1
EXHIBIT 4.2
TERMS SUPPLEMENT
TO THE
INDENTURE OF TRUST
Dated as of ________ 1, 1999,
by and among
STUDENT LOAN FUNDING 1999-A/B TRUST,
A Delaware common law trust,
FIRSTAR BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely as co-owner eligible
lender trustee for the benefit of
Student Loan Funding 1999-A/B Trust,
and
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee,
Dated as of ________ 1, 1999
Securing
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1999A-1
(LIBOR RATE),
STUDENT LOAN SENIOR ASSET-BACKED NOTES,
SERIES 1999A-2
(LIBOR RATE)
and
STUDENT LOAN SUBORDINATE ASSET-BACKED NOTES,
SERIES 1999B-1
(LIBOR RATE)
OF
STUDENT LOAN FUNDING 1999-A/B TRUST
2
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
-----------
ARTICLE II
Authorization, Terms and Provisions of Notes
--------------------------------------------
SECTION 2.01 Authorization of Notes; Notes to Constitute Special Obligations..................10
SECTION 2.02 Terms of Notes...................................................................10
SECTION 2.03 Determination of Series Interest Rates on the Notes..............................13
SECTION 2.03.1 Determination of the Series Interest Rate on the Notes.......13
SECTION 2.03.2 Carryover Interest...........................................14
SECTION 2.03.3 Additional Provisions Regarding Series Interest Rate.........15
SECTION 2.04 Forms of Notes and Instructions for Payment......................................15
ARTICLE
Redemption of the Notes
-----------------------
SECTION 3.01 Redemption of Notes in General...................................................17
SECTION 3.02 Auction of Financed Student Loans; Redemption of Outstanding Notes from
Auction Proceeds prior to the Legal Final Maturity......................................17
SECTION 3.03 Optional Redemption of Notes prior to the Legal Final Maturity...................18
ARTICLE IV
Disposition of Proceeds of the Notes; Collection Account; Acquisition Fund
--------------------------------------------------------------------------
SECTION 4.01 Disposition of Proceeds of the Notes.............................................19
SECTION 4.02 Disposition of Collection Account................................................19
ARTICLE V
Miscellaneous
-------------
SECTION 5.01 Execution and Delivery of this Terms Supplement..................................23
SECTION 5.02. Effect of Terms Supplement on Indenture.........................................23
SECTION 5.03 Execution of Counterparts........................................................23
i
3
SECTION 5.04. Governing Law...................................................................23
SCHEDULE I TERMS OF SENIOR NOTES; TERMS OF SUBORDINATE NOTES
EXHIBIT A DISTRIBUTION STATEMENT
EXHIBIT B FORM OF SENIOR LIBOR FLOATING RATE NOTE
EXHIBIT C FORM OF SUBORDINATE NOTE
EXHIBIT D INSTRUCTION FOR PAYMENT OF INTEREST
ii
4
TERMS SUPPLEMENT
THIS TERMS SUPPLEMENT, dated as of ________ 1, 1999 (this "Terms
Supplement"), by and among STUDENT LOAN FUNDING 1999-A/B TRUST, a common law (as
opposed to statutory) trust created under the laws of the State of Delaware (the
"Issuer"), by FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking association
duly organized and existing under the laws of the United States, having its
principal corporate trust office in Cincinnati, Ohio, not in its individual
capacity, but solely as Co-Owner Trustee of the Issuer (the "Co-Owner Trustee"),
FIRSTAR BANK, NATIONAL ASSOCIATION, not in its individual capacity, but solely
in its capacity as the initial eligible lender trustee holding title to the
Financed Student Loans on behalf of the Issuer (the "Initial Co-Owner Eligible
Lender Trustee"), and FIRSTAR BANK, NATIONAL ASSOCIATION, a national banking
association duly organized and existing under the laws of the United States,
having its principal corporate trust office in Cincinnati, Ohio (the "Indenture
Trustee"), as Indenture Trustee under that certain Indenture of Trust, dated as
of ________ 1, 1999 (as hereafter amended and supplemented by Supplemental
Indentures, the "Base Indenture"), among the Issuer, the Initial Co-Owner
Eligible Lender Trustee and the Indenture Trustee, amends and supplements the
Base Indenture (as amended and supplemented by this Terms Supplement, the
"Indenture"). Words and terms used as defined words and terms herein and not
otherwise defined herein shall have the meanings given them in the Base
Indenture. (References to the name "Student Loan Funding 1999-A/B Trust" or to
the term "Issuer" in this Terms Supplement, including the Schedules and Exhibits
attached hereto and made a part hereof, shall mean the Co-Owner Trustee, not in
its individual capacity, but solely as Co-Owner Trustee of the Issuer on behalf
of the Issuer.)
WITNESSETH:
WHEREAS, Section 2.1 of the Base Indenture provides, among other
things, that the Issuer, the Initial Co-Owner Eligible Lender Trustee and the
Indenture Trustee shall enter into a Terms Supplement thereto for the purposes
of (i) authorizing the issuance of a Series of Notes thereunder and (ii)
specifying certain terms of such Notes; and
WHEREAS, the Issuer has determined to provide hereunder for the
issuance of (i) its Student Loan Senior Asset-Backed Notes, Series 1999A-1
(LIBOR Rate) (the "Series 1999A-1 Notes"), (ii) Student Loan Senior Asset-Backed
Notes, Series 1999A-2 (LIBOR Rate) (the "Series 1999A-2 Notes" and, together
with the Series 1999A-1 Notes, the "Senior Notes"), and (iii) its Student Loan
Subordinate Asset-Backed Notes, Series 1999B-1 (LIBOR Rate) (the "Subordinate
Notes" and, collectively with the Senior Notes, the "Notes"); and
WHEREAS, the Issuer, the Initial Co-Owner Eligible Lender Trustee and
the Indenture Trustee desire to execute and deliver this Terms Supplement in
order to authorize the issuance of each Series of the Notes and to declare the
terms upon which each Series of the Notes will be issued; and
1
5
NOW, THEREFORE, THIS TERMS SUPPLEMENT WITNESSETH:
That it is hereby mutually covenanted and agreed that the terms and
conditions upon which each Series of the Notes are executed, authenticated,
issued, delivered, secured and accepted by all Persons who shall from time to
time be or become the Holders thereof, and the trusts and conditions upon which
the Trust Estate is to be held and disbursed, are as set forth herein and in the
Base Indenture:
2
6
ARTICLE I
DEFINITIONS
Unless the context shall clearly indicate some other meaning or may
otherwise require, the terms defined in this Article I shall, for all purposes
of the Base Indenture and of any indenture or other instrument amendatory or
supplemental thereto, have the meanings herein specified (terms used herein as
defined terms and not defined herein, shall have the meanings ascribed thereto
in the Base Indenture):
"AUTHORIZED DENOMINATIONS" shall mean (a) as applicable solely in
connection with the original issuance of each such Series of Notes, $1,000 and
integral multiples of $1,000 in excess thereof and (b) after distribution of
principal in accordance with Section 5.5.2 of the Base Indenture, the
Outstanding principal amount that results after such distribution.
"BOOK-ENTRY FORM" or "BOOK-ENTRY SYSTEM" shall mean a form or system
under which (i) the beneficial right to principal and interest may be
transferred only through a book entry, (ii) physical Series 1999A-1 Notes,
Series 1999A-2 Notes, Series 1999B-1 Notes or notes in registered form are
issued only to a Depository or its nominee as registered owner, with such Notes
"immobilized" to the custody of the Depository, and (iii) the book entry is the
record that identifies the owners of beneficial interests in that principal and
interest and Xxxxxxxxx Interest, if any.
"CALCULATION AGENT" shall mean __________________________________, as
Calculation Agent under the Calculation Agent Agreement, or any successor to it
as such agent under the Calculation Agent Agreement.
"CALCULATION AGENT AGREEMENT" shall mean the Calculation Agent
Agreement, dated as of ________ 1, 1999, among the Issuer, the Calculation Agent
and the Indenture Trustee, in each case as originally executed and as from time
to time amended or supplemented in accordance with the terms thereof and the
Indenture.
"CEDEL" shall mean a professional depository incorporated under the
laws of Luxembourg which holds securities for its participating organizations
and facilitates the clearance and settlement of securities transactions between
Cedel Participants through electronic book-entry.
"CEDEL PARTICIPANTS" means recognized financial institutions around the
world that utilize the services of Cedel, including initial purchasers,
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations and may include the Initial Purchasers.
"COLLECTION PERIOD" shall mean (i) initially, (a) with respect to the
Series 1999A Notes, the period commencing on Date of Issuance and running
through and including ________________, and (b) with respect to the Series
1999B-1 Notes, the period commencing on Date of Issuance and running through and
including ________________, (ii) thereafter (a) with respect to the Series 1999A
Notes, a period of one calendar month commencing and including the
3
7
date next following the end of the preceding Collection Period and (b) with
respect to the Series 1999B-1 Notes, a period of three calendar months
commencing and including the date next following the end of the preceding
Collection Period.
"DATE OF ISSUANCE" shall mean with respect to each Series of the Notes,
________________, the date of their initial issuance and delivery.
"DEPOSITORY" shall mean any securities depository that is a clearing
agency under federal law operating and maintaining a Book-Entry System to record
beneficial ownership of the right to principal and interest, and to effect
transfers of Notes, in Book-Entry Form, and includes and means initially (i)
DTC, if the Notes are offered in the United States, and (ii) Cedel or Euroclear,
if the Notes are offered in Europe.
"DEPOSITORY PARTICIPANT" shall mean any broker-dealer, bank or other
financial institution for which a Depository holds Notes from time to time as
securities depository.
"DISTRIBUTION DATE" shall mean (i) with respect to each Series of
Series 1999A Notes, a Monthly Distribution Date, (ii) with respect to the Series
1999B-1 Notes, a Quarterly Distribution Date, (iii) any date on which an Issuer
Exchange Payment is due and payable, and (iv) the Legal Final Maturity of each
Series of Notes, or if such day is not a Business Day, on the next succeeding
Business Day.
"DTC" shall mean The Depository Trust Company (a limited purpose trust
company), New York, New York.
"EUROCLEAR" shall mean Xxxxxx Guaranty Trust Company of New York,
Brussels, Belgium office.
"FORMULA RATE" shall mean, (i) with respect to the Series 1999A-1
Notes, the lesser of One-Month LIBOR as of the related Interest Determination
Date for such Interest Accrual Period plus ____% per ------------ annum and 18%,
(ii) with respect to the Series 1999A-2 Notes, the lesser of One-Month LIBOR as
of the related Interest Determination Date for such Interest Accrual Period plus
____% per annum and 18%, and (iii) with respect to the Series 1999B-1 Notes, the
lesser of Three-Month LIBOR as of the related Interest Determination Date for
such Interest Accrual Period plus ____% and 18%.
"INDIRECT PARTICIPANT" shall mean any Person which has indirect access
to a Clearing Agency, such as securities brokers and dealers, banks, and trust
companies that clear through or maintain a custodial relationship with a
Participant, either directly or indirectly.
"INITIAL DISTRIBUTION DATE" shall mean, (i) as to the Series 1999A-1
Notes, ___________, 1999, (ii) as to the Series 1999A-2 Notes, ____________,
1999, and (iii) as to the Series 1999B-1 Notes, _____________, 1999.
"INITIAL INTEREST DETERMINATION DATE" shall mean (i) as to the Series
1999A-1 Notes, ____________, 1999, (ii) as to the Series 1999A-2 Notes,
_________, 1999, and (iii) as to the Series 1999B-1 Notes, ____________, 1999.
4
8
"INTEREST ACCRUAL PERIOD" shall mean with respect to each Series of
Notes, the period of time in which interest may accrue commencing initially on
the Date of Issuance for such Series of Notes and ending on the day before the
Initial Distribution Date for each Series and thereafter commencing on each
Distribution Date for such Series of Notes and ending on the day before the next
Distribution Date for such Series.
"INTEREST DETERMINATION DATE" shall mean (i) the Initial Interest
Determination Date and thereafter (ii) the second London Banking Day immediately
preceding the first day of each Interest Accrual Period.
"LEGAL FINAL MATURITY" shall mean with respect to (i) the Series
1999A-1 Notes, _______________, (ii) the Series 1999A-2 Notes, ____________; and
(iii) the Series 1999B-1 Notes, ______________.
"LIBOR" shall mean, the rate of interest per annum equal to the rate
per annum at which United States dollar deposits having a particular maturity
are offered to prime banks in the London interbank market which appears on the
Telerate Page 3750 as of approximately 11:00 a.m., Greenwich Mean time, on the
Interest Determination Date. If such rate does not appear on Telerate Page 3750,
the rate for that day will be determined on the basis on the Reuters Screen
LIBOR Page. If at least two such quotations appear, LIBOR shall be the
arithmetic mean (rounded to the nearest one-hundredth of one percent (.01%)) of
such offered rates. If fewer than two such quotes appear, LIBOR with respect to
an Interest Accrual Period will be determined at approximately 11:00 a.m.,
London time, on such applicable Interest Determination Date on the basis of the
rate at which deposits in United States dollars having such particular maturity
are offered to prime banks in the London interbank market by four major banks in
the London interbank market selected by the Calculation Agent and in a principal
amount of not less than U.S. $1,000,000 and that is representative for a single
transaction in such market at such time. The Calculation Agent will request the
principal London office of each of such banks to provide a quotation of its
rate. If at least two quotations are provided, LIBOR shall be the arithmetic
mean (rounded to the nearest one-hundredth of one percent (.01%)) of such
offered rates. If fewer than two quotations are provided, LIBOR with respect to
such Interest Accrual Period shall be the arithmetic mean (rounded to the
nearest one-hundredth of one percent (.01%)) of the rates quoted at
approximately 11:00 a.m., New York City time on such applicable Interest
Determination Date by three major banks in New York, New York selected by the
Calculation Agent for loans in United States dollars to leading European banks
having such particular maturity and in a principal amount equal to an amount of
not less than U.S. $1,000,000 and that is representative for a single
transaction in such market at such time; provided, however, that if the banks
selected as aforesaid are not quoting as mentioned in this sentence, LIBOR in
effect for the applicable Interest Accrual Period shall be LIBOR in effect for
the immediately preceding Interest Accrual Period.
"LONDON BANKING DAY" shall mean any business day on which dealings in
deposits in United States dollars are transacted in the London interbank market.
5
9
"MONTHLY DISTRIBUTION DATE" shall mean, with respect to a Series of
Series 1999A Notes, the last Business Day of each month, commencing on the
Initial Distribution Date for each such Series of Notes.
"NET LOAN RATE" shall mean with respect to any Interest Accrual Period
for a Series of the Notes, the annualized percentage rate determined by the
Calculation Agent on each Interest Determination Date by multiplying (a) the
ratio of 360 to the actual number of days in such Interest Accrual Period, and
(b) the ratio of (i) Expected Interest Collections for the applicable Collection
Period less Program Operating Expenses with respect to such Collection Period,
to (ii) the Pool Balance as of the first day of such Collection Period. In
calculating the Net Loan Rate, the applicable Collection Period for the Notes is
the Collection Period immediately preceding the Collection Period in which the
Distribution Date occurs.
"ONE-MONTH LIBOR" shall mean LIBOR with respect to U.S. denominated
deposits having a maturity of one (1) month.
"PARITY PERCENTAGE" shall have the meaning given such term in the Base
Indenture.
"PARITY PERCENTAGE LIMITATION" shall mean ___%.
"PARITY PERCENTAGE PAYMENT" shall mean those principal amounts required
to be paid on the Notes pursuant to Section 4.2 hereof until the Parity
Percentage is ___%.
"PARTICIPANT" shall mean a Person who is a participant in or member of
the Depository, as determined by the rules or bylaws of the Depository.
"PRINCIPAL FACTOR" shall mean a seven-digit decimal number which, when
multiplied by the initial principal amount of each Note, produces its
Outstanding principal balance. The Principal Factor will be 1.0000000 for each
such Note as of the Date of Issuance; thereafter, the Principal Factor for each
such Note will decline to reflect reductions in the Outstanding principal
balance of such Note.
"PROGRAM EXPENSE REQUIREMENT" shall have the meaning given such term in
the Base Indenture.
"QUARTERLY DISTRIBUTION DATE" shall mean, with respect to the Series
1999B-1 Notes, the last Business Day of each third month, commencing on the
Initial Distribution Date for the Series 1999B-1 Notes.
"RECORD DATE" shall mean the second Business Day preceding a
Distribution Date.
"SENIOR PARITY PERCENTAGE" shall have the meaning given such term in
the Base Indenture.
"SERIES 1999A NOTEHOLDERS" shall mean, collectively, the Series 1999A-1
Noteholders and the Series 1999A-2 Noteholders.
6
10
"SERIES 1999A NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" shall mean,
with respect to any Distribution Date for a Series of Series 1999A Notes, the
Series 1999A Principal Distribution Amount for such Distribution Date plus the
Series 1999A Principal Shortfall as of the close of the preceding Distribution
Date; provided that the Series 1999A Noteholders' Principal Distribution Amount
will not exceed the outstanding principal balance of the Series 1999A Notes. In
addition, (i) on the Legal Final Maturity of the Series 1999A-1 Notes, the
principal required to be distributed to the Series 1999A-1 Noteholders will
include the amount required to reduce the outstanding principal balance of the
Series 1999A-1 Notes to zero, and (ii) on the Legal Final Maturity of the Series
1999A-2 Notes, the principal required to be distributed to the Series 1999A-2
Noteholders will include the amount required to reduce the outstanding principal
balance of the Series 1999A-2 Notes to zero.
"SERIES 1999A NOTES" shall mean, collectively, the Series 1999A-1 Notes
and the Series 1999A-2 Notes.
"SERIES 1999A PRINCIPAL DISTRIBUTION AMOUNT" shall be equal to (i) with
respect to the Series 1999A-1 Notes, an amount equal to the decline in the Pool
Balance between the end of the second Collection Period preceding a Monthly
Distribution Date and the end of the immediately preceding Collection Period,
and (ii) with respect to the Series 1999A-2 Notes on and after which the
principal balance of the Series 1999A-1 Notes has been paid in full, an amount
equal to the decline in the Pool Balance between the end of the second
Collection Period preceding a Monthly Distribution Date and the end of the
immediately preceding Collection Period.
"SERIES 1999A PRINCIPAL SHORTFALL" shall mean, as of the close of any
Distribution Date, the excess of (i) the Series 1999A Principal Distribution
Amount on such Distribution Date over (ii) the amount of principal actually
distributed to the Series 1999A Noteholders on such Distribution Date.
"SERIES 1999A-1 INTEREST SHORTFALL" shall mean, with respect to any
Monthly Distribution Date, the excess of (i) the Series 1999A-1 Noteholders'
Interest Distribution Amount on the preceding Monthly Distribution Date over
(ii) the amount of interest actually distributed to the Series 1999A-1
Noteholders on such preceding Monthly Distribution Date, plus interest on the
amount of such excess interest due to the Series 1999A-1 Noteholders, to the
extent permitted by law, at the related Series Interest Rate from such preceding
Monthly Distribution Date to the current Monthly Distribution Date.
"SERIES 1999A-1 NOTEHOLDERS" shall mean the Holders of the Series
1999A-1 Notes.
"SERIES 1999A-1 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean
with respect to any Monthly Distribution Date, the sum of (i) the amount of
interest accrued at the related Series Interest Rate for the related Interest
Accrual Period on the aggregate outstanding principal balance of the Series
1999A-1 Notes on the immediately preceding Monthly Distribution Date after
giving effect to all principal distributions to Holders of Series 1999A-1 Notes
on such preceding Monthly Distribution Date (or, in the case of the first
Monthly
7
11
Distribution Date, on the Date of Issuance) and (ii) the Series 1999A-1 Interest
Shortfall for such Distribution Date; provided that the Series 1999A-1
Noteholders' Interest Distribution Amount will not include any Carryover
Interest on the Series 1999A-1 Notes.
"SERIES 1999A-1 NOTES" shall mean the Student Loan Senior Asset-Backed
Notes, Series 1999A-1 (XXXXX Xxxx), of the Issuer issued under the Indenture.
"SERIES 1999A-2 INTEREST SHORTFALL" shall mean, with respect to any
Monthly Distribution Date, the excess of (i) the Series 1999A-2 Noteholders'
Interest Distribution Amount on the preceding Monthly Distribution Date over
(ii) the amount of interest actually distributed to the Series 1999A-2
Noteholders on such preceding Monthly Distribution Date, plus interest on the
amount of such excess interest due to the Series 1999A-2 Noteholders, to the
extent permitted by law, at the related Series Interest Rate from such preceding
Monthly Distribution Date to the current Monthly Distribution Date.
"SERIES 1999A-2 NOTEHOLDERS" shall mean the Holders of the Series
1999A-2 Notes.
"SERIES 1999A-2 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean
with respect to any Monthly Distribution Date, the sum of (i) the amount of
interest accrued at the related Series Interest Rate for the related Interest
Accrual Period on the aggregate outstanding principal balance of the Series
1999A-2 Notes on the immediately preceding Monthly Distribution Date after
giving effect to all principal distributions to Holders of Series 1999A-2 Notes
on such preceding Monthly Distribution Date (or, in the case of the first
Monthly Distribution Date, on the Date of Issuance) and (ii) the Series 1999A-2
Interest Shortfall for such Monthly Distribution Date; provided that the Series
1999A-2 Noteholders' Interest Distribution Amount will not include any Carryover
Interest on the Series 1999A-2 Notes.
"SERIES 1999A-2 NOTES" shall mean the Student Loan Senior Asset-Backed
Notes, Series 1999A-2 (XXXXX Xxxx), of the Issuer issued under the Indenture.
"SERIES 1999B-1 INTEREST SHORTFALL" shall mean, with respect to any
Quarterly Distribution Date, the excess of (i) the Series 1999B-1 Noteholders'
Interest Distribution Amount on the preceding Quarterly Distribution Date over
(ii) the amount of interest actually distributed to the Series 1999B-1
Noteholders on such preceding Quarterly Distribution Date, plus interest on the
amount of such excess interest due to the Series 1999B-1 Noteholders, to the
extent permitted by law, at the related Series Interest Rate from such preceding
Quarterly Distribution Date to the current Quarterly Distribution Date.
"SERIES 1999B-1 NOTEHOLDERS" shall mean the Holders of the Series
1999B-1 Notes.
"SERIES 1999B-1 NOTEHOLDERS' INTEREST DISTRIBUTION AMOUNT" shall mean,
with respect to any Quarterly Distribution Date, the sum of (i) the amount of
interest accrued at the related Series Interest Rate for the related Interest
Accrual Period on the aggregate outstanding principal balance of the Series
1999B-1 Notes on the immediately preceding Quarterly Distribution Date after
giving effect to all principal distributions to Holders of Series 1999B-1
8
12
Notes on such preceding Quarterly Distribution Date (or, in the case of the
first Quarterly Distribution Date, on the Date of Issuance) and (ii) the Series
1999B-1 Interest Shortfall for such Quarterly Distribution Date; provided that
the Series 1999B-1 Noteholders' Interest Distribution Amount will not include
any Carryover Interest on the Series 1999B-1 Notes.
"SERIES 1999B-1 NOTEHOLDERS' PRINCIPAL DISTRIBUTION AMOUNT" shall mean,
with respect to any Quarterly Distribution Date, the Series 1999B-1 Principal
Distribution Amount for such Quarterly Distribution Date plus the Series 1999B-1
Principal Shortfall as of the close of the preceding Quarterly Distribution
Date; provided that the Series 1999B-1 Noteholders' Principal Distribution
Amount shall not exceed the outstanding principal balance of the Series 1999B-1
Notes. In addition, on the Legal Final Maturity of the Series 1999B-1 Notes, the
principal required to be distributed to the Series 1999B-1 Noteholders shall
include the amount required to reduce the outstanding principal balance on the
Series 1999B-1 Notes to zero.
"SERIES 1999B-1 NOTES" shall mean the Student Loan Subordinate
Asset-Backed Notes, Series 1999B-1 (LIBOR Rate), of the Issuer issued under the
Indenture.
"SERIES 1999B-1 PRINCIPAL DISTRIBUTION AMOUNT" shall mean on each
Quarterly Distribution Date on and after which the principal balance of the
Series 1999A Notes has been paid in full, an amount equal to the decline in the
Pool Balance between the end of the second Collection Period preceding a
Quarterly Distribution Date and the end of the immediately preceding Collection
Period (reduced with respect to the first Quarterly Distribution Date on which
principal is to be paid on the Series 1999B-1 Notes by the Series 1999A
Noteholders' Principal Distribution Amount on such Quarterly Distribution Date).
"SERIES 1999B-1 PRINCIPAL SHORTFALL" shall mean, as of the close of any
Quarterly Distribution Date, the excess of (i) the Series 1999B-1 Principal
Distribution Amount on such Distribution Date over (ii) the amount of principal
actually distributed to the Series 1999B-1 Noteholders on such Quarterly
Distribution Date.
"TELERATE PAGE 3750" shall mean the display page so designated on the
Dow Xxxxx Telerate Service (or such other page as may replace that page on that
service for the purpose of displaying comparable rates or prices).
"THREE-MONTH LIBOR" shall mean LIBOR with respect to U.S. denominated
deposits having a maturity of three (3) months.
9
13
ARTICLE II
AUTHORIZATION, TERMS AND PROVISIONS OF NOTES
SECTION 2.01 AUTHORIZATION OF NOTES; NOTES TO CONSTITUTE SPECIAL
OBLIGATIONS There is hereby authorized the borrowing of funds, and to evidence
such borrowing there is authorized the issuance of Notes of the Issuer in the
following aggregate principal amounts and Series: (i) _______________ Dollars
($___________) designated "Student Loan Funding 1999-A/B Trust Student Loan
Senior Asset-Backed Notes, Series 1999A-1 (LIBOR Rate)" (herein referred to as
the "Series 1999A-1 Notes"); (ii) _____________________ Dollars ($___________)
designated "Student Loan Funding 1999-A/B Trust Student Loan Senior Asset-Backed
Notes, Series 1999A-2 (LIBOR Rate)" (herein referred to as the "Series 1999A-2
Notes" and together with the Series 1999A-1 Notes, the "Senior Notes"); and
(iii) _____________________ Dollars ($________________) designated "Student Loan
Funding 1999-A/B Trust Student Loan Subordinate Asset-Backed Notes, Series
1999B-1 (LIBOR Rate)" (herein referred to as the "Subordinate Notes" or the
"Series 1999B-1 Notes" and, collectively with the Senior Notes, the "Notes").
SECTION 2.02 TERMS OF NOTES
(a) TERMS OF NOTES GENERALLY. Payments of principal of and interest on
each Note shall be made by the Indenture Trustee from its principal corporate
trust office in Cincinnati, Ohio in lawful money of the United States, and
payment of interest on each Note shall, if the Holder thereof is the registered
owner of $1,000,000 or more in aggregate principal amount of Notes, be made by
the deposit or wiring of immediately available funds to the credit of an account
specified by such Holder in duly executed instructions, with signature
guaranteed in a manner satisfactory to the Indenture Trustee, in the form set
forth in Exhibit D hereto delivered to the Indenture Trustee no less than ten
(10) Business Days prior to the date such payment is to be made. If such
instructions are not delivered to the Indenture Trustee in accordance with the
immediately preceding sentence and except as otherwise provided for when Notes
are registered in the name of the Depository or its nominee, payment of interest
shall be made by check mailed to such Xxxxxx's address as it appears on the
books of registry maintained by the Indenture Trustee pursuant to Section 2.4 of
the Base Indenture. Each payment of principal and interest and Carryover
Interest, if any, on each Note of a Series shall be accompanied by the CUSIP
number, if any, of the Note of such Series to which such payment relates.
Notwithstanding the foregoing and except as otherwise provided for when
Notes are registered in the name of the Depository or its nominee, no payment of
principal shall be made on any Note unless and until such Note is tendered to
the Indenture Trustee for cancellation; and no payment of interest or Carryover
Interest shall be made on any Note except to the Person whose name appears on
the books of registry maintained by the Indenture Trustee as the registered
Holder thereof as of the close of business on the Record Date.
If and as long as a Book-Entry System is utilized, (i) the Notes shall
be issued in the form of one fully registered Note for each Legal Final Maturity
within each Series of Notes or otherwise as may be required or requested by the
Depository and agreed to by the Issuer,
10
14
registered in the name of the Depository or its nominee, as registered owner,
and immobilized in the custody of the Depository; (ii) (a) the principal of the
Notes shall be payable in next day or federal funds delivered or transmitted to
the Depository or its nominee on the Legal Final Maturity or such other date as
principal is payable hereunder and (b) interest on the Notes shall be payable in
same day or federal funds delivered to the Depository or its nominee on the
applicable Distribution Date; (iii) the beneficial owners in Book-Entry Form
shall have no right to receive Notes in the form of physical securities or
certificates; (iv) ownership of beneficial interests in Book-Entry Form shall be
shown by a book entry on the system maintained and operated by the Depository
and its Participants, and transfers of the ownership of beneficial interests
shall be made only by book entry by the Depository and its Participants; and (v)
the Notes as such shall not be transferable or exchangeable, except for transfer
to another Depository or to another nominee of a Depository, without further
action by the Issuer.
As long as the Notes are held by a Depository in a Book-Entry System,
the Indenture Trustee shall send any notice of redemption only to the
Depository. In the event that the Indenture Trustee gives notice of redemption
to the Depository, such notice shall initiate the Depository's standard
redemption process.
If any Depository determines not to continue to act as a Depository for
the Notes for use in a Book-Entry System, the Authorized Officer may attempt to
have established a securities depository/book-entry relationship with another
qualified Depository. If (i) the Issuer advises the Indenture Trustee in writing
the a Depository is no longer willing or able to discharge properly its
responsibilities as Depository with respect to the Notes, and the Issuer is
unable to locate a qualified successor, (ii) the Issuer, at its option, advises
the Indenture Trustee in writing that it elects to terminate the Book-entry
System through a Depository, or (iii) after the occurrence of an Event of
Default, Noteholders representing not less than 50% of the Outstanding principal
balance of the Directing Notes advise the Indenture Trustee and the Depository
in writing that the continuation of a Book-entry System through a Depository is
no longer in the best interest of the Noteholders, the Indenture Trustee shall
permit withdrawal of the Notes from the Depository or its nominee, all at the
cost and expense (including any costs of printing), if the event is not the
result of Issuer action or inaction, of those Persons requesting such issuance.
Note certificates authenticated and delivered pursuant to this paragraph shall
be in Authorized Denominations.
With respect to the Notes registered in the name of Cede & Co., as
nominee of DTC, or in the name of any successor Depository or its nominee, the
Issuer and the Indenture Trustee shall have no responsibility or obligation to
any Depository Participant or to any Indirect Participant. Without limiting the
generality of the immediately preceding sentence, the Issuer and the Indenture
Trustee shall have no responsibility or obligation with respect to (i) the
accuracy of the records of DTC, Cede & Co., any other Depository, its nominee,
or any Depository Participant with respect to any ownership interest in the
Notes, (ii) the delivery to any Depository Participant or any Indirect
Participant or any other Person, other than a Holder of a Note, of any notice
with respect to the Notes, including any notice of redemption, or (iii) the
payment to any Depository Participant or any Indirect Participant or any other
Person, other than a Holder of a Note, of any amount with respect to principal
of or interest on the Notes.
11
15
For as long as the Notes are in Book-Entry Form, the notice, tender and
delivery procedures of DTC, or any other Depository to which the Notes are
transferred, shall be applicable. Whenever during the term of the Notes the
beneficial ownership thereof is determined by a book-entry at DTC, the
requirements of the Indenture of holding, delivering, surrendering or
transferring Notes shall be deemed modified to require the appropriate person to
meet the requirements of DTC as to registering, holding, surrendering or
transferring the book-entry to produce the same effect.
(b) TERMS OF SENIOR NOTES GENERALLY. The Senior Notes shall be
initially issued in fully registered form in substantially the form set forth in
Exhibit B. The Senior Notes may be issued only in Authorized Denominations. The
Senior Notes initially issued hereunder shall be dated their Date of Issuance,
and each Series of such Senior Notes shall mature on the respective Legal Final
Maturity for such Series. The Senior Notes shall be subject to redemption prior
to their respective Legal Final Maturity as provided in Article III hereof. The
Senior Notes of each Series shall be numbered in consecutive numerical order as
set forth in Schedule I attached hereto.
The Senior Notes shall be issued to a Depository for use in a
Book-Entry System in accordance with the provisions of the Indenture. The
Authorized Officer, on behalf of the Issuer and to the extent necessary or
required, shall enter into any agreements determined necessary in connection
with the registration, authentication, immobilization, and transfer of the
Senior Notes, including arrangements for the payment of principal and interest
by wire transfer, after determining that the execution thereof will not endanger
the funds or securities of the Issuer.
Each Senior Note of a Series shall be payable on its respective Legal
Final Maturity and shall bear interest for each Interest Accrual Period at the
Series Interest Rate determined in accordance with the procedures and subject to
the limitations set forth in Section 2.03 hereof. Interest at such Series
Interest Rate shall accrue during each Interest Accrual Period on the principal
balance of each Series of Senior Notes Outstanding until such Series of Senior
Notes has been paid in full or payment has been duly provided for, as the case
may be, and shall accrue from the later of the date thereof or the most recent
applicable Distribution Date to which interest has been paid or duly provided
for until paid, subject, however, to the provisions of Section 2.03 hereof. Each
Senior Note of a Series shall initially bear interest at the rate of interest
per annum set forth in Schedule I attached hereto. Interest on each Senior Note
shall be paid on each applicable Distribution Date to the extent of interest
accrued on the principal then being paid or redeemed to the Holders of such
Senior Notes as of the Record Date. Interest accrued as of any applicable
Distribution Date on the Senior Notes of a Series but not paid on such
Distribution Date shall be payable on the succeeding applicable Distribution
Date, together with interest thereon at the applicable Series Interest Rate.
Interest shall be paid pro rata to the Holders of each such Series of Senior
Notes Outstanding.
(c) TERMS OF SUBORDINATE NOTES GENERALLY. The Subordinate Notes shall
be initially issued in fully registered form in substantially the form set forth
in Exhibit C hereof. The Subordinate Notes shall be issued only in Authorized
Denominations. The Subordinate Notes issued hereunder shall be dated their Date
of Issuance and shall mature on the Legal Final
12
16
Maturity. The Subordinate Notes shall be subject to redemption prior to their
respective Legal Final Maturity as provided in Article III hereof. The
Subordinate Notes shall be numbered in consecutive numerical order as set forth
in Schedule I hereto.
The Subordinate Notes shall be issued to a Depository for use in a
Book-entry System in accordance with the provisions of the Indenture. The
Authorized Officer, on behalf of the Issuer and to the extent necessary or
required, shall enter into any agreements determined necessary in connection
with the registration, authentication, immobilization, and transfer of the
Subordinate Notes, including arrangements for the payment of principal and
interest by wire transfer, after determining that the execution thereof will not
endanger the funds or securities of the Issuer.
The Subordinate Notes shall be payable on their Legal Final Maturity
and shall bear interest for each Interest Accrual Period at the Series Interest
Rate determined in accordance with the procedures, subject to the limitations
set forth in Section 2.03 hereof. Interest shall accrue during each Interest
Accrual Period on the principal balance of the Subordinate Notes Outstanding
until such Subordinate Notes have been paid in full or payment has been duly
provided for, as the case may be, and shall accrue from the later of the date
thereof or the most recent applicable Distribution Date to which interest has
been paid or duly provided for until paid, subject, however, to the provisions
of Section 2.03 hereof. Each Subordinate Note shall bear interest at the rate of
interest per annum set forth in Schedule I attached hereto. Interest accrued as
of any applicable Distribution Date on the Subordinate Notes but not paid on
such Distribution Date shall be payable on the next succeeding applicable
Distribution Date, together with interest thereon at the applicable Series
Interest Rate. Interest will be paid pro rata to the Holders of the Subordinate
Notes Outstanding.
The Indenture Trustee shall make available to each Holder or owner of a
beneficial interest in a Series of Notes via telephone information concerning
the Series Interest Rate applicable to the Notes of each Series. The Indenture
Trustee shall make such information available to such Holders between the hours
of 9 a.m. and 5 p.m. Eastern time on any day on which the principal corporate
trust office of the Indenture Trustee is open for business.
SECTION 2.03 DETERMINATION OF SERIES INTEREST RATES ON THE NOTES.
SECTION 2.03.1 DETERMINATION OF SERIES INTEREST RATES ON THE NOTES. (a)
The Calculation Agent shall determine the Series Interest Rate with respect to a
Series of Notes for each Interest Accrual Period which Series Interest Rate
shall equal the Formula Rate calculated as follows, subject to the limitation of
the Net Loan Rate as hereinafter described. The Formula Rate for each Interest
Accrual Period for each Series of Series 1999A Notes shall equal One-Month LIBOR
plus ___%, but in no event greater than 18% per annum. The Formula Rate for each
Interest Accrual Period for the Series 1999B-1 Notes shall equal Three-Month
LIBOR plus ____%, but in no event greater than 18%.
Interest on each Series of Notes for each Interest Accrual Period shall
be calculated on the basis of the actual number of days elapsed in such Interest
Accrual Period on
13
17
the basis of a year consisting of 360 days. The calculation of the Formula Rates
described above shall be based on the actual number of days in such Interest
Accrual Period.
If the Calculation Agent shall fail or refuse to determine the Formula
Rate on a Series of Notes on any Interest Determination Date, the Formula Rate
on such Notes shall be determined by a securities dealer appointed by the Issuer
and capable, in the reasonable judgment of the Issuer, of making such a
determination in accordance with the provisions of the Indenture and written
notice of such determination shall be given by such securities dealer to the
Indenture Trustee.
SECTION 2.03.2 CARRYOVER INTEREST. The Calculation Agent shall announce
the Formula Rate and the Net Loan Rate to the Indenture Trustee and the Issuer.
If, with respect to any Series of Notes for any Interest Accrual
Period, interest at the Formula Rate exceeds interest at the Net Loan Rate with
respect to such Series of Notes for such Interest Accrual Period, the Series
Interest Rate for such Interest Accrual Period shall be the Net Loan Rate, and
the Indenture Trustee, on the Distribution Date for such Interest Accrual
Period, shall pay to the Holders of such Series of Notes interest at the Net
Loan Rate. With respect to such Series of Notes, the Indenture Trustee shall
also calculate the amount by which interest at the Formula Rate exceeds interest
at the Net Loan Rate for such Interest Accrual Period, and such excess, together
with interest thereon (compounded on each Distribution Date for the related
Series when such interest is not paid on the first Distribution Date for such
Series when such interest was otherwise payable) at the applicable Formula Rate
from the Distribution Date for the related Series on which such excess was
calculated until paid, if at all, shall constitute Carryover Interest. Such
Carryover Interest shall be paid on each Distribution Date for the related
Series subsequent to the Distribution Date on which such excess was calculated
to the extent funds are available therefor in the Note Payment Account of the
Collection Fund after making the other required payments from the Note Payment
Account in accordance with the provisions of Section 5.5.2 of the Base Indenture
and Section 4.02 hereof. Carryover Interest shall continue to be so payable
notwithstanding that the principal amount of the applicable Series of Notes has
been reduced to zero until (i) no Notes remain outstanding and (ii) the balances
in the Funds and Accounts have been reduced to zero. For purpose of the
Indenture any reference herein to "principal or "interest" shall not include
within the meaning of such words Carryover Interest.
Carryover Interest shall be separately calculated for each Series of
Notes by the Indenture Trustee in sufficient time for the Indenture Trustee to
give notice to each Holder of such Carryover Interest as required in this
paragraph. On the Distribution Date for an Interest Accrual Period with respect
to which Carryover Interest has been calculated by the Indenture Trustee, the
Indenture Trustee shall, in accordance with Section 7.10 of the Base Indenture,
give written notice to each Holder of the Carryover Interest applicable to such
Holder's Note for such Interest Accrual Period, which written notice may
accompany the payment of interest by check made to each such Holder on such
Distribution Date or otherwise shall be mailed on such Distribution Date by
first class mail, postage prepaid, to each such Holder at such Xxxxxx's address
as it appears on the books of registry maintained by the Indenture Trustee
pursuant to the Indenture.
14
18
Such notice shall state, in addition to such Carryover Interest, that,
Carryover Interest shall continue to be payable notwithstanding that the
principal amount of the applicable Series of Notes has been reduced to zero
until (i) no Notes remain outstanding and (ii) the balances in the Funds and
Accounts have been reduced to zero.
SECTION 2.03.3 ADDITIONAL PROVISIONS REGARDING SERIES INTEREST RATE.
The determination of a Series Interest Rate by the Calculation Agent or any
other Person pursuant to the provisions of the applicable Section of this
Article II shall be conclusive and binding on the Holders of the Series of Note
or Notes to which such Series Interest Rate applies, and the Issuer and the
Indenture Trustee may rely thereon for all purposes.
In no event shall the cumulative amount of interest paid or payable on
a Series of Notes (including interest calculated as provided herein, plus any
other amounts that constitute interest on the Notes of such Series under
applicable law which are contracted for, charged, reserved, taken or received
pursuant to the Notes of such Series or related documents) calculated from the
Date of Issuance of the Notes of such Series through any subsequent day during
the term of the Notes of such Series or otherwise prior to payment in full of
the Notes of such Series exceed the amount permitted by applicable law. If the
applicable law is ever judicially interpreted so as to render usurious any
amount called for under the Notes of such Series or related documents or
otherwise contracted for, charged, reserved, taken or received in connection
with the Notes of such Series, or if the redemption or acceleration of the
maturity of the Notes of such Series results in payment to or receipt by the
Holder or any former Holder of the Notes of such Series of any interest in
excess of that permitted by applicable law, then, notwithstanding any provision
of the Notes of such Series or related documents to the contrary, all excess
amounts theretofore paid or received with respect to the Notes of such Series
shall be credited on the principal balance of the Notes of such Series (or, if
the Notes of such Series have been paid or would thereby be paid in full,
refunded by the recipient thereof), and the provisions of the Notes of such
Series and related documents shall immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for under the Notes of such Series and under the related documents.
SECTION 2.04 FORMS OF NOTES AND INSTRUCTIONS FOR PAYMENT. The Senior
Notes and the certificate of authentication and form of assignment for transfer
to be endorsed thereon shall be in substantially the form of Exhibit B hereof,
with necessary or appropriate variations, omissions or insertions, as permitted
or required by this Indenture.
Each Subordinate Note and the certificate of authentication and form of
assignment for transfer to be endorsed thereon shall be in substantially the
form of Exhibit C hereof, with necessary or appropriate variations, omissions or
insertions, as permitted or required by this Indenture.
15
19
Any instructions to the Indenture Trustee for payment of interest on
the Notes shall be in substantially the form of Exhibit D hereof, with necessary
or appropriate variations, omissions or insertions, as permitted or required by
this Indenture.
16
20
ARTICLE III
REDEMPTION OF THE NOTES
SECTION 3.01 REDEMPTION OF NOTES IN GENERAL. The Notes shall be
subject to redemption prior to their Legal Final Maturity only upon the terms
and conditions, and only on the applicable dates and at the redemption price, as
are set forth in this Terms Supplement. The redemption price of the Notes shall,
in each case, be par plus (i) accrued interest to the applicable dates on which
such redemption will occur and (ii) all unpaid Carryover Interest, if any,
thereon. Principal of and interest and unpaid Carryover Interest on the Notes
shall be paid from the moneys available therefor in the Note Payment Account in
the Collection Fund and in the Reserve Fund.
If Outstanding Notes are to be redeemed pursuant to the provisions of
this Article III, the Indenture Trustee shall give written notice of such
redemption to the Holders of such Outstanding Notes not less than fifteen (15)
days prior to the applicable dates on which such Outstanding Notes are to be
redeemed. Each notice of redemption shall state (i) the date, Series and numbers
of the Notes to be redeemed, the applicable dates on which such redemption will
occur and the redemption price payable upon such redemption; (ii) that the
interest on such Outstanding Notes and on any unpaid Carryover Interest shall
cease to accrue from and after the applicable date on which such redemption will
occur and (iii) that on said date there will become due and payable on each such
Outstanding Note the principal amount thereof and the interest accrued on such
principal amount to the applicable date on which the redemption will occur and
all unpaid Carryover Interest. Each notice of redemption shall also state that
each such Outstanding Note must be surrendered to the Indenture Trustee for
payment of the principal of and interest and any unpaid Carryover Interest on
such Outstanding Notes.
If notice of redemption of Outstanding Notes has been duly given as
hereinbefore provided and if moneys for the payment of the principal of and
interest and any unpaid Carryover Interest on such Outstanding Notes are held
for the purpose of such payment by the Indenture Trustee, then such Outstanding
Notes shall, on the applicable dates on which such redemption will occur, become
due and payable, and interest on said Outstanding Notes and on any unpaid
Carryover Interest shall cease to accrue.
All Notes surrendered pursuant to the provisions of this Article III
shall be canceled by the Indenture Trustee.
SECTION 3.02 AUCTION OF FINANCED STUDENT LOANS; REDEMPTION OF
OUTSTANDING NOTES FROM AUCTION PROCEEDS PRIOR TO THE LEGAL FINAL MATURITY. On or
after ________________, if the then outstanding Pool Balance is 10% or less of
the Initial Pool Balance, the Indenture Trustee shall offer the Financed Student
Loans in the Trust Estate for sale. The Issuer, its affiliates and unrelated
third parties may offer bids to purchase such Financed Student Loans on or prior
to such date. If at least two bids are received, the Indenture Trustee shall
accept the higher bid if it, together with the funds (including the Value of
Eligible Investments, if any, to the credit of the Reserve Fund) on deposit in
the Collection Account and
17
21
the Reserve Fund, will pay accrued and unpaid Program Operating Expenses and all
fees and expenses in connection with the sale of the Financed Student Loans and
the redemption of the Notes (the "Transaction Costs") and all principal of and
accrued interest and unpaid Carryover Interest on all such Outstanding Notes due
to the Noteholders and all amounts due to Exchange Counterparties, if any. If at
least two bids are not received or the bid proceeds, together with the funds
(including the Value of Eligible Investments, if any, to the credit of the
Reserve Fund) on deposit in the Reserve Fund, are not sufficient to pay
Transaction Costs and all principal of and accrued interest and unpaid Carryover
Interest on all such Outstanding Notes due to the Noteholders, the Indenture
Trustee shall not consummate the sale and may, but is not obligated to, solicit
bids for the Financed Student Loans in the Trust Estate on future Distribution
Dates until a successful bid is accepted or until the Notes have been paid in
full. The net proceeds of such purchase, together with such funds from the
Reserve Fund as are necessary to effect such redemption, shall be applied to
redeem all Outstanding Notes at par plus accrued interest to and all unpaid
Carryover Interest on the next applicable Distribution Date.
SECTION 3.03 OPTIONAL REDEMPTION OF NOTES PRIOR TO THE LEGAL FINAL
MATURITY. All Outstanding Notes will be subject to redemption in whole on any
applicable Distribution Date in the event the Issuer exercises its option to
repurchase all remaining Financed Student Loans, and thus effect the early
retirement of the Notes, on any applicable Distribution Date for the applicable
Series of Notes on or after the Monthly Distribution Date on which the Pool
Balance is equal to 10% or less of the Initial Pool Balance, at a price at least
equal to, for each Financed Student Loan, the outstanding principal balance of
such Financed Student Loan as of the end of the preceding Collection Period,
together with all accrued interest thereon and unamortized premiums, if any, and
sufficient to pay Transaction Costs and all amount due to the Noteholders,
including Carryover Interest, after application of funds (including the Value of
Eligible Investments, if any, to the credit of the Reserve Fund) on deposit in
the Collection Account and the Reserve Fund.
In connection with the optional redemption of any Notes, all unpaid
Carryover Interest on such Notes (and accrued interest, if any, thereon) shall
be paid on or before the date of optional redemption of such Notes.
18
22
ARTICLE IV
DISPOSITION OF PROCEEDS OF THE NOTES; COLLECTION ACCOUNT;
ACQUISITION FUND
SECTION 4.01 DISPOSITION OF PROCEEDS OF THE NOTES. All proceeds of the
issuance and sale of the Series of Notes hereunder shall be deposited with the
Indenture Trustee on the Date of Issuance, and the Indenture Trustee shall
deposit such proceeds to the following Funds and Accounts:
(a) $________ of the proceeds of the Notes, an amount equal to
the Specified Reserve Fund Balance, shall be deposited by the Indenture
Trustee upon receipt in the Reserve Fund;
(b) $_________ of the proceeds of the Notes shall be deposited
by the Indenture Trustee upon receipt to the Collection Account in the
Collection Fund;
(c) $________ of the proceeds of the Notes shall be deposited
by the Indenture Trustee upon receipt to the Expense Account in the
Collection Fund; and
(d) $_________ of the proceeds of the Notes shall be deposited
by the Indenture Trustee upon receipt to the Capitalized Interest
Account in the Acquisition Fund; and
(e) The balance of the proceeds of the Notes shall be
deposited by the Indenture Trustee upon receipt in the Acquisition
Fund.
SECTION 4.02 DISPOSITION OF COLLECTION ACCOUNT.
Except as otherwise noted below, on each Monthly Distribution Date, as
described below, the Indenture Trustee shall transfer from the Collection
Account the following amounts in the following priority, subject to Available
Funds for the immediately preceding Collection Period:
(i) to the Expense Account, to the extent required to increase the
balance of such Account to the Program Expense Requirement
calculated as of such Monthly Distribution Date;
(ii) to the Note Payment Account, an amount up to (a) the Series 1999A
Noteholders' Interest Distribution Amount for payment on such
Monthly Distribution Date to the Series 1999A Noteholders without
preference or priority of any kind and (b) any related Senior Issuer
Exchange Payment for payment to the related Senior Exchange
Counterparty, including any related early termination payment as a
result of a default by the Issuer;
19
23
(iii) to the Note Payment Account, an amount up to (a) one-third (1/3) of
the Series 1999B-1 Noteholders' Interest Distribution Amount for
payment on the next succeeding or concurrent Quarterly Distribution
Date to the Series 1999B-1 Noteholders without preference or
priority of any kind and (b) any related Subordinate Issuer Exchange
Payment for payment to the related Subordinate Exchange
Counterparty, including an early termination payment or as a result
of a default by the Issuer;
(iv) to the Note Payment Account,
(a) an amount up to the Series 1999A Noteholders' Principal
Distribution Amount for payment on such Monthly Distribution Date to
the Series 1999A-1 Noteholders until the Outstanding principal
balance of Series 1999A-1 Notes has been reduced to zero, then,
(b) once the Series 1999A-1 Notes are no longer Outstanding, an
amount up to the Series 1999A Noteholders' Principal Distribution
Amount for payment on such Monthly Distribution Date to the Series
1999A-2 Noteholders until the Outstanding principal balance of the
Series 1999A-2 Notes has been reduced to zero;
(v) once the Series 1999A Notes are no longer Outstanding, on each
Quarterly Distribution Date to the Note Payment Account, an amount
up to the Series 1999B-1 Noteholders' Principal Distribution Amount
for payment on such Quarterly Distribution Date to the Series
1999B-1 Noteholders until the Outstanding principal balance of the
Series 1999B-1 Notes has been reduced to zero;
(vi) to the Reserve Fund the amount, if any, required to increase the
balance thereof to the Specified Reserve Fund Balance as provided
for in Section 5.2 of the Base Indenture;
(vii) to the Note Payment Account, an amount up to Parity Percentage
Payments to the extent then required:
(a) for payment on such Monthly Distribution Date to the Series
1999A-1 Noteholders until the principal balance of the Series
1999A-1 Notes has been reduced to zero, then
(b) once the Series 1999A-1 Notes are no longer Outstanding, for
payment on such Monthly Distribution Date to the Series 1999A-2
Noteholders until the principal balance of the Series 1999A-2 Notes
has been reduced to zero, then
(c) once the Series 1998A Notes are no longer Outstanding, on each
Quarterly Distribution Date for payment on such Quarterly
Distribution Date to the Series
20
24
1999B-1 Noteholders until the principal balance of each such Series
of Series 1999B-1 Notes has been reduced to zero;
(viii) to the Note Payment Account,
(a) an amount up to any Carryover Interest, ratably, to the Series
1999A Noteholders for payment on such Monthly Distribution Date, and
upon payment of all Carryover Interest due to the Series 1999A
Noteholders, then,
(b) an amount up to one-third (1/3) any Carryover Interest, to the
Series 1999B-1 Noteholders for payment on the next succeeding or
concurrent Quarterly Distribution Date;
(ix) to the Note Payment Account, an amount up to the amount, if any,
owed an Exchange Counterparty in respect of an early termination
payment or damages for early termination as a result of anything
other than a default by the Issuer under any Exchange Agreement for
payment to such Exchange Counterparty; and
(x) any remainder, to the Excess Surplus Account.
Notwithstanding the foregoing, if on any Distribution Date after giving effect
to all distributions to be made on such Distribution Date, either:
(a) the Outstanding principal amount of the Series 1999A Notes would
exceed the sum of the (i) the Pool Balance plus (ii) accruals of
Special Allowance Payments and Interest Subsidy Payments payable
with respect to the Financed Student Loans as of the end of the
preceding Collection Period, plus the balance of the Reserve Fund as
of the computation date, or
(b) an Event of Default described in item 1 of the first paragraph of
Section 8.1 of the Base Indenture has occurred (but prior to the
acceleration of the Legal Final Maturity of the Notes),
then, until the applicable conditions described in clauses (a) and (b) no longer
exist, the Series 1999B-1 Noteholders' Interest Distribution Amount and the
Series 1999B-1 Noteholders' Principal Distribution Amount will not be paid to
the Series 1999B-1 Noteholders pursuant to clauses (iii) and (v) above and no
Subordinate Issuer Exchange Payment shall be made. For so long as any Series
1999A Notes remain Outstanding, such deferral in the payment of the Series
1999B-1 Noteholders' Interest Distribution Amount, the Series 1999B-1
Noteholders' Principal Distribution Amount or Subordinate Issuer Exchange
Payments (except with respect to the Legal Final Maturity of the Series 1999B-1
Notes) shall not constitute an Event of Default. In addition, as long as the
applicable conditions described in clause (b) continue to exist, the Series
1999A Noteholders' Principal Distribution Amount shall be paid pro rata among
each Series of Series 1999A Notes, without preference or priority of any kind.
21
25
22
26
ARTICLE V
MISCELLANEOUS
SECTION 5.01 EXECUTION AND DELIVERY OF THIS TERMS SUPPLEMENT. This Terms
Supplement is executed and delivered pursuant to Section 2.1 of the Base
Indenture.MENT
SECTION 5.02 EFFECT OF TERMS SUPPLEMENT ON INDENTURE. This Terms
Supplement shall supplement the Base Indenture, which is in all respects
ratified and confirmed, and the Base Indenture so supplemented by this Terms
Supplement shall be read, taken and construed as one and the same instrument.
Each addition to and amendment of the Base Indenture herein is solely for the
purposes of the Notes. If any term of this Terms Supplement conflicts with any
terms of the Base Indenture, this Terms Supplement shall control for purposes of
the Notes.
SECTION 5.03 EXECUTION OF COUNTERPARTS. This Terms Supplement may be
executed in several counterparts, each of which shall be regarded as an original
and all of which shall constitute but one and the same document. It shall not be
necessary in proving this Terms Supplement to produce or account for more than
one of those counterparts.
SECTION 5.04 GOVERNING LAW. This Terms Supplement is entered into with the
intent that the laws of the State of Ohio shall govern its construction, without
giving effect to the conflict of law principles thereof.
[balance of page left blank intentionally]
23
27
IN WITNESS WHEREOF, STUDENT LOAN FUNDING 1999-A/B TRUST, by Firstar Bank,
National Association, not in its individual capacity, but solely as co-owner
trustee of the Issuer, has caused this Terms Supplement to be signed in its name
and on its behalf by one of its officers thereunto duly authorized; and FIRSTAR
BANK, NATIONAL ASSOCIATION, as Initial Co-Owner Eligible Lender Trustee, has
caused this Terms Supplement to be signed in its name and on its behalf by one
of its officers thereunto duly authorized; and FIRSTAR BANK, NATIONAL
ASSOCIATION, to evidence its acceptance of the trusts hereby created, has caused
this Terms Supplement to be signed in its name and on its behalf by one of its
officers thereunto duly authorized, all as of the date first above written.
STUDENT LOAN FUNDING 1999-A/B TRUST
By Firstar Bank, National Association,
not in its individual capacity, but solely as
co-owner trustee of the Issuer on behalf of
the Issuer
By___________________________________________
Title:_______________________________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Initial Co-Owner Eligible Lender Trustee
By___________________________________________
Title:_______________________________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By___________________________________________
Title:_______________________________________
24
28
SCHEDULE I
TERMS OF SENIOR NOTES
---------------------
INITIAL INTEREST RATE (A-1) ____%
INITIAL INTEREST RATE (A-2): ____%
DATED DATE: ___________, 1999.
INITIAL INTEREST DETERMINATION
DATE FOR SERIES 1999A-1 NOTES: ___________, 1999
INITIAL INTEREST DETERMINATION
DATE FOR SERIES 1999A-2 NOTES: ___________, 1999
SERIES 1999A-1 - NUMBERED FROM: A-1
SERIES 1999A-2 - NUMBERED FROM: B-1
TERMS OF SUBORDINATE NOTES
--------------------------
INITIAL INTEREST RATE: ____%
DATED DATE: ____________, 1999
INITIAL INTEREST DETERMINATION DATE
FOR THE SERIES 1999B-1 NOTES: ____________, 1999
SERIES 1999B-1 - NUMBERED FROM: C-1
I-1
29
EXHIBIT A
---------
DISTRIBUTION STATEMENT
NOTEHOLDERS' STATEMENT FOR STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN ASSET-BACKED NOTES SERIES 1999 A-1, A-2 AND B-1
FOR COLLECTION PERIOD ENDING
Monthly Distribution Date:______________________
(A) Principal Factor
(i) Series A-1 Notes:____________
(ii) Series A-2 Notes:____________
(iii) Series B-1 Notes:____________
(B) Amount of principal being paid or distributed:
(i) Series A-1 Notes:$___________
(ii) Series A-2 Notes:$___________
(iii) Series B-1 Notes:$___________
(C) (i) Amount of Interest being paid or distributed:
(a) Series A-1 Notes:$____________
(b) Series A-2 Notes:$____________
(c) Series B-1 Notes:$____________
(ii) Applicable Interest Rates (based on the [Formula Rate/Net Loan
Rate]:
(a) Series A-1 Notes:____________%
(b) Series A-2 Notes:____________%
(c) Series B-1 Notes:____________%
(D) Amount of Distribution allocable to any Carryover Interest:
(i) Series A-1 Notes:$____________
(ii) Series A-2 Notes:$____________
(iii) Series B-1 Notes:$____________
(E) Pool Balance at end of preceding Collection Period:$___________
(F) After giving effect to distributions on this Distribution Date:
(i) outstanding principal amount of Series A-1 Notes:$_____________
(ii) outstanding principal amount of Series A-2 Notes:$_____________
(iii) outstanding principal amount of Series B-1 Notes:$_____________
(G) Amount of Program Operating Expenses to be allocated for the upcoming
Distribution Date:$______________
(H) (i) Aggregate amount of Realized Losses (if any) for the Collection
Period immediately preceding the Distribution Date:$_____________
A-1
30
(ii) Amount received for recoveries of Realized Losses from a previous
Collection Period$____________
(a) interest:$_____________
(b) principal:$____________
(I) (i) Amount of distribution attributable to amounts in the following
Funds:
(a) Reserve Fund:$_________
(b) Expense Account:$____________
(c) Acquisition Fund:$____________
(d) Collection Account:$__________
(e) Note Payment Account:$________
(f) Excess Surplus Account:$________
(ii) Balance of Funds and Accounts on Distribution Date
(a) Reserve Fund:$_________
(b) Expense Account:$___________
(c) Acquisition Fund:$___________
(d) Collection Account:$__________
(e) Note Payment Account:$___________
(f) Excess Surplus Account:$___________
(iii) Parity Percentage:__________%
(iv) Senior Parity Percentage:___________%
(v) Amount of Parity Percentage Payments:$__________
(J) The aggregate amount paid for Financed Student Loans purchased from the
Student Loan Portfolio Fund during the immediately preceding Collection
Period:$____________
(K) Amount of Financed Student Loans:
(i) that are 31 through 60 days delinquent:$_________
(ii) that are 61 through 90 days delinquent:$__________
(iii) that are 91 through 120 days delinquent:$___________
(iv) that are more than 120 days delinquent:$____________
(v) for which claims have been filed with the appropriate guarantor or
the Secretary and which are awaiting payment:$___________
By: Star Bank as Indenture Trustee for Student Loan Funding 1999-A/B Trust
Student Loan Asset-Backed Notes, Series 1999A and Series 1999B.
A-2
31
EXHIBIT B
FORM OF SENIOR LIBOR RATE NOTE
------------------------------
THE INTEREST ON THIS SERIES 1999A-_ NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. A/B-__ $__,000,000
STUDENT LOAN FUNDING 1999-A/B TRUST
STUDENT LOAN SENIOR ASSET-BACKED NOTE
SERIES 1999A-_
(LIBOR RATE)
Dated: ___________, 1999 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: ________________
Student Loan Funding 1999-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, a national banking
association duly organized and existing under the laws of the United States, not
in its individual capacity, but solely as co-owner trustee of the Issuer on
behalf of the Issuer (the "Co-Owner Trustee"), hereby acknowledges itself
indebted and, for value received, hereby promises to pay (but only out of the
Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
________________________________ DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1999A-_ Note is one of a duly authorized issue of notes of the
Issuer designated as "Student Loan Funding 1999-A/B Trust Student Loan Senior
Asset-Backed Notes, Series 1999A-_ (LIBOR Rate)" in the aggregate principal
amount of $___________ (this series herein referred to as the "Series 1999A-_
Notes"), issued (a) pursuant to a resolution duly adopted by the board of
directors of the Issuer authorizing the issuance of the Series 1999A-_ Notes and
(b) under an Indenture of Trust, dated as of ________ 1, 1999 (the "Base
Indenture"), and a Terms Supplement, dated as of even date with the Base
Indenture (the "Terms Supplement"), as such Base Indenture and Terms Supplement
is supplemented or amended from time to time (the "Indenture"), each by and
among the Issuer, Firstar Bank, National Association, as initial eligible lender
trustee on behalf of the Issuer (the "Initial Co-Owner Eligible Lender Trustee"
and together with any other eligible lender trustee, each an "Eligible Lender
Trustee"), and Firstar Bank, National Association, as indenture trustee (the
"Indenture Trustee"). The Series 1999A-_ Notes are issued simultaneously and on
a parity with the Issuer's $__________ Student Loan Senior Asset-Backed Notes,
Series 1999A-_ (LIBOR Rate) (the "Series 1999A-_ Notes" and, together with the
Series 1999A-_ Notes, the Series 1999A Notes), and simultaneously with and on a
basis senior to the Issuer's $___________ Student Loan Subordinate Asset-Backed
Notes, Series 1999B-1 (LIBOR Rate) (the "Series 1999B-1 Notes" and collectively
with the Series 1998A Notes, the "Notes").
Reference is hereby made to the Indenture, a copy of which is on file with
the Indenture Trustee, and to all of the provisions thereof, to all of which
provisions the Holder of this Series 1999A-_ Note, by acceptance hereof, hereby
assents and agrees, for definitions of terms; the descriptions of and the nature
and extent of the security for
B-1
32
the Series 1999A-_ Notes; the student loan purchase program being financed by
the issuance of the Series 1999A-_ Notes; the revenues and other assets pledged
(the "Trust Estate") to the payment of the principal of and interest and any
Carryover Interest on the Series 1999A-_ Notes (subject to the prior rights of
the Indenture Trustee to any realization from the Indenture Trustee's lien on
and security interest in the Trust Estate for payment of its fees and expenses
and the fees and expenses of each Eligible Lender Trustee); the nature and
extent and manner of enforcement of the pledge; the conditions upon which the
Indenture may be amended or supplemented with or without the consent of the
Holders of the Directing Notes; the rights and remedies of the Holders of the
Series 1999A-_ Notes, including the limitations therein contained upon the right
of a Holder to institute any suit, action or proceeding in equity or at law with
respect hereto and thereto; the rights, duties and obligations of the Issuer,
each Eligible Lender Trustee and the Indenture Trustee thereunder; the terms and
provisions upon which the liens, pledges, charges, trusts, security interests,
assignments and covenants made therein may be discharged at or prior to the
maturity of this Series 1999A-_ Note, this Series 1999A-_ Note thereafter no
longer being secured by the Indenture or being deemed to be outstanding
thereunder; and for the other terms and provisions thereof. References in this
Series 1999A-_ Note to the name "Student Loan Funding 1999-A/B Trust" or to the
term "Issuer" shall mean the Co-Owner Trustee, not in its individual capacity,
but solely as Co-Owner Trustee of the Issuer.
Words and terms used as defined words and terms in this Series 1999A-_
Note and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest and Xxxxxxxxx Interest, if any, on the
Series 1999A-_ Notes are limited obligations of the Issuer payable only out of
the Trust Estate, as and to the extent set forth in the Indenture, and are
secured by a pledge of, lien on, security interest in and assignment of the
Trust Estate, subject to the provisions of the Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth
in the Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE NET
LOAN RATE, THE METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE
SERIES 1999A-_ NOTES, THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND
CARRYOVER INTEREST, IF ANY, ON THIS SERIES 1999A-_ NOTE AND REDEMPTION OF THIS
SERIES 1999A-_ NOTE WILL BE DETERMINED IN ACCORDANCE WITH THE TERMS, CONDITIONS
AND PROVISIONS OF THE INDENTURE AND THE CALCULATION AGENT AGREEMENT, TO WHICH
TERMS, CONDITIONS AND PROVISIONS SPECIFIC REFERENCE IS HEREBY MADE, AND ALL OF
WHICH TERMS, CONDITIONS AND PROVISIONS ARE HEREBY SPECIFICALLY INCORPORATED
HEREIN BY REFERENCE.
No covenant or agreement contained in this Series 1999A-_ Note or in the
Indenture shall be deemed to be a covenant or agreement of any director,
officer, agent or employee of the Issuer in his or her individual capacity, and
none of such directors, officers, agents or employees nor any person executing
this Series 1999A-_ Note on behalf of the Issuer shall be liable personally on
this Series 1999A-_ Note or be subject to any personal liability or
accountability by reason of the issuance of this Series 1999A-_ Note.
If an Event of Default occurs, the principal of and interest on all Notes
issued under the Indenture may be declared due and payable upon the conditions
and in the manner and with the effect provided in the Indenture. The Indenture
and the rights and obligations of the Issuer, each Eligible Lender Trustee, the
Indenture Trustee and the registered owner hereof may be modified or amended in
the manner and subject to the conditions set forth in the Indenture.
Except when this Series 1999A-_ Note is held in a Book-entry System, this
Series 1999A-_ Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1999A-_ Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee, subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series 1999A-_ Note or Series
1999A-_ Notes of Authorized Denominations of the same aggregate principal amount
and date as this Series 1999A-_ Note. The person in whose name this Series
1999A-_ Note is registered shall be deemed the owner hereof for all purposes,
and the Issuer, the Indenture Trustee and any other designated Authenticating
Agent shall not be affected by any notice to the contrary.
B-2
33
The Series 1999A-_ Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1999A-_ Note is held in a
Book-entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series 1999A-_ Notes may be
exchanged at said office of the Indenture Trustee for a like aggregate principal
amount of Series 1999A-_ Notes of the same date and series of other Authorized
Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1999A-_ Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date fixed for the payment
thereof.
It is hereby certified, recited and declared that all acts, conditions and
things required to have happened, to exist and to have been performed precedent
to and in the issuance of this Series 1999A-_ Note and the issue of which it is
one, have happened, exist and have been performed in regular and due time, form
and manner as required by law; and that this Series 1999A-_ Note and the issue
of which it is one do not exceed any limitations of indebtedness prescribed by
law or otherwise applicable to the Issuer.
This Series 1999A-_ Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1999A-_ Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series 1999A-_ Note to be
executed in its name and on its behalf by the facsimile signatures of two
Authorized Officers of the Issuer.
STUDENT LOAN FUNDING 1999-A/B Trust
By Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee
of the Issuer on behalf of the Issuer
BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
----------------------- -----------------------
B-3
34
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series 1999A-_ Notes described in the within mentioned
Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By _________________________________
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Senior Asset-Backed Note, Series
1999A-_ (LIBOR Rate), of Student Loan Funding 1999-A/B Trust, and hereby
irrevocably constitutes and appoints _______________ attorney to transfer said
Note on the registry books kept by the Indenture Trustee for that purpose with
full power of substitution in the premises.
Dated_______________ ______________________________
Signature
NOTE: The signature to the assignment must correspond to the name as
written on the face of this Note in every particular, without any alteration or
change whatsoever.
Signature Guarantee:______________________________
B-4
35
EXHIBIT C
FORM OF SUBORDINATE NOTE
------------------------
THE INTEREST ON THIS SERIES 1999B-1 NOTE IS NOT EXCLUDABLE FROM GROSS INCOME FOR
FEDERAL INCOME TAX PURPOSES.
Registered Registered
No. C-__ $54,500,000
STUDENT LOAN FUNDING 1999-A/B Trust
STUDENT LOAN SENIOR ASSET-BACKED NOTE
SERIES 1999B-1
(LIBOR RATE)
Dated: ___________, 1999 CUSIP: ______________
Interest Rate: As Herein Provided Legal Final Maturity: ________________
Student Loan Funding 1999-A/B Trust, a common law (as opposed to
statutory) trust created under the laws of the State of Delaware (herein called
the "Issuer"), by Firstar Bank, National Association, a national banking
association duly organized and existing under the laws of the United States, not
in its individual capacity, but solely as co-owner trustee of the Issuer on
behalf of the Issuer (the "Co-Owner Trustee"), hereby acknowledges itself
indebted and, for value received, hereby promises to pay (but only out of the
Trust Estate) to
CEDE & CO.
or registered assigns, on the Legal Final Maturity stated above (subject to
prior redemption referred to herein), the principal sum of
_______________________________ DOLLARS
in lawful money of the United States of America; and to pay interest thereon at
the Series Interest Rate applicable for each Interest Accrual Period on the
dates as provided herein (but only out of said Trust Estate) in like lawful
money.
This Series 1999B-1 Note is one of a duly authorized issue of notes of the
Issuer designated as "Student Loan Funding 1999-A/B Trust Student Loan
Subordinate Asset-Backed Notes, Series 1999B-1 (LIBOR Rate)" in the aggregate
principal amount of $_______________ (this series herein referred to as the
"Series 1999B-1 Notes"), issued (a) pursuant to a resolution duly adopted by the
board of directors of the Issuer authorizing the issuance of the Series 1999B-1
Notes and (b) under an Indenture of Trust, dated as of ________ 1, 1999 (the
"Base Indenture"), and a Terms Supplement, dated as of even date with the Base
Indenture (the "Terms Supplement"), as such Base Indenture and Terms Supplement
is supplemented or amended from time to time (the "Indenture"), each by and
among the Issuer, Firstar Bank, National Association, as initial eligible lender
trustee on behalf of the Issuer (the "Initial Co-Owner Eligible Lender Trustee"
and together with any other eligible lender trustee, each an "Eligible Lender
Trustee"), and Firstar Bank, National Association, as indenture trustee (the
"Indenture Trustee"). The Series 1999B-1 Notes are issued simultaneously with
and on a basis subordinate to the Issuer's $___________ Student Loan Senior
Asset-Backed Notes, Series 1999A-1 (LIBOR Rate) (the "Series 1999A-1 Notes"),
and the Issuer's $__________ Student Loan Senior Asset-Backed Notes, Series
1999A-2 (LIBOR Rate) (the "Series 1999A-2 Notes", and together with the Series
1999A-1 Notes, the "Series 1999A Notes", and collectively with the Series
1999B-1 Notes, the "Notes").
C-1
36
Reference is hereby made to the Indenture, a copy of which is on file with
the Indenture Trustee, and to all of the provisions thereof, to all of which
provisions the Holder of this Series 1999B-1 Note, by acceptance hereof, hereby
assents and agrees, for definitions of terms; the descriptions of and the nature
and extent of the security for the Series 1999B-1 Notes; the student loan
purchase program being financed by the issuance of the Series 1999B-1 Notes; the
revenues and other assets pledged (the "Trust Estate") to the payment of the
principal of and interest on the Series 1999B-1 Notes (subject to the prior
rights of the Indenture Trustee to any realization from the Indenture Trustee's
lien on and security interest in the Trust Estate for payment of its fees and
expenses, the fees and expenses of each Eligible Lender Trustee and for payment
of the principal of and interest on the Series 1998A Notes); the nature and
extent and manner of enforcement of the pledge; the conditions upon which the
Indenture may be amended or supplemented with or without the consent of the
Holders of the Series 1999B-1 Notes; the rights and remedies of the Holders of
the Directing Notes, including the limitations therein contained upon the right
of a Holder to institute any suit, action or proceeding in equity or at law with
respect hereto and thereto; the rights, duties and obligations of the Issuer,
each Eligible Lender Trustee and the Indenture Trustee thereunder; the terms and
provisions upon which the liens, pledges, charges, trusts, security interests,
assignments and covenants made therein may be discharged at or prior to the
maturity of this Series 1999B-1 Note, this Series 1999B-1 Note thereafter no
longer being secured by the Indenture or being deemed to be outstanding
thereunder; and for the other terms and provisions thereof. References in this
Series 1999A-1 Note to the name "Student Loan Funding 1999-A/B Trust" or to the
term "Issuer" shall mean the Co-Owner Trustee, not in its individual capacity,
but solely as Co-Owner Trustee of the Issuer.
Words and terms used as defined words and terms in this Series 1999B-1
Note and not otherwise defined herein shall have the meanings given them in the
Indenture.
The principal of and interest and Xxxxxxxxx Interest, if any, on the
Series 1999B-1 Notes are limited obligations of the Issuer payable only out of
the Trust Estate, as and to the extent set forth in the Indenture, and are
secured by a pledge of, lien on, security interest in and assignment of the
Trust Estate, subject to the provisions of the Indenture permitting the
application thereof for the purposes and on the terms and conditions set forth
in the Indenture.
THE INTEREST ACCRUAL PERIOD, THE APPLICABLE SERIES INTEREST RATE, THE NET
LOAN RATE, THE METHOD OF DETERMINING THE SERIES INTEREST RATE ON EACH OF THE
SERIES 1999B-1 NOTES, THE DISTRIBUTION OF PRINCIPAL OF AND INTEREST AND
CARRYOVER INTEREST, IF ANY, ON THIS SERIES 1999B-1 NOTE AND THE REDEMPTION OF
THIS SERIES 1999B-1 NOTE WILL BE DETERMINED IN ACCORDANCE WITH THE TERMS,
CONDITIONS AND PROVISIONS OF THE INDENTURE, TO WHICH TERMS, CONDITIONS AND
PROVISIONS SPECIFIC REFERENCE IS HEREBY MADE, AND ALL OF WHICH TERMS, CONDITIONS
AND PROVISIONS ARE HEREBY SPECIFICALLY INCORPORATED HEREIN BY REFERENCE.
No covenant or agreement contained in this Series 1999B-1 Note or in the
Indenture shall be deemed to be a covenant or agreement of any director,
officer, member, agent or employee of the Issuer in his or her individual
capacity, and none of such directors, officers, agents or employees nor any
person executing this Series 1999B-1 Note on behalf of the Issuer shall be
liable personally on this Series 1999B-1 Note or be subject to any personal
liability or accountability by reason of the issuance of this Series 1999B-1
Note.
If an Event of Default occurs, the principal of and interest on all Notes
issued under the Indenture may be declared due and payable upon the conditions
and in the manner and with the effect provided in the Indenture. The Indenture
and the rights and obligations of the Issuer, each Eligible Lender Trustee, the
Indenture Trustee and the registered owner hereof may be modified or amended in
the manner and subject to the conditions set forth in the Indenture.
Except when this Series 1999B-1 Note is held in a Book-entry System, this
Series 1999B-1 Note is transferable by the registered owner hereof or its
attorney duly authorized in writing at the principal corporate trust office of
the Indenture Trustee, upon surrender of this Series 1999B-1 Note, accompanied
by a duly executed instrument of transfer in the form set forth herein, with
signature guaranteed in a manner satisfactory to the Indenture Trustee subject
to such reasonable regulations as the Issuer or the Indenture Trustee may
prescribe, and upon payment of any tax, fee or other governmental charge
incident to such transfer. Upon any such transfer there shall be issued in the
name of the transferee a new fully registered Series 1999B-1 Note or Series
1999B-1 Notes of
C-2
37
Authorized Denominations of the same aggregate principal amount and date as this
Series 1999B-1 Note. The person in whose name this Series 1999B-1 Note is
registered shall be deemed the owner hereof for all purposes, and the Issuer,
the Indenture Trustee and any other designated Authenticating Agent shall not be
affected by any notice to the contrary.
The Series 1999B-1 Notes are issuable only as fully registered notes in
Authorized Denominations. Except when this Series 1999B-1 Note is held in a
Book-entry System and subject to the limitations and upon payment of the
charges, if any, provided in the Indenture, Series 1999B-1 Notes may be
exchanged at said office of the Indenture Trustee for a like aggregate principal
amount of Series 1999B-1 Notes of the same date and series of other Authorized
Denominations.
In any case where the date fixed for the payment of principal of or
interest or Carryover Interest on this Series 1999B-1 Note shall not be a
Business Day, then payment of such principal or interest or Carryover Interest
need not be made on such date but may be made on the next succeeding Business
Day with the same force and effect as if made on the date fixed for the payment
thereof.
It is hereby certified, recited and declared that all acts, conditions and
things required to have happened, to exist and to have been performed precedent
to and in the issuance of this Series 1999B-1 Note and the issue of which it is
one, have happened, exist and have been performed in regular and due time, form
and manner as required by law; and that this Series 1999B-1 Note and the issue
of which it is one do not exceed any limitations of indebtedness prescribed by
law or otherwise applicable to the Issuer.
This Series 1999B-1 Note shall not be entitled to any benefit under the
Indenture, or become valid or obligatory for any purpose, until the certificate
of authentication and registration hereon endorsed shall have been signed by the
Indenture Trustee or the Authenticating Agent.
This Series 1999B-1 Note shall be governed by, and construed and
interpreted in accordance with, the laws of the State of Ohio.
IN WITNESS WHEREOF, the Issuer has caused this Series 1999B-1 Note to be
executed in its name and on its behalf by the facsimile signatures of two
Authorized Officers of the Issuer.
STUDENT LOAN FUNDING 1999-A/B Trust
By Firstar Bank, National Association,
not in its individual capacity, but solely as co-owner trustee
of the Issuer on behalf of the Issuer
BY: [FACSIMILE SIGNATURE] BY: [FACSIMILE SIGNATURE]
------------------------ ------------------------
C-3
38
[FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION]
This is one of the Series 1999B-1 Notes described in the within mentioned
Indenture, and has been registered this date:
Date of Registration and Authentication: _______________________
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Indenture Trustee
By __________________________________
Authorized Signatory
[Form of Assignment for Transfer]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto _______________ (Tax Identification or Social Security Number:
_______________) the within Student Loan Subordinate Asset-Backed Note, Series
1999B-1 (LIBOR Rate), of Student Loan Funding 1999-A/B Trust, and hereby
irrevocably constitutes and appoints _______________ attorney to transfer said
Note on the registry books kept by the Indenture Trustee for that purpose with
full power of substitution in the premises.
Dated_______________ ______________________________
Signature
NOTE: The signature to the assignment must correspond to the name as
written on the face of this Note in every particular, without any alteration or
change whatsoever.
Signature Guarantee:______________________________
C-4
39
EXHIBIT D
---------
[FORM OF]
INSTRUCTIONS FOR
PAYMENT OF INTEREST
Firstar Bank, National Association
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Services
The undersigned is the registered owner of Student Loan Asset-Backed
Note(s), Series 1999[A/B-_], of Student Loan Funding 1999-A/B Trust No(s).
_____________ (the "Note(s)"), in an aggregate principal amount of $1,000,000 or
more. Until further notice or until the undersigned ceases to be the registered
owner of the Note(s), you are instructed to make payment of all interest due on
the Note(s) on any date due by depositing or wiring immediately available funds
on such date to the credit of the undersigned's Account No. ___________ with
__________________.
Name ______________________________
Date:____________________ ____________________________________
Authorized Signature
Signature Guaranteed:
_____________________________________
D-1
