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SERIES 2001B SUPPLEMENTAL INDENTURE OF TRUST
by and between
NELNET STUDENT LOAN CORPORATION-2
and
ZIONS FIRST NATIONAL BANK,
as Trustee
Authorizing the Issuance of
$550,000,000
NELNET Student Loan Corporation-2
Student Loan Asset-Backed Notes
Series 2001B
Dated as of September 1, 2001
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TABLE OF CONTENTS
Page
Article I
DEFINITIONS AND USE OF PHRASES................................................1
Article II
SERIES 2001B NOTE DETAILS, FORM OF SERIES 2001B NOTES,
REDEMPTION OF SERIES 2001B NOTES AND
USE OF PROCEEDS OF SERIES 2001B NOTES
Section 2.01. Series 2001B Note Details...................................3
Section 2.02. Redemption of the Series 2001B Notes........................6
Section 2.03. Delivery of Series 2001B Notes..............................7
Section 2.04. Trustee's Authentication Certificate........................8
Section 2.05. Deposit of Series 2001B Note Proceeds.......................8
Section 2.06. Forms of Series 2001B Notes.................................8
Article III
AMENDMENTS TO ORIGINAL INDENTURE
Article IV
GENERAL PROVISIONS
Section 4.01. Date of Execution...........................................10
Section 4.02. Laws Governing..............................................10
Section 4.03. Severability................................................10
Section 4.04. Exhibits....................................................10
Article V
APPLICABILITY OF INDENTURE....................................................10
APPENDIX A CERTAIN TERMS AND PROVISIONS OF THE AUCTION RATE NOTES
EXHIBIT A-1 FORM OF SENIOR CLASS 2001A NOTES
EXHIBIT A-2 FORM OF SUBORDINATE CLASS 2001B NOTES
EXHIBIT B SERIES 2001B CLOSING CASH FLOW PROJECTIONS
EXHIBIT C NOTICE OF PAYMENT DEFAULT
EXHIBIT D NOTICE OF CURE OF PAYMENT DEFAULT
EXHIBIT E NOTICE OF PROPOSED CHANGE IN LENGTH OF ONE OR MORE AUCTION PERIODS
EXHIBIT F NOTICE ESTABLISHING CHANGE IN LENGTH OF ONE OR MORE AUCTION PERIODS
EXHIBIT G NOTICE OF CHANGE IN AUCTION DATE
SERIES 2001B SUPPLEMENTAL INDENTURE OF TRUST
THIS SERIES 2001B SUPPLEMENTAL INDENTURE OF TRUST (this "Supplemental
Indenture") dated as of September 1, 2001, is by and between NELNET STUDENT LOAN
CORPORATION-2, a corporation duly organized and existing under the laws of the
State of Nevada (the "Issuer"), and ZIONS FIRST NATIONAL BANK, a national
banking association duly organized and operating under the laws of the United
States of America (together with its successors, the "Trustee"), as trustee
hereunder (all capitalized terms used in these preambles, recitals and granting
clauses shall have the same meanings assigned thereto in Article I hereof);
W I T N E S S E T H:
WHEREAS, the Issuer has previously entered into an Indenture of Trust
dated as of June 1, 2000 (as previously amended, the "Original Indenture," and
together with this Supplemental Indenture, the "Indenture"), between the Issuer
and the Trustee;
WHEREAS, the Issuer desires to enter into this Supplemental Indenture in
order to issue Notes pursuant to the terms of the Original Indenture, including
Section 2.08 thereof;
WHEREAS, the Issuer represents that it is duly created as a corporation
under the laws of the State and that by proper action it has duly authorized the
issuance of $550,000,000 of its Student Loan Asset-Backed Notes, Series 2001B
consisting of two Classes, designated as Senior Class 2001A (the "Class 2001A
Notes") and Subordinate Class 2001B (the "Class 2001B Notes," and together with
the Class 2001A Notes, the "Series 2001B Notes"), and it has by proper corporate
action authorized the execution and delivery of this Supplemental Indenture;
WHEREAS, the Series 2001B Notes constitute Notes as defined in the
Indenture;
WHEREAS, the Trustee has agreed to accept the trusts herein created upon
the terms herein set forth; and
NOW, THEREFORE, it is mutually covenanted and agreed as follows:
ARTICLE I
DEFINITIONS AND USE OF PHRASES
All words and phrases defined in Article I of the Indenture shall have
the same meaning in this Supplemental Indenture, except as otherwise appears in
this Article. In addition, the following terms have the following meanings in
this Supplemental Indenture unless the context clearly requires otherwise:
"AUTHORIZED DENOMINATIONS" means $50,000 and any integral multiple
thereof.
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"CLASS 2001A NOTES" means, collectively, the Class 2001A-2 Notes, the
Class 2001A-3 Notes, the Class 2001A-4 Notes, the Class 2001A-5 Notes, the Class
2001A-6 Notes and the Class 2001A-7 Notes.
"CLASS 2001A-2 NOTES" means the $50,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2001A-2 Auction
Rate Notes.
"CLASS 2001A-3 NOTES" means the $50,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2001A-3 Auction
Rate Notes.
"CLASS 2001A-4 NOTES" means the $75,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2001A-4 Auction
Rate Notes.
"CLASS 2001A-5 NOTES" means the $100,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2001A-5 Auction
Rate Notes.
"CLASS 2001A-6 NOTES" means the $100,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2001A-6 Auction
Rate Notes.
"CLASS 2001A-7 NOTES" means the $100,000,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Senior Class 2001A-7 Auction
Rate Notes.
"CLASS 2001B NOTES" means the Class 2001B-1 Notes and the Class 2001B-2
Notes.
"CLASS 2001B-1 NOTES" means the $37,500,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Subordinate Class 2001B-1
Auction Rate Notes.
"CLASS 2001B-2 NOTES" means the $37,500,000 NELNET Student Loan
Corporation-2, Student Loan Asset-Backed Notes, Subordinate Class 2001B-2
Auction Rate Notes.
"DATE OF ISSUANCE" means, with respect to the Series 2001B Notes,
September 4, 2001.
"RATING AGENCY" means, collectively, Fitch, Inc., Standard & Poor's
Ratings Services and Xxxxx'x Investors Service.
"SERIES 2001B NOTES" means the NELNET Student Loan Corporation-2,
Student Loan Asset-Backed Notes, Series 2001B issued pursuant to the Indenture
and this Supplemental Indenture in the aggregate principal amount of
$550,000,000 consisting of the Class 2001A Notes and the Class 2001B Notes.
"SERIES 2001B RESERVE FUND REQUIREMENT" means 0.75% of the Notes
outstanding; provided, however, that so long as any Notes remain Outstanding
there shall be at least $1,000,000 on deposit in the Reserve Fund.
"SERVICER" means NELnet, Inc., a Nevada corporation, and its successors
and assigns.
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"SERVICING AGREEMENT" means, collectively, (i) the Servicing Agreement
dated as of June 1, 2000, as supplemented and amended from time to time, between
the Issuer and the Servicer, (ii) the Loan Subservicing Agreement dated as of
June 1, 2000, as supplemented and amended from time to time, between the
Servicer and UNIPAC Service Corporation, as subservicer and (iii) the Loan
Sub-Servicing Agreement dated as of June 1, 2000, as supplemented and amended
from time to time, between the Servicer and InTuition, Inc., as subservicer.
"SUBSERVICER" means, collectively, UNIPAC Service Corporation and
InTuition, Inc., and their successors and assigns.
"UNDERWRITER" means, collectively, UBS PaineWebber Inc., Xxxxxxx Xxxxx
Barney Inc., Banc of America Securities LLC and X.X. Xxxxxx Securities Inc.
Words importing the masculine gender include the feminine gender. Words
importing persons include firms, associations and corporations. Words importing
the singular number include the plural number and vice versa. Additional terms
are defined in the body of this Supplemental Indenture and the Appendices
hereto.
In the event that any term or provision contained herein with respect to
the Series 2001B Notes shall conflict with or be inconsistent with any term or
provision contained in the Indenture, the terms and provisions of this
Supplemental Indenture shall govern.
ARTICLE II
SERIES 2001B NOTE DETAILS,
FORM OF SERIES 2001B NOTES,
REDEMPTION OF SERIES 2001B NOTES
AND USE OF PROCEEDS OF SERIES 2001B NOTES
SECTION 2.01. SERIES 2001B NOTE DETAILS.
(a) The aggregate principal amount of the Series 2001B Notes
which may be initially authenticated and delivered under this
Supplemental Indenture is limited to $550,000,000 except for Series
2001B Notes authenticated and delivered upon transfer of, or in exchange
for, or in lieu of Notes pursuant to Sections 2.03 and 2.04 of the
Indenture. The Series 2001B Notes shall be issued in eight (8) separate
subclasses (each a "subclass") consisting of $50,000,000 of Class
2001A-2 Notes, $50,000,000 of Class 2001A-3 Notes, $75,000,000 of Class
2001A-4 Notes, $100,000,000 of Class 2001A-5 Notes, $100,000,000 of
Class 2001A-6 Notes, $100,000,000 of Class 2001A-7 Notes, $37,500,000 of
Class 2001B-1 Notes and $37,500,000 of Class 2001B-2 Notes. The Series
2001B Notes shall be issuable only as fully registered notes in the
Authorized Denominations. The Series 2001B Notes of each subclass shall
each be lettered "R" and shall be numbered separately from 1 upwards,
respectively.
The Series 2001B Notes (collectively, the "Auction Rate Notes")
shall be dated their Date of Issuance and shall bear interest from their
Date of Issuance, payable on each Interest Payment Date (as defined in
Appendix A to this Supplemental Indenture), except that Auction Rate
Notes which are issued upon transfer, exchange or other replacement
shall bear interest from the most recent Interest Payment Date to which
interest has been paid, or if no interest has been paid, from the date
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of the Auction Rate Notes. The Series 2001B Notes shall mature on June
1, 2035. Interest on the Auction Rate Notes shall be computed on the
basis of a 360-day year and actual days elapsed. The terms of and
definitions related to the Auction Rate Notes are found in Article I
hereof and Appendix A to this Supplemental Indenture.
The principal of the Series 2001B Notes due at its Stated
Maturity or redemption in whole shall be payable at the Principal Office
of the Trustee, or such other location as directed by the Trustee, or at
the Principal Office of its successor in trust upon presentation and
surrender of the Series 2001B Notes. Payment of interest and principal
paid subject to a redemption on any Series 2001B Note shall be made to
the Registered Owner thereof by check or draft mailed on the Interest
Payment Date by the Trustee to the Registered Owner at his address as it
last appears on the registration books kept by the Trustee at the close
of business on the Record Date for such interest payment date, but any
such interest not so timely paid or duly provided for shall cease to be
payable to the Registered Owner thereof at the close of business on the
Record Date and shall be payable to the Registered Owner thereof at the
close of business on a special record date (a "Special Record Date") for
the payment of any such defaulted interest. Such Special Record Date
shall be fixed by the Trustee whenever moneys become available for
payment of the defaulted interest, and notice of such Special Record
Date shall be given to the Registered Owners of the Series 2001B Notes
not less than 10 days prior thereto by first-class mail to each such
Registered Owner as shown on the Trustee's registration books on the
date selected by the Trustee, stating the date of the Special Record
Date and the date fixed for the payment of such defaulted interest.
Payment of interest to the Securities Depository or its nominee shall,
and at the written request addressed to the Trustee of any other
Registered Owner owning at least $1,000,000 principal amount of the
Series 2001B Notes, payments of interest shall, be paid by wire transfer
within the United States to the bank account number filed no later than
the Record Date or Special Record Date with the Trustee for such
purpose. All payments on the Series 2001B Notes shall be made in lawful
money of the United States of America.
(b) Except as otherwise provided in this Section, the Series
2001B Notes in the form of one global note for each Stated Maturity date
shall be registered in the name of the Securities Depository or its
nominee and ownership thereof shall be maintained in book-entry form by
the Securities Depository for the account of the Agent Members.
Initially, each Series 2001B Note shall be registered in the name of
CEDE & Co., as the nominee of The Depository Trust Company. Except as
provided in subsection (d) of this Section, the Series 2001B Notes may
be transferred, in whole but not in part, only to the Securities
Depository or a nominee of the Securities Depository or to a successor
Securities Depository selected or approved by the Issuer or to a nominee
of such successor Securities Depository. Each global note shall bear a
legend substantially to the following effect: "Except as otherwise
provided in the Indenture, this global note may be transferred, in whole
but not in part, only to another nominee of the Securities Depository
(as defined in the Indenture) or to a successor Securities Depository or
to a nominee of a successor Securities Depository."
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(c) Except as otherwise provided herein, the Issuer and the
Trustee shall have no responsibility or obligation with respect to (i)
the accuracy of the records of the Securities Depository or any Agent
Member with respect to any beneficial ownership interest in the Series
2001B Notes, (ii) the delivery to any Agent Member, beneficial owner of
the Series 2001B Notes or other Person, other than the Securities
Depository, of any notice with respect to the Series 2001B Notes or
(iii) the payment to any Agent Member, beneficial owner of the Series
2001B Notes or other Person, other than the Securities Depository, of
any amount with respect to the principal of or interest on the Series
2001B Notes. So long as the certificates for the Series 2001B Notes
issued under this Supplemental Indenture are not issued pursuant to
subsection (d) of this Section the Issuer and the Trustee may treat the
Securities Depository as, and deem the Securities Depository to be, the
absolute owner of the Series 2001B Notes for all purposes whatsoever,
including, without limitation, (A) the payment of principal of and
interest on such Series 2001B Notes, (B) giving notices of redemption
and other matters with respect to such Series 2001B Notes and (C)
registering transfers with respect to such Series 2001B Notes. In
connection with any notice or other communication to be provided to the
Registered Owners pursuant to this Supplemental Indenture by the Issuer
or the Trustee with respect to any consent or other action to be taken
by the Registered Owners, the Issuer or the Trustee, as the case may be,
shall establish a record date for such consent or other action and, if
the Securities Depository shall hold all of the Series 2001B Notes, give
the Securities Depository notice of such record date not less than 15
calendar days in advance of such record date to the extent possible.
Such notice to the Securities Depository shall be given only when the
Securities Depository is the sole Registered Owner.
(d) If at any time the Securities Depository notifies the Issuer
and the Trustee that it is unwilling or unable to continue as Securities
Depository with respect to any or all of the Series 2001B Notes or if at
any time the Securities Depository shall no longer be registered or in
good standing under the Securities Exchange Act or other applicable
statute or regulation and a successor Securities Depository is not
appointed by the Issuer within 90 days after the Issuer receives notice
or becomes aware of such condition, as the case may be, subsections (b)
and (c) of this Section shall no longer be applicable and the Issuer
shall execute and the Trustee shall authenticate and deliver
certificates representing the Series 2001B Notes as provided below. In
addition, the Issuer may determine at any time that the Series 2001B
Notes shall no longer be represented by global certificates and that the
provisions of subsections (b) and (c) of this Section shall no longer
apply to the Series 2001B Notes. In such event, the Issuer shall execute
and the Trustee shall authenticate and deliver certificates representing
the Series 2001B Notes as provided below. Certificates for the Series
2001B Notes issued in exchange for a global certificate pursuant to this
subsection shall be registered in such names and authorized
denominations as the Securities Depository, pursuant to instructions
from the Agent Members or otherwise, shall instruct in writing to the
Issuer and the Trustee, and upon which written instructions the Trustee
may rely without investigation. The Trustee shall promptly deliver such
certificates representing the Series 2001B Notes to the Persons in whose
names such Notes are so registered.
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SECTION 2.02. REDEMPTION OF THE SERIES 2001B NOTES.
(a) MANDATORY REDEMPTION. Subject to the provisions of Section
2.02(d) hereof, the Series 2001B Notes are subject to mandatory
redemption (a) in whole or in part, on the first Interest Payment Date
after March 15, 2002, at a redemption price equal to the principal
amount thereof plus interest accrued, if any, to the date of redemption
thereof from moneys deposited in the Acquisition Fund on the Date of
Issuance which have not been used to finance Eligible Loans by March 1,
2002 and (b) at the direction of the Issuer, in whole or in part, on any
Interest Payment Date, at a redemption price equal to the principal
amount thereof plus interest accrued, if any, to the date of redemption
thereof from moneys representing Recoveries of Principal deposited in
the Acquisition Fund after July 1, 2004, unless such date can be
extended without affecting the Rating on any of the Notes, as evidenced
by a Rating Confirmation.
(b) OPTIONAL REDEMPTIONS AND OPTIONAL PURCHASE.
(i) OPTIONAL REDEMPTION OF SERIES 2001B NOTES. Subject
to the provisions of Section 2.02(d) hereof, the Series 2001B
Notes are subject to redemption at the option of the Issuer,
from funds received by the Trustee constituting interest on
Financed Eligible Loans remaining in the Revenue Fund after all
other prior required payments have been made from the Revenue
Fund, in whole or in part, on any Interest Payment Date, at a
redemption price equal to the principal amount thereof being
redeemed, plus interest accrued, if any, to the date of
redemption.
(ii) EXTRAORDINARY OPTIONAL REDEMPTION OF SERIES 2001B
NOTES. Subject to the provisions of Section 2.02(d) hereof, the
Series 2001B Notes shall also be subject to extraordinary
optional redemption, at the option of the Issuer, from any
unallocated and available moneys in the Trust Estate, at a
redemption price equal to the principal amount of the Series
2001B Notes being redeemed, plus accrued interest to the date of
redemption, without premium in whole or in part on any Interest
Payment Date, if the Issuer reasonably determines that it is
unable to acquire Financed Eligible Loans, that the rate of
return on Financed Eligible Loans has materially decreased, or
that the costs of administering the Trust Estate have placed
unreasonable burdens upon the ability of the Issuer to perform
its obligations under the Indenture.
(iii) OPTIONAL PURCHASE OF SERIES 2001B NOTES. Subject
to the provisions of Section 2.02(d) hereof, the Issuer may
purchase or cause to be purchased all of the Series 2001B Notes
on any Interest Payment Date on which the aggregate current
principal balance of the Series 2001B Notes shall be less than
or equal to 20% of the initial aggregate principal balance of
the Series 2001B Notes on their Date of Issuance, at a purchase
price equal to the aggregate current principal balance of such
Series 2001B Notes, plus accrued interest on the Series 2001B
Notes through the day preceding the Interest Payment Date on
which the purchase occurs. The amount deposited pursuant to this
subsection (iii) shall be paid to the Registered Owners on the
related Interest Payment Date following the date of such
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deposit. All Series 2001B Notes which are purchased pursuant to
this subsection (iii) shall be delivered by the Issuer upon such
purchase to, and be canceled by, the Trustee and be disposed of
in a manner satisfactory to the Trustee and the Issuer.
(c) NOTICE OF REDEMPTION AND PURCHASE. The Trustee shall
cause notice of any redemption or purchase to be given by
mailing a copy of the notice by first-class mail to the
Registered Owner of any Series 2001B Notes, and the Auction
Agent, designated for redemption or purchase in whole or in
part, at their address as the same shall last appear upon the
registration books, in each case not less than 15 days prior to
the redemption or purchase date; provided, however, that failure
to give such notice, or any defect therein, shall not affect the
validity of any proceedings for the redemption or purchase date
of such Series 2001B Notes for which no such failure or defect
occurs.
(d) PARTIAL REDEMPTION.
(i) If less than all of the Series 2001B Notes are to be
redeemed pursuant to Section 2.02(a) or 2.02(b) hereof, the
subclass of Series 2001B Notes to be redeemed shall be redeemed
as directed by an Issuer Order. If less than all of the Series
2001B Notes of any Stated Maturity of any subclass of the Series
2001B Notes are to be redeemed, the Series 2001B Notes of the
same Stated Maturity to be redeemed shall be selected by lot in
such manner as the Trustee shall determine. Notwithstanding the
foregoing, Class 2001B Notes shall only be redeemed if after the
redemption of such Class 2001B Notes, the Aggregate Market Value
of the Trust Estate will equal at least 105% of the aggregate
principal amount of all Notes Outstanding.
(ii) In case a Series 2001B Note is of a denomination
larger than an Authorized Denomination, a portion of such Note
(in an Authorized Denomination) may be redeemed. Upon surrender
of any Series 2001B Note for redemption in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to
the Registered Owner thereof, the cost of which shall be paid by
the Issuer, a new Series 2001B Note or Series 2001B Notes of the
same series, maturity and of authorized denominations, in an
aggregate principal amount equal to the unredeemed portion of
the Series 2001B Note surrendered.
SECTION 2.03. DELIVERY OF SERIES 2001B NOTES. Upon the execution and
delivery of this Supplemental Indenture, the Issuer shall execute and deliver to
the Trustee and the Trustee shall authenticate the Series 2001B Notes and
deliver them to The Depository Trust Company and as hereinafter in this Section
provided.
Prior to the delivery by the Trustee of any of the Series 2001B Notes,
there shall have been filed with or delivered to the Trustee the following:
(a) A resolution duly adopted by the Issuer, certified by the
Secretary or other Authorized Officer thereof, authorizing the execution
and delivery of this Supplemental Indenture and the issuance of the
Series 2001B Notes.
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(b) Duly executed copies of this Supplemental Indenture and a
copy of the Indenture.
(c) Rating letters from each Rating Agency pursuant to Section
2.08(b)(ii) of the Original Indenture.
(d) An opinion of Note Counsel pursuant to Section 2.08(b)(iii)
of the Original Indenture.
SECTION 2.04. TRUSTEE'S AUTHENTICATION CERTIFICATE. The Trustee's
authentication certificate upon the Series 2001B Notes shall be substantially in
the forms provided in Exhibits A-1 and A-2 hereof. No Series 2001B Note shall be
secured hereby or entitled to the benefit hereof, or shall be valid or
obligatory for any purpose, unless a certificate of authentication,
substantially in such form, has been duly executed by the Trustee; and such
certificate of the Trustee upon any Series 2001B Note shall be conclusive
evidence and the only competent evidence that such Note has been authenticated
and delivered hereunder. The Trustee's certificate of authentication shall be
deemed to have been duly executed by it if manually signed by an authorized
officer of the Trustee, but it shall not be necessary that the same person sign
the certificate of authentication on all of the Series 2001B Notes issued
hereunder.
SECTION 2.05. DEPOSIT OF SERIES 2001B NOTE PROCEEDS. Upon the issuance
and delivery of the Series 2001B Notes, the Trustee shall deposit the net
proceeds thereof (i.e., net of Underwriters' discount and a structuring fee of
$1,540,000):
(a) an amount equal to $544,335,000 shall be deposited to the
Acquisition Fund; and
(b) an amount equal to $4,125,000 shall be deposited to the
Reserve Fund.
SECTION 2.06. FORMS OF SERIES 2001B NOTES. The Series 2001B Notes shall
be in substantially the form set forth in Exhibit A-1 and A-2 hereto, each with
such variations, omissions and insertions as may be necessary.
ARTICLE III
AMENDMENTS TO ORIGINAL INDENTURE
Article IV of the Original Indenture is hereby amended to include the
following as Sections 4.19 and 4.20:
SECTION 4.19 REPRESENTATIONS OF THE ISSUER REGARDING THE TRUSTEE'S
SECURITY INTEREST. The Issuer hereby represents and warrants for the benefit of
the Trustee and the Registered Owners as follows:
(a) This Indenture creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code in effect
in the State of Colorado and Nevada) in the Financed Eligible Loans in
favor of the Trustee, which security interest is prior to all other
liens, charges, security interests, mortgages or other encumbrances ,
and is enforceable as such as against creditors of and purchasers from
Issuer.
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(b) The Financed Eligible Loans constitute either "general
intangibles" or "instruments" within the meaning of the applicable UCC.
(c) Issuer owns and has good and marketable title to the Financed
Eligible Loans free and clear of any lien, charge, security interest,
mortgage or other encumbrance, claim or encumbrance of any Person.
(d) Issuer has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to
perfect the security interest in the Financed Eligible Loans granted to
the Trustee hereunder.
(e) All executed copies of each promissory note that constitute
or evidence the Financed Eligible Loans have been delivered to either
the Trustee or the Custodian.
(f) Issuer has received a written acknowledgment from Custodian
that Custodian is holding the promissory notes that constitute or
evidence the Financed Eligible Loans solely on behalf and for the
benefit of the Trustee.
(g) Other than the security interest granted to the Trustee
pursuant to this Indenture, Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the
Financed Eligible Loans. Issuer has not authorized the filing of and is
not aware of any financing statements against Issuer that include a
description of collateral covering the Financed Eligible Loans other
than any financing statement relating to the security interest granted
to the Trustee hereunder or that has been terminated. Debtor is not
aware of any judgment or tax lien filings against Issuer.
SECTION 4.20 COVENANTS OF THE ISSUER REGARDING THE TRUSTEE'S SECURITY
INTEREST. The Issuer hereby covenants for the benefit of the Trustee and the
Registered Owners as follows:
(a) The representations and warranties set forth in Section 4.19
shall survive the termination of this Indenture.
(b) The Trustee shall not waive any of the representations and
warranties set forth in Section 4.19 above.
(c) The Issuer shall take all steps necessary, and shall cause
the Servicers to take all steps necessary and appropriate, to maintain
the perfection and priority of the Trustee's security interest in the
Financed Eligible Loans.
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ARTICLE IV
GENERAL PROVISIONS
SECTION 4.01. DATE OF EXECUTION. This Supplemental Indenture for
convenience and for the purpose of reference is dated as of September 1, 2001.
SECTION 4.02. LAWS GOVERNING. It is the intent of the parties hereto
that this Supplemental Indenture shall in all respects be governed by the laws
of the State.
SECTION 4.03. SEVERABILITY. If any covenant, agreement, waiver, or part
thereof in this Supplemental Indenture contained be forbidden by any pertinent
law or under any pertinent law be effective to render this Supplemental
Indenture invalid or unenforceable or to impair the lien hereof, then each such
covenant, agreement, waiver, or part thereof shall itself be and is hereby
declared to be wholly ineffective, and this Supplemental Indenture shall be
construed as if the same were not included herein.
SECTION 4.04. EXHIBITS. The terms of the Exhibits attached to this
Supplemental Indenture are incorporated herein in all particulars.
ARTICLE V
APPLICABILITY OF INDENTURE
The provisions of the Indenture are hereby ratified, approved and
confirmed, except as otherwise expressly modified by this Supplemental
Indenture. The representations, warranties and covenants contained in the
Indenture (except as expressly modified herein) are hereby reaffirmed with the
same force and effect as if fully set forth herein and made again as of the date
hereof.
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IN WITNESS WHEREOF, the Issuer has caused this Supplemental Indenture to
be executed in its corporate name and behalf by the Vice President, and the
Trustee, to evidence its acceptance of the trusts hereby created, has caused
this Supplemental Indenture to be executed in its corporate name and behalf, all
in multiple counterparts, each of which shall be deemed an original, and the
Issuer and the Trustee have caused this Supplemental Indenture to be dated as of
the date herein above first shown, although actually executed on the dates shown
in the acknowledgments hereafter appearing.
NELNET STUDENT LOAN CORPORATION-2
By /s/ Xxxxxx X. Page
------------------------------------------
Xxxxxx X. Page
Vice President
ZIONS FIRST NATIONAL BANK, as Trustee
By /s/ Xxxxx X. Xxxx
------------------------------------------
Xxxxx X. Xxxx
Vice President
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APPENDIX A
CERTAIN TERMS AND PROVISIONS OF
THE AUCTION RATE NOTES
ARTICLE I
DEFINITIONS
Except as provided below in this Section, all terms which are defined in
Article I of the Indenture and Article I of this Supplemental Indenture shall
have the same meanings, respectively, in this Appendix A as such terms are given
in the Indenture and Article I of this Supplemental Indenture. In addition, the
following terms shall have the following respective meanings:
"ALL HOLD RATE" means the Applicable LIBOR Rate less .20%; provided,
that in no event shall the applicable All Hold Rate be greater than the
applicable Maximum Rate.
"APPLICABLE LIBOR RATE" means, (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.
"AUCTION" means the implementation of the Auction Procedures on an
Auction Date.
"AUCTION AGENT" means the Initial Auction Agent under the Initial
Auction Agent Agreement unless and until a Substitute Auction Agent Agreement
becomes effective, after which "Auction Agent" shall mean the Substitute Auction
Agent.
"AUCTION AGENT AGREEMENT" means 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" has the meaning set forth in the Auction Agent
Agreement.
"AUCTION DATE" means, initially, October 2, 2001 with respect to the
Class 2001A-2 Notes, October 9, 2001 with respect to the Class 2001A-3 Notes,
October 16, 2001 with respect to the Class 2001A-4 Notes, October 17, 2001 with
respect to the Class 2001A-5 Notes, October 3, 2001 with respect to the Class
2001A-6 Notes, September 26, 2001 with respect to the Class 2001A-7 Notes,
October 23, 2001 with respect to the Class 2001B-1 Notes and October 30, 2001
with respect to the Class 2001B-2 Notes, and thereafter, the Business Day
immediately preceding the first day of each Auction Period for each respective
Subclass, other than:
(a) each Auction Period commencing after the ownership of the
applicable Auction Rate Notes is no longer maintained in Book-entry Form
by the Securities Depository;
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(b) each Auction Period commencing after and during the
continuance of a Payment Default; or
(c) each Auction Period commencing less than two Business Days
after the cure or waiver of a Payment Default.
Notwithstanding the foregoing, the Auction Date for one or more Auction Periods
may be changed pursuant to Section 2.02(h) of this Appendix A.
"AUCTION RATE NOTES" means, collectively, the Series 2001B Notes.
"AUCTION NOTE INTEREST RATE" means each variable rate of interest per
annum borne by an Auction Rate Note for each Auction Period and determined in
accordance with the provisions of Sections 2.01 and 2.02 of this Appendix A;
provided, however, that in the event of a Payment Default, the Auction Note
Interest Rate shall equal the applicable Non-Payment Rate; provided, further,
however that such Auction Note Interest Rate shall in no event exceed the lesser
of the Net Loan Rate and the Maximum Rate.
"AUCTION PERIOD" means the Interest Period applicable to the Auction
Rate Notes during which time the Interest Rate is determined pursuant to Section
2.02(a) of this Appendix A, which Auction Period (after the Initial Period for
such Subclass) initially shall consist generally of 28 days for the Class
2001A-2 Notes, the Class 2001A-3 Notes, the Class 2001A-4 Notes, the Class
2001A-5 Notes, the Class 2001A-6 Notes, the Class 2001A-7 Notes, the Class
2001B-1 Notes and the Class 2001B-2 Notes, as the same may be adjusted pursuant
to Section 2.02(g) of this Appendix A.
"AUCTION PERIOD ADJUSTMENT" means an adjustment to the Auction Period as
provided in Section 2.02(g) of this Appendix A.
"AUCTION PROCEDURES" means the procedures set forth in Section 2.02(a)
of this Appendix A by which the Auction Rate is determined.
"AUCTION RATE" means the rate of interest per annum that results from
implementation of the Auction Procedures and is determined as described in
Section 2.02(a)(iii)(B) of this Appendix A.
"AUTHORIZED DENOMINATIONS" means $50,000 and any integral multiple
thereof.
"AVAILABLE AUCTION RATE NOTES" has the meaning set forth in Section
2.02(a)(iii)(A)(1) of this Appendix A.
"BID" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.
"BID AUCTION RATE" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A.
"BIDDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.
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"BOND EQUIVALENT YIELD" means, in respect of any security the rate for
which is quoted in THE WALL STREET JOURNAL on a bank discount basis, the "bond
equivalent yield" (expressed as a percentage) for such security which appears on
Telerate's United States Treasury and Money Market Composite Page 0223, rounded
up to the nearest one one-hundredth of one percent.
"BOOK-ENTRY FORM" or "BOOK-ENTRY SYSTEM" means a form or system under
which (a) the beneficial right to principal and interest may be transferred only
through a book entry, (b) physical securities in registered form are issued only
to a Securities Depository or its nominee as registered owner, with the
securities "immobilized" to the custody of the Securities Depository, and (c)
the book entry is the record that identifies the owners of beneficial interests
in that principal and interest.
"BROKER-DEALER" means, collectively, UBS PaineWebber Inc., Xxxxxxx Xxxxx
Xxxxxx Inc., Banc of America Securities LLC and X.X. Xxxxxx Securities Inc., or
any other broker or dealer (each as defined in the Securities Exchange Act of
1934, as amended), commercial bank or other entity permitted by law to perform
the functions required of a Broker-Dealer set forth in the Auction Procedures
that (a) is a Participant (or an affiliate of a Participant), (b) has been
appointed as such by the Issuer pursuant to Section 2.02(f) of this Appendix A,
and (c) has entered into a Broker-Dealer Agreement that is in effect on the date
of reference.
"BROKER-DEALER AGREEMENT" means each agreement between the Auction Agent
and a Broker-Dealer, and approved by 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 shall be in substantially the form of the Broker-Dealer Agreements,
each dated as of September 1, 2001, among the Issuer, Bankers Trust Company, as
Auction Agent, and the Broker-Dealers.
"BROKER-DEALER FEE" has the meaning set forth in the Auction Agent
Agreement.
"BROKER-DEALER FEE RATE" has the meaning set forth in the Auction Agent
Agreement.
"BUSINESS DAY" means any day other than April 14 and 15, December 30 and
31, a Saturday, Sunday, holiday or day on which banks located in the City of New
York, New York, or the New York Stock Exchange, the Trustee or the Auction
Agent, are authorized or permitted by law or executive order to close or such
other date as may be agreed to in writing by the Auction Agent, the
Broker-Dealers and the Issuer.
"CARRY-OVER AMOUNT" means the excess, if any, of (a) the amount of
interest on an Auction Rate Note that would have accrued with respect to the
related Interest Period at the applicable Auction Rate over (b) the amount of
interest on such Auction Rate Note actually accrued with respect to such Auction
Rate Note with respect to such Interest Period based on the Net Loan Rate,
together with the unreduced portion of any such excess from prior Interest
Periods; provided that any reference to "principal" or "interest" in the
Supplemental Indenture and in this Appendix A and the Auction Rate Notes shall
not include within the meanings of such words any Carry-over Amount or any
interest accrued on any Carry-over Amount.
"CLOSING DATE" means the Date of Issuance of the Auction Rate Notes
(September 4, 2001).
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"COMMERCIAL PAPER DEALER" means UBS PaineWebber Inc., its successors and
assigns, and any other commercial paper dealer appointed pursuant to Section
2.02(c) of this Appendix A.
"EFFECTIVE INTEREST RATE" means, with respect to any Financed Eligible
Loan, the interest rate per annum payable by the borrower as of the last day of
the calendar quarter borne by such Financed Eligible Loan after giving effect to
any reduction in such interest rate pursuant to borrower incentives, (a) less
all accrued rebate fees on such Financed Eligible Loan constituting
Consolidation Loans paid during such calendar quarter expressed as a percentage
per annum and (b) plus all accrued Interest Benefit Payments and Special
Allowance Payments applicable to such Financed Eligible Loan during such
calendar quarter expressed as a percentage per annum.
"ELIGIBLE CARRY-OVER MAKE-UP AMOUNT" means, with respect to each
Interest Period relating to the Auction Rate Notes as to which, as of the first
day of such Interest Period, there is any unpaid Carry-over Amount, an amount
equal to the lesser of (a) interest computed on the principal balance of the
Auction Rate Notes in respect to such Interest Period at a per annum rate equal
to the excess, if any, of the Net Loan Rate over the Auction Rate, together with
the unreduced portion of any such excess from prior Interest Periods and (b) the
aggregate Carry-over Amount remaining unpaid as of the first day of such
Interest Period together with interest accrued and unpaid thereon through the
end of such Interest Period.
"EXISTING OWNER" means (a) with respect to and for the purpose of
dealing with the Auction Agent in connection with an Auction, a Person who is a
Broker-Dealer listed in the Existing Owner Registry at the close of business on
the Business Day immediately preceding the Auction Date for such Auction and (b)
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 OWNER REGISTRY" means the registry of Persons who are owners
of the Auction Rate Notes, maintained by the Auction Agent as provided in the
Auction Agent Agreement.
"HOLD ORDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.
"INITIAL AUCTION AGENT" means Bankers Trust Company, a New York banking
corporation, its successors and assigns.
"INITIAL AUCTION AGENT AGREEMENT" means, collectively, the Auction Agent
Agreement dated as of September 1, 2001, by and among the Issuer, the Trustee
and the Initial Auction Agent, including any amendment thereof or supplement
thereto.
"INITIAL PERIOD" means, as to Auction Rate Notes, the period commencing
on the Closing Date and continuing through the day immediately preceding the
Initial Rate Adjustment Date for such Auction Rate Notes.
"INITIAL RATE" means 3.55% for the Class 2001A-2 Notes, 3.55% for the
Class 2001A-3 Notes, 3.55% for the Class 2001A-4 Notes, 3.52% for the Class
2001A-5 Notes, 3.55% for the Class 2001A-6 Notes, 3.569% for the Class 2001A-7
Notes, 3.65% for the Class 2001B-1 Notes and 3.65% for the Class 2001B-2 Notes.
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"INITIAL RATE ADJUSTMENT DATE" means, with respect to the Class 2001A-2
Notes, October 3, 2001; with respect to the Class 2001A-3 Notes, October 10,
2001; with respect to the Class 2001A-4 Notes, October 17, 2001; with respect to
the Class 2001A-5 Notes, October 18, 2001; with respect to the Class 2001A-6
Notes, October 4, 2001; with respect to the Class 2001A-7 Notes, September 27,
2001; with respect to the Class 2001B-1 Notes, October 24, 2001; and with
respect to the Class 2001B-2 Notes, October 31, 2001.
"INTEREST PAYMENT DATE" means (a) so long as the Auction Rate Notes bear
interest at an Auction Note Interest Rate for an Interest Period of not greater
than 180 days, the Business Day immediately following the expiration of the
Initial Period for such Subclass, and each related Auction Period thereafter and
(b) if and for so long as the Auction Rate Notes bear interest at an Auction
Note Interest Rate for an Interest Period of greater than 180 days, each January
1 and June 1.
"INTEREST PERIOD" means, with respect to the Auction Rate Notes, the
Initial Period and each period commencing on an Interest Rate Adjustment Date
for such Subclass and ending on the day before (a) the next Interest Rate
Adjustment Date for such Subclass or (b) the Stated Maturity of such Subclass,
as applicable.
"INTEREST RATE ADJUSTMENT DATE" means the date on which an Auction Note
Interest Rate is effective, and means, with respect to the Auction Rate Notes,
the date of commencement of each Auction Period.
"INTEREST RATE DETERMINATION DATE" means, with respect to the Auction
Rate Notes, the Auction Date, or if no Auction Date is applicable to such
Subclass, the Business Day immediately preceding the date of commencement of an
Auction Period.
"MAXIMUM RATE" means the least of (a) either (i) the Applicable LIBOR
Rate plus 1.50% (if the ratings assigned by the Rating Agency to the Auction
Rate Notes are "Aa3" and "AA-," respectively, or better) or (ii) the Applicable
LIBOR Rate plus 2.50% (if any one of the ratings assigned by the Rating Agency
to the Auction Rate Notes is less than "Aa3" or "AA-," respectively), (b) 18%
and (c) the highest rate the Issuer may legally pay, from time to time, as
interest on the Auction Rate Notes. 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 written notice pursuant to the
Auction Agent Agreement.
"NET LOAN RATE" means, respect to any Interest Period applicable to the
Auction Rate Notes, the greater of (a) the rate of interest per annum (rounded
to the next highest one one-hundredth of one percent) equal to the applicable
United States Treasury Security Rate plus 1.50% or (b) the rate of interest per
annum (rounded to the next highest one-hundredth of one percent) equal to (i)
the weighted average Effective Interest Rate of the Financed Eligible Loans for
the calendar quarter immediately preceding such Interest Period, as determined
by the Issuer on the last day of such calendar quarter, less (ii) the Program
Expense Percentage, as determined by the Issuer on the last day of each calendar
year. In making the determinations in (b)(i) and (ii) of this definition of "Net
Loan Rate," the Issuer shall take into account as an increase to such Net Loan
Rate the receipt of any Reciprocal Payment and as a decrease to any Issuer
Derivative Payment. The determinations made by the Issuer in (b)(i) and (ii) of
this definition of "Net Loan Rate" shall be given in writing to the Auction
Agent, the Trustee and the Broker-Dealers immediately upon their respective
calculation dates.
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"NON-PAYMENT RATE" means One-Month LIBOR plus 1.50%.
"ONE-MONTH LIBOR," "THREE-MONTH LIBOR," "SIX-MONTH LIBOR" or "ONE-YEAR
LIBOR," means the offered rate, as determined by the Auction Agent or Trustee,
as applicable, of the Applicable LIBOR Based Rate for United States dollar
deposits which appears on Telerate Page 3750, as reported by Bloomberg Financial
Markets Commodities News (or such other page as may replace Telerate Page 3750
for the purpose of displaying comparable rates) as of approximately 11:00 a.m.,
London time, on the LIBOR Determination Date; provided, that if on any
calculation date, no rate appears on Telerate Page 3750 as specified above, the
Auction Agent or Trustee, as applicable, shall determine the arithmetic mean of
the offered quotations of four major banks in the London interbank market, for
deposits in United States dollars for the respective periods specified above to
the banks in the London interbank market as of approximately 11:00 a.m., London
time, on such calculation date and in a principal amount of not less than
$1,000,000 that is representative of a single transaction in such market and at
such time, unless fewer than two such quotations are provided, in which case,
the Applicable LIBOR Based Rate shall be the arithmetic mean of the offered
quotations that leading banks in New York City selected by the Auction Agent or
Trustee, as applicable, are quoting on the relevant LIBOR Determination Date for
loans in United States dollars to leading European banks in a principal amount
of not less than $1,000,000 that is representative of a single transaction in
such market at such time. All percentages resulting from such calculations shall
be rounded upwards, if necessary, to the nearest one-hundredth of one percent.
"ORDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.
"PAYMENT DEFAULT" means, with respect to the Auction Rate Notes, (a) a
default in the due and punctual payment of any installment of interest on such
Auction Rate Notes, or (b) a default in the due and punctual payment of any
interest on and principal of such Auction Rate Notes at their maturity.
"POTENTIAL OWNER" means any Person (including an Existing Owner that is
(a) a Broker-Dealer when dealing with the Auction Agent and (b) 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 Owner thereof, an
additional principal amount of Auction Rate Notes).
"PROGRAM EXPENSE PERCENTAGE" means, the percentage that all Program
Expenses estimated for the next 12 months represent of the principal amount of
the Notes, which as of September 1, 2001 is 1.05%, and which the Issuer shall
calculate annually on the last day of each calendar year. Any adjustment in the
Program Expense Percentage shall be effective beginning on the first Interest
Rate Determination Date following each such calculation.
"PSA" means the Public Securities Association, its successors and
assigns.
"QUARTERLY AVERAGE AUCTION RATE" means the simple average of the Auction
Rates for the Auction Dates preceding the current Auction Date by 91 days or
less, including the current Auction Date.
"QUARTERLY AVERAGE T-XXXX RATE" means the simple average of the Bond
Equivalent Yields of 91-day Treasury bills auctioned in the 91 days preceding
(but not including) the current Auction Date.
A-1-6
"REGULAR RECORD DATE" means the Business Day next preceding the
applicable Auction Date.
"S&P" means Standard & Poor's Ratings Services, a Division of The
XxXxxx-Xxxx Companies, Inc., its successors and assigns.
"SELL ORDER" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A.
"SUBMISSION DEADLINE" means 1:00 p.m., eastern time, on any Auction Date
or such other time on any Auction Date by which Broker-Dealers are required to
submit Orders to the Auction Agent as specified by the Auction Agent from time
to time.
"SUBMITTED BID" has the meaning set forth in Section 2.02(a)(iii)(A) of
this Appendix A.
"SUBMITTED HOLD ORDER" has the meaning set forth in Section
2.02(a)(iii)(A) of this Appendix A.
"SUBMITTED ORDER" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A.
"SUBMITTED SELL ORDER" has the meaning set forth in Section
2.02(a)(iii)(A) of this Appendix A.
"SUBSTITUTE AUCTION AGENT" means the Person with whom the Issuer and the
Trustee enter into a Substitute Auction Agent Agreement.
"SUBSTITUTE AUCTION AGENT AGREEMENT" means an auction agent agreement
containing terms substantially similar to the terms of the Initial Auction Agent
Agreement, whereby a Person having the qualifications required by Section
2.02(e) of this Appendix A agrees with the Trustee and the Issuer to perform the
duties of the Auction Agent under this Appendix A.
"SUFFICIENT BIDS" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A.
"UNITED STATES TREASURY SECURITY RATE" means, for purposes of
calculating the Net Loan Rate applicable to the Auction Rate Notes, that rate of
interest per annum equal to the Bond Equivalent Yield on the applicable United
States Treasury securities sold at the last auction thereof that immediately
precedes the Interest Rate Adjustment Date for the Auction Rate Notes.
"VARIABLE RATE" means the variable rate of interest per annum, including
the Initial Rate, borne by each Subclass of Auction Rate Notes during the
Initial Period for such Subclass, and each Interest Period thereafter as such
rate of interest is determined in accordance with the provisions of Article II
of this Appendix A.
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ARTICLE II
TERMS AND ISSUANCE
SECTION 2.01. AUCTION RATE AND CARRY-OVER AMOUNTS. During the Initial
Period, the Auction Rate Notes shall bear interest at the Initial Rate for such
Subclass. Thereafter, and except with respect to an Auction Period Adjustment,
the Auction Rate Notes shall bear interest at an Auction Note Interest Rate
based on a 28-day Auction Period for the Auction Rate Notes, as determined
pursuant to this Section 2.01 and Section 2.02 of this Appendix A.
For the Auction Rate Notes during the Initial Period and each Auction
Period thereafter, interest at the applicable Auction Rate Notes 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 Auction Note Interest Rate to be borne by the Auction Rate Notes
after such Initial Period for each Auction Period until an Auction Period
Adjustment, if any, shall be determined as described below. Each such Auction
Period after the Initial Period shall commence on and include the day following
the expiration of the immediately preceding Auction Period and terminate on and
include the (i) second Business Day of the following fourth week in the case of
the Class 2001A-2 Notes, the Class 2001A-3 Notes, the Class 2001A-4 Notes, the
Class 2001B-1 Notes and the Class 2001B-2 Notes, and (ii) third Business Day of
the following fourth week in the case of the Class 2001A-5 Notes, the Class
2001A-6 Notes and the Class 2001A-7 Notes; provided, however, that in the case
of the Auction Period that immediately follows the Initial Period for the
Auction Rate Notes, such Auction Period shall commence on the Initial Rate
Adjustment Date. The Auction Note Interest Rate of the Auction Rate Notes for
each Auction Period shall be the Auction Rate in effect for such Auction Period
as determined in accordance with Section 2.02(a) of this Appendix A; provided
that if, on any Interest Rate Determination Date, an Auction is not held for any
reason, then the Auction Note Interest Rate on such Auction Rate Notes for the
next succeeding Auction Period shall be the applicable Maximum Rate.
Notwithstanding the foregoing:
(a) if the ownership of an Auction Rate Note is no longer
maintained in Book-entry Form, the Auction Note Interest Rate on the
Auction Rate Notes for any Interest Period commencing after the delivery
of certificates representing Auction Rate Notes pursuant to this
Supplemental Indenture shall equal the lesser of (i) the Maximum Rate
and (ii) the Net Loan Rate on the Business Day immediately preceding the
first day of such subsequent Interest Period; or
(b) if a Payment Default shall have occurred, the Auction Note
Interest Rate on the Auction Rate Notes for the Interest Period
commencing on or immediately after such Payment Default, and for each
Interest Period thereafter, to and including the Interest Period, if
any, during which, or commencing less than two Business Days after, such
Payment Default is cured, shall equal the applicable Non-Payment Rate on
the first day of each such Interest Period.
In accordance with Section 2.02(a)(iii)(B) and (C) of this Appendix A,
the Auction Agent shall promptly give written notice to the Trustee and the
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Issuer of each Auction Note Interest Rate (unless the Auction Note Interest Rate
is the applicable Non-Payment Rate) and the Maximum Rate when such rate is not
the Auction Note Interest Rate, applicable to the Auction Rate Notes. The
Trustee shall notify the Registered Owners and the Issuer of Auction Rate Notes
of the applicable Auction Note Interest Rate applicable to such Auction Rate
Notes for each Auction Period not later than the third Business Day of such
Auction Period. Notwithstanding any other provision of the Auction Rate Notes or
this Supplemental Indenture and except for 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 applicable
Maximum Rate in effect for such Auction Period.
If the Auction Rate for the Auction Rate Notes is greater than the Net
Loan Rate, then the Variable Rate applicable to such Auction Rate Notes for that
Interest Period will be the Net Loan Rate. If the Variable Rate applicable to
such Auction Rate Notes for any Interest Period is the Net Loan Rate, the
Trustee shall determine the Carry-over Amount, if any, with respect to such
Auction Rate Notes for such Interest Period. Such Carry-over Amount shall bear
interest calculated at a rate equal to One-Month LIBOR (as determined by the
Auction Agent, provided the Trustee has received notice of One-Month LIBOR from
the Auction Agent, and if the Trustee shall not have received such notice from
the Auction Agent, then as determined by the Trustee) from the Interest Payment
Date for the Interest Period with respect to which such Carry-over Amount was
calculated, until paid. Any payment in respect of Carry-over Amount shall be
applied, first, to any accrued interest payable thereon and, second, in
reduction of such Carry-over Amount. For purposes of this Supplemental Indenture
and this Appendix A, any reference to "principal" or "interest" herein shall not
include within the meaning of such words Carry-over Amount or any interest
accrued on any such Carry-over Amount. Such Carry-over Amount shall be
separately calculated for each Auction Rate Note by the Trustee during such
Interest Period in sufficient time for the Trustee to give notice to each
Registered Owner of such Carry-over Amount as required in the next succeeding
sentence. Not less than four days before the Interest Payment Date for an
Interest Period with respect to which such Carry-over Amount has been calculated
by the Trustee, the Trustee shall give written notice to each Registered Owner
the Auction Agent and the Issuer of the Carry-over Amount applicable to each
Registered Owner's Auction Rate Note, which written notice may accompany the
payment of interest by check made to each such Registered Owner on such Interest
Payment Date or otherwise shall be mailed on such Interest Payment Date by
first-class mail, postage prepaid, to each such Registered Owner at such
Registered Owner's address as it appears on the registration records maintained
by the Registrar. Such notice shall state, in addition to such Carry-over
Amount, that, unless and until an Auction Rate Note has been redeemed (other
than by optional redemption), after which all accrued Carry-over Amounts (and
all accrued interest thereon) that remains unpaid shall be canceled and no
Carry-over Amount (and interest accrued thereon) shall be paid with respect to
an Auction Rate Note, (a) the Carry-over Amount (and interest accrued thereon
calculated at a rate equal to One-Month LIBOR) shall be paid by the Trustee on
an Auction Rate Note on the earliest of (i) the date of defeasance of the
Auction Rate Notes or (ii) the first occurring Interest Payment Date (or on the
date of any such optional redemption) if and to the extent that (A) the Eligible
Carry-over Make-Up Amount with respect to such subsequent Interest Period is
greater than zero, and (B) moneys are available pursuant to the terms of the
Indenture in an amount sufficient to pay all or a portion of such Carry-over
Amount (and interest accrued thereon), and (b) interest shall accrue on the
Carry-over Amount at a rate equal to One-Month LIBOR until such Carry-over
Amount is paid in full or is cancelled.
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The Carry-over Amount (and interest accrued thereon) for Auction Rate
Notes shall be paid by the Trustee on Outstanding Auction Rate Notes on the
earliest of (a) the date of defeasance of any of the Auction Rate Notes or (b)
the first occurring Interest Payment Date if and to the extent that (i) the
Eligible Carry-over Make-Up Amount with respect to such Interest Period is
greater than zero, and (ii) on such Interest Payment Date there are sufficient
moneys in the Revenue Fund to pay all interest due on the Auction Rate Notes on
such Interest Payment Date. Any Carry-over Amount (and any interest accrued
thereon) on any Auction Rate Note which is due and payable on an Interest
Payment Date, which Auction Rate Note is to be redeemed (other than by optional
redemption) on said Interest Payment Date, shall be paid to the Registered Owner
thereof on said Interest Payment Date to the extent that moneys are available
therefor in accordance with the provisions of this Appendix A; provided,
however, that any Carry-over Amount (and any interest accrued thereon) which is
not yet due and payable on said Interest Payment Date shall be cancelled with
respect to said Auction Rate Note that is to be redeemed (other than by optional
redemption) on said Interest Payment Date and shall not be paid on any
succeeding Interest Payment Date. To the extent that any portion of the
Carry-over Amount (and any interest accrued thereon) remains unpaid after
payment of a portion thereof, such unpaid portion shall be paid in whole or in
part as required hereunder until fully paid by the Trustee on the earliest of
(a) the date of defeasance of any of the Auction Rate Notes or (b) the next
occurring Interest Payment Date or Dates, as necessary, if and to the extent
that the conditions in the second preceding sentence are satisfied. On any
Interest Payment Date on which the Trustee pays only a portion of the Carry-over
Amount (and any interest accrued thereon) on Auction Rate Notes, the Trustee
shall give written notice in the manner set forth in the immediately preceding
paragraph to the Registered Owner of such Auction Rate Note receiving such
partial payment of the Carry-over Amount remaining unpaid on such Auction Rate
Note.
The Interest Payment Date or other date on which such Carry-over Amount
(or any interest accrued thereon) for Auction Rate Notes shall be paid shall be
determined by the Trustee in accordance with the provisions of the immediately
preceding paragraph, and the Trustee shall make payment of the Carry-over Amount
(and any interest accrued thereon) in the same manner as, and from the same Fund
from which, it pays interest on the Auction Rate Notes on an Interest Payment
Date. Any payment of Carry-over Amounts (and interest accrued thereon) shall
reduce the amount of Eligible Carry-Over Make-Up Amount.
In the event that the Auction Agent no longer determines, or fails to
determine, when required, the Auction Note Interest Rate with respect to Auction
Rate Notes, or, if for any reason such manner of determination shall be held to
be invalid or unenforceable, the Auction Note Interest Rate for the next
succeeding Interest Period, which Interest Period shall be an Auction Period,
for Auction Rate Notes shall be the applicable Maximum Rate as determined by the
Auction Agent for such next succeeding Auction Period, and if the Auction Agent
shall fail or refuse to determine the Maximum Rate, the Maximum Rate shall be
determined by the securities dealer appointed by the Issuer capable of making
such a determination in accordance with the provisions of this Appendix A and
written notice of such determination shall be given by such securities dealer to
the Trustee.
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SECTION 2.02. AUCTION RATE.
(a) DETERMINING THE AUCTION RATE. 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 (x) to participate in Auctions on the terms
described herein, (y) to have its beneficial ownership of the Auction
Rate Notes maintained at all times in Book-entry Form for the account of
its Participant, which in turn will maintain records of such beneficial
ownership and (z) to authorize such Participant to disclose to the
Auction Agent such information with respect to such beneficial ownership
as the Auction Agent may request.
So long as the ownership of Auction Rate Notes is maintained in
Book-entry Form by the Securities Depository, an Existing Owner 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 Owner, its Broker-Dealer or its Participant advises the Auction
Agent of such transfer. Auctions shall be conducted on each Auction
Date, if there is an Auction Agent on such Auction Date, in the
following manner:
(i) (A) Prior to the Submission Deadline on each Auction Date;
(1) each Existing Owner of Auction Rate Notes
may submit to a Broker-Dealer by telephone or otherwise
any information as to:
a. the principal amount of
Outstanding Auction Rate Notes, if any,
owned by such Existing Owner which such
Existing Owner desires to continue to own
without regard to the Auction Note Interest
Rate for the next succeeding Auction Period;
b. the principal amount of
Outstanding Auction Rate Notes, if any,
which such Existing Owner offers to sell if
the Auction Note Interest Rate for the next
succeeding Auction Period shall be less than
the rate per annum specified by such
Existing Owner; and/or
c. the principal amount of
Outstanding Auction Rate Notes, if any,
owned by such Existing Owner which such
Existing Owner offers to sell without regard
to the Auction Note Interest Rate for the
next succeeding Auction Period;
and
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(2) one or more Broker-Dealers may contact
Potential Owners to determine the principal amount
of Auction Rate Notes which each Potential Owner
offers to purchase, if the Auction Note Interest
Rate for the next succeeding Auction Period shall
not be less than the rate per annum specified by
such Potential Owner.
The statement of an Existing Owner or a Potential
Owner referred to in (1) or (2) of this paragraph (A) is
herein referred to as an "Order," and each Existing Owner
and each Potential Owner placing an Order is herein
referred to as a "Bidder"; an Order described in clause
(1)a is herein referred to as a "Hold Order"; an Order
described in clauses (1)b and (2) is herein referred to as
a "Bid"; and an Order described in clause (1)c is herein
referred to as a "Sell Order."
(B) (1) Subject to the provisions of Section
2.02(a)(ii) of this Appendix A, a Bid by an
Existing Owner shall constitute an irrevocable
offer to sell:
a. the principal amount of Outstanding
Auction Rate Notes specified in such Bid if
the Auction Note Interest Rate determined
as provided in this Section 2.02(a) shall be
less than the rate specified therein; or
b. such principal amount, or a
lesser principal amount of Outstanding
Auction Rate Notes to be determined as set
forth in Section 2.02(a)(iv)(A)(4) of this
Appendix A, if the Auction Note Interest
Rate determined as provided in this Section
2.02(a) shall be equal to the rate specified
therein; or
c. such principal amount, or a
lesser principal amount of Outstanding
Auction Rate Notes to be determined as set
forth in Section 2.02(a)(iv)(B)(3) of this
Appendix A, if the rate specified therein
shall be higher than the applicable Maximum
Rate and Sufficient Bids have not been made.
(2) Subject to the provisions of Section
2.02(a)(ii) of this Appendix A, a Sell Order by an
Existing Owner shall constitute an irrevocable
offer to sell:
a. the principal amount of
Outstanding Auction Rate Notes specified in
such Sell Order; or
b. such principal amount, or a
lesser principal amount of Outstanding
Auction Rate Notes set forth in Section
2.02(a)(iv) (B)(3) of this Appendix A, if
Sufficient Bids have not been made.
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(3) Subject to the provisions of Section
2.02(a)(ii) of this Appendix A, a Bid by a
Potential Owner shall constitute an irrevocable
offer to purchase:
a. the principal amount of Outstanding
Auction Rate Notes specified in such Bid if the
Auction Note Interest Rate determined as
provided in this Section 2.02(a) shall be higher
than the rate specified in such Bid; or
b. such principal amount, or a lesser
principal amount of Outstanding Auction Rate
Notes set forth in Section 2.02(a)(iv)(A)(5) of
this Appendix A, if the Auction Note Interest
Rate determined as provided in this Section
2.02(a) shall be equal to the rate specified in
such Bid.
(ii) (A) Each Broker-Dealer shall submit in writing to the
Auction Agent prior to the Submission Deadline on each
Auction Date all Orders obtained by such Broker-Dealer and
shall specify with respect to each such Order:
(1) the name of t he Bidder placing such Order;
(2) the aggregate principal amount of Auction
Rate Notes that are the subject of such Order;
(3) to the extent that such Bidder is an
Existing Owner:
a. the principal amount of Auction Rate
Notes, if any, subject to any Hold Order placed
by such Existing Owner;
b. the principal amount of Auction Rate
Notes, if any, subject to any Bid placed by such
Existing Owner and the rate specified in such
Bid; and
c. the principal amount of Auction Rate
Notes, if any, subject to any Sell Order placed
by such Existing Owner;
and
(4) to the extent such Bidder is a Potential
Owner, the rate specified in such Potential Owner's Bid.
(B) 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 of 1%.
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(C) If an Order or Orders covering all Outstanding
Auction Rate Notes owned by an Existing Owner 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 Owner
covering the principal amount of Outstanding Auction Rate
Notes owned by such Existing Owner and not subject to an
Order submitted to the Auction Agent.
(D) Neither the Issuer, the Trustee nor the Auction
Agent shall be responsible for any failure of a
Broker-Dealer to submit an Order to the Auction Agent on
behalf of any Existing Owner or Potential Owner.
(E) If any Existing Owner 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 owned by such Existing
Owner, such Orders shall be considered valid as follows
and in the following order of priority:
(1) All Hold Orders shall be considered
valid, but only up to the aggregate principal
amount of Outstanding Auction Rate Notes owned by
such Existing Owner, and if the aggregate principal
amount of Auction Rate Notes subject to such Hold
Orders exceeds the aggregate principal amount of
Auction Rate Notes owned by such Existing Owner,
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 owned by such
Existing Owner.
(2) a. Any Bid shall be considered valid up
to an amount equal to the excess of the
principal amount of Outstanding Auction Rate
Notes owned by such Existing Owner over the
aggregate principal amount of Auction Rate
Notes subject to any Hold Order referred to
in clause (A) of this paragraph (v);
b. subject to subclause (1) of this
clause (B), if more than one Bid with the
same rate is submitted on behalf of such
Existing Owner and the aggregate principal
amount of Outstanding Auction Rate Notes
subject to such Bids is greater than such
excess, such Bids shall be considered valid
up to an amount equal to such excess;
c. 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 Owner, such Bids shall be
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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
d. 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 Owner at the rate therein
specified; and
(3) All Sell Orders shall be considered
valid up to an amount equal to the excess of the
principal amount of Outstanding Auction Rate Notes
owned by such Existing Owner over the aggregate
principal amount of Auction Rate Notes subject to
Hold Orders referred to in clause (1) of this
paragraph (v) and valid Bids referred to in clause
(2) of this paragraph (E).
(F) If more than one Bid for Auction Rate Notes is
submitted on behalf of any Potential Owner, each Bid
submitted shall be a separate Bid with the rate and
principal amount therein specified.
(G) An Existing Owner that offers to purchase
additional Auction Rate Notes is, for purposes of such
offer, treated as a Potential Owner.
(H) Any Bid or Sell Order submitted by an Existing
Owner 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 Owner covering an aggregate
principal amount of Auction Rate Notes not equal to an
Authorized Denomination shall be rejected.
(I) Any Bid specifying a rate higher than the
applicable Maximum Rate will (1) be treated as a Sell
Order if submitted by an Existing Owner and (2) not be
accepted if submitted by a Potential Owner.
(J) Any Order submitted in an Auction by a
Broker-Dealer to the Auction Agent prior to the Submission
Deadline on any Auction Date shall be irrevocable.
(iii) (A) Not earlier than the Submission Deadline on each
Auction Date, the Auction Agent shall assemble all valid
Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed
submitted by a Broker-Dealer being herein referred to
individually as a "Submitted Hold Order," a "Submitted
Bid" or a "Submitted Sell Order," as the case may be, or
as a "Submitted Order," and collectively as "Submitted
Hold Orders," "Submitted Bids" or "Submitted Sell Orders,"
as the case may be, or as "Submitted Orders") and shall
determine:
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(1) 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 herein referred to as the
"Available Auction Rate Notes"), and
(2) from the Submitted Orders whether:
a. the aggregate principal amount of
Outstanding Auction Rate Notes subject to
Submitted Bids by Potential Owners specifying
one or more rates equal to or lower than the
applicable Maximum Rate;
exceeds or is equal to the sum of:
b. the aggregate principal amount of
Outstanding Auction Rate Notes subject to
Submitted Bids by Existing Owners specifying one
or more rates higher than the applicable Maximum
Rate; and
c. 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 a. above
shall be referred to collectively as "Sufficient
Bids"); and
(3) if Sufficient Bids exist, the Bid
Auction Rate, which shall be the lowest rate
specified in such Submitted Bids such that if:
a. (x) each Submitted Bid from Existing
Owners specifying such lowest rate and (y) all
other Submitted Bids from Existing Owners
specifying lower rates were rejected, thus
entitling such Existing Owners to continue to
own the principal amount of Auction Rate Notes
subject to such Submitted Bids; and
b. (x) each such Submitted Bid from
Potential Owners specifying such lowest rate and
(y) all other Submitted Bids from Potential
Owners specifying lower rates were accepted;
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the result would be that such Existing Owners
described in subclause a. above would continue
to own 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 Owners described in subclause b.
above, would equal not less than the Available
Auction Rate Notes.
(B) Promptly after the Auction Agent has made the
determinations pursuant to Section 2.02(a)(iii)(A) of this
Appendix A, the Auction Agent shall advise the Trustee,
the Broker-Dealers and the Issuer of the Net Loan Rate,
Maximum Rate and the All Hold Rate and the components
thereof on the Auction Date and, based on such
determinations, the Auction Rate for the next succeeding
Interest Period as follows:
(1) if Sufficient Bids exist, that the
Auction Rate for the next succeeding Interest
Period shall be equal to the Bid Auction Rate so
determined;
(2) if Sufficient 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
Period shall be equal to the applicable Maximum
Rate; or
(3) if all Outstanding Auction Rate Notes
are subject to Submitted Hold Orders, that the
Auction Rate for the next succeeding Interest
Period shall be equal to the applicable All Hold
Rate.
(C) Promptly after the Auction Agent has determined
the Auction Rate, the Auction Agent shall determine and
advise the Trustee of the Auction Note Interest Rate,
which rate shall be the lesser of (x) the Auction Rate and
(y) the Net Loan Rate; provided, however, that in no event
shall the Auction Note Interest Rate exceed the applicable
Maximum Rate.
(iv) Existing Owners shall continue to own 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 Bids have been received by the
Auction Agent, the Bid Auction Rate will be the Auction Note
Interest 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 (A).
If the Net Loan Rate is less than the Auction Rate, the
Net Loan Rate will be the Auction Note Interest Rate. If the
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Auction Rate and the Net Loan Rate are both greater than the
applicable Maximum Rate, the Auction Note Interest Rate shall be
equal to the applicable Maximum Rate. If the Auction Agent has
not received Sufficient Bids (other than because all of the
Outstanding Auction Rate Notes are subject to Submitted Hold
Orders), the Auction Note Interest Rate will be the lesser of the
Net Loan Rate and the applicable Maximum Rate. 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 (B).
(A) If Sufficient Bids have been made and the Net
Loan Rate is equal to or greater than the Bid Auction
Rate, and if the applicable Maximum Rate does not apply
(in which case the Auction Note Interest Rate shall be the
Bid Auction Rate), all Submitted Sell Orders shall be
accepted and, subject to the provisions of clauses (4) and
(5) of this Section 2.02(a)(iv), Submitted Bids shall be
accepted or rejected as follows in the following order of
priority, and all other Submitted Bids shall be rejected:
(1) Existing Owners' Submitted Bids
specifying any rate that is higher than the Auction
Note Interest Rate shall be accepted, thus
requiring each such Existing Owner to sell the
aggregate principal amount of Auction Rate Notes
subject to such Submitted Bids;
(2) Existing Owners' Submitted Bids
specifying any rate that is lower than the Auction
Note Interest Rate shall be rejected, thus
entitling each such Existing Owner to continue to
own the aggregate principal amount of Auction Rate
Notes subject to such Submitted Bids;
(3) Potential Owners' Submitted Bids
specifying any rate that is lower than the Auction
Note Interest Rate shall be accepted;
(4) Each Existing Owners' Submitted Bid
specifying a rate that is equal to the Auction Note
Interest Rate shall be rejected, thus entitling
such Existing Owner to continue to own 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 (2)
and (3) of this Section 2.02(a)(iv)(D)(1), in which
event such Submitted Bid of such Existing Owner
shall be rejected in part, and such Existing Owner
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shall be entitled to continue to own 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 owned by such Existing Owner 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 Owners that specified a
rate equal to the Auction Note Interest Rate,
subject to the provisions of Section 2.02(a)(iv)(D)
of this Appendix A; and
(5) Each Potential Owner's Submitted Bid
specifying a rate that is equal to the Auction Note
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 (2), (3) and (4) of this
Section 2.02(a)(iv)(A) 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 Owners that specified a rate
equal to the Auction Note Interest Rate, subject to
the provisions of Section 2.02(a)(iv)(D) of this
Appendix A.
(B) If Sufficient 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
Auction Note Interest Rate shall be the Net Loan Rate) or
if applicable Maximum Rate applies, subject to the
provisions of Section 2.02(a)(iv)(D) of this Appendix A,
Submitted Orders shall be accepted or rejected as follows
in the following order of priority and all other Submitted
Bids shall be rejected:
(1) Existing Owners' Submitted Bids
specifying any rate that is equal to or lower than
the Auction Note Interest Rate shall be rejected,
thus entitling such Existing Owners to continue to
own the aggregate principal amount of Auction Rate
Notes subject to such Submitted Bids;
(2) Potential Owners' Submitted Bids
specifying (x) any rate that is equal to or lower
than the Auction Note Interest Rate shall be
accepted and (y) any rate that is higher than the
Auction Note Interest Rate shall be rejected; and
A-1-19
(3) each Existing Owner's Submitted Bid
specifying any rate that is higher than the Auction
Note Interest Rate and the Submitted Sell Order of
each Existing Owner shall be accepted, thus
entitling each Existing Owner 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 (2)(x) of this Section
2.02(a)(iv)(B) by a fraction the numerator of which
shall be the aggregate principal amount of
Outstanding Auction Rate Notes owned by such
Existing Owner 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.
(C) If all Auction Rate Notes are subject to
Submitted Hold Orders, all Submitted Bids shall be
rejected.
(D) If, as a result of the procedures described in
paragraph (A) or (B) of this Section 2.02(a)(iv), any
Existing Owner would be entitled or required to sell, or
any Potential Owner 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
Owner or Potential Owner so that the principal amount of
Auction Rate Notes purchased or sold by each Existing
Owner or Potential Owner shall be equal to an Authorized
Denomination.
(E) If, as a result of the procedures described in
paragraph (B) of this Section 2.02(a)(iv), any Potential
Owner 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 Owners so that only Auction
Rate Notes in Authorized Denominations are purchased by
any Potential Owner, even if such allocation results in
one or more of such Potential Owners not purchasing any
Auction Rate Notes.
(v) 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 Owners and Existing
Owners on whose behalf each Broker-Dealer submitted Bids or Sell
Orders and, with respect to each Broker-Dealer, to the extent
that such aggregate principal amount of Auction Rate Notes to be
sold differs from such aggregate principal amount of Auction Rate
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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.
(vi) Any calculation by the Auction Agent or the Trustee,
as applicable, of the Auction Note Interest Rate, the Maximum
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.
(vii) Notwithstanding anything in this Appendix A to the
contrary, (A) no Auction for the Auction Rate Notes for an
Auction Period of less than 180 days will be held on any Auction
Date hereunder on which there are insufficient moneys in the
Revenue Fund to pay, or otherwise held by the Trustee under the
Indenture and available to pay, the principal of and interest due
on the Auction Rate Notes on the Interest Payment Date
immediately following such Auction Date, and (B) no Auction will
be held on any Auction Date hereunder during the continuance of a
Payment Default. The Trustee shall promptly notify the Auction
Agent of any such occurrence.
(b) APPLICATION OF INTEREST PAYMENTS FOR THE AUCTION RATE NOTES.
(i) The Trustee shall determine not later than 2:00 p.m.,
eastern time, on the Business Day next succeeding an Interest
Payment Date, whether a Payment Default has occurred. If a
Payment Default has occurred, the Trustee shall, not later than
2:15 p.m., eastern time, on such Business Day, send a notice
thereof in substantially the form of Exhibit C attached hereto to
the Auction Agent by telecopy or similar means and, if such
Payment Default is cured, the Trustee shall immediately send a
notice in substantially the form of Exhibit D attached hereto to
the Auction Agent by telecopy or similar means.
(ii) Not later than 2:00 p.m., eastern time, on each
anniversary of the Closing Date, the Trustee shall pay to the
Auction Agent, in immediately available funds out of amounts in
the Revenue Fund, an amount equal to the Auction Agent Fee as set
forth in the Auction Agent Agreement. Not later than 2:00 p.m.,
eastern time, on each Auction Date, the Trustee shall pay to the
Auction Agent, in immediately available funds out of amounts in
the Revenue Fund, an amount equal to the Broker-Dealer Fee as
calculated in the Auction Agent Agreement. The Trustee shall,
from time to time at the request of the Auction Agent and at the
direction of an Authorized Officer, 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 Revenue
Fund.
(c) CALCULATION OF MAXIMUM RATE, ALL HOLD RATE, NET LOAN RATE,
APPLICABLE LIBOR RATE, AND NON-PAYMENT RATE. The Auction Agent shall
calculate the applicable Maximum Rate, Net Loan Rate, Applicable LIBOR
Rate, and All Hold Rate, as the case may be, on each Auction Date and
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shall notify the Trustee and the Broker-Dealers of the applicable
Maximum Rate, Net Loan Rate, Applicable LIBOR Rate, and All Hold Rate,
as the case may be, as provided in the Auction Agent Agreement;
provided, that if the ownership of the Auction Rate Notes is no longer
maintained in Book-entry Form, or if a Payment Default has occurred,
then the Trustee shall determine the applicable Maximum Rate, Net Loan
Rate, Applicable LIBOR Rate, All Hold Rate and Non-Payment Rate for each
such Interest Period. If the ownership of the Auction Rate Notes is no
longer maintained in Book-entry Form by the Securities Depository, the
Trustee shall calculate the applicable Maximum Rate and the Net Loan
Rate on the Business Day immediately preceding the first day of each
Interest Period after the delivery of certificates representing the
Auction Rate Notes pursuant to the Indenture. If a Payment Default shall
have occurred, the Trustee shall calculate the Non-Payment Rate on the
Interest Rate Determination Date for (i) each Interest Period commencing
after the occurrence and during the continuance of such Payment Default
and (ii) any Interest Period commencing less than two Business Days
after the cure of any Payment Default. The determination by the Trustee
or the Auction Agent, as the case may be, of the applicable Maximum
Rate, Net Loan Rate, Applicable LIBOR Rate, All Hold Rate and
Non-Payment Rate shall (in the absence of manifest error) be final and
binding upon all parties. If calculated or determined by the Auction
Agent, the Auction Agent shall promptly advise the Trustee of the
applicable Maximum Rate, Net Loan Rate, Applicable LIBOR Rate, and All
Hold Rate.
(d) NOTIFICATION OF RATES, AMOUNTS AND PAYMENT DATES.
(i) By 12:00 noon, eastern time, on the Business Day
following each Regular Record Date, the Trustee shall determine
the aggregate amounts of interest distributable on the next
succeeding Interest Payment Date to the beneficial owners of
Auction Rate Notes.
(ii) At least four days prior to any Interest Payment
Date, the Trustee shall:
(A) 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 Securities Depository, (1) the date
of such next Interest Payment Date and (2) the amount
payable to the Auction Agent on the Auction Date pursuant
to Section 2.02(b)(ii) of this Appendix A;
(B) pursuant to Section 2.01 of this Appendix A,
advise the Registered Owners of a Subclass of Auction Rate
Notes of any Carry-over Amount accruing on such Auction
Rate Notes; and
(C) advise the Securities Depository, so long as
the ownership of the Auction Rate Notes is maintained in
Book-entry Form by the Securities Depository, upon
request, of the aggregate amount of interest distributable
on such next Interest Payment Date to the beneficial
owners of each Subclass of the Auction Rate Notes.
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If any day scheduled to be an Interest Payment Date shall be
changed after the Trustee shall have given the notice or confirmation
referred to in clause (i) of the preceding sentence, the Trustee shall,
not later than 11:15 a.m., eastern time, on the Business Day next
preceding the earlier of the new Interest Payment Date or the old
Interest Payment Date, by such means as the Trustee deems practicable,
give notice of 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 Securities
Depository.
(e) AUCTION AGENT.
(i) Bankers Trust Company is hereby appointed as Initial
Auction Agent to serve as agent for the Issuer in connection with
Auctions. The Trustee and the Issuer will, and the Trustee is
hereby directed to, enter into the Initial Auction Agent
Agreement with Bankers Trust Company, as the Initial Auction
Agent. Any Substitute Auction Agent shall be (A) a bank, national
banking association or trust company duly organized under the
laws of the United States of America or any state or territory
thereof having its principal place of business in the Borough of
Manhattan, New York, or such other location as approved by the
Trustee in writing and having a combined capital stock or surplus
of at least $50,000,000, or (B) 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
Appendix A by giving at least 90 days' notice to the Trustee,
each Broker-Dealer and the Issuer. The Auction Agent may be
removed at any time by the Trustee upon the written direction of
an Authorized Officer or the Registered Owners of 51% of the
aggregate principal amount of the Auction Rate Notes then
Outstanding, and if by such Registered Owners, by an instrument
signed by such Registered Owners or their attorneys and filed
with the Auction Agent, the Issuer and the Trustee upon at least
90 days' written 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, 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 25 days after notifying the Trustee, each
Broker-Dealer and the Issuer 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.
(ii) If the Auction Agent shall resign or be removed or be
dissolved, or if the property or affairs of the Auction Agent
A-1-23
shall be taken under the control of any state or federal court or
administrative body because of bankruptcy or insolvency, or for
any other reason, the Trustee at the direction of an Authorized
Officer, shall use its best efforts to appoint a Substitute
Auction Agent.
(iii) The Auction Agent is acting 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 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.
(f) BROKER-DEALERS.
(i) The Auction Agent will enter into Broker-Dealer
Agreements with UBS PaineWebber Inc., Xxxxxxx Xxxxx Xxxxxx Inc.,
Banc of America Securities LLC and X. X. Xxxxxx Securities Inc.
as the initial Broker-Dealers. An Authorized Officer may, from
time to time, approve one or more additional persons to serve as
Broker-Dealers under Broker-Dealer Agreements and shall be
responsible for providing such Broker-Dealer Agreements to the
Trustee and the Auction Agent.
(ii) Any Broker-Dealer may be removed at any time, at
the request of an Authorized Officer, but there shall, at all
times, be at least one Broker-Dealer appointed and acting as
such.
(g) CHANGES IN AUCTION PERIOD OR PERIODS AND CERTAIN PERCENTAGES.
(i) 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 (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. The Issuer shall not initiate an Auction Period
Adjustment unless it shall have received the written consent of
the applicable Broker-Dealer, which consent shall not be
unreasonably withheld, not later than nine days prior to the
Auction Date for such Auction Period. The Issuer shall initiate
the Auction Period Adjustment by giving written notice by Issuer
Order to the Trustee, the Auction Agent, the applicable
Broker-Dealer, each Rating Agency and the Securities Depository
in substantially the form of, or containing substantially the
information contained in, Exhibit E attached hereto at least 10
days prior to the Auction Date for such Auction Period.
(ii) Any such adjusted Auction Period shall not be less
than 7 days nor more than 366 days.
(iii) An Auction Period Adjustment shall take effect
only if (A) the Trustee and the Auction Agent receive, by 11:00
a.m.,
A-1-24
eastern time, on the Business Day before the Auction Date for
the first such Auction Period, an Issuer Certificate in
substantially the form attached as, or containing substantially
the same information contained in, Exhibit F attached hereto,
authorizing the Auction Period Adjustment specified in such
certificate along with a copy of the written consent of the
applicable Broker-Dealer and, (B) Sufficient Bids exist as of
the Auction on the Auction Date for such first Auction Period.
If the condition referred to in (A) above is not met, the
applicable Auction Note Interest Rate for the next Auction
Period shall be determined pursuant to the above provisions of
this Section 2.02 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 applicable Auction Note
Interest Rate for the next Auction Period shall be the
applicable Maximum Rate and the Auction Period shall be the
Auction Period determined without reference to the proposed
change.
In connection with any Auction Period Adjustment, the
Auction Agent shall provide such further notice to such parties
as is specified in Section 2.03 of the Auction Agent Agreement.
(h) CHANGES IN THE AUCTION DATE. The applicable Broker-Dealer,
with the written consent of an Authorized Officer and, if applicable,
upon receipt of the opinion of Note Counsel as required below, may
specify an earlier Auction Date (but in no event more than five Business
Days earlier) than the Auction Date that would otherwise be determined
in accordance with the definition of "Auction Date" in Section 1.01 of
this Appendix A with respect to one or more specified Auction Periods in
order to conform with then current market practice with respect to
similar securities or to accommodate economic and financial factors that
may affect or be relevant to the day of the week constituting an Auction
Date and the interest rate borne on the Auction Rate Notes. The
applicable Broker-Dealer shall deliver a written request for consent to
such change in the length of the Auction Date to the Issuer at least 14
days prior to the effective date of such change. If the Issuer shall
have delivered such written consent to the applicable Broker-Dealer,
such Broker-Dealer shall provide notice of its determination to specify
an earlier Auction Date for one or more Auction Periods by means of a
written notice delivered at least 10 days prior to the proposed changed
Auction Date to the Trustee, the Auction Agent, the Issuer, each Rating
Agency and the Securities Depository. Such notice shall be substantially
in the form of, or contain substantially the information contained in,
Exhibit G attached hereto.
In connection with any change described in this Section 2.02(h),
the Auction Agent shall provide such further notice to such parties as
is specified in Section 2.03 of the Auction Agent Agreement.
SECTION 2.03. ADDITIONAL PROVISIONS REGARDING THE INTEREST RATES ON THE
AUCTION RATE NOTES. The determination of a Variable Rate by the 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 Registered Owners of the
Auction Rate Notes to which such Variable Rate applies, and the Issuer and the
Trustee may rely thereon for all purposes.
A-1-25
In no event shall the cumulative amount of interest paid or payable on
the Auction Rate Notes (including interest calculated as provided herein, plus
any other amounts that constitute interest on the Auction Rate Notes under
applicable law, which are contracted for, charged, reserved, taken or received
pursuant to the Auction Rate Notes or related documents) calculated from the
Date of Closing of the Auction Rate Notes through any subsequent day during the
term of the Auction Rate Notes or otherwise prior to payment in full of the
Auction Rate Notes 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 Auction Rate Notes or related documents or otherwise
contracted for, charged, reserved, taken or received in connection with the
Auction Rate Notes, or if the redemption or acceleration of the maturity of the
Auction Rate Notes results in payment to or receipt by the Registered Owner or
any former Registered Owner of the Auction Rate Notes of any interest in excess
of that permitted by applicable law, then, notwithstanding any provision of the
Auction Rate Notes or related documents to the contrary, all excess amounts
theretofore paid or received with respect to the Auction Rate Notes shall be
credited on the principal balance of the Auction Rate Notes (or, if the Auction
Rate Notes have been paid or would thereby be paid in full, refunded by the
recipient thereof), and the provisions of the Auction Rate Notes and related
documents shall automatically and immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
under the Auction Rate Notes and under the related documents.
X-0-00
XXXXXXX X-0
FORM OF SENIOR NOTES
EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE, THIS GLOBAL NOTE MAY BE
TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES
DEPOSITORY (AS DEFINED IN THE INDENTURE) OR TO A SUCCESSOR SECURITIES DEPOSITORY
OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.
NELNET STUDENT LOAN CORPORATION-2
STUDENT LOAN ASSET-BACKED NOTE
SENIOR CLASS 2001A-[2] [3] [4] [5] [6] [7]
AUCTION RATE NOTES
REGISTERED NO. R-__ REGISTERED $_______________
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE CUSIP NO.
June 1, 2035 Variable September 4, 2001 __________
PRINCIPAL SUM: _________________________________________ AND 00/100 DOLLARS
REGISTERED OWNER: CEDE & CO.
NELNET STUDENT LOAN CORPORATION-2, a corporation organized under the
corporation laws of the State of Nevada (the "Issuer," which term includes any
successor corporation under the Indenture of Trust, dated as of June 1, 2000 (as
previously amended, the "Original Indenture") and the Series 2001B Supplemental
Indenture of Trust dated as of September 1, 2001 (as amended, the "Series 2001B
Supplemental Indenture," and together with the Original Indenture, the
"Indenture"), each between the Issuer and Zions First National Bank, as trustee
(the "Trustee," which term includes any successor trustee under the Indenture))
for value received, hereby promises to pay to the Registered Owner (stated
above) or registered assigns, the Principal Sum of (stated above), but solely
from the revenues and receipts hereinafter specified and not otherwise, on the
Maturity Date specified above (subject to the right of prior redemption
hereinafter described), upon presentation and surrender of this note at the
Principal Office of the Trustee, as paying agent, trustee, authenticating agent
and registrar for the Notes, or a duly appointed successor paying agent, and to
pay interest in arrears on said Principal Sum, but solely from the revenues and
receipts hereinafter specified and not otherwise, to the Registered Owner hereof
from the most recent Interest Payment Date to which interest has been paid
hereon, until the payment of said principal sum in full.
Any capitalized words and terms used as defined words and terms in this
note and not otherwise defined herein shall have the meanings given them in the
Indenture.
This note shall bear interest at an Auction Rate, all as determined in
Appendix A of the Series 2001B Supplemental Indenture.
The principal of and interest on this note are payable in lawful money
of the United States of America. If the specified date for any payment of
principal or interest accrued to such specified date shall be a day other than a
Business Day then such payment may be made on the next succeeding Business Day,
with the same force and effect as if made on the specified date for such payment
without additional interest.
Interest payable on this note shall be computed on the assumption that
each year contains 360 days and actual days elapsed.
This note is one of a series of notes of the Issuer designated Student
Loan Asset-Backed Notes, Senior Class 2001A-[2][3][4][5][6][7] Auction Rate
Notes, dated the Original Issue Date, in the aggregate original principal amount
of $_______________ (the "Class 2001A-[2][3][4][5][6][7] Notes") which have been
authorized by the Issuer under a certain resolution, and issued by the Issuer
pursuant to the Indenture. The Issuer is, simultaneously with the Class
2001A-[2][3][4][5][6][7] Notes, issuing $_______________ of its Student Loan
Asset-Backed Notes, Senior Class 2001A Notes in five subclasses (together with
the Class 2001A-[2][3][4][5][6][7] Notes, the "Class 2001A Notes") and
$75,000,000 of its Student Loan Asset-Backed Notes, Subordinate Class 2001B
Notes in two subclasses (the "Class 2001B Notes"). The proceeds of such notes
have been used by the Issuer, together with other moneys of the Issuer, for the
purpose of providing funds to finance the acquisition of student loans, fund a
reserve fund and to pay certain costs and expenses in connection with the
issuance of such notes. The Issuer has previously issued $1,480,000,000 of its
Student Loan Asset-Backed Notes pursuant to the terms of the Indenture,
consisting of $1,430,000,000 of Senior Class A Notes (the "Outstanding Class A
Notes," and together with the Class 2001A Notes, the "Class A Notes") and
$50,000,000 of Subordinate Class B Notes (the "Outstanding Class B Notes," and
together with the Class 2001B Notes, the "Class B Notes"). The Indenture
provides for the issuance of additional notes (the "Additional Notes") which may
be secured on a parity with or subordinate to the Class A Notes or the Class B
Notes as determined by the Issuer. The Class A Notes, the Class B Notes and any
Additional Notes are collectively referred to herein as the "Notes."
MANDATORY REDEMPTION, OPTIONAL REDEMPTION AND EXTRAORDINARY REDEMPTION.
This note is subject to mandatory redemption, optional redemption and
extraordinary redemption, all as described in the Indenture.
OPTIONAL PURCHASE. The Issuer may purchase or cause to be purchased all
of the Notes on any Interest Payment Date on which the aggregate current
principal balance of the Notes shall be less than or equal to 20% of the initial
aggregate principal balance of the Notes on the Date of Issuance, at a purchase
price equal to the aggregate current principal balance of such Notes, plus
accrued interest on the Notes through the day preceding the Interest Payment
Date on which the purchase occurs.
NOTICE OF REDEMPTION OR PURCHASE. Notice of the call for redemption
shall be given by the Trustee by mailing a copy of the notice at least 15 days
prior to the redemption or purchase date to the Registered Owners of the Notes
to be redeemed in whole or in part at the address of such Registered Owner last
A-1-2
showing on the registration books. Failure to give such notice or any defect
therein shall not affect the validity of any proceedings for the redemption or
purchase of such Auction Rate Notes for which no such failure or defect occurs.
All Notes called for redemption or purchase will cease to bear interest after
the specified redemption or purchase date, provided funds for their payment are
on deposit at the place of payment at the time. If less than all Notes are to be
redeemed or purchased, Notes shall be selected for redemption or purchase as
provided in the Indenture.
The Indenture provides that the Issuer may enter into a derivative
product between the Issuer and a derivative provider (a "Reciprocal Payor"), as
originally executed and as amended or supplemented, or other interest rate hedge
agreement between the Issuer and a Reciprocal Payor, as originally executed and
as amended or supplemented. Payments due to a Reciprocal Payor from the Issuer
pursuant to the applicable Derivative Product are referred to herein as "Issuer
Derivative Payments," and may be secured on a parity with any series of Bonds.
The principal of and interest on the Class A Notes and any Additional
Notes issued on a parity with the Class A Notes and any Issuer Derivative
Payments secured on a parity with the Class A Notes are payable on a superior
basis to such payments on the Class B Notes and any Additional Notes issued on a
parity or subordinate to the Class B Notes; provided, however, that current
principal and interest may be paid on the Class B Notes and any Additional Notes
issued on a parity with the Class B Notes or subordinate to the Class B Notes if
all principal and interest payments due and owing at such time on the Class A
Notes and any Additional Notes issued on a parity with the Class A Notes and any
Issuer Derivative Payments secured on a parity with the Class A Notes have been
previously made or provided for as provided in the Indenture.
Reference is hereby made to the Indenture, copies of which are on file
in the Principal Office of the Trustee, and to all of the provisions of which
any Registered Owner of this note by his acceptance hereof hereby assents, for
definitions of terms; the description of and the nature and extent of the
security for the Notes; the Issuer's student loan origination and acquisition
program; the revenues and other money pledged to the payment of the principal of
and interest on the 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 Registered Owners of the Notes
and any Reciprocal Payor; the rights and remedies of the Registered Owner hereof
with respect hereto and thereto, including the limitations upon the right of a
Registered Owner hereof to institute any suit, action, or proceeding in equity
or at law with respect hereto and thereto; the rights, duties, and obligations
of the Issuer and the Trustee thereunder; the terms and provisions upon which
the liens, pledges, charges, trusts, and covenants made therein may be
discharged at or prior to the stated maturity or earlier redemption of this
note, and this note thereafter shall no longer be secured by the Indenture or be
deemed to be Outstanding, as defined in the Indenture, thereunder; and for the
other terms and provisions thereof.
THE NOTES ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM,
AND FURTHER SECURED BY, THE TRUST ESTATE, AS DEFINED IN THE INDENTURE.
A-1-3
No recourse, either directly or indirectly, shall be had for the payment
of the principal of and interest on this note or any claim based hereon or in
respect hereof or of the Indenture, against the Trustee, or any incorporator,
director, officer, employee, or agent of the Issuer, nor against the State of
Nevada, or any official thereof, but the obligation to pay all amounts required
by the Indenture securing this note and the obligation to do and perform the
covenants and acts required of the Issuer therein and herein shall be and remain
the responsibility and obligation of said Issuer, limited as herein set forth.
Subject to the restrictions specified in the Indenture, this note is
transferable on the Note Register kept for that purpose by the Trustee, as
registrar, upon surrender of this note for transfer at the principal office of
the Trustee, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by, the Registered
Owner hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of the same series, Stated Maturity, of authorized denominations,
bearing interest at the same rate, and for the same aggregate principal amount
will be issued to the designated transferee or transferees. At the option of the
Registered Owner, any Note may be exchanged for other Notes in authorized
denominations upon surrender of the Note to be exchanged at the principal office
of the Trustee. Upon any such presentation for exchange, one or more new Notes
of the same series, Stated Maturity, in authorized denominations, bearing
interest at the same rate, and for the same aggregate principal amount as the
Note or Notes so surrendered will be issued to the Registered Owner of the Note
or Notes so surrendered; and the Note or Notes so surrendered shall thereupon be
cancelled by the Trustee.
Notwithstanding the foregoing, so long as the ownership of the Notes is
maintained in book-entry form by The Depository Trust Company (the "Securities
Depository") or a nominee thereof, this note may be transferred in whole but not
in part only to the Securities Depository or a nominee thereof or to a successor
Securities Depository or its nominee.
The Issuer, the Trustee, and any agent of either of them shall treat the
Person in whose name this note is registered as the Registered Owner hereof (a)
on the record date for purposes of receiving timely payment of interest hereon,
and (b) on the date of surrender of this note for purposes of receiving payment
of principal hereof at its stated maturity and (c) for all other purposes,
whether or not this note is overdue, and neither the Issuer, the Trustee, nor
any such agent shall be affected by notice to the contrary.
To the extent permitted by the Indenture, modifications or alterations
of the Indenture and any supplemental indenture may be made with the consent of
less than all of the Registered Owners of the Notes then outstanding or without
the consent of any of such Registered Owners (by reason of a change in the Act
or Regulation or to cure ambiguities or conflicts), but such modification or
alteration is not permitted to affect the maturity date, Stated Maturity,
amount, Interest Payment Date, or rate of interest on any outstanding Notes or
affect the rights of the Registered Owners of less than all of the Notes
outstanding.
The Registered Owner hereof shall not have the right to demand payment
of this note or any interest hereon out of funds raised or to be raised by
taxation.
A-1-4
Any capitalized term used herein and not otherwise defined herein shall
have the same meaning ascribed to such term in the herein defined Indenture
unless the context shall clearly indicate otherwise.
It is hereby certified and recited that all acts and things required by
the laws of the State of Nevada to happen, exist, and be performed precedent to
and in the issuance of this note, and the passage of said resolution and the
execution of said Indenture, have happened, exist and have been performed as so
required.
A-1-5
IN TESTIMONY WHEREOF, the Board of Directors of NELNET STUDENT LOAN
CORPORATION-2 has caused this note to be executed by the manual or facsimile
signatures of the President and Secretary of the Issuer all as of the Original
Issue Date.
NELNET STUDENT LOAN CORPORATION-2
By
--------------------------------------------
President
By
--------------------------------------------
Secretary
A-1-6
CERTIFICATE OF AUTHENTICATION
This note is one of the Class 2001A-__ Notes designated therein and
described in the within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, as Trustee
By
---------------------------------
Authorized Signatory
Authentication Date:
---------------------------------------
A-1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto __________ (Social Security or other identifying number __________) the
within note and all rights thereunder and hereby irrevocably appoints __________
attorney to transfer the within note on the books kept for registration thereof,
with full power of substitution in the premises.
Dated: SIGNED:
---------------------- ------------------------------------
NOTICE: The signature on this Assignment must
correspond with the name of the Registered Owner
as it appears on the face of the within note in
every particular.
Signature Guaranteed by:
-------------------------------
A Member of The New York Stock
Exchange or a State or National
Bank
X-0-0
XXXXXXX X-0
FORM OF SUBORDINATE NOTES
EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE, THIS GLOBAL NOTE MAY BE
TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE OF THE SECURITIES
DEPOSITORY (AS DEFINED IN THE INDENTURE) OR TO A SUCCESSOR SECURITIES DEPOSITORY
OR TO A NOMINEE OF A SUCCESSOR SECURITIES DEPOSITORY.
NELNET STUDENT LOAN CORPORATION-2
STUDENT LOAN ASSET-BACKED NOTE
SUBORDINATE CLASS 2001B-[1] [2]
AUCTION RATE NOTES
REGISTERED NO. R-1 REGISTERED $37,500,000
MATURITY DATE INTEREST RATE ORIGINAL ISSUE DATE CUSIP NO.
June 1, 2035 Variable September 4, 2001 __________
PRINCIPAL SUM: THIRTY SEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100
DOLLARS
REGISTERED OWNER: CEDE & CO.
NELNET STUDENT LOAN CORPORATION-2, a corporation organized under the
corporation laws of the State of Nevada (the "Issuer," which term includes any
successor corporation under the Indenture of Trust, dated as of June 1, 2000 (as
previously amended, the "Original Indenture") and the Series 2001B Supplemental
Indenture of Trust dated as of September 1, 2001 (as amended, the "Series 2001B
Supplemental Indenture," and together with the Original Indenture, the
"Indenture"), each between the Issuer and Zions First National Bank, as trustee
(the "Trustee," which term includes any successor trustee under the Indenture))
for value received, hereby promises to pay to the Registered Owner (stated
above) or registered assigns, the Principal Sum of (stated above), but solely
from the revenues and receipts hereinafter specified and not otherwise, on the
Maturity Date specified above (subject to the right of prior redemption
hereinafter described), upon presentation and surrender of this note at the
Principal Office of the Trustee, as paying agent, trustee, authenticating agent
and registrar for the Notes, or a duly appointed successor paying agent, and to
pay interest in arrears on said Principal Sum, but solely from the revenues and
receipts hereinafter specified and not otherwise, to the Registered Owner hereof
from the most recent Interest Payment Date to which interest has been paid
hereon, until the payment of said principal sum in full.
Any capitalized words and terms used as defined words and terms in this
note and not otherwise defined herein shall have the meanings given them in the
Indenture.
This note shall bear interest at an Auction Rate, all as determined in
Appendix A of the Series 2001B Supplemental Indenture.
The principal of and interest on this note are payable in lawful money
of the United States of America. If the specified date for any payment of
principal or interest accrued to such specified date shall be a day other than a
Business Day then such payment may be made on the next succeeding Business Day,
with the same force and effect as if made on the specified date for such payment
without additional interest.
Interest payable on this note shall be computed on the assumption that
each year contains 360 days and actual days elapsed.
This note is one of a series of notes of the Issuer designated Student
Loan Asset-Backed Notes, Subordinate Class 2001B-[1][2] Auction Rate Notes,
dated the Original Issue Date, in the aggregate original principal amount of
$37,500,000 (the "Class 2001B-[1][2] Notes") which have been authorized by the
Issuer under a certain resolution, and issued by the Issuer pursuant to the
Indenture. The Issuer is, simultaneously with the Class 2001B-[1][2] Notes,
issuing $37,500,000 of its Student Loan Asset-Backed Notes, Subordinate Class
2001B-[1][2] (the "Class 2001B-[1][2] Notes," and together with the Class
2001B-[1][2] Notes, the "Class 2001B Notes") and $475,000,000 of its Student
Loan Asset-Backed Notes, Senior Class 2001A Notes in six subclasses
(collectively, the "Class 2001A Notes"). The proceeds of such notes have been
used by the Issuer, together with other moneys of the Issuer, for the purpose of
providing funds to finance the acquisition of student loans, fund a reserve fund
and to pay certain costs and expenses in connection with the issuance of such
notes. The Issuer has previously issued $1,480,000,000 of its Student Loan
Asset-Backed Notes pursuant to the terms of the Indenture, consisting of
$1,430,000,000 of Senior Class A Notes (the "Outstanding Class A Notes," and
together with the Class 2001A Notes, the "Class A Notes") and $50,000,000 of
Subordinate Class B Notes (the "Outstanding Class B Notes," and together with
the Class 2001B Notes, the "Class B Notes"). The Indenture provides for the
issuance of additional notes (the "Additional Notes") which may be secured on a
parity with or subordinate to the Class A Notes or the Class B Notes as
determined by the Issuer. The Class A Notes, the Class B Notes and any
Additional Notes are collectively referred to herein as the "Notes."
MANDATORY REDEMPTION, OPTIONAL REDEMPTION AND EXTRAORDINARY REDEMPTION.
This note is subject to mandatory redemption, optional redemption and
extraordinary redemption, all as described in the Indenture.
OPTIONAL PURCHASE. The Issuer may purchase or cause to be purchased all
of the Notes on any Interest Payment Date on which the aggregate current
principal balance of the Notes shall be less than or equal to 20% of the initial
aggregate principal balance of the Notes on the Date of Issuance, at a purchase
price equal to the aggregate current principal balance of such Notes, plus
accrued interest on the Notes through the day preceding the Interest Payment
Date on which the purchase occurs.
NOTICE OF REDEMPTION OR PURCHASE. Notice of the call for redemption
shall be given by the Trustee by mailing a copy of the notice at least 15 days
prior to the redemption or purchase date to the Registered Owners of the Notes
A-2-2
to be redeemed in whole or in part at the address of such Registered Owner last
showing on the registration books. Failure to give such notice or any defect
therein shall not affect the validity of any proceedings for the redemption or
purchase of such Auction Rate Notes for which no such failure or defect occurs.
All Notes called for redemption or purchase will cease to bear interest after
the specified redemption or purchase date, provided funds for their payment are
on deposit at the place of payment at the time. If less than all Notes are to be
redeemed or purchased, Notes shall be selected for redemption or purchase as
provided in the Indenture.
The Indenture provides that the Issuer may enter into a derivative
product between the Issuer and a derivative provider (a "Reciprocal Payor"), as
originally executed and as amended or supplemented, or other interest rate hedge
agreement between the Issuer and a Reciprocal Payor, as originally executed and
as amended or supplemented. Payments due to a Reciprocal Payor from the Issuer
pursuant to the applicable Derivative Product are referred to herein as "Issuer
Derivative Payments," and may be secured on a parity with any series of Bonds.
The principal of and interest on the Class A Notes and any Additional
Notes issued on a parity with the Class A Notes and any Issuer Derivative
Payments secured on a parity with the Class A Notes are payable on a superior
basis to such payments on the Class B Notes and any Additional Notes issued on a
parity or subordinate to the Class B Notes; provided, however, that current
principal and interest may be paid on the Class B Notes and any Additional Notes
issued on a parity with the Class B Notes or subordinate to the Class B Notes if
all principal and interest payments due and owing at such time on the Class A
Notes and any Additional Notes issued on a parity with the Class A Notes and any
Issuer Derivative Payments secured on a parity with the Class A Notes have been
previously made or provided for as provided in the Indenture.
Reference is hereby made to the Indenture, copies of which are on file
in the Principal Office of the Trustee, and to all of the provisions of which
any Registered Owner of this note by his acceptance hereof hereby assents, for
definitions of terms; the description of and the nature and extent of the
security for the Notes; the Issuer's student loan origination and acquisition
program; the revenues and other money pledged to the payment of the principal of
and interest on the 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 Registered Owners of the Notes
and any Reciprocal Payor; the rights and remedies of the Registered Owner hereof
with respect hereto and thereto, including the limitations upon the right of a
Registered Owner hereof to institute any suit, action, or proceeding in equity
or at law with respect hereto and thereto; the rights, duties, and obligations
of the Issuer and the Trustee thereunder; the terms and provisions upon which
the liens, pledges, charges, trusts, and covenants made therein may be
discharged at or prior to the stated maturity or earlier redemption of this
note, and this note thereafter shall no longer be secured by the Indenture or be
deemed to be Outstanding, as defined in the Indenture, thereunder; and for the
other terms and provisions thereof.
THE NOTES ARE LIMITED OBLIGATIONS OF THE ISSUER, PAYABLE SOLELY FROM,
AND FURTHER SECURED BY, THE TRUST ESTATE, AS DEFINED IN THE INDENTURE.
A-2-3
No recourse, either directly or indirectly, shall be had for the payment
of the principal of and interest on this note or any claim based hereon or in
respect hereof or of the Indenture, against the Trustee, or any incorporator,
director, officer, employee, or agent of the Issuer, nor against the State of
Nevada, or any official thereof, but the obligation to pay all amounts required
by the Indenture securing this note and the obligation to do and perform the
covenants and acts required of the Issuer therein and herein shall be and remain
the responsibility and obligation of said Issuer, limited as herein set forth.
Subject to the restrictions specified in the Indenture, this note is
transferable on the Note Register kept for that purpose by the Trustee, as
registrar, upon surrender of this note for transfer at the principal office of
the Trustee, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by, the Registered
Owner hereof or his attorney duly authorized in writing, and thereupon one or
more new Notes of the same series, Stated Maturity, of authorized denominations,
bearing interest at the same rate, and for the same aggregate principal amount
will be issued to the designated transferee or transferees. At the option of the
Registered Owner, any Note may be exchanged for other Notes in authorized
denominations upon surrender of the Note to be exchanged at the principal office
of the Trustee. Upon any such presentation for exchange, one or more new Notes
of the same series, Stated Maturity, in authorized denominations, bearing
interest at the same rate, and for the same aggregate principal amount as the
Note or Notes so surrendered will be issued to the Registered Owner of the Note
or Notes so surrendered; and the Note or Notes so surrendered shall thereupon be
cancelled by the Trustee.
Notwithstanding the foregoing, so long as the ownership of the Notes is
maintained in book-entry form by The Depository Trust Company (the "Securities
Depository") or a nominee thereof, this note may be transferred in whole but not
in part only to the Securities Depository or a nominee thereof or to a successor
Securities Depository or its nominee.
The Issuer, the Trustee, and any agent of either of them shall treat the
Person in whose name this note is registered as the Registered Owner hereof (a)
on the record date for purposes of receiving timely payment of interest hereon,
and (b) on the date of surrender of this note for purposes of receiving payment
of principal hereof at its stated maturity and (c) for all other purposes,
whether or not this note is overdue, and neither the Issuer, the Trustee, nor
any such agent shall be affected by notice to the contrary.
To the extent permitted by the Indenture, modifications or alterations
of the Indenture and any supplemental indenture may be made with the consent of
less than all of the Registered Owners of the Notes then outstanding or without
the consent of any of such Registered Owners (by reason of a change in the Act
or Regulation or to cure ambiguities or conflicts), but such modification or
alteration is not permitted to affect the maturity date, Stated Maturity,
amount, Interest Payment Date, or rate of interest on any outstanding Notes or
affect the rights of the Registered Owners of less than all of the Notes
outstanding.
The Registered Owner hereof shall not have the right to demand payment
of this note or any interest hereon out of funds raised or to be raised by
taxation.
A-2-4
Any capitalized term used herein and not otherwise defined herein shall
have the same meaning ascribed to such term in the herein defined Indenture
unless the context shall clearly indicate otherwise.
It is hereby certified and recited that all acts and things required by
the laws of the State of Nevada to happen, exist, and be performed precedent to
and in the issuance of this note, and the passage of said resolution and the
execution of said Indenture, have happened, exist and have been performed as so
required.
A-2-5
IN TESTIMONY WHEREOF, the Board of Directors of NELNET STUDENT LOAN
CORPORATION-2 has caused this note to be executed by the manual or facsimile
signatures of the President and Secretary of the Issuer all as of the Original
Issue Date.
NELNET STUDENT LOAN CORPORATION-2
By
-----------------------------------------------
President
By
-----------------------------------------------
Secretary
A-2-6
CERTIFICATE OF AUTHENTICATION
This note is one of the Class 2001B-1 Notes designated therein and
described in the within-mentioned Indenture.
ZIONS FIRST NATIONAL BANK, as Trustee
By
------------------------------------
Authorized Signatory
Authentication Date:
--------------------------------------
A-2-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns, and transfers
unto __________ (Social Security or other identifying number __________) the
within note and all rights thereunder and hereby irrevocably appoints __________
attorney to transfer the within note on the books kept for registration thereof,
with full power of substitution in the premises.
Dated: SIGNED:
---------------------- ------------------------------------
NOTICE: The signature on this Assignment must
correspond with the name of the Registered Owner
as it appears on the face of the within note in
every particular.
Signature Guaranteed by:
-------------------------------------
A Member of The New York Stock
Exchange or a State or National
Bank
A-2-8
EXHIBIT B
SERIES 2001B CLOSING CASH FLOW PROJECTIONS
EXHIBIT C
NOTICE OF PAYMENT DEFAULT
NELNET STUDENT LOAN CORPORATION-2
STUDENT LOAN ASSET-BACKED NOTES
CLASS 2001__
AUCTION RATE CERTIFICATE NOTES
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and is
continuing with respect to the Auction Rate Notes identified above. The next
Auction for the Auction Rate Notes will not be held. The Auction Rate for the
Auction Rate Notes for the next succeeding Interest Period shall be the
Non-Payment Rate.
ZIONS FIRST NATIONAL BANK, as Trustee
Dated: By
------------ -----------------------------------
EXHIBIT D
NOTICE OF CURE OF PAYMENT DEFAULT
NELNET STUDENT LOAN CORPORATION-2
STUDENT LOAN ASSET-BACKED NOTES
CLASS 2001__
AUCTION RATE CERTIFICATE NOTES
NOTICE IS HEREBY GIVEN that a Payment Default with respect to the
Auction Rate Notes identified above has been waived or cured. The next Interest
Payment Date is __________________________ and the Auction Date is
__________________________.
ZIONS FIRST NATIONAL BANK, as Trustee
Dated: By
------------------------- ----------------------------------
EXHIBIT E
NOTICE OF PROPOSED CHANGE IN LENGTH
OF ONE OR MORE AUCTION PERIODS
NELNET STUDENT LOAN CORPORATION-2
STUDENT LOAN ASSET-BACKED NOTES
CLASS 2001__
AUCTION RATE CERTIFICATE NOTES
Notice is hereby given that the Issuer proposes to change the length of
one or more Auction Periods pursuant to the Indenture of Trust, as amended (the
"Indenture") as follows:
1. The change shall take effect on _______________, the Interest Rate
Adjustment Date for the next Auction Period (the "Effective Date").
2. The Auction Period Adjustment in Paragraph 1 shall take place only if
(a) the Trustee and the Auction Agent receive, by 11:00 a.m., eastern time, on
the Business Day before the Auction Date for the Auction Period commencing on
the Effective Date, a certificate from the Issuer, as required by the Indenture
authorizing the change in length of one or more Auction Periods and (b)
Sufficient Bids exist on the Auction Date for the Auction Period commencing on
the Effective Date.
3. If the condition referred to in (a) above is not met, the Auction
Rate for the Auction Period commencing on the Effective Date will be determined
pursuant to the Auction Procedures and the Auction Period shall be the Auction
Period determined without reference to the proposed change. If the condition
referred to in (a) is met but the condition referred to in (b) above is not met,
the Auction Rate for the Auction Period commencing on the Effective Date shall
be the Maximum 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
Class 2001__ Notes described herein, that there were Sufficient Bids for such
Class 2001__ 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 Class 2001__ Notes.
NELNET STUDENT LOAN CORPORATION-2
Dated: By
----------------------- ---------------------------------
EXHIBIT F
NOTICE ESTABLISHING CHANGE IN LENGTH
OF ONE OR MORE AUCTION PERIODS
NELNET STUDENT LOAN CORPORATION-2
STUDENT LOAN ASSET-BACKED NOTES
CLASS 2001__
AUCTION RATE CERTIFICATE NOTES
Notice is hereby given that the Issuer hereby establishes new lengths
for one or more Auction Periods pursuant to the Indenture of Trust, as amended:
1. The change shall take effect on _______________, the Interest Rate
Adjustment Date for the next Auction Period (the "Effective Date").
2. For the Auction Period commencing on the Effective Date, the Interest
Rate Adjustment 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 Interest Rate Adjustment Date 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 the
Indenture of Trust.
4. The changes described in paragraphs 2 and 3 above shall take place
only upon delivery of this Notice and the satisfaction of other conditions set
forth in the Indenture of Trust and our prior notice dated _______________
regarding the proposed change.
5. Terms not defined in this Notice shall have the meanings set forth in
the Indenture of Trust relating to the Class 2001__ Notes.
NELNET STUDENT LOAN CORPORATION-2
Dated: By
----------------------- ---------------------------------
EXHIBIT G
NOTICE OF CHANGE IN AUCTION DATE
NELNET STUDENT LOAN CORPORATION-2
STUDENT LOAN ASSET-BACKED NOTES
CLASS 2001__
AUCTION RATE CERTIFICATE NOTES
Notice is hereby given by [ ], as Broker-Dealer for the Auction Rate
Notes, that with respect to the Auction Rate Notes, the Auction Date is hereby
changed as follows:
1. With respect to Class 2001__ Notes, the definition of "Auction Date"
shall be deemed amended by substituting "_______________(number) Business Day"
in the second line thereof 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 Auction Date for the Class 2001__ Notes shall be subject to
further change hereafter as provided in the Indenture of Trust.
4. Terms not defined in this Notice shall have the meaning set forth in
the Indenture of Trust, as amended, relating to the Class 2001__ Notes.
[BROKER-DEALER], as Broker-Dealer
Dated: By
----------------------- ---------------------------------
