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EXHIBIT 4.2
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SECOND AMENDED AND RESTATED
TERMS SUPPLEMENT
TO THE
SECOND AMENDED AND RESTATED
INDENTURE OF TRUST
Dated as of June 1, 1999,
by and among
STUDENT LOAN FUNDING 1998-A/B TRUST
A DELAWARE COMMON LAW TRUST,
FIRSTAR BANK, NATIONAL ASSOCIATION,
NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
CO-OWNER ELIGIBLE LENDER TRUSTEE FOR THE BENEFIT OF
STUDENT LOAN FUNDING 1998-A/B TRUST,
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Dated as of June 1, 1999
Securing
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES A-3
(LIBOR FLOATING RATE),
STUDENT LOAN SENIOR ASSET-BACKED CALLABLE NOTES,
SERIES A-4, SERIES A-5 AND SERIES A-6
(AUCTION RATE)
and
STUDENT LOAN SUBORDINATE ASSET-BACKED NOTES,
SERIES B-3
(FIXED RATE)
OF
STUDENT LOAN FUNDING 1998-A/B TRUST
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EXHIBIT 4.2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
PAGE
SECTION 2.01 Authorization of Notes; Notes to Constitute Special Notes 23
SECTION 2.02 Terms of Notes 24
SECTION 2.03 Determination of Series Interest Rates on the Notes 29
SECTION 2.03.1 Determination of the Series Interest Rate on the Series A-3 Notes 29
SECTION 2.03.2 Determination of the Series Interest Rate on the Auction Rate Notes 29
SECTION 2.03.2.1 Auction Procedures 31
SECTION 2.03.2.2 Application of Interest Payments for the Auction Rate Notes 40
SECTION 2.03.2.3 Calculation of Maximum Auction Rate, All Hold Rate, Net Loan Rate,
Applicable LIBOR Rate and Non-Payment Rate 41
SECTION 2.03.2.4 Notification of Rates, Amounts and Payment Dates 42
SECTION 2.03.2.5 Auction Agent 43
SECTION 2.03.2.6. Broker-Dealers 43
SECTION 2.03.2.7 Changes in Auction Period or Periods 44
SECTION 2.03.2.8 Changes in the Interest Determination Date 45
SECTION 2.03.2.9 Auction Period Conversions 47
SECTION 2.03.2.10 Mandatory Tender and Purchase of Series Auction Rate Notes in connection with
Auction Period Conversion 49
SECTION 2.03.2.11 Remarketing Agent Notes 49
SECTION 2.03.3 Determination of Series Interest Rate on the Series B-3 Notes 49
SECTION 2.03.4 Carryover Interest 49
SECTION 2.03.5 Additional Provisions Regarding Series Interest Rate 50
SECTION 2.04 Forms of Notes and Instructions for Payment 51
SECTION 2.05 Transfer Restrictions 51
SECTION 2.06. Legends on Notes 55
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SECTION 2.07. Legends on Global Securities 56
SECTION 2.08. Certification Forms 56
ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.01 Redemption of Notes in General 57
SECTION 3.02 Auction of Financed Student Loans; Redemption of Outstanding
Notes from Auction Proceeds prior to the Legal Final Maturity 57
SECTION 3.03 Optional Redemption of Notes prior to the Legal Final Maturity 58
ARTICLE IV
Disposition of Proceeds of the Notes; Collection Account; Acquisition Fund
SECTION 4.01 Disposition of Proceeds of the Notes 60
SECTION 4.02 Disposition of Collection Account 60
SECTION 4.03 Transfer of Proceeds in the Acquisition Fund 65
ARTICLE V
MISCELLANEOUS
SECTION 5.01 Adoption of this Terms Supplement 66
SECTION 5.02 Effect of Terms Supplement on Indenture 66
SECTION 5.03 Execution of Counterparts 66
SECTION 5.04 Governing Law 66
SCHEDULE I Terms of Senior Notes; Terms of Subordinate Notes
Exhibit A Distribution Statement
Exhibit B Form of Senior LIBOR Floating Rate Note (Unregistered Note)
Exhibit C Form of Senior Auction Rate Note (Unregistered Note)
Exhibit D Form of Subordinate Note (Unregistered Note)
Exhibit E Instruction for Payment of Interest
Exhibit F Notice of Payment Default
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Exhibit G Notice of Cure of Payment Default
Exhibit H Notice of Proposed Auction Period Adjustment
Exhibit I Notice Establishing Auction Period Adjustment
Exhibit J Notice of Change in Rate Determination Date
Exhibit K Notice of Proposed Auction Period Conversion
Exhibit L Notice Establishing Auction Period Conversion
Exhibit M Form of Transfer Certificate for Transfer From Restricted
Global Security to Regulation S Global Security
Exhibit N Form of Transfer Certificates for Transfer From Regulation S
Global Security to Restricted Global Security
Exhibit O Form of Senior LIBOR Floating Rate Note (Registered Note)
Exhibit P Form of Senior Auction Rate Note (Registered Note)
Exhibit Q Form of Subordinate Note (Registered Note)
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EXHIBIT 4.2
SECOND AMENDED AND RESTATED
TERMS SUPPLEMENT
THIS SECOND AMENDED AND RESTATED TERMS SUPPLEMENT, dated as of
June 1, 1999 (this "Terms Supplement"), by and among STUDENT LOAN FUNDING
1998-A/B TRUST, a common law (as opposed to statutory) trust created under the
laws of the State of Delaware (the "Delaware Trust" or the "Issuer") by Firstar
Bank, National Association, not in its individual capacity, but solely in its
capacity as co-owner trustee of the Delaware Trust (the "Co-Owner Trustee"),
FIRSTAR BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely
in its capacity as the initial eligible lender holding title to the Financed
Student Loans for the benefit of the Delaware Trust (the "Initial Co-Owner
Eligible Lender Trustee"), and FIRSTAR BANK, NATIONAL ASSOCIATION, a national
banking association duly organized and existing under the laws of the United
States, having its principal corporate trust office in Cincinnati, Ohio (the
"Indenture Trustee"), as Indenture Trustee under that certain Second Amended and
Restated Indenture of Trust, dated as of June 1, 1999 (as hereafter amended and
supplemented by Supplemental Indentures, the "Base Indenture"), among the
Delaware Trust, the Initial Co-Owner Eligible Lender Trustee and the Indenture
Trustee, amends and restates that certain First Amended and Restated Terms
Supplement, dated as of March 15, 1999 (the "First Restated Terms Supplement")
by and among the Delaware Trust, the Initial Co-Owner Trustee and the Indenture
Trustee, which amended and restated that certain Terms Supplement, dated as of
December 1, 1998 (the "Original Terms Supplement"), by and among Student Loan
Funding LLC, a limited liability company formed under the laws of the State of
Delaware (the "Original Issuer"), Firstar Bank, National Association (successor
by merger to Star Bank, National Association), not in its individual capacity,
but solely as initial eligible lender trustee for the benefit of the Original
Issuer ("Original Initial ELT"), and the Indenture Trustee and, as such, amends
and supplements the Base Indenture (as amended and supplemented by this Terms
Supplement, the "Indenture"). References in this Terms Supplement to the name
"Student Loan Funding 1998-A/B Trust" or to the terms "Delaware Trust" or the
"Issuer" shall mean the Co-Owner Trustee, not in its individual capacity, but
solely as Co-Owner Trustee of the Delaware Trust. Words and terms used as
defined words and terms herein and not otherwise defined herein shall have the
meanings given them in the Base Indenture.
WITNESSETH:
WHEREAS, Section 2.1 of the Original Base Indenture provides,
among other things, that the Original Issuer, each Eligible Lender Trustee and
the Indenture Trustee shall enter into the Original Terms Supplement thereto for
the purposes of (i) authorizing the issuance of a Series of Notes thereunder and
(ii) specifying certain terms of such Notes; and
WHEREAS, pursuant to certain exemptions under the Securities
Act, the Original
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Issuer provided under the Original Terms Supplement for the issuance of (i) its
Student Loan Senior Asset-Backed Notes, Series 1998A-3 (LIBOR Floating Rate)
(the "Series 1998A-3 Notes"), (ii) Student Loan Senior Asset-Backed Callable
Notes, Series 1998A-4 (Auction Rate) (the "Series 1998A-4 Notes"), (iii) its
Student Loan Senior Asset-Backed Callable Notes, Series 1998A-5 (Auction Rate)
(the "Series 1998A-5 Notes"), (iv) its Student Loan Senior Asset-Backed Callable
Notes, Series 1998A-6 (Auction Rate) (the "Series 1998A-6 Notes" and,
collectively with the Series 1998A-3 Notes, the Series 1998A-4 Notes and the
Series 1998A-5 Notes, the "Unregistered Senior Notes") and (iv) its Student Loan
Subordinate Asset-Backed Notes, Series B-3 (Fixed Rate) (the "Unregistered
Subordinate Notes" and, collectively with the Unregistered Senior Notes, the
"Unregistered Notes"); and
WHEREAS, in connection with the execution and delivery of the
Transfer and Sale Agreement pursuant to which the Original Issuer, together with
the Original Initial ELT at the direction of the Original Issuer, transferred
the Trust Estate and the Ancillary Agreements to the Issuer and the Initial
Co-Owner Eligible Lender Trustee in consideration of their assumption of all of
the obligations of the Original Issuer and the Original Initial ELT under the
Unregistered Notes and the Original Indenture, the Issuer, the Initial Co-Owner
Eligible Lender Trustee and the Indenture Trustee executed and delivered the
First Amended and Restated Indenture of Trust and the First Amended and Restated
Terms Supplement, each dated as of March 15, 1999, in order to evidence the
effect of the transfer and sale on the Original Indenture and to confirm the
issuance of each Series of the Unregistered Notes and the terms upon which each
Series of the Unregistered Notes has been issued and is Outstanding;
WHEREAS, in connection with the consummation of the Exchange
Offer, the Issuer, the Initial Co-Owner Eligible Lender Trustee and the
Indenture Trustee are executing and delivering the Base Indenture, and now
desire to execute and deliver this Second Amended and Restated Terms Supplement
in order to (a) provide for the issuance of each Series of the Registered Notes
and the terms upon which each such Series of the Registered Notes will be issued
and Outstanding upon the consummation of the Exchange Offer and (b) confirm the
issuance of each Series of the Unregistered Notes and the terms upon which each
Series of the Unregistered Notes has been issued and will remain Outstanding
upon the consummation of the Exchange Offer;
NOW, THEREFORE, THIS SECOND AMENDED AND RESTATED TERMS
SUPPLEMENT WITNESSETH:
That it is hereby mutually covenanted and agreed that the
terms and conditions upon which each Series of the Notes have been executed,
authenticated, issued, delivered, secured and accepted by all Persons who shall
from time to time be or become the Holders thereof, and the trusts and
conditions upon which the Trust Estate is to be held and disbursed, are as set
forth herein and in the Base Indenture:
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ARTICLE I
DEFINITIONS
Unless the context shall clearly indicate some other meaning
or may otherwise require, the terms defined in this Article I shall, for all
purposes of the Base Indenture and of any indenture or other instrument
amendatory or supplemental thereto, have the meanings herein specified (terms
used herein as defined terms and not defined herein, shall have the meanings
ascribed thereto in the Base Indenture):
"ACCREDITED INVESTOR" shall have the meaning specified in
Section 2.02 hereof.
"AGENT MEMBER" with respect to any Global Security shall mean
a member of or participant in the Depository for such Global Security.
"AGENT MEMBER TRANSFEREE" shall have the meaning specified in
Section 2.05(c)(i) hereof.
"AGENT MEMBER TRANSFEROR" shall have the meaning specified in
Section 2.05(c)(i) hereof.
"ALL HOLD RATE" shall mean eighty-five percent (85%) of the
Applicable LIBOR Rate.
"APPLICABLE LIBOR RATE" shall mean (a) for Auction Periods of
35 days or less, One-Month LIBOR, (b) for Auction Periods of more than 35 days
but less than 91 days, Three-Month LIBOR, (c) for Auction Periods of more than
90 days but less than 181 days, Six-Month LIBOR, and (d) for Auction Periods of
more than 180 days, One-Year LIBOR. As used in this definition and otherwise
herein, the terms "Three-Month LIBOR," "Six-Month LIBOR" or "One-Year LIBOR,"
means the rate of interest per annum equal to the rate per annum with respect to
United States dollar deposits in the London interbank market having a maturity
of three months, six months or one year, respectively.
"APPLICABLE PROCEDURES" shall mean, with respect to any
transfer or exchange of a beneficial interest in a Global Security, the rules
and procedures of the Depository for such Global Security, Euroclear and Cedel
to the extent the same are applicable to such transfer and exchange.
"AUCTION" shall mean the implementation of the Auction
Procedures on an Interest Determination Date.
"AUCTION AGENT" shall mean with respect to the Auction Rate
Notes, the Initial Auction Agent unless and until a Substitute Auction Agent
Agreement becomes effective, after which the Auction Agent shall mean the
Substitute Auction Agent.
"AUCTION AGENT AGREEMENT" shall mean with respect to the
Auction Rate Notes,
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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 set forth in the
applicable Auction Agent Agreement.
"AUCTION AGENT FEE RATE" shall have the meaning set forth in
the applicable Auction Agent Agreement.
"AUCTION PERIOD" shall mean with respect to each Series of
Auction Rate Notes, a period generally consisting of twenty-eight (28) days
beginning on a Thursday and ending on the fourth Wednesday thereafter, as the
same may be changed pursuant to Section 2.03.2.7 hereof.
"AUCTION PERIOD ADJUSTMENT" shall mean with respect to a
Series of Auction Rate Notes, the change, from time to time, in the length of an
Auction Period and, specifically, (i) with respect to an Auction Period between
seven (7) and ninety-one (91) days, inclusive, from such an Auction Period to
any other Auction Period between seven (7) and ninety-one (91) days, inclusive,
or (ii) with respect to an Auction Period between ninety-two (92) days and the
Legal Final Maturity of a Series of Auction Rate Notes, inclusive, from such an
Auction Period to an Auction Period between ninety-two (92) days and the Legal
Final Maturity of a Series of Auction Rate Notes, inclusive, if such latter
Auction Period is no more than three (3) months shorter or no more than three
(3) months longer than the Auction Period for such series of Auction Rate Notes
established either at the initial issuance of such Series of Auction Rate Notes
or pursuant to an Auction Period Conversion, whichever has occurred most
recently.
"AUCTION PERIOD COMMENCEMENT DATE" shall mean, with respect to
the Auction Rate Notes, the first Business Day following each Interest
Determination Date.
"AUCTION PERIOD CONVERSION" shall mean with respect to a
Series of Auction Rate Notes, the change in the length of an Auction Period (i)
from an Auction Period between seven (7) and ninety-one (91) days, inclusive, to
an Auction Period between ninety-two (92) days and the Legal Final Maturity of
such Series of Auction Rate Notes, inclusive, (ii) from an Auction Period
between ninety-two (92) days and the Legal Final Maturity of such Series of
Auction Rate Notes, inclusive, to an Auction Period between seven (7) and
ninety-one (91) days, inclusive, or (iii) from an Auction Period between
ninety-two (92) days and the Legal Final Maturity of such Series of Auction Rate
Notes, inclusive, to an Auction Period between ninety-two (92) days and the
Legal Final Maturity of such Series of Auction Rate Notes, inclusive, if such
latter Auction Period is at least three (3) months shorter or at least three (3)
months longer than the Auction Period for such Series of Auction Rate Notes
established either upon initial issuance of such Series of Auction Rate Notes or
pursuant to an Auction Period Conversion, whichever has occurred most recently.
"AUCTION PERIOD CONVERSION DATE" shall mean, with respect to a
Series of Auction Rate Notes, the date on which an Auction Period Conversion is
effective which shall be an
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Auction Period Distribution Date.
"AUCTION PERIOD DISTRIBUTION DATE" shall mean, with respect to
a Series of Auction Rate Notes, the Business Day immediately following the
expiration of each related Auction Period, commencing on the Initial
Distribution Date for each Series of Auction Rate Notes; provided, however, that
in connection with any Auction Period Adjustment or Auction Period Conversion,
the Auction Period Distribution Date may be changed.
"AUCTION PROCEDURES" shall mean the procedures set forth in
Section 2.03.2 hereof.
"AUCTION RATE" shall mean with respect to the Series Interest
Rate on a Series of Auction Rate Notes, the interest rate that results from
implementation of the applicable Auction Procedures.
"AUCTION RATE NOTEHOLDERS" shall mean the Holders of Auction
Rate Notes.
"AUCTION RATE NOTES" shall mean collectively, the Series A-4
Notes, the Series A-5 Notes and the Series A-6 Notes.
"AUTHORIZED DENOMINATIONS" shall mean (a) with respect to the
Series A-3 Notes and the Series B-3 Notes, (i) as applicable solely in
connection with the original issuance of each such Series of Notes, $50,000 and
integral multiples of $1,000 in excess thereof and (ii) after distribution of
principal in accordance with Section 5.5.2 of the Base Indenture, the
Outstanding principal amount that results after such distribution, and (b) with
respect to the Auction Rate Notes, $50,000 and integral multiples of $50,000 in
excess thereof.
"BID AUCTION RATE" shall have the meaning described in Section
2.03.2.1(c)(i) hereof.
"BIDDER" shall have the meaning set forth in Section
2.03.2.1(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 Series A-3 Notes, Series
A-4 Notes, Series A-5 Notes, Series A-6 Notes, Series B-3 Notes or notes in
registered form are issued only to a Depository or its nominee as registered
owner, with such Notes "immobilized" to the custody of the Depository, and (iii)
the book entry is the record that identifies the owners of beneficial interests
in that principal and interest and Carryover Interest, if any.
"BROKER-DEALER" shall mean NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities
LLC 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 confirmed as such by the Issuer pursuant to Section 2.03.2.6 hereof,
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and (c) has entered into a Broker-Dealer Agreement that is in effect on the date
of reference.
"BROKER-DEALER AGREEMENT" shall mean each agreement between
the Auction Agent and a Broker-Dealer, approved by the Original Issuer or the
Issuer, 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 from and after the effective date of
this Indenture shall be substantially in the form of the Broker-Dealer
Agreement, dated as of December 1, 1998, between Bankers Trust Company, as
Auction Agent, and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, as Broker-Dealer.
"BROKER-DEALER FEE" shall have the meaning set forth in the
applicable Auction Agent Agreement.
"BROKER-DEALER FEE RATE" shall have the meaning set forth in
the applicable Auction Agent Agreement.
"CALCULATION AGENT" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., New
York, New York, as Calculation Agent under the Calculation Agent Agreement, or
any successor to it as such agent under the Calculation Agent Agreement.
"CALCULATION AGENT AGREEMENT" shall mean the Calculation Agent
Agreement, dated as of December 1, 1998, among the Original Issuer, the
Calculation Agent and the Indenture Trustee, in each case as originally executed
and as from time to time amended or supplemented in accordance with the terms
thereof and the Indenture.
"CEDEL" shall mean a professional depository incorporated
under the laws of Luxemboeurg which holds securities for its participating
organizations and facilitates the clearance and settlement of securities
transactions between Cedel Participants through electronic book-entry.
"CEDEL PARTICIPANTS" means recognized financial institutions
around the world that utilize the services of Cedel, including initial
purchasers, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the Initial
Purchasers.
"COLLECTION PERIOD" shall mean (i) initially the period
commencing on Date of Issuance and running through and including January 31,
1999, and (ii) thereafter a period of one calendar month commencing and
including the date next following the end of the preceding Collection Period.
"DATE OF ISSUANCE" shall mean (i) with respect to each Series
of the Unregistered Notes, December 22, 1998, the date of their initial issuance
and delivery and (ii) with respect to each Series of the Registered Notes, June
__, 1999, the date of their initial issuance and delivery.
"DEPOSITORY" shall mean any securities depository that is a
clearing agency under
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federal law operating and maintaining a Book-Entry System to record beneficial
ownership of the right to principal and interest, and to effect transfers of
Notes, in Book-Entry Form, and includes and means initially (i) DTC, if the
Notes are offered in the United States, and (ii) Cedel or Euroclear, if the
Notes are offered in Europe.
"DEPOSITORY PARTICIPANT" shall mean any broker-dealer, bank or
other financial institution for which a Depository holds Notes from time to time
as securities depository.
"DISTRIBUTION DATE" shall mean (i) with respect to the Series
A-3 Notes, a Monthly Distribution Date, (ii) with respect to each Series of
Auction Rate Notes, an Auction Period Distribution Date, (iii) with respect to
the Series B-3 Notes, a Monthly Distribution Date (iv) any date on which an
Issuer Exchange Payment is due and payable, and (v) the Legal Final Maturity of
each Series of Notes, or if such day is not a Business Day, on the next
succeeding Business Day.
"DTC" shall mean The Depository Trust Company (a limited
purpose trust company), New York, New York.
"EUROCLEAR" shall mean ▇▇▇▇▇▇ Guaranty Trust Company of New
York, Brussels, Belgium office.
"EXCHANGE AGENT" shall mean Firstar Bank, National
Association, as agent for the Issuer in connection with the Exchange Offer.
"EXCHANGE OFFER" shall mean the offer to exchange a Series of
Notes for Registered Notes registered under the Securities Act.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean the
registration statement (together with all amendments and exhibits thereto) filed
by the Issuer with the Commission under the Securities Act and declared
effective by the Commission on May__, 1999 whereby, pursuant to the Exchange
Offer, Unregistered Notes of a Series are exchanged for Registered Notes of the
same Series.
"EXISTING HOLDER" shall mean, (i) with respect to and for the
purpose of dealing with the Auction Agent in connection with the 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 Auction Rate
Notes.
"EXISTING HOLDER REGISTRY" shall mean the registry of Persons
who are holders of Auction Rate Notes maintained by the Auction Agent as
provided in the Auction Agent Agreement.
"FORMULA RATE" shall mean, (i) with respect to the Series A-3
Notes, the lesser of One-Month LIBOR as of the related Interest Determination
Date for such Interest Accrual Period plus .38% per annum and 17%, (ii) with
respect to the Series A-4 Notes, the lesser of the Auction
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Rate for such Interest Accrual Period and 17%, (iii) with respect to the Series
A-5 Notes, the lesser of the Auction Rate for such Interest Accrual Period and
17%, and (iv) with respect to the Series A-6 Notes, the lesser of the Auction
Rate for such Interest Accrual Period and 17%.
"GLOBAL SECURITY" shall mean a Note, bearing the legend
specified in Section 2.07 hereof if such Note is an Unregistered Note,
evidencing all or part of the Notes, authenticated and delivered to, and
registered in the name of, the Depository with respect to the Notes or a nominee
thereof, and in which beneficial interests are evidenced on the records of such
Depository or its Agent Members.
"INDIRECT PARTICIPANT" shall mean any Person which has
indirect access to a Clearing Agency, such as securities brokers and dealers,
banks, and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly.
"INITIAL AUCTION AGENT" shall mean Bankers Trust Company, New
York, New York, its successors and assigns.
"INITIAL AUCTION AGENT AGREEMENT" shall mean the Auction Agent
Agreement, dated as of December 1, 1998, by and among the Original Issuer, the
Indenture Trustee and the Initial Auction Agent, including any amendment thereof
or supplement thereto, relating to the Auction Rate Notes.
"INITIAL DISTRIBUTION DATE" shall mean, (i) as to the Series
1998A-3 Notes, January 29, 1999, (ii) as to the Series 1998A-4 Notes, January
28, 1999, (iii) as to the Series 1998A-5 Notes, February 4, 1999, (iv) as to the
Series 1998A-6 Notes, February 11, 1999, and (v) as to the Series 1998B-3 Notes,
January 29, 1999.
"INITIAL INTEREST DETERMINATION DATE" shall mean (i) as to the
Series 1998A-3 Notes, January 27, 1999, (ii) as to the Series 1998A-4 Notes,
January 27, 1999, (iii) as to the Series 1998A-5 Notes, February 3, 1999, (iv)
as to the Series 1998A-6 Notes, February 10, 1999.
"INTEREST ACCRUAL PERIOD" shall mean with respect to each
Series of Notes, the period of time in which interest may accrue commencing
initially on the Date of Issuance for such Series of Notes and ending on the day
before the Initial Distribution Date for each Series and thereafter commencing
on each Distribution Date for such Series of Notes and ending on the day before
the next Distribution Date for such Series.
"INTEREST DETERMINATION DATE" shall mean (i) the Initial
Interest Determination Date and thereafter (ii) (a) with respect to the Series
A-3 Notes, the second London Banking Day immediately preceding the first day of
each Interest Accrual Period, and (b) with respect to the Auction Rate Notes,
the Business Day on which the Auction Rate is determined by an Auction and that
immediately preceded the first day of each Interest Accrual Period, other than
(1) an Interest Accrual Period which commences on an Auction Period Conversion
Date or an Auction Period Adjustment Date; (2) each Interest Accrual Period
commencing after the ownership of the Auction Rate Notes is no longer maintained
in Book-Entry Form; (3) each Interest Accrual Period commencing after the
occurrence and during the continuance of a Payment Default;
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provided, however, that if such day is not a Business Day, then the next
succeeding Business Day.
"LEGAL FINAL MATURITY" shall mean with respect to (i) the
Series ▇-▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇, (▇▇) the Series A-4 Notes, December 1, 2019;
(iii) the Series A-5 Notes, December 1, 2019; (iv) the Series A-6 Notes,
December 1, 2019 and (v) the Series B-3 Notes, December 1, 2019.
"LIBOR" shall mean, the rate of interest per annum equal to
the rate per annum at which United States dollar deposits having a particular
maturity are offered to prime banks in the London interbank market which appears
on the Telerate Page 3750 as of approximately 11:00 a.m., Greenwich Mean time,
on the Interest Determination Date. If such rate does not appear on Telerate
Page 3750, the rate for that day will be determined on the basis on the Reuters
Screen LIBOR Page. If at least two such quotations appear, LIBOR shall be the
arithmetic mean (rounded to the nearest one-hundredth of one percent (.01%)) of
such offered rates. If fewer than two such quotes appear, LIBOR with respect to
an Interest Accrual Period will be determined at approximately 11:00 a.m.,
London time, on such applicable Interest Determination Date on the basis of the
rate at which deposits in United States dollars having such particular maturity
are offered to prime banks in the London interbank market by four major banks in
the London interbank market selected by the Calculation Agent 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 Calculation Agent 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, LIBOR shall be the arithmetic
mean (rounded to the nearest one-hundredth of one percent (.01%)) of such
offered rates. If fewer than two quotations are provided, LIBOR with respect to
such Interest Accrual Period shall be the arithmetic mean (rounded to the
nearest one-hundredth of one percent (.01%)) of the rates quoted at
approximately 11:00 a.m., New York City time on such applicable Interest
Determination Date by three major banks in New York, New York selected by the
Calculation Agent for loans in United States dollars to leading European banks
having such particular maturity 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, LIBOR in
effect for the applicable Interest Accrual Period shall be LIBOR in effect for
the immediately preceding Interest Accrual Period.
"LONDON BANKING DAY" shall mean any business day on which
dealings in deposits in United States dollars are transacted in the London
interbank market.
"MAXIMUM AUCTION RATE" shall mean (i) prior to an Auction
Period Conversion, (a) the Applicable LIBOR Rate plus 1.50% (if both of the
ratings assigned by the Rating Agencies to the Auction Rate Notes are "Aa3,"
"AA-" or better) or (b) the Applicable LIBOR Rate plus 2.50% (if any one of the
ratings assigned by Rating Agencies to the Auction Rate Notes is less than "Aa3"
or "AA-" but at least "A") or (c) the Applicable LIBOR Rate plus 3.50% (if any
one of the ratings assigned by the Ratings Agencies to the Auction Rate Notes is
less than "A") and (ii) after an Auction Period Conversion, the rate set forth
in the Supplemental
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Indenture executed in connection with the Auction Period Conversion. 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 has
been given notice pursuant to the Auction Agent Agreement.
"MONTHLY DISTRIBUTION DATE" shall mean, with respect to the
Series A-3 Notes and the Series B-3 Notes, the last Business Day of each month,
commencing on the Initial Distribution Date for each such Series of Notes.
"NET LOAN RATE" shall mean with respect to any Interest
Accrual Period for a Series of the Notes, the annualized percentage rate
determined by multiplying (a) the ratio of 360 to the actual number of days in
such Interest Accrual Period, and (b) the ratio of (i) Expected Interest
Collections for the applicable Collection Period less Program Operating Expenses
with respect to such Collection Period, to (ii) the Pool Balance as of the first
day of such Collection Period. In calculating the Net Loan Rate, the applicable
Collection Period for the Series A-3 Notes is the Collection Period immediately
preceding the Collection Period in which the Monthly Distribution Date occurs.
The applicable Collection Period for the applicable Auction Rate Notes is the
second preceding Collection Period prior to the applicable Auction Period
Distribution Date.
"NON-PAYMENT RATE" on any date of determination, shall mean
(a) prior to an Auction Period Conversion, One-Month LIBOR plus 1.50% and (b)
after an Auction Period Conversion, the interest rate per annum set forth in the
definition thereof in the Supplemental Indenture executed in connection with the
Auction Period Conversion.
"NOTICE OF FEE 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 D to the applicable Auction Agent Agreement.
"ONE-MONTH LIBOR" shall mean LIBOR with respect to U.S.
denominated deposits having a maturity of one (1) month.
"PARITY PERCENTAGE" shall have the meaning given such term in
the Base Indenture.
"PARITY PERCENTAGE LIMITATION" shall mean 103%.
"PARITY PERCENTAGE PAYMENT" shall mean those principal amounts
required to be paid on the Notes pursuant to Section 4.2 hereof until the
Parity Percentage is 101%.
"PARTICIPANT" shall mean a Person who is a participant in or
member of the Depository, as determined by the rules or bylaws of the
Depository.
"PAYMENT DEFAULT" shall mean (a) a default in the due and
punctual payment of any installment of interest on a Series of Auction Rate
Notes or (b) a default in the due and punctual payment of any interest on and
principal of a Series of Auction Rate Notes at their Final Legal Maturity.
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"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 Auction Rate Notes (or, in the case of an
Existing Holder thereof, an additional principal amount of Auction Rate Notes).
"PRINCIPAL FACTOR" shall mean a seven-digit decimal number
which, when multiplied by the initial principal amount of a Series A-3 Note or a
Series B-3 Note, produces its Outstanding principal balance. The Principal
Factor will be 1.0000000 for each such Note as of the Date of Issuance;
thereafter, the Principal Factor for each such Note will decline to reflect
reductions in the Outstanding principal balance of such Note.
"PROGRAM EXPENSE REQUIREMENT" shall have the meaning given
such term in the Base Indenture.
"QIB" shall have the meaning specified in Section 2.02 hereof.
"RECORD DATE" shall mean, (i) with respect to the Series A-3
Notes, the second Business Day preceding a Monthly Distribution Date, (ii) with
respect to the Auction Rate Notes, the Business Day immediately preceding an
Auction Period Distribution Date, and (iii) with respect to the Series B-3
Notes, the Business Day preceding a Monthly Distribution Date.
"REGISTERED" shall mean, with respect to any notes, notes
which are registered under the Securities Act.
"REGISTERED NOTES" shall mean the Notes with terms
substantially identical to a Series of Notes which were exchanged pursuant to
the Exchange Offer and the Exchange Offer Registration Statement whereby the
Notes were registered under the Securities Act.
"REGULATION S" shall mean, Regulation S promulgated under the
Securities Act, as hereafter amended from time to time.
"REGULATION S GLOBAL SECURITY" shall have the meaning
specified in Section 2.02 hereof.
"REGULATION S GLOBAL SECURITY TRANSFERRED AMOUNT" shall have
the meaning specified in Section 2.05(c)(ii) hereof.
"REMARKETING AGENT" shall mean, with respect to the Auction
Rate Notes, the remarketing agent under the remarketing agreement related to the
Auction Rate Notes, or any successor to it as such agent.
"REMARKETING AGREEMENT" shall mean a remarketing agreement
among the Original Issuer, the Remarketing Agent and the Indenture Trustee, or
any similar agreement hereafter entered into by the Issuer with respect to the
Auction Rate Notes, in each case as originally executed and as from time to time
amended or supplemented in accordance with the terms thereof and with this
Indenture.
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"RESTRICTED GLOBAL SECURITY" shall have the meaning specified
in Section 2.02 hereof.
"RESTRICTED PERIOD" shall have the meaning specified in
Section 2.02 hereof.
"RESTRICTED SECURITIES" shall have the meaning specified in
Section 2.02 hereof.
"RULE 144" shall mean Rule 144 under the Securities Act or any
successor provision thereto, as hereafter amended from time to time.
"RULE 144A" shall mean Rule 144A under the Securities Act or
any successor provision thereto, as hereafter amended from time to time.
"RULE 501(A)" shall mean Rule 501(a) under the Securities Act
or any successor provision thereto, as hereafter amended from time to time.
"SENIOR PARITY PERCENTAGE" shall have the meaning given such
term in the Base Indenture.
"SERIES 1998A NOTEHOLDERS" shall mean, collectively, the
Series 1998A-3 Noteholders, the Series 1998A-4 Noteholders, the Series 1998A-5
Noteholders and the Series 1998A-6 Noteholders.
"SERIES 1998A NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT"
shall mean, with respect to any Distribution Date for a Series of Series 1998A
Notes, the Series 1998A Principal Distribution Amount for such Distribution Date
plus the Series 1998A Principal Shortfall as of the close of the preceding
Distribution Date; provided that the Series 1998A Noteholders' Principal
Distribution Amount will not exceed the outstanding principal balance of the
Series 1998A Notes. In addition, (i) on the Legal Final Maturity of the Series
A-3 Notes, the principal required to be distributed to the Series 1998A-3
Noteholders will include the amount required to reduce the outstanding principal
balance of the Series A-3 Notes to zero, (ii) on the Legal Final Maturity of the
Series A-4 Notes, the principal required to be distributed to the Series 1998A-4
Noteholders will include the amount required to reduce the outstanding principal
balance of the Series A-4 Notes to zero, (iii) on the Legal Final Maturity of
the Series A-5 Notes, the principal required to be distributed to the Series
1998A-5 Noteholders will include the amount required to reduce the outstanding
principal balance of the Series A-5 Notes to zero, and (iv) on the Legal Final
Maturity of the Series A-6 Notes, the principal required to be distributed to
the Series 1998A-6 Noteholders will include the amount required to reduce the
outstanding principal balance of the Series A-6 Notes to zero.
"SERIES 1998A NOTES" shall mean, collectively, the Series A-3
Notes, the Series A-4 Notes, the Series A-5 Notes and the Series A-6 Notes.
"SERIES 1998A PRINCIPAL DISTRIBUTION AMOUNT" shall be equal to
(i) with respect to the Series A-3 Notes, an amount equal to the decline in the
Pool Balance between the end of the second Collection Period preceding a Monthly
Distribution Date and the end of the immediately
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preceding Collection Period, less, for each Monthly Distribution Date occurring
after June 30, 2003, the amount of any principal to be paid on such Monthly
Distribution Date on the Series B-3 Notes, (ii) with respect to the Series A-4
Notes on and after which the principal balance of the Series A-3 Notes has been
paid in full, an amount equal to the decline in the Pool Balance between the end
of the third Collection Period preceding an Auction Period Distribution Date and
the end of the second preceding Collection Period, less, for each Monthly
Distribution Date occurring after June 30, 2003, the amount of any principal to
be paid on the immediately preceding Monthly Distribution Date on the Series B-3
Notes and (iii) with respect to the Series A-5 Notes on and after the principal
balance of the Series A-3 Notes and the Series A-4 Notes has been paid in full,
an amount equal to the decline in the Pool Balance between the end of the third
Collection Period preceding an Auction Period Distribution Date and the end of
the second preceding Collection Period, less, for each Monthly Distribution Date
occurring after June 30, 2003, the amount of any principal to be paid on the
immediately preceding Monthly Distribution Date on the Series B-3 Notes, and
(iv) with respect to the Series A-6 Notes on and after the principal balance of
the Series A-3 Notes, the Series A-4 Notes and the Series A-5 Notes has been
paid in full, an amount equal to the decline in the Pool Balance between the end
of the third Collection Period preceding an Auction Period Distribution Date and
the end of the second preceding Collection Period, less, for each Monthly
Distribution Date occurring after June 30, 2003, the amount of any principal to
be paid on the immediately preceding Monthly Distribution Date on the Series B-3
Notes.
"SERIES 1998A PRINCIPAL SHORTFALL" shall mean, as of the close
of any Distribution Date, the excess of (i) the Series 1998A Principal
Distribution Amount on such Distribution Date over (ii) the amount of principal
actually distributed to the Series 1998A Noteholders on such Distribution Date.
"SERIES 1998A-3 INTEREST SHORTFALL" shall mean, with respect
to any Monthly Distribution Date, the excess of (i) the Series 1998A-3
Noteholders' Interest Distribution Amount on the preceding Monthly Distribution
Date over (ii) the amount of interest actually distributed to the Series 1998A-3
Noteholders on such preceding Monthly Distribution Date, plus interest on the
amount of such excess interest due to the Series 1998A-3 Noteholders, to the
extent permitted by law, at the related Series Interest Rate from such preceding
Monthly Distribution Date to the current Monthly Distribution Date.
"SERIES 1998A-3 NOTEHOLDERS" shall mean the Holders of the
Series A-3 Notes.
"SERIES 1998A-3 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Monthly Distribution Date, the sum of (i) the
amount of interest accrued at the related Series Interest Rate for the related
Interest Accrual Period on the aggregate outstanding principal balance of the
Series A-3 Notes on the immediately preceding Monthly Distribution Date after
giving effect to all principal distributions to Holders of Series A-3 Notes on
such preceding Monthly Distribution Date (or, in the case of the first Monthly
Distribution Date, on the Date of Issuance) and (ii) the Series 1998A-3 Interest
Shortfall for such Distribution Date; provided that the Series 1998A-3
Noteholders' Interest Distribution Amount will not include any Carryover
Interest on the Series A-3 Notes.
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"SERIES 1998A-3 NOTES" shall mean the Student Loan Senior
Asset-Backed Notes, Series 1998A-3 (LIBOR Floating Rate), of the Issuer issued
and Outstanding under the Indenture as Unregistered Notes.
"SERIES 1998A1-3 NOTES" shall mean the Student Loan Senior
Asset-Backed Notes, Series 1998A1-3 (LIBOR Floating Rate), of the Issuer issued
and Outstanding under the Indenture as Registered Notes.
"SERIES A-3 NOTES" shall mean, collectively, the Series
1998A-3 Notes and the Series 1998A1-3 Notes.
"SERIES 1998A-4 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1998A-4
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1998A-4 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1998A-4
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
"SERIES 1998A-4 NOTEHOLDERS" shall mean the Holders of the
Series A-4 Notes.
"SERIES 1998A-4 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series A-4 Notes on the immediately preceding Auction Period Distribution
Date after giving effect to all principal distributions to Holders of Series A-4
Notes on such preceding Auction Period Distribution Date (or, in the case of the
first Auction Period Distribution Date, on the Date of Issuance) and (ii) the
Series 1998A-4 Interest Shortfall for such Auction Period Distribution Date;
provided that the Series 1998A-4 Noteholders' Interest Distribution Amount will
not include any Carryover Interest on the Series A-4 Notes.
"SERIES 1998A-4 NOTES" shall mean the Student Loan Senior
Asset-Backed Callable Notes, Series 1998A-4 (Auction Rate), of the Issuer issued
and Outstanding under the Indenture as Unregistered Notes.
"SERIES 1998A1-4 NOTES" shall mean the Student Loan Senior
Asset-Backed Callable Notes, Series 1998A1-4 (Auction Rate), of the Issuer
issued and Outstanding under the Indenture as Registered Notes.
"SERIES A-4 NOTES" shall mean, collectively, the Series
1998A-4 Notes and the Series 1998A1-4 Notes.
"SERIES 1998A-5 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1998A-5
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1998A-5 Noteholders on such preceding Auction Period
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Distribution Date, plus interest on the amount of such excess interest due to
the Series 1998A-5 Noteholders, to the extent permitted by law, at the related
Series Interest Rate from such preceding Auction Period Distribution Date to the
current Auction Period Distribution Date.
"SERIES 1998A-5 NOTEHOLDERS" shall mean the Holders of the
Series A-5 Notes.
"SERIES 1998A-5 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series A-5 Notes on the immediately preceding Auction Period Distribution
Date after giving effect to all principal distributions to Holders of Series A-5
Notes on such preceding Auction Period Distribution Date (or, in the case of the
first Auction Period Distribution Date, on the Date of Issuance) and (ii) the
Series 1998A-5 Interest Shortfall for such Auction Period Distribution Date;
provided that the Series 1998A-5 Noteholders' Interest Distribution Amount will
not include any Carryover Interest on the Series A-5 Notes.
"SERIES 1998A-5 NOTES" shall mean the Student Loan Senior
Asset-Backed Callable Notes, Series 1998A-5 (Auction Rate), of the Issuer issued
and Outstanding under the Indenture as Unregistered Notes.
"SERIES 1998A1-5 NOTES" shall mean the Student Loan Senior
Asset-Backed Callable Notes, Series 1998A1-5 (Auction Rate), of the Issuer
issued and Outstanding under the Indenture as Registered Notes.
"SERIES A-5 NOTES" shall mean, collectively, the Series
1998A-5 Notes and the Series 1998A1-5 Notes.
"SERIES 1998A-6 INTEREST SHORTFALL" shall mean, with respect
to any Auction Period Distribution Date, the excess of (i) the Series 1998A-6
Noteholders' Interest Distribution Amount on the preceding Auction Period
Distribution Date over (ii) the amount of interest actually distributed to the
Series 1998A-6 Noteholders on such preceding Auction Period Distribution Date,
plus interest on the amount of such excess interest due to the Series 1998A-6
Noteholders, to the extent permitted by law, at the related Series Interest Rate
from such preceding Auction Period Distribution Date to the current Auction
Period Distribution Date.
"SERIES 1998A-6 NOTEHOLDERS" shall mean the Holders of the
Series A-6 Notes.
"SERIES 1998A-6 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean with respect to any Auction Period Distribution Date, the sum of (i)
the amount of interest accrued at the related Series Interest Rate for the
related Interest Accrual Period on the aggregate outstanding principal balance
of the Series A-6 Notes on the immediately preceding Auction Period Distribution
Date after giving effect to all principal distributions to Holders of Series A-6
Notes on such preceding Auction Period Distribution Date (or, in the case of the
first Auction Period Distribution Date, on the Date of Issuance) and (ii) the
Series 1998A-6 Interest Shortfall for such Auction Period Distribution Date;
provided that the Series 1998A-6 Noteholders' Interest Distribution Amount will
not include any Carryover Interest on the Series A-6 Notes.
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"SERIES 1998A-6 NOTES" shall mean the Student Loan Senior
Asset-Backed Callable Notes, Series 1998A-6 (Auction Rate), of the Issuer issued
and Outstanding under the Indenture as Unregistered Notes.
"SERIES 1998A1-6 NOTES" shall mean the Student Loan Senior
Asset-Backed Callable Notes, Series 1998A1-6 (Auction Rate), of the Issuer
issued and Outstanding under the Indenture as Registered Notes.
"SERIES A-6 NOTES" shall mean, collectively, the Series
1998A-6 Notes and the Series 1998A1-6 Notes.
"SERIES 1998B-3 INTEREST SHORTFALL" shall mean, with respect
to any Monthly Distribution Date, the excess of (i) the Series 1998B-3
Noteholders' Interest Distribution Amount on the preceding Monthly Distribution
Date over (ii) the amount of interest actually distributed to the Series 1998B-3
Noteholders on such preceding Monthly Distribution Date, plus interest on the
amount of such excess interest due to the Series 1998B-3 Noteholders, to the
extent permitted by law, at the related Series Interest Rate from such preceding
Monthly Distribution Date to the current Monthly Distribution Date.
"SERIES 1998B-3 NOTEHOLDERS" shall mean the Holders of the
Series B-3 Notes.
"SERIES 1998B-3 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT"
shall mean, with respect to any Monthly Distribution Date, the sum of (i) the
amount of interest accrued at the related Series Interest Rate for the related
Interest Accrual Period on the aggregate outstanding principal balance of the
Series B-3 Notes on the immediately preceding Monthly Distribution Date after
giving effect to all principal distributions to Holders of Series B-3 Notes on
such preceding Monthly Distribution Date (or, in the case of the first Monthly
Distribution Date, on the Date of Issuance) and (ii) the Series 1998B-3 Interest
Shortfall for such Monthly Distribution Date; provided that the Series 1998B-3
Noteholders' Interest Distribution Amount will not include any Carryover
Interest on the Series B-3 Notes.
"SERIES 1998B-3 NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT"
shall mean, with respect to any Monthly Distribution Date, the Series 1998B-3
Principal Distribution Amount for such Monthly Distribution Date plus the Series
1998B-3 Principal Shortfall as of the close of the preceding Monthly
Distribution Date; provided that the Series 1998B-3 Noteholders' Principal
Distribution Amount shall not exceed the outstanding principal balance of the
Series B-3 Notes. In addition, on the Legal Final Maturity of the Series B-3
Notes, the principal required to be distributed to the Series 1998B-3
Noteholders shall include the amount required to reduce the outstanding
principal balance on the Series B-3 Notes to zero.
"SERIES 1998B-3 NOTES" shall mean the Student Loan Subordinate
Asset-Backed Notes, Series B-3 (Fixed Rate), of the Issuer issued and
Outstanding under the Indenture as Unregistered Notes.
"SERIES 1998B1-3 NOTES" shall mean the Student Loan
Subordinate Asset-Backed Notes, Series 1998B1-3 (Fixed Rate), of the Issuer
issued and Outstanding under the Indenture as
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Registered Notes.
"SERIES B-3 NOTES" shall mean, collectively, the Series
1998B-3 Notes and the Series 1998B1-3 Notes.
"SERIES 1998B-3 PRINCIPAL DISTRIBUTION AMOUNT" shall mean (i)
on each Monthly Distribution Date occurring after June 30, 2003, an amount equal
to the lesser of (a) an amount equal to the decline in the Pool Balance between
the end of the second Collection Period preceding a Monthly Distribution Date
and the end of the immediately preceding Collection Period and (b) the greatest
amount which would result in a Senior Parity Percentage of no less than 109% and
a Parity Percentage of no less than 101% following such payment of principal on
the Series B-3 Notes and (ii) on each Monthly Distribution Date on and after
which the principal balance of the Series 1998A Notes has been paid in full, an
amount equal to the decline in the Pool Balance between the end of the second
Collection Period preceding a Monthly Distribution Date and the end of the
immediately preceding Collection Period (reduced with respect to the first
Monthly Distribution Date on which principal is to be paid on the Series B-3
Notes by the Series 1998A Noteholders' Principal Distribution Amount on such
Monthly Distribution Date).
"SERIES 1998B-3 PRINCIPAL SHORTFALL" shall mean, as of the
close of any Monthly Distribution Date, the excess of (i) the Series 1998B-3
Principal Distribution Amount on such Distribution Date over (ii) the amount of
principal actually distributed to the Series 1998B-3 Noteholders on such Monthly
Distribution Date.
"SUBMISSION DEADLINE" shall mean 12:30 p.m., eastern time, on
any Interest Determination Date or such other time on any Interest Determination
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 set forth in Section
2.03.2.1(c)(i) hereof.
"SUBMITTED HOLD ORDER" shall have the meaning set forth in
Section 2.03.2.1(c)(i).
"SUBMITTED ORDER" shall have the meaning set forth in Section
2.03.2.1(c)(i).
"SUBMITTED SELL ORDER" shall have the meaning set forth in
Section 2.3.2.1(c)(i).
"SUBSTITUTE AUCTION AGENT" shall mean a Person having the
qualifications required by Section 2.03.2.5 of this Indenture with whom the
Indenture Trustee and the Issuer enter 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 Substitute Auction Agent agrees with
the Indenture Trustee and the Issuer to perform the duties of the Auction Agent
under this Indenture.
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"TELERATE PAGE 3750" shall mean the display page so designated
on the Dow ▇▇▇▇▇ Telerate Service (or such other page as may replace that page
on that service for the purpose of displaying comparable rates or prices).
"TRANSFER RESTRICTIONS" shall have the meaning specified in
Section 2.05 hereof.
"UNREGISTERED NOTES" shall mean notes issued under the
Original Indenture which were not exchanged pursuant to the Exchange Offer and
the Exchange Offer Registration Statement and are not registered under the
Securities Act.
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ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
SECTION 2.01 AUTHORIZATION OF NOTES; NOTES TO CONSTITUTE
SPECIAL OBLIGATIONS There was heretofore authorized under the Original Terms
Supplement the borrowing of funds, and to evidence such borrowing there was
authorized the issuance of Unregistered Notes of the Original Issuer in the
following aggregate principal amounts and Series: (i) Four Hundred Million
Dollars ($400,000,000) originally designated "Student Loan Funding LLC Student
Loan Senior Asset-Backed Notes, Series 1998A-3 (LIBOR Floating Rate)" (herein
referred to as the "Series 1998A-3 Notes"); (ii) Ninety-Three Million Three
Hundred Thousand Dollars ($93,300,000) originally designated "Student Loan
Funding LLC Student Loan Senior Asset-Backed Callable Notes, Series 1998A-4
(Auction Rate)" (herein referred to as the "Series 1998A-4 Notes"); (iii) Ninety
Million Dollars ($90,000,000) originally designated "Student Loan Funding LLC
Student Loan Senior Asset-Backed Callable Notes, Series 1998A-5 (Auction Rate)"
(herein referred to as the "Series 1998A-5 Notes") (iv) Ninety Million Dollars
($90,000,000) originally designated "Student Loan Funding LLC Student Loan
Senior Asset-Backed Callable Notes, Series 1998A-6 (Auction Rate)" (herein
referred to as the "Series 1998A-6 Notes" and collectively with the Series
1998A-3 Notes, the Series 1998A-4 Notes and the Series 1998A-5 Notes, the
"Unregistered Senior Notes"); and (v) Fifty-Four Million Five Hundred Thousand
Dollars ($54,500,000) originally designated "Student Loan Funding LLC Student
Loan Subordinate Asset-Backed Notes, Series 1998B-3 (Fixed Rate)" (herein
referred to as the "Series 1998B-3 Notes" or the "Unregistered Subordinate
Notes" and, collectively with the Unregistered Senior Notes, the "Unregistered
Notes"). Pursuant to the Transfer and Sale Agreement, the Issuer assumed all of
the obligations of Student Loan Funding LLC under the Unregistered Notes and the
Original Indenture, as amended and restated by the First Restated Indenture, and
amended the designation of the Issuer on the Unregistered Notes to read "Student
Loan Funding 1998-A/B Trust" in lieu of "Student Loan Funding LLC".
In connection with the consummation of the Exchange Offer,
there are authorized under this Terms Supplement the issuance by the Issuer of
the following notes to be exchanged for Unregistered Notes of the same Series
and same aggregate principal amount that have been properly tendered and
accepted by the Exchange Agent: (i) in exchange for Series 1998A-3 Notes,
Registered notes designated "Student Loan Funding 1998-A/B Trust Student Loan
Senior Asset-Backed Notes, Series 1998A1-3 (LIBOR Floating Rate)" (herein
referred to as the "Series 1998A1-3 Notes"); (ii) in exchange for Series 1998A-4
Notes, Registered notes designated "Student Loan Funding 1998-A/B Trust Student
Loan Senior Asset-Backed Callable Notes, Series 1998A1-4 (Auction Rate)" (herein
referred to as the "Series 1998A1-4 Notes"); (iii) in exchange for Series
1998A-5 Notes, Registered notes designated "Student Loan Funding 1998-A/B Trust
Student Loan Senior Asset-Backed Callable Notes, Series 1998A1-5 (Auction Rate)"
(herein referred to as the "Series 1998A1-5 Notes"); (iv) in exchange for Series
1998A-6 Notes, Registered notes designated "Student Loan Funding 1998-A/B Trust
Student Loan Senior Asset-Backed Callable Notes, Series 1998A1-6 (Auction Rate)"
(herein referred to as the "Series 1998A1-6 Notes" and collectively with the
Series 1998A1-3 Notes, the Series 1998A1-4 Notes and the Series 1998A1-5 Notes,
the "Registered Senior Notes" and collectively with the
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Unregistered Senior Notes, the "Senior Notes"; and (v) in exchange for Series
1998B-3 Notes, Registered notes designated "Student Loan Funding 1998-A/B Trust
Student Loan Subordinate Asset-Backed Notes, Series 1998B1-3 (Fixed Rate)"
(herein referred to as the "Series 1998B1-3 Notes" or the "Registered
Subordinate Notes" and, collectively with the Registered Senior Notes, the
"Registered Notes").
SECTION 2.02 TERMS OF NOTES
(a) TERMS OF NOTES GENERALLY. Payments of principal of and
interest on each Note shall be made by the Indenture Trustee from its principal
corporate trust office in Cincinnati, Ohio in lawful money of the United States,
and payment of interest on each Note shall, if the Holder thereof is the
registered owner of $1,000,000 or more in aggregate principal amount of Notes,
be made by the deposit or wiring of immediately available funds to the credit of
an account specified by such Holder in duly executed instructions, with
signature guaranteed in a manner satisfactory to the Indenture Trustee, in the
form set forth in Exhibit E hereto delivered to the Indenture Trustee no less
than ten (10) Business Days prior to the date such payment is to be made. If
such instructions are not delivered to the Indenture Trustee in accordance with
the immediately preceding sentence and except as otherwise provided for when
Notes are registered in the name of the Depository or its nominee, payment of
interest shall be made by check mailed to such Holder's address as it appears on
the books of registry maintained by the Indenture Trustee pursuant to Section
2.4 of the Base Indenture. Each payment of principal and interest and Carryover
Interest, if any, on each Note of a Series shall be accompanied by the CUSIP
number, if any, of the Note of such Series to which such payment relates.
Notwithstanding the foregoing and except as otherwise provided
for when Notes are registered in the name of the Depository or its nominee, no
payment of principal shall be made on any Note unless and until such Note is
tendered to the Indenture Trustee for cancellation; and no payment of interest
or Carryover Interest shall be made on any Note except to the Person whose name
appears on the books of registry maintained by the Indenture Trustee as the
registered Holder thereof as of the close of business on the Record Date.
If and as long as a Book-Entry System is utilized, (i) (a) the
Registered Notes shall be issued in the form of one fully registered Global
Security for each Legal Final Maturity within each Series of Notes in principal
amount equal to the principal amount of Registered Notes of such Series of Notes
bearing such Legal Final Maturity or otherwise as may be required or requested
by the Depository and agreed to by the Issuer, registered in the name of the
Depository or its nominee, as registered owner, and immobilized in the custody
or at the direction of the Depository, and (b) the Unregistered Notes shall be
issued in the form of one fully registered Global Security for each Legal Final
Maturity within each Series of Notes in principal amount equal to the principal
amount of Unregistered Notes of such Series of Notes bearing such Legal Final
Maturity or otherwise as may be required or requested by the Depository or its
nominees, as registered owner, immobilized in the custody or at the direction of
the Depository; (ii) (a) the principal of the Notes shall be payable in next day
or federal funds delivered or transmitted to the Depository or its nominee on
the Legal Final Maturity or such other date as principal is payable hereunder
and (b) interest on the Notes shall be payable in same
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day or federal funds delivered to the Depository or its nominee on the
applicable Distribution Date; (iii) the beneficial owners in Book-Entry Form
shall have no right to receive Notes in the form of physical securities or
certificates; (iv) ownership of beneficial interests in Book-Entry Form shall be
shown by a book entry on the system maintained and operated by the Depository
and its Participants, and transfers of the ownership of beneficial interests
shall be made only by book entry by the Depository and its Participants; and (v)
the Notes as such shall not be transferable or exchangeable, except for transfer
to another Depository or to another nominee of a Depository, without further
action by the Issuer.
As long as the Notes are held by a Depository in a Book-Entry
System, the Indenture Trustee shall send any notice of redemption only to the
Depository. In the event that the Indenture Trustee gives notice of redemption
to the Depository, such notice shall initiate the Depository's standard
redemption process.
If any Depository determines not to continue to act as a
Depository for the Notes for use in a Book-Entry System, the Authorized Officer
may attempt to have established a securities depository/book-entry relationship
with another qualified Depository. If (i) the Issuer advises the Indenture
Trustee in writing the a Depository is no longer willing or able to discharge
properly its responsibilities as Depository with respect to the Notes, and the
Issuer is unable to locate a qualified successor, (ii) the Issuer, at its
option, advises the Indenture Trustee in writing that it elects to terminate the
Book-entry System through a Depository, or (iii) after the occurrence of an
Event of Default, Noteholders representing not less than 50% of the Outstanding
principal balance of the Directing Notes advise the Indenture Trustee and the
Depository in writing that the continuation of a Book-entry System through a
Depository is no longer in the best interest of the Noteholders, the Indenture
Trustee shall permit withdrawal of the Notes from the Depository or its nominee,
all at the cost and expense (including any costs of printing), if the event is
not the result of Issuer action or inaction, of those Persons requesting such
issuance. Note certificates authenticated and delivered pursuant to this
paragraph shall be in Authorized Denominations.
With respect to the Notes registered in the name of Cede &
Co., as nominee of DTC, or in the name of any successor Depository or its
nominee, the Issuer and the Indenture Trustee shall have no responsibility or
obligation to any Depository Participant or to any Indirect Participant. Without
limiting the generality of the immediately preceding sentence, the Issuer and
the Indenture Trustee shall have no responsibility or obligation with respect to
(i) the accuracy of the records of DTC, Cede & Co., any other Depository, its
nominee, or any Depository Participant with respect to any ownership interest in
the Notes, (ii) the delivery to any Depository Participant or any Indirect
Participant or any other Person, other than a Holder of a Note, of any notice
with respect to the Notes, including any notice of redemption, or (iii) the
payment to any Depository Participant or any Indirect Participant or any other
Person, other than a Holder of a Note, of any amount with respect to principal
of or interest on the Notes.
For as long as the Notes are in Book-Entry Form, the notice,
tender and delivery procedures of DTC, or any other Depository to which the
Notes are transferred, shall be applicable. Whenever during the term of the
Notes the beneficial ownership thereof is
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determined by a book-entry at DTC, the requirements of the Indenture of holding,
delivering, surrendering or transferring Notes shall be deemed modified to
require the appropriate person to meet the requirements of DTC as to
registering, holding, surrendering or transferring the book-entry to produce the
same effect.
Except as otherwise provided herein, Unregistered Notes
offered and sold as part of their initial distribution in reliance on Regulation
S under the Securities Act shall be issued in the form of one or more Global
Securities in definitive, fully registered form without coupons, substantially
in the form set forth herein, with such applicable legends as are provided for
in Sections 2.06 and 2.07 hereof. Such Global Securities shall be registered in
the name of the Depository for such Global Securities or its nominee and
deposited with the Indenture Trustee, at its designated corporate trust office,
as custodian for such Depository, duly executed by the Issuer and authenticated
by the Indenture Trustee as herein provided, for credit by the Depository to the
respective accounts of beneficial owners of such Unregistered Notes (or to such
other accounts as they may direct) at Euroclear or Cedel. Until such time as the
applicable Restricted Period shall have terminated, each such Global Security
shall be referred to herein as a "Regulation S Global Security". After such time
as the applicable Restricted Period shall have terminated, each such Global
Security shall be referred to herein as an "Unrestricted Global Security". The
aggregate principal amount of any Regulation S Global Security and any
Unrestricted Global Security may from time to time be increased or decreased by
adjustments made on the records of the Indenture Trustee, as custodian for the
Depository for such Global Security, as provided in Section 2.05 hereof. As used
herein, the term "Restricted Period", with respect to Global Securities
initially offered and sold in reliance on Regulation S, means the period of
forty (40) consecutive days beginning on and including the later of (i) the day
that the underwriter(s) or placement agent(s), if any, for the offering of
Unregistered Notes advised the Original Issuer and the Indenture Trustee in
writing is the day on which such Unregistered Notes were first offered to
persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the Closing Date. No Regulation S Global Security shall be
issued except as provided in this paragraph to evidence Unregistered Notes
offered and sold as part of their initial distribution in reliance on Regulation
S.
Except as otherwise provided herein, Unregistered Notes
offered and sold as part of their initial distribution in transactions exempt
from the registration requirements of the Securities Act ("Restricted
Securities") other than pursuant to Regulation S to Persons who are (i)
"qualified institutional buyers", as defined in Rule 144A under the Securities
Act ("QIBs") or (ii) institutional "Accredited Investors" as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Accredited Investor")
shall be issued in the form of one or more Global Securities (each a "Restricted
Global Security") in definitive, fully registered form without coupons,
substantially in the form set forth in Exhibits B, C or D hereto, as
appropriate, with such applicable legends as are provided for in Sections 2.06
and 2.07 hereof. Such Global Securities shall be registered in the name of the
Depository for such Global Security or its nominee and deposited with the
Indenture Trustee, at its designated corporate trust office, as custodian for
such Depository, duly executed by the Issuer and authenticated by the Indenture
Trustee as hereinafter provided. The aggregate principal amount of any
Restricted Global Security may from time to time be increased or decreased by
adjustments made on the records of
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the Indenture Trustee, as custodian for the Depository for such Global Security,
as provided in Section 2.05 hereof.
For purposes of this Terms Supplement, the term "Restricted
Securities" shall include all Unregistered Notes issued upon registration of
transfer of, exchange for or in lieu of Restricted Securities except as
otherwise provided in Section 2.05 hereof.
(b) TERMS OF SENIOR NOTES GENERALLY. The Unregistered Senior Notes have
been initially issued in fully registered form in substantially the form set
forth in Exhibits B or C hereof, as appropriate. Upon the consummation of the
Exchange Offer, the Issuer shall execute and deliver Registered Note
certificates authenticated by the Indenture Trustee and evidencing Registered
Senior Notes of the applicable Series in exchange for the Unregistered Note
certificates of the same Series executed and delivered upon the execution of the
First Restated Indenture. Registered Senior Notes shall be issued in fully
registered form in substantially the form set forth in Exhibits O and P hereof,
as appropriate. The Senior Notes may be issued only in Authorized Denominations.
The Senior Notes initially issued hereunder were, and the Registered Senior
Notes shall be, dated their Date of Issuance. Each Series of such Senior Notes
shall mature on the respective Legal Final Maturity for such Series. The Senior
Notes shall be subject to redemption prior to their respective Legal Final
Maturity as provided in Article III hereof. The replacement Senior Notes of each
Series shall be numbered in consecutive numerical order as set forth in Schedule
I attached hereto.
The Senior Notes were issued, and shall continue to be issued
to a Depository for use in a Book-Entry System in accordance with the provisions
of the Indenture. The Authorized Officer, on behalf of the Original Issuer and
to the extent necessary or required, entered into any agreements determined
necessary in connection with the registration, authentication, immobilization,
and transfer of the Senior Notes, including arrangements for the payment of
principal and interest by wire transfer, after determining that the execution
thereof would not endanger the funds or securities of the Original Issuer. The
Authorized Officer, on behalf of the Issuer and to the extent necessary or
required, shall enter into any agreements determined necessary in connection
with the continued registration, authentication, immobilization, and transfer of
the Senior Notes, including arrangements for the payment of principal and
interest by wire transfer, after determining that the execution thereof will not
endanger the funds or securities of the Issuer.
Each Senior Note of a Series shall be payable on its
respective Legal Final Maturity and shall bear interest for each Interest
Accrual Period at the Series Interest Rate determined in accordance with the
procedures and subject to the limitations set forth in Section 2.03 hereof.
Interest at such Series Interest Rate shall accrue during each Interest Accrual
Period on the principal balance of each Series of Senior Notes Outstanding until
such Series of Senior Notes has been paid in full or payment has been duly
provided for, as the case may be, and shall accrue from the later of the date
thereof or the most recent applicable Distribution Date to which interest has
been paid or duly provided for until paid, subject, however, to the provisions
of Section 2.03 hereof. Each Unregistered Senior Note of a Series shall
initially bear interest at the rate of interest per annum set forth in Schedule
I attached hereto.
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Each Registered Senior Note of a Series shall initially bear interest at the
rate of interest per annum being borne by the Unregistered Senior Note of the
same Series on the Date of Issuance of such Registered Senior Note or, if all
Unregistered Senior Notes of such Series are to be exchanged for Registered
Notes of such Series, then such Registered Senior Notes shall initially bear
interest as determined in Section 2.03. Interest on each Senior Note shall be
paid on each applicable Distribution Date to the extent of interest accrued on
the principal then being paid or redeemed to the Holders of such Senior Notes as
of the Record Date. Interest accrued as of any applicable Distribution Date on
the Senior Notes of a Series but not paid on such Distribution Date shall be
payable on the succeeding applicable Distribution Date, together with interest
thereon at the applicable Series Interest Rate. Interest shall be paid pro rata
to the Holders of each such Series of Senior Notes Outstanding.
(c) TERMS OF SUBORDINATE NOTES GENERALLY. The Unregistered
Subordinate Notes were initially issued in fully registered form in
substantially the form set forth in Exhibit D hereof. Upon the consummation of
the Exchange Offer, the Issuer shall execute and deliver Registered Note
certificates authenticated by the Indenture Trustee and evidencing Registered
Subordinate Notes in exchange for the Unregistered Note certificates executed
and delivered upon the execution of the First Restated Indenture. Registered
Subordinate Notes shall be issued in fully registered form in substantially the
form set forth in Exhibit Q hereof. The Subordinate Notes shall be issued only
in Authorized Denominations. The Unregistered Subordinate Notes issued hereunder
were, and the Registered Subordinate Notes shall be, dated their respective Date
of Issuance. The Subordinate Notes shall mature on the Legal Final Maturity. The
Subordinate Notes shall be subject to redemption prior to their respective Legal
Final Maturity as provided in Article III hereof. The replacement Subordinate
Notes shall be numbered in consecutive numerical order as set forth in Schedule
I hereto.
The Subordinate Notes were and shall continue to be issued to
a Depository for use in a Book-entry System in accordance with the provisions of
the Indenture. The Authorized Officer, on behalf of the Original Issuer and to
the extent necessary or required, entered into any agreements determined
necessary in connection with the registration, authentication, immobilization,
and transfer of the Subordinate Notes, including arrangements for the payment of
principal and interest by wire transfer, after determining that the execution
thereof would not endanger the funds or securities of the Original Issuer. The
Authorized Officer, on behalf of the Issuer and to the extent necessary or
required, shall enter into any agreements determined necessary in connection
with the continued registration, authentication, immobilization, and transfer of
the Subordinate Notes, including arrangements for the payment of principal and
interest by wire transfer, after determining that the execution thereof will not
endanger the funds or securities of the Issuer.
The Subordinate Notes shall be payable on their Legal Final
Maturity and shall bear interest for each Interest Accrual Period at the Series
Interest Rate determined in accordance with the procedures, subject to the
limitations set forth in Section 2.03 hereof. Interest shall accrue during each
Interest Accrual Period on the principal balance of the Subordinate Notes
Outstanding until such Subordinate Notes have been paid in full or payment has
been duly provided for, as the case may be, and shall accrue from the later of
the date thereof or the most
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recent applicable Distribution Date to which interest has been paid or duly
provided for until paid, subject, however, to the provisions of Section 2.03
hereof. Each Subordinate Note shall bear interest at the rate of interest per
annum set forth in Schedule I attached hereto. Interest accrued as of any
applicable Distribution Date on the Subordinate Notes but not paid on such
Distribution Date shall be payable on the next succeeding applicable
Distribution Date, together with interest thereon at the applicable Series
Interest Rate. Interest will be paid pro rata to the Holders of the Subordinate
Notes Outstanding.
The Indenture Trustee shall make available to each Holder or
owner of a beneficial interest in a Series of Notes via telephone information
concerning the Series Interest Rate applicable to the Notes of each Series. The
Indenture Trustee shall make such information available to such Holders between
the hours of 9 a.m. and 5 p.m. Eastern time on any day on which the principal
corporate trust office of the Indenture Trustee is open for business.
SECTION 2.03 DETERMINATION OF SERIES INTEREST RATES ON THE
NOTES.
SECTION 2.03.1 DETERMINATION OF THE SERIES INTEREST RATE ON
THE SERIES A-3 NOTES. The Calculation Agent shall determine the Series Interest
Rate with respect to the Series A-3 Notes for each Interest Accrual Period which
Series Interest Rate shall equal the Formula Rate calculated as follows, subject
to the limitation of the Net Loan Rate as hereinafter described. The Formula
Rate for each Interest Accrual Period for the Series A-3 Notes shall equal
One-Month LIBOR plus .38%, but in no event greater than 17% per annum.
Interest on the Series A-3 Notes for each Interest Accrual
Period shall be calculated on the basis of the actual number of days elapsed in
such Interest Accrual Period on the basis of a year consisting of 360 days. The
calculation of the Formula Rates described above shall be based on the actual
number of days in such Interest Accrual Period.
If the Calculation Agent shall fail or refuse to determine the
Formula Rate on the Series A-3 Notes on any Interest Determination Date, the
Formula Rate on the Series A-3 Notes shall be determined by a securities dealer
appointed by the Issuer and capable, in the reasonable judgment of the Issuer,
of making such a determination in accordance with the provisions of the
Indenture and written notice of such determination shall be given by such
securities dealer to the Indenture Trustee.
SECTION 2.03.2 DETERMINATION OF THE SERIES INTEREST RATE ON
THE AUCTION RATE NOTES. Until an Auction Period Adjustment or Auction Period
Conversion and subject to the Net Loan Rate, the Auction Rate Notes shall bear
interest at a Series Interest Rate based on a 28-day Auction Period, as
determined pursuant to Section 2.03.2 hereof and the subsections thereunder.
For the Auction Rate Notes during each Interest Accrual
Period, interest at the applicable Series Interest Rate shall accrue daily and
shall be computed for the actual number of days elapsed on the basis of a year
consisting of 360 days.
The Series Interest Rate to be borne by each Series of Auction
Rate Notes after
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the initial Interest Accrual Period shall be determined by the Auction Agent,
which Series Interest Rate shall be the Formula Rate, as hereinafter described
and subject to the limitation of the Net Loan Rate, as hereinafter described.
Each Auction Period shall commence on and include the first day of such Interest
Accrual Period and end on and include the immediately succeeding Interest
Determination Date. The Series Interest Rate on each Series of Auction Rate
Notes for each Auction Period shall be the lesser of the (i) Net Loan Rate in
effect for such Auction Period and (ii) the Formula Rate in effect for such
Auction Period; provided that if, on any Interest Determination Date, an Auction
is not held for any reason, then the Series Interest Rate on the Auction Rate
Notes for the next succeeding Auction Period shall be the Net Loan Rate.
Notwithstanding the foregoing:
(A) if the ownership of Auction Rate Notes
is no longer maintained in Book-entry Form, the Auction Rate on such
Auction Rate Notes for any Interest Accrual Period commencing after the delivery
of certificates representing such series pursuant to Section 2.3 of the Base
Indenture 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 Accrual Period; or
(B) if a Payment Default shall have
occurred, the Auction Rate on the Auction Rate Notes for the Interest Accrual
Period commencing on or immediately after such Payment Default, and for each
Interest Accrual Period thereafter, to and including the Interest Accrual
Period, if any, during which, or commencing less than two Business Days after,
such Payment Default is cured in accordance with this Indenture, shall be the
Non-Payment Rate on the first day of each such Interest Accrual Period; or
(C) the Auction Rate for an Auction Period
that commences on an Auction Period Conversion Date will be equal to the
lesser of (i) the interest rate necessary to enable the Auction Agent to sell
all of such Auction Rate Notes at par plus accrued interest to the Auction
Period Conversion Date or (ii) the Maximum Auction Rate as of the Auction Period
Conversion Date, subject to the Net Loan Rate.
In accordance with Section 2.03.2.1(c)(ii) hereof, the Auction
Agent shall promptly give written notice to the Indenture Trustee and the Issuer
of each Series Interest Rate (unless the Series Interest Rate is the Non-Payment
Rate in which case the Indenture Trustee will determine the Non-Payment Rate and
give written notice thereof to the Issuer) and either the Auction Rate or the
Net Loan Rate, as the case may be, when such rate is not the Series Interest
Rate, applicable to the Auction Rate Notes. The Indenture Trustee shall notify
the Holders of Auction Rate Notes of the Series Interest Rate applicable to the
Auction Rate Notes for each Auction Period on the second Business Day of such
Auction Period.
In the event that there are fewer than three (3) Business Days
in any week during which the Auction Period for the Auction Rate Notes would
otherwise be scheduled to expire, the expiration date and the Auction Period
Distribution Date for such Auction Period then in
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effect, and the Interest Determination Date and commencement date for the
immediately following Auction Period for the Auction Rate Notes, may be adjusted
to fall on such dates as the Calculation Agent, with the consent of the Issuer,
may determine to be appropriate under such circumstances. The Calculation Agent
will promptly notify the Indenture Trustee and the Auction Agent in writing of
any such determination. The Indenture Trustee, upon receipt of such notice, will
immediately give written notification of such determination to the Holders of
the Auction Rate Notes.
Notwithstanding any other provision of the Auction Rate Notes
or this Indenture and except for interest payable at the Non-Payment Rate in
connection with the occurrence of a Payment Default, interest payable on the
Auction Rate Notes for an Auction Period shall never exceed for such Auction
Period the amount of interest payable at the Net Loan Rate in effect for such
Auction Period.
In the event that the Auction Agent no longer determines, or
fails to determine, when required, the Series Interest Rate with respect to each
series of Auction Rate Notes, or, if for any reason such manner of determination
shall be held to be invalid or unenforceable, the Series Interest Rate for the
next succeeding Interest Accrual Period, which period shall be an Auction
Period, for each Series of Auction Rate Notes shall be the Net Loan Rate as
determined by the Administrator for such next succeeding Auction Period, and if
the Administrator shall fail or refuse to determine said Net Loan Rate, the Net
Loan Rate shall be determined by a securities dealer appointed by the Issuer and
capable, in the reasonable judgment of the Issuer, of making such a
determination in accordance with the provisions hereof, and written notice of
such determination shall be given by such securities dealer to the Indenture
Trustee.
SECTION 2.03.2.1 AUCTION PROCEDURES.
By purchasing Auction Rate Notes, whether in an Auction or
otherwise, each purchaser of the Auction Rate 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 Auction Rate Notes maintained at all times in Book-Entry Form for the
account of its Depository Participant, which in turn will maintain records of
such beneficial ownership and (iii) to authorize such Depository 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 Auction Rate Notes is
maintained in Book-Entry Form by the Depository, an Existing Holder may sell,
transfer or otherwise dispose of Auction Rate Notes only pursuant to a Bid or
Sell Order placed in an Auction or otherwise sell, transfer or dispose of
Auction Rate 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 Depository Participant advises the Auction Agent of such
transfer. Prior to a Period Adjustment Date and except with respect to the
Interest Determination Date immediately preceding an Auction Period Conversion
Date, Auctions shall be conducted on each Interest Determination Date, if there
is an Auction Agent on such Interest Determination Date, in the
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following manner:
(a) (i) Prior to the Submission Deadline on each
Interest Determination Date;
(A) each Existing Holder of Auction Rate
Notes may submit to a Broker-Dealer by telephone or otherwise any
information as to:
(1) the principal amount of
Outstanding Auction Rate Notes, if any, held by such Existing Holder which such
Existing Holder desires to continue to hold without regard to the Series
Interest Rate for the next succeeding Auction Period;
(2) the principal amount of
Outstanding Auction Rate Notes, if any, which such Existing Holder offers to
sell if the Series Interest 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 Auction Rate Notes, if any, held by such Existing Holder which such
Existing Holder offers to sell without regard to the Series Interest Rate for
the next succeeding Auction Period;
and
(B) one or more Broker-Dealers may contact
Potential Holders to determine the principal amount of Auction Rate Notes
which each Potential Holder offers to purchase, if the Series Interest 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 hereinafter referred to as an
"Order," and each Existing Holder and each Potential Holder placing an Order is
hereinafter referred to as a "Bidder"; an Order described in clause (A)(1) is
hereinafter referred to as a "Hold Order"; an Order described in clauses (A)(2)
and (B) is hereinafter referred to as a "Bid"; and an Order described in clause
(A)(3) is hereinafter referred to as a "Sell Order."
(ii) (A) Subject to the provisions of Section
2.03.2.1(b) hereof, a Bid by an Existing Holder shall constitute an irrevocable
offer to sell:
(1) the principal amount of
Outstanding Auction Rate Notes specified in such Bid if the Series Interest Rate
determined as provided in this Section 2.03.2.1 shall be less than the rate
specified therein; or
(2) such principal amount or a
lesser principal amount of Outstanding Auction Rate Notes to be determined as
set forth in Section 2.03.2.1(d)(i)(D), if the Series Interest Rate determined
as provided in this Section 2.03.2.1 shall be equal to the rate
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specified therein; or
(3) such principal amount or a
lesser principal amount of Outstanding Auction Rate Notes to be determined as
set forth in Section 2.03.2.1(d)(ii)(C) if the rate specified therein shall be
higher than the Series Interest Rate and Sufficient Clearing Bids have not been
made.
(B) Subject to the provisions of Section
2.03.2.1(b) hereof, a Sell Order by an Existing Holder shall constitute an
irrevocable offer to sell:
(1) the principal amount of
Outstanding Auction Rate Notes specified in such Sell Order; or
(2) such principal amount or a
lesser principal amount of Outstanding Auction Rate Notes set forth in
Section 2.03.2.1(d)(i)(C), if Sufficient Clearing Bids have not been made.
(C) Subject to the provisions of Section
2.03.2.1(b) hereof, a Bid by a Potential Holder shall constitute an
irrevocable offer to purchase:
(1) the principal amount of
Outstanding Auction Rate Notes specified in such Bid if the Series Interest Rate
determined as provided in this Section 2.03.2.1 shall be higher than the rate
specified in such Bid; or
(2) such principal amount or a
lesser principal amount of Outstanding Auction Rate Notes set forth in Section
2.03.2.1(d)(i)(E), if the Series Interest Rate determined as provided in this
Section 2.03.2.1 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 Interest Determination
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 Auction Rate
Notes that are the subject of such Order;
(C) to the extent that such Bidder is an Existing
Holder:
(1) the principal amount of Auction
Rate Notes, if any, subject to any Hold Order placed by such Existing Holder;
(2) the principal amount of Auction
Rate Notes, if any, subject to any Bid placed by such Existing Holder and the
rate specified in such Bid; and
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(3) the principal amount of Auction Rate 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 one- thousandth (.001) of 1%.
(iii) If an Order or Orders covering all Outstanding Auction
Rate Notes held 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 Auction Rate Notes held by such Existing Holder and not
subject to an Order submitted to the Auction Agent.
(iv) Neither the Issuer, the Indenture 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 Auction Rate Notes held 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 Auction Rate
Notes held by such Existing Holder, and if the aggregate principal amount of
Auction Rate Notes subject to such Hold Orders exceeds the aggregate principal
amount of Auction Rate Notes held by such Existing Holder, the aggregate
principal amount of Auction Rate Notes subject to each such Hold Order shall be
reduced pro rata so that the aggregate principal amount of Auction Rate Notes
subject to such Hold Order equals the aggregate principal amount of Outstanding
Auction Rate Notes held 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
Auction Rate Notes held by such Existing Holder over the aggregate principal
amount of Auction Rate 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 the aggregate principal amount of outstanding Auction
Rate Notes subject to such Bids is greater than such excess, such
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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 Auction Rate 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
Auction Rate Notes held by such Existing Holder over the aggregate principal
amount of Auction Rate 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 Auction Rate 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 Auction Rate 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 Auction Rate 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
Auction Rate Notes not equal to an Authorized Denomination shall be rejected.
(ix) Any Bid specifying a rate higher than the Maximum Auction
Rate shall (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 Interest Determination
Date shall be irrevocable.
(c) (i) Not earlier than the Submission Deadline on
each Interest Determination 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 hereinafter
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 Auction Rate Notes over the sum of the aggregate
principal amount of Outstanding Auction Rate Notes subject to Submitted Hold
Orders (such excess being hereinafter referred to as the "Available Auction Rate
Notes"), and
(B) from the Submitted Orders
whether:
(1) the aggregate principal
amount of Outstanding Auction Rate 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 Auction Rate 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 Auction Rate Notes subject to submitted Sell Orders;
(in the event such excess or such equality exists, other than
because all of the Outstanding Auction Rate Notes are subject to Submitted Hold
Orders, such Submitted Bids described in subclause (1) above shall be referred
to collectively as "Sufficient Clearing Bids"); and
(C) if Sufficient Clearing Bids exist, the Bid
Auction Rate (the "Bid Auction Rate") shall be the lowest rate specified in
such Submitted Bids such that if:
(1) (aa) each Submitted Bid from
Existing Holders specifying such lowest rate and (bb) all other Submitted Bids
from Existing Holders specifying lower rates were rejected, thus entitling such
Existing Holders to continue to hold the principal amount of Auction Rate Notes
subject to such Submitted Bids; and
(2) (aa) each such Submitted Bid
from Potential Holders specifying such lowest rate and (bb) 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 hold an aggregate principal amount of Outstanding Auction Rate Notes
which, when added to the aggregate principal amount of Outstanding Auction Rate
Notes to be purchased by such Potential Holders described in subclause (2)
above, would equal not less than the Available Auction Rate Notes.
(ii) Promptly after the Auction Agent has made the
determinations pursuant to Section 2.03.2.1(c)(i) hereof, the Auction Agent
shall advise the Indenture Trustee and the Broker-Dealers of the Net Loan Rate,
the Maximum Auction Rate and the All Hold Rate and the components thereof on the
Interest Determination Date and, based on such determinations, the
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Auction Rate for the next succeeding Interest Accrual Period as follows:
(A) if Sufficient Clearing Bids exist, that the
Auction Rate for the next succeeding Interest Accrual Period shall be equal
to the Bid Auction Rate so determined;
(B) if Sufficient Clearing Bids do not exist (other
than because all of the Outstanding Auction Rate Notes are subject to
Submitted Hold Orders), that the Auction Rate for the next succeeding Interest
Accrual Period shall be equal to the Maximum Auction Rate; or
(C) if all Outstanding Auction Rate Notes are subject
to Submitted Hold Orders, that the Auction Rate for the next succeeding
Interest Accrual 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 Indenture Trustee
of the Series Interest Rate, which rate shall be the lesser of (a) the Formula
Rate and (b) the Net Loan Rate. In no event shall the Series Interest Rate
exceed 17%.
(d) Existing Holders shall continue to hold the
principal amount of Auction Rate Notes that are subject to Submitted Hold
Orders. If the Net Loan Rate is equal to or greater than the Bid Auction Rate
and if Sufficient Clearing 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 Net Loan Rate is greater than the Auction Rate, the
Series Interest Rate for the Outstanding Auction Rate Notes will be the Auction
Rate. If the Net Loan Rate is less than the Auction Rate, the Series Interest
Rate for the Outstanding Auction Rate Notes will be the Net Loan Rate. If the
Auction Rate and the Net Loan Rate for the Auction Rate Notes are both greater
than 17%, the Series Interest Rate shall be equal to 17%. If the Auction Agent
has not received Sufficient Clearing Bids (other than because all of the
Outstanding Auction Rate Notes are subject to Submitted Hold Orders), the Series
Interest Rate will be the lesser of the Auction Rate (which shall be the Maximum
Auction Rate) and the Net Loan Rate, but in no event greater than 17%. In any of
the cases described above, 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 Clearing Bids have been made and the Net
Loan Rate is equal to or greater than the Bid Auction Rate (in which case the
Series Interest Rate shall be the Bid Auction Rate), all Submitted Sell Orders
shall be accepted and, subject to the provisions of paragraphs (iv) and (v) of
this Section 2.03.2.1(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 Series Interest Rate shall be accepted, thus
requiring each such Existing Holder to sell the aggregate principal amount of
Auction Rate Notes subject to such Submitted Bids;
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(B) Existing Holders' Submitted Bids specifying any
rate that is lower than the Series Interest Rate shall be rejected, thus
entitling each such Existing Holder to continue to hold the aggregate principal
amount of Auction Rate Notes subject to such Submitted Bids;
(C) Potential Holders' Submitted Bids specifying any
rate that is lower than the Series Interest Rate shall be accepted;
(D) Each Existing Holders' Submitted Bid specifying a
rate that is equal to the Series Interest Rate shall be rejected, thus
entitling such Existing Holder to continue to hold the aggregate principal
amount of Auction Rate Notes subject to such Submitted Bid, unless the aggregate
principal amount of Outstanding Auction Rate Notes subject to all such Submitted
Bids shall be greater than the principal amount of Auction Rate Notes (the
"remaining principal amount") equal to the excess of the Available Auction Rate
Notes over the aggregate principal amount of Auction Rate Notes subject to
Submitted Bids described in clauses (B) and (C) of this Section 2.03.2.1(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 hold the
principal amount of Auction Rate Notes subject to such Submitted Bid, but only
in an amount equal to the aggregate principal amount of Auction Rate Notes
obtained by multiplying the remaining principal amount by a fraction, the
numerator of which shall be the principal amount of Outstanding Auction Rate
Notes held by such Existing Holder subject to such Submitted Bid and the
denominator of which shall be the sum of the principal amount of Outstanding
Auction Rate Notes subject to such Submitted Bids made by all such Existing
Holders that specified a rate equal to the Series Interest Rate; and
(E) Each Potential Holder's Submitted Bid specifying
a rate that is equal to the Series Interest Rate shall be accepted, but
only in an amount equal to the principal amount of Auction Rate Notes obtained
by multiplying the excess of the aggregate principal amount of Available Auction
Rate Notes over the aggregate principal amount of Auction Rate Notes subject to
Submitted Bids described in clauses (B), (C) and (D) of this Section
2.03.2.1(d)(i) by a fraction the numerator of which shall be the aggregate
principal amount of Outstanding Auction Rate Notes subject to such Submitted Bid
and the denominator of which shall be the sum of the principal amount of
Outstanding Auction Rate Notes subject to Submitted Bids made by all such
Potential Holders that specified a rate equal to the Series Interest Rate; and
(F) Each Potential Noteholder's Bid specifying a rate
that is higher than the Series Interest Rate will be rejected.
(ii) If Sufficient Clearing Bids have not been made (other
than because all of the Outstanding Auction Rate Notes are subject to submitted
Hold Orders), or if the Net Loan Rate is less than the Bid Auction Rate (in
which case the Series Interest Rate shall equal the Net Loan Rate), or if the
Series Interest Rate would be greater than 17%, subject to the provisions of
Section 2.03.2.1(d)(iv), Submitted Orders shall be accepted or rejected as
follows in the following order of priority and all other Submitted Bids shall be
rejected:
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(A) Existing Holders' Submitted Bids specifying any
rate that is equal to or lower than the Series Interest Rate shall be
rejected, thus entitling such Existing Holders to continue to hold the aggregate
principal amount of Auction Rate Notes subject to such Submitted Bids;
(B) Potential Holders' Submitted Bids specifying
(1) any rate that is equal to or lower than the Series Interest Rate shall be
accepted and (2) any rate that is higher than the Series Interest Rate shall be
rejected; and
(C) each Existing Holder's Submitted Bid specifying
any rate that is higher than the Series Interest 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 Auction Rate 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 Auction Rate Notes obtained by multiplying the aggregate principal
amount of Auction Rate Notes subject to Submitted Bids described in clause (B)
of this Section 2.03.2.1(d)(ii) by a fraction the numerator of which shall be
the aggregate principal amount of Outstanding Auction Rate Notes held 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
Auction Rate Notes subject to all such Submitted Bids and Submitted Sell Orders.
(iii) If all Outstanding Auction Rate 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 2.03.2.1(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 Auction Rate 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 Auction
Rate Notes to be purchased or sold by any Existing Holder or Potential Holder so
that the principal amount of Auction Rate 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
(ii) of this Section 2.03.2.1(d), any Potential Holder would be entitled or
required to purchase less than an Authorized Denomination of Auction Rate Notes,
the Auction Agent shall, in such manner as in its sole discretion it shall
determine, allocate Auction Rate Notes for purchase among Potential Holders so
that only Auction Rate 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 Auction Rate Notes.
(e) Based on the result of each Auction, the Auction Agent
shall determine the aggregate principal amount of Auction Rate Notes to be
purchased and the aggregate principal amount of Auction Rate Notes to be sold by
Potential Holders and Existing Holders on whose
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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
Auction Rate Notes to be sold differs from such aggregate principal amount of
Auction Rate 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, Auction Rate
Notes.
(f) The Issuer and any affiliate may not submit an Order in
any Auction.
(g) Any calculation by the Auction Agent (or Administrator or
the Indenture Trustee, if applicable) of the Series Interest Rate, the
Applicable LIBOR Rate, the Maximum Auction Rate, the All Hold Rate, the Net Loan
Rate and the Non-Payment Rate shall, in the absence of manifest error, be
binding on all other parties.
SECTION 2.03.2.2 APPLICATION OF INTEREST PAYMENTS FOR THE
AUCTION RATE NOTES.
(a) The Indenture Trustee shall determine not later than 12:00
Noon, eastern time, on the Business Day next succeeding an Auction Period
Distribution Date, whether a Payment Default has occurred. If a Payment Default
has occurred, the Indenture Trustee shall, not later than 12:15 p.m., eastern
time, on such Business Day, send a notice thereof in substantially the form of
Exhibit F attached hereto to the Auction Agent by telecopy or similar means and,
if such Payment Default is cured, the Indenture Trustee shall immediately send a
notice in substantially the form of Exhibit G attached hereto to the Auction
Agent by telecopy or similar means.
(b) Not later than 12:00 Noon, eastern time, on each Auction
Period Distribution Date the Indenture Trustee shall pay to the Auction Agent,
in immediately available funds out of amounts in the Expense Account, an amount
equal to the Auction Agent Fee and the Broker-Dealer Fee as calculated in the
Auction Agent Agreement. The Indenture Trustee shall, from time to time at the
request of the Auction Agent and with the approval of an Authorized Officer of
the Issuer, reimburse the Auction Agent for its reasonable expenses as provided
in the Auction Agent Agreement, such expenses to be paid out of amounts in the
Expense Account.
SECTION 2.03.2.3 CALCULATION OF MAXIMUM AUCTION RATE, ALL HOLD
RATE, NET LOAN RATE, APPLICABLE LIBOR RATE AND NON-PAYMENT RATE. The Auction
Agent shall calculate the Maximum Auction Rate, the All Hold Rate and the
Applicable LIBOR Rate on each Interest Determination Date and shall notify the
Indenture Trustee and the Broker-Dealers of the Maximum Auction Rate, the All
Hold Rate and the Applicable LIBOR Rate as provided in the Auction Agent
Agreement. The Administrator shall calculate the Net Loan Rate and no later than
the Business Day immediately preceding each Interest Determination Date shall
report to the Auction Agent in writing, the Net Loan Rate. Upon receipt of
notice from the Indenture Trustee of a failed Auction Period Conversion as
described in Section 2.03.2.9 hereof, the Auction Agent shall calculate the
Maximum Auction Rate and the Administrator will report to the Auction Agent in
writing the Net Loan Rate as of such failed Auction Period Conversion and give
notice thereof as provided and to the parties specified in Section 2.3(b)(iv) of
the Auction Agent Agreement. If the ownership of a Series of Auction Rate Notes
is no longer maintained in
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Book-Entry form by the Depository, the Indenture Trustee shall calculate the
Maximum Auction Rate and Administrator shall report to the Indenture Trustee in
writing the Net Loan Rate on the Business Day immediately preceding the
commencement of each Interest Accrual Period after the delivery of certificates
representing such Series of Auction Rate Notes pursuant to this Indenture. If a
Payment Default shall have occurred, the Indenture Trustee shall calculate the
Non-Payment Rate on the Interest Determination Date for (i) each Interest
Accrual Period commencing on or after the occurrence and during the continuance
of such Payment Default and (ii) any Interest Accrual Period commencing less
than two Business Days after the cure of any Payment Default. The Auction Agent
shall determine the Applicable LIBOR Rate for each Interest Accrual Period other
than the Initial Period; provided, that if the ownership of the Auction Rate is
no longer maintained in Book-Entry form, or if a Payment Default has occurred,
then the Indenture Trustee shall determine the Applicable LIBOR Rate for each
such Interest Accrual Period. The determination by the Indenture Trustee or the
Auction Agent, as the case may be, of the Applicable LIBOR Rate shall (in the
absence of manifest error) be final and binding upon all parties. If determined
by the Auction Agent, the Auction Agent shall promptly advise the Indenture
Trustee of the Applicable LIBOR Rate.
SECTION 2.03.2.4 NOTIFICATION OF RATES, AMOUNTS AND PAYMENT
DATES.
(a) By 10:00 a.m., eastern time, on the Business Day following
each Record Date, the Indenture Trustee shall determine the aggregate amounts of
interest distributable on the next succeeding Auction Period Distribution Date
to the beneficial owners of Auction Rate Notes.
(b) Promptly after the Closing Date and after the beginning of
each subsequent Interest Accrual Period, and in any event at least four (4) days
prior to any Auction Period Distribution Date, as the case may be, the Indenture
Trustee shall:
(i) confirm with the Auction Agent, so long as
no Payment Default has occurred and is continuing and the ownership of the
Auction Rate Notes is maintained in Book-Entry form by the Depository, (1) the
date of such next Auction Period Distribution Date and (2) the amount payable to
the Auction Agent on the Interest Determination Date pursuant to Section
2.03.2.2(b) hereof;
(ii) pursuant to Section 2.03.3 hereof, advise the
Holders of any Carryover Interest accruing on any series of Series Auction
Rate Notes; and
(iii) advise the Depository, so long as the ownership
of the Auction Rate Notes is maintained in Book-entry form by the
Depository, upon request, of the Series Interest Rate payable on the Auction
Rate Notes and the interest amount.
If any day scheduled to be an Auction Period Distribution Date
shall be changed after the Indenture Trustee shall have given the notice or
confirmation referred to in clause (i) of the preceding sentence, the Indenture
Trustee shall, not later than 9:15 a.m., eastern time, on the Business Day next
preceding the earlier of the new Auction Period Distribution Date or the old
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Auction Period Distribution Date, by such means as the Indenture Trustee deems
practicable, give notice of such change to the Auction Agent, so long as no
Payment Default has occurred and is continuing and the ownership of the Auction
Rate Notes is maintained in Book-Entry Form by the Depository.
SECTION 2.03.2.5 AUCTION AGENT.
(a) Bankers Trust Company has been appointed as Auction Agent
to serve as agent for the Issuer in connection with Auctions with respect to the
Auction Rate Notes. The Indenture Trustee has entered 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 is approved by the
Indenture Trustee and the Calculation Agent 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 Indenture by giving at least 90 days' notice to the
Indenture Trustee, the Issuer and the Calculation Agent. The Auction Agent may
be removed at any time by the Indenture Trustee upon the written direction of an
Authorized Officer of the Issuer or the Holders of 66-2/3% of the aggregate
principal amount of the Auction Rate Notes then Outstanding, and if by the
Holders, by an instrument signed by such Holders or their attorneys and filed
with the Auction Agent, the Issuer, the Indenture Trustee and the Calculation
Agent upon at least 90 days' notice. Neither resignation nor removal of the
Auction Agent pursuant to the preceding two sentences shall be effective until
and unless a Substitute Auction Agent has been appointed and has accepted such
appointment. If required by the Issuer or by the Calculation Agent, with the
Issuer's consent, 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 fifteen (15) days
after notifying the Indenture Trustee, the Issuer and the Calculation Agent 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 Indenture Trustee at
the direction of an Authorized Officer of the Issuer (after receipt of a
certificate from the Calculation Agent confirming that any proposed Substitute
Auction Agent meets the requirements described in the immediately preceding
paragraph), shall use its best efforts to appoint a Substitute Auction Agent.
(c) The Auction Agent shall act as agent for the Issuer in
connection with Auctions. In the absence of bad faith, negligent failure to act
or negligence on its part, the
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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 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 Indenture Trustee in accordance
with the Auction Agent Agreement.
SECTION 2.03.2.6. BROKER-DEALERS.
(a) The Auction Agent has entered into a Broker-Dealer
Agreement with NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, as the initial
Broker-Dealer. An Authorized Officer of the Issuer 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 Indenture Trustee and the Auction Agent;
provided, however, that while NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC is serving
as a Broker-Dealer, NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC shall have the right
to consent to the approval of any additional Broker-Dealers, 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 Issuer, but there shall, at all times,
be at least one Broker-Dealer appointed and acting as such.
SECTION 2.03.2.7 CHANGES IN AUCTION PERIOD OR PERIODS.
(a) While any of the Auction Rate Notes are Outstanding, the
Issuer may, from time to time, convert on an Auction Period Distribution Date
the length of one or more Auction Periods pursuant to 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 interest rate
borne by the Auction Rate Notes; provided, however that the Issuer shall only
initiate a change in the length in the Auction Period to an Auction Period of
other than seven (7) or twenty-eight (28) days upon written evidence based on a
Cash Flow Statement from each of the Rating Agencies then rating any Outstanding
Auction Rate Notes that such a change will not adversely affect any rating of
such Rating Agencies on any Outstanding Auction Rate Notes; provided, further,
however, that each Rating Agency may waive the requirement for delivery of a
Cash Flow Statement. The Issuer shall not initiate an Auction Period Adjustment
unless it shall have received the written consent of the Calculation Agent,
which consent shall not be unreasonably withheld, not less than fifteen (15)
days nor more than twenty (20) days prior to the Auction Period Adjustment. The
Issuer shall initiate the Auction Period Adjustment by giving written notice to
the Indenture Trustee, the Auction Agent, the Calculation Agent, the Depository
and each Rating Agency then rating the Auction Rate Notes subject to such
Auction Period Adjustment in substantially the form of, or containing
substantially the information contained in, Exhibit H to this Indenture at least
ten (10) days prior to the Interest Determination Date for such
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Auction Period.
(b) The length of any such adjusted Auction Period pursuant to
an Auction Period Adjustment shall be subject to the limitations thereon set
forth in the definition of an Auction Period Adjustment in this Indenture.
(c) An Auction Period Adjustment shall not be allowed unless
Sufficient Clearing Bids existed or all of the Outstanding Auction Rate Notes
were subject to Submitted Hold Orders at both the Auction, if any, before the
date on which the notice of the proposed change was given as provided in this
Section 2.03.2.7 and the Auction immediately preceding the proposed change.
(d) An Auction Period Adjustment shall take effect on an
Auction Period Distribution Date only if (A) the Indenture Trustee and the
Auction Agent receive, by 11:00 a.m., eastern time, on the Business Day before
the Interest Determination Date for the first such Auction Period, a certificate
from the Issuer in substantially the form attached as, or containing
substantially the same information contained in, Exhibit I to this Indenture,
authorizing the Auction Period Adjustment specified in such certificate along
with a copy of the certificate of the Calculation Agent described above in
subparagraph (a) and (B) Sufficient Clearing Bids exist or all of the
Outstanding Auction Rate Notes are subject to Submitted Hold Orders on the
Interest Determination Date for such first Auction Period. If the condition
referred to in (A) above is not met, the Auction Rate for the Auction Period
commencing on the Effective Date (as defined in Exhibit I) 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 in (B) above is not met,
the Series Interest Rate for the next Auction Period shall be the lesser of the
Auction Rate (which shall be the Maximum Auction Rate) and the Net Loan Rate,
but in no event greater than 17%, and the Auction Period shall be the Auction
Period determined without reference to the proposed change.
(e) In connection with any Auction Period Adjustment, the
Auction Agent will provide such further notice as is specified in Section 2.5 of
the Auction Agent Agreement.
(f) While any of the Auction Rate Notes are Outstanding, the
Issuer may, from time to time, change the length of one or more Auction Periods
pursuant to an Auction Period Conversion. In such case, the Issuer, the
Indenture Trustee and the Auction Agent shall comply with the provisions of
Section 2.03.2.9 of this Indenture for effecting such an Auction Period
Conversion. If the conditions set forth in Section 2.03.2.9 are not met, the
Series Interest Rate for the Auction Period with respect to which the proposed
Auction Rate Conversion was to have been effective shall be the lesser of the
Auction Rate (which shall be the Maximum Auction Rate) and the Net Loan Rate,
but in no event greater than 17%, and the Auction Period shall be the Auction
Period determined without reference to the proposed change.
SECTION 2.03.2.8 CHANGES IN THE INTEREST DETERMINATION DATE.
The Calculation Agent may specify an earlier Interest Determination Date than
the Interest Determination Date that would otherwise be determined in accordance
with the definition of "Interest Determination
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Date" in Article I of this Terms Supplement 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
Interest Determination Date and the Series Interest Rate borne on the Auction
Rate Notes. The Authorized Officer of the Issuer shall not consent to such
change in the Interest Determination Date unless he or she shall have received a
written request for consent from the Calculation Agent not less than fifteen
(15) days nor more than twenty (20) days prior to the effective date of such
change. The Calculation Agent shall provide notice of its determination to
specify an earlier Interest Determination Date for one or more Auction Periods
by means of a written notice delivered at least ten (10) days prior to the
proposed changed Interest Determination Date to the Indenture Trustee, the
Auction Agent, the Issuer and the Depository. Such notice shall be substantially
in the form of, or contain substantially the information contained in, Exhibit J
to this Indenture.
In connection with any change described in this Section
2.03.2.8, the Auction Agent will provide such further notice as is specified in
Section 2.5 of the Auction Agent Agreement.
SECTION 2.03.2.9 AUCTION PERIOD CONVERSIONS. At the option of
the Issuer, the length of an Auction Period for a Series of Auction Rate Notes
is subject to an Auction Period Conversion on an Auction Period Conversion Date.
The length of the new Auction Period, the new Interest Determination Dates, if
any, and the Auction Period Distribution Dates with respect to the new Auction
Period shall be set forth in a Supplemental Indenture executed in connection
with such Auction Period Conversion. No such Auction Period Conversion shall be
effective unless prior to the Auction Period Conversion Date the Issuer shall
have furnished to the Indenture Trustee written evidence from each of the Rating
Agencies then rating any Outstanding Auction Rate Notes that execution of the
Supplemental Indenture and the related Auction Period Conversion will not
adversely affect the ratings on any series of Outstanding Auction Rate Notes.
With respect to an Auction Period Conversion, the Issuer shall
give written notice to the Indenture Trustee, the Auction Agent, the Calculation
Agent and the Remarketing Agent of any such proposed Auction Period Conversion
not less than twenty-eight (28) days prior to the Auction Period Conversion Date
in substantially the form of, or containing substantially the information
contained in, Exhibit K to this Indenture.
Upon receipt of such written notice from the Issuer, the
Indenture Trustee shall give written notice to the Holders of such Series of
Auction Rate Notes in the manner set forth in Section 3.01 of this Terms
Supplement not less than twenty-five (25) days prior to the Auction Period
Conversion Date. Such notice shall state (i) that (a) the length of the Auction
Period will be converted (1) from an Auction Period between seven (7) and
ninety-one (91) days, inclusive, to an Auction Period between ninety-two (92)
days and the Final Legal Maturity of such Series of Auction Rate Notes,
inclusive, (2) from an Auction Period between ninety-two (92) days and the Final
Legal Maturity of such Series of Auction Rate Notes, inclusive, to an Auction
Period between seven (7) and ninety-one (91) days, inclusive, or (3) from an
Auction Period between
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ninety-two (92) days and the Final Legal Maturity of such Series of Auction Rate
Notes, inclusive, to an Auction Period between ninety-two (92) days and the
Final Legal Maturity of such Series of Auction Rate Notes, inclusive, if such
latter Auction Period is at least three (3) months shorter or at least three (3)
months longer than the Auction Period established for such series at its initial
issuance or pursuant to an Auction Period Conversion, as applicable; (ii) the
Auction Period Conversion Date, (iii) that all Holders of such Series of Auction
Rate Notes are required to tender their Auction Rate Notes to the Indenture
Trustee or its agent no later than the Auction Period Conversion Date for
purchase at a price equal to 100% of the principal amount thereof plus accrued
interest and any unpaid Carryover Interest (and interest accrued thereon) to the
Auction Period Conversion Date; provided, however, that all such Auction Rate
Notes that are not tendered to the Indenture Trustee by such date shall be
deemed tendered to the Indenture Trustee as of the Auction Period Conversion
Date, subject, however, to remarketing or purchase by the Remarketing Agent for
settlement on the Auction Period Conversion Date and receipt by the Indenture
Trustee of the purchase price equal to 100% of the principal amount of Auction
Rate Notes from the purchasers thereof or the Remarketing Agent; (iv) that in
the event that on the Auction Period Conversion Date, the Remarketing Agent has
been unable to remarket all Auction Rate Notes for settlement on the Auction
Period Conversion Date and has elected not to purchase for its own account such
unremarketed Auction Rate Notes, or on the Auction Period Conversion Date the
Indenture Trustee has not received the purchase price equal to 100% of the
principal amount of the Auction Rate Notes from the purchasers thereof or the
Remarketing Agent, the proposed Auction Period Conversion of the Auction Rate
Notes shall be canceled and such Auction Rate Notes shall remain in the Auction
Period applicable to such Auction Rate Notes prior to the proposed Auction
Period Conversion; (v) that the proposed Auction Period Conversion is
conditioned upon there being sufficient moneys available in the Note Payment
Account, after making provision for the payment of accrued interest on such
Auction Rate Notes and interest on other Auction Rate Notes due and payable on
such Auction Period Conversion Date to pay on the Auction Period Conversion Date
all Carryover Interest (and accrued interest thereon), if any, on such Auction
Rate Notes through the Auction Period Conversion Date; and (vi) that a Holder
has no right to elect to retain any such Auction Rate that have been remarketed,
or will be purchased, by the Remarketing Agent, on the Auction Period
Conversion. The Indenture Trustee shall mail a copy of such notice to each of
the Rating Agencies.
Notwithstanding anything to the contrary in this Section
2.03.2.9 or elsewhere in this Indenture, if all of the Auction Rate Notes
subject to Auction Period Conversion are not remarketed or purchased by the
Remarketing Agent for settlement on the Auction Period Conversion Date, or if
the Indenture Trustee does not, by 11:00 a.m., eastern time, on the Auction
Period Conversion Date receive from the purchaser or the Remarketing Agent the
purchase price equal to 100% of the principal amount thereof or if there are not
sufficient moneys available in the Note Payment Account, after making provision
for the payment of accrued interest on such Auction Rate Notes due and payable
on Auction Period Conversion Date to pay on the Auction Period Conversion Date
all Carryover Interest (and accrued interest thereon), if any, on such Auction
Rate Notes through the Auction Period Conversion Date, none of such Auction Rate
Notes shall be subject to such Auction Period Conversion, but all such Auction
Rate Notes shall bear interest at the lesser of the Net Loan Rate or the Auction
Rate (which shall be the Maximum Auction Rate), but in no event greater than
17%, for the Interest
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Accrual Period commencing on such date and shall continue to be held by and
registered to the Holders that held such Auction Rate Notes immediately prior to
the failed Auction Period Conversion. Upon the occurrence of a failed Auction
Period Conversion, the Indenture Trustee shall give written notice to the
Issuer, the Auction Agent, the Calculation Agent, the Remarketing Agent and each
Rating Agency then rating the Auction Rate Notes, as appropriate, confirming
such failure.
SECTION 2.03.2.10 MANDATORY TENDER AND PURCHASE OF SERIES
AUCTION RATE NOTES IN CONNECTION WITH AUCTION PERIOD CONVERSION.
In the event that an Auction Period Conversion with respect to
Auction Rate Notes is to take place, such Auction Rate Notes shall be tendered
to the Authenticating Agent no later than the related Auction Period Conversion
Date for purchase at a purchase price equal to 100% of the principal amount
thereof plus accrued interest and any unpaid Carryover Interest (and any
interest accrued thereon) to the Auction Period Conversion Date; provided,
however, that any Auction Rate Note not tendered to the Authenticating Agent by
such date shall be deemed tendered to the Authenticating Agent. The Indenture
Trustee shall give notice by mail to the Holders of such Auction Rate Notes not
less than twenty-five (25) days prior to the Auction Period Conversion Date, of
the mandatory tender of such Series of Auction Rate Notes, which notice shall be
contained in the notice given in accordance with the provisions of Section
2.03.2.9 hereof.
Pursuant to a Remarketing Agreement, the Remarketing Agent
shall be obligated (i) to use its best efforts to remarket the Auction Rate
Notes subject to an Auction Period Conversion at a purchase price of not less
than 100% of the principal amount thereof, (ii) not later than 3:00 p.m.,
eastern time, on the Business Day before the Auction Period Conversion Date, to
give notice to the Indenture Trustee stating whether all of the Auction Rate
Notes have been remarketed or will be purchased by the Remarketing Agent on the
Auction Period Conversion Date, and (iii) to cause the purchase price of each
Auction Rate Note so remarketed or to be purchased by the Remarketing Agent to
be deposited in the fund to be established under a Remarketing Agreement and
maintained by the Indenture Trustee pursuant to a Remarketing Agreement (the
"Note Purchase Fund") in immediately available funds. Pursuant to a Remarketing
Agreement, all amounts deposited in the Note Purchase Fund as aforesaid shall be
held by the Indenture Trustee uninvested and in cash and in trust for the sole
and exclusive benefit of the Holders of the Auction Rate Notes for the purchase
of which such amounts were deposited in the Note Purchase Fund and shall be
applied by the Indenture Trustee to such purchase by payment to such Holders
without further authorization or direction. Accrued interest and any unpaid
Carryover Interest (and any interest accrued thereon) on the Auction Rate Notes
shall be paid by the Indenture Trustee to such Holders from the Note Payment
Account.
If by 11:00 a.m., eastern time, on the Auction Period
Conversion Date, there is on deposit in the Note Purchase Fund and the Note
Payment Account an aggregate amount sufficient to pay the purchase price of all
Auction Rate Notes subject to Auction Period Conversion equal to 100% of the
principal amount thereof plus accrued interest and any unpaid Carryover Interest
(and any interest accrued thereon) due and payable on the Auction Period
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Conversion Date, all Auction Rate Notes which have not been delivered to the
Indenture Trustee shall be deemed to have been tendered in accordance with the
provisions hereof. In connection with an Auction Period Conversion, if
necessary, replacement note certificates, if any, amending and restating the
tendered or deemed tendered note certificates with respect to changes to the
terms of such tendered or deemed tendered note certificates, shall be
authenticated by the Indenture Trustee and delivered to the purchasers thereof;
provided, however, that in the case of Auction Rate Notes held in a Book-Entry
System, any such replacement Auction Rate Notes shall be authenticated by the
Indenture Trustee and delivered to the Depository or its agent. The Holder of
any undelivered Auction Rate Notes shall not be entitled to any payment
(including any interest to accrue on and subsequent to the Auction Period
Conversion Date) other than the purchase price for such undelivered Auction Rate
Notes, and undelivered Auction Rate Notes shall no longer be entitled to the
benefit of this Indenture, except for the purpose of payment of the purchase
price therefor.
As of such Auction Period Conversion Date, the Auction Rate
Notes subject to Auction Period Conversion shall be registered to the purchasers
thereof, regardless of tender of the predecessor Auction Rate Notes by the
Holders thereof and shall bear interest at the new Auction Rate for the new
Auction Period. The Issuer shall give written notice to the Indenture Trustee,
the Auction Agent, the Calculation Agent and the Depository of any such
successful Auction Period Conversion no later than 5:00 p.m., eastern time, on
the Auction Period Conversion Date in substantially the form of, or containing
substantially the information contained in, Exhibit L to this Indenture.
The Holders of Auction Rate Notes which are subject to
mandatory tender on the Auction Period Conversion Date do not have the right to
elect to retain such Auction Rate Notes. Subject only to receipt by the
Indenture Trustee from the purchaser of the purchase price equal to 100% of the
principal amount of all Auction Rate Notes on the Auction Period Conversion Date
and the payment of accrued interest and any unpaid Carryover Interest (and
accrued interest thereon) as described above, such Auction Rate Notes will be
deemed to be tendered to the Indenture Trustee on such Auction Period Conversion
Date and registered in the names of the purchasers thereof.
If by 11:00 a.m., eastern time, on the Auction Period
Conversion Date there is not on deposit in the Note Purchase Fund and the Note
Payment Account (after taking into account other amounts to be paid from the
Note Payment Account as hereinbefore described) an aggregate amount sufficient
to pay the purchase price of all Auction Rate Notes subject to Auction Period
Conversion all Auction Rate Notes that have been tendered to the Indenture
Trustee shall be returned by the Indenture Trustee to the tendering Holders
thereof, and the Indenture Trustee shall give written notice on the date that
the proposed Auction Period Conversion was to have occurred to each Holder of
Auction Rate Notes, whether such Holder has actually tendered his Auction Rate
Notes or not, that (i) the Auction Period Conversion of such Auction Rate Notes
has been canceled because (A) not all Auction Rate Notes were remarketed or
purchased by the Remarketing Agent or (B) there were not moneys available to pay
accrued interest on such Auction Rate Notes due and payable on the Auction
Period Conversion Date, and any unpaid Carryover Interest (and accrued interest
thereon), if any, on
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such Auction Rate Notes and (ii) such Auction Rate Notes will bear interest at
the lesser of the Net Loan Rate or the Auction Rate (which shall be the Maximum
Auction Rate) as of the failed Auction Period Conversion Date for the Interest
Accrual Period commencing on such date, but in no event greater than 17%,
written notice of which Series Interest Rate will be given by the Indenture
Trustee to each such Holder on the second Business Day of the new Auction
Period.
SECTION 2.03.2.11 REMARKETING AGENT NOTES. Notwithstanding the
fact that the Remarketing Agent is under no obligation to purchase any Auction
Rate Notes in connection with an Auction Period Conversion, in the event that
the Remarketing Agent should elect, in its sole discretion, to purchase Auction
Rate Notes, then the Auction Rate Notes so purchased by the Remarketing Agent
will constitute "Remarketing Agent Notes" until the date, if any, on which such
Auction Rate Notes are sold by the Remarketing Agent. For so long as such
Auction Rate Notes constitute Remarketing Agent Notes, the Remarketing Agent
will be entitled to payment of the Remarketing Agent Recovery Amount, as
hereinafter defined, with respect to the principal amount of Remarketing Agent
Notes. For purposes of this Section 2.03.2.11, "Remarketing Agent Recovery
Amount" shall mean, with respect to any Remarketing Agent Notes, an amount equal
to the Daily Deferred Rate, as hereinafter defined, multiplied by the daily
principal balance of such Remarketing Agent Notes for the actual number of days
such Auction Rate Notes constitute Remarketing Agent Notes. For purposes of this
Section 2.03.2.11, "Daily Deferred Rate" shall mean an amount equal to the
excess, if any, of (x) the rate published as the "Broker Call" in THE WALL
STREET JOURNAL on each day the Remarketing Agent is the owner of such
Remarketing Agent Notes over (y) the new Series Interest Rate in effect for such
Auction Rate Notes from and after the Auction Period Conversion Date. Any
accrued but unpaid Remarketing Agent Recovery Amount is payable from the Note
Payment Account, to the extent funds are available therefor after payment of all
other amounts payable therefrom, on each Auction Period Distribution Date.
In the event that the Remarketing Agent acquires Auction Rate
Notes other than in connection with a mandatory tender in anticipation of an
Auction Period Conversion, such Auction Rate Notes will not constitute
Remarketing Agent Notes prior to Auction Period Conversion. In the event that
the Remarketing Agent holds such Auction Rate Notes and such Auction Rate Notes
become subject to Auction Period Conversion, the Remarketing Agent will tender
them to the Indenture Trustee, and in connection with such Auction Period
Conversion such Auction Rate Notes may become Remarketing Agent Notes in
accordance with the provisions of this Section 2.03.2.11.
SECTION 2.03.3 DETERMINATION OF SERIES INTEREST RATE ON THE
SERIES B-3 NOTES The Series Interest Rate for the Series B-3 Notes shall equal a
fixed rate of 6.25% per annum. Interest on the Series B-3 Notes shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
SECTION 2.03.4 CARRYOVER INTEREST The Calculation Agent and
Auction Agent, as appropriate, shall announce the Formula Rate and the Net Loan
Rate to the Indenture Trustee and the Issuer.
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If, with respect to any Series of Series 1998A Notes for any
Interest Accrual Period, interest at the Formula Rate exceeds interest at the
Net Loan Rate with respect to such Series of Series 1998A Notes for such
Interest Accrual Period, the Series Interest Rate for such Interest Accrual
Period shall be the Net Loan Rate, and the Indenture Trustee, on the
Distribution Date for such Interest Accrual Period, shall pay to the Holders of
such Series of Series 1998A Notes interest at the Net Loan Rate. With respect to
such Series of Series 1998A Notes, the Indenture Trustee shall also calculate
the amount by which interest at the Formula Rate exceeds interest at the Net
Loan Rate for such Interest Accrual Period, and such excess, together with
interest thereon (compounded on each Distribution Date for the related Series
when such interest is not paid on the first Distribution Date for such Series
when such interest was otherwise payable) at the applicable Formula Rate from
the Distribution Date for the related Series on which such excess was calculated
until paid, if at all, shall constitute Carryover Interest. Such Carryover
Interest shall be paid on each Distribution Date for the related Series
subsequent to the Distribution Date on which such excess was calculated to the
extent funds are available therefor in the Note Payment Account of the
Collection Fund after making the other required payments from the Note Payment
Account in accordance with the provisions of Section 5.5.2 of the Base Indenture
and Section 4.02 hereof. Carryover Interest shall continue to be so payable
notwithstanding that the principal amount of the applicable Series of Series
1998A Notes has been reduced to zero until (i) no Notes remain outstanding and
(ii) the balances in the Funds and Accounts have been reduced to zero. For
purpose of the Indenture any reference herein to "principal or "interest" shall
not include within the meaning of such words Carryover Interest.
Carryover Interest shall be separately calculated for each
Series of Series 1998A Notes by the Indenture Trustee in sufficient time for the
Indenture Trustee to give notice to each Holder of such Carryover Interest as
required in this paragraph. On the Distribution Date for an Interest Accrual
Period with respect to which Carryover Interest has been calculated by the
Indenture Trustee, the Indenture Trustee shall, in accordance with Section 7.10
of the Base Indenture, give written notice to each Holder of the Carryover
Interest applicable to such Holder's Note for such Interest Accrual Period,
which written notice may accompany the payment of interest by check made to each
such Holder on such Distribution Date or otherwise shall be mailed on such
Distribution Date by first class mail, postage prepaid, to each such Holder at
such Holder's address as it appears on the books of registry maintained by the
Indenture Trustee pursuant to the Indenture.
Such notice shall state, in addition to such Carryover
Interest, that, Carryover Interest shall continue to be payable notwithstanding
that the principal amount of the applicable Series of Series 1998A Notes has
been reduced to zero until (i) no Notes remain outstanding and (ii) the balances
in the Funds and Accounts have been reduced to zero.
SECTION 2.03.5 ADDITIONAL PROVISIONS REGARDING SERIES INTEREST
RATE. The determination of a Series Interest Rate by the Calculation Agent,
Auction Agent or any other Person pursuant to the provisions of the applicable
Section of this Article II shall be conclusive and binding on the Holders of the
Series of Note or Notes to which such Series Interest Rate applies, and the
Issuer and the Indenture Trustee may rely thereon for all purposes.
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In no event shall the cumulative amount of interest paid or
payable on a Series of Notes (including interest calculated as provided herein,
plus any other amounts that constitute interest on the Notes of such Series
under applicable law which are contracted for, charged, reserved, taken or
received pursuant to the Notes of such Series or related documents) calculated
from the Date of Issuance of the Notes of such Series through any subsequent day
during the term of the Notes of such Series or otherwise prior to payment in
full of the 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 Notes of such Series or related documents or
otherwise contracted for, charged, reserved, taken or received in connection
with the Notes of such Series, or if the redemption or acceleration of the
maturity of the Notes of such Series results in payment to or receipt by the
Holder or any former Holder of the Notes of such Series of any interest in
excess of that permitted by applicable law, then, notwithstanding any provision
of the Notes of such Series or related documents to the contrary, all excess
amounts theretofore paid or received with respect to the Notes of such Series
shall be credited on the principal balance of the Notes of such Series (or, if
the Notes of such Series have been paid or would thereby be paid in full,
refunded by the recipient thereof), and the provisions of the Notes of such
Series 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 the Notes of such Series and under the related documents.
SECTION 2.04 FORMS OF NOTES AND INSTRUCTIONS FOR PAYMENT. The
Senior Notes and the certificate of authentication and form of assignment for
transfer to be endorsed thereon shall be in substantially the form of Exhibits
B, C, O or P hereof, as appropriate, with necessary or appropriate variations,
omissions or insertions, as permitted or required by this Indenture.
Each Subordinate Note and the certificate of authentication
and form of assignment for transfer to be endorsed thereon shall be in
substantially the form of Exhibits D or Q hereof, as appropriate, with necessary
or appropriate variations, omissions or insertions, as permitted or required by
this Indenture.
Any instructions to the Indenture Trustee for payment of
interest on the Notes shall be in substantially the form of Exhibit E hereof,
with necessary or appropriate variations, omissions or insertions, as permitted
or required by this Indenture.
SECTION 2.05 TRANSFER RESTRICTIONS (a) RESTRICTED SECURITIES.
Restricted Securities shall be subject to the restrictions on transfer (the
"Transfer Restrictions") provided in the applicable legend(s) the ("Restrictive
Legends") required to be set forth on the face of each Restricted Security
pursuant to Section 2.06 hereof, and each Holder of a Restricted Security, by
its acceptance thereof, agrees to be bound by, and to comply with, the Transfer
Restrictions, in each case unless compliance with the Transfer Restrictions
shall be waived by the Issuer in writing delivered to the Indenture Trustee.
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The Transfer Restrictions shall cease and terminate with
respect to any particular Restricted Security upon receipt by the Issuer of
evidence satisfactory to it (which may include an opinion of independent counsel
experienced in matters of United States federal securities law) that, as of the
date of determination, such Restricted Security (a) could be transferred by the
Holder thereof to a QIB or to an Accredited Investor pursuant to Rule 144A
promulgated under the Securities Act, (b) has been sold pursuant to an effective
registration statement under the Securities Act, or (c) has been transferred (i)
to the Issuer, (ii) in a transaction satisfying all the requirements of Rule 903
or 904 (as applicable) of Regulation S promulgated under the Securities Act or
(iii) pursuant to Rule 144A under the Securities Act, and receipt by the
Indenture Trustee of a certificate from an Authorized Officer certifying that
the Issuer has received such evidence and that the Transfer Restrictions have
ceased and terminated with respect to such Restricted Security. All references
in the preceding sentence to any Regulation, Rule or provision thereof shall be
deemed also to refer to any successor provisions thereof. In addition, the
Issuer may terminate the Transfer Restrictions with respect to any particular
Restricted Security in such other circumstances as it determines are appropriate
for this purpose and shall deliver to the Indenture Trustee a certificate from
an Authorized Officer certifying that the Transfer Restrictions have ceased and
terminated with respect to such Restricted Security.
At the request of the Holder and, upon the surrender of such
Restricted Security to the Indenture Trustee or the Registrar for exchange in
accordance with the provisions of Section 2.3 of the Base Indenture, any
Restricted Security as to which the Transfer Restrictions shall have terminated
in accordance with the preceding paragraph shall be exchanged for a new Note of
like tenor and aggregate principal amount, but without the Restrictive Legends.
Any Restricted Security as to which the Restrictive Legends shall have been
removed pursuant to this paragraph (and any Unregistered Notes issued upon
registration of transfer of, exchange for or in lieu of such Restricted
Security) shall thereupon cease to be "Restricted Securities" for all purposes
of this Indenture.
The Issuer shall notify the Indenture Trustee of the effective
date of any registration statement registering any Restricted Securities under
the Securities Act and shall ensure that any opinion of counsel received by it
in connection with the removal of any Restrictive Legend is also addressed to
the Indenture Trustee. The Indenture Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith and without negligence on its
part in reliance upon a certificate of the Issuer executed by an Authorized
Officer in accordance with this Section 2.05(a).
As used in this Section 2.5(a), the term "transfer"
encompasses any sale, pledge, transfer or other disposition of any Unregistered
Notes referred to herein.
(b) GLOBAL SECURITIES. Each Global Security authenticated
under the Indenture shall be registered in the name of the Depository designated
for such Global Security or a nominee thereof and delivered to such Depository
or a nominee thereof or custodian therefor at its designated corporate trust
office, and each such Global Security shall constitute a single Note for all
purposes of this Indenture.
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Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Unregistered Notes
registered, and no transfer of a Global Security in whole or part may be made or
registered, in the name of any Person other than the Depository for such Global
Security or a nominee thereof unless (A) such Depository (i) has notified the
Issuer that it is unwilling or unable to continue to act as Depository for such
Global Security or (ii) has ceased to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or any other applicable statute or
regulation, and, in either case, a successor Depository is not appointed by the
Issuer within ninety (90) days of such event (B) there shall have occurred and
be continuing an Event of Default with respect to such Global Security, or (C)
the Issuer in its sole discretion shall have notified the Depository that the
Global Securities shall be exchanged for such Unregistered Notes. Any Global
Security exchanged pursuant to clause (A) above shall be so exchanged in whole
and not in part and any Global Security exchanged pursuant to clause (B) or (C)
above may be exchanged in whole or from time to time in part as directed by the
Depository for such Global Security. Notwithstanding any other provision in this
Indenture, a Global Security to which the restriction set forth in the second
preceding sentence shall have ceased to apply may be transferred only to, and
may be registered and exchanged for Notes registered only in the name or names
of, such Person or Persons as the Depository for such Global Security shall have
directed and no transfer thereof other than such a transfer may be registered.
Nothing in this Section 2.05(b) shall prohibit or render ineffective any
transfer of a beneficial interest in a Global Security effected in accordance
with this Section 2.05 or Section 2.3 of the Base Indenture.
Subject to the preceding paragraph, any exchange of a Global
Security for other Notes may be made in whole or in part, and all Unregistered
Notes issued in exchange for a Global Security or any portion thereof shall be
registered in such names as the Depository for such Global Security shall
direct.
Every Unregistered Note authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Unregistered Note is registered in the
name of a Person other than the Depository for such Global Security or a nominee
thereof.
Until the termination of the Restricted Period with respect to
Unregistered Notes, interests in any Regulation S Global Security may be held
only through Agent Members acting for and on behalf of Euroclear and Cedel;
provided, however, that the Indenture Trustee shall have no responsibility to
determine compliance with this requirement.
(c) TRANSFERS BETWEEN GLOBAL SECURITIES.
(i) RESTRICTED GLOBAL SECURITY TO REGULATION S GLOBAL
SECURITY. If the owner of a beneficial interest (an "Owner Transferor") in a
Restricted Global Security wishes at any time to transfer such beneficial
interest to a person (an "Owner Transferee") who wishes to take delivery thereof
in the form of a beneficial interest in an Regulation S Global Security, such
transfer may be effected, subject to the Applicable Procedures, only in
accordance with the provisions of this
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Section 2.05(c)(i). Upon receipt by the Indenture Trustee, as custodian, at its
designated corporate trust office of (1) written instructions given in
accordance with the Applicable Procedures from the Agent Member whose account is
to be debited (an "Agent Member Transferor") with respect to the Restricted
Global Security directing the Indenture Trustee, as Registrar, to credit or
cause to be credited to a specified account of another Agent Member (an "Agent
Member Transferee") (which shall be an account with Euroclear or Cedel or both)
a beneficial interest in a Regulation S Global Security in a principal amount
equal to the beneficial interest in the Restricted Global Security to be
transferred (the "Restricted Global Transferred Amount"), (2) a written order
given in accordance with the Applicable Procedures containing information
regarding the account of the Agent Member Transferee to be credited with, and
the account of the Agent Member Transferor to be debited for, the Restricted
Global Transferred Amount, and (3) a certificate in substantially the form set
forth in Section 2.08(a) given by the Owner Transferor, the Indenture Trustee,
as Registrar, shall instruct the Depository for such Global Securities to reduce
the principal amount of the Restricted Global Security, and to increase the
principal amount of the Regulation S Global Security, by the Restricted Global
Transferred Amount, and to credit or cause to be credited to the account of the
Agent Member Transferee a beneficial interest in the Regulation S Global
Security, and to debit or cause to be debited to the account of the Agent Member
Transferor a beneficial interest in the Restricted Global Security, in each case
having a principal amount equal to the Restricted Global Transferred Amount.
(ii) REGULATION S GLOBAL SECURITY TO RESTRICTED GLOBAL
SECURITY. If an Owner Transferor wishes at any time to transfer a beneficial
interest in a Regulation S Global Security to an Owner Transferee who wishes to
take delivery thereof in the form of a beneficial interest in a Restricted
Global Security, such transfer may be effected, subject to the Applicable
Procedures, only in accordance with this Section 2.05(c)(ii). Upon receipt by
the Indenture Trustee, as Registrar, at its designated corporate trust office of
(1) written instructions given in accordance with the Applicable Procedures from
the Agent Member Transferor directing the Indenture Trustee, as Registrar, to
credit or cause to be credited to a specified account of an Agent Member
Transferee a beneficial interest in the Restricted Global Security in a
principal amount equal to that of the beneficial interest in the Regulation S
Global Security to be so transferred (the "Regulation S Global Transferred
Amount"), (2) a written order given in accordance with the Applicable Procedures
containing information regarding the account of the Agent Member Transferee to
be credited with, and the account of the Agent Member Transferor (which must be
an account with Euroclear or Cedel or both) to be debited for, the Regulation S
Global Amount, and (3) a certificate in substantially the form set forth in
Section 2.08(b) given by the Owner Transferor or Owner Transferee, as the case
may be, the Indenture Trustee, as Registrar, shall instruct the Depository for
such Global Securities to reduce the principal amount of the Regulation S Global
Security, and increase the principal amount of the Restricted Global Security,
by the Regulation S Global Transferred Amount, and to credit or cause to be
credited to the account of the Agent Member Transferee a beneficial interest in
the Restricted Global Security, and to debit or cause to be debited to the
account of the Agent Member Transferor a beneficial interest in the Regulation S
Global Security, in each case having a principal amount equal to the Regulation
S Global Transferred Amount.
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(d) OTHER TRANSFERS AND EXCHANGES. In case of any transfer or
exchange the procedures and requirements for which are not addressed in detail
in this Section 2.05, such transfer or exchange will be subject to such
procedures and requirements as may be reasonably prescribed by the Issuer and
the Indenture Trustee from time to time and, in the case of a transfer or
exchange involving a Global Security, the Applicable Procedures.
SECTION 2.06. LEGENDS ON UNREGISTERED NOTES. Unless otherwise
specified pursuant to and in accordance with Section 2.05 hereof, every
Unregistered Note authenticated and delivered hereunder, including any issued
upon transfer, exchange or replacement of such Unregistered Notes, shall bear,
and shall be subject to the restrictions on transfer provided in Section 2.05
hereof, if such Unregistered Note is issued as a Global Security. Any
Unregistered Notes issued upon transfer, exchange or replacement of Unregistered
Notes which in accordance with Section 2.05 have ceased to be Restricted
Securities shall not bear such legends.
NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
EACH OF THE HOLDER HEREOF AND EACH OWNER OF A BENEFICIAL INTEREST HEREIN, BY
HOLDING THIS GLOBAL SECURITY AND ACQUIRING THEIR BENEFICIAL INTERESTS HEREIN,
RESPECTIVELY, AGREES FOR THE BENEFIT OF STUDENT LOAN FUNDING 1998-A/B TRUST (THE
"ISSUER") THAT THIS GLOBAL SECURITY AND BENEFICIAL INTERESTS HEREIN MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE ISSUER, (2) SO LONG AS
THIS GLOBAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A IN ACCORDANCE WITH RULE
144A OR AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF THE SECURITIES ACT WHICH PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER OR AN INSTITUTIONAL ACCREDITED
INVESTOR TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144(A), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) (RESALES DESCRIBED IN
SUBCLAUSES (1) THROUGH (4) BEING REFERRED TO AS "SAFE HARBOR RESALES"), (5)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT (PROVIDED THAT AS A CONDITION TO REGISTRATION OF
TRANSFER OF THIS GLOBAL SECURITY OTHERWISE THAN IN A SAFE HARBOR RESALE THE
ISSUER OR THE INDENTURE TRUSTEE MAY REQUIRE DELIVERY OF ANY DOCUMENTS OR OTHER
EVIDENCE THAT IT, IN ITS ABSOLUTE DISCRETION, DEEMS NECESSARY OR APPROPRIATE TO
EVIDENCE COMPLIANCE WITH SUCH EXEMPTION AND WITH ANY STATE SECURITIES LAWS THAT
MAY BE
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APPLICABLE), OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAW OR ANY STATE OF THE UNITED STATES. EACH OWNER OF A BENEFICIAL
INTEREST IN THIS GLOBAL SECURITY, BY ACQUIRING SUCH BENEFICIAL INTEREST,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOTIFY ANY
PURCHASER OF SUCH BENEFICIAL INTEREST FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO ABOVE. THIS LEGEND WILL BE REMOVED ONLY IN THE CIRCUMSTANCES
SPECIFIED IN THE INDENTURE.
SECTION 2.07. LEGENDS ON GLOBAL SECURITIES. In addition to the
legend required by Section 2.06 hereof, every Global Security authenticated and
delivered hereunder shall bear a legend in substantially the following form:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE
TRUSTEE OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE OR ANY PORTION THEREOF 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
OTHER THAN DTC OR A NOMINEE THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 2.08. CERTIFICATION FORMS. (a) Whenever any
certification is required to be given pursuant to Section 2.05(c)(i) of this
Terms Supplement in connection with the transfer of a beneficial interest in a
Restricted Global Security to a person who wishes to take delivery thereof in
the form of a beneficial interest in a Regulation S Global Security, such
certification shall be provided substantially in the form of Exhibit M to this
Terms Supplement, with only such changes as shall be approved in writing by the
Issuer.
(b) Whenever any certifications are required to be given pursuant to
Section 2.05(c)(ii) of this Terms Supplement in connection with the transfer of
a beneficial interest in the Regulation S Global Security to a person who wishes
to take delivery thereof in the form of a beneficial interest in the Restricted
Global Security, such certifications shall be provided substantially in the form
of Exhibit N to this Terms Supplement, with only such changes as shall be
approved in writing by the Issuer.
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ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.01 REDEMPTION OF NOTES IN GENERAL. The Notes shall
be subject to redemption prior to their Legal Final Maturity only upon the terms
and conditions, and only on the applicable dates and at the redemption price, as
are set forth in this Terms Supplement. The redemption price of the Notes shall,
in each case, be par plus (i) accrued interest to the applicable dates on which
such redemption will occur and (ii) all unpaid Carryover Interest, if any,
thereon. Principal of and interest and unpaid Carryover Interest on the Notes
shall be paid from the moneys available therefor in the Note Payment Account in
the Collection Fund and in the Reserve Fund.
If Outstanding Notes are to be redeemed pursuant to the
provisions of this Article III, the Indenture Trustee shall give written notice
of such redemption to the Holders of such Outstanding Notes not less than
fifteen (15) days prior to the applicable dates on which such Outstanding Notes
are to be redeemed. Each notice of redemption shall state (i) the date, Series
and numbers of the Notes to be redeemed, the applicable dates on which such
redemption will occur and the redemption price payable upon such redemption;
(ii) that the interest on such Outstanding Notes and on any unpaid Carryover
Interest shall cease to accrue from and after the applicable date on which such
redemption will occur and (iii) that on said date there will become due and
payable on each such Outstanding Note the principal amount thereof and the
interest accrued on such principal amount to the applicable date on which the
redemption will occur and all unpaid Carryover Interest. Each notice of
redemption shall also state that each such Outstanding Note must be surrendered
to the Indenture Trustee for payment of the principal of and interest and any
unpaid Carryover Interest on such Outstanding Notes.
If notice of redemption of Outstanding Notes has been duly
given as hereinbefore provided and if moneys for the payment of the principal of
and interest and any unpaid Carryover Interest on such Outstanding Notes are
held for the purpose of such payment by the Indenture Trustee, then such
Outstanding Notes shall, on the applicable dates on which such redemption will
occur, become due and payable, and interest on said Outstanding Notes and on any
unpaid Carryover Interest shall cease to accrue.
All Notes surrendered pursuant to the provisions of this
Article III shall be canceled by the Indenture Trustee.
SECTION 3.02 AUCTION OF FINANCED STUDENT LOANS; REDEMPTION OF
OUTSTANDING NOTES FROM AUCTION PROCEEDS PRIOR TO THE LEGAL FINAL MATURITY. On
or after May 31, 2007, if the then outstanding Pool Balance is 10% or less of
the Initial Pool Balance, the Indenture Trustee shall offer the Financed
Student Loans in the Trust Estate for sale. The Issuer, its affiliates and
unrelated third parties may offer bids to purchase such Financed Student Loans
on or prior to such date. If at least two bids are received, the Indenture
Trustee shall accept the higher bid if it, together with the funds (including
the Value of Eligible Investments, if any, to the credit of the Reserve Fund)
on deposit in the Reserve Fund, will pay accrued and unpaid
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Program Operating Expenses and all fees and expenses in connection with the sale
of the Financed Student Loans and the redemption of the Notes (the "Transaction
Costs") and all principal of and accrued interest and unpaid Carryover Interest
on all such Outstanding Notes due to the Noteholders. If at least two bids are
not received or the bid proceeds, together with the funds (including the Value
of Eligible Investments, if any, to the credit of the Reserve Fund) on deposit
in the Reserve Fund, are not sufficient to pay Transaction Costs and all
principal of and accrued interest and unpaid Carryover Interest on all such
Outstanding Notes due to the Noteholders, the Indenture Trustee shall not
consummate the sale and may, but is not obligated to, solicit bids for the
Financed Student Loans in the Trust Estate on future Distribution Dates until a
successful bid is accepted or until the Notes have been paid in full. The net
proceeds of such purchase, together with such funds from the Reserve Fund as are
necessary to effect such redemption, shall be applied to redeem all Outstanding
Notes at par plus accrued interest to and all unpaid Carryover Interest on the
next applicable Distribution Date.
SECTION 3.03 OPTIONAL REDEMPTION OF NOTES PRIOR TO THE LEGAL
FINAL MATURITY. (a) All Outstanding Notes will be subject to redemption in whole
on any applicable Distribution Date in the event the Issuer exercises its option
to repurchase all remaining Financed Student Loans, and thus effect the early
retirement of the Notes, on any applicable Distribution Date for the applicable
Series of Notes on or after the Monthly Distribution Date on which the Pool
Balance is equal to 10% or less of the Initial Pool Balance, at a price at least
equal to, for each Financed Student Loan, the outstanding principal balance of
such Financed Student Loan as of the end of the preceding Collection Period,
together with all accrued interest thereon and unamortized premiums, if any, and
sufficient to pay Transaction Costs and all amount due to the Noteholders,
including Carryover Interest, after application of funds (including the Value of
Eligible Investments, if any, to the credit of the Reserve Fund) on deposit in
the Reserve Fund.
In connection with the optional redemption of any Series 1998A
Notes, all unpaid Carryover Interest on such Series (and accrued interest, if
any, thereon) shall be paid on or before the date of optional redemption of such
Series.
(b) On and after such date that there are no Series A-3 Notes
Outstanding, the Auction Rate Notes shall be subject to redemption in whole or
in part on any Auction Period Commencement Date prior to their Final Legal
Maturity, at the option of the Issuer (including the designation of which Series
is to be redeemed) from funds deposited by or on behalf of the Issuer or
otherwise to the credit of the Note Payment Account, upon notice given by the
Indenture Trustee to the Noteholders thereof not less than fifteen (15) days
prior to the redemption date in the form and manner described in 3.01 hereof, at
a redemption price of 100% of the principal amount redeemed plus accrued
interest to the date of redemption. The Issuer may not exercise its option to
redeem any Auction Rate Notes unless after any such redemption the Parity
Percentage is no less than 101% and the provisions of Section 5.4 of the Base
Indenture regarding the minimum amount of Financed Student Loans bearing
interest at a fixed rate held in the Student Loan Portfolio Fund are satisfied.
With respect to the optional redemption of Auction Rate Notes pursuant to this
Section 3.03, in the event of a redemption in part of a Series, the Auction Rate
Notes to be redeemed will be selected by lot by the Indenture Trustee. No
Auction Rate Notes will be subject to redemption in part in an amount less than
an
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Authorized Denomination thereof, and no portion of the Auction Rate Notes is
to be retained by a Noteholders in an amount less than an Authorized
Denomination.
In connection with the optional redemption of any Auction Rate
Notes, all unpaid Carryover Interest on such Auction Rate Notes (and accrued
interest, if any, thereon) shall be paid on or before the date of optional
redemption of such Auction Rate Notes.
Any amounts in the Note Payment Account in excess of the
amounts thereof applied to an optional redemption pursuant to this Section
3.03(b) shall remain in such Account until such amounts are applied by the
Indenture Trustee to any other payments to be made from such Account as provided
in Section 5.5.1 of the Base Indenture and Section 4.02 hereof or transferred to
the Issuer upon its written request if such amounts represent funds deposited by
or on behalf of the Issuer.
Auction Rate Notes to be redeemed pursuant to this Section
3.03(b) shall be redeemed by the Indenture Trustee only upon written notice from
the Issuer to the Indenture Trustee. That notice shall specify the redemption
date and shall be given at least twenty (20) days prior to the redemption date
or such shorter period as shall be acceptable to the Indenture Trustee in its
sole discretion. Before the Indenture Trustee shall give notice of redemption to
the Noteholders as provided in Section 3.01 hereof, the Indenture Trustee shall
confirm that there is on deposit in the Note Payment Account funds which will be
sufficient to pay on the date fixed for redemption the redemption price of the
Auction Rate Notes to be redeemed pursuant to such notice.
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ARTICLE IV
DISPOSITION OF PROCEEDS OF THE NOTES; COLLECTION ACCOUNT;
ACQUISITION FUND
SECTION 4.01 DISPOSITION OF PROCEEDS OF THE NOTES. All
proceeds of the issuance and sale of the Series of Notes hereunder were
deposited with the Indenture Trustee on the Date of Issuance, and the Indenture
Trustee deposited such proceeds to the following Funds and Accounts:
(a) $10,917,000 of the proceeds of the Notes, an amount equal
to the Specified Reserve Fund Balance, were deposited by the Indenture
Trustee upon receipt in the Reserve Fund;
(b) $5,000,000 of the proceeds of the Notes were deposited by
the Indenture Trustee upon receipt to the Collection Account in the
Collection Fund;
(c) $3,275,100 of the proceeds of the Notes were deposited by
the Indenture Trustee upon receipt to the Expense Account in the
Collection Fund; and
(d) The balance of the proceeds of the Notes was deposited by
the Indenture Trustee upon receipt in the Acquisition Fund.
SECTION 4.02 DISPOSITION OF COLLECTION ACCOUNT. On each
Monthly Distribution Date, as described below, the Indenture Trustee shall
transfer from the Collection Account the following amounts in the following
priority, subject to Available Funds for the immediately preceding Collection
Period; provided that, if any moneys are transferred on January 31, 1999 to the
Collection Account from the Acquisition Fund pursuant to Section 4.03 hereof in
an amount equal to or greater than $1,000,000, all such moneys shall be used
solely to pay principal on the Series A-4 Notes on the first Auction Period
Distribution Date thereof (rounded down, to the extent necessary, to the nearest
Authorized Denomination):
(i) to the Expense Account, to the extent required to increase
the balance of such Account to the Program Expense
Requirement calculated as of such Monthly Distribution Date;
(ii) to the Note Payment Account,
(a) an amount up to (1) the Series 1998A-3 Noteholders'
Interest Distribution Amount for payment on such Monthly
Distribution Date to the Series 1998A-3 Noteholders,
ratably, without preference or priority of any kind and (2)
any related Senior Issuer Exchange Payment with respect to
the Series A-3 Notes for payment to the related Senior
Exchange Counterparty,
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(b) an amount up to (1) the Series 1998A-4 Noteholders'
Interest Distribution Amount for payment on each Auction
Period Distribution Date occurring in the next succeeding
calendar month to the Series 1998A-4 Noteholders, ratably,
without preference or priority of any kind and (2) any
related Senior Issuer Exchange Payment with respect to the
Series A-4 Notes for payment to the related Senior Exchange
Counterparty,
(c) an amount up to (1) the Series 1998A-5 Noteholders'
Interest Distribution Amount for payment on each Auction
Period Distribution Date occurring in the next succeeding
calendar month to the Series 1998A-5 Noteholders, ratably,
without preference or priority of any kind and (2) any
related Senior Issuer Exchange Payment with respect to the
Series A-5 Notes for payment to the related Senior Exchange
Counterparty, and
(d) an amount up to (1) the Series 1998A-6 Noteholders'
Interest Distribution Amount for payment on each Auction
Period Distribution Date occurring in the next succeeding
calendar month to the Series 1998A-6 Noteholders, ratably,
without preference or priority of any kind and (2) any
related Senior Issuer Exchange Payment with respect to the
Series A-6 Notes for payment to the related Senior Exchange
Counterparty;
(iii) to the Note Payment Account, an amount up to (a) the Series
1998B-3 Noteholders' Interest Distribution Amount for
payment on such Monthly Distribution Date to the Series
1998B-3 Noteholders, ratably, without preference or priority
of any kind and (b) any related Subordinate Issuer Exchange
Payment with respect to the Series B-3 Notes for payment to
the related Subordinate Exchange Counterparty;
(iv) to the Note Payment Account,
(a) (1) an amount up to the Series 1998A Noteholders'
Principal Distribution Amount for payment on such Monthly
Distribution Date to the Series 1998A-3 Noteholders until
the Outstanding principal balance of Series A-3 Notes has
been reduced to zero, and (2) an amount up to the Series
1998B-3 Noteholders' Principal Distribution Amount for
payment on such Monthly Distribution Date for payment on
such Monthly Distribution Date to the Series 1998B-3
Noteholders,
(b) once the Series A-3 Notes are no longer Outstanding, (1)
an amount up to the Series 1998A Noteholders' Principal
Distribution Amount for payment on the next succeeding
Auction Period Distribution Date to the Series 1998A-4
Noteholders until the Outstanding principal balance of the
Series A-4 Notes has been reduced to zero, and (2) an amount
up to the Series 1998B-3 Noteholders' Principal Distribution
Amount for payment on such Monthly Distribution Date for
payment on such Monthly Distribution Date to the Series
1998B-3
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Noteholders,
(c) once the Series A-3 Notes and the Series A-4 Notes are
no longer Outstanding, (1) an amount up to the Series 1998A
Noteholders' Principal Distribution Amount for payment on
the next succeeding Auction Period Distribution Date to the
Series 1998A-5 Noteholders until the Outstanding principal
balance of the Series A-5 Notes has been reduced to zero,
and (2) an amount up to the Series 1998B-3 Noteholders'
Principal Distribution Amount for payment on such Monthly
Distribution Date for payment on such Monthly Distribution
Date to the Series 1998B-3 Noteholders, and
(d) once the Series A-3 Notes, the Series A-4 Notes and the
Series A-5 Notes are no longer Outstanding, (1) an amount up
to the Series 1998A Noteholders' Principal Distribution
Amount for payment on the next succeeding Auction Period
Distribution Date to the Series 1998A-6 Noteholders until
the Outstanding principal balance of the Series A-6 Notes
has been reduced to zero, and (2) an amount up to the Series
1998B-3 Noteholders' Principal Distribution Amount for
payment on such Monthly Distribution Date for payment on
such Monthly Distribution Date to the Series 1998B-3
Noteholders;
(v) once the Series 1998A Notes are no longer Outstanding, to
the Note Payment Account, an amount up to the Series 1998B-3
Noteholders' Principal Distribution Amount for payment on
such Monthly Distribution Date to the Series 1998B-3
Noteholders until the Outstanding principal balance of the
Series B-3 Notes has been reduced to zero;
(vi) to the Reserve Fund on each Monthly Distribution Date, the
amount, if any, required to increase the balance thereof to
the Specified Reserve Fund Balance as provided for in
Section 5.2 of the Base Indenture;
(vii) to the Note Payment Account, an amount up to Parity
Percentage Payments to the extent then required:
(a) for payment on such Monthly Distribution Date to the
Series 1998A-3 Noteholders until the principal balance of
the Series A-3 Notes has been reduced to zero, then
(b) once the Series A-3 Notes are no longer Outstanding, for
payment on the next succeeding Auction Period Distribution
Date to the Series 1998A-4 Noteholders until the principal
balance of the Series A-4 Notes has been reduced to zero,
then
(c) once the Series A-3 Notes and the Series A-4 Notes are
no longer Outstanding, for payment on the next succeeding
Auction Period Distribution Date to the Series 1998A-5
Noteholders until the principal balance of the Series
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A-5 Notes has been reduced to zero, then
(d) once the Series A-3 Notes, the Series A-4 Notes and the
Series A-5 Notes are no longer Outstanding, for payment on
the next succeeding Auction Period Distribution Date to the
Series 1998A-6 Noteholders until the principal balance of
the Series A-6 Notes has been reduced to zero, then
(e) once the Series 1998A Notes are no longer Outstanding,
for payment on such Monthly Distribution Date to the Series
1998B-3 Noteholders until the principal balance of each such
Series of Series B-3 Notes has been reduced to zero;
(viii) to the Note Payment Account on any Monthly Distribution
Date, an amount up to any Carryover Interest,
(a) first to the Series 1998A-3 Noteholders for payment on
such Monthly Distribution Date, and upon payment of all
Carryover Interest due to the Series 1998A-3 Noteholders,
then,
(b) to the Series 1998A-4 Noteholders for payment on the
next succeeding Auction Period Distribution Date, and upon
payment of all Carryover Interest due to the Series 1998A-4
Noteholders, then,
(c) to the Series 1998A-5 Noteholders for payment on the
next succeeding Auction Period Distribution Date, and upon
payment of all Carryover Interest due to the Series 1998A-5
Noteholders, thereafter
(d) to the Series 1998A-6 Noteholders for payment on the
next succeeding Auction Period Distribution Date, and upon
payment of all Carryover Interest due to the Series 1998A-6
Noteholders;
(ix) to the Note Payment Account, an amount up to the amount, if
any, owed an Exchange Counterparty in respect of an early
termination payment or damages for early termination by, or
as a result of a default by the Issuer under any Exchange
Agreement for payment to such Exchange Counterparty; and
(x) any remainder, to the Excess Surplus Account.
Notwithstanding the foregoing, if on any Monthly Distribution Date after giving
effect to all distributions to be made on such Monthly Distribution Date,
either:
(a) the Outstanding principal amount of the Series 1998A Notes would
exceed the sum of (i) the Pool Balance plus (ii) the aggregate
balance on deposit in the Funds and Accounts (exclusive of the
balance of the Student Loan Portfolio Fund) under the Indenture
at the end of the immediately preceding Collection Period, less
all
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distributions to be made on such Distribution Date, or
(b) an Event of Default described in item 1 of the first paragraph
of Section 8.1 of the Base Indenture has occurred (but prior
to the acceleration of the Legal Final Maturity of the Notes),
then, until the applicable conditions described in clauses (a) and (b) no longer
exist, the Series 1998B-3 Noteholders' Interest Distribution Amount and the
Series 1998B-3 Noteholders' Principal Distribution Amount will not be paid to
the Series 1998B-3 Noteholders pursuant to clauses (iii) and (iv) above and no
Subordinate Issuer Exchange Payment shall be made. For so long as any Series
1998A Notes remain Outstanding, such deferral in the payment of the Series
1998B-3 Noteholders' Interest Distribution Amount, the Series 1998B-3
Noteholders' Principal Distribution Amount or Subordinate Issuer Exchange
Payments (except with respect to the Legal Final Maturity of the Series B-3
Notes) shall not constitute an Event of Default. In addition, as long as the
applicable conditions described in clause (b) continue to exist, the Series
1998A Noteholders' Principal Distribution Amount shall be paid pro rata among
each Series of Series 1998A Notes, without preference or priority of any kind.
In connection with transfers made pursuant to subclauses (b),
(c), and (d) of item (ii) above, if the Series Interest Rate for a Series of
Auction Rate Notes is unable to be calculated on any Monthly Distribution Date
with regard to one or more Auction Period Distribution Dates for such Series
occurring in the calendar month next succeeding such Monthly Distribution Date,
the Indenture Trustee shall calculate the related Noteholders' Interest
Distribution Amount using the Net Loan Rate for the preceding Collection Period.
To the extent the Series Interest Rate once calculated is lower than the Net
Loan Rate, any excess deposited to the Note Payment Account pursuant to
subclauses (b), (c), and (d) of item (ii) above shall be transferred to the
Collection Account.
Notwithstanding the foregoing, principal payments will be made to
the Auction Rate Noteholders only in amounts equal to $50,000 and integral
multiples in excess thereof. If the amount in the Note Payment Account otherwise
required to be applied as a payment of principal either (i) is less than $50,000
or (ii) exceeds an even multiple of $50,000, then, in the case of (i), such
entire amount or, in the case of (ii), such excess amount, will not be paid as
principal on the upcoming Auction Period Distribution Date, but will be retained
in the Note Payment Account until the amount therein available for payment of
principal equals $50,000.
With respect to the Series of Auction Rate Notes entitled to
receive payments of principal, the actual Notes of such Series that will receive
payments of principal on each applicable Auction Period Distribution Date will
be selected no later than five (5) Business Days prior to the such Auction
Period Distribution Date by the Indenture Trustee by lot in such manner as the
Indenture Trustee in its discretion may determine and which will provide for the
selection for payment of principal in the minimum denominations of $50,000, and
integral multiples in excess thereof.
Notice of the specific Auction Rate Notes to receive payments of
principal is to be
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given by the Indenture Trustee by first-class, postage prepaid, mailed not less
than five (5) Business Days but no more than ten (10) Business Days before the
applicable Auction Period Distribution Date at the address of the applicable
Noteholder appearing on the registration books. Any defect in or failure to give
such mailed notice shall not affect the validity of proceedings for the payment
of any other Notes not affected by such failure or defect. All notices of
payment are to state: (i) the applicable Auction Period Distribution Date, (ii)
the amount of principal to be paid, and (iii) the Series of Auction Rate Notes
to be paid.
SECTION 4.03 TRANSFER OF PROCEEDS IN THE ACQUISITION FUND Any
portion of the moneys in the Acquisition Fund which is not, or which the Issuer
at any time determines cannot for any reason be, used to Finance Student Loans
prior to January 31, 1999 shall, at the written direction of the Original
Issuer, have been transferred by the Indenture Trustee to the Collection Account
and if such moneys equal or exceed $1,000,000, substantially all of such moneys
shall be applied to pay principal on the Series A-4 Notes on the next succeeding
Auction Period Distribution Date in accordance with Section 4.02 hereof.
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ARTICLE V
MISCELLANEOUS
SECTION 5.01 EXECUTION AND DELIVERY OF THIS TERMS SUPPLEMENT.
This Terms Supplement is executed and delivered pursuant to Section 2.1 of the
Base Indenture.
SECTION 5.02 EFFECT OF TERMS SUPPLEMENT ON INDENTURE. This
Terms Supplement shall supplement the Base Indenture, which is in all respects
ratified and confirmed, and the Base Indenture so supplemented by this Terms
Supplement shall be read, taken and construed as one and the same instrument.
Each addition to and amendment of the Base Indenture herein is solely for the
purposes of the Notes. If any term of this Terms Supplement conflicts with any
terms of the Base Indenture, this Terms Supplement shall control for purposes of
the Notes.
SECTION 5.03 EXECUTION OF COUNTERPARTS. This Terms Supplement
may be executed in several counterparts, each of which shall be regarded as an
original and all of which shall constitute but one and the same document. It
shall not be necessary in proving this Terms Supplement to produce or account
for more than one of those counterparts.
SECTION 5.04. GOVERNING LAW. This Terms Supplement is entered
into with the intent that the laws of the State of Ohio shall govern its
construction, without giving effect to the conflict of law principles thereof.
[balance of page left blank intentionally]
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IN WITNESS WHEREOF, STUDENT LOAN FUNDING 1998-A/B TRUST, as
Issuer, has caused this Terms Supplement to be signed in its name and on its
behalf by an Authorized Officer; FIRSTAR BANK, NATIONAL ASSOCIATION, as Initial
Co-Owner Eligible Lender Trustee, has caused this Terms Supplement to be signed
in its name and on its behalf by one of its officers thereunto duly authorized;
and FIRSTAR BANK, NATIONAL ASSOCIATION, to evidence its acceptance of the trusts
hereby created, has caused this Terms Supplement to be signed in its name and on
its behalf by one of its officers thereunto duly authorized, all as of the date
first above written.
STUDENT LOAN FUNDING 1998-A/B TRUST,
as Issuer
By: Firstar Bank, National Association,
not in its individual capacity but
solely in its capacity as co-owner
trustee of the Delaware Trust
By: ____________________________________
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Initial Co-Owner Eligible Lender Trustee
for the benefit of the Delaware Trust
By
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By
Title
67
68
SCHEDULE I
TERMS OF SENIOR NOTES
---------------------
INITIAL INTEREST RATE (A-3) 5.94906%
INITIAL INTEREST RATE (A-4): 5.85%
INITIAL INTEREST RATE (A-5): 5.85%
INITIAL INTEREST RATE (A-6) 5.85%
DATED DATE: December 22, 1998.
INITIAL INTEREST DETERMINATION DATE FOR
SERIES 1998A-3 NOTES: January 27, 1999
INITIAL INTEREST DETERMINATION DATE FOR (i) January 27, 1999, with
AUCTION RATE NOTES: respect to the Series
1998A-4 Notes, (ii)
February 3, 1999, with
respect to the Series
1998A-5 Notes, and (iii)
February 10, 1999, with
respect to the Series
1998A-6 Notes.
UNREGISTERED SERIES 1998A-3 -
NUMBERED FROM: C-3
REGISTERED SERIES 1998A1-3
NUMBERED FROM: H-1
UNREGISTERED SERIES 1998A-4 -
NUMBERED FROM: D-3
REGISTERED SERIES 1998A1-4 -
NUMBERED FROM: J-1
UNREGISTERED SERIES 1998A-5 -
NUMBERED FROM: E-3
REGISTERED SERIES 1998A1-5 -
NUMBERED FROM: K-1
69
UNREGISTERED SERIES 1998A-6 - NUMBERED FROM:
F-3
REGISTERED SERIES 1998A1-6 -NUMBERED FROM:
L-1
TERMS OF SUBORDINATE NOTES
--------------------------
INITIAL INTEREST RATE: 6.25%
DATED DATE: December 22, 1998
UNREGISTERED SERIES 1998B-3 - NUMBERED FROM:
G-3
REGISTERED SERIES 1998B1-3 - NUMBERED FROM:
M-1
I-69
70
EXHIBIT 4.2
EXHIBIT A
---------
DISTRIBUTION STATEMENT
NOTEHOLDERS' STATEMENT FOR STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN ASSET-BACKED NOTES SERIES ▇-▇, ▇-▇, ▇-▇, ▇-▇ ▇▇▇ ▇-▇
FOR COLLECTION PERIOD ENDING
Monthly Distribution Date:______________________
(A) Principal Factor
(i) Series A-3 Notes:____________
(ii) Series B-3 Notes:____________
(B) Amount of principal being paid or distributed:
(i) Series A-3 Notes:$___________
(ii) Series A-4 Notes:$___________
(iii) Series A-5 Notes:$___________
(iv) Series A-6 Notes:$___________
(v) Series B-3 Notes:$___________
(C) (i) Amount of Interest being paid or distributed:
(a) Series A-3 Notes:$____________
(b) Series A-4 Notes:$____________
(c) Series A-5 Notes:$____________
(d) Series A-6 Notes:$____________
(e) Series B-3 Notes:$____________
(ii) Applicable Interest Rates (based on the
[Formula Rate/Net Loan Rate]:
(a) Series A-3 Notes:____________%
(b) Series A-4 Notes:____________%
(c) Series A-5 Notes:____________%
(d) Series A-6 Notes:____________%
(e) Series B-3 Notes:____________%
(D) Amount of Distribution allocable to any Carryover Interest:
(i) Series A-3 Notes:$____________
(ii) Series A-4 Notes:$____________
(iii) Series A-5 Notes:$____________
(iv) Series A-6 Notes:$____________
(v) Series B-3 Notes:$____________
71
(E) Pool Balance at end of preceding Collection
Period:$___________
(F) After giving effect to distributions on this Distribution
Date:
(i) outstanding principal amount of Series A-3
Notes:$_____________
(ii) outstanding principal amount of Series A-4
Notes:$_____________
(iii) outstanding principal amount of Series A-5
Notes:$______________
(iv) outstanding principal amount of Series A-6
Notes:$______________
(v) outstanding principal amount of Series B-3
Notes:$______________
(G) Amount of Program Operating Expenses to be allocated for the
upcoming Distribution Date:$______________
(H) (i) Aggregate amount of Realized Losses (if any) for the
Collection Period immediately preceding the
Distribution Date:$_____________
(ii) Amount received for recoveries of Realized Losses
from a previous Collection Period$____________
(a) interest:$_____________
(b) principal:$____________
(I) (i) Amount of distribution attributable to amounts in the
following Funds:
(a) Reserve Fund:$_________
(b) Expense Account:$____________
(c) Acquisition Fund:$____________
(d) Collection Account:$__________
(e) Note Payment Account:$________
(f) Excess Surplus Account:$________
(ii) Balance of Funds and Accounts on Distribution Date
(a) Reserve Fund:$_________
(b) Expense Account:$___________
(c) Acquisition Fund:$___________
(d) Collection Account:$__________
(e) Note Payment Account:$___________
(f) Excess Surplus Account:$___________
(iii) Parity Percentage:__________%
(iv) Senior Parity Percentage:___________%
(v) Amount of Parity Percentage Payments:$__________
(J) The aggregate amount paid for Financed Student Loans purchased
from the Student Loan Portfolio Fund during the immediately
preceding Collection Period:$____________
(K) Amount of Financed Student Loans:
(i) that are 31 through 60 days delinquent:$_________
(ii) that are 61 through 90 days delinquent:$__________
(iii) that are 91 through 120 days delinquent:$___________
A-71
72
(iv) that are more than 120 days delinquent:$____________
(v) for which claims have been filed with the appropriate
guarantor or the Secretary and which are awaiting
payment:$___________
By: Firstar Bank, National Association as Indenture Trustee for Student Loan
Funding 1998-A/B Trust Student Loan Asset-Backed Notes, Series 1998A and Series
B-3.
A-72
73
EXHIBIT B
---------
FORM OF SENIOR LIBOR FLOATING RATE NOTE
---------------------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE
TRUSTEE OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE OR ANY PORTION THEREOF 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
OTHER THAN DTC OR A NOMINEE THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
EACH OF THE HOLDER HEREOF AND EACH OWNER OF A BENEFICIAL INTEREST HEREIN, BY
HOLDING THIS GLOBAL SECURITY AND ACQUIRING THEIR BENEFICIAL INTERESTS HEREIN,
RESPECTIVELY, AGREES FOR THE BENEFIT OF STUDENT LOAN FUNDING 1998-A/B TRUST (THE
"ISSUER") THAT THIS GLOBAL SECURITY AND BENEFICIAL INTERESTS HEREIN MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE ISSUER, (2) SO LONG AS
THIS GLOBAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A IN ACCORDANCE WITH RULE
144A OR AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF THE SECURITIES ACT WHICH PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER OR AN INSTITUTIONAL ACCREDITED
INVESTOR TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144(A), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) (RESALES DESCRIBED IN
SUBCLAUSES (1) THROUGH (4) BEING REFERRED TO AS "SAFE HARBOR RESALES"), (5)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT (PROVIDED THAT AS A CONDITION TO REGISTRATION OF
TRANSFER OF THIS GLOBAL SECURITY OTHERWISE THAN IN A SAFE HARBOR RESALE THE
ISSUER OR THE INDENTURE TRUSTEE MAY REQUIRE DELIVERY OF ANY DOCUMENTS OR OTHER
EVIDENCE THAT IT, IN ITS ABSOLUTE DISCRETION, DEEMS NECESSARY OR APPROPRIATE TO
EVIDENCE COMPLIANCE WITH SUCH EXEMPTION AND WITH ANY STATE SECURITIES LAWS THAT
MAY BE APPLICABLE), OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAW OR ANY STATE OF THE UNITED STATES. EACH OWNER OF A BENEFICIAL
INTEREST IN THIS GLOBAL SECURITY, BY ACQUIRING SUCH BENEFICIAL INTEREST,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOTIFY ANY
PURCHASER OF SUCH BENEFICIAL INTEREST FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO ABOVE. THIS LEGEND WILL BE REMOVED ONLY IN THE CIRCUMSTANCES
SPECIFIED IN THE INDENTURE.
THE INTEREST ON THIS SERIES 1998A-3 NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. C-__ $__,000,000
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTE
SERIES 1998A-3
(LIBOR FLOATING RATE)
Dated: December 22, 1998 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2006
74
Student Loan Funding 1998-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, not in its individual
capacity, but solely as co-owner trustee of Student Loan Funding 1998-A/B Trust
(the "Co-Owner Trustee"), hereby acknowledges itself indebted and, for value
received, hereby promises to pay (but only out of the Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
________________________________ DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1998A-3 Note is one of a duly authorized issue of notes of
the Issuer designated as "Student Loan Funding 1998-A/B Trust Student Loan
Senior Asset-Backed Notes, Series A-3 (LIBOR Floating Rate)" in the aggregate
principal amount of $400,000,000 (the Unregistered Notes of this series herein
referred to as the "Series 1998A-3 Notes" and collectively with the Registered
Notes of this Series, the "Series A-3 Notes"), initially issued (a) pursuant to
a resolution duly adopted by the Management Committee of the Student Loan
Funding LLC, a Delaware limited liability company (the "Original Issuer")
authorizing the issuance of the Series 1998A-3 Notes and (b) under (i) the
authority of the Certificate of Formation and Limited Liability Company
Agreement of the Original Issuer and (ii) an Indenture of Trust, dated as of
December 1, 1998 (the "Original Base Indenture"), and a Terms Supplement, dated
as of even date with the Original Base Indenture (the "Original Terms
Supplement"). In connection with the sale and transfer of the Trust Estate to
the Issuer by the Original Issuer and the assumption by the Issuer of all of the
Original Issuer's obligations under the Original Base Indenture and Original
Terms Supplement, the Original Base Indenture and Original Terms Supplement have
been amended and restated by the First Amended and Restated Indenture of Trust
and the First Amended and Restated Terms Supplement to the First Amended and
Restated Indenture of Trust, respectively, each dated as of March 15, 1999
(collectively, the "First Restated Indenture"), and each by and among the
Issuer, Firstar Bank, National Association, not in its individual capacity, but
solely in its capacity as the initial eligible lender trustee for the benefit of
the Issuer (the "Initial Eligible Lender Trustee" and together with any other
eligible lender trustee thereunder, each an "Eligible Lender Trustee"), and
Firstar Bank, National Association, as indenture trustee (the "Indenture
Trustee"). In connection with the consummation of an exchange offer, the First
Restated Indenture has been amended and restated by the Second Amended and
Restated Indenture of Trust and the Second Amended and Restated Terms
Supplement, each dated June 1, 1999, each by and among the Issuer, the Initial
Eligible Lender Trustee and the Indenture Trustee (collectively, the
"Indenture"). The Series A-3 Notes are issued simultaneously and on a parity
with Student Loan Funding 1998-A/B Trust's $93,900,000 Student Loan Senior
Asset-Backed Callable Notes, Series A-4 (Auction Rate) (the "Series A-4 Notes"),
Student Loan Funding 1998-A/B Trust's $90,000,000 Student Loan Senior
Asset-Backed Callable Notes, Series A-5 (Auction Rate) (the "Series A-5 Notes"),
Student Loan Funding 1998-A/B Trust's $90,000,000 Student Loan Senior
Asset-Backed Callable Notes, Series A-6 (Auction Rate) (collectively with the
Series 1998A-3 Notes, the Series A-4 Notes and the Series A-5 Notes, the "Series
1998A Notes"), and simultaneously with and on a basis senior to Student Loan
Funding 1998-A/B Trust's $54,500,000 Student Loan Subordinate Asset-Backed
Notes, Series B-3 (Fixed Rate) (collectively with the Series 1998A Notes, the
"Notes"). References in this Series 1998A-3 Note to the name "Student Loan
Funding 1998-A/B Trust" or to the term "Issuer" shall mean the Co-Owner Trustee,
not in its individual capacity, but solely as Co-Owner Trustee of the Issuer.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1998A-3 Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series A-3 Notes; the student loan
purchase program being financed by the issuance of the Series A-3 Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest and any
▇-▇▇
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on the Series A-3 Notes (subject to the prior rights of the
Indenture Trustee to any realization from the Indenture Trustee's lien on and
security interest in the Trust Estate for payment of its fees and expenses and
the fees and expenses of each Eligible Lender Trustee); the nature and extent
and manner of enforcement of the pledge; the conditions upon which the Indenture
may be amended or supplemented with or without the consent of the Holders of the
Directing Notes; the rights and remedies of the Holders of the Series A-3 Notes,
including the limitations therein contained upon the right of a Holder to
institute any suit, action or proceeding in equity or at law with respect hereto
and thereto; the rights, duties and obligations of the Issuer, each Eligible
Lender Trustee and the Indenture Trustee thereunder; the terms and provisions
upon which the liens, pledges, charges, trusts, security interests, assignments
and covenants made therein may be discharged at or prior to the maturity of this
Series 1998A-3 Note, this Series 1998A-3 Note thereafter no longer being secured
by the Indenture or being deemed to be outstanding thereunder; and for the other
terms and provisions thereof.
Words and terms used as defined words and terms in this Series 1998A-3
Note and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest and Carryover Interest, if any, on the
Series A-3 Notes are limited obligations of the Issuer payable only out of the
Trust Estate, as and to the extent set forth in the Indenture, and are secured
by a pledge of, lien on, security interest in and assignment of the Trust
Estate, subject to the provisions of the Indenture permitting the application
thereof for the purposes and on the terms and conditions set forth in the
Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE SERIES A-3 NOTES,
THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND CARRYOVER INTEREST, IF ANY, ON
THIS SERIES 1998A-3 NOTE AND REDEMPTION OF THIS SERIES 1998A-3 NOTE WILL BE
DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF THE
INDENTURE AND THE CALCULATION 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.
No covenant or agreement contained in this Series 1998A-3 Note or in
the Indenture shall be deemed to be a covenant or agreement of any officer,
director, agent or employee of the Issuer in his or her individual capacity, and
none of such officers, directors, agents or employees nor any person executing
this Series 1998A-3 Note on behalf of the Issuer shall be liable personally on
this Series 1998A-3 Note or be subject to any personal liability or
accountability by reason of the issuance of this Series 1998A-3 Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1998A-3 Note is held in a Book-entry System,
this Series 1998A-3 Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1998A-3 Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee, subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series 1998A-3 Note or Series
1998A-3 Notes of Authorized Denominations of the same aggregate principal amount
and date as this Series 1998A-3 Note. The person in whose name this Series
1998A-3 Note is registered shall be deemed the owner hereof for all purposes,
and the Issuer, the Indenture Trustee and any other designated Authenticating
Agent shall not be affected by any notice to the contrary.
The Series A-3 Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1998A-3 Note is held in a
Book-entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series 1998A-3 Notes may be
exchanged at said office of the
B-75
76
Indenture Trustee for a like aggregate principal amount of Series 1998A-3 Notes
of the same date and series of other Authorized Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1998A-3 Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date fixed for the payment
thereof.
It is hereby certified, recited 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 Series 1998A-3 Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1998A-3 Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1998A-3 Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1998A-3 Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series 1998A-3
Note to be executed in its name and on its behalf by the facsimile signatures of
the undersigned authorized officers of the Issuer.
STUDENT LOAN FUNDING 1998-A/B TRUST,
By: Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee of
Student Loan Funding 1998-A/B Trust,
BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
------------------------- ------------------------
Title: Title:
--------------------- ---------------------
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series A-3 Notes described in the within
mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By
-------------------------------------
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
B-76
77
_______________ (Tax Identification or Social Security Number: _______________)
the within Student Loan Senior Asset-Backed Note, Series A-3 (LIBOR Floating
Rate) of Student Loan Funding 1998-A/B Trust, and hereby irrevocably constitutes
and appoints _______________ attorney to transfer said Note on the registry
books kept by the Indenture Trustee for that purpose with full power of
substitution in the premises.
Dated______________________ _____________________________
Signature
NOTE: The signature to the assignment must correspond to the name as
written on the face of this Note in every particular, without any alteration or
change whatsoever.
Signature Guarantee:______________________________
B-77
78
EXHIBIT C
---------
FORM OF SENIOR AUCTION RATE NOTES
---------------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE
TRUSTEE OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE OR ANY PORTION THEREOF 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
OTHER THAN DTC OR A NOMINEE THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
EACH OF THE HOLDER HEREOF AND EACH OWNER OF A BENEFICIAL INTEREST HEREIN, BY
HOLDING THIS GLOBAL SECURITY AND ACQUIRING THEIR BENEFICIAL INTERESTS HEREIN,
RESPECTIVELY, AGREES FOR THE BENEFIT OF STUDENT LOAN FUNDING 1998-A/B TRUST (THE
"ISSUER") THAT THIS GLOBAL SECURITY AND BENEFICIAL INTERESTS HEREIN MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE ISSUER, (2) SO LONG AS
THIS GLOBAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A IN ACCORDANCE WITH RULE
144A OR AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF THE SECURITIES ACT WHICH PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER OR AN INSTITUTIONAL ACCREDITED
INVESTOR TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144(A), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) (RESALES DESCRIBED IN
SUBCLAUSES (1) THROUGH (4) BEING REFERRED TO AS "SAFE HARBOR RESALES"), (5)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT (PROVIDED THAT AS A CONDITION TO REGISTRATION OF
TRANSFER OF THIS GLOBAL SECURITY OTHERWISE THAN IN A SAFE HARBOR RESALE THE
ISSUER OR THE INDENTURE TRUSTEE MAY REQUIRE DELIVERY OF ANY DOCUMENTS OR OTHER
EVIDENCE THAT IT, IN ITS ABSOLUTE DISCRETION, DEEMS NECESSARY OR APPROPRIATE TO
EVIDENCE COMPLIANCE WITH SUCH EXEMPTION AND WITH ANY STATE SECURITIES LAWS THAT
MAY BE APPLICABLE), OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAW OR ANY STATE OF THE UNITED STATES. EACH OWNER OF A BENEFICIAL
INTEREST IN THIS GLOBAL SECURITY, BY ACQUIRING SUCH BENEFICIAL INTEREST,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOTIFY ANY
PURCHASER OF SUCH BENEFICIAL INTEREST FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO ABOVE. THIS LEGEND WILL BE REMOVED ONLY IN THE CIRCUMSTANCES
SPECIFIED IN THE INDENTURE.
THE INTEREST ON THIS SERIES 1998A-_ NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. [D/E/F]-__ $__,000,000
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED CALLABLE NOTE
SERIES 1998A-_
(AUCTION RATE)
Dated: December 22, 1998 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2019
79
Student Loan Funding 1998-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, not in its individual
capacity, but solely as co-owner trustee of Student Loan Funding 1998-A/B Trust
(the "Co-Owner Trustee"), hereby acknowledges itself indebted and, for value
received, hereby promises to pay (but only out of the Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
________________________________ DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1998A-_ Note is one of a duly authorized issue of notes of
the Issuer designated as "Student Loan Funding 1998-A/B Trust Student Loan
Senior Asset-Backed Callable Notes, Series A-_ (Auction Rate)" in the aggregate
principal amount of $______,000 (the Unregistered Notes of this series herein
referred to as the "Series 1998A-_ Notes and collectively with the Registered
Notes of this Series, the "Series A-3 Notes"), initially issued (a) pursuant to
a resolution duly adopted by the Management Committee of Student Loan Funding
LLC, a Delaware limited liability company (the "Original Issuer") authorizing
the issuance of the Series 1998A-_ Notes and (b) under (i) the authority of the
Certificate of Formation and Limited Liability Company Agreement of the Original
Issuer and (ii) an Indenture of Trust, dated as of December 1, 1998 (the
"Original Base Indenture"), and a Terms Supplement, dated as of even date with
the Base Indenture (the "Original Terms Supplement"). In connection with the
sale and transfer of the Trust Estate to the Issuer by the Original Issuer and
the assumption by the Issuer of all of the Original Issuer's obligations under
the Original Base Indenture and Original Terms Supplement, the Original Base
Indenture and Original Terms Supplement have been amended and restated by the
First Amended and Restated Indenture of Trust and the First Amended and Restated
Terms Supplement to the First Amended and Restated Indenture of Trust,
respectively, each dated as of March 15, 1999 (collectively, the "First Restated
Indenture"), and each by and among the Issuer, Firstar Bank, National
Association, not in its individual capacity, but solely in its capacity as the
initial eligible lender trustee for the benefit of the Issuer (the "Initial
Eligible Lender Trustee" and together with any other eligible lender trustee
thereunder, each an "Eligible Lender Trustee"), and Firstar Bank, National
Association, as indenture trustee (the "Indenture Trustee"). In connection with
the consummation of an exchange offer, the First Restated Indenture has been
amended and restated by the Second Amended and Restated Indenture of Trust and
the Second Amended and Restated Terms Supplement, each dated June 1, 1999, each
by and among the Issuer, the Initial Eligible Lender Trustee and the Indenture
Trustee (collectively, the "Indenture"). The Series A-_ Notes are issued
simultaneously and on a parity with the Student Loan Funding 1998-A/B Trust's
$400,000,000 Student Loan Senior Asset-Backed Notes, Series A-3 (LIBOR Floating
Rate) (the "Series A-3 Notes"), Student Loan Funding 1998-A/B Trust's
$___,000,000 Student Loan Senior Asset-Backed Callable Notes, Series A-_
(Auction Rate) (the "Series 1998A-_ Notes"), and Student Loan Funding 1998-A/B
Trust's $___,000,000 Student Loan Senior Asset-Backed Callable Notes, Series A-_
(Auction Rate) (collectively with the Series A-3 Notes, the Series A-_ Notes and
Series A-_ Notes, the "Series 1998A Notes") and simultaneously with and on a
basis senior to Student Loan Funding 1998-A/B Trust's $54,500,000 Student Loan
Subordinate Asset-Backed Notes, Series B-3 (Fixed Rate) (collectively with the
Series 1998A Notes, the "Notes"). References in this Series 1998A-_ Note to the
name "Student Loan Funding 1998-A/B Trust" or to the term "Issuer" shall mean
the Co-Owner Trustee, not in its individual capacity, but solely as Co-Owner
Trustee of the Issuer.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1998A-_ Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series A-_ Notes; the student loan
purchase program being financed by the issuance of the Series A-_ Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest and any
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Carryover Interest on the Series A-_ Notes (subject to the prior rights of the
Indenture Trustee to any realization from the Indenture Trustee's lien on and
security interest in the Trust Estate for payment of its fees and expenses and
the fees and expenses of each Eligible Lender Trustee); the nature and extent
and manner of enforcement of the pledge; the conditions upon which the Indenture
may be amended or supplemented with or without the consent of the Holders of the
Directing Notes; the rights and remedies of the Holders of the Series A-_ Notes,
including the limitations therein contained upon the right of a Holder to
institute any suit, action or proceeding in equity or at law with respect hereto
and thereto; the rights, duties and obligations of the Issuer, each Eligible
Lender Trustee and the Indenture Trustee thereunder; the terms and provisions
upon which the liens, pledges, charges, trusts, security interests, assignments
and covenants made therein may be discharged at or prior to the maturity of this
Series 1998A-_ Note, this Series 1998A-_ Note thereafter no longer being secured
by the Indenture or being deemed to be outstanding thereunder; and for the other
terms and provisions thereof.
Words and terms used as defined words and terms in this Series A-_ Note
and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest and Carryover Interest, if any, on the
Series A-_ Notes are limited obligations of the Issuer payable only out of the
Trust Estate, as and to the extent set forth in the Indenture, and are secured
by a pledge of, lien on, security interest in and assignment of the Trust
Estate, subject to the provisions of the Indenture permitting the application
thereof for the purposes and on the terms and conditions set forth in the
Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE SERIES A-_ NOTES,
THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND CARRYOVER INTEREST, IF ANY, ON
THIS SERIES 1998A-_ NOTE AND REDEMPTION OF THIS SERIES 1998A-_ NOTE WILL BE
DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF THE
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.
No covenant or agreement contained in this Series 1998A-_ Note or in
the Indenture shall be deemed to be a covenant or agreement of any officer,
director, agent or employee of the Issuer in his or her individual capacity, and
none of such officers, directors, agents or employees nor any person executing
this Series 1998A-_ Note on behalf of the Issuer shall be liable personally on
this Series 1998A-_ Note or be subject to any personal liability or
accountability by reason of the issuance of this Series 1998A-_ Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1998A-_ Note is held in a Book-entry System,
this Series 1998A-_ Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1998A-_ Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee, subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series 1998A-_ Note or Series
1998A-_ Notes of Authorized Denominations of the same aggregate principal amount
and date as this Series 1998A-_ Note. The person in whose name this Series
1998A-_ Note is registered shall be deemed the owner hereof for all purposes,
and the Issuer, the Indenture Trustee and any other designated Authenticating
Agent shall not be affected by any notice to the contrary.
The Series A-_ Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1998A-_ Note is held in a
Book-entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series 1998A-_ Notes may be
exchanged at said office of the
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Indenture Trustee for a like aggregate principal amount of Series 1998A-_ Notes
of the same date and series of other Authorized Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1998A-_ Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date fixed for the payment
thereof.
It is hereby certified, recited 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 Series 1998A-_ Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1998A-_ Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1998A-_ Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1998A-_ Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series 1998A-_
Note to be executed in its name and on its behalf by the facsimile signatures of
the undersigned authorized officers of the Issuer.
STUDENT LOAN FUNDING 1998-A/B TRUST,
By Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee of
Student Loan Funding 1998-A/B Trust,
BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
------------------------------ -------------------------
Title: Title:
------------------------------ -------------------------
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series A-_ Notes described in the within
mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By ____________________________________
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ___
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____________ (Tax Identification or Social Security Number: _______________) the
within Student Loan Senior Asset-Backed Callable Note, Series A-___ (Auction
Rate), of Student Loan Funding 1998-A/B Trust, and hereby irrevocably
constitutes and appoints _______________ attorney to transfer said Note on the
registry books kept by the Indenture Trustee for that purpose with full power of
substitution in the premises.
Dated______________________ ______________________________
Signature
NOTE: The signature to the assignment must correspond to the name as
written on the face of this Note in every particular, without any alteration or
change whatsoever.
Signature Guarantee:______________________________
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EXHIBIT D
---------
FORM OF SUBORDINATE NOTE
------------------------
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE
TRUSTEE OR ITS AGENT FOR REGISTRATION OR TRANSFER, EXCHANGE, OR PAYMENT AND ANY
CERTIFICATE ISSUED IN EXCHANGE FOR THIS CERTIFICATE OR ANY PORTION THEREOF 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
OTHER THAN DTC OR A NOMINEE THEREOF IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
NEITHER THIS GLOBAL SECURITY NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
EACH OF THE HOLDER HEREOF AND EACH OWNER OF A BENEFICIAL INTEREST HEREIN, BY
HOLDING THIS GLOBAL SECURITY AND ACQUIRING THEIR BENEFICIAL INTERESTS HEREIN,
RESPECTIVELY, AGREES FOR THE BENEFIT OF STUDENT LOAN FUNDING 1998-A/B TRUST (THE
"ISSUER") THAT THIS GLOBAL SECURITY AND BENEFICIAL INTERESTS HEREIN MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE ISSUER, (2) SO LONG AS
THIS GLOBAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER AS DEFINED IN RULE 144A IN ACCORDANCE WITH RULE
144A OR AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2),
(3) OR (7) OF THE SECURITIES ACT WHICH PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER OR AN INSTITUTIONAL ACCREDITED
INVESTOR TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144(A), (3) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE) OF REGULATION S UNDER THE
SECURITIES ACT (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION IN ACCORDANCE WITH
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) (RESALES DESCRIBED IN
SUBCLAUSES (1) THROUGH (4) BEING REFERRED TO AS "SAFE HARBOR RESALES"), (5)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT (PROVIDED THAT AS A CONDITION TO REGISTRATION OF
TRANSFER OF THIS GLOBAL SECURITY OTHERWISE THAN IN A SAFE HARBOR RESALE THE
ISSUER OR THE INDENTURE TRUSTEE MAY REQUIRE DELIVERY OF ANY DOCUMENTS OR OTHER
EVIDENCE THAT IT, IN ITS ABSOLUTE DISCRETION, DEEMS NECESSARY OR APPROPRIATE TO
EVIDENCE COMPLIANCE WITH SUCH EXEMPTION AND WITH ANY STATE SECURITIES LAWS THAT
MAY BE APPLICABLE), OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAW OR ANY STATE OF THE UNITED STATES. EACH OWNER OF A BENEFICIAL
INTEREST IN THIS GLOBAL SECURITY, BY ACQUIRING SUCH BENEFICIAL INTEREST,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE ISSUER THAT IT WILL NOTIFY ANY
PURCHASER OF SUCH BENEFICIAL INTEREST FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO ABOVE. THIS LEGEND WILL BE REMOVED ONLY IN THE CIRCUMSTANCES
SPECIFIED IN THE INDENTURE.
THE INTEREST ON THIS SERIES 1998B-3 NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. G-__ $54,500,000
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SUBORDINATE ASSET-BACKED NOTE
SERIES 1998B-3
(FIXED RATE)
Dated: December 22, 1998 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2019
84
Student Loan Funding 1998-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, not in its individual
capacity, but solely as co-owner trustee of Student Loan Funding 1998-A/B Trust
(the "Co-Owner Trustee"), hereby acknowledges itself indebted and, for value
received, hereby promises to pay (but only out of the Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
FIFTY-FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1998B-3 Note is one of a duly authorized issue of
notes of the Issuer designated as "Student Loan Funding 1998-A/B Trust Student
Loan Subordinate Asset-Backed Notes, Series B-3 (Fixed Rate)" in the aggregate
principal amount of $54,500,000 (the Unregistered Notes of this series herein
referred to as the "Series 1998B-3 Notes" and collectively with the Registered
Notes of this Series, the "Series B-3 Notes"), initially issued (a) pursuant to
a resolution duly adopted by the Management Committee of Student Loan Funding
LLC, a Delaware limited liability company (the "Original Issuer") authorizing
the issuance of the Series 1998B-3 Notes and (b) under (i) the authority of the
Certificate of Formation and Limited Liability Company Agreement of the Original
Issuer and (ii) an Indenture of Trust, dated as of December 1, 1998 (the
"Original Base Indenture"), and a Terms Supplement, dated as of even date with
the Base Indenture (the "Original Terms Supplement"). In connection with the
sale and transfer of the Trust Estate to the Issuer by the Original Issuer and
the assumption by the Issuer of all of the Original Issuer's obligations under
the Original Base Indenture and Original Terms Supplement, the Original Base
Indenture and Original Terms Supplement have been amended and restated by the
First Amended and Restated Indenture of Trust and the First Amended and Restated
Terms Supplement to the First Amended and Restated Indenture of Trust,
respectively, each dated as of March 15, 1999 (collectively, the "First Restated
Indenture"), and each by and among the Issuer, Firstar Bank, National
Association, not in its individual capacity, but solely in its capacity as the
initial eligible lender trustee for the benefit of the Issuer (the "Initial
Eligible Lender Trustee" and together with any other eligible lender trustee
thereunder, each an "Eligible Lender Trustee"), and Firstar Bank, National
Association, as indenture trustee (the "Indenture Trustee"). In connection with
the consummation of an exchange offer, the First Restated Indenture has been
amended and restated by the Second Amended and Restated Indenture of Trust and
the Second Amended and Restated Terms Supplement, each dated June 1, 1999, each
by and among the Issuer, the Initial Eligible Lender Trustee and the Indenture
Trustee (collectively, the "Indenture"). The Series B-3 Notes are issued
simultaneously with and on a basis subordinate to the Student Loan Funding
1998-A/B Trust's $400,000,000 Student Loan Senior Asset-Backed Notes, Series A-3
(LIBOR Floating Rate) (the "Series 1998A-3 Notes"), the Student Loan Funding
1998-A/B Trust's $93,000,000 Student Loan Senior Asset-Backed Callable Notes,
Series A-4 (Auction Rate) (the "Series A-4 Notes"), the Student Loan Funding
1998-A/B Trust's $90,000,000 Student Loan Senior Asset-Backed Callable Notes,
Series A-5 (Auction Rate) (the "Series A-5 Notes"), and the Student Loan Funding
1998-A/B Trust's $90,000,000 Student Loan Senior Asset-Backed Callable Notes,
Series A-6 (Auction Rate) (collectively with the Series 1998A-3 Notes, the
Series A-4 Notes and the Series A-5 Notes, the "Series 1998A Notes", and
collectively with the Series B-3 Notes, the "Notes"). References in this Series
B-3 Note to the name "Student Loan Funding 1998-A/B Trust" or to the term
"Issuer" shall mean the Co-Owner Trustee, not in its individual capacity, but
solely as Co-Owner Trustee of the Issuer.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1998B-3 Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series B-3 Notes; the student loan
purchase program being financed by the issuance of the Series B-3 Notes; the
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revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest on the Series B-3 Notes (subject to the prior rights
of the Indenture Trustee to any realization from the Indenture Trustee's lien on
and security interest in the Trust Estate for payment of its fees and expenses,
the fees and expenses of each Eligible Lender Trustee and for payment of the
principal of and interest on the Series 1998A Notes); the nature and extent and
manner of enforcement of the pledge; the conditions upon which the Indenture may
be amended or supplemented with or without the consent of the Holders of the
Series B-3 Notes; the rights and remedies of the Holders of the Directing Notes,
including the limitations therein contained upon the right of a Holder to
institute any suit, action or proceeding in equity or at law with respect hereto
and thereto; the rights, duties and obligations of the Issuer, each Eligible
Lender Trustee and the Indenture Trustee thereunder; the terms and provisions
upon which the liens, pledges, charges, trusts, security interests, assignments
and covenants made therein may be discharged at or prior to the maturity of this
Series 1998B-3 Note, this Series 1998B-3 Note thereafter no longer being secured
by the Indenture or being deemed to be outstanding thereunder; and for the other
terms and provisions thereof.
Words and terms used as defined words and terms in this Series 1998B-3
Note and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest on the Series B-3 Notes are limited
obligations of the Issuer payable only out of the Trust Estate, as and to the
extent set forth in the Indenture, and are secured by a pledge of, lien on,
security interest in and assignment of the Trust Estate, subject to the
provisions of the Indenture permitting the application thereof for the purposes
and on the terms and conditions set forth in the Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE SERIES B-3 NOTES,
THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST, ON THIS SERIES 1998B-3 NOTE AND
THE REDEMPTION OF THIS SERIES 1998B-3 NOTE WILL BE DETERMINED IN ACCORDANCE WITH
THE TERMS, CONDITIONS AND PROVISIONS OF THE INDENTURE, 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.
No covenant or agreement contained in this Series 1998B-3 Note or in
the Indenture shall be deemed to be a covenant or agreement of any officer,
director, agent or employee of the Issuer in his or her individual capacity, and
none of such officers, directors, agents or employees nor any person executing
this Series 1998B-3 Note on behalf of the Issuer shall be liable personally on
this Series 1998B-3 Note or be subject to any personal liability or
accountability by reason of the issuance of this Series 1998B-3 Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1998B-3 Note is held in a Book-entry System,
this Series 1998B-3 Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1998B-3 Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series 1998B-3 Note or Series
1998B-3 Notes of Authorized Denominations of the same aggregate principal amount
and date as this Series 1998B-3 Note. The person in whose name this Series
1998B-3 Note is registered shall be deemed the owner hereof for all purposes,
and the Issuer, the Indenture Trustee and any other designated Authenticating
Agent shall not be affected by any notice to the contrary.
The Series B-3 Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1998B-3 Note is held in a
Book-entry System and subject to the limitations and upon payment of
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the charges, if any, provided in the Indenture, Series 1998B-3 Notes may be
exchanged at said office of the Indenture Trustee for a like aggregate principal
amount of Series 1998B-3 Notes of the same date and series of other Authorized
Denominations.
In any case where the date fixed for the payment of principal of or
interest on this Series 1998B-3 Note shall not be a Business Day, then payment
of such principal or interest need not be made on such date but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date fixed for the payment thereof.
It is hereby certified, recited 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 Series 1998B-3 Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1998B-3 Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1998B-3 Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1998B-3 Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series B-3 Note to be
executed in its name and on its behalf by the facsimile signatures of the
undersigned authorized officers of the Issuer.
STUDENT LOAN FUNDING 1998-A/B TRUST,
By Firstar Bank, National Association,
not in its individual capacity, but solely in its capacity
as co-owner trustee of Student Loan Funding 1998-A/B Trust,
BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
------------------------------ ------------------------
Title: Title:
--------------------------- ---------------------
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series B-3 Notes described in the within
mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By ____________________________________
Authorized Signatory
[Form of Assignment for Transfer]
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FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Subordinate Asset-Backed Note, Series
B-3 (Fixed Rate) of Student Loan Funding 1998-A/B Trust, and hereby irrevocably
constitutes and appoints _______________ attorney to transfer said Note on the
registry books kept by the Indenture Trustee for that purpose with full power of
substitution in the premises.
Dated______________________ ______________________________
Signature
NOTE: The signature to the assignment must correspond to the name as
written on the face of this Note in every particular, without any alteration or
change whatsoever.
Signature Guarantee:______________________________
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EXHIBIT E
---------
[FORM OF]
INSTRUCTIONS FOR
PAYMENT OF INTEREST
Firstar Bank, National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services
The undersigned is the registered owner of Student Loan
Asset-Backed Note(s), Series 1998[A/B[1]-_], of Student Loan Funding 1998-A/B
Trust No(s). _____________ (the "Note(s)"), in an aggregate principal amount of
$1,000,000 or more. Until further notice or until the undersigned ceases to be
the registered owner of the Note(s), you are instructed to make payment of all
interest due on the Note(s) on any date due by depositing or wiring immediately
available funds on such date to the credit of the undersigned's Account No.
___________ with __________________.
Name ___________________________
Date:____________________ ____________________________________
Authorized Signature
Signature Guaranteed:
____________________________________
89
EXHIBIT F
---------
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1998A-_
NOTICE OF PAYMENT DEFAULT
-------------------------
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and
is continuing with respect to the Notes identified above. The next Auction for
the Series 1998A-_ Notes will not be held. The Auction Rate for the Series
1998A-_ Notes for the next succeeding Interest Accrual Period shall be the
Non-Payment Rate.
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Dated: ____________________ By: ____________________________
90
EXHIBIT G
---------
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1998A-_
NOTICE OF CURE OF PAYMENT DEFAULT
---------------------------------
NOTICE IS HEREBY GIVEN that a Payment Default with respect to
the Notes identified above has been waived or cured. The next Distribution Date
for the Series 1998A-_ Notes is _____________________ and the next Interest
Determination Date is ___________________.
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
Dated:_____________________ By: ___________________________
91
EXHIBIT H
---------
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1998A-_
NOTICE OF PROPOSED AUCTION PERIOD ADJUSTMENT
--------------------------------------------
Notice is hereby given that Student Loan Funding 1998-A/B
Trust, by Firstar Bank, National Association, not in its individual capacity,
but solely in its capacity of co-owner trustee of the Student Loan Funding
1998-A/B Trust, proposes to change with respect to the captioned Notes the
length of the Auction Period pursuant to the Indenture as follows:
1. The change shall take effect on __________________,
the Distribution 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 Indenture Trustee and the Auction Agent receive, by
11:00 A.M., eastern time, on the Business Day before the Auction Date for the
Auction Period commencing on the Effective Date, a certificate from the
Calculation Agent, as required by the Indenture authorizing the change in length
of one or more Auction Periods and (B) Sufficient Clearing Bids exist on the
Interest Determination 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 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.
4. It is hereby represented, upon advice of the Auction
Agent for the Notes described herein, that there were Sufficient Clearing Bids
for such Notes at the Auction immediately preceding the date of this Notice.
5. Terms not defined in this Notice shall have the
meanings set forth in the Indenture entered into in connection with the
captioned Notes.
STUDENT LOAN FUNDING 1998-A/B TRUST
By: Firstar Bank, National Association,
92
not in its individual capacity, but
solely in its capacity as co-owner
trustee of Student Loan Funding 1998-A/B
Trust,
Date:______________________ By:___________________________
B-92
93
EXHIBIT I
---------
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1998A-_
NOTICE ESTABLISHING AUCTION PERIOD ADJUSTMENT
---------------------------------------------
Notice is hereby given that Student Loan Funding 1998-A/B
Trust, by Firstar Bank, National Association, not in its individual capacity,
but solely in its capacity of co-owner trustee of the Student Loan Funding
1998-A/B Trust hereby establishes with respect to the captioned Notes new
lengths for one or more Auction Periods pursuant to the Indenture:
1. The change shall take effect on _______________, the
Distribution 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 Distribution 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
commencing on the Effective Date the Distribution 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
2.03.2.7 of the Indenture.
4. For all purposes of the Indenture, from and after the
Effective Date, "RATE ADJUSTMENT DATE" shall mean the Effective Date, and
thereafter _________ of each __________, if each such __________ is a Business
Day; provided, however, that if each such __________ is not a Business Day, then
the first Business Day next succeeding such ____________.
5. 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 Indenture and our prior notice dated
________________ regarding the proposed change.
6. Terms not defined in this Notice shall have the meanings
set forth in the Indenture relating to the captioned Notes.
STUDENT LOAN FUNDING 1998-A/B TRUST
By: Firstar Bank, National Association,
not in its individual capacity, but
solely in its capacity as co-owner
trustee of Student Loan
94
Funding 1998-A/B Trust,
Date:______________________ By:___________________________
I-94
95
EXHIBIT J
---------
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1998A-_
NOTICE OF CHANGE IN INTEREST DETERMINATION DATE
-----------------------------------------------
Notice is hereby given by ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC., as
Calculation Agent for the captioned Notes, that with respect to the Series
1998A-_ Notes, the Interest Determination Date is hereby changed as follows:
1. The definition of "Interest Determination Date" shall be
deemed amended by substituting "________________ (number) Business Day" as set
forth in the definition thereof in the Indenture and by substituting
"___________________ (number) Business Days" for "two 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 Interest Determination Date for the Series 1998A-_
Notes shall be subject to further change hereafter as provided in the Indenture.
4. Terms not defined in this Notice shall have the meanings
set forth in the Indenture relating to the captioned Notes.
▇▇▇▇▇▇▇ ▇▇▇▇▇ BARNEY INC.,
as Calculation Agent
Dated:____________________ By: ___________________________
96
EXHIBIT K
---------
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1998A-_
NOTICE OF PROPOSED AUCTION PERIOD CONVERSION
--------------------------------------------
Notice is hereby given that Student Loan Funding 1998-A/B
Trust, by Firstar Bank, National Association, not in its individual capacity,
but solely in its capacity of co-owner trustee of Student Loan Funding 1998-A/B
Trust, proposes to change for the captioned Notes the length of one or more
Auction Periods pursuant to an Auction Period Conversion under the Indenture as
follows:
1. The change shall take effect on __________________, the
Distribution Date for the current Auction Period and the date of commencement of
the next Auction Period (the "Auction Period Conversion Date").
2. The Auction Period Conversion in Paragraph 1 shall take
place only if the provisions set forth in Sections 2.03.2.9 and 2.03.2.10 of the
Indenture are fully satisfied. In connection with such proposed Auction Period
Conversion, the Auction Agent shall not conduct an Auction on the Interest
Determination Date immediately preceding the Auction Period Conversion Date.
3. Regardless of whether the provisions in Sections 2.03.2.9
and 2.03.2.10 of the Indenture are met or are not met, the Auction Agent shall
resume conducting an Auction on the Interest Determination Date that immediately
succeeds such Auction Period Conversion Date.
4. Terms not defined in this Notice shall have the meanings
set forth in the Indenture entered into in connection with the captioned Notes.
STUDENT LOAN FUNDING 1998-A/B TRUST
By: Firstar Bank, National Association,
not in its individual capacity, but
solely in its capacity as co-owner
trustee of Student Loan Funding 1998-A/B
Trust,
97
Date:______________________ By:___________________________
K-97
98
EXHIBIT L
---------
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1998A-_
NOTICE ESTABLISHING AUCTION PERIOD CONVERSION
---------------------------------------------
Notice is hereby given that Student Loan Funding 1998-A/B
Trust, by Firstar Bank, National Association, not in its individual capacity,
but solely in its capacity of co-owner trustee of Student Loan Funding 1998-A/B
Trust, hereby establishes for the captioned Notes new lengths for one or more
Auction Periods pursuant an Auction Period Conversion under the Indenture:
1. The Auction Period Conversion is effective _______________,
being the Distribution Date for the Auction Period immediately preceding the
date of commencement of the Auction Period with respect to which the Auction
Period Conversion is initially effective (the "Effective Date").
2. Terms and provisions applicable to the new Auction Periods
established pursuant to the Auction Period Conversion are set forth in the
Supplemental Indenture attached hereto as Attachment 1 and effective on the
Effective Date.
3. Attached hereto as Attachment 2 is the written evidence
required by Section 2.03.2.9 of the Indenture to the effect that the Auction
Period Conversion described herein will not adversely affect the ratings on the
obligations described in such Section 2.03.2.9.
4. Terms not defined in this Notice shall have the meanings
set forth in the Indenture relating to the captioned Notes.
STUDENT LOAN FUNDING 1998-A/B TRUST
By: Firstar Bank, National Association,
not in its individual capacity, but solely
in its capacity as co-owner trustee of
Student Loan Funding 1998-A/B Trust,
Date:______________________ By:___________________________
99
EXHIBIT M
---------
FORM OF TRANSFER CERTIFICATE
----------------------------
FOR TRANSFER FROM RESTRICTED GLOBAL
-----------------------------------
SECURITY TO REGULATION S GLOBAL SECURITY
----------------------------------------
(Transfers pursuant to Section 2.05(c)(i)
of the Base Indenture)
Firstar Bank, National Association
as Indenture Trustee
Cincinnati, Ohio
Attn: Corporate Trust Department
Re: Student Loan Funding 1998-A/B Trust Student Loan
[Senior/Subordinate] Asset-Backed Notes, Series
1998_-_ (the "Notes")
Reference is hereby made to the Second Amended and Restated
Indenture of Trust, dated as of ______ 1, 1999 (the "Base Indenture"), as
supplemented by the Second Amended and Restated Terms Supplement, dated as of
______ 1, 1999 (the "Terms Supplement" and collectively with the Base Indenture,
the "Indenture"), among Student Loan Funding 1998-A/B Trust, by Firstar Bank,
National Association, not in its individual capacity, but solely in its capacity
of co-owner trustee of Student Loan Funding 1998-A/B Trust (the "Issuer"),
Firstar Bank, National Association, not in its individual capacity, but solely
in its capacity as eligible lender trustee for the benefit of the Issuer, and
Firstar Bank, National Association, as Indenture Trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
This letter relates to US $______________ principal amount of
Notes which are evidenced by one or more Restricted Global Securities (CUSIP No.
_________) and held with the Depository in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Notes to a person who will take delivery thereof in
the form of an equal principal amount of Notes evidenced by one or more
Regulation S Global Securities (CUSIP No. _______), which amount, immediately
after such transfer, is to be held with the Depository through Euroclear or
Cedel or both (Common Code:
_______; ISIN: _________________).
In connection with such request and in respect of such Notes,
the Transferor does hereby certify that such transfer has been effected pursuant
to and in accordance with Rule 903 or Rule 904 (as applicable) under the United
States Securities Act of 1933, as amended (the "Securities Act"), and
accordingly the Transferor does hereby further certify that:
100
(1) the offer of the Notes was not made to a person in the United
States;
(2) either:
(A) At the time the buy order was originated, the
transferee was outside the United States or the Transferor and any person acting
on its behalf reasonably believed that the transferee was outside the United
States, or
(B) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither the
Transferor nor any person acting on its behalf knows that the transaction was
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above is to be held with the Depository through
Euroclear or Cedel or both.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer and the initial purchasers or
initial purchasers, if any, of the initial offering of such Notes being
transferred. Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ____________.
M-100
101
EXHIBIT N
---------
FORM OF TRANSFER CERTIFICATES
-----------------------------
FOR TRANSFER FROM REGULATION S GLOBAL
-------------------------------------
SECURITY TO RESTRICTED GLOBAL SECURITY
--------------------------------------
(Transfers pursuant to Section 2.05(c)(ii)
of the Terms Supplement)
[Transferor Certificate]
Firstar Bank, National Association
as Indenture Trustee
Cincinnati, Ohio
Attn: Corporate Trust Department
Re: Student Loan Funding 1998-A/B Trust, Student Loan
[Senior/Subordinate] Asset-Backed Notes, Series 1998_-_ (the
"Notes")
Reference is hereby made to the Second Amended and Restated
Indenture of Trust, dated as of ______ 1, 1999 (the "Base Indenture"), as
supplemented by the Second Amended and Restated Terms Supplement, dated as of
______ 1, 1999 (the "Terms Supplement" and collectively with the Base Indenture,
the "Indenture"), among Student Loan Funding 1998-A/B Trust, by Firstar Bank,
National Association, not in its individual capacity, but solely in its capacity
of co-owner trustee of Student Loan Funding 1998-A/B Trust (the "Issuer"),
Firstar Bank, National Association, not in its individual capacity, but solely
in its capacity as eligible lender trustee for the benefit of the Issuer, and
Firstar Bank, National Association, as Indenture Trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
This letter relates to US $______________ principal amount of
Notes which are evidenced by one or more Regulation S Global Securities (CUSIP
No. _________) and held with the Depository through [Euroclear] [Cedel] (Common
Code ___________) in the name of [insert name of transferor] (the "Transferor").
The Transferor has requested a transfer of such beneficial interest in the Notes
to a person that will take delivery thereof (the "Transferee") in the form of an
equal principal amount of Notes evidenced by one or more Restricted Global
Securities (CUSIP No. _______).
In connection with such request and in respect of such Notes,
the Transferor does
102
hereby certify that such Transferor did not purchase such Notes as part of their
initial distribution and the transfer is being effected pursuant to and in
accordance with an exemption from the United States Securities Act of 1933, as
amended (the "Securities Act") and in accordance with any applicable securities
laws of any state of the United States or any other jurisdiction.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer and the initial purchasers and
initial purchasers, if any, of the Notes being transferred.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ____________.
N-102
103
FORM OF TRANSFER CERTIFICATES
-----------------------------
FOR TRANSFER FROM REGULATION S GLOBAL
-------------------------------------
SECURITY TO RESTRICTED GLOBAL SECURITY
--------------------------------------
(Transfers pursuant to Section 2.05(c)(ii)
of the Terms Supplement)
[Transferee Certificate]
Firstar Bank, National Association
as Indenture Trustee
Cincinnati, Ohio
Attn: Corporate Trust Department
Re: Student Loan Funding 1998-A/B Trust, Student Loan
[Senior/Subordinate] Asset-Backed [Callable] Notes, Series
1998_-_ (the "Notes")
Reference is hereby made to the Second Amended and Restated
Indenture of Trust, dated as of ______ 1, 1999 (the "Base Indenture"), as
supplemented by the Second Amended and Restated Terms Supplement, dated as of
______ 1, 1999 (the "Terms Supplement" and collectively with the Base Indenture,
the "Indenture"), among Student Loan Funding 1998-A/B Trust, by Firstar Bank,
National Association, not in its individual capacity, but solely in its capacity
of co-owner trustee of Student Loan Funding 1998-A/B Trust (the "Issuer"),
Firstar Bank, National Association, not in its individual capacity, but solely
in its capacity as eligible lender trustee for the benefit of the Issuer, and
Firstar Bank, National Association, as Indenture Trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
This letter relates to US $________________ principal amount
of Notes which are evidenced by one or more Regulation S Global Securities
(CUSIP No. _____________) and held with the Depository through
[Euroclear][Cedel] (Common Code ______________) in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Notes to [insert name of transferee] (the
"Transferee") that will take delivery thereof in the form of an equal principal
amount of Notes evidenced by one or more Restricted Global Securities (CUSIP No.
__________).
In connection with such request and in respect of such Notes,
the Transferee does hereby certify that it is purchasing the Notes for its own
account, or for one or more accounts with respect to which the Transferee
exercises sole investment discretion, and the Transferee and each such account
is [a "qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act (a "QIB")][an institutional "Accredited Investor" as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act (an "Accredited
Investor")].
The Transferee hereby agrees that any future resale, pledge or
transfer of such
N-103
104
Notes may be made only (i) to the Issuer, (ii) to a person who the seller
reasonably believes is (a) a QIB in a transaction meeting the requirements of
Rule 144A under the Securities Act or (b) an Accredited Investor as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act, (iii) in an offshore
transaction complying with Rule 903 or 904 (as applicable) of Regulation S under
the Securities Act, (iv) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if available), (v) pursuant to any other
available exemption from the registration requirements under the Securities Act
(provided that as a condition to the registration of transfer of any such Notes
pursuant to this clause (v) the Issuer or the Indenture Trustee may require
delivery of any documents or other evidence (including, but not limited to, an
opinion of counsel) that it, in its sole discretion, may deem necessary or
appropriate to evidence compliance with such exemption), or (vi) pursuant to an
effective registration statement under the Securities Act, and in each of such
cases in accordance with any applicable securities laws of any state of the
United States. The Transferee will notify any purchaser of Notes from it of the
resale restrictions referred to above, if then applicable.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Issuer and the initial purchasers and
initial purchasers, if any, of the Notes being transferred.
[Insert Name of Transferee]
By:
Name:
Title:
Dated: ____________.
N-104
105
EXHIBIT O
---------
FORM OF SENIOR LIBOR FLOATING RATE NOTE
---------------------------------------
THE INTEREST ON THIS SERIES 1998A1-3 NOTE IS NOT EXCLUDABLE FROM GROSS INCOME
FOR FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. H-__ $__,000,000
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTE
SERIES 1998A1-3
(LIBOR FLOATING RATE)
Dated: June __, 1999 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2006
Student Loan Funding 1998-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, not in its individual
capacity, but solely as co-owner trustee of Student Loan Funding 1998-A/B Trust
(the "Co-Owner Trustee"), hereby acknowledges itself indebted and, for value
received, hereby promises to pay (but only out of the Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
________________________________ DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1998A1-3 Note is one of a duly authorized issue of notes of
the Issuer designated as "Student Loan Funding 1998-A/B Trust Student Loan
Senior Asset-Backed Notes, Series A-3 (LIBOR Floating Rate)" in the aggregate
principal amount of $400,000,000 (the Registered Notes of this series herein
referred to as the "Series 1998A1-3 Notes" and collectively with the
Unregistered Notes of this Series, the "Series A-3 Notes"), initially issued
pursuant to the authority granted to the Issuer in the Trust Agreement and the
Second Amended and Restated Indenture of Trust and the Second Amended and
Restated Terms Supplement thereto, each dated as of June 1, 1999 (collectively,
the "Indenture), each by and among the Issuer, Firstar Bank, National
Association, not in its individual capacity, but solely in its capacity as the
initial eligible lender trustee for the benefit of the Issuer (the "Initial
Eligible Lender Trustee" and together with any other eligible lender trustee
thereunder, each an "Eligible Lender Trustee"), and Firstar Bank, National
Association, as indenture trustee (the "Indenture Trustee"). In connection with
the sale and transfer of the Trust Estate to the Issuer by the Student Loan
Funding LLC, a Delaware
106
limited liability company (the "Original Issuer") and the assumption by the
Issuer of all of the Original Issuer's obligations under the Indenture of Trust,
dated as of December 1, 1998 (the "Original Base Indenture"), and a Terms
Supplement, dated as of even date with the Original Base Indenture (the
"Original Terms Supplement"), the Original Base Indenture and Original Terms
Supplement have been amended and restated by the First Amended and Restated
Indenture of Trust and the First Amended and Restated Terms Supplement to the
First Amended and Restated Indenture of Trust, respectively, each dated as of
March 15, 1999 (collectively, the "First Restated Indenture"), and each by and
among the Issuer, the Initial Eligible Lender Trustee and the Indenture Trustee.
In connection with the consummation of an Exchange Offer, the First Restated
Indenture has been amended and restated by the Indenture. The Series A-3 Notes
are issued simultaneously and on a parity with Student Loan Funding 1998-A/B
Trust's $93,900,000 Student Loan Senior Asset-Backed Callable Notes, Series A-4
(Auction Rate) (the "Series A-4 Notes"), Student Loan Funding 1998-A/B Trust's
$90,000,000 Student Loan Senior Asset-Backed Callable Notes, Series A-5 (Auction
Rate) (the "Series A-5 Notes"), Student Loan Funding 1998-A/B Trust's
$90,000,000 Student Loan Senior Asset-Backed Callable Notes, Series A-6 (Auction
Rate) (collectively with the Series A-3 Notes, the Series A-4 Notes and the
Series A-5 Notes, the "Series 1998A Notes"), and simultaneously with and on a
basis senior to Student Loan Funding 1998-A/B Trust's $54,500,000 Student Loan
Subordinate Asset-Backed Notes, Series B-3 (Fixed Rate) (collectively with the
Series 1998A Notes, the "Notes"). References in this Series 1998A1-3 Note to the
name "Student Loan Funding 1998-A/B Trust" or to the term "Issuer" shall mean
the Co-Owner Trustee, not in its individual capacity, but solely as Co-Owner
Trustee of the Issuer.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1998A1-3 Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series A-3 Notes; the student loan
purchase program being financed by the issuance of the Series A-3 Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest and any Carryover Interest on the Series A-3 Notes
(subject to the prior rights of the Indenture Trustee to any realization from
the Indenture Trustee's lien on and security interest in the Trust Estate for
payment of its fees and expenses and the fees and expenses of each Eligible
Lender Trustee); the nature and extent and manner of enforcement of the pledge;
the conditions upon which the Indenture may be amended or supplemented with or
without the consent of the Holders of the Directing Notes; the rights and
remedies of the Holders of the Series A-3 Notes, including the limitations
therein contained upon the right of a Holder to institute any suit, action or
proceeding in equity or at law with respect hereto and thereto; the rights,
duties and obligations of the Issuer, each Eligible Lender Trustee and the
Indenture Trustee thereunder; the terms and provisions upon which the liens,
pledges, charges, trusts, security interests, assignments and covenants made
therein may be discharged at or prior to the maturity of this Series 1998A1-3
Note, this Series 1998A1-3 Note thereafter no longer being secured by the
Indenture or being deemed to be outstanding thereunder; and for the other terms
and provisions thereof.
Words and terms used as defined words and terms in this Series 1998A1-3
Note and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest and Carryover Interest, if any, on the
Series A-3 Notes are limited obligations of the Issuer payable only out of the
Trust Estate, as and to the extent set forth in the Indenture, and are secured
by a pledge of, lien on, security interest in and assignment of the Trust
Estate, subject to the provisions of the Indenture permitting the application
thereof for the purposes and on the terms and conditions set forth in the
Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE SERIES A-3 NOTES,
THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND CARRYOVER INTEREST, IF ANY, ON
THIS SERIES 1998A1-3 NOTE AND REDEMPTION OF THIS SERIES 1998A1-3 NOTE WILL BE
DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF THE
INDENTURE AND THE CALCULATION 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.
No covenant or agreement contained in this Series 1998A1-3 Note or in
the Indenture shall be deemed to be a covenant or agreement of any officer,
director, agent or employee of the Issuer in his or her individual capacity,
O-106
107
and none of such officers, directors, agents or employees nor any person
executing this Series 1998A1-3 Note on behalf of the Issuer shall be liable
personally on this Series 1998A1-3 Note or be subject to any personal liability
or accountability by reason of the issuance of this Series 1998A1-3 Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1998A1-3 Note is held in a Book-entry System,
this Series 1998A1-3 Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1998A1-3 Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee, subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series 1998A1-3 Note or Series
1998A1-3 Notes of Authorized Denominations of the same aggregate principal
amount and date as this Series 1998A1-3 Note. The person in whose name this
Series 1998A1-3 Note is registered shall be deemed the owner hereof for all
purposes, and the Issuer, the Indenture Trustee and any other designated
Authenticating Agent shall not be affected by any notice to the contrary.
The Series A-3 Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1998A1-3 Note is held in a
Book-entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series A-3 Notes may be exchanged at
said office of the Indenture Trustee for a like aggregate principal amount of
Series A-3 Notes of the same date and series of other Authorized Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1998A1-3 Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date fixed for the payment
thereof.
It is hereby certified, recited 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 Series 1998A1-3 Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1998A1-3 Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1998A1-3 Note shall not be entitled to any benefit under
the Indenture, or become valid or obligatory for any purpose, until the
certificate of authentication and registration hereon endorsed shall have been
signed by the Indenture Trustee or the Authenticating Agent.
This Series 1998A1-3 Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series
1998A1-3 Note to be executed in its name and on its behalf by the facsimile
signatures of the undersigned authorized officers of the Issuer.
STUDENT LOAN FUNDING 1998-A/B TRUST,
By: Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee of
Student Loan Funding 1998-A/B Trust,
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BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
------------------------------ ------------------------
Title: Title:
--------------------------- ---------------------
O-108
109
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series 1998A1-3 Notes described in the
within mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By ____________________________________
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Senior Asset-Backed Note, Series A-3
(LIBOR Floating Rate) of Student Loan Funding 1998-A/B Trust, and hereby
irrevocably constitutes and appoints _______________ attorney to transfer said
Note on the registry books kept by the Indenture Trustee for that purpose with
full power of substitution in the premises.
Dated______________________ ______________________________
Signature
NOTE: The signature to the assignment must correspond to the
name as written on the face of this Note in every particular, without any
alteration or change whatsoever.
Signature Guarantee:______________________________
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EXHIBIT P
FORM OF SENIOR AUCTION RATE NOTE
--------------------------------
THE INTEREST ON THIS SERIES 1998A1-_ NOTE IS NOT EXCLUDABLE FROM GROSS INCOME
FOR FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. [I/J/K]-__ $__,000,000
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED CALLABLE NOTE
SERIES 1998A1-_
(AUCTION RATE)
Dated: June __, 1999 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2019
Student Loan Funding 1998-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, not in its individual
capacity, but solely as co-owner trustee of Student Loan Funding 1998-A/B Trust
(the "Co-Owner Trustee"), hereby acknowledges itself indebted and, for value
received, hereby promises to pay (but only out of the Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
________________________________ DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1998A1-_ Note is one of a duly authorized issue of notes of
the Issuer designated as "Student Loan Funding 1998-A/B Trust Student Loan
Senior Asset-Backed Callable Notes, Series A-_ (Auction Rate)" in the aggregate
principal amount of $______,000 (the Registered Notes of this series herein
referred to as the "Series 1998A1-_ Notes, and collectively with the
Unregistered Notes of the Series, the "Series A-3 Notes"), initially issued
pursuant to the authority granted to the Issuer in the Trust Agreement and the
Second Amended and Restated Indenture of Trust and the Second Amended and
Restated Terms Supplement thereto, each dated as of June 1, 1999 (collectively,
the "Indenture"), each by and among the Issuer, Firstar Bank, National
Association, not in its individual capacity, but solely in its capacity as the
initial eligible lender trustee for the benefit of the Issuer (the "Initial
Eligible Lender Trustee" and together with any other eligible lender trustee
thereunder, each an "Eligible Lender Trustee"), and Firstar Bank, National
Association, as indenture trustee (the "Indenture Trustee"). In connection with
the sale and transfer of the Trust Estate to the Issuer by the Student Loan
Funding LLC, a Delaware
111
limited liability company (the "Original Issuer") and the assumption by the
Issuer of all of the Original Issuer's obligations under Indenture of Trust,
dated as of December 1, 1998 (the "Original Base Indenture"), and a Terms
Supplement, dated as of even date with the Base Indenture (the "Original Terms
Supplement"), the Original Base Indenture and Original Terms Supplement have
been amended and restated by the First Amended and Restated Indenture of Trust
and the First Amended and Restated Terms Supplement to the First Amended and
Restated Indenture of Trust, respectively, each dated as of March 15, 1999
(collectively, the "First Restated Indenture"), and each by and among the
Issuer, the Initial Eligible Lender Trustee and the Indenture Trustee. In
connection with the consummation of the Exchange Offer, the First Restated
Indenture has been amended and restated by the Indenture. The Series A-_ Notes
are issued simultaneously and on a parity with the Student Loan Funding 1998-A/B
Trust's $400,000,000 Student Loan Senior Asset-Backed Notes, Series A-3 (LIBOR
Floating Rate) (the "Series A-3 Notes"), Student Loan Funding 1998-A/B Trust's
$___,000,000 Student Loan Senior Asset-Backed Callable Notes, Series A-_
(Auction Rate) (the "Series A-_ Notes"), and Student Loan Funding 1998-A/B
Trust's $___,000,000 Student Loan Senior Asset-Backed Callable Notes, Series A-_
(Auction Rate) (collectively with the Series A-3 Notes, the Series A-_ Notes and
Series A-_ Notes, the "Series 1998A Notes") and simultaneously with and on a
basis senior to Student Loan Funding 1998-A/B Trust's $54,500,000 Student Loan
Subordinate Asset-Backed Notes, Series B-3 (Fixed Rate) (collectively with the
Series 1998A Notes, the "Notes"). References in this Series 1998A1-_ Note to the
name "Student Loan Funding 1998-A/B Trust" or to the term "Issuer" shall mean
the Co-Owner Trustee, not in its individual capacity, but solely as Co-Owner
Trustee of the Issuer.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1998A1-_ Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series A-_ Notes; the student loan
purchase program being financed by the issuance of the Series 1998A-_ Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest and any Carryover Interest on the Series A-_ Notes
(subject to the prior rights of the Indenture Trustee to any realization from
the Indenture Trustee's lien on and security interest in the Trust Estate for
payment of its fees and expenses and the fees and expenses of each Eligible
Lender Trustee); the nature and extent and manner of enforcement of the pledge;
the conditions upon which the Indenture may be amended or supplemented with or
without the consent of the Holders of the Directing Notes; the rights and
remedies of the Holders of the Series A-_ Notes, including the limitations
therein contained upon the right of a Holder to institute any suit, action or
proceeding in equity or at law with respect hereto and thereto; the rights,
duties and obligations of the Issuer, each Eligible Lender Trustee and the
Indenture Trustee thereunder; the terms and provisions upon which the liens,
pledges, charges, trusts, security interests, assignments and covenants made
therein may be discharged at or prior to the maturity of this Series 1998A1-_
Note, this Series 1998A1-_ Note thereafter no longer being secured by the
Indenture or being deemed to be outstanding thereunder; and for the other terms
and provisions thereof.
Words and terms used as defined words and terms in this Series
1998A1-_ Note and not otherwise defined herein shall have the meanings given
them in the Indenture.
The principal of and interest and Carryover Interest, if any, on the
Series A-_ Notes are limited obligations of the Issuer payable only out of the
Trust Estate, as and to the extent set forth in the Indenture, and are secured
by a pledge of, lien on, security interest in and assignment of the Trust
Estate, subject to the provisions of the Indenture permitting the application
thereof for the purposes and on the terms and conditions set forth in the
Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE SERIES A-_ NOTES,
THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND CARRYOVER INTEREST, IF ANY, ON
THIS SERIES 1998A1-_ NOTE AND REDEMPTION OF THIS SERIES 1998A1-_ NOTE WILL BE
DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS AND PROVISIONS OF THE
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.
No covenant or agreement contained in this Series 1998A1-_ Note or in
the Indenture shall be deemed to be a covenant or agreement of any officer,
director, agent or employee of the Issuer in his or her individual capacity, and
none of such officers, directors, agents or employees nor any person executing
this Series 1998A1-_ Note on
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112
behalf of the Issuer shall be liable personally on this Series 1998A1-_ Note or
be subject to any personal liability or accountability by reason of the issuance
of this Series 1998A1-_ Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1998A1-_ Note is held in a Book-entry System,
this Series 1998A1-_ Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1998A1-_ Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee, subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series 1998A-_ Note or Series
1998A-_ Notes of Authorized Denominations of the same aggregate principal amount
and date as this Series 1998A1-_ Note. The person in whose name this Series
1998A1-_ Note is registered shall be deemed the owner hereof for all purposes,
and the Issuer, the Indenture Trustee and any other designated Authenticating
Agent shall not be affected by any notice to the contrary.
The Series A-_ Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1998A1-_ Note is held in a
Book-entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series A-_ Notes may be exchanged at
said office of the Indenture Trustee for a like aggregate principal amount of
Series A-_ Notes of the same date and series of other Authorized Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1998A1-_ Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date fixed for the payment
thereof.
It is hereby certified, recited 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 Series 1998A1-_ Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1998A1-_ Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1998A-_ Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1998A-_ Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series
1998A1-_ Note to be executed in its name and on its behalf by the facsimile
signatures of the undersigned authorized officers of the Issuer.
STUDENT LOAN FUNDING 1998-A/B TRUST,
By Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee of
Student Loan Funding 1998-A/B Trust,
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BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
------------------------------ -------------------------
Title: Title:
--------------------------- ----------------------
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114
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series 1998A-_ Notes described in the
within mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By ____________________________________
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Senior Asset-Backed Callable Note,
Series A-___ (Auction Rate), of Student Loan Funding 1998-A/B Trust, and hereby
irrevocably constitutes and appoints _______________ attorney to transfer said
Note on the registry books kept by the Indenture Trustee for that purpose with
full power of substitution in the premises.
Dated______________________ ________________________
Signature
NOTE: The signature to the assignment must correspond to the
name as written on the face of this Note in every particular, without any
alteration or change whatsoever.
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EXHIBIT Q
FORM OF SUBORDINATE NOTE
THE INTEREST ON THIS SERIES 1998B-3 NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. L-__ $54,500,000
STUDENT LOAN FUNDING 1998-A/B TRUST
STUDENT LOAN SUBORDINATE ASSET-BACKED NOTE
SERIES 1998B-3
(FIXED RATE)
Dated: June __, 1999 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: December 1, 2019
Student Loan Funding 1998-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, not in its individual
capacity, but solely as co-owner trustee of Student Loan Funding 1998-A/B Trust
(the "Co-Owner Trustee"), hereby acknowledges itself indebted and, for value
received, hereby promises to pay (but only out of the Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
FIFTY-FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1998B1-3 Note is one of a duly authorized issue of
notes of the Issuer designated as "Student Loan Funding 1998-A/B Trust Student
Loan Subordinate Asset-Backed Notes, Series B-3 (Fixed Rate)" in the aggregate
principal amount of $54,500,000 (the Registered Notes of this series herein
referred to as the "Series 1998B1-3 Notes", and collectively with the
Unregistered Notes of this Series, the "Series B-3 Notes"), initially issued
pursuant to the authority granted to the Issuer in the Trust Agreement and the
Second Amended and Restated Indenture of Trust and the Second Amended and
Restated Terms Supplement thereto, each dated as of June 1, 1999 (collectively,
the "Indenture"), each by and among the Issuer, Firstar Bank, National
Association, not in its individual capacity, but solely in its capacity as the
initial eligible lender trustee for the benefit of the Issuer (the "Initial
Eligible Lender Trustee" and together with any other eligible lender trustee
thereunder, each an "Eligible Lender Trustee"), and Firstar Bank, National
Association, as indenture trustee (the "Indenture Trustee"). In
116
connection with the sale and transfer of the Trust Estate to the Issuer by the
Student Loan Funding LLC, a Delaware limited liability company (the "Original
Issuer") and the assumption by the Issuer of all of the Original Issuer's
obligations under Indenture of Trust, dated as of December 1, 1998 (the
"Original Base Indenture"), and a Terms Supplement, dated as of even date with
the Base Indenture (the "Original Terms Supplement"), the Original Base
Indenture and Original Terms Supplement have been amended and restated by the
First Amended and Restated Indenture of Trust and the First Amended and Restated
Terms Supplement to the First Amended and Restated Indenture of Trust,
respectively, each dated as of March 15, 1999 (collectively, the "First Restated
Indenture"), and each by and among the Issuer, the Initial Eligible Lender
Trustee and the Indenture Trustee. In connection with the consummation of the
Exchange Offer, the First Restated Indenture has been amended and restated by
the Indenture. The Series B-3 Notes are issued simultaneously with and on a
basis subordinate to the Student Loan Funding 1998-A/B Trust's $400,000,000
Student Loan Senior Asset-Backed Notes, Series A-3 (LIBOR Floating Rate) (the
"Series A-3 Notes"), the Student Loan Funding 1998-A/B Trust's $93,000,000
Student Loan Senior Asset-Backed Callable Notes, Series A-4 (Auction Rate) (the
"Series A-4 Notes"), the Student Loan Funding 1998-A/B Trust's $90,000,000
Student Loan Senior Asset-Backed Callable Notes, Series A-5 (Auction Rate) (the
"Series A-5 Notes"), and the Student Loan Funding 1998-A/B Trust's $90,000,000
Student Loan Senior Asset-Backed Callable Notes, Series A-6 (Auction Rate)
(collectively with the Series A-3 Notes, the Series A-4 Notes and the Series A-5
Notes, the "Series 1998A Notes", and collectively with the Series B-3 Notes, the
"Notes"). References in this Series 1998B1-3 Note to the name "Student Loan
Funding 1998-A/B Trust" or to the term "Issuer" shall mean the Co-Owner Trustee,
not in its individual capacity, but solely as Co-Owner Trustee of the Issuer.
Reference is hereby made to the Indenture, a copy of which is on file
with the Indenture Trustee, and to all of the provisions thereof, to all of
which provisions the Holder of this Series 1998B1-3 Note, by acceptance hereof,
hereby assents and agrees, for definitions of terms; the descriptions of and the
nature and extent of the security for the Series B-3 Notes; the student loan
purchase program being financed by the issuance of the Series B-3 Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest on the Series B-3 Notes (subject to the prior rights
of the Indenture Trustee to any realization from the Indenture Trustee's lien on
and security interest in the Trust Estate for payment of its fees and expenses,
the fees and expenses of each Eligible Lender Trustee and for payment of the
principal of and interest on the Series 1998A Notes); the nature and extent and
manner of enforcement of the pledge; the conditions upon which the Indenture may
be amended or supplemented with or without the consent of the Holders of the
Series B-3 Notes; the rights and remedies of the Holders of the Directing Notes,
including the limitations therein contained upon the right of a Holder to
institute any suit, action or proceeding in equity or at law with respect hereto
and thereto; the rights, duties and obligations of the Issuer, each Eligible
Lender Trustee and the Indenture Trustee thereunder; the terms and provisions
upon which the liens, pledges, charges, trusts, security interests, assignments
and covenants made therein may be discharged at or prior to the maturity of this
Series 1998B1-3 Note, this Series 1998B1-3 Note thereafter no longer being
secured by the Indenture or being deemed to be outstanding thereunder; and for
the other terms and provisions thereof.
Words and terms used as defined words and terms in this Series
1998B1-3 Note and not otherwise defined herein shall have the meanings given
them in the Indenture.
The principal of and interest on the Series B-3 Notes are limited
obligations of the Issuer payable only out of the Trust Estate, as and to the
extent set forth in the Indenture, and are secured by a pledge of, lien on,
security interest in and assignment of the Trust Estate, subject to the
provisions of the Indenture permitting the application thereof for the purposes
and on the terms and conditions set forth in the Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE
METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE SERIES B-3 NOTES,
THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST, ON THIS SERIES 1998B1-3 NOTE AND
THE REDEMPTION OF THIS SERIES 1998B1-3 NOTE WILL BE DETERMINED IN ACCORDANCE
WITH THE TERMS, CONDITIONS AND PROVISIONS OF THE INDENTURE, 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.
No covenant or agreement contained in this Series 1998B1-3 Note or in
the Indenture shall be deemed to be a covenant or agreement of any officer,
director, agent or employee of the Issuer in his or her individual capacity,
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and none of such officers, directors, agents or employees nor any person
executing this Series 1998B1-3 Note on behalf of the Issuer shall be liable
personally on this Series 1998B1-3 Note or be subject to any personal liability
or accountability by reason of the issuance of this Series 1998B1-3 Note.
If an Event of Default occurs, the principal of and interest on all
Notes issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture. The
Indenture and the rights and obligations of the Issuer, each Eligible Lender
Trustee, the Indenture Trustee and the registered owner hereof may be modified
or amended in the manner and subject to the conditions set forth in the
Indenture.
Except when this Series 1998B1-3 Note is held in a Book-entry System,
this Series 1998B1-3 Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1998B1-3 Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series B-3 Note or Series B-3
Notes of Authorized Denominations of the same aggregate principal amount and
date as this Series 1998B1-3 Note. The person in whose name this Series 1998B1-3
Note is registered shall be deemed the owner hereof for all purposes, and the
Issuer, the Indenture Trustee and any other designated Authenticating Agent
shall not be affected by any notice to the contrary.
The Series B-3 Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1998B1-3 Note is held in a
Book-entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series B-3 Notes may be exchanged at
said office of the Indenture Trustee for a like aggregate principal amount of
Series B-3 Notes of the same date and series of other Authorized Denominations.
In any case where the date fixed for the payment of principal of or
interest on this Series 1998B1-3 Note shall not be a Business Day, then payment
of such principal or interest need not be made on such date but may be made on
the next succeeding Business Day with the same force and effect as if made on
the date fixed for the payment thereof.
It is hereby certified, recited 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 Series 1998B1-3 Note and the issue of
which it is one, have happened, exist and have been performed in regular and due
time, form and manner as required by law; and that this Series 1998B1-3 Note and
the issue of which it is one do not exceed any limitations of indebtedness
prescribed by law or otherwise applicable to the Issuer.
This Series 1998B1-3 Note shall not be entitled to any benefit under
the Indenture, or become valid or obligatory for any purpose, until the
certificate of authentication and registration hereon endorsed shall have been
signed by the Indenture Trustee or the Authenticating Agent.
This Series 1998B1-3 Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series 1998B1-3 Note to
be executed in its name and on its behalf by the facsimile signatures of the
undersigned authorized officers of the Issuer.
STUDENT LOAN FUNDING 1998-A/B TRUST,
By Firstar Bank, National Association,
not in its individual capacity, but solely in its capacity
as co-owner trustee of Student Loan Funding 1998-A/B Trust,
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BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
---------------------------- ------------------------
Title: Title:
------------------------- -------------------
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119
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series B-3 Notes described in the within
mentioned Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By
--------------------------------
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Subordinate Asset-Backed Note, Series
B-3 (Fixed Rate) of Student Loan Funding 1998-A/B Trust, and hereby irrevocably
constitutes and appoints _______________ attorney to transfer said Note on the
registry books kept by the Indenture Trustee for that purpose with full power of
substitution in the premises.
Dated ------------------------------
------------------------------ Signature
NOTE: The signature to the assignment must correspond to the
name as written on the face of this Note in every particular, without any
alteration or change whatsoever.
Signature Guarantee:
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Q-119