of the first day of
such Interest Period together with interest accrued and unpaid thereon through
the end of such Interest Period. The Eligible Carry-Over Make-Up Amount shall be
$0.00 for any Interest Period with respect to which the Series 2001-1 Note
Auction Rate equals or exceeds the Net Loan Rate.
"Existing Holder" shall mean (i) with respect to and for the purpose of
dealing with the Auction Agent in connection with an Auction, a Person who is a
Broker-Dealer listed in the Existing Holder Registry at the close of business on
the Business Day immediately preceding such Auction and (ii) with respect to and
for the purpose of dealing with the Broker-Dealer in connection with an Auction,
a Person who is a beneficial owner of Series 2001-1 Notes.
"Existing Holder Registry" shall mean the registry of Persons who are
owners of the Series 2001-1 Notes, maintained by the Auction Agent as provided
in the Auction Agent Agreement.
"First Supplemental Indenture" shall mean the First Supplemental Indenture
of Trust, dated as of December 1, 1999, as amended or supplemented in accordance
with the terms thereof and of the Indenture.
"Hold Order" shall have the meaning ascribed to such term in Section
4(a)(i) hereof.
"Initial Auction Agent" shall mean Bankers Trust Company, a New York
banking corporation, its successors and assigns.
"Initial Auction Agent Agreement" shall mean the Auction Agent Agreement,
dated as of July 1, 2001, by and among the Corporation, the Trustee and the
Initial Auction Agent, including any amendment thereof or supplement thereto.
"Initial Interest Period" shall mean, as to a series of Series 2001-1
Notes, the period commencing on the Closing Date and continuing through the day
immediately preceding the Initial Interest Rate Adjustment Date for such series.
"Initial Interest Rate Adjustment Date" shall mean, (i) with respect to the
Series 2001-1A Notes and the Series 2001-1C Notes, August 30, 2001, and (ii)
with respect to the Series 2001-1B Notes, September 6, 2001.
"Interest Payment Date" shall mean (i) each regularly scheduled interest
payment date on the Series 2001-1 Notes, which shall be the Business Day
immediately following the expiration of the Initial Interest Period for such
series and each related Auction Period thereafter; or (ii) with respect to the
payment of interest upon redemption or acceleration of a Series 2001-1 Note or
the payment of Defaulted Interest, such date on which such interest is payable
under the Indenture.
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"Interest Period" shall mean, with respect to a series of Series 2001-1
Notes, the Initial Interest Period and each period commencing on an Interest
Rate Adjustment Date for such series and ending on the last day before (i) the
next Interest Rate Adjustment Date for such series or (ii) the Stated Maturity
of such series, as applicable.
"Interest Rate Adjustment Date" shall mean, with respect to a series of
Series 2001-1 Notes, the date on which a Series 2001-1 Note Interest Rate for
such series is effective, which shall be the date of commencement of each
Auction Period.
"Interest Rate Determination Date" shall mean, with respect to a series of
Series 2001-1 Notes, the Auction Date, or, if no Auction Date is applicable to
such series, the Business Day immediately preceding the date of commencement of
an Auction Period.
"London Business Day" shall mean any business day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
"Market Agent" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., New York, New York, in
such capacity hereunder, or any successor to it in such capacity hereunder.
"Maximum Auction Rate" shall mean:(A) Auction Periods of thirty-five (35)
days or less, either (a) One-Month LIBOR plus 1.5% (if the ratings assigned by
Moody's and Fitch to the Series 2001-1 Senior Notes are at least "Aa3" and
"AA-," respectively), (b) One-Month LIBOR plus 2.5% (if any one of the ratings
assigned by Moody's and Fitch to the Series 2001-1 Senior Notes is less than
"Aa3" or "AA-," respectively, but is at least "A") or (c) One-Month LIBOR plus
3.5% (if any one of the ratings assigned by Moody's and Fitch to the Series
2001-1 Senior Notes is less than "A"); or (ii) for Auction Periods of greater
than thirty-five (35) days, either (a) the greater of One-Month LIBOR or
Three-Month LIBOR, plus, in either case, 1.5% (if the ratings assigned by
Moody's and Fitch to the Series 2001-1 Senior Notes are at least "Aa3" and
"AA-," respectively), (b) the greater of One-Month LIBOR or Three-Month LIBOR,
plus, in either case, 2.5% (if any one of the ratings assigned by Moody's and
Fitch to the Series 2001-1 Senior Notes is less than "Aa3" or "AA-,"
respectively, but is at least "A") or (c) the greater of One-Month LIBOR or
Three-Month LIBOR, plus, in either case, 3.5% (if any one of the ratings
assigned by Moody's and Fitch to the Series 2001-1 Senior Notes is less than
"A"); and
(B) with respect to the Series 2001-1C Notes: (i) for Auction Periods
of thirty-five (35) days or less, either (a) One-Month LIBOR plus 2.5% (if
the ratings assigned by Moody's and Fitch to the Series 2001-1C Notes are
at least "A2" and "A," respectively), or (b) One-Month LIBOR plus 3.5% (if
any one of the ratings assigned by Moody's and Fitch to the Series 2001-1C
Notes is less than "A2" or "A," respectively); or (ii) for Auction Periods
of greater than thirty-five (35) days, either (a) the greater of One-Month
LIBOR or Three-Month LIBOR, plus, in either case, 2.5% (if the ratings
assigned by Moody's and Fitch to the Series 2001-1C Notes are at least "A2"
and "A," respectively), or (b) the greater of One-Month LIBOR or
Three-Month LIBOR, plus, in either case, 3.5% (if any one of the ratings
assigned by Moody's and Fitch to the Series 2001-1C Notes is less than "A2"
or "A," respectively).
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For purposes of the Auction Agent and the Auction Procedures, the ratings
referred to in this definition shall be the last ratings of which the Auction
Agent shall have been given notice pursuant to the Auction Agent Agreement.
"Net Loan Rate" shall mean, with respect to any Interest Period for a
series of the Series 2001-1 Notes commencing during a given calendar month, the
highest rate of interest per annum, rounded to the next highest .01%, which
would not cause the weighted average of the Auction Rates for such Interest
Period and (except in the case of a series of the Series 2001-1 Notes having
Interest Periods longer than forty-five (45) days) the Series 2001-1 Note
Auction Rate for the two (2) preceding Interest Periods to exceed (1) the
average of the weighted average Effective Interest Rate of the Financed Student
Loans, determined as of the last day of the second, third and fourth preceding
months, less (ii) the Administrative Cost and Note Fee Rate with respect to the
Series 2001-1 Notes.
"Non-Payment Rate" shall mean the lesser of (i) One-Month LIBOR plus 1.5%,
and (ii) 18%.
"Note Registrar" shall mean, with respect to the Series 2001-1 Notes, the
Trustee.
"Notice of Fee Rate Change" shall mean a notice of a change in the Auction
Agent Fee Rate or the Broker-Dealer Fee Rate substantially in the form of
Exhibit E to the Auction Agent Agreement.
"One-Month LIBOR" shall mean, with respect to a series of Series 2001-1
Notes, the rate of interest per annum equal to the rate per annum at which
United States dollar deposits having a maturity of one month are offered to
prime banks in the London interbank market which appear on the Reuters Screen
LIBOR Page as of approximately 11:00 a.m., London time, on the applicable
Interest Rate Determination Date. If at least two such quotations appear,
One-Month LIBOR will be the arithmetic mean (rounded upwards, if necessary, to
the nearest .01%) of such offered rates. If fewer than two such quotes appear,
One-Month LIBOR will be determined at approximately 11:00 a.m., London time, on
the applicable Interest Rate Determination Date on the basis of the rate at
which deposits in United States dollars having a maturity of one month are
offered to prime banks in the London interbank market by four major banks in the
London interbank market selected by (i) the Auction Agent after consultation
with the Trustee or (ii) the Trustee, as applicable, and in a principal amount
of not less than U.S. $1,000,000 and that is representative for a single
transaction in such market at such time. The Auction Agent or the Trustee, as
applicable, will request the principal London office of each such bank to
provide a quotation of its rate. If at least two quotations are provided,
One-Month LIBOR will be the arithmetic mean (rounded upwards, if necessary, to
the nearest .01%) of such offered rates. If fewer than two quotations are
provided, One-Month LIBOR will be the arithmetic mean (rounded upwards, if
necessary, to the nearest .01%) of the rates quoted at approximately 11:00 a.m.,
New York City time, on the applicable Interest Rate Determination Date by three
major banks in New York, New York, selected by (x) the Auction Agent after
consultation with the Trustee or (y) the Trustee, as applicable, for loans in
United States dollars to leading European banks having a maturity of one month
and in a principal amount equal to an amount of not less than U.S. $1,000,000
and that is representative for a single transaction in such market at such time;
provided, however, that if the banks selected as aforesaid are not quoting as
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mentioned in this sentence, One-Month LIBOR will be the One-Month LIBOR in
effect for the immediately preceding Interest Period.
"Order" shall have the meaning ascribed to such term in Section 4(a)(i)
hereof.
"Original Indenture" shall mean the Indenture of Trust, dated as of
December 1, 1999, between the Corporation and the Trustee, as originally
executed.
"Participant" shall mean a member of, or participant in, the Securities
Depository.
"Payment Default" shall mean, with respect to a series of Series 2001-1
Notes, (i) a default in the due and punctual payment of any installment of
interest on such series, or (ii) a default in the due and punctual payment of
any interest on and principal of such series at Maturity.
"Paying Agent" shall mean, with respect to the Series 2001-1 Notes, the
Trustee and its successor or successors or any other commercial bank designated
in accordance herewith as a place at which principal of, premium, if any, or
interest on the Series 2001-1 Notes is payable.
"Potential Holder" shall mean any Person (including an Existing Holder that
is (i) a Broker-Dealer when dealing with the Auction Agent and (ii) a potential
beneficial owner when dealing with a Broker-Dealer) who may be interested in
acquiring Series 2001-1 Notes (or, in the case of an Existing Holder thereof, an
additional principal amount of Series 2001-1 Notes).
"Regular Record Date" shall mean with respect to any regularly scheduled
Interest Payment Date occurring with respect to a series of Series 2001-1 Notes,
the last Business Day preceding such Interest Payment Date.
"Reuters Screen LIBOR Page" shall mean the display designated as page
"LIBOR" on the Reuters Monitor Money Rates Service (or such other page as may
replace the LIBOR page for the purposes of displaying London interbank offered
rates of major banks).
"Second Supplemental Indenture" shall mean the Second Supplemental
Indenture of Trust, dated as of December 1, 2000, as amended or supplemented in
accordance with the terms thereof and of the Indenture.
"Securities Depository" shall mean The Depository Trust Company, New York,
New York, and its successors and assigns, or, if (i) the then-existing
Securities Depository resigns from its functions as depository of the Series
2001-1 Notes or (ii) the Corporation discontinues use of the Securities
Depository pursuant to Section 17(c) hereof, then any other securities
depository which agrees to follow the procedures required to be followed by a
securities depository in connection with the Series 2001-1 Notes and which is
selected by the Corporation with the consent of the Trustee.
"Sell Order" shall have the meaning ascribed to such term in Section
4(a)(i) hereof.
"Series 1999-1 Notes" shall mean the Series 1999-1A Notes, the Series
1999-1B Notes and the Series 1999-1C Notes.
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"Series 1999-1A Notes" shall mean the Notes created and issued under the
First Supplemental Indenture in the original principal amount of $78,000,000 and
designated as the "Student Loan Asset-Backed Notes, Senior Series 1999-1A."
"Series 1999-1B Notes" shall mean the Notes created and issued under the
First Supplemental Indenture in the original principal amount of $39,000,000 and
designated as the "Student Loan Asset-Backed Notes, Senior Series 1999-1B."
"Series 1999-1C Notes" shall mean the Notes created and issued under the
First Supplemental Indenture in the original principal amount of $9,300,000 and
designated as the "Student Loan Asset-Backed Notes, Subordinate Series 1999-1C."
"Series 2000-1 Notes" shall mean the Series 2000-1A Notes, the Series
2000-1B Notes and the Series 2000-1C Notes.
"Series 2000-1A Notes" shall mean the Notes created and issued under the
Second Supplemental Indenture in the original principal amount of $54,100,000
and designated as the "Student Loan Asset-Backed Notes, Senior Series 2000-1A."
"Series 2000-1B Notes" shall mean the Notes created and issued under the
Second Supplemental Indenture in the original principal amount of $54,100,000
and designated as the "Student Loan Asset-Backed Notes, Senior Series 2000-1B."
"Series 2000-1C Notes" shall mean the Notes created and issued under the
Second Supplemental Indenture in the original principal amount of $22,000,000
and designated as the "Student Loan Asset-Backed Notes, Subordinate Series
2000-1C."
"Series 2001-1 Capitalized Interest Account" shall mean the Account by that
name created in the Acquisition Fund pursuant to Section 18 of this Third
Supplemental Indenture.
"Series 2001-1 Cost of Issuance Account" shall mean the Account by that
name created in the Administration Fund pursuant to Section 18 of this Third
Supplemental Indenture.
"Series 2001-1 Notes" shall mean the Series 2001-1A Notes, the Series
2001-1B Notes and the Series 2001-1C Notes.
"Series 2001-1 Note Auction Rate" shall mean the rate of interest per annum
borne by a series of the Series 2001-1 Notes for each Auction Period and
determined in accordance with the provisions of Sections 4 through 12 hereof;
provided, however, that in the event of a Payment Default, the Series 2001-1
Note Auction Rate shall equal the Non-Payment Rate; and provided, further, that
such Series 2001-1 Note Auction Rate shall in no event exceed the Series 2001-1
Note Auction Rate Limitation.
"Series 2001-1 Note Auction Rate Limitation" shall mean a rate per annum
equal to 18% or, if less than such rate, the highest rate the Corporation may
legally pay, from time to time, as interest on the Series 2001-1 Notes.
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"Series 2001-1 Note Initial Interest Rate" shall mean 3.80% for the Series
2001-1A Notes, 3.80% for the Series 2001-1B Notes and 3.90% for the Series
2001-1C Notes.
"Series 2001-1 Note Interest Rate" shall mean the rate of interest per
annum borne by a series of Series 2001-1 Notes, as of the time referred to,
including, without limitation, the Series 2001-1 Note Initial Interest Rate and
the Series 2001-1 Note Auction Rate.
"Series 2001-1 Senior Notes" shall mean the Series 2001-1A Notes and the
Series 2001-1B Notes.
"Series 2001-1 Transfer Agreement" shall mean the Transfer Agreement, dated
as of July 1, 2001, among the Corporation, the Trustee, GOAL Funding and the
trustee for GOAL Funding, as from time to time amended or supplemented.
"Series 2001-1A Notes" shall mean the Notes created and to be issued under
this Third Supplemental Indenture in the original principal amount of
$79,000,000 and designated as the "Student Loan Asset-Backed Notes, Senior
Series 2001-1A."
"Series 2001-1B Notes" shall mean the Notes created and to be issued under
this Third Supplemental Indenture in the original principal amount of
$79,000,000 and designated as the "Student Loan Asset-Backed Notes, Senior
Series 2001-1B."
"Series 2001-1C Notes" shall mean the Notes created and to be issued under
this Third Supplemental Indenture in the original principal amount of
$23,800,000 and designated as the "Student Loan Asset-Backed Notes, Subordinate
Series 2001-1C."
"Special Redemption and Prepayment Account Requirement" shall mean an
amount, as of any Monthly Payment Date, with respect to the Series 2001-1 Notes,
equal to $0.00.
"Submission Deadline" shall mean 12:30 p.m., New York City time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Auction Agent as specified by the Auction Agent
from time to time.
"Submitted Bid" shall have the meaning ascribed to such term in Section
4(c)(i) hereof.
"Submitted Hold Order" shall have the meaning ascribed to such term in
Section 4(c)(i) hereof.
"Submitted Order" shall have the meaning ascribed to such term in Section
4(c)(i) hereof.
"Submitted Sell Order" shall have the meaning ascribed to such term in
Section 4(c)(i) hereof.
"Substitute Auction Agent" shall mean the Person with whom the Trustee
enters into a Substitute Auction Agent Agreement.
"Substitute Auction Agent Agreement" shall mean an auction agent agreement
containing terms substantially similar to the terms of the Initial Auction Agent
Agreement, whereby a
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Person having the qualifications required by Section 8 of this Third
Supplemental Indenture agrees with the Trustee and the Corporation to perform
the duties of the Auction Agent under this Third Supplemental Indenture.
"Sufficient Bids" shall have the meaning ascribed to such term in Section
4(c)(i) hereof.
"Third Supplemental Indenture" shall mean this Third Supplemental Indenture
of Trust, as amended or supplemented in accordance with the terms hereof and of
the Indenture.
"Three-Month LIBOR" shall mean, with respect to a series of Series 2001-1
Notes, the rate of interest per annum equal to the rate per annum at which
United States dollar deposits having a maturity of three months are offered to
prime banks in the London interbank market which appear on the Reuters Screen
LIBOR Page as of approximately 11:00 a.m., London time, on the applicable
Interest Rate Determination Date. If at least two such quotations appear,
Three-Month LIBOR will be the arithmetic mean (rounded upwards, if necessary, to
the nearest .01%) of such offered rates. If fewer than two such quotes appear,
Three-Month LIBOR will be determined at approximately 11:00 a.m., London time,
on the applicable Interest Rate Determination Date on the basis of the rate at
which deposits in United States dollars having a maturity of three months are
offered to prime banks in the London interbank market by four major banks in the
London interbank market selected by (i) the Auction Agent after consultation
with the Trustee or (ii) the Trustee, as applicable, and in a principal amount
of not less than U.S. $1,000,000 and that is representative for a single
transaction in such market at such time. The Auction Agent or the Trustee, as
applicable, will request the principal London office of each of such banks to
provide a quotation of its rate. If at least two quotations are provided,
Three-Month LIBOR will be the arithmetic mean (rounded upwards, if necessary, to
the nearest .01%) of such offered rates. If fewer than two quotations are
provided, Three-Month LIBOR will be the arithmetic mean (rounded upwards, if
necessary, to the nearest .01%) of the rates quoted at approximately 11:00 a.m.,
New York City time on the applicable Interest Rate Determination Date by three
major banks in New York, New York, selected by (x) the Auction Agent after
consultation with the Trustee or (y) the Trustee, as applicable, for loans in
United States dollars to leading European banks having a maturity of three
months and in a principal amount equal to an amount of not less than U.S.
$1,000,000 and that is representative for a single transaction in such market at
such time; provided, however, that if the banks selected as aforesaid are not
quoting as mentioned in this sentence, Three-Month LIBOR will be the Three-Month
LIBOR in effect for the immediately preceding Interest Period.
Section 2. Authorization and Terms of Series 2001-1 Notes. There is hereby
created and there shall be (1) a series of Class A Notes entitled "Student Loan
Asset-Backed Notes, Senior Series 2001-1A," (2) a series of Class A Notes
entitled "Student Loan Asset-Backed Notes, Senior Series 2001-1B," and (3) a
series of Class B Notes entitled "Student Loan Asset-Backed Notes, Subordinate
Series 2001-1C." The aggregate principal amount of the Series 2001-1A Notes that
may be authenticated and delivered and Outstanding under the Indenture is
limited to and shall not exceed $79,000,000. The aggregate principal amount of
the Series 2001-1B Notes that may be authenticated and delivered and Outstanding
under the Indenture is limited to and shall not exceed $79,000,000. The
aggregate principal amount of the Series 2001-1C Notes that may be
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authenticated and delivered and Outstanding under the Indenture is limited to
and shall not exceed $23,800,000.
The Series 2001-1A Notes shall consist of Term Notes with a Stated Maturity
on December 1, 2035.
The Series 2001-1B Notes shall consist of Term Notes with a Stated Maturity
on December 1, 2035.
The Series 2001-1C Notes shall consist of Term Notes with a Stated Maturity
on December 1, 2035.
Each series of Series 2001-1 Notes shall bear interest at a rate per annum
equal to the applicable Series 2001-1 Note Interest Rate (which, after the
Initial Interest Period, shall be the Series 2001-1 Note Auction Rate), and at
the same rate per annum (to the extent that the payment of such interest shall
be legally enforceable) on overdue installments of interest.
The Series 2001-1 Notes shall be issued as fully registered Notes without
coupons in Authorized Denominations.
The Series 2001-1 Notes shall be dated as provided in Section 3.9 of the
Indenture and shall bear interest from their date until payment of principal has
been made or duly provided for. The date of original issue of the Series 2001-1
Notes shall be the Closing Date. The Series 2001-1 Notes of each series shall be
numbered in such manner as the Note Registrar shall determine.
Interest on each series of Series 2001-1 Notes shall be computed on the
basis of actual days elapsed and accrue daily from the date thereof (on the
basis of a 360-day year), and shall be payable on each regularly scheduled
Interest Payment Date with respect to such series prior to the Maturity thereof
and at the Maturity thereof. The interest payable on each Interest Payment Date
for each series of the Series 2001-1 Notes shall be that interest which has
accrued through the last day of the last complete Interest Period immediately
preceding the Interest Payment Date or, in the case of the Maturity of such
series, the last day preceding the date of such Maturity. The applicable Series
2001-1 Note Interest Rate shall be effective as of and on the first day (whether
or not a Business Day) of the applicable Interest Period and be in effect
thereafter through the end of such Interest Period.
The principal of and premium, if any, on the Series 2001-1 Notes, together
with interest payable on the Series 2001-1 Notes at the Maturity thereof if the
date of such Maturity is not a regularly scheduled Interest Payment Date, shall
be payable in lawful money of the United States of America upon, except as
otherwise provided in Section 17 hereof, presentation and surrender of such
Series 2001-1 Notes at the Principal Office of the Trustee, as Paying Agent with
respect to the Series 2001-1 Notes, or a duly appointed successor Paying Agent.
Interest on the Series 2001-1 Notes shall be payable on each regularly scheduled
Interest Payment Date, except as otherwise provided in Section 17 hereof, by
check or draft drawn upon the Paying Agent and mailed to the person who is the
Holder thereof as of 5:00 p.m. in the city in which the Principal Office of the
Note Registrar is located on the Regular Record Date for such Interest Payment
Date at the address of such Holder as it appears on the Note Register, or, in
the case of any Series 2001-1 Note the Holder of which is the Holder of Series
2001-1 Notes in the aggregate principal
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amount of $1,000,000 or more, at the direction of such Holder received by the
Paying Agent by 5:00 p.m. in the city in which the Principal Office of the
Paying Agent is located on the last Business Day preceding the applicable
Regular Record Date, by electronic transfer by the Paying Agent in immediately
available funds to an account designated by such Holder. Any interest not so
timely paid or duly provided for (herein referred to as "Defaulted Interest")
shall cease to be payable to the person who is the Holder thereof at the close
of business on the Regular Record Date and shall be payable to the person who is
the Holder thereof at the close of business on a Special Record Date for the
payment of any such Defaulted Interest. Such Special Record Date shall be fixed
by the Trustee whenever moneys become available for payment of the Defaulted
Interest, and notice of the Special Record Date shall be given to the Holders of
the Series 2001-1 Notes not less than ten (10) days prior thereto by first-class
mail to each such Holder as shown on the Note Register on a date selected by the
Trustee, stating the date of the Special Record Date and the date fixed for the
payment of such Defaulted Interest. All payments of principal of and interest on
the Series 2001-1 Notes shall be made in lawful money of the United States of
America.
The Series 2001-1 Notes are subject to redemption prior to their Stated
Maturities upon the terms and conditions and at the Redemption Prices specified
in Section 16 hereof.
Subject to the provisions of the Indenture, the Series 2001-1 Senior Notes
shall be in substantially the form set forth in Exhibit A hereto, with such
variations, omissions and insertions as may be required by the circumstances, be
required or permitted by the Indenture, or be consistent with the Indenture and
necessary or appropriate to conform to the rules and requirements of any
governmental authority or any usage or requirement of law with respect thereto.
Subject to the provisions of the Indenture, the Series 2001-1C Notes shall
be in substantially the form set forth in Exhibit B hereto, with such
variations, omissions and insertions as may be required by the circumstances, be
required or permitted by the Indenture, or be consistent with the Indenture and
necessary or appropriate to conform to the rules and requirements of any
governmental authority or any usage or requirement of law with respect thereto.
Section 3. Interest Payable on Series 2001-1 Notes. The Initial Interest
Rate Adjustment Dates for each series of Series 2001-1 Notes shall be (i) with
respect to the Series 2001-1A Notes and the Series 2001-1C Notes, August 30,
2001, and (ii) with respect to the Series 2001-1B Notes, September 6, 2001.
During the Initial Interest Period, each series of Series 2001-1 Notes
shall bear interest at the Series 2001-1 Note Initial Interest Rate for such
series. Thereafter, except with respect to an Auction Period Adjustment, the
Series 2001-1 Notes shall bear interest at a Series 2001-1 Note Auction Rate
based on a 28-day Auction Period, as determined pursuant to this Section 3 and
Sections 4 through 12 hereof.
The Series 2001-1 Note Auction Rate to be borne by each series of Series
2001-1 Notes after such Initial Interest Period for each Auction Period until an
Auction Period Adjustment, if any, shall be determined as hereinbelow described.
Each such Auction Period shall commence
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on and include the Thursday (or, if such Thursday is not a Business Day, the
next succeeding Business Day) following the expiration of the immediately
preceding Auction Period and terminate on and include the last day immediately
preceding the Thursday (or, if such Thursday is not a Business Day, the next
succeeding Business Day) of the fourth following week; provided, however, that
in the case of the Auction Period that immediately follows the Initial Interest
Period for a series of Series 2001-1 Notes, such Auction Period shall commence
on the Initial Interest Rate Adjustment Date for such series. The Series 2001-1
Note Auction Rate on each series of Series 2001-1 Notes for each Auction Period
shall be the lesser of (i) the Net Loan Rate in effect for such Auction Period,
and (ii) the Auction Rate in effect for such Auction Period as determined in
accordance with Section 4 hereof; provided that if, on any Interest Rate
Determination Date, an Auction is not held for any reason, then the Series
2001-1 Note Auction Rate on such series for the next succeeding Auction Period
shall equal the lesser of (a) the Maximum Auction Rate and (b) the Net Loan
Rate.
Notwithstanding the foregoing:
(a) if the ownership of a series of Series 2001-1 Notes is no longer
maintained in Book-Entry Form, the Series 2001-1 Note Auction Rate on such
series for any Interest Period commencing after the delivery of definitive
notes representing such series pursuant to Section 17 hereof shall equal
the lesser of (i) the Maximum Auction Rate and (ii) the Net Loan Rate on
the Business Day immediately preceding the first day of such subsequent
Interest Period; or
(b) if a Payment Default shall have occurred with respect to a series
of Series 2001-1 Notes, the Series 2001-1 Note Auction Rate on such series
for the Interest Period commencing on or immediately after such Payment
Default, and for each Interest Period thereafter, to and including the
Interest Period, if any, during which, or commencing less than two (2)
Business Days after, such Payment Default is cured, shall equal the
Non-Payment Rate on the first day of each such Interest Period.
In accordance with Section 4(c)(iii) hereof, the Auction Agent shall
promptly give written notice to the Trustee and the Corporation of each Series
2001-1 Note Auction Rate (unless the Series 2001-1 Note Auction Rate is the
Non-Payment Rate or the ownership of such series is no longer maintained in
Book-Entry Form) and either the Auction Rate or the Net Loan Rate, as the case
may be, when such rate is not the Series 2001-1 Note Auction Rate, applicable to
each series of Series 2001-1 Notes. The Trustee shall notify the Holders of
Series 2001-1 Notes of the Series 2001-1 Note Auction Rate applicable to each
such series for each Auction Period on the second Business Day of such Auction
Period.
In the event that the last Business Day immediately preceding what would
otherwise be the commencement date of an Auction Period for a series of Series
2001-1 Notes is more than five days prior to such date, the Interest Rate
Determination Date and commencement date for such Auction Period, as well as the
expiration date for the preceding Auction Period, may be adjusted to fall on
such dates as the Market Agent, with the consent of the Corporation, may
determine to be appropriate under such circumstances. The Market Agent shall
promptly notify the Trustee and the Auction Agent in writing of any such
determination. The Trustee, upon
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receipt of such notice, shall immediately give written notification of such
determination to the Holders of such series of Series 2001-1 Notes.
Notwithstanding any other provision of the Series 2001-1 Notes or this
Third Supplemental Indenture, and except for the occurrence of a Payment
Default, interest payable on each series of the Series 2001-1 Notes for an
Auction Period shall never exceed for such Auction Period the amount of interest
payable at the Net Loan Rate (subject to the Series 2001-1 Note Auction Rate
Limitation) in effect for such Auction Period.
If the Auction Rate for a series of Series 2001-1 Notes is greater than the
Net Loan Rate, then the Series 2001-1 Note Auction Rate applicable to such
series for that Interest Period will be the Net Loan Rate. If the Series 2001-1
Note Auction Rate for a series of Series 2001-1 Notes for any Interest Period is
the Net Loan Rate, the Trustee shall determine the Carry-Over Amount, if any,
with respect to such series for such Interest Period. Such determination of the
Carry-Over Amount shall be made separately for each series of Series 2001-1
Notes. Each Carry-Over Amount shall bear interest calculated at a rate equal to
One-Month LIBOR (as determined by the Auction Agent, provided the Trustee has
received notice of One-Month LIBOR from the Auction Agent, and, if the Trustee
shall not have received such notice from the Auction Agent, then as determined
by the Trustee) from the Interest Payment Date for the Interest Period with
respect to which such Carry-Over Amount was calculated, until paid. Any payment
in respect of Carry-Over Amount shall be applied, first, to any accrued interest
payable thereon and, thereafter, in reduction of such Carry-Over Amount. For
purposes of this Third Supplemental Indenture, the Indenture and the Series
2001-1 Notes, any reference to "principal" or "interest" herein and therein
shall not include, within the meaning of such words, Carry-Over Amount or any
interest accrued on any such Carry-Over Amount. Such Carry-Over Amount shall be
separately calculated for each Series 2001-1 Note of such series by the Trustee
during such Interest Period in sufficient time for the Trustee to give notice to
each Holder of such Carry-Over Amount as required in the next succeeding
sentence. On the Interest Payment Date for an Interest Period with respect to
which such Carry-Over Amount has been calculated by the Trustee, the Trustee
shall give written notice to each Holder of the Carry-Over Amount applicable to
such Holder's Series 2001-1 Note, which written notice may accompany the payment
of interest by check made to each such Holder on such Interest Payment Date or
otherwise shall be mailed on such Interest Payment Date by first-class mail,
postage prepaid, to each such Holder at such Holder's address as it appears on
the registration books maintained by the Note Registrar. Such notice shall
state, in addition to such Carry-Over Amount, that, unless and until a Series
2001-1 Note has been redeemed or has been deemed no longer Outstanding under the
Indenture (after which all accrued Carry-Over Amount with respect to such Series
2001-1 Note (and all accrued interest thereon) that remains unpaid shall be
cancelled and no Carry-Over Amount (or interest accrued thereon) shall be paid
with respect to such Series 2001-1 Note), (i) the Carry-Over Amount (and
interest accrued thereon) shall be paid by the Trustee on such Series 2001-1
Note on the first occurring Interest Payment Date for a subsequent Interest
Period if and to the extent that (l) the Eligible Carry-Over Make-Up Amount with
respect to such Interest Period is greater than zero, and (2) moneys are
available pursuant to the terms of this Third Supplemental Indenture to pay such
Carry-Over Amount (and interest accrued thereon), and (ii) interest shall accrue
on the Carry-Over Amount at a per annum rate equal to One-Month LIBOR until such
Carry-Over Amount is paid in full or is cancelled.
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The Carry-Over Amount (and interest accrued thereon) for a series of Series
2001-1 Notes shall be paid by the Trustee on Outstanding Series 2001-1 Notes of
such series on the first occurring Interest Payment Date for a subsequent
Interest Period if and to the extent that (i) the Eligible Carry-Over Make-Up
Amount with respect to such Interest Period is greater than zero, and (ii)
moneys in the Surplus Account are available on such Interest Payment Date for
transfer to the Interest Account for such purpose in accordance with the second
paragraph of Section 4.8 of the Indenture, after taking into account all other
amounts payable from the Surplus Fund in accordance with such paragraph on such
Interest Payment Date. Any Carry-Over Amount (and any interest accrued thereon)
with respect to any Series 2001-1 Note which is unpaid as of an Interest Payment
Date, which Series 2001-1 Note is to be redeemed or deemed no longer Outstanding
under this Third Supplemental Indenture on such Interest Payment Date, shall be
paid to the Holder thereof on such Interest Payment Date to the extent that
moneys are available therefor in accordance with the provisions of the preceding
clause (ii); provided, however, that any Carry-Over Amount (and any interest
accrued thereon) which is not so paid on such Interest Payment Date shall be
cancelled with respect to such Series 2001-1 Note on such Interest Payment Date
and shall not be paid on any succeeding Interest Payment Date. To the extent
that any portion of the Carry-Over Amount (and any interest accrued thereon)
remains unpaid after payment of a portion thereof, such unpaid portion shall be
paid in whole or in part as required hereunder until fully paid by the Trustee
on the next occurring Interest Payment Date or Dates, as necessary, for a
subsequent Interest Period or Periods, if and to the extent that the conditions
in the first sentence of this paragraph are satisfied. On any Interest Payment
Date on which the Trustee pays less than all of the Carry-Over Amount (and any
interest accrued thereon) with respect to a Series 2001-1 Note, the Trustee
shall give written notice in the manner set forth in the immediately preceding
paragraph to the Holder of such Series 2001-1 Note of the Carry-Over Amount
remaining unpaid on such Series 2001-1 Note.
The Interest Payment Date on which any Carry-Over Amount (or any interest
accrued thereon) for a series of Series 2001-1 Notes shall be paid shall be
determined by the Trustee in accordance with the provisions of the immediately
preceding paragraph, and the Trustee shall make payment of the Carry-Over Amount
(and any interest accrued thereon) in the same manner as, and from the same
Account from which, it pays interest on the Series 2001-1 Notes on an Interest
Payment Date.
In the event that the Auction Agent no longer determines, or fails to
determine, when required, the Series 2001-1 Note Auction Rate with respect to a
series of Series 2001-1 Notes, or, if for any reason, such manner of
determination shall be held to be invalid or unenforceable, the Series 2001-1
Note Auction Rate for the next succeeding Interest Period (which Interest Period
shall be an Auction Period for such series of Series 2001-1 Notes) shall be the
Net Loan Rate. The Net Loan Rate with respect to each Interest Rate
Determination Date shall be determined and communicated to the Auction Agent and
the Trustee in accordance with Section 6 hereof.
Section 4. Determining the Series 2001-1 Note Auction Rate. By purchasing
Series 2001-1 Notes, whether in an Auction or otherwise, each purchaser of the
Series 2001-1 Notes, or its Broker-Dealer, must agree and shall be deemed by
such purchase to have agreed (i) to participate in Auctions on the terms
described herein, (ii) to have its beneficial ownership of the Series 2001-1
Notes maintained at all times in Book-Entry Form for the account of its
Participant, which in turn will maintain records of such beneficial ownership,
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and (iii) to authorize such Participant to disclose to the Auction Agent such
information with respect to such beneficial ownership as the Auction Agent may
request.
So long as the ownership of a series of Series 2001-1 Notes is maintained
in Book-Entry Form by the Securities Depository, an Existing Holder may sell,
transfer or otherwise dispose of Series 2001-1 Notes of such series only
pursuant to a Bid or Sell Order placed in an Auction or otherwise sell, transfer
or dispose of Series 2001-1 Notes through a Broker-Dealer, provided that, in the
case of all transfers other than pursuant to Auctions, such Existing Holder, its
Broker-Dealer or its Participant advises the Auction Agent of such transfer.
Auctions shall be conducted on each Auction Date, if there is an Auction Agent
on such Auction Date, in the following manner (such procedures to be applicable
separately to each series of the Series 2001-1 Notes):
(a) (i) Prior to the Submission Deadline on each Auction Date;
(A) each Existing Holder of Series 2001-1 Notes may submit
to a Broker-Dealer by telephone or otherwise any information as
to:
(1) the principal amount of Outstanding Series 2001-1
Notes, if any, owned by such Existing Holder which such
Existing Holder desires to continue to own without regard to
the Auction Rate for the next succeeding Auction Period;
(2) the principal amount of Outstanding Series 2001-1
Notes, if any, which such Existing Holder offers to sell if
the Auction Rate for the next succeeding Auction Period
shall be less than the rate per annum specified by such
Existing Holder; and/or
(3) the principal amount of Outstanding Series 2001-1
Notes, if any, owned by such Existing Holder which such
Existing Holder offers to sell without regard to the Auction
Rate for the next succeeding Auction Period; and
(B) one or more Broker-Dealers may contact Potential Holders
to determine the principal amount of Series 2001-1 Notes which
each Potential Holder offers to purchase, if the Auction Rate for
the next succeeding Auction Period shall not be less than the
rate per annum specified by such Potential Holder.
The statement of an Existing Holder or a Potential Holder
referred to in (A) or (B) of this paragraph (i) is herein
referred to as an "Order," and each Existing Holder and each
Potential Holder placing an Order is herein referred to as a
"Bidder"; an Order described in clause (A)(1) is herein referred
to as a "Hold Order"; an Order described in clauses (A)(2) and
(B) is herein referred to as a "Bid"; and an Order described in
clause (A)(3) is herein referred to as a "Sell Order."
(ii) (A) Subject to the provisions of Section 4(b) hereof, a Bid
by an Existing Holder shall constitute an irrevocable offer to sell:
(1) the principal amount of Outstanding Series 2001-1 Notes
specified in such Bid if the Auction Rate determined as provided
in this Section 4 shall be less than the rate specified therein;
or
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(2) such principal amount, or a lesser principal amount of
Outstanding Series 2001-1 Notes to be determined as set forth in
Section 4(d)(i)(D) hereof, if the Auction Rate determined as
provided in this Section 4 shall be equal to the rate specified
therein; or
(3) such principal amount, or a lesser principal amount of
Outstanding Series 2001-1 Notes to be determined as set forth in
Section 4(d)(ii)(C) hereof, if the rate specified therein shall
be higher than the Maximum Auction Rate and Sufficient Bids have
not been made.
(B) Subject to the provisions of Section 4(b) hereof, a Sell
Order by an Existing Holder shall constitute an irrevocable offer to
sell:
(1) the principal amount of Outstanding Series 2001-1 Notes
specified in such Sell Order; or
(2) such principal amount, or a lesser principal amount, of
Outstanding Series 2001-1 Notes set forth in Section 4(d)(ii)(C)
hereof, if Sufficient Bids have not been made.
(C) Subject to the provisions of Section 4(b) hereof, a Bid by a
Potential Holder shall constitute an irrevocable offer to purchase:
(1) the principal amount of Outstanding Series 2001-1 Notes
specified in such Bid if the Auction Rate determined as provided
in this Section 4 shall be higher than the rate specified in such
Bid; or
(2) such principal amount, or a lesser principal amount of
Outstanding Series 2001-1 Notes set forth in Section 4(d)(i)(E)
hereof, if the Auction Rate determined as provided in this
Section 4 shall be equal to the rate specified in such Bid.
(b) (i) Each Broker-Dealer shall submit in writing to the Auction
Agent prior to the Submission Deadline on each Auction Date all Orders
obtained by such Broker-Dealer and shall specify with respect to each such
Order:
(A) the name of the Bidder placing such Order;
(B) the aggregate principal amount of Series 2001-1 Notes that
are the subject of such Order;
(C) to the extent that such Bidder is an Existing Holder:
(1) the principal amount of Series 2001-1 Notes, if any,
subject to any Hold Order placed by such Existing Holder;
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(2) the principal amount of Series 2001-1 Notes, if any,
subject to any Bid placed by such Existing Holder and the rate
specified in such Bid; and
(3) the principal amount of Series 2001-1 Notes, if any,
subject to any Sell Order placed by such Existing Holder; and
(D) to the extent such Bidder is a Potential Holder, the rate
specified in such Potential Holder's Bid.
(ii) If any rate specified in any Bid contains more than three figures
to the right of the decimal point, the Auction Agent shall round such rate
up to the next higher .001%.
(iii) If an Order or Orders covering all Outstanding Series 2001-1
Notes owned by an Existing Holder is not submitted to the Auction Agent
prior to the Submission Deadline, the Auction Agent shall deem a Hold Order
to have been submitted on behalf of such Existing Holder covering the
principal amount of Outstanding Series 2001-1 Notes owned by such Existing
Holder and not subject to an Order submitted to the Auction Agent.
(iv) Neither the Corporation, the Trustee nor the Auction Agent shall
be responsible for any failure of a Broker-Dealer to submit an Order to the
Auction Agent on behalf of any Existing Holder or Potential Holder.
(v) If any Existing Holder submits through a Broker-Dealer to the
Auction Agent one or more Orders covering in the aggregate more than the
principal amount of Outstanding Series 2001-1 Notes owned by such Existing
Holder, such Orders shall be considered valid as follows and in the
following order of priority:
(A) All Hold Orders shall be considered valid, but only up to the
aggregate principal amount of Outstanding Series 2001-1 Notes owned by
such Existing Holder, and if the aggregate principal amount of Series
2001-1 Notes subject to such Hold Orders exceeds the aggregate
principal amount of Series 2001-1 Notes owned by such Existing Holder,
the aggregate principal amount of Series 2001-1 Notes subject to each
such Hold Order shall be reduced pro rata so that the aggregate
principal amount of Series 2001-1 Notes subject to such Hold Order
equals the aggregate principal amount of Outstanding Series 2001-1
Notes owned by such Existing Holder.
(B) (1) any Bid shall be considered valid up to an amount equal
to the excess of the principal amount of Outstanding Series 2001-1
Notes owned by such Existing Holder over the aggregate principal
amount of Series 2001-1 Notes subject to any Hold Order referred to in
clause (A) of this paragraph (v);
(2) subject to subclause (1) of this clause (B), if more
than one Bid with the same rate is submitted on behalf of such
Existing Holder and
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the aggregate principal amount of Outstanding Series 2001-1 Notes
subject to such Bids is greater than such excess, such Bids shall
be considered valid up to an amount equal to such excess;
(3) subject to subclauses (1) and (2) of this clause (B), if
more than one Bid with different rates are submitted on behalf of
such Existing Holder, such Bids shall be considered valid first
in the ascending order of their respective rates until the
highest rate is reached at which such excess exists and then at
such rate up to the amount of such excess; and
(4) in any such event, the amount of Outstanding Series
2001-1 Notes, if any, subject to Bids not valid under this clause
(B) shall be treated as the subject of a Bid by a Potential
Holder at the rate therein specified; and
(C) All Sell Orders shall be considered valid up to an amount
equal to the excess of the principal amount of Outstanding Series
2001-1 Notes owned by such Existing Holder over the aggregate
principal amount of Series 2001-1 Notes subject to Hold Orders
referred to in clause (A) of this paragraph (v) and valid Bids
referred to in clause (B) of this paragraph (v).
(vi) If more than one Bid for Series 2001-1 Notes is submitted on
behalf of any Potential Holder, each Bid submitted shall be a separate Bid
with the rate and principal amount therein specified.
(vii) An Existing Holder that offers to purchase additional Series
2001-1 Notes is, for purposes of such offer, treated as a Potential Holder.
(viii) Any Bid or Sell Order submitted by an Existing Holder covering
an aggregate principal amount of Series 2001-1 Notes not equal to an
Authorized Denomination shall be rejected and shall be deemed a Hold Order.
Any Bid submitted by a Potential Holder covering an aggregate principal
amount of Series 2001-1 Notes not equal to an Authorized Denomination shall
be rejected.
(ix) Any Bid specifying a rate higher than the Maximum Auction Rate
will (a) be treated as a Sell Order if submitted by an Existing Holder and
(b) not be accepted if submitted by a Potential Holder.
(x) Any Order submitted in an Auction by a Broker-Dealer to the
Auction Agent prior to the Submission Deadline on any Auction Date shall be
irrevocable.
(c) (i) Not earlier than the Submission Deadline on each Auction Date,
the Auction Agent shall assemble all valid Orders submitted or deemed
submitted to it by the Broker-Dealers (each such Order as submitted or
deemed submitted by a Broker-Dealer being herein referred to individually
as a "Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell Order,"
as the case may be, or as a "Submitted Order," and collectively as
"Submitted Hold Orders," "Submitted Bids" or "Submitted Sell Orders," as
the case may be, or as "Submitted Orders") and shall determine:
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(A) the excess of the total principal amount of Outstanding
Series 2001-1 Notes over the sum of the aggregate principal amount of
Outstanding Series 2001-1 Notes subject to Submitted Hold Orders (such
excess being herein referred to as the "Available Series 2001-1
Notes"), and
(B) from the Submitted Orders whether:
(1) the aggregate principal amount of Outstanding Series
2001-1 Notes subject to Submitted Bids by Potential Holders
specifying one or more rates equal to or lower than the Maximum
Auction Rate;
exceeds or is equal to the sum of:
(2) the aggregate principal amount of Outstanding Series
2001-1 Notes subject to Submitted Bids by Existing Holders
specifying one or more rates higher than the Maximum Auction
Rate; and
(3) the aggregate principal amount of Outstanding Series
2001-1 Notes subject to Submitted Sell Orders;
(in the event such excess or such equality exists, other than
because all of the Outstanding Series 2001-1 Notes are subject to
Submitted Hold Orders, such Submitted Bids described in subclause
(1) above shall be referred to collectively as "Sufficient
Bids"); and
(C) if Sufficient Bids exist, the Bid Auction Rate, which shall
be the lowest rate specified in such Submitted Bids such that if:
(1) (x) each such Submitted Bid from Existing Holders
specifying such lowest rate and (y) all other Submitted Bids from
Existing Holders specifying lower rates were rejected, thus
entitling such Existing Holders to continue to own the principal
amount of Series 2001-1 Notes subject to such Submitted Bids; and
(2) (x) each such Submitted Bid from Potential Holders
specifying such lowest rate and (y) all other Submitted Bids from
Potential Holders specifying lower rates were accepted;
the result would be that such Existing Holders described in
subclause (1) above would continue to own an aggregate principal
amount of Outstanding Series 2001-1 Notes which, when added to
the aggregate principal amount of Outstanding Series 2001-1 Notes
to be purchased by such Potential Holders described in subclause
(2) above, would equal not less than the Available Series 2001-1
Notes.
(ii) Promptly after the Auction Agent has made the determinations
pursuant to Section 4(c)(i) hereof, the Auction Agent shall advise the
Trustee, the Broker-Dealers and the Corporation of the Net Loan Rate, the
Maximum Auction Rate and the All Hold Rate
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and the components thereof on the Auction Date and, based on such
determinations, the Auction Rate for the next succeeding Interest Period as
follows:
(A) if Sufficient Bids exist, that the Auction Rate for the next
succeeding Interest Period shall be equal to the Bid Auction Rate so
determined;
(B) if Sufficient Bids do not exist (other than because all of
the Outstanding Series 2001-1 Notes are subject to Submitted Hold
Orders), that the Auction Rate for the next succeeding Interest Period
shall be equal to the Maximum Auction Rate; or
(C) if all Outstanding Series 2001-1 Notes are subject to
Submitted Hold Orders, that the Auction Rate for the next succeeding
Interest Period shall be equal to the All Hold Rate.
(iii) Promptly after the Auction Agent has determined the Auction
Rate, the Auction Agent shall determine and advise the Trustee of the
Series 2001-1 Note Auction Rate, which rate shall be the lesser of (a) the
Auction Rate and (b) the Net Loan Rate; provided, however, that in no event
shall the Series 2001-1 Note Auction Rate exceed the Series 2001-1 Note
Auction Rate Limitation.
(d) Existing Holders shall continue to own the principal amount of Series
2001-1 Notes that are subject to Submitted Hold Orders. If Sufficient Bids have
been received by the Auction Agent, the Bid Auction Rate will be the Auction
Rate, and Submitted Bids and Submitted Sell Orders will be accepted or rejected
and the Auction Agent will take such other action as described below in
subparagraph (i).
If the Auction Agent has not received Sufficient Bids (other than because
all of the Outstanding Series 2001-1 Notes are subject to Submitted Hold
Orders), the Auction Rate will be the Maximum Auction Rate, and Submitted Orders
will be accepted or rejected and the Auction Agent will take such other action
as described below in subparagraph (ii).
(i) if Sufficient Bids have been made, all Submitted Sell Orders shall
be accepted and, subject to the provisions of paragraphs (iv) and (v) of
this Section 4(d), Submitted Bids shall be accepted or rejected as follows
in the following order of priority, and all other Submitted Bids shall be
rejected:
(A) Existing Holders' Submitted Bids specifying any rate that is
higher than the Bid Auction Rate shall be accepted, thus requiring
each such Existing Holder to sell the aggregate principal amount of
Series 2001-1 Notes subject to such Submitted Bids;
(B) Existing Holders' Submitted Bids specifying any rate that is
lower than the Bid Auction Rate shall be rejected, thus entitling each
such Existing Holder to continue to own the aggregate principal amount
of Series 2001-1 Notes subject to such Submitted Bids;
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(C) Potential Holders' Submitted Bids specifying any rate that is
lower than the Bid Auction Rate shall be accepted;
(D) Each Existing Holders' Submitted Bid specifying a rate that
is equal to the Bid Auction Rate shall be rejected, thus entitling
such Existing Holder to continue to own the aggregate principal amount
of Series 2001-1 Notes subject to such Submitted Bid, unless the
aggregate principal amount of Outstanding Series 2001-1 Notes subject
to all such Submitted Bids shall be greater than the principal amount
of Series 2001-1 Notes (the "remaining principal amount") equal to the
excess of the Available Series 2001-1 Notes over the aggregate
principal amount of Series 2001-1 Notes subject to Submitted Bids
described in clauses (B) and (C) of this Section 4(d)(i), in which
event such Submitted Bid of such Existing Holder shall be rejected in
part, and such Existing Holder shall be entitled to continue to own
the principal amount of Series 2001-1 Notes subject to such Submitted
Bid, but only in an amount equal to the aggregate principal amount of
Series 2001-1 Notes obtained by multiplying the remaining principal
amount by a fraction, the numerator of which shall be the principal
amount of Outstanding Series 2001-1 Notes owned by such Existing
Holder subject to such Submitted Bid and the denominator of which
shall be the sum of the principal amount of Outstanding Series 2001-1
Notes subject to such Submitted Bids made by all such Existing Holders
that specified a rate equal to the Bid Auction Rate; and
(E) Each Potential Holder's Submitted Bid specifying a rate that
is equal to the Bid Auction Rate shall be accepted, but only in an
amount equal to the principal amount of Series 2001-1 Notes obtained
by multiplying the excess of the aggregate principal amount of
Available Series 2001-1 Notes over the aggregate principal amount of
Series 2001-1 Notes subject to Submitted Bids described in clauses
(B), (C) and (D) of this Section 4(d)(i) by a fraction the numerator
of which shall be the aggregate principal amount of Outstanding Series
2001-1 Notes subject to such Submitted Bid and the denominator of
which shall be the sum of the principal amount of Outstanding Series
2001-1 Notes subject to Submitted Bids made by all such Potential
Holders that specified a rate equal to the Bid Auction Rate.
(ii) If Sufficient Bids have not been made (other than because all of
the Outstanding Series 2001-1 Notes are subject to Submitted Hold Orders),
subject to the provisions of Section 4(d)(iv) hereof, Submitted Orders
shall be accepted or rejected as follows in the following order of priority
and all other Submitted Bids shall be rejected:
(A) Existing Holders' Submitted Bids specifying any rate that is
equal to or lower than the Maximum Auction Rate shall be rejected,
thus entitling such Existing Holders to continue to own the aggregate
principal amount of Series 2001-1 Notes subject to such Submitted
Bids;
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(B) Potential Holders' Submitted Bids specifying (1) any rate
that is equal to or lower than the Maximum Auction Rate shall be
accepted and (2) any rate that is higher than the Maximum Auction Rate
shall be rejected; and
(C) each Existing Holder's Submitted Bid specifying any rate that
is higher than the Maximum Auction Rate and the Submitted Sell Order
of each Existing Holder shall be accepted, thus entitling each
Existing Holder that submitted any such Submitted Bid or Submitted
Sell Order to sell the Series 2001-1 Notes subject to such Submitted
Bid or Submitted Sell Order, but in both cases only in an amount equal
to the aggregate principal amount of Series 2001-1 Notes obtained by
multiplying the aggregate principal amount of Series 2001-1 Notes
subject to Submitted Bids described in clause (B)(1) of this Section
4(d)(ii) by a fraction the numerator of which shall be the aggregate
principal amount of Outstanding Series 2001-1 Notes owned by such
Existing Holder subject to such Submitted Bid or Submitted Sell Order
and the denominator of which shall be the aggregate principal amount
of Outstanding Series 2001-1 Notes subject to all such Submitted Bids
and Submitted Sell Orders.
(iii) If all Outstanding Series 2001-1 Notes are subject to Submitted
Hold Orders, all Submitted Bids shall be rejected.
(iv) If, as a result of the procedures described in paragraph (i) or
(ii) of this Section 4(d), any Existing Holder would be entitled or
required to sell, or any Potential Holder would be entitled or required to
purchase, a principal amount of Series 2001-1 Notes that is not equal to an
Authorized Denomination, the Auction Agent shall, in such manner as in its
sole discretion it shall determine, round up or down the principal amount
of Series 2001-1 Notes to be purchased or sold by any Existing Holder or
Potential Holder so that the principal amount of Series 2001-1 Notes
purchased or sold by each Existing Holder or Potential Holder shall be
equal to an Authorized Denomination.
(v) If, as a result of the procedures described in paragraph (i) of
this Section 4(d), any Potential Holder would be entitled or required to
purchase less than an Authorized Denomination of Series 2001-1 Notes, the
Auction Agent shall, in such manner as in its sole discretion it shall
determine, allocate Series 2001-1 Notes for purchase among Potential
Holders so that only Series 2001-1 Notes in Authorized Denominations are
purchased by any Potential Holder, even if such allocation results in one
or more of such Potential Holders not purchasing any Series 2001-1 Notes.
(e) Based on the result of each Auction, the Auction Agent shall determine
the aggregate principal amount of Series 2001-1 Notes to be purchased and the
aggregate principal amount of Series 2001-1 Notes to be sold by Potential
Holders and Existing Holders on whose behalf each Broker-Dealer submitted Bids
or Sell Orders and, with respect to each Broker-Dealer, to the extent that such
aggregate principal amount of Series 2001-1 Notes to be sold differs from such
aggregate principal amount of Series 2001-1 Notes to be purchased, determine to
which other Broker-Dealer or Broker-Dealers acting for one or more purchasers
such Broker-Dealer shall deliver, or from which other Broker-Dealer or
Broker-Dealers acting for one or more sellers such Broker-Dealer shall receive,
as the case may be, Series 2001-1 Notes.
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(f) Any calculation by the Auction Agent, the Corporation or the Trustee,
as applicable, of the Series 2001-1 Note Auction Rate, One-Month LIBOR,
Three-Month LIBOR, Maximum Auction Rate, All Hold Rate and Non-Payment Rate, and
any calculation by or on behalf of the Corporation of the Net Loan Rate, shall,
in the absence of manifest error, be binding on all other parties.
(g) Notwithstanding anything in this Third Supplemental Indenture to the
contrary notwithstanding, no Auction will be held on any Auction Date hereunder
during the continuance of a Payment Default.
Section 5. Determination of Payment Defaults and Payment of Auction Agent
and Broker-Dealer Fees.
(a) The Trustee shall determine, not later than 2:00 p.m., New York
City time, on the Business Day next succeeding each Interest Payment Date
relating to a series of Series 2001-1 Notes, whether a Payment Default has
occurred with respect to such series. If a Payment Default has occurred,
the Trustee shall, not later than 2:15 p.m., New York City time, on such
Business Day, send a notice thereof in substantially the form of Exhibit C
attached hereto to the Auction Agent by telecopy or similar means and, if
such Payment Default is cured, the Trustee shall immediately send a notice
in substantially the form of Exhibit D attached hereto to the Auction Agent
by telecopy or similar means.
(b) Not later than 12:00 noon, New York City time, on each Interest
Payment Date relating to a series of Series 2001-1 Notes, the Corporation
shall pay to the Auction Agent, in immediately available funds out of
amounts available therefor in the Administration Fund, an amount equal to
the Auction Agent Fee and the Broker-Dealer Fee as calculated in accordance
with the Auction Agent Agreement. The Corporation shall, from time to time
at the request of the Auction Agent, reimburse the Auction Agent for its
reasonable expenses as provided in the Auction Agent Agreement, such
expenses to be paid out of amounts available therefor in the Administration
Fund.
Section 6. Calculation of Maximum Auction Rate, All Hold Rate, Net Loan
Rate, One-Month LIBOR, Three-Month LIBOR and Non-Payment Rate. The Auction Agent
shall calculate the Maximum Auction Rate, the All Hold Rate and One-Month LIBOR
or Three-Month LIBOR, as the case may be, on each Auction Date and shall notify
the Trustee and the Broker-Dealers of the Maximum Auction Rate, the All Hold
Rate and One-Month LIBOR or Three-Month LIBOR, as the case may be, as provided
in the Auction Agent Agreement. If the ownership of the Series 2001-1 Notes is
no longer maintained in Book-Entry Form by the Securities Depository, the
Trustee shall calculate the Maximum Auction Rate on the Business Day immediately
preceding each Interest Payment Date after the delivery of definitive Series
2001-1 Notes pursuant to Section 17 hereof. If a Payment Default shall have
occurred, the Trustee shall calculate the Non-Payment Rate on the Interest Rate
Determination Date for (i) each Interest Period commencing after the occurrence
and during the continuance of such Payment Default and (ii) any Interest Period
commencing less than two Business Days after the cure of any Payment Default.
The Auction Agent shall determine One-Month LIBOR or Three-Month LIBOR, as
applicable, for each Interest Period other than the first Interest Period;
-25-
provided that if the ownership of the Series 2001-1 Notes is no longer
maintained in Book-Entry Form, or if a Payment Default has occurred, then the
Trustee shall determine One-Month LIBOR or Three-Month LIBOR, as applicable, for
each such Interest Period. The determination by the Trustee or the Auction
Agent, as the case may be, of One-Month LIBOR or Three-Month LIBOR, as
applicable, shall (in the absence of manifest error) be final and binding upon
all parties. If calculated or determined by the Auction Agent, the Auction Agent
shall promptly advise the Trustee of One-Month LIBOR or Three-Month LIBOR, as
applicable.
The Net Loan Rate with respect to each Interest Rate Determination Date
shall be determined by or on behalf of the Corporation and written notice
thereof given to the Auction Agent and the Trustee on or prior to the
twenty-fifth day (or, if such twenty-fifth day is not a Business Day, the next
succeeding Business Day) of the calendar month preceding such Interest Rate
Determination Date. If the Corporation shall fail or refuse to determine the Net
Loan Rate, the Net Loan Rate shall be the Net Loan Rate last determined and
communicated to the Auction Agent and the Trustee in accordance with this
paragraph. The determination by or on behalf of the Corporation of the Net Loan
Rate shall (in the absence of manifest error) be final and binding upon all
parties.
Section 7. Notification of Rates, Amounts and Payment Dates.
(a) By 10:00 a.m., New York City time, on each Regular Record Date
with respect to the Series 2001-1 Notes, the Trustee shall determine the
aggregate amounts of interest distributable on the next succeeding Interest
Payment Date to the beneficial owners of each series thereof.
(b) As soon as practicable prior to each Interest Payment Date with
respect to the Series 2001-1 Notes, the Trustee shall:
(i) confirm with the Auction Agent, so long as no Payment Default
has occurred and is continuing and the ownership of each series of
Series 2001-1 Notes is maintained in Book-Entry Form by the Securities
Depository, (1) the date of such next Interest Payment Date and (2)
the amount payable to the Auction Agent on such Interest Payment Date
pursuant to Section 5(b) hereof;
(ii) pursuant to Section 3 hereof, advise the Holders of each
series of Series 2001-1 Notes of any Carry-Over Amount accruing on
such Series 2001-1 Notes; and
(iii) advise the Securities Depository, so long as the ownership
of each series of Series 2001-1 Notes is maintained in Book-Entry Form
by the Securities Depository, upon request, of the Series 2001-1 Note
Interest Rate payable on such series of Series 2001-1 Notes and the
interest amount.
If any day scheduled to be an Interest Payment Date with respect to a
series of Series 2001-1 Notes shall be changed after the Trustee shall have
given the notice or confirmation referred to in clause (i) of the preceding
sentence, the Trustee shall, not later than 9:15 a.m., New York City time,
on the Business Day next preceding the earlier of the new Interest Payment
Date or the old Interest Payment Date, by such means as the Trustee deems
practicable, give notice of
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such change to the Auction Agent, so long as no Payment Default has
occurred and is continuing and the ownership of the Series 2001-1 Notes is
maintained in Book-Entry Form by the Securities Depository.
Section 8. Auction Agent.
(a) Bankers Trust Company is hereby appointed as Initial Auction Agent
to serve as agent for the Corporation in connection with Auctions. The
Trustee and the Corporation will, and the Trustee is hereby directed to,
enter into the Initial Auction Agent Agreement with Bankers Trust Company,
as the Initial Auction Agent. Any Substitute Auction Agent shall be (i) a
bank, national banking association or trust company duly organized under
the laws of the United States of America or any state or territory thereof
having its principal place of business in the Borough of Manhattan, New
York, or such other location as approved by the Trustee in writing and
having a combined capital stock or surplus of at least $50,000,000, or (ii)
a member of the National Association of Securities Dealers, Inc., having a
capitalization of at least $50,000,000, and, in either case, authorized by
law to perform all the duties imposed upon it hereunder and under the
Auction Agent Agreement. The Auction Agent may at any time resign and be
discharged of the duties and obligations created by this Third Supplemental
Indenture by giving at least ninety (90) days' notice to the Trustee, the
Market Agent and the Corporation. The Auction Agent may be removed at any
time by the Trustee upon the written direction of an Authorized Officer of
the Corporation or the Holders of 66-2/3% of the aggregate principal amount
of the Series 2001-1 Senior Notes then Outstanding (or, if no Series 2001-1
Senior Notes are then Outstanding, the Holders of 66-2/3% of the aggregate
principal amount of the Series 2001-1C Notes then Outstanding), and, if by
such Holders, by an instrument signed by such Holders or their attorneys
and filed with the Auction Agent, the Corporation and the Trustee upon at
least ninety (90) days' notice. Neither resignation nor removal of the
Auction Agent pursuant to the preceding two sentences shall be effective
unless and until a Substitute Auction Agent has been appointed and has
accepted such appointment. However, if a successor Auction Agent shall not
have been appointed within sixty (60) days from the date of a notice of
resignation, the resigning Auction Agent may petition any court of
competent jurisdiction for the appointment of a successor Auction Agent. If
required by the Corporation, a Substitute Auction Agent Agreement shall be
entered into with a Substitute Auction Agent. Notwithstanding the
foregoing, the Auction Agent may terminate the Auction Agent Agreement if,
within twenty-five (25) days after notifying the Trustee, the Market Agent
and the Corporation in writing that it has not received payment of any
Auction Agent Fee due it in accordance with the terms of the Auction Agent
Agreement, the Auction Agent does not receive such payment.
(b) If the Auction Agent shall resign or be removed or be dissolved,
or if the property or affairs of the Auction Agent shall be taken under the
control of any state or federal court or administrative body because of
bankruptcy or insolvency, or for any other reason, the Trustee at the
direction of an Authorized Officer of the Corporation, shall use its best
efforts to appoint a Substitute Auction Agent.
(c) The Auction Agent is acting as agent for the Corporation in
connection with Auctions. In the absence of bad faith, negligent failure to
act or negligence on its part, the Auction Agent shall not be liable for
any action taken, suffered or omitted or any error of judgment made by it
in the performance of its duties under the Auction Agent Agreement and
-27-
shall not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been negligent in ascertaining (or failing to
ascertain) the pertinent facts.
(d) In the event of a change in the Auction Agent Fee Rate pursuant to
Section 6.4(b) of the Auction Agent Agreement, the Auction Agent shall give
a Notice of Fee Rate Change to the Trustee in accordance with the Auction
Agent Agreement.
Section 9. Broker-Dealers.
(a) The Auction Agent will enter into a Broker-Dealer Agreement with
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as the sole initial Broker-Dealer with respect
to the Series 2001-1 Notes. An Authorized Officer of the Corporation may,
from time to time, approve one or more additional persons to serve as
Broker-Dealers under Broker-Dealer Agreements and shall be responsible for
providing such Broker-Dealer Agreements to the Trustee and the Auction
Agent; provided, however, that while ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. is serving
as a Broker-Dealer with respect to a series of the Series 2001-1 Notes,
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. shall have the right to consent to the approval
of any additional Broker-Dealers with respect to such series, which consent
will not be unreasonably withheld.
(b) Any Broker-Dealer may be removed at any time, at the request of an
Authorized Officer of the Corporation, but there shall, at all times, be at
least one Broker-Dealer appointed and acting as such.
Section 10. Changes in Auction Period or Periods.
(a) While any of the Series 2001-1 Notes are Outstanding, the
Corporation may, from time to time, convert the length of one or more
Auction Periods (an "Auction Period Adjustment"), in order to conform with
then current market practice with respect to similar securities or to
accommodate economic and financial factors that may affect or be relevant
to the length of the Auction Period and the Series 2001-1 Note Interest
Rate borne by the Series 2001-1 Notes. The Corporation shall not initiate
an Auction Period Adjustment unless it shall have received, not less than
three (3) days nor more than twenty (20) days prior to the Auction Period
Adjustment, (i) the written consent of the Market Agent, which consent
shall not be unreasonably withheld and (ii) written confirmation from each
of the Rating Agencies then rating the Series 2001-1 Notes that such
Auction Period Adjustment will not adversely affect its ratings then
applicable to any of the Series 2001-1 Notes. The Corporation shall
initiate the Auction Period Adjustment by giving written notice by
Corporation Order to the Trustee, the Auction Agent, the Market Agent and
the Securities Depository in substantially the form of, or containing
substantially the information contained in, Exhibit E to this Third
Supplemental Indenture at least ten (10) days prior to the Auction Date for
such Auction Period.
(b) Any such adjusted Auction Period shall not be less than seven (7)
days nor more than ninety-one (91) days. If any such adjusted Auction
Period will be less than twenty-eight (28) days, the notice described above
will be effective only if it is accompanied by a written statement of the
Trustee, the Auction Agent and the Securities Depository to the effect that
they are capable of performing their duties, if any, under this Third
Supplemental Indenture, the
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Auction Agent Agreement and any Broker-Dealer Agreement with respect to
such changed Auction Period.
(c) An Auction Period Adjustment shall take effect only (A) if the
Trustee and the Auction Agent receive, by 11:00 a.m., New York City time,
on the Business Day before the Auction Date for the first such Auction
Period, a Corporation Certificate in substantially the form attached as, or
containing substantially the same information contained in, Exhibit F to
this Third Supplemental Indenture, authorizing the Auction Period
Adjustment specified in such certificate along with a copy of the consent
of the Market Agent and the Rating Agency confirmations described in
subparagraph (a) above and, if applicable, the written statement of the
Trustee, the Auction Agent and the Securities Depository described in
subparagraph (b) above, and (B) Sufficient Bids exist as of the Auction on
the Auction Date for such first Auction Period. If the condition referred
to in (A) above is not met, the Series 2001-1 Note Interest Rate for the
next Auction Period shall be determined pursuant to the provisions of
Sections 4 through 9 hereof and the Auction Period shall be the Auction
Period determined without reference to the proposed change. If the
condition referred to in (A) is met but the condition referred in (B) above
is not met, the Series 2001-1 Note Auction Rate for the next Auction Period
shall be the lesser of the Maximum Auction Rate and the Net Loan Rate and
the Auction Period shall be the Auction Period determined without reference
to the proposed change.
In connection with any Auction Period Adjustment, the Auction Agent
shall provide such further notice to such parties as is specified in
Section 2.5 of the Auction Agent Agreement.
Section 11. Changes in the Auction Date. The Market Agent, with the written
consent of an Authorized Officer of the Corporation, may specify an earlier
Auction Date (but in no event more than five Business Days earlier) than the
Auction Date that would otherwise be determined in accordance with the
definition of "Auction Date" in Section 1 of this Third Supplemental Indenture
with respect to one or more specified Auction Periods in order to conform with
then current market practice with respect to similar securities or to
accommodate economic and financial factors that may affect or be relevant to the
day of the week constituting an Auction Date and the Series 2001-1 Note Interest
Rate borne by the Series 2001-1 Notes. The Market Agent shall deliver a written
request for consent to such change in the Auction Date to the Corporation not
less than three days nor more than twenty (20) days prior to the effective date
of such change. The Market Agent shall provide notice of its determination to
specify an earlier Auction Date for one or more Auction Periods by means of a
written notice delivered at least ten (10) days prior to the proposed changed
Auction Date to the Trustee, the Auction Agent, the Corporation and the
Securities Depository. Such notice shall be substantially in the form of, or
contain substantially the information contained in, Exhibit G to this Third
Supplemental Indenture.
In connection with any change described in this Section 11, the Auction
Agent shall provide such further notice to such parties as is specified in
Section 2.5 of the Auction Agent Agreement.
Section 12. Additional Provisions Regarding the Series 2001-1 Note Interest
Rate. The determination of a Series 2001-1 Note Interest Rate by the Auction
Agent or any other
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Person pursuant to the provisions of the applicable Section
of this Third Supplemental Indenture shall be conclusive and binding on the
Holders of the series of Series 2001-1 Notes to which such Series 2001-1 Note
Interest Rate applies, and the Corporation and the Trustee may rely thereon for
all purposes.
In no event shall the cumulative amount of interest paid or payable on a
series of Series 2001-1 Notes (including interest calculated as provided herein,
plus any other amounts that constitute interest on the Series 2001-1 Notes of
such series under applicable law, which are contracted for, charged, reserved,
taken or received pursuant to the Series 2001-1 Notes of such series or related
documents) calculated from the date of issuance of such series through any
subsequent day during the term of such series or otherwise prior to payment in
full of the Series 2001-1 Notes of such series exceed the amount permitted by
applicable law. If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under the Series 2001-1 Notes of a series
or related documents or otherwise contracted for, charged, reserved, taken or
received in connection with the Series 2001-1 Notes of such series, or if the
redemption or acceleration of the maturity of the Series 2001-1 Notes of such
series results in payment to or receipt by the Holder or any former Holder of
the Series 2001-1 Notes of such series of any interest in excess of that
permitted by applicable law, then, notwithstanding any provision of the Series
2001-1 Notes of such series or related documents to the contrary, all excess
amounts theretofore paid or received with respect to the Series 2001-1 Notes of
such series shall be credited on the principal balance of the Series 2001-1
Notes of such series (or, if the Series 2001-1 Notes of such series have been
paid or would thereby be paid in full, refunded by the recipient thereof), and
the provisions of the Series 2001-1 Notes of such series and related documents
shall automatically and immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
under the Series 2001-1 Notes of such series and under the related documents.
Section 13. Qualifications of Market Agent. The Market Agent shall be a
member of the National Association of Securities Dealers, Inc., have a
capitalization of at least $50,000,000 and be authorized by law to perform all
the duties imposed upon it by this Third Supplemental Indenture. The Market
Agent may resign and be discharged of the duties and obligations created by this
Third Supplemental Indenture by giving at least thirty (30) days notice to the
Corporation and the Trustee, provided that such resignation shall not be
effective until the appointment of a successor market agent by the Corporation
and the acceptance of such appointment by such successor market agent. The
Market Agent may be replaced at the direction of the Corporation, by an
instrument signed by an Authorized Officer of the Corporation filed with the
Market Agent and the Trustee at least thirty (30) days before the effective date
of such replacement, provided that such replacement shall not be effective until
the appointment of a successor market agent by the Corporation and the
acceptance of such appointment by such successor market agent.
In the event that the Market Agent shall be removed or be dissolved, or if
the property or affairs of the Market Agent shall be taken under the control of
any state or federal court or administrative body because of bankruptcy or
insolvency, or for any other reason, and there is no Market Agent, and the
Corporation shall not have appointed its successor as Market Agent, the
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Trustee, notwithstanding the provisions of the first paragraph of this Section
13, shall be deemed to be the Market Agent for all purposes of this Third
Supplemental Indenture until the appointment by the Corporation of the successor
Market Agent. Nothing in this Section 13 shall be construed as conferring on the
Trustee additional duties other than as set forth herein.
Section 14. Purposes of Issuance of Series 2001-1 Notes. The Series 2001-1
Notes are being issued to provide funds to be used to (a) acquire student loan
notes incurred under the Higher Education Act and under the Alternative Loan
Programs, (b) fund the Reserve Fund, (c) pay a portion of the interest coming
due on the Series 2001-1 Notes and (d) pay Costs of Issuance of the Series
2001-1 Notes.
Section 15. Deposit of Series 2001-1 Note Proceeds. From the proceeds
derived from the sale of the Series 2001-1 Notes, there shall be deposited with
the Trustee:
(A) for credit to the Series 2001-1 Reserve Account, an amount equal
to $2,727,000;
(B) for credit to the Series 2001-1 Capitalized Interest Account, an
amount equal to $250,000;
(C) for credit to the Series 2001-1 Cost of Issuance Account, an
amount equal to $400,000; and
(D) for credit to the Series 2001-1 Acquisition Account, the
remainder, to remain in the Series 2001-1 Acquisition Account until applied
for the acquisition or origination of Eligible Loans, including the
acquisition of Eligible Loans pursuant to the Series 2001-1 Transfer
Agreement (which Eligible Loans were either originated by GOAL Funding or
purchased by GOAL Funding pursuant to the Student Loan Purchase Agreements
identified in Exhibit H-2 hereto) and pursuant to the Student Loan Purchase
Agreements identified in Exhibit H-1 hereto (as such Exhibit H-1 may be
amended or supplemented from time to time).
Upon the acquisition of Eligible Loans pursuant to the Series 2001-1
Transfer Agreement, the Trustee shall deposit to the credit of the Series 2001-1
Alternative Loan Guarantee Account cash in the amount of $840,159.10 received
from the trustee for GOAL Funding in connection with such acquisition.
Thereafter, upon the acquisition of any Alternative Loan with amounts from the
Series 2001-1 Acquisition Account or the Series 2001-1 Surplus Account, the
Trustee shall, as a condition of such acquisition, receive and deposit to the
credit of the Series 2001-1 Alternative Loan Guarantee Account cash in the
amount of the origination fee, if any, paid in connection with the origination
of such Alternative Loan.
Section 16. Redemption of Series 2001-1 Notes. The Series 2001-1 Notes are
subject to redemption as provided in this Section 16.
(A) Redemption From Unexpended Proceeds. Subject to compliance with
Section 10.2 of the Indenture, Outstanding Series 2001-1 Notes shall be
redeemed, in part, on the first regularly scheduled Interest Payment Date
occurring after November 25, 2001, for which notice can be given in
accordance with subsection (E) of this Section 16, at a Redemption Price
equal to
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100% of the principal amount of Series 2001-1 Notes so redeemed, from
proceeds of the Series 2001-1 Notes constituting that portion of the
Balance of the Series 2001-1 Acquisition Account that have not been used to
acquire Eligible Loans by November 25, 2001, and from that portion of the
Reserve Fund which, if left in the Reserve Fund upon such redemption, would
cause the Balance in the Reserve Fund to exceed the Reserve Fund
Requirement, calculated after giving effect to such redemption. The Trustee
shall transfer any such moneys to the credit of the Series 2001-1
Retirement Subaccount for such purpose without any further authorization or
direction.
(B) Redemption from Surplus Account. Subject to compliance with
Section 10.2 of the Indenture, Outstanding Series 2001-1 Notes shall be
redeemed on any regularly scheduled Interest Payment Date with respect
thereto, in whole or in part, at a Redemption Price equal to 100% of the
principal amount thereof to be redeemed, from that portion of the Balance
of the Series 2001-1 Surplus Subaccount transferred to the Series 2001-1
Retirement Account in accordance with this subsection (B). If there are any
amounts in the Series 2001-1 Surplus Subaccount which have been on deposit
therein for at least twelve (12) months and have not been used to acquire
Student Loans, and if there are no deficiencies in any of the
Indemnification Fund, the Note Fund, the Reserve Fund or the Special
Redemption and Prepayment Account, the Trustee shall give written notice to
the Corporation that such moneys will be transferred to the Series 2001-1
Retirement Account and applied to the redemption of Series 2001-1 Notes in
accordance with this subsection (B) unless the Corporation, within ten (10)
Business Days of receipt of such notice, delivers to the Trustee a
Corporation Certificate to the effect that some or all of such amounts are
reasonably expected to be necessary to pay Debt Service on the Outstanding
Notes or on Outstanding Other Obligations, Carry-Over Amounts, including
accrued interest thereon, with respect to Outstanding Notes, Administrative
Expenses or Note Fees or to make required deposits to the Indemnification
Fund. Any amounts so certified by the Corporation will remain in the Series
2001-1 Surplus Subaccount and will not be applied to the redemption of
Series 2001-1 Notes pursuant to this subsection (B).
(C) Optional Redemption. Subject to compliance with Section 10.2 of
the Indenture, Outstanding Series 2001-1 Notes may, at the option of the
Corporation and from amounts credited to the Retirement Account for such
purpose, be redeemed on any regularly scheduled Interest Payment Date with
respect thereto, in whole or in part, at a Redemption Price equal to 100%
of the principal amount of Series 2001-1 Notes to be so redeemed.
Notwithstanding the foregoing, no Series 2001-1 Notes shall be
redeemed pursuant to this subsection (C) unless the Trustee receives, at
least forty-five (45) days prior to the proposed Redemption Date (unless a
shorter notice is satisfactory to the Trustee), a Corporation Certificate
certifying that, based on a Cash Flow Projection, such redemption of such
Series 2001-1 Notes will not materially adversely affect the Corporation's
ability to pay Debt Service on the Outstanding Notes and Outstanding Other
Obligations, Carry-Over Amounts (including accrued interest thereon) with
respect to Outstanding Notes, Administrative Expenses or Note Fees or to
make required deposits to the Indemnification Fund.
(D) Selection of Series 2001-1 Notes for Redemption. If less than all
Outstanding Series 2001-1 Notes are to be redeemed pursuant to subsections
(A), (B) or (C) of this Section 16, the principal amounts of each series of
Series 2001-1 Notes to be redeemed shall be selected as follows: to the
extent that the provisions of Section 10.2 of the Indenture will not be
violated
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thereby, either (i) that principal amount of Series 2001-1C Notes shall be
redeemed which bears, as nearly as practicable, the same (but no greater)
proportion to the aggregate principal amount of all Outstanding Series
2001-1 Notes to be redeemed as the aggregate principal amount of
Outstanding Series 2001-1C Notes bears to the aggregate principal amount of
all Outstanding Series 2001-1 Notes or (ii) if the Trustee receives, at
least forty-five (45) days prior to the Redemption Date (unless a shorter
notice is satisfactory to the Trustee), a Corporation Certificate
certifying that, based on a Cash Flow Projection, a different proportion of
Series 2001-1C Notes to be redeemed will not materially adversely affect
the Corporation's ability to pay Debt Service on the Outstanding Notes and
on Outstanding Other Obligations, Carry-Over Amounts (including accrued
interest thereon) with respect to Outstanding Notes, Administrative
Expenses or Note Fees or to make required deposits to the Indemnification
Fund, Series 2001-1C Notes shall be redeemed in such principal amount as is
designated by the Corporation in such certificate. The remaining Series
2001-1 Notes to be redeemed shall be selected from each series of the
Series 2001-1 Senior Notes in, as nearly as practicable, the same
proportion to the aggregate principal amount of all Outstanding Series
2001-1 Senior Notes to be redeemed as the aggregate principal amount of
Outstanding Series 2001-1 Senior Notes of such series bears to the
aggregate principal amount of all Outstanding Series 2001-1 Senior Notes.
Notwithstanding the foregoing provisions of this Section 16, to the
extent Series 2001-1C Notes cannot be redeemed due to the application of
Section 10.2 of the Indenture, but Series 2001-1 Senior Notes may be
redeemed without violating the provisions of said Section 10.2, the
particular Series 2001-1 Notes to be redeemed shall be selected from the
Series 2001-1 Senior Notes in the manner described in the preceding
paragraph.
If less than all of the Outstanding Series 2001-1 Notes of a given
series are to be redeemed pursuant to this Section 16, the particular
Series 2001-1 Notes to be redeemed shall be selected by the Trustee by lot
in such manner as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal of
Series 2001-1 Notes in an Authorized Denomination.
The Trustee shall promptly notify the Note Registrar and any Paying
Agent for the Series 2001-1 Notes (in each case, if other than the Trustee)
in writing of the Series 2001-1 Notes selected for redemption and, in the
case of any Series 2001-1 Note selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of the Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Series 2001-1 Notes
shall relate, in the case of any Series 2001-1 Note redeemed or to be
redeemed only in part, to the portion of the principal of such Series
2001-1 Note which has been or is to be redeemed.
(E) Notice of Redemption. Notice of redemption of Series 2001-1 Notes
pursuant to this Section 16 shall be given not less than fifteen (15) days
prior to the Redemption Date in accordance with the provisions of Section
10.4 of the Indenture.
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Section 17. Book-Entry Series 2001-1 Notes.
(a) The registered Holder of all Series 2001-1 Notes shall be the
Securities Depository and the Series 2001-1 Notes shall be registered in
the name of the nominee for the Securities Depository. The "Series 2001-1
Notes" referred to in this subsection (a) shall refer to the Series 2001-1
Notes registered in the name of the Securities Depository.
(b) The Series 2001-1 Notes shall be initially issued in the form of
separate, single, authenticated fully-registered Series 2001-1 Notes for
each series thereof in the amount of such series. Upon initial issuance,
the ownership of each such Series 2001-1 Note shall be registered in the
registration books kept by the Note Registrar in the name of the nominee of
the Securities Depository. The Trustee and the Corporation may treat the
Securities Depository (or its nominee) as the sole and exclusive owner of
the Series 2001-1 Notes registered in its name for the purposes of (1)
payment of the principal or Redemption Price of, interest on or Carry-Over
Amount (including any accrued interest thereon) with respect to the Series
2001-1 Notes, (2) selecting the Series 2001-1 Notes or portions thereof to
be redeemed, (3) giving any notice permitted or required to be given to
Holders under the Indenture, (4) registering the transfer of Series 2001-1
Notes, and (5) obtaining any consent or other action to be taken by Holders
and for all other purposes whatsoever, and neither the Trustee nor the
Corporation shall be affected by any notice to the contrary (except as
provided in subsection (c) below). Neither the Trustee nor the Corporation
shall have any responsibility or obligation to any Participant, any
Beneficial Owner or any other Person claiming a beneficial ownership
interest in the Series 2001-1 Notes under or through the Securities
Depository or any Participant, or any other Person which is not shown on
the registration books of the Note Registrar as being a Holder, with
respect to the accuracy of any records maintained by the Securities
Depository or any Participant, the payment to the Securities Depository of
any amount in respect of the principal or Redemption Price of, interest on
or Carry-Over Amount (including any accrued interest thereon) with respect
to the Series 2001-1 Notes; any notice which is permitted or required to be
given to Holders under the Indenture; the selection by the Securities
Depository or any Participant of any Person to receive payment in the event
of a partial redemption of the Series 2001-1 Notes; or any consent given or
other action taken by the Securities Depository as Holder. The Trustee
shall pay all principal and Redemption Price of, interest on and Carry-Over
Amount (including any accrued interest thereon) with respect to the Series
2001-1 Notes only "to or upon the order of" the Securities Depository (as
that phrase is used in the Uniform Commercial Code as adopted in the State
of South Dakota), and all such payments shall be valid and effective to
fully satisfy and discharge the Corporation's obligations with respect to
the principal, purchase price or Redemption Price of, interest on and
Carry-Over Amount (including any accrued interest thereon) with respect to
the Series 2001-1 Notes to the extent of the sum or sums so paid. Except as
provided in subsection(c) below, no Person other than the Securities
Depository shall receive an authenticated Series 2001-1 Note evidencing the
obligation of the Corporation to make payments of principal or Redemption
Price, interest and Carry-Over Amount (including any accrued interest
thereon) pursuant to this Indenture. Upon delivery by the Securities
Depository to the Trustee of written notice to the effect that the
Securities Depository has determined to substitute a new nominee in place
of the preceding nominee, the Series 2001-1 Notes will be transferable to
such new nominee in accordance with subsection (f) below.
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(c) Except with respect to any Series 2001-1 Notes during such time as
they bear interest at the Auction Rate, in the event the Corporation
determines that it is in the best interest of the Corporation not to
continue the book-entry system of transfer or that the interest of the
Holders might be adversely affected if the book-entry system of transfer is
continued, the Corporation may so notify the Securities Depository and the
Trustee, whereupon the Securities Depository will notify the Participants
of the availability through the Securities Depository of definitive Series
2001-1 Notes. In such event, the Trustee shall authenticate, transfer and
exchange definitive Series 2001-1 Notes as requested by the Securities
Depository in appropriate amounts in accordance with subsection (f) below.
The Securities Depository may determine to discontinue providing its
services with respect to the Series 2001-1 Notes at any time by giving
notice to the Corporation and the Trustee and discharging its
responsibilities with respect thereto under applicable law, or the
Corporation may determine that the Securities Depository is incapable of
discharging its responsibilities and may so advise the Securities
Depository. In either such event, the Corporation shall either establish
its own book-entry system or use reasonable efforts to locate another
securities depository. Under such circumstances (if there is no successor
Securities Depository), the Corporation and the Trustee shall be obligated
to deliver definitive Series 2001-1 Notes as described in this Indenture
and in accordance with subsection (f) below. In the event definitive Series
2001-1 Notes are issued, the provisions of this Indenture shall apply to
such definitive Series 2001-1 Notes in all respects, including, among other
things, the transfer and exchange of such Series 2001-1 Notes and the
method of payment of principal or Redemption Price of, interest on and
Carry-Over Amount (including any accrued interest thereon) with respect to
such Series 2001-1 Notes. Whenever the Securities Depository requests the
Corporation and the Trustee to do so, the Trustee and the Corporation will
cooperate with the Securities Depository in taking appropriate action after
reasonable notice (A) to make available one or more separate definitive
Series 2001-1 Notes to any Participant having Series 2001-1 Notes credited
to its account with the Securities Depository or (B) to arrange for another
securities depository to maintain custody of definitive Series 2001-1
Notes.
(d) Notwithstanding any other provision of the Indenture to the
contrary, so long as any Series 2001-1 Note is registered in the name of
the nominee of the Securities Depository, all payments with respect to the
principal or Redemption Price of, interest on and Carry-Over Amount
(including any accrued interest thereon) with respect to such Series 2001-1
Note and all notices with respect to such Series 2001-1 Note shall be made
and given, respectively, to the Securities Depository as provided in its
letter of representations.
(e) In connection with any notice or other communication to be
provided to Holders pursuant to the Indenture by the Corporation or the
Trustee or with respect to any consent or other action to be taken by
Holders, the Corporation or the Trustee, as the case may be, shall
establish a record date for such consent or other action and give the
Securities Depository notice of such record date not less than fifteen (15)
calendar days in advance of such record date to the extent possible. Such
notice to the Securities Depository shall be given only when the Securities
Depository is the sole Holder.
(f) In the event that any transfer or exchange of Series 2001-1 Notes
is permitted under subsection (b) or (c) of this Section 17, such transfer
or exchange shall be accomplished upon receipt by the Trustee from the
registered Holder thereof of the Series 2001-1 Notes to be transferred or
exchanged and appropriate instruments of transfer to the permitted
transferee, all
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in accordance with the applicable provisions of the Indenture. In the event
definitive Series 2001-1 Notes are issued to Holders other than the nominee
of the Securities Depository, or another securities depository as Holder of
all the Series 2001-1 Notes, the provisions of the Indenture shall also
apply to, among other things, the printing of such definitive Series 2001-1
Notes and the methods of payment of principal or Redemption Price of,
interest on and Carry-Over Amount (including any accrued interest thereon)
with respect to such Series 2001-1 Notes.
(g) Notwithstanding any provision of Article Ten of the Indenture to
the contrary, in connection with any redemption of Series 2001-1 Notes
while The Depository Trust Company, New York, New York ("DTC"), is the sole
Holder, the Corporation shall give notice of such redemption to the Trustee
at least thirty (30) days prior to the date fixed for redemption with
respect to the Series 2001-1 Notes, and the Trustee shall give notice of
redemption to DTC as Holder of such Series 2001-1 Notes pursuant to Section
10.4 of the Indenture at least fifteen (15) days and not more than thirty
(30) days prior to the date fixed for redemption of Series 2001-1 Notes.
Section 18. Series 2001-1 Accounts and Subaccounts. So long as any Series
2001-1 Notes are Outstanding, the following Accounts and Subaccounts, which are
hereby established, shall be maintained by the Trustee or the Deposit Agent, as
the case may be: in the Acquisition Fund, an Account to be known as the "Series
2001-1 Acquisition Account" and an Account to be known as the "Series 2001-1
Capitalized Interest Account"; in the Administration Fund, an Account to be
known as the "Series 2001-1 Administration Account" and an Account to be known
as the "Series 2001-1 Cost of Issuance Account"; in the Reserve Fund, an Account
to be known as the "Series 2001-1 Reserve Account"; in the Interest Account, a
Subaccount to be known as the "Series 2001-1 Interest Subaccount"; in the
Principal Account, a Subaccount to be known as the "Series 2001-1 Principal
Subaccount"; in the Retirement Account, a Subaccount to be known as the "Series
2001-1 Retirement Subaccount"; in the Alternative Loan Guarantee Fund, an
Account to be known as the "Series 2001-1 Alternative Loan Guarantee Account";
and in the Surplus Account, a Subaccount to be known as the "Series 2001-1
Surplus Subaccount."
All amounts transferred to the Acquisition Fund, the Administration Fund,
the Reserve Fund, the Interest Account, the Principal Account, the Retirement
Account, the Alternative Loan Guarantee Fund and the Surplus Account from any
other Fund or Account pursuant to the requirements of the Indenture with respect
to the Series 2001-1 Notes or the Student Loans Financed with the proceeds
thereof shall be deposited to the credit of the Series 2001-1 Acquisition
Account, the Series 2001-1 Administration Account, the Series 2001-1 Reserve
Account, the Series 2001-1 Interest Subaccount, the Series 2001-1 Principal
Subaccount, the Series 2001-1 Retirement Subaccount, the Series 2001-1
Alternative Loan Guarantee Account or the Series 2001-1 Surplus Subaccount,
respectively, and as appropriate.
Except as heretofore provided in this Section 18, nothing herein shall be
deemed to prohibit (1) the Trustee from using Balances of any Account or
Subaccount established by this Section 18 to remedy deficiencies for which
Balances of the Fund or Account in which such Account or Subaccount is
established are subject to use under the Indenture, or (2) the application of
Balances of any Account or Subaccount established by this Section 18 for any
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purpose for which Balances of the Fund or Account in which such Account or
Subaccount is established are authorized to be applied by the Indenture.
When there shall be no Series 2001-1 Notes Outstanding, the Series 2001-1
Acquisition Account and the Series 2001-1 Capitalized Interest Account shall
each terminate and any Balance thereof at such time shall be used as other
Balances of the Acquisition Fund, and the Series 2001-1 Administration Account
and the Series 2001-1 Cost of Issuance Account shall each terminate and any
Balance thereof at such time shall be used as other Balances of the
Administration Fund. When there shall be no Series 2001-1 Notes Outstanding, the
Series 2001-1 Interest Account shall terminate and any Balance thereof at such
time shall be used as other Balances of the Interest Account, the Series 2001-1
Principal Account shall terminate and any Balance thereof at such time shall be
used as other Balances of the Principal Account, the Series 2001-1 Retirement
Account shall terminate and any Balance thereof at such time shall be used as
other Balances of the Retirement Account, the Series 2001-1 Reserve Account
shall terminate and any Balance thereof at such time shall be used as other
Balances of the Reserve Fund, the Series 2001-1 Alternative Loan Guarantee
Account shall terminate and any Balance thereof at such time shall be used as
other Balances of the Reserve Fund and the Series 2001-1 Surplus Subaccount
shall terminate and any Balance thereof at such time shall be used as other
Balances of the Surplus Account.
Section 19. Series 2001-1 Capitalized Interest Account. A deposit shall be
made to the credit of the Series 2001-1 Capitalized Interest Account pursuant to
Section 15 of this Third Supplemental Indenture. Notwithstanding the provisions
of Section 4.2 of the Indenture, amounts in the Series 2001-1 Capitalized
Interest Account, the Series 1999-1 Capitalized Interest Account or the Series
2000-1 Capitalized Interest Account shall be transferred to the Series 2001-1
Interest Subaccount on any Monthly Payment Date to the extent necessary to
remedy any deficiency therein after any required transfers thereto from the
Revenue Fund and the Series 2001-1 Surplus Subaccount. The Corporation may, at
any time prior to November 25, 2001, by Corporation Order, direct that all or a
portion of the Balance in the Series 2001-1 Capitalized Interest Account be
transferred to the Series 2001-1 Acquisition Subaccount and thereafter applied
in the same manner as those amounts originally deposited to the credit of the
Series 2001-1 Acquisition Subaccount pursuant to Section 15 of this Third
Supplemental Indenture, provided (i) that the Corporation has certified in such
Corporation Order that, based on a Cash Flow Projection, any such amount is not
reasonably expected to be needed to remedy a deficiency in the Series 2001-1
Interest Subaccount as described above, and (ii) such transfer and application
will not result in the reduction or withdrawal of the outstanding rating
assigned by any Rating Agency to the Series 2001-1 Notes, as evidenced in
writing to the Trustee by each such Rating Agency. Any amounts remaining in the
Series 2001-1 Capitalized Interest Account as of July 1, 2003, shall be
transferred by the Trustee to the Series 2001-1 Retirement Account and
thereafter applied to the redemption of Series 2001-1 Notes pursuant to Section
16(C) hereof.
Section 20. Purchase or Origination of Eligible Loans From Series 2001-1
Acquisition Account and Series 2001-1 Surplus Subaccount. The price paid to
purchase an Eligible Loan from the Balances in the Series 2001-1 Acquisition
Account (other than the Eligible Loans to be purchased pursuant to the Series
2001-1 Transfer Agreement, the
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purchase price for which is set forth in such agreement) or the Series 2001-1
Surplus Subaccount shall not exceed 100% of the remaining unpaid principal
amount of such Eligible Loan, plus accrued Special Allowance Payments and
noncapitalized borrower interest thereon, if any, to the date of purchase,
reasonable transfer, origination and assignment fees, if applicable, and, in the
case of FFELP Loans only, a premium which would not cause the weighted average
of the premiums paid on all FFELP Loans Financed from the Series 2001-1
Acquisition Account and the Series 2001-1 Surplus Subaccount to exceed 1.75% (or
such greater premium the payment of which will not materially adversely affect
the Corporation's ability to pay Debt Service on the Outstanding Notes, Other
Indenture Obligations, Carry-Over Amounts (including accrued interest thereon)
with respect to Outstanding Notes, Administrative Expenses or Note Fees or to
make required transfers to the Indemnification Fund, as shown in a subsequent
Cash Flow Projection received by the Trustee, and which will not result in the
reduction or withdrawal of the outstanding rating assigned by any Rating Agency
to the Series 2001-1 Notes, as evidenced in writing to the Trustee by each such
Rating Agency), and as otherwise authorized by Section 4.2 of the Indenture.
After the purchase of Eligible Loans pursuant to the Series 2001-1 Transfer
Agreement, any remaining amounts in the Series 2001-1 Acquisition Account shall
be applied to the purchase or origination of Eligible Loans in accordance with
the following restrictions:
(1) No more than $3,000,000 aggregate Principal Balance of Alternative
Loans may be so purchased or originated, of which no more than (a)
$1,650,000 may be "credit ready" Alternative Loans, and (b) $450,000 may be
Alternative Loans made with respect to students attending schools of less
than four (4) years;
(2) No more than $8,000,000 aggregate Principal Balance of
Consolidation Loans may be so purchased or originated; and
(3) All FFELP Loans so purchased must be from Lenders located in
states in the midwestern portion of the United States;
provided that the foregoing restrictions may be exceeded if action will not
materially adversely affect the Corporation's ability to pay Debt Service on the
Outstanding Notes, Other Indenture Obligations, Carry-Over Amounts (including
accrued interest thereon) with respect to Outstanding Notes, Administrative
Expenses or Note Fees or to make required transfers to the Indemnification Fund,
as shown in a subsequent Cash Flow Projection received by the Trustee, and which
will not result in the reduction or withdrawal of the outstanding rating
assigned by any Rating Agency to the Series 2001-1 Notes, as evidenced in
writing to the Trustee by each such Rating Agency.
The Corporation shall not purchase or originate any Financed Student Loans
which are subject to any interest rate reduction or other program that would
reduce the yield thereon (I) if such yield reduction (a) is more than 2.0% per
annum plus (provided there are no delinquencies in the first 24 months) return
of some or all of the origination fee in excess of $250, (b) may commence if any
of the first forty-eight (48) consecutive payments have not been received in a
timely fashion or (c) may continue if any payments are not received in a timely
fashion, or (II)
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from Balances in the Series 2001-1 Acquisition Account and the Series 2001-1
Surplus Subaccount if, as a result of such purchase or origination, the
aggregate of the amounts applied from such Balances to the purchase or
origination of Student Loans subject to such programs would exceed 50% of the
aggregate of the amounts applied from such Balances to the purchase or
origination of all Student Loans, unless the Corporation delivers to the Trustee
(i) a Corporation Certificate certifying that, based on a Cash Flow Projection,
the purchase or origination of such Student Loan will not materially adversely
affect the Corporation's ability to pay Debt Service on the Outstanding Notes
and on Outstanding Other Obligations, to pay Carry-Over Amounts (including
accrued interest thereon) with respect to Outstanding Notes or to make required
deposits to the Indemnification Fund, and (ii) written confirmation from each
Rating Agency then rating the Series 2001-1 Notes that the purchase or
origination of such Student Loan will not result in a reduction or withdrawal of
the rating of the Series 2001-1 Notes; provided that the foregoing restrictions
shall not apply to the purchase or origination of any Student Loan subject to a
yield reduction program which the Corporation may, at its option, discontinue at
any time and which would not reduce the yield thereon by more than .25% per
annum.
The Corporation shall not agree to, or permit any Servicer to agree to, any
discount or other reduction in the yield on any Student Loan Financed from
Balances in the Series 2001-1 Acquisition Account or the Series 2001-1 Surplus
Subaccount (other than any such reduction that existed at the time such Student
Loan was so Financed) if, as a result thereof, the yield on such Student Loan
would be reduced by more than .25% per annum, unless the Corporation delivers to
the Trustee (1) a Corporation Certificate certifying that, based on a Cash Flow
Projection, such reduction will not materially adversely affect the
Corporation's ability to pay Debt Service on the Outstanding Notes and on
Outstanding Other Obligations, to pay Carry-Over Amounts (including accrued
interest thereon) with respect to Outstanding Notes or to make required deposits
to the Indemnification Fund, and (2) written confirmation from each Rating
Agency then rating the Series 2001-1 Notes that such reduction will not result
in a reduction or withdrawal of the rating of the Series 2001-1 Notes.
The Corporation shall not purchase or originate any Student Loan from the
Balance in the Series 2001-1 Surplus Subaccount:
(A)(i) after August 31, 2002, or (ii) if such Student Loan is an
Alternative Loan and the purchase or origination thereof would cause either
(a) the aggregate of the principal balances of Alternative Loans purchased
or originated from Balances in the Series 1999-1 Surplus Subaccount, the
Series 2000-1 Surplus Subaccount and the Series 2001-1 Surplus Subaccount
to exceed one-half of the aggregate of the principal balances of FFELP
Loans purchased or originated from such Balances during the period from the
Closing Date through August 31, 2002, or (b) the aggregate of the principal
balances of "credit worthy" Alternative Loans purchased or originated from
Balances in the Series 1999-1 Surplus Subaccount, the Series 2000-1 Surplus
Subaccount and the Series 2001-1 Surplus Subaccount to be less than 45% of
the aggregate of the principal balances of all Alternative Loans purchased
or originated from such Balances during the period from the Closing Date
through August 31, 2002, in any such case unless the Corporation delivers
to the Trustee:
-39-
(1) a Corporation Certificate certifying that, based on a Cash
Flow Projection, the purchase or origination of such Student Loan will
not materially adversely affect the Corporation's ability to pay Debt
Service on the Outstanding Notes and on Outstanding Other Obligations,
to pay Carry-Over Amounts (including accrued interest thereon) with
respect to Outstanding Notes or to make required deposits to the
Indemnification Fund, and
(2) written confirmation from each Rating Agency then rating the
Series 2001-1 Notes that the purchase or origination of such Student
Loan will not result in a reduction or withdrawal of the rating of the
Series 2001-1 Notes, or
(B) if such Student Loan is a FFELP Loan from a Lender located in a
state outside the midwestern portion of the United States, unless the
Corporation delivers to the Trustee written confirmation from each Rating
Agency then rating the Series 2001-1 Notes that the purchase of such
Student Loan will not result in a reduction or withdrawal of the rating of
the Series 2001-1 Notes.
The Corporation shall not purchase or originate (A) any FFELP Loan from the
Balances in the Series 2001-1 Acquisition Account or the Series 2001-1 Surplus
Subaccount if, as a result of an amendment to the Higher Education Act after the
date of this Third Supplemental Indenture (other than an amendment contained in
a ▇▇▇▇ currently pending in Congress and subsequently enacted into law), such
FFELP Loan bears a rate of interest that is lower than the rate of interest such
FFELP Loan would have borne under the Higher Education Act as it currently
exists, or (B) any Consolidation Loan from the Balances in the Series 2001-1
Acquisition Account or the Series 2001-1 Surplus Subaccount that has a final
payment date beyond November 30, 2035, unless the Corporation delivers to the
Trustee (1) a Corporation Certificate certifying that, based on a Cash Flow
Projection, the purchase or origination of such FFELP Loan or Consolidation Loan
will not materially adversely affect the Corporation's ability to pay Debt
Service on the Outstanding Notes and on Outstanding Other Obligations, to pay
Carry-Over Amounts (including accrued interest thereon) with respect to
Outstanding Notes or to make required deposits to the Indemnification Fund, and
(2) written confirmation from each Rating Agency then rating the Series 2001-1
Notes that the purchase or origination of such FFELP Loan or Consolidation Loan
will not result in a reduction or withdrawal of the rating of the Series 2001-1
Notes.
If the Corporation purchases any Student Loans from Balances in the Series
2001-1 Surplus Subaccount that do not constitute Eligible Loans, it shall give
written notice of such purchase to each Rating Agency then rating the Series
2001-1 Notes.
Any Student Loans Financed from Balances in the Series 2001-1 Surplus
Subaccount prior to November 25, 2001, and constituting Eligible Loans shall,
upon the financing thereof, be credited to, and included in the Balance of, the
Series 2001-1 Acquisition Account, and shall not be deemed to have been Financed
with moneys in the Surplus Account but to have been Financed with moneys in the
Acquisition Fund.
Section 21. Limitation on Costs of Issuance, Administrative Expenses and
Note Fees. The Corporation covenants and agrees that the Costs of Issuance,
Administrative
-40-
Expenses and Note Fees to be paid, or reimbursed to the Corporation, from the
Administration Fund shall not exceed the aggregate amount thereof specified in
the Closing Cash Flow Projection, unless the Corporation delivers to the Trustee
(i) a Corporation Certificate certifying that, based on a Cash Flow Projection,
the payment or reimbursement of a greater amount of Costs of Issuance,
Administrative Expenses and Note Fees from the Administration Fund will not
materially adversely affect the Corporation's ability to pay Debt Service on the
Outstanding Notes and on Outstanding Other Obligations, to pay Carry-Over
Amounts (including accrued interest thereon) with respect to Outstanding Notes
or to make required deposits to the Indemnification Fund and (ii) written
confirmation from each of the Rating Agencies then rating the Series 2001-1
Notes to the effect that payment or reimbursement of such additional Costs of
Issuance, Administrative Expenses or Note Fees will not result in a reduction or
withdrawal of the rating of the Series 2001-1 Notes.
Section 22. Proceeds of Sales of Certain Student Loans To Be Deposited in
the Acquisition Fund. The Trustee shall deposit in the Acquisition Fund the
proceeds of the resale to a Lender of any Student Loans Financed with proceeds
of the Series 2001-1 Notes pursuant to such Lender's repurchase obligation under
the applicable Student Loan Purchase Agreement upon receipt thereof from the
Corporation, to the extent directed in a Corporation Order and received by the
Trustee prior to November 25, 2001. Any such proceeds received by the Trustee
after such date shall be deposited in the Revenue Fund.
Section 23. Certain Findings, Determinations and Designations. The
Corporation hereby finds and determines as follows:
(A) The Original Indenture, except as provided in the First
Supplemental Indenture and the Second Supplemental Indenture, has not been
amended, supplemented or repealed since the execution thereof. This Third
Supplemental Indenture amends and supplements the Indenture, constitutes
and is a "Supplemental Indenture" within the meaning of such term as
defined and used in the Indenture and is executed under and pursuant to the
Indenture.
(B) No Note, other than the Series 1999-1 Notes and the Series 2000-1
Notes, have heretofore been issued under the Indenture. The Series 2001-1A
Notes and the Series 2001-1B Notes constitute, and are hereby designated
as, "Class A Notes" within the meaning of the term as defined and used in
the Indenture, and the Series 2001-1C Notes constitute, and are hereby
designated as, "Class B Notes" within the meaning of the term as defined
and used in the Indenture.
(C) Upon receipt of the proceeds of the sale of the Series 2001-1
Notes: (1) the Trust Estate pledged under the Indenture will not be
encumbered by any lien or charge thereon or pledge thereof, other than the
lien and charge thereon and pledge thereof created by the Indenture for the
payment and security of the Notes; and (2) there will not be outstanding
any bonds, notes or other evidences of indebtedness payable from and
secured by a lien on or pledge or charge upon the Trust Estate pledged
under the Indenture other than the Series 2001-1 Notes.
-41-
(D) There does not exist an "Event of Default," within the meaning of
such term as defined in the Indenture, which is continuing, nor does there
exist any condition which, after the passage of time, would constitute such
an "Event of Default."
Section 24. Amendment of Granting Clause First of the Indenture. Granting
Clause First of the Indenture is hereby amended as follows:
GRANTING CLAUSE FIRST
All rights, title, interest and privileges of the Corporation (1) with
respect to Financed Student Loans, in, to and under the Federal
Reimbursement Contracts, any Servicing Agreement, the Student Loan Purchase
Agreements (including, but not limited to, those agreements described in
Exhibits H-1 and H-2 to the First Supplemental Indenture, in Exhibits
H-1 and H-2 to the Second Supplemental Indenture and in Exhibits H-1 and
H-2 to the Third Supplemental Indenture), the Transfer Agreements, any
Non-Delivery Fees and the Guarantee Agreements, (2) in, to and under all
Financed Student Loans (including the evidences of indebtedness thereof and
related documentation), the proceeds of the sale of the Notes (until
expended for the purpose for which the Notes were issued) and the revenues,
moneys, evidences of indebtedness , instruments, securities and other
financial assets (including any earnings thereon) in and payable into the
Acquisition Fund, Note Fund, Revenue Fund, Reserve Fund, Administration
Fund, Indemnification Fund, Alternative Loan Guarantee Fund and Surplus
Fund, and any deposit accounts or securities accounts to which such
Financed Student Loans, proceeds, revenues, moneys, evidences of
indebtedness, instruments, securities and other financial assets may be
credited, including, without limitation, the Acquisition Fund, Note Fund,
Revenue Fund, Reserve Fund, Administration Fund, Indemnification Fund,
Alternative Loan Guarantee Fund and Surplus Fund and any Accounts or
Subaccounts therein, in the manner and subject to the prior applications
provided in Article Four hereof, and (3) in, to and under any Credit
Enhancement Facility, any Demand Purchase Agreement, any Swap Agreement,
any Swap Counterparty Guarantee, any Depositary Agreement, any Remarketing
Agreement, any Auction Agent Agreement and any Broker-Dealer Agreement, all
as hereinbefore and hereinafter defined, including any contract, any
payment intangible, any general intangible or any evidence of indebtedness
or other rights of the Corporation to receive any of the same whether now
existing or hereafter coming into existence, and whether now or hereafter
acquired;
Section 25. Amendment of Section 5.04 of the Indenture. Subject to
subsection (B) below, Section 5.04 of the Indenture is hereby amended as
follows:
Section 5.04. Trustee to Hold Alternative Loan Notes To the extent
necessary, based upon an Opinion of Counsel, to perfect the security
interest granted in each Financed Student Loan under this Indenture, the
Trustee shall hold the original of each promissory note delivered in
connection with the acquisition of such Financed Alternative Loan. The
Trustee shall not release custody of any such promissory note except upon
the sale thereof or to the Servicer as necessary in connection with the
servicing of the related Financed Alternative Loan under the Servicing
Agreement. Any
-42-
such promissory note so released to the custody of the Servicer shall,
except in the case of the liquidation thereof, be promptly returned to the
Trustee. The Trustee shall maintain a record of all such promissory notes
held by the Trustee and any releases thereof to the custody of the
Servicer.
(B) The amendments to Section 5.04 of the Indenture contained in
subsection (A) of this Section 25 shall not take effect until such time as
such amendments have either been consented to by the requisite percentage
of Noteholders under Section 8.2 of the Indenture or met the requirements
of Section 8.1 of the Indenture or a combination thereof.
Section 26. Consent of Series 2001-1 Noteholders to Amendments to
Indenture. Each Holder of Series 2001-1 Notes, by his acceptance thereof, shall
be deemed to have consented to each of the amendments to the Indenture contained
in Sections 24 and 25 of this Third Supplemental Indenture.
Section 27. Governing Law. This Third Supplemental Indenture shall be
governed by and be construed in accordance with the laws of the State without
giving effect to the conflicts-of-laws principles thereof; provided that those
provisions of this Third Supplemental Indenture relating to the rights and
duties of the Auction Agent shall be governed by and be construed in accordance
with the laws of the State of New York.
Section 28. Section Headings; Table of Contents. The headings or titles of
the several sections hereof shall be solely for convenience of reference and
shall not affect the meaning or construction, interpretation or effect of this
Third Supplemental Indenture.
Section 29. Severability. If any provision of this Third Supplemental
Indenture shall be held or deemed to be or shall, in fact, be inoperative or
unenforceable as applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions or in all cases because it conflicts with
any provisions of any constitution or statute or rule of public policy, or for
any other reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses or paragraphs
in this Third Supplemental Indenture contained shall not affect the remaining
portions of this Third Supplemental Indenture or part thereof.
Section 30. Counterparts. This Third Supplemental Indenture may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 31. Effect of Third Supplemental Indenture. Upon the execution and
delivery of this Third Supplemental Indenture, the Indenture shall be amended
and supplemented in accordance herewith, and this Third Supplemental Indenture
shall form a part of the Indenture for all purposes and every Holder of Notes
hereafter authenticated and delivered and Other Beneficiary under the Indenture
shall be bound hereby.
-43-
IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental
Indenture to be duly executed all as of the day and year first above written.
EDUCATION LOANS INCORPORATED
By
-------------------------------------
President
Attest:
-----------------------------
Secretary
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
-------------------------------------
Assistant Vice President
Attest:
-----------------------------
Trust Officer
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EXHIBIT A
---------
FORM OF SERIES 2001-1 SENIOR NOTES
----------------------------------
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER 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.
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTE
SENIOR SERIES 2001-1A [B]
CLASS A
No. R_____ $________
Stated Date of Original Interest
Maturity Date Issue Rate CUSIP
------------- ----- ---- -----
December 1, 2035 July 30, 2001 Variable ______
REGISTERED HOLDER: CEDE & CO.
PRINCIPAL AMOUNT:
FOR VALUE RECEIVED, EDUCATION LOANS INCORPORATED, a corporation organized
under the laws of the State of Delaware (the "Corporation," which term includes
any successor corporation under the Indenture hereinafter referred to),
acknowledges itself indebted and hereby promises to pay to the registered holder
specified above, or registered assigns (the "Registered Holder"), but solely
from the revenues and receipts hereinafter specified and not otherwise, the
Principal Amount specified above on the Stated Maturity Date specified above
(subject to the right of prior redemption hereinafter mentioned), upon
presentation and surrender of this Note at the Principal Office of the Trustee
(as hereinafter defined), as Paying Agent for the Series 2001-1 Notes (as
hereinafter defined), or a duly appointed successor Paying Agent, and to pay
interest on said Principal Amount, but solely from the revenues and receipts
hereinafter specified and not otherwise, to the Registered Holder hereof from
the date hereof until the payment of said Principal Amount has been made or duly
provided for, payable on each Interest Payment Date and at Maturity, at the
Series 2001-1 Note Interest Rate (as hereinafter
A-1
described), and at the same rate per annum (to the extent that the payment of
such interest shall be legally enforceable) on overdue installments of interest.
Payment of interest on this Note on each regularly scheduled Interest Payment
Date shall be made by check or draft drawn upon the Paying Agent and mailed to
the person who is the Registered Holder hereof as of 5:00 p.m. in the city in
which the Principal Office of the Note Registrar is located on the applicable
Regular Record Date at the address of such Registered Holder as it appears on
the Note Register maintained by the Note Registrar, or, if the Registered Holder
of this Note is the Registered Holder of Series 2001-1 Notes in the aggregate
principal amount of $1,000,000 or more, at the direction of such Registered
Holder received by the Paying Agent by 5:00 p.m. in the city in which the
Principal Office of the Paying Agent is located on the last Business Day
preceding the applicable Regular Record Date, by electronic transfer by the
Paying Agent in immediately available funds to an account designated by such
Registered Holder. In addition, premium, if any, and interest on this Note are
payable at the Maturity hereof in the same manner as the principal hereof,
unless the date of such maturity is a regularly scheduled Interest Payment Date,
in which event interest is payable in the manner set forth in the preceding
sentence. Any interest not so timely paid or duly provided for shall cease to be
payable to the person who is the Registered Holder hereof at the close of
business on the Regular Record Date and shall be payable to the person who is
the Registered Holder hereof at the close of business on a special record date
for the payment of any such defaulted interest. Such special record date shall
be fixed by the Trustee whenever moneys become available for payment of the
defaulted interest, and notice of the special record date shall be given to the
Registered Holder hereof not less than ten days prior thereto by first-class
mail to such Registered Holder as shown on the Note Register on a date selected
by the Trustee, stating the date of the special record date and the date fixed
for the payment of such defaulted interest. The principal of, premium, if any,
and interest on this Note are payable in lawful money of the United States of
America.
This Note is one of an authorized issue of Notes (the "Notes"), issued and
to be issued by the Corporation in one or more series pursuant to an Indenture
of Trust, dated as of December 1, 1999 (as supplemented and amended, the
"Indenture"), as amended and supplemented by a First Supplemental Indenture of
Trust, dated as of December 1, 1999, a Second Supplemental Indenture of Trust,
dated as of December 1, 2000, and a Third Supplemental Indenture of Trust, dated
as of July 1, 2001 (the "Third Supplemental Indenture"), each between the
Corporation and U.S. Bank National Association, in Minneapolis, Minnesota, as
Trustee (the "Trustee," which term includes any successor trustee under the
Indenture). As provided in the Indenture, the Notes are issuable in series which
may vary as in the Indenture provided or permitted. This Note is one of a series
issued in an aggregate principal amount of $79,000,000 (the "Series 2001-1A [B]
Notes"). The Series 2001-1A [B] Notes are issued simultaneously with one other
series of Class A Notes issued in the aggregate principal amount of $79,000,000
(the "Series 2001-1B [A] Notes" and, together with the Series 2001-1A [B] Notes,
collectively referred to herein as the "Series 2001-1 Senior Notes"), and a
series of Class B Notes issued in the aggregate principal amount of $23,800,000
(the "Series 2001-1C Notes" and, together with the Series 2001-1 Senior Notes,
collectively referred to herein as the "Series 2001-1 Notes"). The proceeds of
the Series 2001-1 Notes will be used by the Corporation to (a) acquire student
loan notes incurred under the Higher Education Act and under certain Alternative
Loan Programs, (b) fund the Reserve Fund, (c) pay a portion of the interest
coming due on the Series 2001-1 Notes and (d) pay Costs of Issuance of the
Series 2001-1 Notes. The Series 2001-1 Senior Notes are being issued on a
parity, and are equally and ratably secured under the Indenture, with the
Corporation's Student
A-2
Loan Asset-Backed Notes, Senior Series 1999-A and 1999-B, issued under the
Indenture as Class A Notes in the original aggregate principal amount of
$117,000,000, and the Corporation's Student Loan Asset-Backed Notes, Senior
Series 2000-A and 2000-B, issued under the Indenture as Class A Notes in the
original aggregate principal amount of $108,200,000, and the Series 2001-1C
Notes are being issued on a parity, and are equally and ratably secured under
the Indenture, with the Corporation's Student Loan Asset-Backed Notes,
Subordinate Series 1999-1C, issued under the Indenture as Class B Notes in the
original principal amount of $9,300,000, and the Corporation's Student Loan
Asset-Backed Notes, Subordinate Series 2000-1C, issued under the Indenture as
Class B Notes in the original principal amount of $22,000,000 .
Reference is hereby made to the Indenture, copies of which are on file in
the principal corporate trust office of the Trustee, and to all of the
provisions of which any Registered Holder of this Note by his acceptance hereof
hereby assents, for definitions of terms; the description of and the nature and
extent of the security for the various classes of Notes and Other Obligations
secured thereunder; the student loan acquisition program being financed by the
issuance of the Notes; the revenues and other moneys pledged to the payment of
the principal of, premium, if any, and interest on the Notes and the Other
Obligations; the nature and extent and manner of enforcement of the pledge; the
conditions upon which Notes may be issued or Other Obligations may be incurred
by the Corporation thereunder, payable from such revenues and other moneys
thereunder as Senior Obligations, Subordinate Obligations or Class C Notes; the
conditions upon which the Indenture may be amended or supplemented with or
without the consent of the Holders of the Notes; the rights and remedies of the
Registered Holder hereof with respect hereto and thereto, including the
limitations upon the right of a Registered Holder hereof to institute any suit,
action or proceeding in equity or at law with respect hereto and thereto; the
rights, duties and obligations of the Corporation and the Trustee thereunder;
the terms and provisions upon which the liens, pledges, charges, trusts and
covenants made therein may be discharged at or prior to the maturity or
redemption of this Note, and this Note thereafter no longer be secured by the
Indenture, or be deemed to be Outstanding thereunder; and for the other terms
and provisions thereof. Terms used with initial capital letters but not defined
in this Note have the respective meanings given such terms in the Indenture. The
Series 2001-1 Senior Notes are being issued as, and will constitute, Class A
Notes under the Indenture. The Series 2001-1C Notes are being issued as, and
will constitute, Class B Notes under the Indenture.
The Notes and Other Obligations are limited obligations of the Corporation,
payable solely from the revenues and assets of the Corporation pledged therefor
under the Indenture, including certain notes evidencing Student Loans and the
proceeds of the Corporation's bonds, notes or other evidences of indebtedness,
if any, issued with respect to the Notes.
Interest payable on this Note shall be computed on the basis of actual days
elapsed and accrue daily from the date hereof (on the basis of a 360-day year),
and is payable on each regularly scheduled Interest Payment Date prior to the
Maturity of this Note and at the Maturity of this Note. The interest payable on
each Interest Payment Date for this Note shall be that interest which has
accrued through the last day of the last complete Interest Period immediately
preceding the Interest Payment Date or, in the case of the Maturity of this
Note, the last day preceding the date of such Maturity. The Series 2001-1 Note
Interest Rate shall be effective as of and on the first day (whether or not a
Business Day) of the applicable Interest Period and be in effect thereafter
through the end of such Interest Period.
A-3
The unpaid principal amount hereof from time to time outstanding shall bear
interest at a Series 2001-1 Note Auction Rate, as described below, payable on
each Interest Payment Date and at the Maturity hereof, such interest to accrue
from the later of the date hereof or the date through which interest has been
paid or duly provided for.
During the Initial Interest Period, this Note shall bear interest at the
Series 2001-1 Note Initial Interest Rate. Thereafter until an Auction Period
Adjustment, if any, this Note shall bear interest at a Series 2001-1 Note
Auction Rate based on an Auction Period that shall generally consist of 28 days,
all as determined in the Third Supplemental Indenture.
The Series 2001-1 Note Auction Rate to be borne by this Note after the
Initial Interest Period for each Auction Period until an Auction Period
Adjustment, if any, shall be the lesser of (i) the Net Loan Rate in effect for
such Auction Period, (ii) the Auction Rate determined in accordance with the
applicable provisions of the Third Supplemental Indenture and (iii) the Series
2001-1 Note Auction Rate Limitation.
In no event shall the Series 2001-1 Note Auction Rate on this Note exceed
the Series 2001-1 Note Auction Rate Limitation.
The Interest Period, including, without limitation, an Auction Period, the
applicable Series 2001-1 Note Auction Rate, the method of determining the
applicable Series 2001-1 Note Auction Rate on each of the Series 2001-1A [B]
Notes and the Auction Procedures related thereto, including, without limitation,
required notices thereof to the Holders or Existing Holders of the Series 2001-1
Senior Notes, an Auction Period Adjustment, a change in the Auction Date and the
Interest Payment Dates will be determined in accordance with the terms,
conditions and provisions of the Third Supplemental Indenture and the Auction
Agent Agreement, to which terms, conditions and provisions specific reference is
hereby made, and all of which terms, conditions and provisions are hereby
specifically incorporated herein by reference.
If the Auction Rate for the Series 2001-1A [B] Notes is greater than the
Net Loan Rate, then the Series 2001-1 Note Auction Rate applicable to the Series
2001-1 Notes for that Interest Period will be the Net Loan Rate. If the Series
2001-1 Note Auction Rate applicable to the Series 2001-1A [B] Notes for any
Interest Period is the Net Loan Rate, the Trustee shall determine the Carry-Over
Amount, if any, with respect to the Series 2001-1A [B] Notes for such Interest
Period. Such Carry-Over Amount shall bear interest calculated at a rate equal to
One-Month LIBOR from the Interest Payment Date for the Interest Period with
respect to which such Carry-Over Amount was calculated until paid. For purposes
of this Note, any reference to "principal" or "interest" herein shall not
include within the meaning of such words Carry-Over Amount or any interest
accrued on any such Carry-Over Amount. Such Carry-Over Amount shall be
separately calculated for each Series 2001-1A [B] Note by the Trustee during
such Interest Period in sufficient time for the Trustee to give notice to each
Holder of such Carry-Over Amount as required in the next succeeding sentence. On
the Interest Payment Date for an Interest Period with respect to which such
Carry-Over Amount has been calculated by the Trustee, the Trustee shall give
written notice to each Holder of the Carry-Over Amount applicable to each
Holder's Series 2001-1A [B] Note, which written notice may accompany the payment
of interest by check made to each such Holder on such Interest Payment Date or
otherwise shall be mailed on such Interest Payment Date by first class mail,
postage prepaid, to
A-4
each such Holder at such Holder's address as it appears on the registration
books maintained by the Note Registrar. Such notice shall state, in addition to
such Carry-Over Amount, that, unless and until a Series 2001-1A [B] Note has
been redeemed or has been deemed no longer Outstanding under the Third
Supplemental Indenture (after which no Carry-Over Amount shall be paid with
respect to a Series 2001-1A [B] Note), (i) the Carry-Over Amount (and interest
accrued thereon) shall be paid by the Trustee on such Series 2001-1A [B] Note on
the first occurring Interest Payment Date for a subsequent Interest Period if
and to the extent that (l) the Eligible Carry-Over Make-Up Amount with respect
to such Interest Period is greater than zero, and (2) moneys are available
pursuant to the terms of the Third Supplemental Indenture to pay such Carry-Over
Amount (and interest accrued thereon), and (ii) interest shall accrue on the
Carry-Over Amount at a per annum rate equal to One-Month LIBOR until such
Carry-Over Amount is paid in full or is cancelled.
The Carry-Over Amount for the Series 2001-1A [B] Notes shall be paid by the
Trustee on Outstanding Series 2001-1A [B] Notes on the first occurring Interest
Payment Date for a subsequent Interest Period if and to the extent that (i) the
Eligible Carry-Over Make-Up Amount with respect to such Interest Period is
greater than zero, and (ii) moneys in the Surplus Account are available on such
Interest Payment Date for transfer to the Interest Account for such purpose in
accordance with the applicable provisions of the Indenture, after taking into
account all other amounts payable from the Surplus Fund on such Interest Payment
Date. Any Carry-Over Amount (and any interest accrued thereon) which is unpaid
as of an Interest Payment Date with respect to any Series 2001-1A [B] Note,
which Series 2001-1A [B] Note is to be redeemed or deemed no longer Outstanding
under the Third Supplemental Indenture on such Interest Payment Date, shall be
paid to the Holder thereof on such Interest Payment Date to the extent that
moneys are available therefor in accordance with the provisions of the preceding
clause (ii); provided, however, that any Carry-Over Amount (and any interest
accrued thereon) which is not so paid on such Interest Payment Date shall be
cancelled with respect to such Series 2001-1A [B] Note on such Interest Payment
Date and shall not be paid on any succeeding Interest Payment Date. To the
extent that any portion of the Carry-Over Amount (and any interest accrued
thereon) remains unpaid after payment of a portion thereof, such unpaid portion
shall be paid in whole or in part as required hereunder until fully paid by the
Trustee on the next occurring Interest Payment Date or Dates, as necessary, for
a subsequent Interest Period or Periods, if and to the extent that the
conditions in the first sentence of this paragraph are satisfied. On any
Interest Payment Date on which the Trustee pays less than all of the Carry-Over
Amount (and any interest accrued thereon) with respect to a Series 2001-1A [B]
Note, the Trustee shall give written notice in the manner set forth in the
immediately preceding paragraph to the Holder of such Series 2001-1A [B] Note of
the Carry-Over Amount remaining unpaid on such Series 2001-1A [B] Note.
The Interest Payment Date in such subsequent Interest Period on which such
Carry-Over Amount for the Series 2001-1A [B] Notes shall be paid shall be
determined by the Trustee in accordance with the provisions of the immediately
preceding paragraph, and the Trustee shall make payment of the Carry-Over Amount
in the same manner as, and from the same Account from which, it pays interest on
the Series 2001-1A [B] Notes on an Interest Payment Date.
A-5
By purchasing Series 2001-1A [B] Notes, whether in an Auction or otherwise,
each purchaser of the Series 2001-1A [B] Notes, or its Broker-Dealer, must agree
and shall be deemed by such purchase to have agreed (i) to participate in
Auctions on the terms described in the Third Supplemental Indenture, (ii) to
have its beneficial ownership of the Series 2001-1A [B] Notes maintained at all
times in Book-Entry Form for the account of its Participant, which in turn will
maintain records of such beneficial ownership, and (iii) to authorize such
Participant to disclose to the Auction Agent such information with respect to
such beneficial ownership as the Auction Agent may request. So long as the
ownership of Series 2001-1A [B] Notes is maintained in Book-Entry Form by the
Securities Depository, an Existing Holder may sell, transfer or otherwise
dispose of Series 2001-1A [B] Notes only pursuant to a Bid or Sell Order placed
in an Auction or otherwise sell, transfer or dispose of Series 2001-1A [B] Notes
through a Broker-Dealer, provided that, in the case of all transfers other than
pursuant to Auctions, such Existing Holder, its Broker-Dealer or its Participant
advises the Auction Agent of such transfer.
The determination of a Series 2001-1 Note Interest Rate by the Auction
Agent or any other authorized Person pursuant to the provisions of the Third
Supplemental Indenture shall be conclusive and binding on the Holders of the
Series 2001-1A [B] Notes to which such Series 2001-1 Note Interest Rate applies,
and the Corporation and the Trustee may rely thereon for all purposes.
Notwithstanding any provision of this Note to the contrary, in no event
shall the cumulative amount of interest paid or payable on this Note (including
interest calculated as provided herein, plus any other amounts that constitute
interest on this Note under applicable law, which are contracted for, charged,
reserved, taken or received pursuant to this Note or related documents)
calculated from the date of issuance of this Note through any subsequent day
during the term of this Note or otherwise prior to payment in full of this Note
exceed the amount permitted by applicable law. If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under this
Note or related documents or otherwise contracted for, charged, reserved, taken
or received in connection with this Note, or if the redemption or acceleration
of the maturity of this Note results in payment to or receipt by the Registered
Holder or any former Registered Holder hereof of any interest in excess of that
permitted by applicable law, then notwithstanding any provision of this Note or
related documents to the contrary all excess amounts theretofore paid or
received with respect to this Note shall be credited on the principal balance of
this Note (or, if this Note has been paid or would thereby be paid in full,
refunded by the recipient thereof), and the provisions of this Note and related
documents shall immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for under this
Note and under the related documents.
Subject to compliance with the provisions of the Indenture relating to
certain asset requirements, Outstanding Series 2001-1 Notes shall be redeemed,
in part, on the first regularly scheduled Interest Payment Date occurring after
November 25, 2001 for which notice can be given in accordance with the
requirements of the Third Supplemental Indenture, at a Redemption Price equal to
100% of the principal amount of Series 2001-1 Notes so redeemed, from proceeds
of the Series 2001-1 Notes constituting a portion of the Balance of the
Acquisition Fund that have not been used to acquire Eligible Loans and from that
portion of the Reserve Fund which, if
A-6
left in the Reserve Fund upon such redemption, would cause the Balance in the
Reserve Fund to exceed the Reserve Fund Requirement, calculated giving effect to
such redemption.
Subject to compliance with the provisions of the Indenture relating to
certain asset requirements, Outstanding Series 2001-1A [B] Notes shall be
redeemed on any regularly scheduled Interest Payment Date, in whole or in part,
at a Redemption Price equal to 100% of the principal amount thereof to be
redeemed, from that portion of the balance of the Series 2001-1 Surplus
Subaccount that has been on deposit therein for at least 12 months, has not been
used to acquire Student Loans and as to which the Corporation has failed to
certify to the Trustee is necessary to pay debt service on the Outstanding Notes
or on Outstanding Other Obligations, Carry-Over Amounts, including accrued
interest thereon, with respect to Outstanding Notes, Administrative Expenses or
Note Fees or to make required deposits to the Indemnification Fund.
Subject to compliance with the provisions of the Indenture relating to
certain asset requirements and certain other requirements, Outstanding Series
2001-1A [B] Notes may, at the option of the Corporation, be redeemed on any
regularly scheduled Interest Payment Date, in whole or in part, at a Redemption
Price equal to 100% of the principal amount thereof to be redeemed, from amounts
credited to the Retirement Account for such purpose.
If not all Series 2001-1 Notes are to be redeemed, the particular Series
2001-1 Notes to be redeemed are to be selected as provided in the Indenture.
Notice of redemption shall be given by first-class mail mailed at least 15
days before the Redemption Date to each Holder of Series 2001-1A [B] Notes to be
redeemed at his last address appearing on the Note Register; but no defect in or
failure to give such notice of redemption shall affect the validity of
proceedings for redemption of any Series 2001-1A [B] Notes not affected by such
defect or failure. All Series 2001-1A [B] Notes so called for redemption will
cease to bear interest on such Redemption Date, provided funds for their
redemption have been duly deposited, and, except for the purpose of payment,
shall no longer be protected by the Indenture and shall not be deemed
Outstanding thereunder.
It is provided in the Indenture that Series 2001-1A [B] Notes of a
denomination larger than $50,000 may be redeemed in part ($50,000 or an integral
multiple thereof) and that upon any partial redemption of any such Series
2001-1A [B] Note the same shall be surrendered in exchange for one or more new
Notes of the same series in authorized form for the unredeemed portion of
principal.
If provision is made for the payment of principal of, premium, if any, and
interest on this Note in accordance with the Indenture, this Note shall no
longer be deemed Outstanding under the Indenture, shall cease to be entitled to
the benefits of the Indenture and shall thereafter be payable solely from the
funds provided for such payment.
If an Event of Default shall occur, the principal of all the Outstanding
Notes may and, under certain circumstances, shall be declared due and payable in
the manner and with the effect provided in the Indenture.
A-7
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Notes and Other Beneficiaries
under the Indenture at any time by the Corporation with, among other things, the
consent of the Holders of two-thirds of the aggregate principal amount of Class
A Notes at the time Outstanding, if affected thereby, and the consent of the
Holders of two-thirds of the aggregate principal amount of Class B Notes at the
time Outstanding, if affected thereby. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Class A Notes at the time Outstanding or Other Senior Beneficiaries or, if
no Senior Obligations are Outstanding, the Holders of specified percentages in
aggregate principal amount of the Class B Notes at the time Outstanding or Other
Subordinate Beneficiaries, on behalf of the Holders of all the Notes, to waive
certain past defaults under the Indenture and their consequences. Any such
consent or waiver shall be conclusive and binding upon the Registered Holder of
this Note and upon all future Registered Holders hereof and of any Note issued
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Note.
This Note is transferable by the Registered Holder hereof upon surrender of
this Note for transfer at the Principal Office of the Note Registrar (which
shall be the Trustee unless and until an Authenticating Agent becomes the Note
Registrar under the Indenture) or at the Principal Office of a duly appointed
Authenticating Agent (the "Authenticating Agent," which term includes any
successor Authenticating Agent under the Indenture), duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the Note
Registrar or such Authenticating Agent, as the case may be, and executed by the
Registered Holder hereof or his attorney duly authorized in writing, with
signature guarantees satisfactory to the Note Registrar or such Authenticating
Agent, as the case may be. Thereupon the Corporation shall execute and the
Trustee or the Authenticating Agent, as the case may be, shall authenticate and
deliver, in exchange for this Note, one or more new fully registered Notes in
the name of the transferee, of an authorized denomination, in aggregate
principal amount equal to the principal amount of this Note, of the same series
and bearing interest at the same rate. This Note may also be exchanged for one
or more other Notes of the same series upon surrender hereof at the Principal
Office of the Note Registrar or the Principal Office of an Authenticating Agent.
No Authenticating Agent will be initially appointed with respect to the Series
2001-1A [B] Notes. Notwithstanding the foregoing provisions of this paragraph,
no Series 2001-1A [B] Note shall be required to be transferred, (i) during a
period beginning at the opening of business fifteen days before any selection of
Series 2001-1A [B] Notes for redemption and ending at the close of business on
the day of such selection, or (ii) if such Series 2001-1A [B] Note has been
selected for redemption in whole or in part.
The Corporation may require payment by the Registered Holder hereof of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of this Note, other than certain
exchanges specifically exempted under the Indenture and not involving any
transfer.
The Corporation, the Trustee, each Paying Agent, any Authenticating Agent,
the Note Registrar and any other agent of the Corporation may treat the Person
in whose name this Note is registered on the Note Register as the absolute owner
hereof for all purposes, whether or not this
A-8
Note is overdue, and neither the Corporation, the Trustee, any Paying Agent, any
Authenticating Agent, the Note Registrar nor any other such agent shall be
affected by notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND DECLARED that all acts,
conditions and things required to have happened, to exist and to have been
performed precedent to and in the issuance of this Note have happened, do exist,
and have been performed in regular and due time, form and manner as so required.
This Note shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the Certificate of
Authentication hereon shall have been signed by the Trustee or by the
Authenticating Agent by the manual signature of one of its authorized
representatives.
A-9
IN WITNESS WHEREOF, the Corporation has caused this Note to be executed in
its name by the manual signatures of its President and Secretary.
Dated: ___________________________ EDUCATION LOANS INCORPORATED
-----------------------------------------
President
-----------------------------------------
Secretary
----------
CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes of the series designated therein and issued
under the provisions of the within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
-------------------------------------
Authorized Representative
A-10
----------
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
_____________________ the within Note and irrevocably appoints
______________________, attorney-in-fact, to transfer the within Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated ___________________________
PLEASE INSERT SOCIAL SECURITY ________________________________________
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
___________________________________ within Note in every particular,
without any alteration whatsoever.
SIGNATURE GUARANTEED:
----------------------------------
A-11
EXHIBIT B
---------
FORM OF SERIES 2001-1C NOTES
----------------------------
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER 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.
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTE
SUBORDINATE SERIES 2001-1C
CLASS B
No. R_____ $________
Stated Date of Original Interest
Maturity Date Issue Rate USIP
------------- ----- ---- ----
December 1, 2035 July 30, 2001 Variable ____
REGISTERED HOLDER: CEDE & CO.
PRINCIPAL AMOUNT:
FOR VALUE RECEIVED, EDUCATION LOANS INCORPORATED, a corporation organized
under the laws of the State of Delaware (the "Corporation," which term includes
any successor corporation under the Indenture hereinafter referred to),
acknowledges itself indebted and hereby promises to pay to the registered holder
specified above, or registered assigns (the "Registered Holder"), but solely
from the revenues and receipts hereinafter specified and not otherwise, the
Principal Amount specified above on the Stated Maturity Date specified above
(subject to the right of prior redemption hereinafter mentioned), upon
presentation and surrender of this Note at the Principal Office of the Trustee
(as hereinafter defined), as Paying Agent for the Series 2001-1 Notes (as
hereinafter defined), or a duly appointed successor Paying Agent, and to pay
interest on said Principal Amount, but solely from the revenues and receipts
hereinafter specified and not otherwise, to the Registered Holder hereof from
the date hereof until the payment of said Principal Amount has been made or duly
provided for, payable on each
B-1
Interest Payment Date and at Maturity, at the Series 2001-1 Note Interest Rate
(as hereinafter described), and at the same rate per annum (to the extent that
the payment of such interest shall be legally enforceable) on overdue
installments of interest. Payment of interest on this Note on each regularly
scheduled Interest Payment Date shall be made by check or draft drawn upon the
Paying Agent and mailed to the person who is the Registered Holder hereof as of
5:00 p.m. in the city in which the Principal Office of the Note Registrar is
located on the applicable Regular Record Date at the address of such Registered
Holder as it appears on the Note Register maintained by the Note Registrar, or,
if the Registered Holder of this Note is the Registered Holder of Series 2001-1
Notes in the aggregate principal amount of $1,000,000 or more, at the direction
of such Registered Holder received by the Paying Agent by 5:00 p.m. in the city
in which the Principal Office of the Paying Agent is located on the last
Business Day preceding the applicable Regular Record Date, by electronic
transfer by the Paying Agent in immediately available funds to an account
designated by such Registered Holder. In addition, premium, if any, and interest
on this Note are payable at the Maturity hereof in the same manner as the
principal hereof, unless the date of such maturity is a regularly scheduled
Interest Payment Date, in which event interest is payable in the manner set
forth in the preceding sentence. Any interest not so timely paid or duly
provided for shall cease to be payable to the person who is the Registered
Holder hereof at the close of business on the Regular Record Date and shall be
payable to the person who is the Registered Holder hereof at the close of
business on a special record date for the payment of any such defaulted
interest. Such special record date shall be fixed by the Trustee whenever moneys
become available for payment of the defaulted interest, and notice of the
special record date shall be given to the Registered Holder hereof not less than
ten days prior thereto by first-class mail to such Registered Holder as shown on
the Note Register on a date selected by the Trustee, stating the date of the
special record date and the date fixed for the payment of such defaulted
interest. The principal of, premium, if any, and interest on this Note are
payable in lawful money of the United States of America.
This Note is one of an authorized issue of Notes (the "Notes"), issued and
to be issued by the Corporation in one or more series pursuant to an Indenture
of Trust, dated as of December 1, 1999 (as supplemented and amended, the
"Indenture"), as amended and supplemented by a First Supplemental Indenture of
Trust, dated as of December 1, 1999, a Second Supplemental Indenture of Trust,
dated as of December 1, 2000, and a Third Supplemental Indenture of Trust, dated
as of July 1, 2001 (the "Third Supplemental Indenture"), each between the
Corporation and U.S. Bank National Association, in Minneapolis, Minnesota, as
Trustee (the "Trustee," which term includes any successor trustee under the
Indenture). As provided in the Indenture, the Notes are issuable in series which
may vary as in the Indenture provided or permitted. This Note is one of a series
of Class B Notes issued in an aggregate principal amount of $23,800,000 (the
"Series 2001-1C Notes"). The Series 2001-1C Notes are issued simultaneously with
two series of Class A Notes issued in the aggregate principal amount of
$158,000,000 (the "Series 2001-1 Senior Notes" and, together with the Series
2001-1C Notes, collectively referred to herein as the "Series 2001-1 Notes").
The proceeds of the Series 2001-1 Notes will be used by the Corporation to (a)
acquire student loan notes incurred under the Higher Education Act and under
certain Alternative Loan Programs, (b) fund the Reserve Fund, (c) pay a portion
of the interest coming due on the Series 2001-1 Notes and (d) pay Costs of
Issuance of the Series 2001-1 Notes. The Series 2001-1 Senior Notes are being
issued on a parity, and are equally and ratably secured under the Indenture,
with the Corporation's Student Loan Asset-Backed Notes, Senior Series 1999-A and
1999-B, issued under the Indenture as Class A Notes in the original aggregate
B-2
principal amount of $117,000,000, and the Corporation's Student Loan
Asset-Backed Notes, Senior Series 2000-A and 2000-B, issued under the Indenture
as Class A Notes in the original aggregate principal amount of $108,200,000 (the
"Prior Senior Notes"), and the Series 2001-1C Notes are being issued on a
parity, and are equally and ratably secured under the Indenture, with the
Corporation's Student Loan Asset-Backed Notes, Subordinate Series 1999-1C,
issued under the Indenture as Class B Notes in the original principal amount of
$9,300,000, and the Corporation's Student Loan Asset-Backed Notes, Subordinate
Series 2000-1C, issued under the Indenture as Class B Notes in the original
principal amount of $22,000,000.
Reference is hereby made to the Indenture, copies of which are on file in
the principal corporate trust office of the Trustee, and to all of the
provisions of which any Registered Holder of this Note by his acceptance hereof
hereby assents, for definitions of terms; the description of and the nature and
extent of the security for the various classes of Notes and Other Obligations
secured thereunder; the student loan acquisition program being financed by the
issuance of the Notes; the revenues and other moneys pledged to the payment of
the principal of, premium, if any, and interest on the Notes and the Other
Obligations; the nature and extent and manner of enforcement of the pledge; the
conditions upon which Notes may be issued or Other Obligations may be incurred
by the Corporation thereunder, payable from such revenues and other moneys
thereunder as Senior Obligations, Subordinate Obligations or Class C Notes; the
conditions upon which the Indenture may be amended or supplemented with or
without the consent of the Holders of the Notes; the rights and remedies of the
Registered Holder hereof with respect hereto and thereto, including the
limitations upon the right of a Registered Holder hereof to institute any suit,
action or proceeding in equity or at law with respect hereto and thereto; the
rights, duties and obligations of the Corporation and the Trustee thereunder;
the terms and provisions upon which the liens, pledges, charges, trusts and
covenants made therein may be discharged at or prior to the maturity or
redemption of this Note, and this Note thereafter no longer be secured by the
Indenture, or be deemed to be Outstanding thereunder; and for the other terms
and provisions thereof. Terms used with initial capital letters but not defined
in this Note have the respective meanings given such terms in the Indenture. The
Series 2001-1 Senior Notes are being issued as, and will constitute, Class A
Notes under the Indenture. The Series 2001-1C Notes are being issued as, and
will constitute, Class B Notes under the Indenture.
The Notes and Other Obligations are limited obligations of the Corporation,
payable solely from the revenues and assets of the Corporation pledged therefor
under the Indenture, including certain notes evidencing Student Loans and the
proceeds of the Corporation's bonds, notes or other evidences of indebtedness,
if any, issued with respect to the Notes.
The Series 2001-1C Notes constitute Class B Notes under the Indenture which
are subordinated in right of payment, the direction of remedies and certain
other matters in accordance with the terms of the Indenture to the rights of the
Holders of Class A Notes issued from time to time under the Indenture
(including, without limitation, the Prior Senior Notes and the Series 2001-1
Senior Notes) and Other Senior Beneficiaries thereunder. A failure to pay
principal of, premium, if any, or interest on this Class B Note will not
constitute an Event of Default under the Indenture if any Senior Obligation is
Outstanding.
Interest payable on this Note shall be computed on the basis of actual
days elapsed and accrue daily from the date hereof (on the basis of a 360-day
year), and is payable on each
B-3
regularly scheduled Interest Payment Date prior to the Maturity hereof and at
the Maturity hereof. The interest payable on each Interest Payment Date for this
Note shall be that interest which has accrued through the last day of the last
complete Interest Period immediately preceding the Interest Payment Date or, in
the case of the Maturity hereof, the last day preceding the date of such
Maturity. The Series 2001-1 Note Interest Rate shall be effective as of and on
the first day (whether or not a Business Day) of the applicable Interest Period
and be in effect thereafter through the end of such Interest Period.
The unpaid principal amount hereof from time to time outstanding shall bear
interest at a Series 2001-1 Note Auction Rate, as described below, payable on
each Interest Payment Date and at the Maturity hereof, such interest to accrue
from the later of the date hereof or the date through which interest has been
paid or duly provided for.
During the Initial Interest Period, this Note shall bear interest at the
Series 2001-1 Note Initial Interest Rate. Thereafter until an Auction Period
Adjustment, if any, this Note shall bear interest at a Series 2001-1 Note
Auction Rate based on an Auction Period that shall generally consist of 28 days,
all as determined in the Third Supplemental Indenture.
The Series 2001-1 Note Auction Rate to be borne by this Note after the
Initial Interest Period for each Auction Period until an Auction Period
Adjustment, if any, shall be the lesser of (i) the Net Loan Rate in effect for
such Auction Period, (ii) the Auction Rate determined in accordance with the
applicable provisions of the Third Supplemental Indenture and (iii) the Series
2001-1 Note Auction Rate Limitation.
In no event shall the Series 2001-1 Note Auction Rate on this Note exceed
the Series 2001-1 Note Auction Rate Limitation.
The Interest Period, including, without limitation, an Auction Period, the
applicable Series 2001-1 Note Auction Rate, the method of determining the
applicable Series 2001-1 Note Auction Rate on each of the Series 2001-1C Notes
and the Auction Procedures related thereto, including, without limitation,
required notices thereof to the Holders or Existing Holders of the Series 2001-1
Senior Notes, an Auction Period Adjustment, a change in the Auction Date and the
Interest Payment Dates will be determined in accordance with the terms,
conditions and provisions of the Third Supplemental Indenture and the Auction
Agent Agreement, to which terms, conditions and provisions specific reference is
hereby made, and all of which terms, conditions and provisions are hereby
specifically incorporated herein by reference.
If the Auction Rate for the Series 2001-1C Notes is greater than the Net
Loan Rate, then the Series 2001-1 Note Auction Rate applicable to the Series
2001-1 Notes for that Interest Period will be the Net Loan Rate. If the Series
2001-1 Note Auction Rate applicable to the Series 2001-1C Notes for any Interest
Period is the Net Loan Rate, the Trustee shall determine the Carry-Over Amount,
if any, with respect to the Series 2001-1C Notes for such Interest Period. Such
Carry-Over Amount shall bear interest calculated at a rate equal to One-Month
LIBOR from the Interest Payment Date for the Interest Period with respect to
which such Carry-Over Amount was calculated until paid. For purposes of this
Note, any reference to "principal" or "interest" herein shall not include within
the meaning of such words Carry-Over Amount or any interest accrued on any such
Carry-Over Amount. Such Carry-Over Amount shall be
B-4
separately calculated for each Series 2001-1C Note by the Trustee during such
Interest Period in sufficient time for the Trustee to give notice to each Holder
of such Carry-Over Amount as required in the next succeeding sentence. On the
Interest Payment Date for an Interest Period with respect to which such
Carry-Over Amount has been calculated by the Trustee, the Trustee shall give
written notice to each Holder of the Carry-Over Amount applicable to each
Holder's Series 2001-1C Note, which written notice may accompany the payment of
interest by check made to each such Holder on such Interest Payment Date or
otherwise shall be mailed on such Interest Payment Date by first class mail,
postage prepaid, to each such Holder at such Holder's address as it appears on
the registration books maintained by the Note Registrar. Such notice shall
state, in addition to such Carry-Over Amount, that, unless and until a Series
2001-1C Note has been redeemed or has been deemed no longer Outstanding under
the Third Supplemental Indenture (after which no Carry-Over Amount shall be paid
with respect to a Series 2001-1C Note), (i) the Carry-Over Amount (and interest
accrued thereon) shall be paid by the Trustee on such Series 2001-1C Note on the
first occurring Interest Payment Date for a subsequent Interest Period if and to
the extent that (l) the Eligible Carry-Over Make-Up Amount with respect to such
Interest Period is greater than zero, and (2) moneys are available pursuant to
the terms of the Third Supplemental Indenture to pay such Carry-Over Amount (and
interest accrued thereon), and (ii) interest shall accrue on the Carry-Over
Amount at a per annum rate equal to One-Month LIBOR until such Carry-Over Amount
is paid in full or is cancelled.
The Carry-Over Amount for the Series 2001-1C Notes shall be paid by the
Trustee on Outstanding Series 2001-1C Notes on the first occurring Interest
Payment Date for a subsequent Interest Period if and to the extent that (i) the
Eligible Carry-Over Make-Up Amount with respect to such Interest Period is
greater than zero, and (ii) moneys in the Surplus Account are available on such
Interest Payment Date for transfer to the Interest Account for such purpose in
accordance with the applicable provisions of the Indenture, after taking into
account all other amounts payable from the Surplus Fund on such Interest Payment
Date. Any Carry-Over Amount (and any interest accrued thereon) which is unpaid
as of an Interest Payment Date with respect to any Series 2001-1C Note, which
Series 2001-1C Note is to be redeemed or deemed no longer Outstanding under the
Third Supplemental Indenture on such Interest Payment Date, shall be paid to the
Holder thereof on such Interest Payment Date to the extent that moneys are
available therefor in accordance with the provisions of the preceding clause
(ii); provided, however, that any Carry-Over Amount (and any interest accrued
thereon) which is not so paid on such Interest Payment Date shall be cancelled
with respect to such Series 2001-1C Note on such Interest Payment Date and shall
not be paid on any succeeding Interest Payment Date. To the extent that any
portion of the Carry-Over Amount (and any interest accrued thereon) remains
unpaid after payment of a portion thereof, such unpaid portion shall be paid in
whole or in part as required hereunder until fully paid by the Trustee on the
next occurring Interest Payment Date or Dates, as necessary, for a subsequent
Interest Period or Periods, if and to the extent that the conditions in the
first sentence of this paragraph are satisfied. On any Interest Payment Date on
which the Trustee pays less than all of the Carry-Over Amount (and any interest
accrued thereon) with respect to a Series 2001-1C Note, the Trustee shall give
written notice in the manner set forth in the immediately preceding paragraph to
the Holder of such Series 2001-1C Note of the Carry-Over Amount remaining unpaid
on such Series 2001-1C Note.
The Interest Payment Date in such subsequent Interest Period on which
such Carry-Over Amount for the Series 2001-1C Notes shall be paid shall be
determined by the Trustee in
B-5
accordance with the provisions of the immediately preceding paragraph, and the
Trustee shall make payment of the Carry-Over Amount in the same manner as, and
from the same Account from which, it pays interest on the Series 2001-1C Notes
on an Interest Payment Date.
By purchasing Series 2001-1C Notes, whether in an Auction or otherwise,
each purchaser of the Series 2001-1C Notes, or its Broker-Dealer, must agree and
shall be deemed by such purchase to have agreed (i) to participate in Auctions
on the terms described in the Third Supplemental Indenture, (ii) to have its
beneficial ownership of the Series 2001-1C Notes maintained at all times in
Book-Entry Form for the account of its Participant, which in turn will maintain
records of such beneficial ownership, and (iii) to authorize such Participant to
disclose to the Auction Agent such information with respect to such beneficial
ownership as the Auction Agent may request. So long as the ownership of Series
2001-1C Notes is maintained in Book-Entry Form by the Securities Depository, an
Existing Holder may sell, transfer or otherwise dispose of Series 2001-1C Notes
only pursuant to a Bid or Sell Order placed in an Auction or otherwise sell,
transfer or dispose of Series 2001-1C Notes through a Broker-Dealer, provided
that, in the case of all transfers other than pursuant to Auctions, such
Existing Holder, its Broker-Dealer or its Participant advises the Auction Agent
of such transfer.
The determination of a Series 2001-1 Note Interest Rate by the Auction
Agent or any other authorized Person pursuant to the provisions of the Third
Supplemental Indenture shall be conclusive and binding on the Holders of the
Series 2001-1C Notes to which such Series 2001-1 Note Interest Rate applies, and
the Corporation and the Trustee may rely thereon for all purposes.
Notwithstanding any provision of this Note to the contrary, in no event
shall the cumulative amount of interest paid or payable on this Note (including
interest calculated as provided herein, plus any other amounts that constitute
interest on this Note under applicable law, which are contracted for, charged,
reserved, taken or received pursuant to this Note or related documents)
calculated from the date of issuance of this Note through any subsequent day
during the term of this Note or otherwise prior to payment in full of this Note
exceed the amount permitted by applicable law. If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under this
Note or related documents or otherwise contracted for, charged, reserved, taken
or received in connection with this Note, or if the redemption or acceleration
of the maturity of this Note results in payment to or receipt by the Registered
Holder or any former Registered Holder hereof of any interest in excess of that
permitted by applicable law, then notwithstanding any provision of this Note or
related documents to the contrary all excess amounts theretofore paid or
received with respect to this Note shall be credited on the principal balance of
this Note (or, if this Note has been paid or would thereby be paid in full,
refunded by the recipient thereof), and the provisions of this Note and related
documents shall immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for under this
Note and under the related documents.
Subject to compliance with the provisions of the Indenture relating to
certain asset requirements, Outstanding Series 2001-1 Notes shall be redeemed,
in part, on the first regularly scheduled Interest Payment Date occurring after
November 25, 2001 for which notice can be
B-6
given in accordance with the requirements of the Third Supplemental Indenture,
at a Redemption Price equal to 100% of the principal amount of Series 2001-1
Notes so redeemed, from proceeds of the Series 2001-1 Notes constituting a
portion of the Balance of the Acquisition Fund that have not been used to
acquire Eligible Loans and from that portion of the Reserve Fund which, if left
in the Reserve Fund upon such redemption, would cause the Balance in the Reserve
Fund to exceed the Reserve Fund Requirement, calculated giving effect to such
redemption.
Subject to compliance with the provisions of the Indenture relating to
certain asset requirements, Outstanding Series 2001-1C Notes shall be redeemed
on any regularly scheduled Interest Payment Date, in whole or in part, at a
Redemption Price equal to 100% of the principal amount thereof to be redeemed,
from that portion of the balance of the Series 2001-1 Surplus Subaccount that
has been on deposit therein for at least 12 months, has not been used to acquire
Student Loans and as to which the Corporation has failed to certify to the
Trustee is necessary to pay debt service on the Outstanding Notes or on
Outstanding Other Obligations, Carry-Over Amounts, including accrued interest
thereon, with respect to Outstanding Notes, Administrative Expenses or Note Fees
or to make required deposits to the Indemnification Fund.
Subject to compliance with the provisions of the Indenture relating to
certain asset requirements and certain other requirements, Outstanding Series
2001-1C Notes may, at the option of the Corporation, be redeemed on any
regularly scheduled Interest Payment Date, in whole or in part, at a Redemption
Price equal to 100% of the principal amount thereof to be redeemed, from amounts
credited to the Retirement Account for such purpose.
If not all Series 2001-1 Notes are to be redeemed, the particular Series
2001-1 Notes to be redeemed are to be selected as provided in the Indenture.
Notice of redemption shall be given by first-class mail mailed at least 15
days before the Redemption Date to each Holder of Series 2001-1C Notes to be
redeemed at his last address appearing on the Note Register; but no defect in or
failure to give such notice of redemption shall affect the validity of
proceedings for redemption of any Note not affected by such defect or failure.
All Series 2001-1C Notes so called for redemption will cease to bear interest on
such Redemption Date, provided funds for their redemption have been duly
deposited, and, except for the purpose of payment, shall no longer be protected
by the Indenture and shall not be deemed Outstanding thereunder.
It is provided in the Indenture that Series 2001-1C Notes of a denomination
larger than $50,000 may be redeemed in part ($50,000 or an integral multiple
thereof) and that upon any partial redemption of any such Series 2001-1C Note
the same shall be surrendered in exchange for one or more new Notes of the same
series in authorized form for the unredeemed portion of principal.
If provision is made for the payment of principal of, premium, if any, and
interest on this Note in accordance with the Indenture, this Note shall no
longer be deemed Outstanding under the Indenture, shall cease to be entitled to
the benefits of the Indenture and shall thereafter be payable solely from the
funds provided for such payment.
B-7
If an Event of Default shall occur, the principal of all the Outstanding
Notes may and, under certain circumstances, shall be declared due and payable in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Corporation and the rights of the Holders of the Notes and Other Beneficiaries
under the Indenture at any time by the Corporation with, among other things, the
consent of the Holders of two-thirds of the aggregate principal amount of Class
A Notes at the time Outstanding, if affected thereby, and with the consent of
the Holders of two-thirds of the aggregate principal amount of Class B Notes at
the time Outstanding, if affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Class A Notes at the time Outstanding or Other Senior
Beneficiaries or, if no Senior Obligations are Outstanding, the Holders of
specified percentages in aggregate principal amount of the Class B Notes at the
time Outstanding or Other Subordinate Beneficiaries, on behalf of the Holders of
all the Notes, to waive certain past defaults under the Indenture and their
consequences. Any such consent or waiver shall be conclusive and binding upon
the Registered Holder of this Note and upon all future Registered Holders hereof
and of any Note issued in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
This Note is transferable by the Registered Holder hereof upon surrender of
this Note for transfer at the Principal Office of the Note Registrar (which
shall be the Trustee unless and until an Authenticating Agent becomes the Note
Registrar under the Indenture) or at the Principal Office of a duly appointed
Authenticating Agent (the "Authenticating Agent," which term includes any
successor Authenticating Agent under the Indenture), duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to the Note
Registrar or the Authenticating Agent, as the case may be, and executed by the
Registered Holder hereof or his attorney duly authorized in writing, with
signature guarantees satisfactory to the Note Registrar or the Authenticating
Agent, as the case may be. Thereupon the Corporation shall execute and the
Trustee or the Authenticating Agent, as the case may be, shall authenticate and
deliver, in exchange for this Note, one or more new fully registered Notes in
the name of the transferee, of an authorized denomination, in aggregate
principal amount equal to the principal amount of this Note, of the same series
and bearing interest at the same rate. This Note may also be exchanged for one
or more other Notes of the same series upon surrender hereof at the Principal
Office of the Note Registrar or the Principal Office of an Authenticating Agent.
No Authenticating Agent will be initially appointed with respect to the Series
2001-1C Notes. Notwithstanding the foregoing provisions of this paragraph, no
Series 2001-1C Note shall be required to be transferred, (i) during a period
beginning at the opening of business fifteen days before any selection of Series
2001-1C Notes for redemption and ending at the close of business on the day of
such selection, or (ii) if such Series 2001-1C Note has been selected for
redemption in whole or in part.
The Corporation may require payment by the Registered Holder hereof of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any transfer or exchange of this Note, other than certain
exchanges specifically exempted under the Indenture and not involving any
transfer.
B-8
The Corporation, the Trustee, each Paying Agent, any Authenticating Agent,
the Note Registrar and any other agent of the Corporation may treat the Person
in whose name this Note is registered on the Note Register as the absolute owner
hereof for all purposes, whether or not this Note is overdue, and neither the
Corporation, the Trustee, any Paying Agent, any Authenticating Agent, the Note
Registrar nor any other such agent shall be affected by notice to the contrary.
IT IS HEREBY CERTIFIED, RECITED, COVENANTED AND DECLARED that all acts,
conditions and things required to have happened, to exist and to have been
performed precedent to and in the issuance of this Note have happened, do exist,
and have been performed in regular and due time, form and manner as so required.
This Note shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the Certificate of
Authentication hereon shall have been signed by the Trustee or by the
Authenticating Agent by the manual signature of one of its authorized
representatives.
IN WITNESS WHEREOF, the Corporation has caused this Note to be executed in
its name by the manual signatures of its President and Secretary.
Dated: ___________________________ EDUCATION LOANS INCORPORATED
-----------------------------------------
President
-----------------------------------------
Secretary
----------
CERTIFICATE OF AUTHENTICATION
This Note is one of the Notes of the series designated therein and issued
under the provisions of the within-mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
-------------------------------------
Authorized Representative
B-9
----------
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
_____________________ the within Note and irrevocably appoints
______________________, attorney-in-fact, to transfer the within Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated ___________________________
PLEASE INSERT SOCIAL SECURITY ________________________________________
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
___________________________________ within Note in every particular,
without any alteration whatsoever.
SIGNATURE GUARANTEED:
----------------------------------
B-10
EXHIBIT C
---------
NOTICE OF A PAYMENT DEFAULT
---------------------------
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES 2001-1A [B]
[SUBORDINATE SERIES 2001-1C]
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and not been
cured with respect to the Notes identified above. Determination of the Series
2001-1 Note Interest Rate pursuant to the Auction Procedures will be suspended.
The Series 2001-1 Note Interest Rate on the Series 2001-1A [B][C] Notes for each
Auction Period commencing after the date of Payment Default will equal the
Non-Payment Rate as it is determined by the Trustee on the first day of such
Auction Period.
Terms used herein have the meanings set forth in the Third Supplemental
Indenture of Trust relating to the above-referenced Notes.
Dated: ___________________________ U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
-------------------------------------
Authorized Representative
C-1
EXHIBIT D
---------
NOTICE OF CURE OF PAYMENT DEFAULT
---------------------------------
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES 2001-1A [B]
[SUBORDINATE SERIES 2001-1C]
NOTICE IS HEREBY GIVEN that a Payment Default with respect to the Notes
identified above has been waived or cured. The next Interest Payment Date is
_____________________ and the next Auction Date is ---------------------------.
Terms used herein have the meanings set forth in the Third Supplemental
Indenture of Trust relating to the above-referenced Notes.
Dated: ___________________________ U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
--------------------------------
Authorized Representative
D-1
EXHIBIT E
---------
NOTICE OF PROPOSED AUCTION PERIOD ADJUSTMENT
--------------------------------------------
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES 2001-1A [B]
[SUBORDINATE SERIES 2001-1C]
Notice is hereby given that EDUCATION LOANS INCORPORATED proposes to change
the length of one or more Auction Periods with respect to the Notes identified
above, pursuant to the Third Supplemental Indenture of Trust relating to such
Notes (the "Third Supplemental Indenture"), as follows:
1. The change shall take effect on the Interest Payment Date for the
current Auction Period and the date of commencement of the next Auction
Period (the "Effective Date").
2. The Auction Period Adjustment in Paragraph 1 shall take place only
if (A) the Trustee and the Auction Agent receive, by 11:00 a.m., New York
City time, on the Business Day before the Auction Date for the Auction
Period commencing on the Effective Date, a certificate from the Market
Agent, as required by the Third Supplemental Indenture authorizing the
change in length of one or more Auction Periods and (B) Sufficient Bids
exist on the Auction Date for the Auction Period commencing on the
Effective Date.
3. If the condition referred to in (A) above is not met, the Auction
Rate for the Auction Period commencing on the Effective Date will be
determined pursuant to the Auction Procedures and the Auction Period shall
be the Auction Period determined without reference to the proposed change.
If the condition referred to in (A) is met but the condition referred to in
(B) above is not met, the Auction Rate for the Auction Period commencing on
the Effective Date shall be the Maximum Auction Rate and the Auction Period
shall be the Auction Period determined without reference to the proposed
change.
4. It is hereby represented, upon advice of the Auction Agent for the
Notes described herein, that there were Sufficient Bids for such Notes at
the Auction immediately preceding the date of this Notice.
Terms used herein have the meanings set forth in the Third Supplemental
Indenture.
Dated: ___________________________ EDUCATION LOANS INCORPORATED
By:
-------------------------------------
E-1
EXHIBIT F
---------
NOTICE ESTABLISHING AUCTION PERIOD ADJUSTMENT
---------------------------------------------
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES 2001-1A [B]
[SUBORDINATE SERIES 2001-1C]
Notice is hereby given that EDUCATION LOANS INCORPORATED hereby establishes
new lengths for one or more Auction Periods with respect to the Notes identified
above pursuant to the Third Supplemental Indenture of Trust relating to such
Notes (the "Third Supplemental Indenture"):
1. The change shall take effect on _____________________, the Interest
Payment Date for the current Auction Period and the date of commencement of
the next Auction Period (the "Effective Date").
2. For the Auction Period commencing on the Effective Date, the
Interest Payment Date shall be _____________________, or the next
succeeding Business Day if such date is not a Business Day.
3. For Auction Periods occurring after the Auction Period the Interest
Payment Dates shall be [________________ (date) and every
___________________________ (number) _________________________ (day of
week) thereafter] [every __________________________ (number) (day of week)
after the date set forth in paragraph 2 above], or the next Business Day if
any such day is not a Business Day; provided, however, that the length of
subsequent Auction Periods shall be subject to further change hereafter as
provided in Section 11 of the Third Supplemental Indenture.
4. The changes described in paragraphs 2 and 3 above shall take place
only upon delivery of this Notice and the satisfaction of other conditions
set forth in the Third Supplemental Indenture and our prior notice dated
________________________ regarding the proposed change.
Terms used herein have the meanings set forth in the Third Supplemental
Indenture.
Dated: ___________________________ EDUCATION LOANS INCORPORATED
By
--------------------------------------
F-1
EXHIBIT G
---------
NOTICE OF CHANGE IN AUCTION DATE
--------------------------------
EDUCATION LOANS INCORPORATED
STUDENT LOAN ASSET-BACKED NOTES
SENIOR SERIES 2001-1A [B]
[SUBORDINATE SERIES 2001-1C]
Notice is hereby give by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as Market Agent for the
Notes identified above, that, with respect to such Notes, the Auction Date is
hereby changed as follows:
1. With respect to such Notes, the definition of "Auction Date" shall
be deemed amended by substituting "____________________ (number) Business
Day" in the third and fourth lines thereof and by substituting
"____________________ (number) Business Days" for "two (2) Business Days"
in subsection (d) thereof.
2. This change shall take effect on _______________________, which
shall be the Auction Date for the Auction Period commencing on
____________________________.
3. The Auction Date for such Notes shall be subject to further change
hereafter as provided in the Third Supplemental Indenture of Trust relating
to such Notes (the "Third Supplemental Indenture").
Terms used herein have the meanings set forth in the Third Supplemental
Indenture.
Dated: ___________________________ ▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC., as
Market Agent
By
--------------------------------------
G-1
EXHIBIT H-1
-----------
[List of EdLinc Student Loan Purchase Agreements]
H-1-1
EXHIBIT H-2
-----------
[List of GOAL Funding Student Loan Purchase Agreements]
H-2-1