Exhibit 4.2
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INDENTURE
between
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B,
as Issuer
and
JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Indenture Trustee
Dated as of June 1, 2003
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND USAGE
Section 1.01. Definitions and Usage...........................................2
Section 1.02. Incorporation by Reference of Trust Indenture Act...............2
ARTICLE II THE NOTES
Section 2.01. Form............................................................3
Section 2.02. Execution, Authentication and Delivery..........................3
Section 2.03. Temporary Notes.................................................4
Section 2.04. Registration; Registration of Transfer and Exchange.............4
Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes......................5
Section 2.06. Persons Deemed Owner............................................6
Section 2.07. Payment of Principal and Interest; Note Interest
Shortfall.......................................................6
Section 2.08. Cancellation....................................................7
Section 2.09. Release of Collateral...........................................7
Section 2.10. Book-Entry Notes................................................7
Section 2.11. Notices to Clearing Agency......................................8
Section 2.12. Definitive Notes................................................8
ARTICLE III COVENANTS
Section 3.01. Payment to Noteholders..........................................9
Section 3.02. Maintenance of Office or Agency.................................9
Section 3.03. Money for Payments To Be Held in Trust.........................10
Section 3.04. Existence......................................................11
Section 3.05. Protection of Indenture Trust Estate...........................11
Section 3.06. Opinions as to Indenture Trust Estate..........................12
Section 3.07. Performance of Obligations; Servicing of Trust
Student Loans..................................................12
Section 3.08. Negative Covenants.............................................15
Section 3.09. Annual Statement as to Compliance..............................15
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms............16
Section 3.11. Successor or Transferee........................................17
Section 3.12. No Other Business..............................................17
Section 3.13. No Borrowing...................................................17
Section 3.14. Obligations of Servicer and Administrator......................18
Section 3.15. Guarantees, Loans, Advances and Other Liabilities..............18
Section 3.16. Capital Expenditures...........................................18
Section 3.17. Restricted Payments............................................18
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Section 3.18. Notice of Events of Default....................................18
Section 3.19. Further Instruments and Acts...................................18
ARTICLE IV SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture........................19
Section 4.02. Application of Trust Money.....................................20
Section 4.03. Repayment of Moneys Held by Paying Agent.......................20
Section 4.04. Auction of Trust Student Loans.................................20
ARTICLE V REMEDIES
Section 5.01. Events of Default..............................................21
Section 5.02. Acceleration of Maturity; Rescission and Annulment.............22
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee...............................22
Section 5.04. Remedies; Priorities...........................................24
Section 5.05. Optional Preservation of the Trust Student Loans...............27
Section 5.06. Limitation of Suits............................................27
Section 5.07. Unconditional Rights of Noteholders To Receive
Principal and Interest.........................................28
Section 5.08. Restoration of Rights and Remedies.............................28
Section 5.09. Rights and Remedies Cumulative.................................28
Section 5.10. Delay or Omission Not a Waiver.................................29
Section 5.11. Control by Noteholders.........................................29
Section 5.12. Waiver of Past Defaults........................................29
Section 5.13. Undertaking for Costs..........................................30
Section 5.14. Waiver of Stay or Extension Laws...............................30
Section 5.15. Action on Notes................................................30
Section 5.16. Performance and Enforcement of Certain Obligations.............30
ARTICLE VI THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee....................................31
Section 6.02. Rights of Indenture Trustee....................................32
Section 6.03. Individual Rights of Indenture Trustee.........................33
Section 6.04. Indenture Trustee's Disclaimer.................................33
Section 6.05. Notice of Defaults; Depositor Insolvency.......................33
Section 6.06. Reports by Indenture Trustee to Noteholders....................33
Section 6.07. Compensation and Indemnity.....................................34
Section 6.08. Replacement of Indenture Trustee...............................34
Section 6.09. Successor Indenture Trustee by Merger..........................35
Section 6.10. Appointment of Co-Trustee or Separate Trustee..................36
Section 6.11. Eligibility; Disqualification..................................37
Section 6.12. Preferential Collection of Claims Against Issuer...............38
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ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders.......................................38
Section 7.02. Preservation of Information; Communications to
Noteholders....................................................38
Section 7.03. Reports by Issuer..............................................39
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money............................................40
Section 8.02. Trust Accounts.................................................40
Section 8.03. General Provisions Regarding Accounts..........................40
Section 8.04. Release of Indenture Trust Estate..............................41
Section 8.05. Opinion of Counsel.............................................41
ARTICLE IX SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of
Noteholders....................................................42
Section 9.02. Supplemental Indentures With Consent of Noteholders............43
Section 9.03. Execution of Supplemental Indentures...........................44
Section 9.04. Effect of Supplemental Indenture...............................44
Section 9.05. Conformity with Trust Indenture Act............................45
Section 9.06. Reference in Notes to Supplemental Indentures..................45
ARTICLE X REDEMPTION OF NOTES
Section 10.01. Redemption.....................................................45
Section 10.02. Form of Redemption Notice......................................45
Section 10.03. Notes Payable on Redemption Date...............................46
ARTICLE XI MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions, etc......................46
Section 11.02. Form of Documents Delivered to Indenture Trustee...............48
Section 11.03. Acts of Noteholders............................................49
Section 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies................................................49
Section 11.05. Notices to Noteholders; Waiver.................................50
Section 11.06. Alternate Payment and Notice Provisions........................50
Section 11.07. Conflict with Trust Indenture Act..............................50
Section 11.08. Effect of Headings and Table of Contents.......................51
Section 11.09. Successors and Assigns.........................................51
Section 11.10. Separability...................................................51
Section 11.11. Benefits of Indenture..........................................51
Section 11.12. Legal Holidays.................................................51
Section 11.13. Governing Law..................................................51
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Section 11.14. Counterparts...................................................51
Section 11.15. Recording of Indenture.........................................51
Section 11.16. Trust Obligations..............................................52
Section 11.17. No Petition....................................................52
Section 11.18. Inspection.....................................................52
APPENDICES, SCHEDULES AND EXHIBITS
APPENDIX A-1 Definitions and Usage
APPENDIX A-2 Certain Terms and Provisions of the Auction Rate Notes
SCHEDULE A Schedule of Trust Student Loans
SCHEDULE B Location of Trust Student Loan Files
EXHIBIT A Forms of Notes
EXHIBIT B Form of Note Depository Agreement
EXHIBIT C Notice of Payment Default
EXHIBIT D Notice of Cure of Payment Default
EXHIBIT E Notice of Proposed Change in Length of One or More
Auction Periods
EXHIBIT F Notice Establishing Change in Length of One or More
Auction Periods
EXHIBIT G Notice of Change in Auction Date
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INDENTURE
This INDENTURE, dated as of June 1, 2003, is between SLM PRIVATE CREDIT
STUDENT LOAN TRUST 2003-B, a Delaware statutory trust (the "Issuer"), and
JPMORGAN CHASE BANK, a New York banking corporation, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the holders of the Issuer's Student Loan-Backed
Notes (the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee, as trustee for the
benefit of the Noteholders, effective as of the Closing Date all of their right,
title and interest in and to the following:
(a) the Trust Student Loans, and all obligations of the Obligors
thereunder including all moneys accrued and paid thereunder on or after the
Cutoff Date;
(b) the Servicing Agreement, including the right of the Issuer to cause
the Servicer to purchase Trust Student Loans from the Issuer under circumstances
described therein;
(c) the Depositor Sale Agreement, including the right of the Issuer to
cause the Depositor to repurchase Trust Student Loans from the Issuer under
circumstances described therein and including the rights of the Depositor under
the Seller Sale Agreement;
(d) the Seller Sale Agreement, to the extent that the rights of the
Depositor thereunder have been assigned to the Issuer pursuant to the Depositor
Sale Agreement, including the right of the Depositor to cause the Seller to
repurchase Trust Student Loans from the Depositor under circumstances described
therein;
(e) the Administration Agreement;
(f) the Swap Agreements and the Interest Rate Cap Agreement;
(g) the Trust Accounts and all funds on deposit from time to time in the
Trust Accounts, including the Future Distribution Account, the Reserve Account
Initial Deposit and the Cash Capitalization Account Initial Deposit, and all
investments and proceeds thereof (including all income thereon); and
(h) all present and future claims, demands, causes and choices in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts, acceptances, chattel paper, checks, general
intangibles, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and receivables,
instruments and other
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property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction, and to secure compliance
with the provisions of this Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Noteholders,
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties required
in this Indenture to the best of its ability to the end that the interests of
the Noteholders may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND USAGE
Section 1.01. Definitions and Usage. Except as otherwise specified herein
or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A-1 or Appendix A-2 hereto,
which also contains rules as to usage that shall be applicable herein.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
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ARTICLE II
THE NOTES
Section 2.01. Form. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the forms set forth in
Exhibit A, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing the Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibit A are part of the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Notes for original issue in an aggregate principal amount of $1,343,121,000, of
which $580,000,000 shall be denominated Class A-1 Notes, $440,506,000 shall be
denominated Class A-2 Notes, $109,000,000 shall be denominated Class A-3 Notes,
$109,000,000 shall be denominated Class A-4 Notes, $43,871,000 shall be
denominated Class B Notes and $60,744,000 shall be denominated Class C Notes.
Each Note shall be dated the date of its authentication. The Floating Rate
Notes shall be issuable as registered Floating Rate Notes in multiple
denominations of $1,000. The Auction Rate Notes shall be issuable as registered
Auction Rate Notes in multiple denominations of $50,000.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Note shall be conclusive evidence, and the only
evidence, that such Note has been duly authenticated and delivered hereunder.
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Section 2.03. Temporary Notes. Pending the preparation of Definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture determined to be appropriate
by the Responsible Officer of the Issuer executing the temporary Notes, as
evidenced by his or her execution of such temporary Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes to be
prepared without unreasonable delay. After the preparation of Definitive Notes,
the temporary Notes shall be exchangeable for Definitive Notes upon surrender of
the temporary Notes at the office or agency of the Issuer to be maintained as
provided in Section 3.02, without charge to the Noteholder. Upon surrender for
cancellation of any one or more temporary Notes, the Issuer shall execute and
the Indenture Trustee shall authenticate and deliver in exchange therefor a like
principal amount of Definitive Notes of authorized denominations. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as Definitive Notes.
Section 2.04. Registration; Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee shall be "Note Registrar" for the purpose of registering Notes
and transfers of Notes as herein provided. Upon any resignation of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer shall give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denominations and a like
aggregate principal amount.
At the option of the Noteholder, Notes may be exchanged for other Notes in
any authorized denominations and a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute, and the
Indenture Trustee shall authenticate and the Noteholder shall obtain from the
Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
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All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by the
Noteholder thereof or such Noteholder's attorney duly authorized in writing,
with such signature guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar, which requirements include membership or
participation in Securities Transfer Agent's Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act.
No service charge shall be made to a Noteholder for any registration of
transfer or exchange of Notes, but the Indenture Trustee may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to Section 2.03 or 9.06 not involving any
transfer.
The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Issuer and the Indenture Trustee such
security or indemnity as may be required by each of them to hold the Issuer and
the Indenture Trustee harmless, then, in the absence of notice to the Issuer,
the Note Registrar or the Indenture Trustee that such Note has been acquired by
a bona fide purchaser, and provided that the requirements of Section 8-405 of
the UCC are met, the Issuer shall execute and upon its request the Indenture
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a replacement Note; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within 15 days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Noteholder thereof of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of the Indenture
Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 2.06. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of, interest, if any, on
such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 2.07. Payment of Principal and Interest; Note Interest
Shortfall. (a) The Notes shall accrue interest as provided in the forms of Notes
set forth in Exhibit A and, in the case of the Auction Rate Notes, Xxxxxxxx X-0,
and such interest shall be payable on each applicable Distribution Date as
specified therein, subject to Section 3.01. Any installment of interest or
principal, if any, payable on any Note which is punctually paid or duly provided
for by the Issuer on the applicable Distribution Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
on the applicable Record Date by check mailed first-class, postage prepaid to
such Person's address as it appears on the Note Register on such Record Date,
except that, unless Definitive Notes have been issued pursuant to Section 2.12,
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payment shall
be made by wire transfer in immediately available funds to the account
designated by such nominee and except for the final installment of principal
payable with respect to such Note on a Distribution Date or on the Note Final
Maturity Date for such Note which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of such note set forth in Exhibit A
and, in the case of the Auction Rate Notes, Appendix A-2. Notwithstanding the
foregoing, the entire unpaid principal amount of each class of the Notes shall
be due and payable, if not previously paid, on the Note Final Maturity Date for
such class of Notes and on the date on which an Event of Default shall have
occurred and be continuing if the Indenture Trustee or the Noteholders of the
Notes representing not less than a majority of the Outstanding Amount of the
Controlling Notes have declared the
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Notes to be immediately due and payable in the manner provided in Section 5.02.
All principal payments on the Notes shall be made pro rata to the Class of
Noteholders entitled thereto; provided that principal payments on the Auction
Rate Notes shall be made by lots of $50,000, selected at random. The Indenture
Trustee shall notify the Person in whose name a Note is registered at the close
of business on the Record Date preceding the Distribution Date on which the
Issuer expects that the final installment of principal of and interest on such
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Distribution Date and shall specify that such final installment
will be payable only upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for payment
of such Installment. Notices in connection with redemptions of Notes shall be
mailed to Noteholders as provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest at the applicable Note
Rate on the Notes, the Issuer shall pay the resulting Note Interest Shortfall on
the following Distribution Date as provided in the Administration Agreement.
Section 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time, unless the Issuer shall direct by an Issuer Order that
they be returned to it and so long as such Issuer Order is timely and the Notes
have not been previously disposed of by the Indenture Trustee.
Section 2.09. Release of Collateral. Subject to Section 11.01 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officers' Certificate of the Issuer, an Opinion of Counsel and Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates.
Section 2.10. Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to The Depository Trust Company, the initial Clearing Agency, by,
or on behalf of, the Issuer. Such Notes shall initially be registered on the
Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Note Owner shall receive a Definitive Note (as defined below)
representing such Note Owner's interest in such Note, except as provided in
Section 2.12. Unless and until definitive, fully registered Notes (the
"Definitive Notes") have been issued to Note Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
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(ii) the Note Registrar and the Indenture Trustee, and their
respective directors, officers, employees and agents, may deal with the
Clearing Agency for all purposes (including the payment of principal of and
interest and other amounts on the Notes) as the authorized representative
of the Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this Section
shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement; and
unless and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest and other amounts on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Noteholders of Notes evidencing a
specified percentage of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Note Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee; and
(vi) upon acquisition or transfer of a beneficial interest in any
Book-Entry Note by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section
4975 of the Code, such Note Owner shall be deemed to have represented that
such acquisition or purchase will not constitute or otherwise result in a
non-exempt prohibited transaction in violation of Section 406 of ERISA or
Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of
such deemed representation shall be null and void and of no effect.
Section 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communication
specified herein to be given to Noteholders to the Clearing Agency.
Section 2.12. Definitive Notes. If (i) the Administrator advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to discharge its responsibilities with respect to the Notes, and the
Administrator is unable to locate a successor, (ii) the Administrator at its
option advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence of
an Event of Default, a Servicer Default or an Administrator Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Clearing Agency (which shall then
notify the Indenture Trustee) in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interests of the
Note
8
Owners, then the Indenture Trustee shall cause the Clearing Agency to notify all
Note Owners, through the Clearing Agency, of the occurrence of any such event
and of the availability of Definitive Notes to Note Owners requesting the same.
Upon surrender to the Indenture Trustee of the typewritten Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the
holders of the Definitive Notes as Noteholders.
Upon acquisition or transfer a Definitive Note by, for or with the assets
of, an employee benefit plan or other retirement arrangement subject to Section
406 of ERISA or Section 4975 of the Code, such Note Owner shall be deemed to
have represented that such acquisition or purchase will not constitute or
otherwise result in a non-exempt prohibited transaction in violation of Section
406 of ERISA or Section 4975 of the Code which is not covered by a class or
other applicable exemption. Any transfer found to have been made in violation of
such representation shall be null and void and of no effect.
ARTICLE III
COVENANTS
Section 3.01. Payment to Noteholders. The Issuer shall duly and
punctually pay the principal and interest, if any, with respect to the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, the Issuer shall cause to be distributed to Noteholders, in
accordance with the Administration Agreement, that portion of the amounts on
deposit in the Trust Accounts on a Distribution Date (other than any Eligible
Investments deposited therein that will mature on the Business Day preceding a
subsequent Distribution Date) which the Noteholders are entitled to receive
pursuant to the Administration Agreement. Amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest and/or principal
shall be considered as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
Section 3.02. Maintenance of Office or Agency. The Issuer shall maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Issuer hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
9
Section 3.03. Money for Payments To Be Held in Trust. As provided in
Sections 8.02(a) and (b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts distributed from the Collection
Account or any other Trust Account pursuant to Sections 2.07 and 2.08 of the
Administration Agreement shall be made on behalf of the Issuer by the Indenture
Trustee or by another Paying Agent, and no amounts so distributed from the
Collection Account for payments of Notes shall be paid over to the Issuer except
as provided in this Section.
On or before the Business Day next preceding each Distribution Date and
Redemption Date, the Issuer shall distribute or cause to be distributed to the
Indenture Trustee (or any other Paying Agent) an aggregate sum sufficient to pay
the amounts then becoming due under the Notes, such sum to be held in trust for
the benefit of the Persons entitled thereto and (unless the Paying Agent is the
Indenture Trustee) shall promptly notify the Indenture Trustee of its action or
failure so to act.
The Issuer shall cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of
this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
of which it has actual knowledge (or any other obligor upon the Notes) in
the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts
as those upon which the sums were held by such Paying
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Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Note and remaining unclaimed for two years after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request or if the Issuer has been terminated to
the Depositor upon its written request; and the Noteholder thereof shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Issuer. The Indenture
Trustee shall also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including mailing notice of
such repayment to Noteholders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Noteholder).
Section 3.04. Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
Section 3.05. Protection of Indenture Trust Estate. The Issuer will from
time to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, will take such other
action necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any grant
made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
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(iv) preserve and defend title to the Indenture Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Indenture Trust
Estate against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section.
Section 3.06. Opinions as to Indenture Trust Estate. (a) On the Closing
Date, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording and filing of this Indenture as is necessary to
perfect and make effective the lien and security interest of this Indenture and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) On or before December 31 in each calendar year, beginning in 2003, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture
and any indentures supplemental hereto as is necessary to maintain the lien and
security interest created by this Indenture and relating the details of such
action or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe the recording, filing, recording and refiling of this
Indenture and any indentures supplemental hereto that will, in the opinion of
such counsel, be required to maintain the lien and security interest of this
Indenture until December 31 in the following calendar year.
Section 3.07. Performance of Obligations; Servicing of Trust Student
Loans. (a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Indenture Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, any other Basic Document or such other
instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officers' Certificate of the Issuer
shall be deemed to be action taken by the Issuer; provided, however, the Issuer
shall not be liable for any acts of Persons with whom the Issuer has contracted
with reasonable care. Initially, the Issuer has contracted with the Servicer and
the Administrator to assist the Issuer in performing its duties under this
Indenture. The Issuer shall give written notice to the Indenture Trustee and
each Rating Agency of any such contract with any other Person.
(c) The Issuer shall punctually perform and observe all of its obligations
and agreements contained in this Indenture, the other Basic Documents and the
instruments and agreements included in the Indenture Trust Estate, including
filing or causing to be filed all UCC financing statements and continuation
statements prepared by the Issuer and required to be filed
12
by the terms of this Indenture and the Administration Agreement in accordance
with and within the time periods provided for herein and therein. Except as
otherwise expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without the
consent of the Indenture Trustee or the Noteholders of at least a majority of
the Outstanding Amount of the Notes. The Issuer shall give written notice to
each Rating Agency of any such waiver, amendment, modification, supplement or
termination.
(d) If a Responsible Officer of the Issuer shall have knowledge of the
occurrence of a Servicer Default or an Administrator Default under the Servicing
Agreement or the Administration Agreement, respectively, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to
such default. If a Servicer Default shall arise from the failure of the Servicer
to perform any of its duties or obligations under the Servicing Agreement, or an
Administrator Default shall arise from the failure of the Administrator to
perform any of its duties or obligations under the Administration Agreement, as
the case may be, with respect to the Trust Student Loans, the Issuer shall take
all reasonable steps available to it to enforce its rights under the Basic
Documents in respect of such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers, pursuant to Section 5.01 of
the Servicing Agreement, or to the Administrator of the Administrator's rights
and powers, pursuant to Section 5.01 of the Administration Agreement, the Issuer
shall appoint a successor servicer (the "Successor Servicer") or a successor
administrator (the "Successor Administrator"), respectively, and such Successor
Servicer or Successor Administrator, as the case may be, shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer or Successor Administrator has
not been appointed and accepted its appointment at the time when the Servicer or
Administrator, as the case may be, ceases to act as Servicer or Administrator,
respectively, the Indenture Trustee without further action shall automatically
be appointed the Successor Servicer or Successor Administrator, as the case may
be. The Indenture Trustee may resign as the Servicer or the Administrator by
giving written notice of resignation to the Issuer and in such event will be
released from such duties and obligations, such release not to be effective
until the date a new servicer or a new administrator enters into an agreement
with the Issuer as provided below. Upon delivery of any such notice to the
Issuer, the Issuer shall obtain a new servicer as the Successor Servicer under
the Servicing Agreement or a new administrator as the Successor Administrator
under the Administration Agreement, as the case may be. Any Successor Servicer
or Successor Administrator, other than the Indenture Trustee, shall (i) be an
established institution whose regular business includes the servicing or
administration of student loans and (ii) enter into a servicing agreement or an
administration agreement, respectively, with the Issuer having substantially the
same provisions as the provisions of the Servicing Agreement and the
Administration Agreement, as applicable. If within 30 days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer or new administrator, as the case may be, the Indenture Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Servicer or Successor Administrator; provided, however, that such
right to appoint or to petition for the appointment of any such successor shall
in no event relieve the Indenture Trustee from any obligations otherwise imposed
on it under the Basic Documents until such successor has in fact assumed such
appointment. In connection with any such appointment, the Indenture Trustee
13
may make such arrangements for the compensation of such successor as it and such
successor shall agree, subject to the limitations set forth below and in the
Servicing Agreement or Administration Agreement, as applicable, and in
accordance with Section 5.02 of the Servicing Agreement and Section 5.02 of the
Administration Agreement, the Issuer shall enter into an agreement with such
successor for the servicing or administration of the Trust Student Loans (such
agreement to be in form and substance satisfactory to the Indenture Trustee). If
the Indenture Trustee shall succeed as provided herein to the Servicer's duties
as Servicer with respect to the Trust Student Loans, or the Administrator's
duties with respect to the Issuer and the Trust Student Loans, as the case may
be, it shall do so in its individual capacity and not in its capacity as
Indenture Trustee and, accordingly, the provisions of Article VI hereof shall be
inapplicable to the Indenture Trustee in its duties as the successor to the
Servicer or the Administrator, as the case may be, and the servicing or
administration of the Trust Student Loans. In case the Indenture Trustee shall
become successor to the Servicer or the Administrator, the Indenture Trustee
shall be entitled to appoint as Servicer or as Administrator, as the case may
be, any one of its Affiliates, provided that such appointment shall not affect
or alter in any way the liability of the Indenture Trustee as Successor Servicer
or Successor Administrator, respectively, in accordance with the terms hereof.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Servicing Agreement, or any termination of the Administrator's rights and
powers pursuant to the Administration Agreement, as the case may be, the Issuer
shall promptly notify the Indenture Trustee and each Rating Agency. As soon as a
Successor Servicer or a Successor Administrator is appointed, the Issuer shall
notify the Indenture Trustee and each Rating Agency of such appointment,
specifying in such notice the name and address of such Successor Servicer or
such Successor Administrator.
(g) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer agrees that it will not, without the prior written
consent of the Indenture Trustee or the Noteholders of at least a majority in
Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral or the Basic Documents,
except to the extent otherwise provided in the Basic Documents, or waive timely
performance or observance by the Servicer, the Administrator, the Depositor, SLM
Education Credit Management Corporation or the Issuer under the Basic Documents;
provided, however, that no such amendment shall (i) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, distributions that
are required to be made for the benefit of the Noteholders, or (ii) reduce the
aforesaid percentage of the Notes which are required to consent to any such
amendment, without the consent of the Noteholders of all the Outstanding Notes.
If any such amendment, modification, supplement or waiver shall be so consented
to by the Indenture Trustee or such Noteholders, the Issuer shall give written
notice thereof to each Rating Agency and agrees, promptly following a request by
the Indenture Trustee to do so, to execute and deliver, in its own name and at
its own expense, such agreements, instruments, consents and other documents as
the Indenture Trustee may deem necessary or appropriate in the circumstances.
14
Section 3.08. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture or any other
Basic Document, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the
Indenture Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Indenture
Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest, mortgage or
other encumbrance (other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Indenture Trust Estate
or any part thereof or any interest therein or the proceeds thereof (other
than tax liens and other liens that arise by operation of law, and other
than as expressly permitted by the Basic Documents) or (C) permit the lien
of this Indenture not to constitute a valid first priority (other than with
respect to any such tax or other lien) security interest in the Indenture
Trust Estate; or
(iv) enter into any amendment to any Swap Agreement or the Interest
Rate Cap Agreement to cure any ambiguity in, or to correct or supplement
any provision of the Swap Agreements or the Interest Rate Cap Agreement, so
long as the Issuer has determined, and the Indenture Trustee has agreed in
writing at the written direction of the Issuer, that the amendment will not
materially adversely affect the interests of the Noteholders and provided
that the Indenture Trustee has provided reasonable notice to the Rating
Agencies of such amendment and each Rating Agency has provided written
confirmation that the then current rating of the Notes will not be lowered
or withdrawn.
Section 3.09. Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee and each Rating Agency, within 120 days after the end
of each fiscal year of the Issuer (commencing with the fiscal year ending
December 31, 2003), an Officers' Certificate of the Issuer stating that:
(i) a review of the activities of the Issuer during such year and
of performance under this Indenture has been made under such Authorized
Officers' supervision; and
(ii) to the best of such Authorized Officers' knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or
15
covenant, specifying each such default known to such Authorized Officers
and the nature and status thereof.
Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing under
the laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of, and interest, if any, on all
Notes and the performance or observance of every agreement and covenant of
this Indenture on the part of the Issuer to be performed or observed, all
as provided herein;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Delaware
state tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all its
properties or assets, including those included in the Indenture Trust Estate, to
any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of,
and interest, if any, on all Notes and the performance or observance of
every agreement and covenant of this Indenture on the part of the Issuer to
be performed or observed, all as provided herein, (C) expressly agree by
means of such supplemental indenture that all right, title and
16
interest so conveyed or transferred shall be subject and subordinate to the
rights of Noteholders, (D) unless otherwise provided in such supplemental
indenture, expressly agree to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly agree by means of
such supplemental indenture that such Person (or if a group of Persons,
then one specified Person) shall make all filings with the Commission (and
any other appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction, no Default
shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee) to the effect that
such transaction will not have any material adverse Federal or Delaware
state tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate of the Issuer and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any filing
required by the Exchange Act).
Section 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10(b), SLM Private Credit Student Loan Trust 2003-B
will be released from every covenant and agreement of this Indenture to be
observed or performed on the part of the Issuer with respect to the Notes
immediately upon the delivery by the Issuer of written notice to the Indenture
Trustee stating that SLM Private Credit Student Loan Trust 2003-B is to be so
released.
Section 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Trust Student Loans in the manner contemplated by this Indenture and the other
Basic Documents and activities incidental thereto.
Section 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
17
Section 3.14. Obligations of Servicer and Administrator. The Issuer shall
cause the Servicer to comply with Sections 3.01, 3.02 and 3.03 of the
Administration Agreement and Section 3.07 of the Servicing Agreement and the
Administrator to comply with Sections 2.09, 3.01, 3.02 and 3.03 of the
Administration Agreement.
Section 3.15. Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture and the other Basic Documents, the Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
Section 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.17. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer or the Administrator, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made,
distributions to the Servicer, the Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders, the Administrator and the Depositor as
contemplated by, and to the extent funds are available for such purpose under,
this Indenture and the other Basic Documents. The Issuer will not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the other Basic Documents.
Section 3.18. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Depositor of its
obligations under the Depositor Sale Agreement, SLM Education Credit Management
Corporation of its obligations under the Seller Sale Agreement, the Servicer of
its obligations under the Servicing Agreement, or the Administrator of its
obligations under the Administration Agreement. In addition, the Issuer shall
deliver to the Indenture Trustee and each Rating Agency, within five days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of the Issuer of any event which with the giving of notice and the lapse of time
would become an Event of Default under Section 5.01(iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
Section 3.19. Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
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ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.08,
3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including, without limitation, the rights of the Indenture
Trustee under Section 6.07 and the obligations of the Indenture Trustee under
Section 4.02) and (vi) the rights of Noteholders as beneficiaries hereof with
respect to the property so deposited with the Indenture Trustee payable to all
or any of them, and the Indenture Trustee, on demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when:
(a) either
(1) all Notes theretofore authenticated and delivered (other than
(A) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.05 and (B) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation
(A) have become due and payable,
(B) will become due and payable at their respective Note Final
Maturity Date, within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of notice
of redemption by the Indenture Trustee in the name, and at the expense, of
the Issuer, and the Issuer, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations guaranteed
by the United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount sufficient to
pay and discharge the entire indebtedness on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due to the Note
Final Maturity Date;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an Officers'
Certificate of the Issuer, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an
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Independent Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.01(a) and, subject to Section
11.02, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied with.
Section 4.02. Application of Trust Money. All moneys deposited with the
Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Noteholders of the particular Notes for
the payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Administration Agreement or required by law.
Section 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.03 and thereupon such Paying Agent shall be released from all
further liability with respect to such moneys.
Section 4.04. Auction of Trust Student Loans. Any Trust Student Loans
remaining in the Trust as of the end of the Collection Period immediately
preceding the earliest Quarterly Distribution Date on which the Pool Balance is
equal to 10% or less of the initial Pool Balance three business days prior to
such Quarterly Distribution Date (the "Trust Auction Date") shall be offered for
sale by the Indenture Trustee unless the Servicer has exercised its option to
purchase the Trust Estate as described in Section 6.01(a) of the Administration
Agreement with respect to such Quarterly Distribution Date. The Servicer will be
deemed to have waived such option if it fails to notify the Trustee and the
Indenture Trustee of its exercise thereof in writing prior to the Indenture
Trustee's acceptance of a bid to purchase such Trust Student Loans; provided,
however, that there shall be no such offer for sale if the Indenture Trustee
fails to provide notice to the Servicer in accordance with this Section 4.04.
The Indenture Trustee shall provide written notice to the Servicer of any such
offer for sale at least 5 business days in advance of the Trust Auction Date.
The Indenture Trustee shall permit the Servicer or any of its Affiliates,
including SLM Education Credit Management Corporation and the Depositor, to
offer bids only if the Pool Balance as of the applicable Trust Auction Date is
equal to 10% or less of the Initial Pool Balance and such bid does not exceed
the fair market value of the Trust Student Loans as of the Trust Auction Date.
If at least two bids are received, the Indenture Trustee shall solicit and
resolicit new bids from all participating bidders until only one bid remains or
the remaining bidders decline to resubmit bids. The Indenture Trustee shall
accept the highest of such remaining bids if it is equal to or in excess of both
the Minimum Purchase Amount and the fair market value of such Trust Student
Loans as of the end of the Collection Period immediately preceding the Trust
Auction Date. If at least two bids are not received or the highest bid after the
resolicitation process is completed is not equal to or in excess of the higher
of the Minimum Purchase Amount and the fair market value of the Trust Student
Loans, the Indenture Trustee shall not consummate such sale. The Indenture
Trustee may consult, and, at the direction of the Depositor, shall consult, with
a financial advisor, including an underwriter of the Notes or the
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Administrator, to determine if the fair market value of the Trust Student Loans
has been offered. The proceeds of any such sale will be applied in the order of
priority set forth in Section 5.04(b). If the sale is not consummated in
accordance with the foregoing, the Indenture Trustee may, but shall not be under
any obligation to, solicit bids for sale of the Trust Student Loans with respect
to future Quarterly Distribution Dates upon terms similar to those described
above, including the Servicer's waiver of its option to purchase the Trust
Estate in accordance with Section 6.01(a) of the Administration Agreement with
respect to each such future Quarterly Distribution Date.
ARTICLE V
REMEDIES
Section 5.01. Events of Default. "Event of Default," wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any Controlling Note when
the same becomes due and payable, and such default shall continue for a period
of five Business Days or more;
(b) default in the payment of the principal of any Note when the same
becomes due and payable on the related Note Final Maturity Date;
(c) default in the observance or performance of any covenant or agreement
of the Issuer made in this Indenture (other than a covenant or agreement, a
default in the observance or performance of which is elsewhere in this Section
specifically dealt with), or any representation or warranty of the Issuer made
in this Indenture or in any certificate or other writing having been incorrect
in any material respect as of the time when made, such default or breach having
a material adverse effect on the holders of the Notes, and such default or
breach shall continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect shall not have
been eliminated or otherwise cured, for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuer by the Indenture
Trustee or to the Issuer and the Indenture Trustee by the Noteholders of at
least 25% of the Outstanding Amount of the Controlling Notes, a written notice
specifying such default or incorrect representation or warranty and requiring it
to be remedied and stating that such notice is a notice of Default hereunder;
(d) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial part of
the Indenture Trust Estate in an involuntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of the Issuer or for any substantial part of the Indenture
Trust Estate, or ordering the winding-up or liquidation of the Issuer's affairs,
and such decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or
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(e) the commencement by the Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law, or the consent by the Issuer
to the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Indenture Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure by the
Issuer generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Noteholders of Notes representing not less than a
majority of the Outstanding Amount of the Controlling Notes may declare all the
Notes to be immediately due and payable, by a notice in writing to the Issuer
(and to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable, subject, however, to Section 5.04 of this
Indenture.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
Noteholders of Notes representing a majority of the Outstanding Amount of the
Controlling Notes, by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of and interest on all Notes and all
other amounts that would then be due hereunder or upon such Notes if the
Event of Default giving rise to such acceleration had not occurred; and
(ii) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal of
the Notes that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. The Issuer covenants that if (i) default is made in the
payment of any interest on any Controlling Note when the same becomes due and
payable, and such default continues for a period of five days, or (ii) default
is made in the payment of the principal of any Note when the same becomes due
and payable at the related Note Final Maturity Date, the Issuer shall, upon
demand of the Indenture Trustee, pay to it, for the benefit of the Noteholders,
the whole amount
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then due and payable on such Notes for principal and interest, with interest
upon the overdue principal, and, to the extent payment at such rate of interest
shall be legally enforceable, upon overdue installments of interest, at the rate
specified in Section 2.07 and in addition thereto such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.
(a) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the moneys adjudged or decreed to be
payable.
(b) If an Event of Default occurs and is continuing, the Indenture Trustee
may, as more particularly provided in Section 5.04, in its discretion, proceed
to protect and enforce its rights and the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(c) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Indenture Trust Estate, Proceedings under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other, comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable, as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee
or Person performing similar functions in any such Proceedings;
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(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Indenture
Trustee or the Noteholders allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official
in any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Noteholders.
(f) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities. If an Event of Default shall have
occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.05):
(a) (i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the Notes
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture, with respect to the Indenture Trust
Estate;
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(iii) exercise any remedies of a secured party under the UCC with
respect to the Trust Estate and take any other appropriate action to
protect and enforce the rights and remedies of the Indenture Trustee and
the Noteholders;
(iv) sell the Indenture Trust Estate or any portion thereof or
rights or interest therein, at one or more public or private sales called
and conducted in any manner permitted by law; and/or
(v) elect to have the Trustee maintain ownership of the Trust
Student Loans and continue to apply collections with respect to the Trust
Student Loans as if there had been no declaration of acceleration;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.01(a) or (b), unless (A) the
Noteholders of 100% of the Outstanding Amount of the Controlling Notes consent
thereto, (B) the proceeds of such sale or liquidation distributable to the
Noteholders of the Controlling Notes are sufficient to discharge in full all
amounts then due and unpaid upon such Notes for principal and interest or (C)
the Indenture Trustee determines that the Indenture Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Controlling Notes as they would have become due if the
Controlling Notes had not been declared due and payable, and the Indenture
Trustee obtains the consent of Noteholders of 66-2/3% of the Outstanding Amount
of the Class A Notes; provided, further, that the Indenture Trustee may not sell
or otherwise liquidate the Indenture Trust Estate following an Event of Default,
other than an Event of Default described in Section 5.01(a) or (b) with respect
to the Class A Notes, unless (D) the proceeds of such sale or liquidation
distributable to the Class B Noteholders plus the proceeds of the sale or
liquidation of the Trust Estate distributable to the Class C Noteholders are
sufficient to pay to the Class B Noteholders and the Class C Noteholders the
outstanding principal plus accrued and unpaid interest thereon or (E) the
proceeds of such sale or liquidation distributable to the Class B Noteholders
plus the proceeds of the sale or liquidation of the Trust Estate distributable
to the Class C Noteholders would not be sufficient to pay to the Class B
Noteholders and the Class C Noteholders the outstanding principal plus accrued
and unpaid interest thereon, the Class B Noteholders and the Class C Noteholders
of at least a majority of the principal amount of the Class B Notes and the
Class C Notes consent thereto. In determining such sufficiency or insufficiency
with respect to clauses (B), (C), (D) and (E), the Indenture Trustee may, but
need not, obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Indenture Trust Estate and/or Trust
Estate, as applicable, for such purpose.
(b) Notwithstanding the provisions of Section 8.02, following the
occurrence and during the continuation of an Event of Default specified in
Section 5.01(a), 5.01(b), 5.01(d) or 5.01(e) which has resulted in an
acceleration of the Notes (or following the occurrence of any such event after
an Event of Default specified in Section 5.01(c) has occurred and the Trust has
been liquidated), if the Indenture Trustee collects any money or property, it
shall pay out the money or property (and other amounts including amounts held on
deposit in the Reserve Account and the Cash Capitalization Account) held as
Collateral for the benefit of the
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Noteholders, net of liquidation costs associated with the sale of the assets of
the Trust, in the following order:
(i) to the Indenture Trustee for amounts due under Section 6.07;
(ii) to the Servicer for any due and unpaid Primary Servicing Fees;
(iii) to the Administrator, any due and unpaid Administration Fees;
(iv) to the Auction Agent and the Broker-Dealers (or to the Auction
Agent for remittance to the Broker-Dealers), pro rata, any due and unpaid
Auction Agent Fees or Broker-Dealer Fees;
(v) to the Swap Counterparties, any Swap Payment payable to each
Swap Counterparty under its Swap Agreement for such Distribution Date;
(vi) pro rata, based on the Class Note Balance and the amount of any
Swap Termination Payments due and payable by the Issuer to a Swap
Counterparty under this clause (vi);
(A) to the Class A Noteholders, for amounts due and
unpaid on the Class A Notes for interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Class A Notes for such interest; and
(B) to the Swap Counterparties, the amount of any Swap
Termination Payments, if any, due to each Swap Counterparty
under its Swap Agreement due to a Swap Termination Event
resulting from a payment default by the Issuer or the
insolvency of the Issuer; provided, that if any amounts
allocable to the Class A Notes are not needed to pay Class A
Noteholders' Interest Distribution Amount as of such
Distribution Date, such amounts will be applied to pay the
portion, if any, of any Swap Termination Payments remaining
unpaid;
(vii) A: so long as the Swap Agreement is in effect, to the Class A
Noteholders, ratably, an amount sufficient to reduce their respective Class
A Note Balance to zero; and
B: if the Swap Agreement is not in effect pro rata (1), to the Class A
Noteholders, ratably, an amount sufficient to reduce the respective
principal balances of the Class A Notes to zero and (2) to the Swap
Counterparty, the amount (to the extent not paid under clause (vi) above)
of any Swap Termination Payment due to the Swap Counterparty due to a
Termination Event resulting from a "Cross Default" under 5(a)(vi) of the
Swap Agreement. For the avoidance of doubt, any Swap Termination Payment
due to the Swap Counterparty resulting from such a "Cross-Default" that is
a result of the bankruptcy or insolvency of the Trust shall be payable
under clause (vi) above.
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(viii) to the Class B Noteholders for amounts due and unpaid on the
Class B Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class B Notes for
such interest;
(ix) to Class B Noteholders, an amount sufficient to reduce the Class
B Note Balance to zero;
(x) to the Class C Noteholders, for amounts due and unpaid on the
Class C Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class C Notes for
such interest;
(xi) to the Class C Noteholders, an amount sufficient to reduce the
Class C Note Balance to zero;
(xii) to the Servicer, for any unpaid Carryover Servicing Fees;
(xiii) to the Auction Rate Noteholders, pro rata, any Carryover
Amounts;
(xiv) to each Swap Counterparty, the amount of any Swap Termination
Payment due and payable by the Issuer to that Swap Counterparty under its
Swap Agreement and not payable in clause (vi) above; and
(xv) to the Certificateholders, any remaining funds.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section. At least 15 days before such
record date, the Indenture Trustee shall mail to each Noteholder and the Issuer
a notice that states the record date, the payment date and the amount to be
paid.
Section 5.05. Optional Preservation of the Trust Student Loans. If the
Notes have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Indenture Trust Estate. In determining whether to
maintain possession of the Indenture Trust Estate, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Indenture Trust Estate for such
purpose.
Section 5.06. Limitation of Suits. No Noteholder shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Noteholder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
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(b) the Noteholders of not less than 25% of the Outstanding Amount of the
Controlling Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(c) such Noteholder or Noteholders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such Proceeding; and
(e) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Noteholders of a majority
of the Outstanding Amount of the Controlling Notes;
it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the Outstanding Amount of the Notes, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07. Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, any Noteholder
shall have the right, which is absolute and unconditional, to receive payment of
the principal of and interest on such Note on or after the respective due dates
thereof expressed in such Note or in this Indenture (or, in the case of
redemption, on or after the Redemption Date) and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Noteholder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture Trustee
or any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
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hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Noteholder to exercise any right or remedy accruing
upon any Default shall impair any such right or remedy or constitute a waiver of
any such Default or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
Section 5.11. Control by Noteholders. The Noteholders of a majority of the
Outstanding Amount of the Controlling Notes shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided, that
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) subject to the express terms of Section 5.04, any direction to the
Indenture Trustee to sell or liquidate the Indenture Trust Estate shall be by
the Noteholders of not less than 100% of the Outstanding Amount of the
Controlling Notes;
(c) if the conditions set forth in Section 5.05 have been satisfied and
the Indenture Trustee elects to retain the Indenture Trust Estate pursuant to
such Section, then any direction to the Indenture Trustee by Noteholders of less
than 100% of the Outstanding Amount of the Controlling Notes to sell or
liquidate the Indenture Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction;
provided, however, that subject to Section 6.01, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to such
action.
Section 5.12. Waiver of Past Defaults. Prior to the time a judgment or
decree for payment of money due has been obtained as described in Section 5.02,
the Noteholders of not less than a majority of the Outstanding Amount of the
Controlling Notes may waive any past Default and its consequences except a
Default (a) in payment when due of principal of or interest on any of the Notes
or (b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of each Noteholder. In the case of any such waiver,
the Issuer, the Indenture Trustee and the Noteholders shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred for every purpose of this Indenture;
but no such waiver shall extend to any subsequent or other Default or impair any
right consequent thereto.
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Section 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Noteholder by such Noteholder's acceptance of any Note shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Section 5.15. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Indenture Trust Estate or
upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so and
at the Administrator's expense, the Issuer shall take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by the Depositor, SLM Education Credit Management Corporation, the
Administrator and the Servicer, as applicable, of each of their obligations to
the Issuer, whether directly or by assignment, under or in connection with a
Basic Document, respectively, in accordance with the terms thereof, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with a Basic Document, as the case may be,
to the extent and in the manner directed by the Indenture Trustee, including the
transmission of notices of default on the part of the Depositor, SLM Education
Credit Management Corporation, the Administrator or the Servicer thereunder and
the institution of legal or administrative actions or proceedings to compel or
secure
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performance by the Depositor, SLM Education Credit Management Corporation, the
Administrator or the Servicer of each of their obligations under a Basic
Document, respectively.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the written direction of the Noteholders of 66-2/3% of the
Controlling Outstanding Amount of the Notes shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Depositor, SLM
Education Credit Management Corporation, the Administrator or the Servicer under
or in connection with a Basic Document, respectively, including the right or
power to take any action to compel or secure performance or observance by the
Depositor, SLM Education Credit Management Corporation, the Administrator or the
Servicer of each of their obligations to the Issuer thereunder, whether directly
or by assignment, and to give any consent, request, notice, direction, approval,
extension or waiver under a Basic Document, respectively, and any right of the
Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the Indenture
Trustee shall exercise the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such person's
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture against
the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
Trustee shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this clause (c) does not limit the effect of clause (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
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(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction of the Noteholders received by it pursuant to this Indenture.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the other Basic Documents.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity satisfactory to it against any loss,
liability or expense is not reasonably assured to it.
(g) Except as expressly provided in the Basic Documents, the Indenture
Trustee shall have no obligation to administer, service or collect the Trust
Student Loans or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Trust Student Loans.
(h) In the event that the Indenture Trustee is the Paying Agent or the
Note Registrar, the rights and protections afforded to the Indenture Trustee
pursuant to this Indenture shall also be afforded to the Indenture Trustee in
its capacity as Paying Agent or Note Registrar.
(i) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(j) The rights and protections of the Indenture Trustee under Sections
6.01 and 6.02 shall apply to each of the Basic Documents as though explicitly
incorporated therein.
Section 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Indenture Trustee need not investigate any
fact or matter stated in such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officers' Certificate of the Issuer
and/or an Opinion of Counsel. The Indenture Trustee may conclusively rely on any
such Opinion of Counsel or Officers' Certificate and shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence
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on the part of, or for the supervision of, any such agent, attorney, custodian
or nominee appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
Section 6.05. Notice of Defaults. If a Default or a Servicer Default
occurs and is continuing and if it is either actually known to a Responsible
Officer or written notice of the existence thereof has been delivered to a
Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail
notice of the Default to each Noteholder within 90 days and to each Rating
Agency as soon as practicable within 30 days after it occurs. Except in the case
of a Default in payment of principal of or interest on any Note (including
payments pursuant to the mandatory redemption provisions of such Note), the
Indenture Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Noteholders. Except as provided in the first sentence of this
Section 6.05, in no event shall the Indenture Trustee be deemed to have
knowledge of a Default, a Servicer Default or an Event of Default.
Section 6.06. Reports by Indenture Trustee to Noteholders. The Indenture
Trustee shall deliver to each Noteholder (and to each Person who was a
Noteholder at any time during the applicable calendar year) such information as
may be required to enable such holder to prepare its Federal and state income
tax returns. Within 60 days after each December 31 beginning with the December
31 following the date of this Indenture, the Indenture Trustee shall mail to
each Noteholder a brief report as of such December 31 that complies with TIA
Section 313(a) if required by said section. The Indenture Trustee shall also
comply with TIA Section 313(b). A copy of each such report required pursuant to
TIA Section 313(a) or (b) shall, at the time of such transaction to
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Noteholders, be filed by the Indenture Trustee with the Commission and with each
securities exchange, if any, upon which the Notes are listed, provided that the
Issuer has previously notified the Indenture Trustee of such listing.
Section 6.07. Compensation and Indemnity. The Issuer shall cause the
Depositor to pay to the Indenture Trustee reasonable compensation for its
services in accordance with a separate agreement between the Depositor and the
Indenture Trustee and shall cause the Depositor to reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses including the reasonable
expeses and disbursements of its counsel incurred or made by it as provided in
such separate agreement. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Administrator to indemnify the Indenture Trustee and its
directors, officers, employees and agents against any and all loss, liability or
expense (including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder and
under the other Basic Documents. The Indenture Trustee shall notify the Issuer
and the Administrator promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Administrator
shall not relieve the Issuer or the Administrator of its obligations hereunder
and under the other Basic Documents. The Issuer shall cause the Administrator to
defend the claim and the Administrator shall not be liable for the legal fees
and expenses of the Indenture Trustee after it has assumed such defense;
provided, however, that, in the event that there may be a conflict between the
positions of the Indenture Trustee and the Administrator in conducting the
defense of such claim, the Indenture Trustee shall be entitled to separate
counsel acceptable to it in its sole discretion the reasonable fees and expenses
of which shall be paid by the Administrator on behalf of the Issuer. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture or the earlier resignation
and removal of the Indenture Trustee. When the Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01(d) or (e) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer. The Noteholders of a majority in
Outstanding Amount of the Controlling Notes may remove the Indenture Trustee by
so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event occurs with respect to the Indenture
Trustee;
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(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Noteholders of a majority in Outstanding Amount of
the Controlling Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee. The successor Indenture Trustee
shall give notice of its appointment as successor Indenture Trustee to the
Rating Agencies.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Administrator's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee, provided that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11.
In case at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
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Section 6.10. Appointment of Co-Trustee or Separate Trustee. (a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Indenture Trust Estate may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Indenture Trust Estate, and to vest
in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Indenture Trust Estate, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No such appointment shall relieve the Indenture Trustee of its
obligations hereunder. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11 and no notice to Noteholders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction
of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
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(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. (a) The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a) The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and it shall have a long-term senior unsecured debt rating of not less than
investment grade by each of the Rating Agencies. The Indenture Trustee shall
comply with TIA Section 310(b), including the optional provision permitted by
the second sentence of TIA Section 310(b)(9); provided, however, that there
shall be excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
(b) Within ninety (90) days after ascertaining the occurrence of an Event
of Default which shall not have been cured or waived, unless authorized by the
TIA or the Commission, the Indenture Trustee shall resign with respect to the
Class A Notes, the Class B Notes and/or the Class C Notes in accordance with
Section 6.08 of this Indenture, and the Issuer shall appoint a successor
Indenture Trustee for two or all of such Classes, as applicable, so that there
will be separate Indenture Trustees for the Class A Notes, the Class B Notes and
the Class C Notes. In the event the Indenture Trustee fails to comply with the
terms of the preceding sentence, the Indenture Trustee shall comply with clauses
(ii) and (iii) of TIA Section 310(b).
(c) In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any Class of Notes pursuant to this Section 6.11, the
Issuer, the retiring Indenture Trustee and the successor Indenture Trustee with
respect to such Class of Notes shall execute and deliver an indenture
supplemental hereto wherein each successor Indenture Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, the successor Indenture
Trustee all the rights, powers, trusts and duties of the retiring Indenture
Trustee with respect to the Notes of the Class to which the appointment of such
successor Indenture Trustee relates, (ii) if the retiring Indenture Trustee is
not retiring with respect to all Classes of Notes, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Indenture Trustee with respect to the
Notes of each Class as to which the retiring Indenture Trustee is not retiring
shall continue to be vested in the Indenture Trustee and (iii) shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Indenture Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Indenture Trustees co-trustees of
the same trust and that each such Indenture Trustee shall be a trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Indenture Trustee; and upon the removal of the
retiring Indenture Trustee shall become effective to the extent provided herein.
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Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after the earlier of (i) each Record Date
and (ii) three months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Noteholders as of such Record Date, (b) at such other times as the Indenture
Trustee may request in writing, within 30 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that so
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
Section 7.02. Preservation of Information; Communications to Noteholders.
The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Noteholders contained in the most
recent list furnished to the Indenture Trustee as provided in Section 7.01 and
the names and addresses of Noteholders received by the Indenture Trustee in its
capacity as Note Registrar. The Indenture Trustee may destroy any list furnished
to it as provided in such Section 7.01 upon receipt of a new list so furnished.
(a) Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by three or more
Noteholders or by one or more holders of Notes evidencing not less than 25% of
the Outstanding Amount of the Notes to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA Section 312(b)), the Indenture
Trustee shall promptly notify the Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.
(b) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
(c) On each Distribution Date, the Indenture Trustee shall provide to each
Noteholder of record as of the related Record Date the information provided by
the Administrator to the Indenture Trustee on the related Determination Date
pursuant to Section 2.09 of the Administration Agreement. The Indenture Trustee
shall make such information available on its website at
xxxx://xxx.xxxxxxxx.xxx/xxxxxx. In connection with any electronic transmissions
of information, including without limitation, the use of electronic mail or
internet or intranet web sites, the systems used in such transmissions are not
fully tested by the Indenture Trustee and may not be completely reliable as to
stability, robustness and accuracy. Accordingly, the parties hereto acknowledge
and agree that information electronically transmitted as described herein
38
may not be relied upon as timely, accurate or complete and that the Indenture
Trustee shall have no liability hereunder in connection with such information
transmitted electronically. The parties hereto further acknowledge that any
systems, software or hardware utilized in posting or retrieving any such
information is utilized on an "as is" basis without representation or warranty
as to the intended uses of such systems, software or hardware. The Indenture
Trustee makes no representation or warranty that the systems and the related
software used in connection with the electronic transmission of information are
free and clear of threats known as software and hardware viruses, time bombs,
logic bombs, Trojan horses, worms, or other malicious computer instructions,
intentional devices or techniques which may cause a component or system to
become erased, damaged, inoperable, or otherwise incapable of being used in the
manner to which it is intended, or which would permit unauthorized access
thereto. In the event such web site is not available, the Indenture Trustee
shall use reasonable efforts to distribute such information in a timely manner
to the intended recipients.
(d) The Indenture Trustee shall furnish to the Noteholders promptly upon
receipt of a written request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Indenture Trustee under the Basic Documents. The
Indenture Trustee shall furnish to the Noteholders promptly upon receipt thereof
from the Trustee notice of any amendment of the Administration Agreement
pursuant to Section 8.05 of the Administration Agreement.
Section 7.03. Reports by Issuer. (a) The Issuer shall:
(i) supply to the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) supply to the Indenture Trustee and file with the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it on behalf of Noteholders
pursuant to the Administration Agreement as provided in this Indenture. Except
as otherwise expressly provided in this Indenture, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Indenture Trust Estate, the Indenture Trustee may take such action
as may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default under this Indenture and any
right to proceed thereafter as provided in Article V.
Section 8.02. Trust Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Administrator to establish and maintain, in the name of
the Indenture Trustee, for the benefit of the Noteholders and the
Certificateholders, the Trust Accounts as provided in Section 2.03 of the
Administration Agreement.
(b) On or before the Business Day preceding each Distribution Date, all
Available Funds with respect to the preceding Collection Period will be
deposited in the Collection Account as provided in Section 2.04 of the
Administration Agreement. On or before each Distribution Date, the Indenture
Trustee (or any other Paying Agent) shall make the deposits and distributions as
provided in Sections 2.07, 2.08(a), (b) and (c) of the Administration Agreement
(except as otherwise provided in Section 5.02 or Section 5.04(b)).
Section 8.03. General Provisions Regarding Accounts. (a) So long as no
Default shall have occurred and be continuing, all or a portion of the funds in
the Trust Accounts shall be invested in Eligible Investments and reinvested by
the Indenture Trustee upon Issuer Order, subject to the provisions of Section
2.03(b) of the Administration Agreement. All income or other gain from
investments of moneys deposited in the Trust Accounts shall be deposited by the
Indenture Trustee in the Collection Account, and any loss resulting from such
investments shall be charged to such Trust Account. The Issuer will not direct
the Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any way
be held liable for the selection of Eligible Investments or by reason of any
insufficiency in any of the Trust Accounts resulting from any loss on any
Eligible Investment included therein except for losses attributable to the
Indenture Trustee's failure to make payments on such Eligible
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Investments issued by the Indenture Trustee, in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms. The
Indenture Trustee shall have no liability in respect of losses incurred as a
result of the liquidation of any investment prior to its stated maturity or the
failure of the Issuer to provide timely written investment direction.
(c) If (i) the Issuer shall have failed to give investment directions for
any funds on deposit in the Trust Accounts to the Indenture Trustee by 10:00
a.m. Eastern Time (or such other time as may be agreed by the Issuer and
Indenture Trustee) on any Business Day; or (ii) a Default shall have occurred
and be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.02, or, if such Notes shall have
been declared due and payable following an Event of Default, amounts collected
or receivable from the Indenture Trust Estate are being applied in accordance
with Section 5.05 as if there had not been such a declaration; then the
Indenture Trustee shall invest and reinvest funds in the Trust Accounts in the
Eligible Investments described in clause (d) of the definition thereof.
Section 8.04. Release of Indenture Trust Estate. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee
may, and when required by the provisions of this Indenture shall, execute
instruments to release property from the lien of this Indenture, or convey the
Indenture Trustee's interest in the same, in a manner and under circumstances
that are not inconsistent with the provisions of this Indenture. No party
relying upon an instrument executed by the Indenture Trustee as provided in this
Article VIII shall be bound to ascertain the Indenture Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid, release any remaining portion of the Indenture Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officers' Certificate of the Issuer, an Opinion of
Counsel and (if required by the TIA) Independent Certificates in accordance with
TIA Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section
11.01.
(c) Each Noteholder, by the acceptance of a Note, acknowledges that from
time to time the Indenture Trustee shall release the lien of this Indenture on
any Trust Student Loan to be sold to (i) the Depositor in accordance with
Article VI of the Depositor Sale Agreement, (ii) the Seller in accordance with
Article VI of the Seller Sale Agreement and (iii) the Servicer in accordance
with Section 3.05 of the Servicing Agreement and each Noteholder, by the
acceptance of a Note, consents to any such release.
Section 8.05. Opinion of Counsel. The Indenture Trustee shall receive at
least seven days' notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.04(c), as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and
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concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in contravention of the
provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the
Indenture Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation, on the accuracy and validity of any certificate or
other instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders. (a)
Without the consent of any Noteholders but with prior notice to the Rating
Agencies, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more indentures
supplemental hereto (which shall conform to the provisions of the Trust
Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Noteholders, or to surrender any right or power herein conferred upon the
Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with any
other provision herein or in any supplemental indenture or to make any
other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action
shall not materially adversely affect the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
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(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar Federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies and with the consent of the Noteholders
of not less than a majority of the Outstanding Amount of the Notes, by Act of
such Noteholders delivered to the Issuer and the Indenture Trustee, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Noteholder of each Outstanding Note affected
thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto, change
the provisions of this Indenture relating to the application of collections
on, or the proceeds of the sale of, the Indenture Trust Estate to payment
of principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon
is payable, or impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof (or,
in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Noteholders of which is required for any such
supplemental indenture, or the consent of the Noteholders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided for
in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
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(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Indenture Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the other Basic Documents cannot be
modified or waived without the consent of the Noteholder of each
Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Distribution Date (including the
calculation of any of the individual components of such calculation) or to
affect the rights of the Noteholders to the benefit of any provisions for
the mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Indenture
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive any Noteholder of any Note of the security provided by
the lien of this Indenture.
It shall not be necessary for any Act of Noteholders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders of the Notes to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of the
Indenture Trustee, the Issuer and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and
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amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. The Indenture Trustee shall, upon receipt of
written notice from the Servicer pursuant to Section 6.01 of the Administration
Agreement, give prompt written notice to the Noteholders of the occurrence of
such event. In the event that the assets of the Trust are sold pursuant to
Section 6.01 of the Administration Agreement, that portion of the amounts on
deposit in the Trust Accounts to be distributed to the Noteholders shall be paid
to the Noteholders up to the Outstanding Amount of the Notes and all accrued and
unpaid interest thereon. If amounts are to be paid to Noteholders pursuant to
this Section 10.01, the notice of such event from the Indenture Trustee to the
Noteholders shall include notice of the redemption of Notes by application of
such amounts on the next Distribution Date which is not sooner than 15 days
after the date of such notice (the "Redemption Date"), whereupon all such
amounts shall be payable on the Redemption Date.
Section 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile, mailed or transmitted on or prior to the
applicable Redemption Date to each Noteholder, as of the close of business on
the Record Date preceding the applicable Redemption Date, at such Noteholder's
address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
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(iii) the place where such Notes are to be surrendered for payment of
the Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Noteholder of any Note shall not
impair or affect the validity of the redemption of any other Note.
Section 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc. Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee and the Rating Agencies (i) an Officers' Certificate of the Issuer
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
(a) Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this indenture shall include:
(i) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
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(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture
Trustee and the Rating Agencies an Officers' Certificate of the Issuer
certifying or stating the opinion of each person signing such certificate
as to the fair value (within 90 days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee and the Rating Agencies an Officers' Certificate of the Issuer
certifying or stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver to the
Indenture Trustee an Independent Certificate as to the same matters, if the
fair value to the Issuer of the securities to be so deposited and of all
other such securities made the basis of any such withdrawal or release
since the commencement of the then-current fiscal year of the Issuer, as
set forth in the certificates delivered pursuant to clause (i) above and
this clause (ii), is 10% or more of the Outstanding Amount of the Notes,
but such a certificate need not be furnished with respect to any securities
so deposited, if the fair value thereof to the Issuer as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the Outstanding Amount of the Notes.
(iii) Other than any property released as contemplated by clause (v)
below, whenever any property or securities are to be released from the lien
of this Indenture, the Issuer shall also furnish to the Indenture Trustee
an Officers' Certificate of the Issuer certifying or stating the opinion of
each person signing such certificate as to the fair value (within 90 days
of such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officers' Certificate of the Issuer certifying or stating the
opinion of any signer thereof as to the matters described in clause (iii)
above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property as
contemplated by clause (v) below, or securities released from the lien of
this Indenture since the commencement of the then-current calendar year, as
set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes, but
such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officers' Certificate is less than $25,000 or less than one percent
of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.09 or any other provision of this
Section, the Issuer may, without compliance with the requirements of the
other provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of Trust Student Loans as and to the extent permitted or required
by the Basic Documents, (B) make cash payments out of
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the Trust Accounts as and to the extent permitted or required by the Basic
Documents and (C) convey to the Depositor, the Servicer or another eligible
lender those specified Trust Student Loans as and to the extent permitted
or required by and in accordance with Section 8.04(c) hereof and Section
6.01 of the Depositor Sale Agreement, Section 3.05 of the Servicing
Agreement or Section 3.11(d) of the Servicing Agreement, respectively, so
long as the Issuer shall deliver to the Indenture Trustee every six months,
commencing December 31, 2003, an Officers' Certificate of the Issuer
stating that all the dispositions of Collateral described in clauses (A),
(B) or (C) above that occurred during the immediately preceding six
calendar months were in the ordinary course of the Issuer's business and
that the proceeds thereof were applied in accordance with the Basic
Documents.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters, and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Servicer, the
Depositor, the Issuer or the Administrator, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Depositor, the Issuer or the Administrator, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
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Section 11.03. Acts of Noteholders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the Noteholder
of every Note issued upon registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Indenture Trustee or the Issuer in reliance thereon, whether or
not notation of such action is made upon such Note.
Section 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders is to be made upon, given or
furnished to or filed with:
(a) The Indenture Trustee by any Noteholder, the Servicer, the
Administrator or by the Issuer shall be sufficient for every purpose hereunder
if made, given, furnished or filed in writing to or with the Indenture Trustee
at its Corporate Trust Office, or
(b) The Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed, first-class,
postage prepaid, to the Issuer addressed to: SLM Private Credit Student Loan
Trust 2003-B, in care of the Trustee, Christiana Center/OPS4, 000 Xxxxxxx
Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Department;
with copies to JPMorgan Chase Bank, 4 New York Plaza, 6th Floor, New York, New
York 10004, Attention: Structured Finance Services; SLM Private Credit Student
Loan Trust 2003-B, 00000 Xxxxxx Xxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, Attention:
Director, Corporate Finance Operations, or any other address previously
furnished in writing to the Indenture Trustee by the Issuer or the
Administrator. The Issuer shall promptly transmit any notice received by it from
the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Trustee shall be in writing, personally delivered or
mailed by certified mail, return receipt
49
requested, to (i) in the case of Moody's, at the following address: ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) in the
case of Standard & Poor's, at the following address: 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, Attention: Asset Backed Surveillance Department, 32nd
Floor, and (iii) in the case of Fitch, at the following address: Xxx Xxxxx
Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention Municipal Structured Finance
Group; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
Section 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default.
Section 11.06. Alternate Payment and Notice Provisions. Notwithstanding any
provision of this Indenture or any of the Notes to the contrary, the Issuer may
enter into any agreement with any Noteholder providing for a method of payment,
or notice by the Indenture Trustee or any Paying Agent to such Noteholder, that
is different from the methods provided for in this Indenture for such payments
or notices. The Issuer will furnish to the Indenture Trustee a copy of each such
agreement and the Indenture Trustee will cause payments to be made and notices
to be given in accordance with such agreements.
Section 11.07. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
50
The provisions of TIA Sections 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 11.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.09. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successor and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind the successors, co-trustees and agents (excluding any legal
representatives or accountants) of the Indenture Trustee.
Section 11.10. Separability. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.13. Governing Law. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS (OTHER THAN Section5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.14. Counterparts. This Indenture may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
51
Section 11.16. Trust Obligations. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Depositor, the
Administrator, the Servicer, the Trustee or the Indenture Trustee on the Notes
or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Trustee in its individual capacity, any
holder or owner of a beneficial interest in the Issuer, the Trustee or the
Indenture Trustee or of any successor or assign thereof in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Trustee have no such obligations
in their individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Trustee shall be subject to, and entitled to the benefits of, the
terms and provisions of Article VI, VII and VIII of the Trust Agreement.
Section 11.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they shall not at any time institute against the Depositor or the Issuer,
or join in any institution against the Depositor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency, receivership or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents. The foregoing shall
not limit the rights of the Indenture Trustee to file any claim in, or otherwise
take any action with respect to, any insolvency proceeding that was instituted
against the Issuer by any Person other than the Indenture Trustee.
Section 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information obtained from such examination or inspection except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
52
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
SLM PRIVATE CREDIT STUDENT LOAN
TRUST 2003-B
By: CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Trustee
By: /s/ XXXX X. XXXXXX
-------------------------------------
Xxxx X. Xxxxxx
Vice President
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee
By: /s/ XXXXX XXXXXXX
-------------------------------------
Xxxxx Xxxxxxx
Trust Officer
53
APPENDIX A-1
TO THE INDENTURE
Definitions and Usage
2003-B
Usage
-----
The following rules of construction and usage shall be applicable to any
instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined
meanings when used in any instrument governed hereby and in any certificate or
other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any instrument governed hereby and in any
certificate or other document made or delivered pursuant thereto, accounting
terms not defined in this Appendix or in any such instrument, certificate or
other document, and accounting terms partly defined in this Appendix or in any
such instrument, certificate or other document, to the extent not defined, shall
have the respective meanings given to them under generally accepted accounting
principles as in effect on the date of such instrument. To the extent that the
definitions of accounting terms in this Appendix or in any such instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in an instrument refer to such instrument as a whole and not to
any particular provision or subdivision thereof; references in an instrument to
"Article," "Section" or another subdivision or to an attachment are, unless the
context otherwise requires, to an article, section or subdivision of or an
attachment to such instrument; and the term "including" means "including without
limitation."
(d) The definitions contained in this Appendix are equally applicable
to both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below
or in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
(f) Capitalized terms used herein but not defined herein are defined
in Appendix A-2 which to the extent any instrument is governed thereby are
incorporated herein as if such defined terms were set forth herein.
Appendix A-1-1
Definitions
-----------
"Act" has the meaning specified in Section 11.03(a) of the Indenture.
"Accrual Period" means, with respect to a Distribution Date for (a) a class
of Floating Rate Notes, the period from and including the immediately preceding
Distribution Date for such class of Floating Rate Notes, or in the case of the
initial such period, the Closing Date, to but excluding such current
Distribution Date and (b) a class of Auction Rate Notes, the period from and
including the Distribution Date for such class of Auction Rate Notes, or in the
case of the initial such period, the Closing Date, to but excluding the next
Distribution Date for such class, or in the case of the initial such period, to
but not including the initial Distribution Date for such class.
"Additional Principal Distribution Amount" means, as of any Quarterly
Distribution Date after the last day of the Collection Period on which the Pool
Balance has declined to 10% or less of the Initial Pool Balance, an amount equal
to the lesser of (i) amounts available to be distributed on such Distribution
Date after payment of clauses (i) through (xiv) under Section 2.07(c) of the
Administration Agreement and (ii) the Class Note Balance after giving effect to
all distributions and allocations on that Quarterly Distribution Date other than
pursuant to Section 2.07(xiv) of the Administration Agreement.
"Administration Agreement" means the Administration Agreement, dated as of
June 1, 2003, among the Servicer, the Administrator, the Indenture Trustee, the
Issuer and the Depositor, as such agreement may be amended or supplemented.
"Administration Fee" has the meaning specified in Section 2.12 of the
Administration Agreement.
"Administrator" means Xxxxxx Xxx, Inc., in its capacity as administrator of
the Trust and the Trust Student Loans in accordance with the Administration
Agreement.
"Administrator Default" has the meaning specified in Section 5.01 of the
Administration Agreement.
"Administrator's Certificate" means an Officers' Certificate of the
Administrator delivered pursuant to Section 3.01(c) of the Administration
Agreement.
"Affiliate" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Balance" means, with respect to any Quarterly Distribution Date, an
amount equal to:
PB + CI - R
Appendix A-1-2
Where:
CI = the amount on deposit in the Cash Capitalization Account on
the last day of the related Collection Period less the excess for the
Quarterly Distribution Date of (i) interest due on the Notes plus any
Primary Servicing Fees, Administration Fees, any Swap Payments owed to
a Swap Counterparty by the Trust and any Swap Termination Payments
owed by the Trust to a Swap Counterparty which are pari passu with
interest payments on the Class A Notes due, over (ii) Available Funds
on deposit in the Collection Account. In no case shall CI be less than
zero;
PB = the Pool Balance as of the last day of the related
Collection Period; and
R = the amount to be released from the Cash Capitalization
Account pursuant to section 2.08(a)(viii) and (ix) of the
Administration Agreement.
provided, however, that as of the Closing Date, the Asset Balance shall equal
$1,349,870,574, and that, for all Quarterly Distribution Dates occurring on or
after the December 2006 Quarterly Distribution Date, the Asset Balance will be
equal to the Pool Balance as of the last day of the related Collection Period.
"Auction Agent" shall mean the Initial Auction Agent under the Initial
Auction Agent Agreement unless and until a Substitute Auction Agent Agreement
becomes effective, after which "Auction Agent" shall mean the Substitute Auction
Agent.
"Auction Agent Agreement" shall mean the Initial Auction Agent Agreement
unless and until a Substitute Auction Agent Agreement is entered into, after
which "Auction Agent Agreement" shall mean such Substitute Auction Agent
Agreement.
"Auction Rate Distribution Date" means a Distribution Date with respect to
the Auction Rate Notes.
"Auction Rate Noteholders" means the Class A-3 Noteholders and Class A-4
Noteholders.
"Auction Rate Notes" means the Class A-3 Notes and the Class A-4 Notes.
"Authorized Officer" means (i) with respect to the Trust, any officer of
the Trustee who is authorized to act for the Trustee in matters relating to the
Trust pursuant to the Basic Documents and who is identified on the list of
Authorized Officers delivered by the Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter), (ii) with respect to the Administrator, any officer of the
Administrator or any of its Affiliates who is authorized to act for the
Administrator in matters relating to itself or to the Trust and to be acted upon
by the Administrator pursuant to the Basic Documents and who is identified on
the list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter), (iii) with respect to the Depositor, any officer of
the Depositor or any of its Affiliates who is authorized to act for the
Depositor in matters relating to or to be acted upon by the Depositor pursuant
to the Basic Documents and who is identified on the list of Authorized Officers
delivered by the Depositor to the Indenture Trustee on the Closing Date (as such
list
Appendix A-1-3
may be modified or supplemented from time to time thereafter) and (iv) with
respect to the Servicer, any officer of the Servicer who is authorized to act
for the Servicer in matters relating to or to be acted upon by the Servicer
pursuant to the Basic Documents and who is identified on the list of Authorized
Officers delivered by the Servicer to the Indenture Trustee on the Closing Date
(as such list may be modified or supplemented from time to time thereafter).
"Available Funds" means, with respect to a Distribution Date or any related
Monthly Servicing Payment Date, the sum of the following amounts for the related
Collection Period, or, in the case of a Monthly Servicing Payment Date or a
Distribution Date with respect to the Auction Rate Notes, the applicable portion
of these amounts: (i) all collections received by the Servicer from borrowers on
the Trust Student Loans, (ii) all Recoveries received during that Collection
Period, (iii) the aggregate Purchase Amounts received during that Collection
Period for those Trust Student Loans repurchased by the Depositor or purchased
by the Servicer or SLM Education Credit Management Corporation, (iv) amounts
received by the Trust pursuant to the Servicing Agreement during that Collection
Period related to yield or principal adjustments, (v) Investment Earnings for
that Distribution Date and any interest remitted by the Administrator to the
Collection Account prior to such Distribution Date or Monthly Servicing Payment
Date, (vi) any payments received under the Interest Rate Cap Agreement and (vii)
amounts received from the Swap Counterparties for that Distribution Date;
provided, however, that if with respect to any Distribution Date there would not
be sufficient funds to pay all of the items specified in clauses (i) through
(xii) of Section 2.07(c) of the Administration Agreement, after application of
Available Funds and application of (a) amounts available from the Cash
Capitalization Account to pay any of the items specified in clauses (i) through
(x) of Section 2.07(c) of the Administration Agreement and (b) amounts available
from the Reserve Account to pay any of the items specified in clauses (i)
through (v), (vii) and (ix) and on the respective Note Final Maturity Date of
each Class of Notes, clauses (vi), (viii) and (x), then Available Funds for that
Distribution Date shall include, in addition to the Available Funds as defined
above, amounts on deposit in the Collection Account, or amounts held by the
Administrator, or which the Administrator reasonably estimates to be held by the
Administrator, for deposit into the Collection Account which would have
constituted Available Funds for the Distribution Date succeeding such
Distribution Date, up to the amount necessary to pay such items, and the
Available Funds for such succeeding Distribution Date shall be adjusted
accordingly. In addition, Available Funds on the Quarterly Distribution Dates
from June 2004 through December 2006 shall include all funds released from the
Cash Capitalization Account for deposit into the Collection Account on those
Distribution Dates.
"Back-End Fee" means an amount equal to, with respect to each Trust Student
Loan, the maximum fee allowable under the note evidencing such Trust Student
Loan unless otherwise limited by the insurance commissioner, but not greater
than the amount for such Trust Student Loan listed on Attachment D to the
Servicing Agreement.
"Basic Documents" means the Trust Agreement, the Indenture, the Servicing
Agreement, the Administration Agreement, the Seller Sale Agreement, the
Depositor Sale Agreement, the Note Depository Agreement, the Swap Agreements,
the Interest Rate Cap Agreement and other documents and certificates delivered
in connection with any thereof.
"Benefit Plan" has the meaning specified in Exhibit A to the Trust
Agreement.
Appendix A-1-4
"Xxxx of Sale" has the meaning specified in the Seller Sale Agreement or
the Depositor Sale Agreement, as applicable.
"Book-Entry Note" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.10 of the Indenture.
"Business Day" means (i) with respect to calculating One-Month, Two-Month,
Three-Month or Four-Month LIBOR, any day on which banks in New York, New York
and London, England are open for the transaction of international business; (ii)
with respect to the Auction Agent Agreement, any day other than a Saturday, a
Sunday or a day on which banking institutions or trust companies in New York,
New York or Wilmington, Delaware are authorized or obligated by law, regulation
or executive order to remain closed, or a day on which the New York Stock
Exchange is closed for business and (iii) for all other purposes, any day other
than a Saturday, a Sunday or a day on which banking institutions or trust
companies in New York, New York or Wilmington, Delaware are authorized or
obligated by law, regulation or executive order to remain closed.
"Cap Counterparty" means Xxxxxxx Xxxxx Capital Services, Inc., together
with its successors and permitted assigns.
"Carryover Servicing Fee" has the meaning specified in Attachment A to the
Servicing Agreement.
"Carry-over Amount" has the meaning specified in Appendix A-2 to the
Indenture.
"Cash Capitalization Account" means the account designated as such,
established and maintained pursuant to Section 2.03(a)(iii) of the
Administration Agreement.
"Cash Capitalization Account Initial Deposit" means $102,590,156.
"Charged-Off Loan" means a Trust Student Loan which is written-off in
accordance with the Servicer's policies and procedures, but in any event, not
later than the date such Trust Student Loan becomes 271 days past due.
"Class A Enhancement" means, for any Quarterly Distribution Date, the
excess of (i) the Asset Balance as of the prior Quarterly Distribution Date (or
as of the Closing Date, in the case of the first Quarterly Distribution Date)
over (ii) the Class A Note Balance before taking into account any principal
distributions to the Class A Notes on the current Quarterly Distribution Date.
"Class A Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note
or a Class A-4 Note.
"Class A Note Balance" means the sum of the Class A-1 Note Balance, the
Class A-2 Note Balance, the Class A-3 Note Balance and the Class A-4 Note
Balance.
"Class A Note Interest Shortfall" means, with respect to any Distribution
Date, the sum for all of the Class A Notes with a Distribution Date on this
Distribution Date, of the excess of (i) the amount of interest (excluding
Carry-over Amounts) that was payable to each class of Class A Notes (with a
Distribution Date on this Distribution Date) on the preceding Distribution Date
Appendix A-1-5
for the class over (ii) the amount of interest actually distributed with respect
to this Class A Note on such preceding Distribution Date, plus interest on the
amount of such excess interest due to the Class A Noteholders, to the extent
permitted by law, at the interest rate borne by this Class A Note from such
preceding Distribution Date to the current Distribution Date.
"Class A Note Parity Trigger" means with respect to any Quarterly
Distribution Date that (i) the Class A Note Balance (prior to giving effect to
distributions on such date) is in excess of the sum of (a) the Pool Balance as
of the last day of the related Collection Period and (b) amounts on deposit in
the Collection Account and Cash Capitalization Account after payment of items
(i) through (v) of Section 2.07(c) of the Administration Agreement or (ii) the
Class A Note Balance for such related Quarterly Distribution Date (prior to
giving effect to any distributions on that date) is greater than or equal to the
Asset Balance for the prior Quarterly Distribution Date. The Class A Note Parity
Trigger will remain in effect until the Class A Enhancement is greater than or
equal to the Specified Class A Enhancement.
"Class A Noteholder" means the Person in whose name a Class A Note is
registered in the Note Register.
"Class A Noteholders' Interest Distribution Amount" means, with respect to
any Distribution Date, the sum of (i) the amount of interest accrued at the
Class A-1 Rate, the Class A-2 Rate, the Class A-3 Rate or the Class A-4 Rate, as
applicable, for the related Accrual Period with respect to all classes of Class
A Notes with a Distribution Date on this Distribution Date on the aggregate
outstanding principal balances of these classes of Class A Notes on the
applicable immediately preceding Distribution Date(s) after giving effect to all
principal distributions to Class A Noteholders on preceding Distribution Dates
(or, in the case of the first Distribution Dates, on the Closing Date) and (ii)
the Class A Note Interest Shortfall for such Distribution Date.
"Class A Noteholders' Principal Distribution Amount" means (a) as of any
Quarterly Distribution Date prior to the Stepdown Date or on which a Trigger
Event is in effect, the lesser of (i) 100% of the excess, if any, of (x) the
Class Note Balance (after taking into account distributions or allocations of
principal on the immediately preceding Quarterly Distribution Date or as of the
Closing Date in the case of the first Quarterly Distribution Date) over (y) the
excess, if any, of (1) the Asset Balance for such Quarterly Distribution Date
over (2) the Specified Overcollateralization Amount and (ii) the Class A Note
Balance and (b) on or after the Stepdown Date and as long as a Trigger Event is
not in effect for such Quarterly Distribution Date, the excess, if any, of (x)
the Class A Note Balance (giving effect to principal allocated but not
distributed to the Auction Rate Notes) immediately prior to such Quarterly
Distribution Date over (y) the lesser of (A) the product of (i) 85.0% and (ii)
the Asset Balance as of such Quarterly Distribution Date and (B) the excess, if
any, of the Asset Balance for such Quarterly Distribution Date over the
Specified Overcollateralization Amount. Notwithstanding the foregoing, on or
after the Class A-1 Maturity Date, the Class A-2 Maturity Date, the Class A-3
Maturity Date or the Class A-4 Maturity Date, as applicable, the Class A
Noteholders' Principal Distribution Amount shall not be less than the amount
that is necessary to reduce the Class A-1 Note Balance, Class A-2 Note Balance,
Class A-3 Note Balance or Class A-4 Note Balance, as applicable, to zero.
"Class A-1 Maturity Date" means the September 15, 2017 Distribution Date.
Appendix A-1-6
"Class A-1 Note Balance" means, with respect to any Distribution Date, the
Outstanding Amount of the Class A-1 Notes.
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is
registered in the Note Register.
"Class A-1 Notes" means the $580,000,000 Floating Rate Class A-1 Student
Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially
in the form of Exhibit A-1 thereto.
"Class A-1 Rate" means, for any Accrual Period other than the initial
Accrual Period, Three-Month LIBOR as determined on the second business day
before the beginning of the applicable Accrual Period, plus 0.10%, based on the
actual number of days in such Accrual Period divided by 360. For the initial
Accrual Period, the Class A-1 Rate shall mean the rate determined by the
following formula:
x + [19/33 * (y - x)]
where:
x = Two-Month LIBOR, and
y = Three-Month LIBOR,
in each case, as determined on the second Business Day before the beginning
of that Accrual Period, plus 0.10%, based on the actual number of days in such
Accrual Period divided by 360.
"Class A-2 Maturity Date" means the March 15, 2022 Distribution Date.
"Class A-2 Note Balance" means, with respect to any Distribution Date, the
Outstanding Amount of the Class A-2 Notes.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is
registered in the Note Register.
"Class A-2 Notes" means the $440,506,000 Floating Rate Class A-2 Student
Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially
in the form of Exhibit A-2 thereto.
"Class A-2 Rate" means, for any Accrual Period other than the initial
Accrual Period, Three-Month LIBOR as determined on the second business day
before the beginning of the applicable Accrual Period, plus 0.40%, based on the
actual number of days in such Accrual Period divided by 360. For the initial
Accrual Period, the Class A-2 Rate shall mean the rate determined by the
following formula:
Appendix A-1-7
x + [19/33 * (y - x)]
where:
x = Two-Month LIBOR, and
y = Three-Month LIBOR,
in each case, as determined on the second Business Day before the beginning
of that Accrual Period, plus 0.40%, based on the actual number of days in such
Accrual Period divided by 360.
"Class A-3 Maturity Date" means the March 15, 2033 Distribution Date.
"Class A-3 Note Balance" means, with respect to any Distribution Date, the
Outstanding Amount of the Class A-3 Notes.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note is
registered in the Note Register.
"Class A-3 Notes" means the $109,000,000 Auction Rate Class A-3 Student
Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially
in the form of Exhibit A-3 thereto.
"Class A-3 Rate" means, for any Accrual Period after the initial Auction
Date, the Auction Note Interest Rate for the Class A-3 Notes. For the initial
Accrual Period, the Class A-3 Rate shall mean 1.13%.
"Class A-4 Maturity Date" means the March 15, 2033 Distribution Date.
"Class A-4 Note Balance" means, with respect to any Distribution Date, the
Outstanding Amount of the Class A-4 Notes.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note is
registered in the Note Register.
"Class A-4 Notes" means the $109,000,000 Auction Rate Class A-4 Student
Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially
in the form of Exhibit A-4 thereto.
"Class A-4 Rate" means, for any Accrual Period after the initial Auction
Date, the Auction Note Interest Rate for the Class A-4 Notes. For the initial
Accrual Period, the Class A-4 Rate shall mean 1.12%.
"Class B Enhancement" means for any Quarterly Distribution Date, the excess
of (i) the Asset Balance as of the prior Quarterly Distribution Date (or as of
the Closing Date, in the case of the first Quarterly Distribution Date) over
(ii) the Class A Note Balance and the Class B Note Balance before taking into
account any principal distributions on the current Quarterly Distribution Date
but giving effect to principal allocated but not distributed to the Auction Rate
Notes.
"Class B Maturity Date" means the March 15, 2033 Distribution Date.
Appendix A-1-8
"Class B Note Balance" means, with respect to any Distribution Date, the
Outstanding Amount of the Class B Notes.
"Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Note Register.
"Class B Noteholders' Interest Distribution Amount" means, with respect to
any Quarterly Distribution Date, the sum of (a) the amount of interest accrued
at the Class B Note Rate for the related Accrual Period on the Class B Note
Balance (i) on the immediately preceding Quarterly Distribution Date, after
giving effect to all principal distributions to Class B Noteholders on that
preceding Quarterly Distribution Date or (ii) in the case of the first Quarterly
Distribution Date, the Closing Date, and (b) the Class B Note Interest Shortfall
for that Quarterly Distribution Date.
"Class B Noteholders' Principal Distribution Amount" means, as of any
Quarterly Distribution Date on or after the Stepdown Date and as long as a
Trigger Event is not in effect on such Quarterly Distribution Date, the excess,
if any, of (x) the sum of (i) the Class A Note Balance (after taking into
account the Class A Noteholders' Principal Distribution Amount due on such
Quarterly Distribution Date but after giving effect to principal allocated but
not distributed to the Auction Rate Notes) and (ii) the Class B Note Balance
immediately prior to such Quarterly Distribution Date over (y) the lesser of (A)
the product of (i) 89.875% and (ii) the Asset Balance for such Quarterly
Distribution Date and (B) the excess, if any, of the Asset Balance for such
Quarterly Distribution Date over the Specified Overcollateralization Amount.
Prior to the Stepdown Date or any Quarterly Distribution Date for which a
Trigger Event is in effect, the excess, if any, of (i) the amounts in clause
(a)(i) of the definition of the Class A Noteholders' Principal Distribution
Amount over (ii) the Class A Note Balance (after giving effect to principal
allocated but not distributed to the Auction Rate Notes). Notwithstanding the
foregoing, on or after the Class B Maturity Date, the Class B Noteholders'
Principal Distribution Amount shall not be less than the amount that is
necessary to reduce the Class B Note Balance to zero.
"Class B Note Interest Shortfall" means, with respect to any Quarterly
Distribution Date, the excess of (i) the Class B Noteholders' Interest
Distribution Amount on the preceding Quarterly Distribution Date over (ii) the
amount of interest actually distributed to the Class B Noteholders on that
preceding Quarterly Distribution Date, plus interest on the amount of that
excess, to the extent permitted by law, at the Class B Rate from that preceding
Quarterly Distribution Date to the current Quarterly Distribution Date.
"Class B Note Parity Trigger" means with respect to any Quarterly
Distribution Date that (i) the outstanding Class A Note Balance and Class B Note
Balance (prior to giving effect to any distributions on such date but after
giving effect to principal allocated but not distributed to the Auction Rate
Notes) is in excess of the sum of (a) the Pool Balance as of the last day of the
related Collection Period and (b) amounts on deposit in the Collection Account,
Principal Distribution Account and Cash Capitalization Account after payment of
clauses (i) through (vii) under Section 2.07(c) of the Administration Agreement,
or (ii) the Class A Note Balance and the Class B Note Balance as of the related
Quarterly Distribution Date (prior to giving effect to any distributions on that
date but after giving effect to principal allocated but not distributed to the
Auction Rate Notes) is greater than or equal to the Asset Balance for the prior
Quarterly Distribution Date. The Class B Note Parity Trigger will remain in
effect until the Class B Enhancement is greater than or equal to the Specified
Class B Enhancement.
Appendix A-1-9
"Class B Notes" means the $43,871,000 Floating Rate Class B Student
Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially
in the form of Exhibit A-5 thereto.
"Class B Rate" means, for any Accrual Period other than the initial Accrual
Period, Three-Month LIBOR as determined on the second business day before the
beginning of the applicable Accrual Period, plus 0.70%, based on the actual
number of days in such Accrual Period divided by 360. For the initial Accrual
Period, the Class B Rate shall mean the rate determined by the following
formula:
x + [19/33 * (y - x)]
where:
x = Two-Month LIBOR, and
y = Three-Month LIBOR,
in each case, as determined on the second Business Day before the beginning
of that Accrual Period, plus 0.70%, based on the actual number of days in such
Accrual Period divided by 360.
"Class C Enhancement" means, for any Quarterly Distribution Date, the
excess of (i) the Asset Balance as of the prior Quarterly Distribution Date (or
as of the Closing Date, in the case of the first Quarterly Distribution Date)
over (ii) the Class Note Balance before taking into account any principal
distributions on the current Quarterly Distribution Date but giving effect to
principal allocated but not distributed to the Auction Rate Notes.
"Class C Maturity Date" means the March 15, 2033 Distribution Date.
"Class C Note Balance" means, with respect to any Distribution Date, the
Outstanding Amount of the Class C Notes.
"Class C Noteholder" means the Person in whose name a Class C Note is
registered in the Note Register.
"Class C Noteholders' Interest Distribution Amount" means, with respect to
any Quarterly Distribution Date, the sum of (i) the amount of interest accrued
at the Class C Rate for the related Accrual Period (a) on the Class C Note
Balance on the immediately preceding Quarterly Distribution Date after giving
effect to all principal distributions to Class C Noteholders on that preceding
Quarterly Distribution Date or (b) in the case of the first Quarterly
Distribution Date, the Closing Date and (ii) the Class C Note Interest Shortfall
for that Quarterly Distribution Date.
"Class C Noteholders' Principal Distribution Amount" means, as of any
Quarterly Distribution Date on or after the Stepdown Date and, as long as a
Trigger Event is not in effect on such Quarterly Distribution Date, the excess,
if any, of (x) the sum of (i) the Class A Note Balance (after taking into
account the Class A Noteholders' Principal Distribution Amount due on such
Quarterly Distribution Date and after giving effect to principal allocated but
not distributed to the Auction Rate Notes), (ii) the Class B Note Balance (after
taking into account the Class B Noteholders' Principal Distribution Amount due
on such Quarterly Distribution Date) and (iii) the Class C Note Balance
immediately prior to such Quarterly Distribution Date
Appendix A-1-10
over (y) the lesser of (A) the product of (i) 97.0% and (ii) the Asset Balance
as of such Quarterly Distribution Date and (B) the excess, if any, of the
related Asset Balance for such Quarterly Distribution Date over the Specified
Overcollateralization Amount. Prior to the Stepdown Date or on any Quarterly
Distribution Date with respect to which a Trigger Event is in effect, the
excess, if any, of (i) amounts in clause (a)(i) of the definition of the Class A
Noteholders' Principal Distribution Amount over (ii) the Class A Note Balance
plus the Class B Note Balance (after giving effect to principal allocated but
not distributed to the Auction Rate Notes). Notwithstanding the foregoing, on or
after the Class C Maturity Date, the Class C Noteholders' Principal Distribution
Amount shall not be less than the amount that is necessary to reduce the Class C
Note Balance to zero.
"Class C Note Interest Shortfall" means, with respect to any Quarterly
Distribution Date, the excess of (i) the Class C Noteholders' Interest
Distribution Amount on the preceding Quarterly Distribution Date over (ii) the
amount of interest actually distributed to the Class C Noteholders on that
preceding Quarterly Distribution Date, plus interest on the amount of that
excess, to the extent permitted by law, at the Class C Rate from that preceding
Quarterly Distribution Date to the current Quarterly Distribution Date.
"Class C Note Parity Trigger" means with respect to any Quarterly
Distribution Date that (i) the Class A Note Balance, Class B Note Balance and
Class C Note Balance (prior to giving effect to any distributions on such date
but after giving effect to principal allocated but not distributed to the
Auction Rate Notes) is in excess of the sum of (a) Pool Balance as of the last
day of the related Collection Period and (b) amounts on deposit in the
Collection Account, Principal Distribution Account and Cash Capitalization
Account after payment of clauses (i) through (ix) under Section 2.07(c) of the
Administration Agreement, or (ii) the Class Note Balance as of the related
Quarterly Distribution Date (prior to giving effect to any distributions on that
date but after giving effect to principal allocated but not distributed to the
Auction Rate Notes) is greater than or equal to the Asset Balance for the prior
Quarterly Distribution Date. The Class C Note Parity Trigger will remain in
effect until the Class C Enhancement is greater than or equal to the Specified
Class C Enhancement.
"Class C Notes" means the $60,744,000 Floating Rate Class C Student
Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially
in the form of Exhibit X- 0 thereto.
"Class C Rate" means, for any Accrual Period other than the initial Accrual
Period, Three-Month LIBOR, as determined on the second business day before the
beginning of the applicable Accrual Period, plus 1.60% based on the actual
number of days in such Accrual Period divided by 360. For the initial Accrual
Period, the Class C Rate shall mean the rate determined by the following
formula:
x + [19/33 * (y - x)]
where:
x = Two-Month LIBOR, and
y = Three-Month LIBOR,
Appendix A-1-11
in each case, as determined on the second Business Day before the beginning
of that Accrual Period, plus 1.60%, based on the actual number of days in such
Accrual Period divided by 360.
"Class Note Balance" means the sum of the Class A Note Balance, the Class B
Note Balance and the Class C Note Balance.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act. The initial Clearing Agency shall
be The Depository Trust Company and the initial nominee for the Clearing Agency
shall be Cede & Co.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means June 27, 2003.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such, established and
maintained pursuant to Section 2.03(a)(i) of the Administration Agreement.
"Collection Period" means, with respect to the first Quarterly Distribution
Date, the period beginning on the Cutoff Date and ending on August 31, 2003, and
with respect to each subsequent Quarterly Distribution Date the Collection
Period means the three calendar months immediately following the end of the
previous Collection Period.
"Commission" means the Securities and Exchange Commission.
"Controlling Note" means so long as any of the Class A Notes are
Outstanding, the Class A Notes (voting together as a single class), if the Class
A Notes have been paid in full, the Class B Notes and if the Class B Notes have
been paid in full, the Class C Notes.
"Corporate Trust Office" means (i) with respect to the Indenture Trustee,
the principal office of the Indenture Trustee at which at any particular time
its corporate trust business shall be administered, which office at the Closing
Date is located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust and Agency Group, Structured Finance Team (telephone:
(000) 000-0000; facsimile: (000) 000-0000) or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders
and the Depositor, or the principal corporate trust office of any successor
Indenture Trustee (the address of which the successor Indenture Trustee will
notify the Noteholders, the Administrator and the Depositor) and (ii) with
respect to the Trustee, the principal corporate trust office of the Trustee
located at Christiana Center/OPS4, 000 Xxxxxxx Xxxxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx
00000, Attention: Corporate Trust Department (telephone: (000) 000-0000;
facsimile: (000) 000-0000); or at such other address as the Trustee may
designate by notice to the Depositor, or the principal corporate trust office of
any successor Trustee (the address of which the successor Trustee will notify
the Administrator and the Depositor).
Appendix A-1-12
"Cumulative Realized Losses Test" is satisfied for any Quarterly
Distribution Date on which the cumulative principal amount of Charged-Off Loans,
net of Recoveries is equal to or less than the percentage of the Initial Pool
Balance set forth below for the specified period:
Percentage of
Distribution Date Initial Pool Balance
-------------------------------------------------- --------------------
September 2003 to March 2008...................... 15%
June 2008 to March 2011........................... 18%
June 2011 and thereafter.......................... 20%
"Cutoff Date" means May 12, 2003.
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.10 of the
Indenture.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12, Part V of the
Delaware Code, entitled "Treatment of Delaware Statutory Trusts."
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to bankers' acceptances, commercial paper, negotiable
certificates of deposit and other obligations that constitute "instruments"
within the meaning of Section 9-102(a)(47) of the UCC and are susceptible of
physical delivery, transfer thereof to the Indenture Trustee or its nominee or
custodian by physical delivery to the Indenture Trustee or its nominee or
custodian endorsed to, or registered in the name of, the Indenture Trustee or
its nominee or custodian or endorsed in blank, and, with respect to a
certificated security (as defined in Section 8-102(a)(3) of the UCC) transfer
thereof (i) by delivery of such certificated security endorsed to, or registered
in the name of, the Indenture Trustee or its nominee or custodian or endorsed in
blank to a securities intermediary (as defined in Section 8-102(a)(14) of the
UCC) and the making by such securities intermediary of entries on its books and
records identifying such certificated securities as belonging to the Indenture
Trustee or its nominee or custodian and the sending by such securities
intermediary of a confirmation of the purchase of such certificated security by
the Indenture Trustee or its nominee or custodian, or (ii) by delivery thereof
to a "clearing corporation" (as defined in Section 8-102(a)(5) of the UCC) and
the making by such clearing corporation of appropriate entries on its books
reducing the appropriate securities account of the transferor and increasing the
appropriate securities account of a securities intermediary by the amount of
such certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the securities
intermediary, the maintenance of such certificated securities by such clearing
corporation or the nominee of either subject to the clearing corporation's
exclusive control, the sending of a confirmation by the securities intermediary
of the purchase by the Indenture Trustee or its nominee or custodian of such
securities and the making by such securities intermediary of entries on its
books and records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian (all of the foregoing, but not
including Trust Student Loans, "Physical Property"); and such additional or
alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such Trust Account Property to the
Indenture Trustee or its nominee or custodian, consistent with changes in
applicable law or regulations or the interpretation thereof;
Appendix A-1-13
(b) with respect to any security issued by the U.S. Treasury, the
Government National Mortgage Association, the Federal Home Loan Mortgage
Corporation or by the Federal National Mortgage Association that is a book-entry
security held at a Federal Reserve Bank pursuant to Federal book-entry
regulations, the following procedures, all in accordance with applicable law,
including applicable Federal regulations and Articles 8 and 9 of the UCC: the
crediting of such book-entry security to an appropriate book-entry account of
the Indenture Trustee or its nominee or the custodian or securities intermediary
at a Federal Reserve Bank, causing the custodian to continuously indicate by
book-entry such book-entry security as credited to the relevant book-entry
account, the continuous crediting of such book-entry security to a securities
account of the custodian at such Federal Reserve Bank and the continuous
identification of such book-entry security by the custodian as credited to the
appropriate book-entry account; and
(c) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not governed by
clause (b) above, registration on the books and records of the issuer thereof in
the name of the securities intermediary, the sending of a confirmation by the
securities intermediary of the purchase by the Indenture Trustee or its nominee
or custodian of such uncertificated security, the making by such securities
intermediary of entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or custodian.
"Depositor" means SLM Education Credit Funding LLC, a Delaware limited
liability company.
"Depositor Sale Agreement" means the Sale Agreement, dated as of June 27,
2003, between the Trust and the Depositor.
"Depository Agreement" means the Note Depository Agreement.
"Determination Date" means, with respect to the Collection Period preceding
any Quarterly Distribution Date, the third Business Day preceding such Quarterly
Distribution Date.
"Distribution Date" means (i) for the Floating Rate Notes, the 15th day of
March, June, September and December, or, if such day is not a Business Day, the
immediately following Business Day, commencing on September 15, 2003 and (ii)
for the Auction Rate Notes, (a) the Business Day following the end of each
Auction Period for that class of Auction Rate Notes and (b) for a class of
Auction Rate Notes with an Auction Period in excess of 90 days, in addition to
the days referred to in clause (a), the 15th day of March, June, September and
December or if such day is not a Business Day, the immediately following
Business Day.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate trust
department of a depository institution organized under the laws of the United
States of America or any one of the States or the District of Columbia (or any
domestic branch of a foreign bank), having corporate trust powers and acting as
trustee for funds deposited in such account, so long as any of the securities of
such depository institution have a credit rating from Moody's, Standard &
Poor's, and, if such institution is rated by Fitch, Fitch, in one of their
generic rating categories which signifies investment grade.
"Eligible Institution" means a depository institution organized under the
laws of the United States of America or any one of the States or the District of
Columbia (or any domestic branch of a foreign bank) (i) which has (A) either a
long-term senior unsecured debt rating of
Appendix A-1-14
AAA or a short-term senior unsecured debt or certificate of deposit rating of
A-1+ or better by Standard & Poor's and (B)(1) a long-term senior unsecured debt
rating of A1 or better and (2) a short-term senior unsecured debt rating of P-1
or better by Moody's, and (C) if such institution is rated by Fitch, a long-term
senior unsecured debt rating of AA or a short-term senior unsecured debt rating
of F-1+, or any other long-term, short-term or certificate of deposit rating
with respect to which the Rating Agency Condition has been satisfied and (ii)
whose deposits are insured by the FDIC. If so qualified, the Trustee or the
Indenture Trustee may be considered an Eligible Institution.
"Eligible Investments" means book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form which
evidence:
(a) direct obligations of, and obligations fully guaranteed as to timely
payment by, the United States of America, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association, the Student Loan Marketing Association, or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America; provided,
that obligations of, or guaranteed by, the Government National Mortgage
Association, the Federal Home Loan Mortgage Corporation, the Federal National
Mortgage Association or the Student Loan Marketing Association shall be Eligible
Investments only if, at the time of investment, they meet the criteria of each
of the Rating Agencies for collateral for securities having ratings equivalent
to the respective ratings of the Notes in effect at the Closing Date;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any State (or any domestic branch of a foreign bank)
and subject to supervision and examination by Federal or state banking or
depository institution authorities (including depository receipts issued by any
such institution or trust company as custodian with respect to any obligation
referred to in clause (a) above or portion of such obligation for the benefit of
the holders of such depository receipts); provided, that at the time of the
investment or contractual commitment to invest therein (which shall be deemed to
be made again each time funds are reinvested following each Distribution Date),
the commercial paper or other short-term senior unsecured debt obligations
(other than such obligations the rating of which is based on the credit of a
Person other than such depository institution or trust company) thereof shall
have a credit rating from each of the Rating Agencies in the highest investment
category granted thereby;
(c) commercial paper having, at the time of the investment, a rating from
each of the Rating Agencies in the highest investment category granted thereby;
(d) investments in money market funds having a rating from each of the
Rating Agencies in the highest investment category granted thereby (including
funds for which the Indenture Trustee, the Administrator or the Trustee or any
of their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States of America, in
Appendix A-1-15
either case entered into with a depository institution or trust company (acting
as principal) described in clause (b) above; and
(g) any other investment which would not result in the downgrading or
withdrawal of any rating of the Securities by any of the Rating Agencies as
affirmed in writing delivered to the Indenture Trustee.
For purposes of the definition of "Eligible Investments," the phrase
"highest investment category" means (i) in the case of Fitch, "AAA" for
long-term investments (or the equivalent) and "F-1+" for short-term investments
(or the equivalent), (ii) in the case of Moody's, "Aaa" for long-term
investments (or the equivalent) and "P-1" for short-term investments (or the
equivalent), and (iii) in the case of Standard & Poor's, "AAA" for long-term
investments (or the equivalent) and "A-1+" for short-term investments (or the
equivalent). A proposed investment not rated by Fitch but rated in the highest
investment category by Moody's and Standard & Poor's shall be considered to be
rated by each of the Rating Agencies in the highest investment category granted
thereby.
"Eligible Loans" has the meaning specified in the Purchase Agreement or the
Sale Agreement, as applicable.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning specified in Section 5.01 of the
Indenture.
"Excess Distribution Certificate" means the certificate, substantially in
the form of Exhibit A to the Trust Agreement.
"Excess Distribution Certificate Paying Agent" means any paying agent or
co-paying agent appointed pursuant to Section 3.13(g) of the Trust Agreement,
which shall initially be the Trustee.
"Excess Distribution Certificate Register" and "Excess Distribution
Certificate Registrar" mean the register mentioned and the registrar appointed
pursuant to Section 3.13(c) of the Trust Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" means any and all liabilities, obligations, losses, damages,
taxes, claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Trustee or any of its officers, directors or agents in any way
relating to or arising out of the Trust Agreement, the other Basic Documents,
the Trust Estate, the administration of the Trust Estate or the action or
inaction of the Trustee under the Trust Agreement or the other Basic Documents.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
any Executive Vice President, any Senior Vice President, any Vice President, the
Secretary or the Treasurer of such corporation; and with respect to any
partnership, any general partner thereof.
"FDIC" means the Federal Deposit Insurance Corporation.
Appendix A-1-16
"Federal Funds Rate" for any day means the rate set forth for such day
opposite the caption "Federal Funds (effective)" in the weekly statistical
release designated H.15(519), or any successor publication, published by the
Board of Governors of the Federal Reserve System. If such rate is not published
in the relevant H.15(519) for any day, the rate for such day shall be the
arithmetic mean of the rates for the last transaction in overnight Federal Funds
arranged prior to 9:00 a.m. New York City time on that day by each of four
leading brokers in such transactions located in New York City selected by the
Administrator. The Federal Funds rate for each Saturday and Sunday and for any
other that is not a Business Day shall be the Federal Funds Rate for the
preceding Business Day as determined above.
"First Priority Principal Distribution Amount" means, with respect to any
Quarterly Distribution Date, an amount not less than zero equal to:
AN - AB
Where:
AN = the Class A Note Balance on (i) the immediately preceding
Quarterly Distribution Date (after giving effect to any principal
payments made on or, in the case of the Auction Rate Notes, allocated
to, the Class A Notes on such preceding Quarterly Distribution Date)
or (ii) in the case of the first Quarterly Distribution Date, on the
Closing Date;
AB = the Asset Balance for such Quarterly Distribution Date;
provided, however, that:
. if a Class A Note Parity Trigger is in effect, then the First
Priority Principal Distribution Amount shall equal the Class A
Noteholders' Principal Distribution Amount;
. on or after the Class A-1 Maturity Date, the First Priority
Principal Distribution Amount shall not be less than the
amount that is necessary to reduce the Class A-1 Note Balance
to zero;
. on or after the Class A-2 Maturity Date, the First Priority
Principal Distribution Amount shall not be less than the
amount that is necessary to reduce the Class A-2 Note Balance
to zero; and
. on or after the Class A-3 Maturity Date and Class A-4 Maturity
Date, the First Priority Principal Distribution Amount shall
not be less than the amount that is necessary to reduce the
Class A-3 Note Balance and Class A-4 Note Balance to zero.
"Fitch" means Fitch, Inc. (also known as Fitch Ratings).
"Floating Rate Notes" means the Class A-1 Notes, the Class A-2 Notes, the
Class B Notes and the Class C Notes.
"Future Distribution Account" means the account designated as such,
established and maintained pursuant to Section 2.03(a)(v) of the Administration
Agreement.
Appendix A-1-17
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Indenture" means the Indenture dated as of June 1, 2003, between the Trust
and the Indenture Trustee.
"Indenture Trust Estate" means all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of the Indenture for the benefit of the Noteholders (including all
property and interests Granted to the Indenture Trustee), including all proceeds
thereof.
"Indenture Trustee" means JPMorgan Chase Bank, a New York banking
corporation, not in its individual capacity but solely as trustee under the
Indenture.
"Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Trust, any other obligor upon the
Notes, the Depositor and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Trust, any such other obligor, the Depositor or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Trust, any such
other obligor, the Depositor or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, placement agent, trustee, partner,
director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the Indenture,
made by an Independent appraiser or other expert appointed by an Issuer Order
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in the Indenture and that the signer is Independent within the
meaning thereof.
"Index Maturity" means, with respect to any Accrual Period, a period of
time equal to, one month, two months, three months or four months, as
applicable, commencing on the first day of that Accrual Period.
"Initial Auction Agent Agreement" shall mean the Auction Agent Agreement,
dated as of June 27, 2003, among the Issuer, the Indenture Trustee and the
Initial Auction Agent, including any amendment thereof or supplement thereto.
"Initial Pool Balance" means the Pool Balance as of the Cutoff Date, which
is $1,247,280,318.
"Interest Rate Cap Agreement" means the agreement between the Trust and the
Cap Counterparty, dated June 18, 2003, documented under a 1992 ISDA Master
Agreement
Appendix A-1-18
(Multicurrency-Cross Border), including the related schedule and confirmation,
providing for certain payments to the Trust, in the amounts and under the
conditions set forth therein, which will terminate in accordance with its terms
on the June 2006 Quarterly Distribution Date.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or ordering the
winding-up or liquidation of such Person's affairs, which decree or order
remains unstayed and in effect for a period of 60 consecutive days; or (b) the
commencement by such Person of a voluntary case under any applicable Federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for such Person or for any substantial part of
its property, or the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person generally to pay its debts
as such debts become due, or the taking of action by such Person in furtherance
of any of the foregoing.
"Insolvency Proceeds" has the meaning set forth in Section 6.01(b) of the
Administration Agreement.
"Investment Earnings" means, with respect to any Quarterly Distribution
Date, the investment earnings (net of losses and investment expenses) on amounts
on deposit in the Trust Accounts to be deposited into the Collection Account on
or prior to such Quarterly Distribution Date pursuant to Section 2.03(b) of the
Administration Agreement.
"Issuer" means the Trust and, for purposes of any provision contained in
the Indenture and required by the TIA, each other obligor on the Notes.
"Issuer Order" and "Issuer Request" means a written order or request signed
in the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
"LAW Loan" means a loan originated under the LAWLOANS Program.
"LIBOR Determination Date" means, for each Accrual Period, the second
Business Day before the beginning of that Accrual Period.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens and any other liens, if any, which
attach to the respective Trust Student Loan by operation of law as a result of
any act or omission by the related Obligor.
"Liquidating Distribution" means the amount of any distribution to the
Depositor in connection with the termination of the Trust under Section 9.01(a)
of the Trust Agreement.
"MBA Loan" means a loan originated under the MBA Loans Program.
"MED Loan" means a loan originated under the MEDLOANS Program.
Appendix A-1-19
"Minimum Purchase Amount" means an amount that would be sufficient to (i)
reduce the Outstanding Amount of each class of Notes on such Distribution Date
to zero, (ii) pay to the respective Noteholders the Class A Noteholders'
Interest Distribution Amount, the Class B Noteholders' Interest Distribution
Amount and the Class C Noteholders' Interest Distribution Amount payable on such
Distribution Date and (iii) pay any Carry-over Amounts and interest on
Carry-over Amounts to the Auction Rate Notes.
"Monthly Servicing Payment Date" means the 15th day of each calendar month
or, if such day is not a Business Day, the immediately following Business Day,
commencing on July 15, 2003.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Note Depository Agreement" means the Letter of Representations, dated June
27, 2003, between the Trust, the Trustee and the Indenture Trustee in favor of
the Depository Trust Company.
"Note Final Maturity Date" for a class of Notes means the Class A-1
Maturity Date, the Class A-2 Maturity Date, the Class A-3 Maturity Date, the
Class A-4 Maturity Date, the Class B Maturity Date or the Class C Maturity Date,
as applicable.
"Note Interest Shortfall" means the Class A Note Interest Shortfall, the
Class B Note Interest Shortfall and the Class C Note Interest Shortfall.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency Participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Pool Factor" as of the close of business on a Distribution Date means
a seven-digit decimal figure equal to the outstanding principal balance of a
class of Notes divided by the original outstanding principal balance of such
class of Notes. The Note Pool Factor for each class will be 1.0000000 as of the
Closing Date; thereafter, the Note Pool Factor for each class will decline to
reflect reductions in the outstanding principal balance of that class of Notes.
"Note Rates" means, with respect to any Accrual Period, the Class A-1 Rate,
the Class A-2 Rate, the Class A-3 Rate, the Class A-4 Rate, the Class B Rate and
the Class C Rate for such Accrual Period, collectively.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.04 of the Indenture.
"Noteholder" or "Holder" means either a Class A Noteholder, a Class B
Noteholder or a Class C Noteholder.
"Noteholders' Interest Distribution Amount" means the Class A Noteholders'
Interest Distribution Amount, the Class B Noteholders' Interest Distribution
Amount and the Class C Noteholders' Interest Distribution Amount.
Appendix A-1-20
"Noteholders' Principal Distribution Amount" means the Class A Noteholders'
Principal Distribution Amount, the Class B Noteholders' Principal Distribution
Amount and the Class C Noteholders' Principal Distribution Amount.
"Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes,
collectively.
"Obligor" on a Trust Student Loan means the borrower or co-borrowers of
such Trust Student Loan and any other Person who owes payments in respect of
such Trust Student Loan.
"Officers' Certificate" means (i) in the case of the Trust, a certificate
signed by any two Authorized Officers of the Trustee, under the circumstances
described in, and otherwise complying with, the applicable requirements of
Section 11.01 of the Indenture, and delivered to the Indenture Trustee, and (ii)
in the case of the Depositor, the Administrator or the Servicer, a certificate
signed by any two Authorized Officers of the Depositor, the Administrator or the
Servicer, as applicable.
"One-Month LIBOR", "Two-Month LIBOR", "Three-Month LIBOR" or "Four-Month
LIBOR" means, with respect to any Accrual Period, the London interbank offered
rate for deposits in U.S. dollars having the Index Maturity which appears on
Telerate Page 3750 as of 11:00 a.m. London time, on the related LIBOR
Determination Date. If this rate does not appear on Telerate Page 3750, the rate
for that day will be determined on the basis of the rates at which deposits in
U.S. dollars, having the Index Maturity and in a principal amount of not less
than U.S. $1,000,000, are offered at approximately 11:00 a.m., London time, on
that LIBOR Determination Date, to prime banks in the London interbank market by
the Reference Banks. The Administrator will request the principal London office
of each Reference Bank to provide a quotation of its rate. If the Reference
Banks provide at least two quotations, the rate for that day will be the
arithmetic mean of the quotations. If the Reference Banks provide fewer than two
quotations, the rate for that day will be the arithmetic mean of the rates
quoted by major banks in New York City, selected by the Administrator, at
approximately 11:00 a.m., New York time, on that LIBOR Determination Date, for
loans in U.S. dollars to leading European banks having the Index Maturity and in
a principal amount of not less than U.S. $1,000,000. If the banks selected as
described above are not providing quotations, Three-Month LIBOR and One-Month
LIBOR in effect for the applicable Accrual Period will be Three-Month LIBOR and
One-Month LIBOR, as applicable, in effect for the previous Accrual Period.
"Opinion of Counsel" means (i) with respect to the Trust, one or more
written opinions of counsel who may, except as otherwise expressly provided in
the Indenture, be employees of or counsel to the Trustee, the Trust, the
Depositor or an Affiliate of the Depositor and who shall be satisfactory to the
Indenture Trustee, and which opinion or opinions shall be addressed to the
Indenture Trustee as Indenture Trustee, shall comply with any applicable
requirements of Section 11.01 of the Indenture and shall be in form and
substance satisfactory to the Indenture Trustee, and (ii) with respect to the
Depositor, the Administrator or the Servicer, one or more written opinions of
counsel who may be an employee of or counsel to the Depositor, the Administrator
or the Servicer, which counsel shall be acceptable to the Indenture Trustee and
the Trustee.
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under the Indenture except (i) Notes theretofore
cancelled by the Note Registrar or delivered to the Note Registrar for
cancellation, (ii) Notes or portions thereof the payment for
Appendix A-1-21
which money in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent in trust for the Noteholders thereof
(provided, however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to the Indenture), and (iii) Notes in
exchange for or in lieu of other Notes which have been authenticated and
delivered pursuant to the Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Notes are held by a bona fide purchaser;
provided, that in determining whether the Noteholders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any other Basic
Document, Notes owned by the Trust, any other obligor upon the Notes, the
Depositor or any Affiliate of any of the foregoing Persons shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Trust, any other obligor upon the Notes, the Depositor or any Affiliate of any
of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all (or, if
specified, a subset of) Notes Outstanding at the date of determination.
"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11 of
the Indenture and is authorized by the Trustee on behalf of the Trust to make
the payments to and distributions from the Collection Account and payments of
principal of and interest and any other amounts owing on the Notes on behalf of
the Trust.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization, limited liability company, limited
liability partnership or government or any agency or political subdivision
thereof.
"Physical Property" has the meaning assigned to such terms in the
definition of "Delivery" above.
"Pool Balance" means, as of the last day of a Collection Period, the
aggregate principal balance of the Trust Student Loans as of the beginning of
such Collection Period, including accrued interest as of the beginning of such
Collection Period, that is expected to be capitalized, plus interest and
insurance fees that accrue during such Collection Period that are capitalized or
are to be capitalized and which were not included in the prior Pool Balance, as
reduced by (i) all payments received by the Trust through the last day of such
Collection Period from Obligors (other than Recoveries), (ii) all amounts
received by the Trust through that date from purchases of the Trust Student
Loans by SLM Education Credit Management Corporation, the Depositor or the
Servicer, (iii) the aggregate principal balance of all Trust Student Loans that
became Charged-Off Loans during such Collection Period, and (iv) the amount of
any adjustments to balances of the Trust Student Loans that the Servicer makes
under the Servicing Agreement through the last day of such Collection Period.
The principal balance of a Trust Student Loan that became a Charged-Off Loan
during a prior Collection Period shall be deemed to be zero.
Appendix A-1-22
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture and in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"Primary Servicing Fee" for any Monthly Servicing Payment Date has the
meaning specified in Attachment A to the Servicing Agreement, and shall include
any such fees from prior Monthly Servicing Payment Dates that remain unpaid.
"Principal Distribution Account" means the account designated as such,
established and maintained pursuant to Section 2.03(a)(iv) of the Administration
Agreement.
"Principal Distribution Amount" means the sum of the First Priority
Principal Distribution Amount, the Second Priority Principal Distribution
Amount, the Third Priority Principal Distribution Amount, the Regular Principal
Distribution Amount and any amounts received under the Interest Rate Cap
Agreement for a Quarterly Distribution Date.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Program" means one of the loan programs under which a Med Loan, MBA Loan,
LAW Loan or Signature Loan was originated.
"Purchase Amount" with respect to any Trust Student Loan means the amount
required to prepay in full such Trust Student Loan under the terms thereof
including all accrued interest thereon.
"Purchased Student Loan" means a Trust Student Loan which is, as of the
close of business on the last, day of a Collection Period, purchased by the
Servicer pursuant to Section 3.05 of the Servicing Agreement or repurchased by
the Depositor pursuant to Section 6.01 of the Depositor Sale Agreement or
purchased by the Seller pursuant to Section 6.01 of the Seller Sale Agreement.
"Quarterly Distribution Date" means, with respect to each Collection
Period, the 15th day of March, June, September or December, as applicable, or,
if such day is not a Business Day, the immediately following Business Day,
commencing on September 15, 2003.
"Rating Agency" means Xxxxx'x, Standard & Poor's and Fitch. If any such
organization or successor thereto is no longer in existence, "Rating Agency"
with respect to such organization shall be a nationally recognized statistical
rating organization or other comparable Person designated by the Administrator,
notice of which designation shall be given to the Indenture Trustee, the Trustee
and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' prior notice thereof and that each
of the Rating Agencies shall have notified the Administrator, the Servicer, the
Trustee and the Indenture Trustee in writing that such action will not result in
and of itself in a reduction or withdrawal of the then current rating of any of
the Notes.
Appendix A-1-23
"Record Date" means, with respect to a Distribution Date or Redemption Date
(i) for the Floating Rate Notes, the close of business on the day preceding such
Distribution Date or Redemption Date and (ii) for the Auction Rate Notes, (a)
for payments of interest at the applicable Note Rate and for payments of
principal, two Business Days before the related Distribution Date and (b) for
payments of Carry-over Amounts and interest accrued thereon, the Record Date
relating to the Distribution Date for which the Carry-over Amount accrued.
"Recoveries" means, as of any date of determination, all amounts received
by the Trust in respect of a Charged-Off Loan after such Trust Student Loan
became a Charged-Off Loan.
"Redemption Date" means in the case of a payment to Noteholders pursuant to
Section 10.01 of the Indenture, the Quarterly Distribution Date specified
pursuant to Section 10.01 of the Indenture.
"Redemption Price" means an amount equal to the Class Note Balance, plus
accrued and unpaid interest thereon at the applicable Note Rates to but
excluding the Redemption Date.
"Reference Banks" means four major banks in the London interbank market
selected by the Administrator.
"Regular Principal Distribution Amount" means, with respect to any
Quarterly Distribution Date, an amount not less than zero and equal to:
(N - (AB - SOA)) - (FPDA + SPDA + TPDA)
Where:
N = the Class Note Balance on (i) the preceding Quarterly
Distribution Date (after giving effect to any principal payments made
on or, in the case of the Auction Rate Notes, allocated to, such
preceding Quarterly Distribution Date) or (ii) in the case of the
first Quarterly Distribution Date, the Closing Date, as the case may
be;
AB = the Asset Balance for such Quarterly Distribution Date;
SOA = the Specified Overcollateralization Amount for such
Quarterly Distribution Date;
FPDA = the First Priority Principal Distribution Amount, if any,
for such Quarterly Distribution Date;
SPDA = the Second Priority Principal Distribution Amount, if any,
for such Quarterly Distribution Date; and
TPDA = the Third Priority Principal Distribution Amount, if any,
for such Quarterly Distribution Date;
provided, however, that:
. the Regular Principal Distribution Amount shall not exceed the
Class Note Balance on such Quarterly Distribution Date (after
taking into account the allocation of the First Priority
Principal
Appendix A-1-24
Distribution Amount, the Second Priority Principal
Distribution Amount and the Third Principal Distribution
Amount, if any, on such Quarterly Distribution Date and in
the case of the Auction Rate Notes, principal allocated but
not yet paid).
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 2.03(a)(ii) of the Administration Agreement.
"Reserve Account Initial Deposit" means $3,118,201.
"Responsible Officer" means, with respect to the Indenture Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, including
any Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, or any other officer of the Indenture Trustee customarily performing
functions similar to those performed by any of the above designated officers,
with direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee and also, with respect to a
particular matter, any other officer to whom such matter is referred because of
such officer's knowledge of and familiarity with the particular subject.
"Sale Agreement" means, collectively, the Depositor Sale Agreement and the
Seller Sale Agreement.
"Schedule of Trust Student Loans" means the listing of the Trust Student
Loans set forth in Schedule A to the Indenture and the Xxxx of Sale (which
Schedule may be in the form of microfiche).
"Second Priority Principal Distribution Amount" means, with respect to any
Quarterly Distribution Date, an amount not less than zero equal to:
(ABN - AB) - FPDA
Where:
ABN = the sum of the Class A Note Balance and the Class B Note
Balance on (i) the immediately preceding Quarterly Distribution Date
(after giving effect to any principal payments made on or, in the case
of the Auction Rate Notes, allocated to, such preceding Quarterly
Distribution Date or (ii) in the case of the first Quarterly
Distribution Date, the Closing Date;
AB = the Asset Balance for such Quarterly Distribution Date; and
FPDA = the First Priority Principal Distribution Amount, if any,
with respect to such Quarterly Distribution Date;
provided, however, that:
. if a Class B Note Parity Trigger is in effect, then the Second
Priority Principal Distribution Amount shall equal (a) the sum
of
(i) the Class A Noteholders' Principal Distribution Amount and
(ii) the Class B Noteholders' Principal Distribution Amount
less
(b) the First Priority Principal Distribution Amount;
Appendix A-1-25
. the Second Priority Principal Distribution Amount shall not
exceed the Class A Note Balance and the Class B Note Balance
as of such Distribution Date (after taking into account the
allocation of the First Priority Principal Distribution
Amount, if any, on such Distribution Date); and
. on or after the Class B Maturity Date, the Second Priority
Principal Distribution Amount shall not be less than the
amount that is necessary to reduce the Class B Note Balance to
zero.
"Seller" means SLM Education Credit Management Corporation.
"Seller Sale Agreement" means the Sale Agreement, dated June 27, 2003,
between the Seller and the Depositor.
"Servicer" means Xxxxxx Mae Servicing L.P., in its capacity as servicer of
the Trust Student Loans, or any successor thereto in such capacity in accordance
with the Servicing Agreement.
"Servicer Default" means an event specified in Section 5.01 of the
Servicing Agreement.
"Servicer's Report" means any report of the Servicer delivered pursuant to
Section 3.01(a) of the Administration Agreement, substantially in the form
acceptable to the Administrator.
"Servicing Agreement" means the Servicing Agreement, dated as of June 27,
2003, among the Trust, the Trustee, the Depositor, the Servicer, the
Administrator and the Indenture Trustee.
"Servicing Fee" has the meaning specified in Attachment A to the Servicing
Agreement.
"Signature Student Loan" means a loan originated under the Signature
Education Loan Program.
"Specified Class A Enhancement" means, for any Quarterly Distribution Date,
the greater of (a) 15.0% of the Asset Balance for such Quarterly Distribution
Date, or (b) the Specified Overcollateralization Amount for such Quarterly
Distribution Date.
"Specified Class B Enhancement" means, for any Quarterly Distribution Date,
the greater of (a) 10.125% of the Asset Balance for such Quarterly Distribution
Date, or (b) the Specified Overcollateralization Amount for such Quarterly
Distribution Date.
"Specified Class C Enhancement" means, for any Quarterly Distribution Date,
means the greater of (a) 3.0% of the Asset Balance for such Quarterly
Distribution Date, or (b) the Specified Overcollateralization Amount for such
Quarterly Distribution Date.
"Specified Overcollateralization Amount" means, as of any Quarterly
Distribution Date, 2.0% of the initial Asset Balance.
"Specified Reserve Account Balance" means the lesser of $3,118,201 and the
Class Note Balance.
Appendix A-1-26
"Standard & Poor's" means Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc.
"State" means any one of the 00 Xxxxxx xx xxx Xxxxxx Xxxxxx xx Xxxxxxx or
the District of Columbia.
"Stepdown Date" means the earlier to occur of (a) the June 2008 Quarterly
Distribution Date and (b) the Quarterly Distribution Date following that date on
which the Class A Note Balance is reduced to zero.
"Student Loans" means private education loans to students and parents of
students that are not reinsured by the Department of Education or any other
government agency.
"Successor Administrator" has the meaning specified in Section 3.07(e) of
the Indenture.
"Successor Servicer" has the meaning specified in Section 3.07(e) of the
Indenture.
"Swap Agreement" means each of the ISDA Master Agreement by and between the
Trust and Citibank, N.A. dated as of June 18, 2003, including the related
schedule and confirmation and the ISDA Master Agreement by and between the Trust
and Xxxxxxx Xxxxx Derivative Products AG dated as of June 18, 2003, including
the related schedule and confirmation (collectively, the "Swap Agreements").
"Swap Counterparty" means each of Citibank, N.A., together with its
successors and permitted assigns and Xxxxxxx Xxxxx Derivative Products AG,
together with its successors and permitted assigns (collectively, the "Swap
Counterparties").
"Swap Payment" means, with respect to each Distribution Date, the amount
payable to a Swap Counterparty by the Trust for such date as specified in the
related Swap Agreement.
"Swap Termination Date" means the date on which a Swap Agreement terminates
in accordance with its terms.
"Swap Termination Payments" has the meaning set forth in the related Swap
Agreement.
"Telerate Page 3750" means the display page so designated on the Moneyline
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying comparable rates or prices).
"Third Priority Principal Distribution Amount" means, with respect to any
Quarterly Distribution Date, an amount not less than zero equal to:
(N - AB) - (FPDA + SPDA)
Where:
N = the Class Note Balance on (i) the immediately preceding
Quarterly Distribution Date (after giving effect to any principal
payments made on or, in the case of the Auction Rate Notes, allocated
to, the Notes on such preceding Quarterly Distribution Date) or (ii)
in the case of the first Quarterly Distribution Date, the Closing
Date;
Appendix A-1-27
AB = the Asset Balance for such Quarterly Distribution Date;
FPDA = the First Priority Principal Distribution Amount, if any,
such Quarterly Distribution Date; and
SPDA = the Second Priority Principal Distribution Amount, if any,
for such Quarterly Distribution Date;
provided, however, that:
. if a Class C Note Parity Trigger is in effect, then the Third
Priority Principal Distribution Amount shall equal (a) the sum
of (i) the Class A Noteholders' Principal Distribution Amount,
(ii) the Class B Noteholders' Principal Distribution Amount
and (iii) the Class C Noteholders' Principal Distribution
Amount less (b) the First Priority Principal Distribution
Amount plus the Second Priority Principal Distribution Amount;
. the Third Priority Principal Distribution Amount shall not
exceed the Class Note Balance on such Quarterly Distribution
Date (after taking into account the allocation of the First
Priority Principal Distribution Amount and the Second Priority
Principal Distribution Amount, if any, on such Quarterly
Distribution Date); and
. on or after the Class C Maturity Date, the Third Priority
Principal Distribution Amount shall not be less than the
amount that is necessary to reduce the Class C Note Balance to
zero.
"Transfer Date" has the meaning specified in Section 5.02(a) of the
Administration Agreement.
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code. References in any document or
instrument to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trigger Event" means with respect to any Quarterly Distribution Date, that
the Cumulative Realized Losses Test is not satisfied.
"Trust" means SLM Private Credit Student Loan Trust 2003-B, a Delaware
statutory trust established pursuant to the Trust Agreement.
"Trust Account Property" means the Trust Accounts, all cash and investments
held from time to time in any Trust Account (whether in the form of deposit
accounts, Physical Property, book-entry securities, uncertificated securities or
otherwise), including the Reserve Account Initial Deposit, and all earnings on
and proceeds of the foregoing.
"Trust Accounts" has the meaning specified in Section 2.03 of the
Administration Agreement.
Appendix A-1-28
"Trust Agreement" means the Trust Agreement dated as of June 1, 2003, among
the Depositor, the Trustee and the Indenture Trustee.
"Trust Auction Date" has the meaning specified in Section 4.04 of the
Indenture.
"Trustee" means Chase Manhattan Bank USA, National Association, a national
banking association, not in its individual capacity but solely as Trustee under
the Trust Agreement. "Trustee" shall also mean each successor Trustee as of the
qualification of such successor as Trustee under the Trust Agreement.
"Trust Estate" means all right, title and interest of the Trust (or the
Trustee on behalf of the Trust) in and to the property and rights sold,
transferred and assigned to the Trust pursuant to the Sale Agreement, all funds
on deposit from time to time in the Trust Accounts and all other property of the
Trust from time to time, including any rights of the Trustee and the Trust
pursuant to the Trust Agreement, the Administration Agreement, the Interest Rate
Cap Agreement and the Swap Agreements.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
"Trust Student Loan" means any student loan that is listed on the Schedule
of Trust Student Loans on the Closing Date plus any student loan that is
substituted for a Trust Student Loan by the Depositor pursuant to Section 6.01
of the Depositor Sale Agreement, by the Seller pursuant to Section 6.01 of the
Seller Sale Agreement or by the Servicer pursuant to Section 3.05 of the
Servicing Agreement, but shall not include any Purchased Student Loan following
receipt by or on behalf of the Trust of the Purchase Amount with respect
thereto.
"Trust Student Loan Files" means the documents specified in Section 2.01 of
the Servicing Agreement.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
"91-Day Treasury Bills" means direct obligations of the United States with
a maturity of thirteen weeks.
Appendix X-0-00
XXXXXXXX X-0
TO THE INDENTURE
Certain Terms and Provisions of
-------------------------------
the Auction Rate Notes
----------------------
ARTICLE I
DEFINITIONS
Except as provided below, all terms which are defined in Appendix A-1 shall
have the same meanings in this Appendix A-2. In addition, the following terms
shall have the following respective meanings:
"All Hold Rate" shall mean the Applicable LIBOR Rate less 0.20%; provided,
that in no event shall the applicable All Hold Rate be greater than the
applicable Maximum Rate.
"Applicable LIBOR Rate" shall mean, (a) for Auction Periods of 35 days or
less, One-Month LIBOR, (b) for Auction Periods of more than 35 days but less
than 91 days, Three-Month LIBOR, (c) for Auction Periods of more than 90 days
but less than 181 days, Six-Month LIBOR, and (d) for Auction Periods of more
than 180 days, One-Year LIBOR.
"ARS Student Loan Rate" shall mean, respect to any Accrual Period, the rate
of interest per annum (rounded to the next highest one-hundredth of one percent)
equal to the product of (a) the quotient obtained by dividing (i) 360 by (ii)
the actual number of days elapsed in the Collection Period related to that
Accrual Period and (b) (i) the Effective Interest Rate minus (ii) the Expense
Percentage. The Administrator shall, on behalf of the Issuer, calculate the ARS
Student Loan Rate as of the last day of calendar month.
"Auction" has the meaning set forth in the Auction Agent Agreement.
"Auction Agent" shall mean the Initial Auction Agent under the Initial
Auction Agent Agreement unless and until a Substitute Auction Agent Agreement
becomes effective, after which "Auction Agent" shall mean the Substitute Auction
Agent.
"Auction Agent Agreement" shall mean the Initial Auction Agent Agreement
unless and until a Substitute Auction Agent Agreement is entered into, after
which "Auction Agent Agreement" shall mean such Substitute Auction Agent
Agreement.
"Auction Agent Fee" has the meaning set forth in the Auction Agent
Agreement.
"Auction Date" shall mean, initially, July 18, 2003 with respect to the
Class A-3 Notes and July 23, 2003 with respect to the Class A-4 Notes, and
thereafter, the Business Day immediately preceding the first day of each Auction
Period for each respective Class, other than:
(a) each Auction Period commencing after the ownership of the
applicable Auction Rate Notes is no longer maintained as Book-Entry Notes
by the applicable Clearing Agency;
Appendix A-2-1
(b) each Auction Period commencing after and during the continuance
of a Payment Default; or
(c) each Auction Period commencing less than two Business Days
after the cure or waiver of a Payment Default.
Notwithstanding the foregoing, the Auction Date for one or more Auction
Periods may be changed pursuant to Section 2.02(h) of this Appendix A-2.
"Auction Note Interest Rate" shall mean the Variable Rate of interest per
annum borne by an Auction Rate Note for each Auction Period and determined in
accordance with the provisions of Sections 2.01 and 2.02 of this Appendix A-2;
provided, however, that in the event of a Payment Default, the Auction Note
Interest Rate shall equal the applicable Non-Payment Rate; provided, further,
however that such Auction Note Interest Rate shall in no event exceed the lesser
of the ARS Student Loan Rate and the Maximum Rate.
"Auction Period" shall mean the period applicable to an Auction Rate Note
from the Business Day following the previous Auction Date to and including the
day before the next Interest Payment Date, which Auction Period (after the
Initial Period for such Class) initially shall consist generally of 28 days for
the Class A-3 Notes and the Class A-4 Notes, as the same may be adjusted
pursuant to Section 2.02(g) of this Appendix A-2.
"Auction Period Adjustment" shall mean an adjustment to the Auction Period
as provided in Section 2.02(g) of this Appendix A-2.
"Auction Procedures" shall mean the procedures set forth in Section 2.02(a)
of this Appendix A-2 by which the Auction Rate is determined.
"Auction Rate" shall mean the rate of interest per annum that results from
implementation of the Auction Procedures and is determined as described in
Section 2.02(a)(iii)(B) of this Appendix A-2.
"Authorized Denominations" shall mean $50,000 and any integral multiple
thereof.
"Available Auction Rate Notes" has the meaning set forth in Section
2.02(a)(iii)(A)(1) of this Appendix A-2.
"Bid" has the meaning set forth in Section 2.02(a)(i)(A) of this Appendix
A-2.
"Bid Auction Rate" has the meaning set forth in Section 2.02(a)(iii)(A) of
this Appendix A-2.
"Bidder" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A-2.
"Bond Equivalent Yield" shall mean, in respect of any security the rate for
which is quoted in The Wall Street Journal on a bank discount basis, the "bond
equivalent yield" (expressed as a percentage) for such security which appears on
Telerate's United States Treasury and Money Market Composite Page 0223, rounded
up to the nearest one-hundredth (0.01) of one percent.
Appendix A-2-2
"Broker-Dealer" shall mean Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Citigroup Global Markets Inc. or any other broker or dealer (each
as defined in the Securities Exchange Act of 1934, as amended), commercial bank
or other entity permitted by law to perform the functions required of a
Broker-Dealer set forth in the Auction Procedures that (a) is a Clearing Agency
Participant (or an affiliate of a Clearing Agency Participant), (b) has been
appointed as such by the Issuer pursuant to Section 2.02(f) of this Appendix
A-2, and (c) has entered into a Broker-Dealer Agreement that is in effect on the
date of reference.
"Broker-Dealer Agreements" shall mean the agreements between the Auction
Agent and the Broker-Dealers, and approved by the Issuer, pursuant to which the
Broker-Dealers agree to participate in Auctions as set forth in the Auction
Procedures, as from time to time amended or supplemented. The Broker-Dealer
Agreements shall be in substantially the form of the Broker-Dealer Agreements,
dated as of June 27, 2003, among the Issuer, The Bank of New York, as Auction
Agent, and the initial Broker-Dealers.
"Broker-Dealer Fee" has the meaning set forth in the Auction Agent
Agreement.
"Cap Rate" shall mean, with respect to any Accrual Period applicable to the
Auction Rate Notes, the lesser of (i) the applicable Maximum Rate in effect for
that Accrual Period and (ii) the ARS Student Loan Rate in effect for that
Accrual Period.
"Carry-over Amount" shall mean, for any Accrual Period during which
interest is calculated at the ARS Student Loan Rate, the excess, if any, of (a)
the amount of interest on an Auction Rate Note that would have accrued with
respect to the related Accrual Period at the lesser of (i) the applicable
Auction Rate and (ii) the Maximum Rate determined as if the ARS Student Loan
Rate were not a component thereof over (b) the amount of interest on such
Auction Rate Note actually accrued with respect to such Auction Rate Note with
respect to such Accrual Period based on the ARS Student Loan Rate, together with
the unreduced portion of any such excess from prior Accrual Periods; provided
that any reference to "principal" or "interest" in the Supplemental Indenture
and in this Appendix A-2 and the Auction Rate Notes shall not include within the
meanings of such words any Carry-over Amount or any interest accrued on any
Carry-over Amount.
"Commercial Paper Rate (90-day)" shall mean the rate determined at the end
of each calendar quarter using the daily average of that quarter's bond
equivalent 3-Month Financial Commercial Paper rates. The daily bond equivalent
rates are calculated from the 3-Month Financial Commercial Paper discount rates
published in the Federal Reserve's H.15 report. On weekends, holidays, and any
other day when no H.15 rates are available, the rate from the most recent
published date is used.
"Effective Interest Rate" shall mean, with respect to each calendar month
during the term of the Notes, the weighted average effective interest rate of
all Trust Student Loans, where for each Trust Student Loan, the effective
interest rate is equal to the interest rate payable by a borrower on each Trust
Student Loans calculated as of the last day of such calendar month minus the
weighted average of borrower incentives on all Trust Student Loans, each as of
the last day of such calendar month.
"Eligible Carry-Over Make-Up Amount" shall mean, with respect to each
Accrual Period relating to the Auction Rate Notes as to which, as of the first
day of such Accrual Period, there is any unpaid Carry-over Amount, an amount
equal to the lesser of (a) interest computed on the principal balance of the
Auction Rate Notes in respect to such Accrual Period at a per annum rate
Appendix A-2-3
equal to the excess, if any, of the ARS Student Loan Rate over the Auction Rate,
together with the unreduced portion of any such excess from prior Accrual
Periods and (b) the aggregate Carry-over Amount remaining unpaid as of the first
day of such Accrual Period together with interest accrued and unpaid thereon
through the end of such Accrual Period.
"Existing Owner" shall mean (a) with respect to and for the purpose of
dealing with the Auction Agent in connection with an Auction, a Person who is a
Broker-Dealer listed in the Existing Owner Registry at the close of business on
the Business Day immediately preceding the Auction Date for such Auction and (b)
with respect to and for the purpose of dealing with the Broker-Dealers in
connection with an Auction, a Person who is a beneficial owner of Auction Rate
Notes.
"Existing Owner Registry" shall mean the registry of Persons who are owners
of the Auction Rate Notes, maintained by the Auction Agent as provided in the
Auction Agent Agreement.
"Expense Percentage" shall mean, with respect to each calendar month during
the term of the Notes, the percentage equal to (i) the amount of percentage
basis points representing the Primary Servicing Fees, Auction Agent Fees and
Broker-Dealer Fees payable during that month plus (ii) (a) the Administration
Fees payable during the Collection Period in which that month occurs divided by
(b) the total principal outstanding balance of the Notes, as of the immediately
preceding Distribution Date (minus any funds on deposit in the Future
Distribution Account allocated to principal on any Auction Rate Notes but not
yet payable) times (c) 4.
"Hold Order" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A-2.
"Initial Auction Agent" shall mean The Bank of New York, a New York banking
corporation, its successors and assigns.
"Initial Auction Agent Agreement" shall mean, collectively, the Auction
Agent Agreement dated as of June 27, 2003, by and among the Issuer, the
Indenture Trustee and the Initial Auction Agent, including any amendment thereof
or supplement thereto.
"Initial Period" shall mean, as to Auction Rate Notes, the period
commencing on the Closing Date and continuing through the day immediately
preceding the Initial Rate Adjustment Date for such Auction Rate Notes.
"Initial Rate" shall mean 1.13% for the Class A-3 Notes and 1.12% for the
Class A-4 Notes.
"Initial Rate Adjustment Date" shall mean the day immediately following the
Initial Auction Date for each class of Auction Rate Notes.
"Interest Rate Adjustment Date" shall mean the date on which an Auction
Note Interest Rate is effective, and shall mean, with respect to the Auction
Rate Notes, the date of commencement of each Auction Period.
"Interest Rate Determination Date" shall mean, with respect to the Auction
Rate Notes, the Auction Date, or if no Auction Date is applicable to such Class,
the Business Day immediately preceding the date of commencement of an Auction
Period.
Appendix A-2-4
"Maximum Rate" means the least of (a) either (i) the Applicable LIBOR Rate
plus 1.50% (if the ratings assigned by Xxxxx'x, S&P and Fitch to the Auction
Rate Notes are "Aaa," "AAA" and "AAA," respectively, or better) or (ii) the
Applicable LIBOR Rate plus 2.50% (if any one of the ratings assigned by Xxxxx'x,
S&P and Fitch to the Auction Rate Notes is less than "Aaa," "AAA" and "AAA,"
respectively, and greater than or equal to "A3," "A-" and "A-," respectively),
or (iii) the Applicable LIBOR Rate plus 3.50% (if any one of the ratings
assigned by Xxxxx'x, S&P and Fitch to the Auction Rate Notes is less than "A3,"
"A-" and "A-" respectively), (b) 18% and (c) the highest rate the Issuer may
legally pay, from time to time, as interest on the Auction Rate Notes. For
purposes of the Auction Agent and the Auction Procedures, the ratings referred
to in this definition shall be the last ratings of which the Auction Agent has
been given written notice pursuant to the Auction Agent Agreement.
"Non-Payment Rate" shall mean One-Month LIBOR plus 1.50%.
"One-Month LIBOR," "Three-Month LIBOR," "Six-Month LIBOR" or "One-Year
LIBOR," shall mean the offered rate, as determined by the Auction Agent or
Indenture Trustee, as applicable, of the Applicable LIBOR Based Rate for United
States dollar deposits which appears on Telerate Page 3750, as reported by
Moneyline Telerate Service (or such other page as may replace Telerate Page 3750
for the purpose of displaying comparable rates) as of approximately 11:00 a.m.,
London time, on the LIBOR Determination Date; provided, that if on any
calculation date, no rate appears on Telerate Page 3750 as specified above, the
Auction Agent or Indenture Trustee, as applicable, shall determine the
arithmetic mean of the offered quotations of four major banks in the London
interbank market, for deposits in United States dollars for the respective
periods specified above to the banks in the London interbank market as of
approximately 11:00 a.m., London time, on such calculation date and in a
principal amount of not less than $1,000,000 that is representative of a single
transaction in such market and at such time, unless fewer than two such
quotations are provided, in which case, the Applicable LIBOR Based Rate shall be
the arithmetic mean of the offered quotations that leading banks in New York
City selected by the Auction Agent or Indenture Trustee, as applicable, are
quoting on the relevant LIBOR Determination Date for loans in United States
dollars to leading European banks in a principal amount of not less than
$1,000,000 that is representative of a single transaction in such market at such
time. All percentages resulting from such calculations shall be rounded upwards,
if necessary, to the nearest one-hundredth of one percent.
"Order" has the meaning set forth in Section 2.02(a)(i)(A) of this Appendix
A-2.
"Payment Default" shall mean, with respect to the Auction Rate Notes, (a) a
default in the due and punctual payment of any installment of interest at the
applicable Note Rate on such Auction Rate Notes, or (b) a default in the due and
punctual payment of any interest on and principal of such Auction Rate Notes at
their maturity.
"Potential Owner" shall mean any Person (including an Existing Owner that
is (a) a Broker-Dealer when dealing with the Auction Agent and (b) a potential
beneficial owner when dealing with a Broker-Dealer) who may be interested in
acquiring Auction Rate Notes (or, in the case of an Existing Owner thereof, an
additional principal amount of Auction Rate Notes).
"PSA" shall mean the Public Securities Association, its successors and
assigns.
"S&P" shall mean Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., its successors and assigns.
Appendix A-2-5
"Sell Order" has the meaning set forth in Section 2.02(a)(i)(A) of this
Appendix A-2.
"Submission Deadline" shall mean 1:00 p.m., eastern time, on any Auction
Date or such other time on any Auction Date by which the Broker-Dealers are
required to submit Orders to the Auction Agent as specified by the Auction Agent
from time to time.
"Submitted Bid" has the meaning set forth in Section 2.02(a)(iii)(A) of
this Appendix A-2.
"Submitted Hold Order" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A-2.
"Submitted Order" has the meaning set forth in Section 2.02(a)(iii)(A) of
this Appendix A-2.
"Submitted Sell Order" has the meaning set forth in Section 2.02(a)(iii)(A)
of this Appendix A-2.
"Substitute Auction Agent" shall mean the Person with whom the Issuer and
the Indenture Trustee enter into a Substitute Auction Agent Agreement.
"Substitute Auction Agent Agreement" shall mean an auction agent agreement
containing terms substantially similar to the terms of the Initial Auction Agent
Agreement, whereby a Person having the qualifications required by Section
2.02(e) of this Appendix A-2 agrees with the Indenture Trustee and the Issuer to
perform the duties of the Auction Agent under this Appendix A-2.
"Sufficient Bids" has the meaning set forth in Section 2.02(a)(iii)(A) of
this Appendix A-2.
"Variable Rate" shall mean the variable rate of interest per annum,
including the Initial Rate, borne by each Class of Auction Rate Notes during the
Initial Period for such Class, and each Accrual Period thereafter as such rate
of interest is determined in accordance with the provisions of Article II of
this Appendix A-2.
ARTICLE II
TERMS AND ISSUANCE
Section 2.01 Auction Rate and Carry-Over Amounts. During the Initial
Period, each Class of Auction Rate Notes shall bear interest at the Initial Rate
for such Class. Thereafter, and except with respect to an Auction Period
Adjustment, the Auction Rate Notes shall bear interest at an Auction Note
Interest Rate based on a 28-day Auction Period for the Auction Rate Notes, as
determined pursuant to this Section 2.01 and Section 2.02 of this Appendix A-2.
For the Auction Rate Notes during the Initial Period and each Auction
Period thereafter, interest at the applicable Auction Rate Notes Interest Rate
shall accrue daily and shall be computed for the actual number of days elapsed
on the basis of a year consisting of 360 days.
The Auction Note Interest Rate to be borne by the Auction Rate Notes after
such Initial Period for each Auction Period until an Auction Period Adjustment,
if any, shall be determined
Appendix A-2-6
as described below. Each such Auction Period after the Initial Period shall
commence on and include the day following the expiration of the immediately
preceding Auction Period and terminate on and include the third Business Day of
the following fourth week in the case of the Class A-3 Notes and the Class A-4
Notes; provided, however, that in the case of the Auction Period that
immediately follows the Initial Period for the Auction Rate Notes, such Auction
Period shall commence on the Initial Rate Adjustment Date. The Auction Note
Interest Rate of the Auction Rate Notes for each Auction Period shall be the
Auction Rate in effect for such Auction Period as determined in accordance with
Section 2.02(a) of this Appendix A-2; provided that if, on any Interest Rate
Determination Date, an Auction is not held for any reason, then the Auction Note
Interest Rate on such Auction Rate Notes for the next succeeding Auction Period
shall be the applicable Cap Rate.
Notwithstanding the foregoing:
(a) if the ownership of an Auction Rate Note is no longer maintained
as a Book-Entry Note, the Auction Note Interest Rate on the Auction Rate
Notes for any Accrual Period commencing after the delivery of certificates
representing Auction Rate Notes pursuant to this Indenture shall equal the
Cap Rate; or
(b) if a Payment Default shall have occurred, the Auction Note
Interest Rate on the Auction Rate Notes for the Accrual Period commencing
on or immediately after such Payment Default, and for each Accrual Period
thereafter, to and including the Accrual Period, if any, during which, or
commencing less than two Business Days after, such Payment Default is
cured, shall equal the applicable Non-Payment Rate on the first day of each
such Accrual Period.
In accordance with Section 2.02(a)(iii)(B) and (C) of this Appendix A-2,
the Auction Agent shall promptly give written notice to the Indenture Trustee
and the Issuer of each Auction Note Interest Rate (unless the Auction Note
Interest Rate is the applicable Non-Payment Rate) and the Maximum Rate when such
rate is not the Auction Note Interest Rate, applicable to the Auction Rate
Notes. The Indenture Trustee shall, upon request, notify the Noteholders and the
Issuer of Auction Rate Notes of the applicable Auction Note Interest Rate
applicable to such Auction Rate Notes for each Auction Period not later than the
third Business Day of such Auction Period. Notwithstanding any other provision
of the Auction Rate Notes or this Indenture and except for the occurrence of a
Payment Default, interest payable on the Auction Rate Notes for an Auction
Period shall never exceed for such Auction Period the amount of interest payable
at the applicable Maximum Rate in effect for such Auction Period.
If the Auction Rate for the Auction Rate Notes is greater than the ARS
Student Loan Rate, then the Variable Rate applicable to such Auction Rate Notes
for that Accrual Period will be the ARS Student Loan Rate and the Issuer shall
determine the Carry-over Amount, if any, with respect to such Auction Rate Notes
for such Accrual Period.
Such Carry-over Amount shall bear interest calculated at a rate equal to
One-Month LIBOR (as determined by the Issuer, provided the Indenture Trustee has
received notice of One-Month LIBOR from the Issuer, and if the Indenture Trustee
shall not have received such notice from the Issuer, then as determined by the
Indenture Trustee) from the Distribution Date for the Accrual Period with
respect to which such Carry-over Amount was calculated, until paid. Any payment
in respect of Carry-over Amount shall be applied, first, to any accrued interest
payable thereon and, second, in reduction of such Carry-over Amount. For
purposes of this Indenture
Appendix A-2-7
and this Appendix A-2, any reference to "principal" or "interest" herein shall
not include within the meaning of such words Carry-over Amount or any interest
accrued on any such Carry-over Amount. Such Carry-over Amount shall be
separately calculated for each Auction Rate Note by the Issuer during such
Accrual Period in sufficient time for the Indenture Trustee to give notice to
each Noteholder of such Carry-over Amount as required in the next succeeding
sentence. Not less than four days before the Distribution Date for an Accrual
Period with respect to which such Carry-over Amount has been calculated by the
Issuer, the Indenture Trustee shall give written notice to each Noteholder the
Auction Agent and the Issuer, in the form provided by the Issuer, of the
Carry-over Amount applicable to each Auction Rate Note, which written notice may
accompany the payment of interest made to the Noteholder on such Distribution
Date. Such notice shall state, in addition to such Carry-over Amount, that,
unless and until an Auction Rate Note has been redeemed (other than by optional
redemption), after which all accrued Carry-over Amounts (and all accrued
interest thereon) that remains unpaid shall be canceled and no Carry-over Amount
(and interest accrued thereon) shall be paid with respect to such Auction Rate
Note, (a) the Carry-over Amount (and interest accrued thereon calculated at a
rate equal to One-Month LIBOR) shall be paid by the Indenture Trustee pursuant
to an Issuer Order on an Auction Rate Note on the earliest of (i) the date of
defeasance of the Auction Rate Notes or (ii) the first occurring Distribution
Date with respect to the Auction Rate Note (or on the date of any such optional
redemption) if and to the extent that (A) the Eligible Carry-over Make-Up Amount
with respect to such subsequent Accrual Period is greater than zero, and (B)
moneys are available pursuant to the terms of the Indenture in an amount
sufficient to pay all or a portion of such Carry-over Amount (and interest
accrued thereon), and (b) interest shall accrue on the Carry-over Amount at a
rate equal to One-Month LIBOR until such Carry-over Amount is paid in full or is
cancelled.
The Carry-over Amount (and interest accrued thereon until the date of
payment) for Auction Rate Notes shall be allocated to the Auction Rate Notes by
the Indenture Trustee pursuant to an Issuer Order on Outstanding Auction Rate
Notes on the first occurring Quarterly Distribution Date if and to the extent
that (i) the Eligible Carry-over Make-Up Amount is greater than zero, and (ii)
on such Quarterly Distribution Date there are sufficient moneys available after
all distributions or allocations with a higher priority have been made and paid
to the Auction Rate Notes on the succeeding Distribution Date (or on such
Quarterly Distribution Date if it is a Distribution Date for such Auction Rate
Notes). Any Carry-over Amount (and any interest accrued thereon) on any Auction
Rate Note which is due and payable on a Quarterly Distribution Date, which
Auction Rate Note is to be allocated principal (other than by optional
redemption) on said Distribution Date, shall be paid to the Noteholder thereof
on the related Distribution Date to the extent that moneys are available
therefor in accordance with the provisions of this Appendix A-2; provided,
however, that any Carry-over Amount (and any interest accrued thereon) which is
not yet due and payable on said Distribution Date shall be cancelled with
respect to said Auction Rate Note that is to be allocated principal (other than
by optional redemption) on said Quarterly Distribution Date and shall not be
paid on any succeeding Distribution Date. To the extent that any portion of the
Carry-over Amount (and any interest accrued thereon) remains unpaid after
payment of a portion thereof, such unpaid portion shall be paid in whole or in
part as required hereunder until fully allocated by the Indenture Trustee on the
next occurring Quarterly Distribution Date or Dates, as necessary, if and to the
extent that the conditions in the second preceding sentence are satisfied. On
any Distribution Date on which the Indenture Trustee pays only a portion of the
Carry-over Amount (and any interest accrued thereon) on Auction Rate Notes, the
Indenture Trustee shall give written notice in the manner set forth in the
immediately preceding paragraph to the Noteholder of such Auction Rate Note
Appendix A-2-8
receiving such partial payment of the Carry-over Amount remaining unpaid on such
Auction Rate Note.
The Quarterly Distribution Date or other date on which such Carry-over
Amount (or any interest accrued thereon) for Auction Rate Notes shall be
allocated shall be determined by the Indenture Trustee in accordance with the
provisions of the immediately preceding paragraph. Any payment of Carry-over
Amounts (and interest accrued thereon) shall reduce the amount of Eligible
Carry-over Make-up Amount.
In the event that the Auction Agent no longer determines, or fails to
determine, when required, the Auction Note Interest Rate with respect to Auction
Rate Notes, or, if for any reason such manner of determination shall be held to
be invalid or unenforceable, the Auction Note Interest Rate for the next
succeeding Auction Period, for Auction Rate Notes shall be the applicable Cap
Rate as determined by the Auction Agent for such next succeeding Auction Period,
and if the Auction Agent shall fail or refuse to determine the Cap Rate, the Cap
Rate shall be determined by the securities dealer appointed by the Issuer
capable of making such a determination in accordance with the provisions of this
Appendix A-2 and written notice of such determination shall be given by such
securities dealer to the Indenture Trustee.
Section 2.02 Auction Rate.
(a) Determining the Auction Rate. By purchasing Auction Rate Notes,
whether in an Auction or otherwise, each purchaser of the Auction Rate Notes, or
its Broker-Dealer, must agree and shall be deemed by such purchase to have
agreed (x) to participate in Auctions on the terms described herein, (y) to have
its beneficial ownership of the Auction Rate Notes maintained at all times as
Book-Entry Notes for the account of its Clearing Agency Participant, which in
turn will maintain records of such beneficial ownership and (z) to authorize
such Clearing Agency Participant to disclose to the Auction Agent such
information with respect to such beneficial ownership as the Auction Agent may
request.
So long as the ownership of Auction Rate Notes is maintained as Book-Entry
Notes by the Clearing Agency, an Existing Owner may sell, transfer or otherwise
dispose of Auction Rate Notes only pursuant to a Bid or Sell Order placed in an
Auction or otherwise sell, transfer or dispose of Auction Rate Notes through a
Broker-Dealer, provided that, in the case of all transfers other than pursuant
to Auctions, such Existing Owner, its Broker-Dealer or its Clearing Agency
Participant advises the Auction Agent of such transfer. Auctions shall be
conducted on each Auction Date, if there is an Auction Agent on such Auction
Date, in the following manner:
(i) (A) Prior to the Submission Deadline on each Auction Date;
(1) each Existing Owner of Auction Rate Notes may submit to a
Broker-Dealer by telephone or otherwise any information as to:
a. the principal amount of Outstanding Auction Rate
Notes, if any, owned by such Existing Owner which such Existing
Owner desires to continue to own without regard to the Auction
Note Interest Rate for the next succeeding Auction Period;
b. the principal amount of Outstanding Auction Rate
Notes, if any, which such Existing Owner offers to sell if the
Auction Note Interest
Appendix A-2-9
Rate for the next succeeding Auction Period shall be less than
the rate per annum specified by such Existing Owner; and/or
c. the principal amount of Outstanding Auction Rate
Notes, if any, owned by such Existing Owner which such Existing
Owner offers to sell without regard to the Auction Note Interest
Rate for the next succeeding Auction Period;
and
(2) one or more Broker-Dealers may contact Potential Owners to
determine the principal amount of Auction Rate Notes which each
Potential Owner offers to purchase, if the Auction Note Interest Rate
for the next succeeding Auction Period shall not be less than the rate
per annum specified by such Potential Owner.
The statement of an Existing Owner or a Potential Owner referred to in (1)
or (2) of this paragraph (A) is herein referred to as an "Order," and each
Existing Owner and each Potential Owner placing an Order is herein referred to
as a "Bidder"; an Order described in clause (1)a. is herein referred to as a
"Hold Order"; an Order described in clauses (1)b. and (2) is herein referred to
as a "Bid"; and an Order described in clause (1)c. is herein referred to as a
"Sell Order."
(B) (1) Subject to the provisions of Section 2.02(a)(ii) of this
Appendix A-2, a Bid by an Existing Owner shall constitute an
irrevocable offer to sell:
a. the principal amount of Outstanding Auction Rate Notes
specified in such Bid if the Auction Note Interest Rate
determined as provided in this Section 2.02(a) shall be less than
the rate specified therein; or
b. such principal amount, or a lesser principal
amount of Outstanding Auction Rate Notes to be determined as set
forth in Section 2.02(a)(iv)(A)(4) of this Appendix A-2, if the
Auction Note Interest Rate determined as provided in this Section
2.02(a) shall be equal to the rate specified therein; or
c. such principal amount, or a lesser principal
amount of Outstanding Auction Rate Notes to be determined as set
forth in Section 2.02(a)(iv)(B)(3) of this Appendix A-2, if the
rate specified therein shall be higher than the applicable
Maximum Rate and Sufficient Bids have not been made.
(2) Subject to the provisions of Section 2.02(a)(ii) of this
Appendix A-2, a Sell Order by an Existing Owner shall constitute an
irrevocable offer to sell:
a. the principal amount of Outstanding Auction Rate Notes
specified in such Sell Order; or
Appendix A-2-10
b. such principal amount, or a lesser principal amount of
Outstanding Auction Rate Notes set forth in Section
2.02(a)(iv)(B)(3) of this Appendix A-2, if Sufficient Bids have
not been made.
(3) Subject to the provisions of Section 2.02(a)(ii) of this
Appendix A-2, a Bid by a Potential Owner shall constitute an
irrevocable offer to purchase:
a. the principal amount of Outstanding Auction Rate Notes
specified in such Bid if the Auction Note Interest Rate
determined as provided in this Section 2.02(a) shall be higher
than the rate specified in such Bid; or
b. such principal amount, or a lesser principal amount of
Outstanding Auction Rate Notes set forth in Section
2.02(a)(iv)(A)(5) of this Appendix A-2, if the Auction Note
Interest Rate determined as provided in this Section 2.02(a)
shall be equal to the rate specified in such Bid.
(ii) (A) Each Broker-Dealer shall submit in writing to the Auction
Agent prior to the Submission Deadline on each Auction Date all Orders obtained
by such Broker-Dealer and shall specify with respect to each such Order:
(1) the name of the Bidder placing such Order;
(2) the aggregate principal amount of Auction Rate Notes that
are the subject of such Order;
(3) to the extent that such Bidder is an Existing Owner:
a. the principal amount of Auction Rate Notes, if any,
subject to any Hold Order placed by such Existing Owner;
b. the principal amount of Auction Rate Notes, if any,
subject to any Bid placed by such Existing Owner and the rate
specified in such Bid; and
c. the principal amount of Auction Rate Notes, if any,
subject to any Sell Order placed by such Existing Owner;
and
(4) to the extent such Bidder is a Potential Owner, the rate
specified in such Potential Owner's Bid.
(B) If any rate specified in any Bid contains more than three figures
to the right of the decimal point, the Auction Agent shall round such rate
up to the next higher one thousandth of 1%.
(C) If an Order or Orders covering all Outstanding Auction Rate Notes
owned by an Existing Owner is not submitted to the Auction Agent prior to
the Submission Deadline, the Auction Agent shall deem a Hold Order to have
been submitted on behalf
Appendix A-2-11
of such Existing Owner covering the principal amount of Outstanding Auction
Rate Notes owned by such Existing Owner and not subject to an Order
submitted to the Auction Agent.
(D) Neither the Issuer, the Indenture Trustee nor the Auction Agent
shall be responsible for any failure of a Broker-Dealer to submit an Order
to the Auction Agent on behalf of any Existing Owner or Potential Owner.
(E) If any Existing Owner submits through a Broker-Dealer to the
Auction Agent one or more Orders covering in the aggregate more than the
principal amount of Outstanding Auction Rate Notes owned by such Existing
Owner, such Orders shall be considered valid as follows and in the
following order of priority:
(1) All Hold Orders shall be considered valid, but only up
to the aggregate principal amount of Outstanding Auction Rate Notes
owned by such Existing Owner, and if the aggregate principal amount of
Auction Rate Notes subject to such Hold Orders exceeds the aggregate
principal amount of Auction Rate Notes owned by such Existing Owner,
the aggregate principal amount of Auction Rate Notes subject to each
such Hold Order shall be reduced pro rata so that the aggregate
principal amount of Auction Rate Notes subject to such Hold Order
equals the aggregate principal amount of Outstanding Auction Rate
Notes owned by such Existing Owner.
(2) a. Any Bid shall be considered valid up to an amount
equal to the excess of the principal amount of Outstanding Auction
Rate Notes owned by such Existing Owner over the aggregate principal
amount of Auction Rate Notes subject to any Hold Order referred to in
clause (A) of this paragraph (ii);
b. subject to subclause (1) of this clause (E), if more
than one Bid with the same rate is submitted on behalf of such
Existing Owner and the aggregate principal amount of Outstanding
Auction Rate Notes subject to such Bids is greater than such
excess, such Bids shall be considered valid up to an amount equal
to such excess;
c. subject to subclauses (1) and (2) of this clause (E), if
more than one Bid with different rates are submitted on behalf of
such Existing Owner, such Bids shall be considered valid first in
the ascending order of their respective rates until the highest
rate is reached at which such excess exists and then at such rate
up to the amount of such excess; and
d. in any such event, the amount of Outstanding Auction
Rate Notes, if any, subject to Bids not valid under this clause
(E) shall be treated as the subject of a Bid by a Potential Owner
at the rate therein specified; and
(3) All Sell Orders shall be considered valid up to an
amount equal to the excess of the principal amount of Outstanding
Auction Rate Notes owned by such Existing Owner over the aggregate
principal amount of Auction Rate Notes subject to Hold Orders referred
to in clause (1) of this paragraph (v) and valid Bids referred to in
clause (2) of this paragraph (E).
Appendix A-2-12
(F) If more than one Bid for Auction Rate Notes is submitted on
behalf of any Potential Owner, each Bid submitted shall be a separate Bid
with the rate and principal amount therein specified.
(G) An Existing Owner that offers to purchase additional Auction Rate
Notes is, for purposes of such offer, treated as a Potential Owner.
(H) Any Bid or Sell Order submitted by an Existing Owner covering an
aggregate principal amount of Auction Rate Notes not equal to an Authorized
Denomination shall be rejected and shall be deemed a Hold Order. Any Bid
submitted by a Potential Owner covering an aggregate principal amount of
Auction Rate Notes not equal to an Authorized Denomination shall be
rejected.
(I) Any Bid specifying a rate higher than the applicable Maximum Rate
will (1) be treated as a Sell Order if submitted by an Existing Owner and
(2) not be accepted if submitted by a Potential Owner.
(J) Any Order submitted in an Auction by a Broker-Dealer to the
Auction Agent prior to the Submission Deadline on any Auction Date shall be
irrevocable.
(iii)(A) Not earlier than the Submission Deadline on each Auction Date,
the Auction Agent shall assemble all valid Orders submitted or deemed submitted
to it by the Broker-Dealers (each such Order as submitted or deemed submitted by
a Broker-Dealer being herein referred to individually as a "Submitted Hold
Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be, or as
a "Submitted Order," and collectively as "Submitted Hold Orders," "Submitted
Bids" or "Submitted Sell Orders," as the case may be, or as "Submitted Orders")
and shall determine:
(1) the excess of the total principal amount of Outstanding
Auction Rate Notes over the sum of the aggregate principal amount of
Outstanding Auction Rate Notes subject to Submitted Hold Orders (such
excess being herein referred to as the "Available Auction Rate
Notes"), and
(2) from the Submitted Orders whether:
a. the aggregate principal amount of Outstanding Auction
Rate Notes subject to Submitted Bids by Potential Owners
specifying one or more rates equal to or lower than the
applicable Maximum Rate;
exceeds or is equal to the sum of:
b. the aggregate principal amount of Outstanding Auction
Rate Notes subject to Submitted Bids by Existing Owners
specifying one or more rates higher than the applicable Maximum
Rate; and
c. the aggregate principal amount of Outstanding Auction
Rate Notes subject to Submitted Sell Orders;
(in the event such excess or such equality exists, other than
because all of the Outstanding Auction Rate Notes are subject to
Submitted Hold Orders, such
Appendix A-2-13
Submitted Bids described in subclause a. above shall be referred to
collectively as "Sufficient Bids"); and
(3) if Sufficient Bids exist, the Bid Auction Rate, which
shall be the lowest rate specified in such Submitted Bids such that
if:
a. (x) each Submitted Bid from Existing Owners
specifying such lowest rate and (y) all other Submitted Bids from
Existing Owners specifying lower rates were rejected, thus
entitling such Existing Owners to continue to own the principal
amount of Auction Rate Notes subject to such Submitted Bids; and
b. (x) each such Submitted Bid from Potential Owners
specifying such lowest rate and (y) all other Submitted Bids from
Potential Owners specifying lower rates were accepted;
the result would be that such Existing Owners described in
subclause a. above would continue to own an aggregate principal amount
of Outstanding Auction Rate Notes which, when added to the aggregate
principal amount of Outstanding Auction Rate Notes to be purchased by
such Potential Owners described in subclause b. above, would equal not
less than the Available Auction Rate Notes.
(B) Promptly after the Auction Agent has made the determinations
pursuant to Section 2.02(a)(iii)(A) of this Appendix A-2, the Auction Agent
shall advise, based upon the information provided and determinations made
by the Administrator, the Indenture Trustee, the Broker-Dealers and the
Issuer of the ARS Student Loan Rate, Maximum Rate and the All Hold Rate and
the components thereof on the Auction Date. Based on such determinations,
the Auction Rate for the next succeeding Accrual Period will be established
as follows:
(1) if Sufficient Bids exist, that the Auction Rate for the next
succeeding Auction Period shall be equal to the Bid Auction Rate so
determined;
(2) if Sufficient Bids do not exist (other than because all of
the Outstanding Auction Rate Notes are subject to Submitted Hold
Orders), that the Auction Rate for the next succeeding Auction Period
shall be equal to the applicable Maximum Rate; or
(3) if all Outstanding Auction Rate Notes are subject to
Submitted Hold Orders, that the Auction Rate for the next succeeding
Auction Period shall be equal to the applicable All Hold Rate.
(C) Promptly after the Auction Agent has determined the Auction Rate,
the Auction Agent shall determine and advise the Indenture Trustee of the
Auction Note Interest Rate, which rate shall be the least of (x) the
Auction Rate, (y) the applicable Maximum Rate and (z) the ARS Student Loan
Rate.
(iv) Existing Owners shall continue to own the principal amount of Auction
Rate Notes that are subject to Submitted Hold Orders. If the ARS Student Loan
Rate is equal to or greater than the Bid Auction Rate and if Sufficient Bids
have been received by the Auction
Appendix A-2-14
Agent, the Bid Auction Rate will be the Auction Note Interest Rate, and
Submitted Bids and Submitted Sell Orders will be accepted or rejected and the
Auction Agent will take such other action as described below in subparagraph
(A).
If the Maximum Rate is less than the Auction Rate, the Maximum Rate will be
the Auction Note Interest Rate. If the Auction Agent has not received Sufficient
Bids (other than because all of the Outstanding Auction Rate Notes are subject
to Submitted Hold Orders), the Auction Note Interest Rate will be the applicable
Maximum Rate. In any of the cases described above, Submitted Orders will be
accepted or rejected and the Auction Agent will take such other action as
described below in subparagraph (B).
(A) If Sufficient Bids have been made and the Maximum Rate is equal
to or greater than the Bid Auction Rate (in which case the Auction Note
Interest Rate shall be the Bid Auction Rate), all Submitted Sell Orders
shall be accepted and, subject to the provisions of clauses (4) and (5) of
this Section 2.02(a)(iv), Submitted Bids shall be accepted or rejected as
follows in the following order of priority, and all other Submitted Bids
shall be rejected:
(1) Existing Owners' Submitted Bids specifying any rate that is
higher than the Auction Note Interest Rate shall be accepted, thus
requiring each such Existing Owner to sell the aggregate principal
amount of Auction Rate Notes subject to such Submitted Bids;
(2) Existing Owners' Submitted Bids specifying any rate that is
lower than the Auction Note Interest Rate shall be rejected, thus
entitling each such Existing Owner to continue to own the aggregate
principal amount of Auction Rate Notes subject to such Submitted Bids;
(3) Potential Owners' Submitted Bids specifying any rate that is
lower than the Auction Note Interest Rate shall be accepted;
(4) Each Existing Owners' Submitted Bid specifying a rate that
is equal to the Auction Note Interest Rate shall be rejected, thus
entitling such Existing Owner to continue to own the aggregate
principal amount of Auction Rate Notes subject to such Submitted Bid,
unless the aggregate principal amount of Outstanding Auction Rate
Notes subject to all such Submitted Bids shall be greater than the
principal amount of Auction Rate Notes (the "remaining principal
amount") equal to the excess of the Available Auction Rate Notes over
the aggregate principal amount of Auction Rate Notes subject to
Submitted Bids described in clauses (2) and (3) of this Section
2.02(a)(iv)(A), in which event such Submitted Bid of such Existing
Owner shall be rejected in part, and such Existing Owner shall be
entitled to continue to own the principal amount of Auction Rate Notes
subject to such Submitted Bid, but only in an amount equal to the
aggregate principal amount of Auction Rate Notes obtained by
multiplying the remaining principal amount by a fraction, the
numerator of which shall be the principal amount of Outstanding
Auction Rate Notes owned by such Existing Owner subject to such
Submitted Bid and the denominator of which shall be the sum of the
principal amount of Outstanding Auction Rate Notes subject to such
Submitted Bids made by all such Existing Owners that specified a rate
equal to the
Appendix A-2-15
Auction Note Interest Rate, subject to the provisions of Section
2.02(a)(iv)(D) of this Appendix A-2; and
(5) Each Potential Owner's Submitted Bid specifying a rate that
is equal to the Auction Note Interest Rate shall be accepted, but only
in an amount equal to the principal amount of Auction Rate Notes
obtained by multiplying the excess of the aggregate principal amount
of Available Auction Rate Notes over the aggregate principal amount of
Auction Rate Notes subject to Submitted Bids described in clauses (2),
(3) and (4) of this Section 2.02(a)(iv)(A) by a fraction the numerator
of which shall be the aggregate principal amount of Outstanding
Auction Rate Notes subject to such Submitted Bid and the denominator
of which shall be the sum of the principal amount of Outstanding
Auction Rate Notes subject to Submitted Bids made by all such
Potential Owners that specified a rate equal to the Auction Note
Interest Rate, subject to the provisions of Section 2.02(a)(iv)(D) of
this Appendix A-2.
(B) If Sufficient Bids have not been made (other than because all of
the Outstanding Auction Rate Notes are subject to submitted Hold Orders),
or if the Maximum Rate is less than the Bid Auction Rate (in which case the
Auction Note Interest Rate shall be the Maximum Rate), subject to the
provisions of Section 2.02(a)(iv)(D) of this Appendix A-2, Submitted Orders
shall be accepted or rejected as follows in the following order of priority
and all other Submitted Bids shall be rejected:
(1) Existing Owners' Submitted Bids specifying any rate that is
equal to or lower than the Auction Note Interest Rate shall be
rejected, thus entitling such Existing Owners to continue to own the
aggregate principal amount of Auction Rate Notes subject to such
Submitted Bids;
(2) Potential Owners' Submitted Bids specifying (x) any rate
that is equal to or lower than the Auction Note Interest Rate shall be
accepted and (y) any rate that is higher than the Auction Note
Interest Rate shall be rejected; and
(3) each Existing Owner's Submitted Bid specifying any rate that
is higher than the Auction Note Interest Rate and the Submitted Sell
Order of each Existing Owner shall be accepted, thus entitling each
Existing Owner that submitted any such Submitted Bid or Submitted Sell
Order to sell the Auction Rate Notes subject to such Submitted Bid or
Submitted Sell Order, but in both cases only in an amount equal to the
aggregate principal amount of Auction Rate Notes obtained by
multiplying the aggregate principal amount of Auction Rate Notes
subject to Submitted Bids described in clause (2)(x) of this Section
2.02(a)(iv)(B) by a fraction the numerator of which shall be the
aggregate principal amount of Outstanding Auction Rate Notes owned by
such Existing Owner subject to such submitted Bid or Submitted Sell
Order and the denominator of which shall be the aggregate principal
amount of Outstanding Auction Rate Notes subject to all such Submitted
Bids and Submitted Sell Orders.
(C) If all Auction Rate Notes are subject to Submitted Hold Orders,
all Submitted Bids shall be rejected.
(D) If, as a result of the procedures described in paragraph (A) or
(B) of this Section 2.02(a)(iv), any Existing Owner would be entitled or
required to sell, or any
Appendix A-2-16
Potential Owner would be entitled or required to purchase, a principal
amount of Auction Rate Notes that is not equal to an Authorized
Denomination, the Auction Agent shall, in such manner as in its sole
discretion it shall determine, round up or down the principal amount of
Auction Rate Notes to be purchased or sold by any Existing Owner or
Potential Owner so that the principal amount of Auction Rate Notes
purchased or sold by each Existing Owner or Potential Owner shall be equal
to an Authorized Denomination.
(E) If, as a result of the procedures described in paragraph (B) of
this Section 2.02(a)(iv), any Potential Owner would be entitled or required
to purchase less than an Authorized Denomination of Auction Rate Notes, the
Auction Agent shall, in such manner as in its sole discretion it shall
determine, allocate Auction Rate Notes for purchase among Potential Owners
so that only Auction Rate Notes in Authorized Denominations are purchased
by any Potential Owner, even if such allocation results in one or more of
such Potential Owners not purchasing any Auction Rate Notes.
(v) Based on the result of each Auction, the Auction Agent shall determine
the aggregate principal amount of Auction Rate Notes to be purchased and the
aggregate principal amount of Auction Rate Notes to be sold by Potential Owners
and Existing Owners on whose behalf each Broker-Dealer submitted Bids or Sell
Orders and, with respect to each Broker-Dealer, to the extent that such
aggregate principal amount of Auction Rate Notes to be sold differs from such
aggregate principal amount of Auction Rate Notes to be purchased, determine to
which other Broker-Dealer or Broker-Dealers acting for one or more purchasers
such Broker-Dealer shall deliver, or from which other Broker-Dealer or
Broker-Dealers acting for one or more sellers such Broker-Dealer shall receive,
as the case may be, Auction Rate Notes.
(vi) Any calculation by the Auction Agent or the Indenture Trustee, as
applicable, of the Auction Note Interest Rate, the Maximum Rate, the All Hold
Rate, the ARS Student Loan Rate and the Non-Payment Rate shall, in the absence
of manifest error, be binding on all other parties.
(vii) Notwithstanding anything in this Appendix A-2 to the contrary, (A) no
Auction for the Auction Rate Notes for an Auction Period of less than 180 days
will be held on any Auction Date hereunder on which there are insufficient
moneys in the Collection Account to pay, or otherwise held by the Indenture
Trustee under the Indenture and available to pay, the principal of and interest
due on the Auction Rate Notes on the Distribution Date immediately following
such Auction Date, and (B) no Auction will be held on any Auction Date hereunder
during the continuance of a Payment Default. The Indenture Trustee shall
promptly notify the Auction Agent of any such occurrence.
(b) Application of Interest Payments for the Auction Rate Notes.
(i) The Indenture Trustee shall determine not later than 2:00 p.m.,
eastern time, on the Business Day next succeeding a Distribution Date, whether a
Payment Default has occurred. If a Payment Default has occurred, the Indenture
Trustee shall, not later than 2:15 p.m., eastern time, on such Business Day,
send a notice thereof in substantially the form of Exhibit C attached hereto to
the Auction Agent by telecopy or similar means and, if such Payment Default is
cured, the Indenture Trustee shall immediately send a notice in substantially
the form of Exhibit D attached hereto to the Auction Agent by telecopy or
similar means.
(ii) Not later than 2:00 p.m., eastern time, on each anniversary of the
initial Distribution Date, the Indenture Trustee shall pay to the Auction Agent,
in immediately available
Appendix A-2-17
funds out of amounts in the Collection Account, an amount equal to the Auction
Agent Fee as set forth in the Auction Agent Agreement. Not later than 2:00 p.m.,
eastern time, on each Auction Date, the Indenture Trustee shall pay to the
Auction Agent, in immediately available funds out of amounts in the Collection
Account, an amount equal to the Broker-Dealer Fee as calculated in the Auction
Agent Agreement. The Indenture Trustee shall, from time to time at the request
of the Auction Agent and at the direction of an Authorized Officer, reimburse
the Auction Agent for its reasonable expenses as provided in the Auction Agent
Agreement, such expenses to be paid out of amounts in the Collection Account.
(c) Calculation of Maximum Rate, All Hold Rate, ARS Student Loan Rate,
Applicable LIBOR Rate, and Non-Payment Rate. The Auction Agent shall calculate
the applicable Maximum Rate, Applicable LIBOR Rate, and All Hold Rate, as the
case may be, on each Auction Date and shall notify the Indenture Trustee and the
Broker-Dealers of the applicable Maximum Rate, Applicable LIBOR Rate and All
Hold Rate, as the case may be, as provided in the Auction Agent Agreement;
provided, that if the ownership of the Auction Rate Notes is no longer
maintained as Book-Entry Notes, or if a Payment Default has occurred, then the
Indenture Trustee shall determine the applicable Maximum Rate, Applicable LIBOR
Rate, All Hold Rate and Non-Payment Rate for each such Accrual Period. If the
ownership of the Auction Rate Notes is no longer maintained as Book-Entry Notes
by the Clearing Agency, the Indenture Trustee shall calculate the applicable
Maximum Rate on the Business Day immediately preceding the first day of each
Auction Period after the delivery of certificates representing the Auction Rate
Notes pursuant to the Indenture. If a Payment Default shall have occurred, the
Indenture Trustee shall calculate the Non-Payment Rate on the Interest Rate
Determination Date for (i) each Accrual Period commencing after the occurrence
and during the continuance of such Payment Default and (ii) any Accrual Period
commencing less than two Business Days after the cure of any Payment Default.
The determination by the Indenture Trustee or the Auction Agent, as the case may
be, of the applicable Maximum Rate, Applicable LIBOR Rate, All Hold Rate and
Non-Payment Rate shall (in the absence of manifest error) be final and binding
upon all parties. If calculated or determined by the Auction Agent, the Auction
Agent shall promptly advise the Indenture Trustee of the applicable Maximum
Rate, Applicable LIBOR Rate and All Hold Rate. The Administrator shall advise
the Auction Agent of the applicable ARS Student Loan Rate.
(d) Notification of Rates, Amounts and Distribution Dates.
(i) By 12:00 noon, eastern time, on the Business Day following each Record
Date, the Indenture Trustee shall determine the aggregate amounts of interest
distributable on the next succeeding Distribution Date to the beneficial owners
of Auction Rate Notes.
(ii) At least four days prior to any Distribution Date, the Indenture
Trustee shall:
(A) confirm with the Auction Agent, so long as no Payment Default has
occurred and is continuing and the ownership of the Auction Rate Notes is
maintained as Book-Entry Notes by the applicable Clearing Agency, (1) the
date of such next Distribution Date and (2) the amount payable to the
Auction Agent on the Auction Date pursuant to Section 2.02(b)(ii) of this
Appendix A-2; and
(B) advise the applicable Clearing Agency, so long as the ownership
of the Auction Rate Notes is maintained as Book-Entry Notes by the
applicable Clearing
Appendix A-2-18
Agency, upon request, of the aggregate amount of interest
distributable on such next Distribution Date to the beneficial owners
of each Class of the Auction Rate Notes.
If any day scheduled to be an Distribution Date shall be changed after the
Indenture Trustee shall have given the notice or confirmation referred to in
clause (i) of the preceding sentence, the Indenture Trustee shall, not later
than 11:15 a.m., eastern time, on the Business Day next preceding the earlier of
the new Distribution Date or the old Distribution Date, by such means as the
Indenture Trustee deems practicable, give notice of such change to the Auction
Agent, so long as no Payment Default has occurred and is continuing and the
ownership of the Auction Rate Notes is maintained as Book-Entry Notes by the
applicable Clearing Agency.
(e) Auction Agent.
(i) The Bank of New York is hereby appointed as Initial Auction
Agent to serve as agent for the Issuer in connection with Auctions. The
Indenture Trustee and the Issuer will, and the Indenture Trustee is hereby
directed to, enter into the Initial Auction Agent Agreement with The Bank of New
York, as the Initial Auction Agent. Any Substitute Auction Agent shall be (A) a
bank, national banking association or trust company duly organized under the
laws of the United States of America or any state or territory thereof having
its principal place of business in the Borough of Manhattan, New York, or such
other location as approved by the Indenture Trustee in writing and having a
combined capital stock or surplus of at least $50,000,000, or (B) a member of
the National Association of Securities Dealers, Inc., having a capitalization of
at least $50,000,000, and, in either case, authorized by law to perform all the
duties imposed upon it hereunder and under the Auction Agent Agreement. The
Auction Agent may at any time resign and be discharged of the duties and
obligations created by this Appendix A-2 by giving at least 90 days' notice to
the Indenture Trustee, each Broker-Dealer and the Issuer. The Auction Agent may
be removed at any time by the Indenture Trustee upon the written direction of an
Authorized Officer or by the holders of a majority of the aggregate principal
amount of the Auction Rate Notes then Outstanding, and if by such Noteholders,
by an instrument signed by such Noteholders or their attorneys and filed with
the Auction Agent, the Issuer and the Indenture Trustee upon at least 90 days'
written notice. Neither resignation nor removal of the Auction Agent pursuant to
the preceding two sentences shall be effective until and unless a Substitute
Auction Agent has been appointed and has accepted such appointment. If required
by the Issuer, a Substitute Auction Agent Agreement shall be entered into with a
Substitute Auction Agent. Notwithstanding the foregoing, the Auction Agent may
terminate the Auction Agent Agreement if, within 25 days after notifying the
Indenture Trustee, each Broker-Dealer and the Issuer in writing that it has not
received payment of any Auction Agent Fee due it in accordance with the terms of
the Auction Agent Agreement, the Auction Agent does not receive such payment.
(ii) If the Auction Agent shall resign or be removed or be dissolved, or if
the property or affairs of the Auction Agent shall be taken under the control of
any state or federal court or administrative body because of bankruptcy or
insolvency, or for any other reason, the Indenture Trustee at the direction of
an Authorized Officer, shall use its best efforts to appoint a Substitute
Auction Agent.
(iii) The Auction Agent is acting as agent for the Issuer in connection
with Auctions. In the absence of bad faith, negligent failure to act or
negligence on its part, the Auction Agent shall not be liable for any action
taken, suffered or omitted or any error of judgment made by it in the
performance of its duties under the Auction Agent Agreement and shall not be
liable for
Appendix A-2-19
any error of judgment made in good faith unless the Auction Agent shall have
been negligent in ascertaining (or failing to ascertain) the pertinent facts.
(f) Broker-Dealer.
(i) The Auction Agent will enter into Broker-Dealer Agreements with
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Citigroup Global Markets
Inc. as the initial Broker-Dealers. An Authorized Officer of the Administrator,
on behalf of the Issuer may, from time to time, approve one or more additional
persons to serve as a Broker-Dealer under the Broker-Dealer Agreements and shall
be responsible for providing such Broker-Dealer Agreements to the Indenture
Trustee and the Auction Agent.
(ii) Any Broker-Dealer may be removed at any time, at the request of an
Authorized Officer of the Administrator, on behalf of the Issuer, but there
shall, at all times, be at least one Broker-Dealer appointed and acting as such.
(g) Changes in Auction Period or Periods and Certain Percentages.
(i) While any of the Auction Rate Notes are Outstanding, the Issuer
may, at the direction of the Broker-Dealers, from time to time, change the
length of one or more Auction Periods (an "Auction Period Adjustment"), in order
to conform with then current market practice with respect to similar securities
or to accommodate economic and financial factors that may affect or be relevant
to the length of the Auction Period and the interest rate borne by the Auction
Rate Notes. The Issuer shall not initiate an Auction Period Adjustment unless it
shall have received the written direction of the applicable Broker-Dealer, not
later than nine days prior to the Auction Date for such Auction Period. The
Broker-Dealer shall initiate the Auction Period Adjustment by giving written
notice by Issuer Order to the Indenture Trustee, the Auction Agent, the
applicable Broker-Dealers, each Rating Agency and the applicable Clearing Agency
in substantially the form of, or containing substantially the information
contained in, Exhibit E attached hereto at least 10 days prior to the Auction
Date for such Auction Period.
(ii) Any such adjusted Auction Period shall not be less than 7 days nor
more than 270 days.
(iii) An Auction Period Adjustment shall take effect only if (A) the
Indenture Trustee and the Auction Agent receive, by 11:00 a.m., eastern time, on
the Business Day before the Auction Date for the first such Auction Period, an
Issuer Certificate in substantially the form attached as, or containing
substantially the same information contained in, Exhibit F attached hereto,
authorizing the Auction Period Adjustment specified in such certificate along
with a copy of the written direction of the applicable Broker-Dealer and, (B)
Sufficient Bids exist as of the Auction on the Auction Date for such first
Auction Period. If the condition referred to in (A) above is not met, the
applicable Auction Note Interest Rate for the next Auction Period shall be
determined pursuant to the above provisions of this Section 2.02 and the Auction
Period shall be the Auction Period determined without reference to the proposed
change. If the condition referred to in (A) is met but the condition referred in
(B) above is not met, the applicable Auction Note Interest Rate for the next
Auction Period shall be the applicable Maximum Rate and the Auction Period shall
be the Auction Period determined without reference to the proposed change.
In connection with any Auction Period Adjustment, the Auction Agent shall
provide such further notice to such parties as is specified in Section 2.03 of
the Auction Agent Agreement.
Appendix A-2-20
(h) Changes in the Auction Date. The applicable Broker-Dealer, and,
if applicable, upon receipt of the opinion of counsel as required below, may
specify a different Auction Date (but in no event more than five Business Days
earlier) than the Auction Date that would otherwise be determined in accordance
with the definition of "Auction Date" in Section 1.01 of this Appendix A-2 with
respect to one or more specified Auction Periods in order to conform with then
current market practice with respect to similar securities or to accommodate
economic and financial factors that may affect or be relevant to the day of the
week constituting an Auction Date and the interest rate borne on the Auction
Rate Notes. The applicable Broker-Dealer shall deliver a written direction to
such change in the length of the Auction Date to the Issuer at least 14 days
prior to the effective date of such change. If the Issuer shall have delivered
such written direction of the applicable Broker-Dealer, such Broker-Dealer shall
provide notice of its determination to specify an earlier Auction Date for one
or more Auction Periods by means of a written notice delivered at least 10 days
prior to the proposed changed Auction Date to the Indenture Trustee, the Auction
Agent, the Issuer, each Rating Agency and the Clearing Agency. Such notice shall
be substantially in the form of, or contain substantially the information
contained in, Exhibit G attached hereto.
In connection with any change described in this Section 2.02(h), the
Auction Agent shall provide such further notice to such parties as is specified
in Section 2.03 of the Auction Agent Agreement.
Section 2.03 Additional Provisions Regarding the Interest Rates on
the Auction Rate Notes. The determination of a Variable Rate by the Auction
Agent or any other Person pursuant to the provisions of the applicable Section
of this Article II shall be conclusive and binding on the Noteholders of the
Auction Rate Notes to which such Variable 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 the
Auction Rate Notes (including interest calculated as provided herein, plus any
other amounts that constitute interest on the Auction Rate Notes under
applicable law, which are contracted for, charged, reserved, taken or received
pursuant to the Auction Rate Notes or related documents) calculated from the
Closing Date through any subsequent day during the term of the Auction Rate
Notes or otherwise prior to payment in full of the Auction Rate Notes exceed the
amount permitted by applicable law. If the applicable law is ever judicially
interpreted so as to render usurious any amount called for under the Auction
Rate Notes or related documents or otherwise contracted for, charged, reserved,
taken or received in connection with the Auction Rate Notes, or if the
redemption or acceleration of the maturity of the Auction Rate Notes results in
payment to or receipt by the Noteholder or any former Noteholder of the Auction
Rate Notes of any interest in excess of that permitted by applicable law, then,
notwithstanding any provision of the Auction Rate Notes or related documents to
the contrary, all excess amounts theretofore paid or received with respect to
the Auction Rate Notes shall be credited on the principal balance of the Auction
Rate Notes (or, if the Auction Rate Notes have been paid or would thereby be
paid in full, refunded by the recipient thereof), and the provisions of the
Auction Rate Notes and related documents shall automatically and immediately be
deemed reformed and the amounts thereafter collectible hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for under the Auction Rate Notes and under the related
documents.
Appendix A-2-21
SCHEDULE A
TO THE INDENTURE
Schedule of Trust Student Loans
-------------------------------
[See Schedule A to the Xxxx of Sale
(Attachment B to the Sale Agreement)]
Schedule A-1
SCHEDULE B
TO THE INDENTURE
Location of Trust Student Loan Files
------------------------------------
[See Attachment B to the Servicing Agreement]
Schedule B-1
EXHIBIT A
TO THE INDENTURE
[FORM OF CLASS A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER Principal Balance as of Closing Date $[Note Face Amount]
R-___ CUSIP NO. 78443C AL8
ISIN NO. US78443C AL81
COMMON CODE NO. 017143719
Exhibit A-1
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
FLOATING RATE CLASS A-1 STUDENT LOAN-BACKED NOTES
SLM Private Credit Student Loan Trust 2003-B, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $500,000,000 and the denominator of which is
$580,000,000 by (ii) the aggregate amount, if any, payable to Class A-1
Noteholders on such Distribution Date in respect of principal of the Notes
pursuant to Section 3.01 of the Indenture dated as of June 1, 2003, among the
Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Trustee on behalf of the Issuer, and JPMorgan Chase Bank, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein being defined in Appendix A-1 and
Appendix A-2 to the Indenture, which also contains rules as to usage that shall
be applicable herein); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the September 15, 2017
Distribution Date (the "Class A-1 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-1 Rate (as defined on the reverse hereof), on each Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date (or, in the case of the first Accrual Period, the
Closing Date) to but excluding the following Distribution Date (each an "Accrual
Period"). Interest shall be calculated on the basis of the actual number of days
elapsed in each Accrual Period divided by 360. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
Exhibit A-2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SLM PRIVATE CREDIT STUDENT LOAN TRUST
2003-B
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee
under the Trust Agreement
By: /s/
--------------------------------
Authorized Signatory
Date: June 27, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee under the
Indenture
By: /s/
--------------------------------
Authorized Signatory
Date: June 27, 2003
Exhibit A-3
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-1 Student Loan-Backed Notes (the "Class
A-1 Notes"), which, together with the Issuer's Floating Rate Class A-2 Student
Loan-Backed Notes (the "Class A-2 Notes"), Auction Rate Class A-3 Student-Loan
Backed Notes (the "Class A-3 Notes"), Auction Rate Class A-4 Student Loan-Backed
Notes (the "Class A-4 Notes"), Floating Rate Class B Student Loan-Backed Notes
(the "Class B Notes") and Floating Rate Class C Student Loan-Backed Notes (the
"Class C Notes" and, together with the Class A-1 Notes, Class A-2 Notes, Class
A-3 Notes, Class A-4 Notes and Class B Notes, the "Notes"), are issued under and
secured by the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders.
The Notes are subject to all terms of the Indenture.
The Class A-1 Notes are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture. The Class
A-1 Notes are prior in order of principal payment to the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes
and senior to the Class B Notes and the Class C Notes as and to the extent
provided in the Indenture.
Principal of the Class A-1 Notes shall be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the 15th
day of each March, June, September and December or, if any such date is not a
Business Day, the next succeeding Business Day, commencing September 15, 2003.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-1 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Class A-1 Notes shall be
made pro rata to the Noteholders entitled thereto.
Interest on the Class A-1 Notes shall be payable on each Distribution Date
on the principal amount outstanding of the Class A-1 Notes until the principal
amount thereof is paid in full, at a rate per annum equal to the Class A-1 Rate.
The "Class A-1 Rate" for each Accrual Period other than the initial Accrual
Period shall be equal to Three-Month LIBOR as determined on the second Business
Day before the beginning of that Accrual Period plus 0.10%. For the initial
Accrual Period, the Class A-1 Rate shall mean the rate determined by the
following formula: x + [19/33 * (y-x)] where: x = Two-Month LIBOR, and y =
Three-Month LIBOR, as determined on the second Business Day before the beginning
of that Accrual Period.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be made by wire transfer in immediately available funds to the account
designated by such
Exhibit A-4
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment, and the mailing of such check shall constitute payment of the amount
thereof regardless of whether such check is returned undelivered. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who was the Noteholder hereof as of the
preceding Record Date by notice mailed no later than five days prior to such
Distribution Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest on this
Note at the Class A-1 Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Trustee in
its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Exhibit A-5
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Upon acquisition or transfer of a Note or a beneficial interest in a Note,
as the case may be, by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section 4975 of
the Code, such Noteholder or Note Owner, as applicable, shall be deemed to have
represented that such acquisition or purchase will not constitute or otherwise
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA or Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of such
representation shall be null and void and of no effect.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
Exhibit A-6
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of JPMorgan Chase Bank in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Trustee for the sole purposes of binding the interests of the Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
Exhibit A-7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
-----------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
----------
*/NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit A-8
[FORM OF CLASS A-1 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER Principal Balance as of Closing Date $[Note Face Amount]
R-___ CUSIP NO. 78443C AL8
ISIN NO. US78443C AL81
COMMON CODE NO. 017143719
Exhibit A-9
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
FLOATING RATE CLASS A-1 STUDENT LOAN-BACKED NOTES
SLM Private Credit Student Loan Trust 2003-B, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $80,000,000 and the denominator of which is
$580,000,000 by (ii) the aggregate amount, if any, payable to Class A-1
Noteholders on such Distribution Date in respect of principal of the Notes
pursuant to Section 3.01 of the Indenture dated as of June 1, 2003, among the
Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Trustee on behalf of the Issuer, and JPMorgan Chase Bank, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein being defined in Appendix A-1 and
Appendix A-2 to the Indenture, which also contains rules as to usage that shall
be applicable herein); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the September 15, 2017
Distribution Date (the "Class A-1 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-1 Rate (as defined on the reverse hereof), on each Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date (or, in the case of the first Accrual Period, the
Closing Date) to but excluding the following Distribution Date (each an "Accrual
Period"). Interest shall be calculated on the basis of the actual number of days
elapsed in each Accrual Period divided by 360. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
Exhibit A-10
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SLM PRIVATE CREDIT STUDENT LOAN TRUST
2003-B
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee
under the Trust Agreement
By: /s/
--------------------------------
Authorized Signatory
Date: June 27, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee under the
Indenture
By: /s/
--------------------------------
Authorized Signatory
Date: June 27, 2003
Exhibit A-11
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-1 Student Loan-Backed Notes (the "Class
A-1 Notes"), which, together with the Issuer's Floating Rate Class A-2 Student
Loan-Backed Notes (the "Class A-2 Notes"), Auction Rate Class A-3 Student-Loan
Backed Notes (the "Class A-3 Notes"), Auction Rate Class A-4 Student Loan-Backed
Notes (the "Class A-4 Notes"), Floating Rate Class B Student Loan-Backed Notes
(the "Class B Notes") and Floating Rate Class C Student Loan-Backed Notes (the
"Class C Notes" and, together with the Class A-1 Notes, Class A-2 Notes, Class
A-3 Notes, Class A-4 Notes and Class B Notes, the "Notes"), are issued under and
secured by the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders.
The Notes are subject to all terms of the Indenture.
The Class A-1 Notes are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture. The Class
A-1 Notes are prior in order of principal payment to the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes
and senior to the Class B Notes and the Class C Notes as and to the extent
provided in the Indenture.
Principal of the Class A-1 Notes shall be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the 15th
day of each March, June, September and December or, if any such date is not a
Business Day, the next succeeding Business Day, commencing September 15, 2003.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-1 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Class A-1 Notes shall be
made pro rata to the Noteholders entitled thereto.
Interest on the Class A-1 Notes shall be payable on each Distribution Date
on the principal amount outstanding of the Class A-1 Notes until the principal
amount thereof is paid in full, at a rate per annum equal to the Class A-1 Rate.
The "Class A-1 Rate" for each Accrual Period other than the initial Accrual
Period shall be equal to Three-Month LIBOR as determined on the second Business
Day before the beginning of that Accrual Period plus 0.10%. For the initial
Accrual Period, the Class A-1 Rate shall mean the rate determined by the
following formula: x + [19/33 * (y-x)] where: x = Two-Month LIBOR, and y =
Three-Month LIBOR, as determined on the second Business Day before the beginning
of that Accrual Period.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be made by wire transfer in immediately available funds to the account
designated by such
Exhibit A-12
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that this Note be submitted for notation of
payment, and the mailing of such check shall constitute payment of the amount
thereof regardless of whether such check is returned undelivered. Any reduction
in the principal amount of this Note (or any one or more Predecessor Notes)
effected by any payments made on any Distribution Date shall be binding upon all
future Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who was the Noteholder hereof as of the
preceding Record Date by notice mailed no later than five days prior to such
Distribution Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest on this
Note at the Class A-1 Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Trustee in
its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Exhibit A-13
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Upon acquisition or transfer of a Note or a beneficial interest in a Note,
as the case may be, by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section 4975 of
the Code, such Noteholder or Note Owner, as applicable, shall be deemed to have
represented that such acquisition or purchase will not constitute or otherwise
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA or Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of such
representation shall be null and void and of no effect.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
Exhibit A-14
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of JPMorgan Chase Bank in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Trustee for the sole purposes of binding the interests of the Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
Exhibit A-15
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
-----------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
----------
*/NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit A-16
[FORM OF CLASS A-2 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER Principal Balance as of Closing Date $[Note Face Amount]
R-___ CUSIP NO. 78443C AM6
ISIN NO. US78443C AM64
COMMON CODE NO. 017143735
Exhibit A-17
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
FLOATING RATE CLASS A-2 STUDENT LOAN-BACKED NOTES
SLM Private Credit Student Loan Trust 2003-B, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] payable to Class A-2
Noteholders on each Distribution Date in respect of principal of the Notes
pursuant to Section 3.01 of the Indenture dated as of June 1, 2003, among the
Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Trustee on behalf of the Issuer, and JPMorgan Chase Bank, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein being defined in Appendix A-1 and
Appendix A-2 to the Indenture, which also contains rules as to usage that shall
be applicable herein); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the March 15, 2022 Distribution
Date (the "Class A-2 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-2 Rate (as defined on the reverse hereof), on each Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date (or, in the case of the first Accrual Period, the
Closing Date) to but excluding the following Distribution Date (each an "Accrual
Period"). Interest shall be calculated on the basis of the actual number of days
elapsed in each Accrual Period divided by 360. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
Exhibit A-18
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SLM PRIVATE CREDIT STUDENT LOAN TRUST
2003-B
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee
under the Trust Agreement
By: /s/
--------------------------------
Authorized Signatory
Date: June 27, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee under the
Indenture
By: /s/
--------------------------------
Authorized Signatory
Date: June 27, 2003
Exhibit A-19
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class A-2 Student Loan-Backed Notes (the "Class
A-2 Notes"), which, together with the Issuer's Floating Rate Class A-1 Student
Loan-Backed Notes (the "Class A-1 Notes"), Auction Rate Class A-3 Student
Loan-Backed Notes (the "Class A-3 Notes"), Auction Rate Class A-4 Student
Loan-Backed Notes (the "Class A-4 Notes"), Floating Rate Class B Student
Loan-Backed Notes (the "Class B Notes") and Floating Rate Class C Student
Loan-Backed Notes (the "Class C Notes" and, together with the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes, the
"Notes") are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class A-2 Notes are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture. The Class
A-1 Notes are prior in order of principal payment to the Class A-2 Notes, and
the Class A-2 Notes are senior to the Class A-3 Notes, Class A-4 Notes, Class B
Notes and the Class C Notes, as and to the extent provided in the Indenture.
Principal of the Class A-2 Notes shall be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the 15th
day of each March, June, September and December or, if any such date is not a
Business Day, the next succeeding Business Day, commencing September 15, 2003.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-2 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Class A-2 Notes shall be
made pro rata to the Noteholders entitled thereto.
Interest on the Class A-2 Notes shall be payable on each Distribution Date
on the principal amount outstanding of the Class A-2 Notes until the principal
amount thereof is paid in full, at a rate per annum equal to the Class A-2 Rate.
The "Class A-2 Rate" for each Accrual Period other than the initial Accrual
Period shall be equal to Three-Month LIBOR as determined on the second Business
Day before the beginning of that Accrual Period plus 0.40%. For the initial
Accrual Period, the Class A-2 Rate shall mean the rate determined by the
following formula: x + [19/33 * (y-x)] where: x = Two-Month LIBOR, and y =
Three-Month LIBOR, as determined on the second Business Day before the beginning
of that Accrual Period.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be
Exhibit A-20
made by wire transfer in immediately available funds to the account designated
by such nominee. Such checks shall be mailed to the Person entitled thereto at
the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Note be submitted for
notation of payment, and the mailing of such check shall constitute payment of
the amount thereof regardless of whether such check is returned undelivered. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Noteholders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, shall notify the Person who was the Noteholder hereof
as of the preceding Record Date by notice mailed no later than five days prior
to such Distribution Date and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in the Borough of Manhattan, The City of New
York.
The Issuer shall pay interest on overdue installments of interest on this
Note at the Class A-2 Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Trustee in
its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Exhibit A-21
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Upon acquisition or transfer of a Note or a beneficial interest in a Note,
as the case may be, by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section 4975 of
the Code, such Noteholder or Note Owner, as applicable, shall be deemed to have
represented that such acquisition or purchase will not constitute or otherwise
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA or Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of such
representation shall be null and void and of no effect.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
Exhibit A-22
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of JPMorgan Chase Bank in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Trustee for the sole purposes of binding the interests of the Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
Exhibit A-23
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
-----------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
----------
*/NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit A-24
[FORM OF CLASS A-3 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER Principal Balance as of Closing Date $[Note Face Amount]
R-___ CUSIP NO. 78443C AN4
ISIN NO. US78443C AN48
Exhibit A-25
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
AUCTION RATE CLASS A-3 STUDENT LOAN-BACKED NOTES
SLM Private Credit Student Loan Trust 2003-B, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] payable to Class A-3
Noteholders on each Distribution Date in respect of principal of the Notes
pursuant to Section 3.01 of the Indenture dated as of June 1, 2003, among the
Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Trustee on behalf of the Issuer, and JPMorgan Chase Bank, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein being defined in Appendix A-1 and
Appendix A-2 to the Indenture, which also contains rules as to usage that shall
be applicable herein); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the March 15, 2033 Distribution
Date (the "Class A-3 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-3 Rate (as defined on the reverse hereof), on each Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date for the Class A-3 Notes (or, in the case of the
first Accrual Period, the Closing Date) to but excluding the following
Distribution Date for the Class A-3 Notes (or, in the case of the first Accrual
Period, to and including the initial Auction Date for the Class A-3 Notes) (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
Exhibit A-26
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SLM PRIVATE CREDIT STUDENT LOAN TRUST
2003-B
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee
under the Trust Agreement,
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Indenture Trustee under
the Indenture,
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
Exhibit A-27
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Auction Rate Class A-3 Student Loan-Backed Notes (the "Class
A-3 Notes"), which, together with the Issuer's Floating Rate Class A-1 Student
Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2 Student
Loan-Backed Notes (the "Class A-2 Notes"), Auction Rate Class A-4 Student
Loan-Backed Notes (the "Class A-4 Notes"), Floating Rate Class B Student
Loan-Backed Notes (the "Class B Notes") and Floating Rate Class C Student
Loan-Backed Notes (the "Class C Notes" and, together with the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes, the
"Notes") are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class A-3 Notes are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture. The Class
A-1 Notes and Class A-2 Notes are prior in order of principal payment to the
Class A-3 Notes, interest on the Class A-3 Notes is paid pari passu with the
Other Class A Notes and principal on the Class A-3 Notes is paid pari passu, in
lots of $50,000, with the Class A-4 Notes, and the Class A-3 Notes are senior to
the Class B Notes and Class C Notes, as and to the extent provided in the
Indenture.
Principal of the Class A-3 Notes shall be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means (a) the day
following the end of each Auction Period for that class of Auction Rate Notes
and (b) for a class of Auction Rate Notes with an Auction Period in excess of 90
days, in addition to the days referred to in clause (a), the Quarterly
Distribution Dates.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-3 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Class A-3 Notes shall be
made pro rata to the Noteholders entitled thereto.
Interest on the Class A-3 Notes shall be payable on each Distribution Date
on the principal amount outstanding of the Class A-3 Notes until the principal
amount thereof is paid in full, at a rate per annum equal to the Class A-3 Rate.
The "Class A-3 Rate" for each Accrual Period shall be equal to the Auction Note
Interest Rate for the Class A-3 Notes. The Class A-3 Rate for the initial
Accrual Period shall equal 1.13%.
The applicable Auction Note Interest Rate will be determined periodically
on the basis of orders placed in an Auction conducted on the Business Day
immediately preceding the first day of each Auction Period and in such other
manner as described in the Indenture.
The Auction Period, the applicable Auction Note Interest Rate, the method
of determining the applicable Auction Note Interest Rate, the Distribution
Dates, and the Auction Procedures related thereto will be determined upon the
terms and conditions, including required notices thereof to the beneficial
owners thereof, provided in the Indenture, to which provisions
Exhibit A-28
specific reference is hereby made, and all of which provisions are hereby
specifically incorporated herein by reference.
In no event shall the applicable Auction Note Interest Rate exceed the
Maximum Rate. The excess of the amount of interest that would have accrued on
this Class A-3 Note at the lesser of the Auction Rate and the Maximum Rate
determined as if the ARS Student Loan Rate were not a component thereof over the
amount of interest actually accrued at the ARS Student Loan Rate, together with
the unreduced portion of any such excess from prior Accrual Periods will accrue
as the Carry-over Amount as provided in the Indenture. Any Carry-over Amount on
this Class A-3 Note and any interest accrued thereon, is due and payable only if
and to the extent as set forth in the Indenture. Any such payment obligation is
extinguished when this Class A-3 Note is paid at maturity or by earlier
redemption.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment, and the mailing of such check shall constitute payment of
the amount thereof regardless of whether such check is returned undelivered. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Noteholders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, shall notify the Person who was the Noteholder hereof
as of the preceding Record Date by notice mailed no later than five days prior
to such Distribution Date and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in the Borough of Manhattan, The City of New
York.
The Issuer shall pay interest on overdue installments of interest on this
Note at the Class A-3 Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in
Exhibit A-29
the same aggregate principal amount shall be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Trustee in
its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Upon acquisition or transfer of a Note or a beneficial interest in a Note,
as the case may be, by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section 4975 of
the Code, such Noteholder or Note Owner, as applicable, shall be deemed to have
represented that such acquisition or purchase will not constitute or otherwise
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA or Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of such
representation shall be null and void and of no effect.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance
Exhibit A-30
by the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
holder of this Note (or any one of more Predecessor Notes) shall be conclusive
and binding upon such holder and upon all future holders of this Note and of any
Note issued upon registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of holders
of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of JPMorgan Chase Bank, in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Trustee for the sole purposes of binding the interests of the Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
Exhibit A-31
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
_______________________________________________________________________________
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
----------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit A-32
[FORM OF CLASS A-4 NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER Principal Balance as of Closing Date $[Note Face Amount]
R-___ CUSIP NO. 78443C AP9
ISIN NO. US78443C AP95
Exhibit A-33
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
AUCTION RATE CLASS A-4 STUDENT LOAN-BACKED NOTES
SLM Private Credit Student Loan Trust 2003-B, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] payable to Class A-4
Noteholders on each Distribution Date in respect of principal of the Notes
pursuant to Section 3.01 of the Indenture dated as of June 1, 2003, among the
Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Trustee on behalf of the Issuer, and JPMorgan Chase Bank, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein being defined in Appendix A-1 and
Appendix A-2 to the Indenture, which also contains rules as to usage that shall
be applicable herein); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the March 15, 2033 Distribution
Date (the "Class A-4 Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class A-4 Rate (as defined on the reverse hereof), on each Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date for the Class A-4 Notes (or, in the case of the
first Accrual Period, the Closing Date) to but excluding the following
Distribution Date for the Class A-4 Notes (or, in the case of the first Accrual
Period, to and including the initial Auction Date for the Class A-4 Notes) (each
an "Accrual Period"). Interest shall be calculated on the basis of the actual
number of days elapsed in each Accrual Period divided by 360. Such principal of
and interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
Exhibit A-34
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SLM PRIVATE CREDIT STUDENT LOAN TRUST
2003-B
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee
under the Trust Agreement
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Indenture Trustee under
the Indenture
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
Exhibit A-35
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Auction Rate Class A-4 Student Loan-Backed Notes (the "Class
A-4 Notes"), which, together with the Issuer's Floating Rate Class A-1 Student
Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2 Student
Loan-Backed Notes (the "Class A-2 Notes"), Auction Rate Class A-3 Student
Loan-Backed Notes (the "Class A-3 Notes"), Floating Rate Class B Student
Loan-Backed Notes (the "Class B Notes") and Floating Rate Class C Student
Loan-Backed Notes (the "Class C Notes" and, together with the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes, the
"Notes") are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class A-4 Notes are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture. The Class
A-1 Notes and Class A-2 Notes are prior in order of principal payment to the
Class A-4 Notes, interest on the Class A-4 Notes is paid pari passu with the
other Class A Notes and principal on the Class A-4 Notes is paid pari passu, in
lots of $50,000, with the Class A-3 Notes, and the Class A-4 Notes are senior to
the Class B Notes and Class C Notes, as and to the extent provided in the
Indenture.
Principal of the Class A-4 Notes shall be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means (a) the day
following the end of each Auction Period for that class of Auction Rate Notes
and (b) for a class of Auction Rate Notes with an Auction Period in excess of 90
days, in addition to the days referred to in clause (a), the Quarterly
Distribution Dates.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class A-4 Maturity Date. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Class A-4 Notes shall be
made pro rata to the Noteholders entitled thereto.
Interest on the Class A-4 Notes shall be payable on each Distribution Date
on the principal amount outstanding of the Class A-4 Notes until the principal
amount thereof is paid in full, at a rate per annum equal to the Class A-4 Rate.
The "Class A-4 Rate" for each Accrual Period shall be equal to the Auction Note
Interest Rate for the Class A-4 Notes. The Class A-4 Rate for the initial
Accrual Period shall equal 1.12%.
The applicable Auction Note Interest Rate will be determined periodically
on the basis of orders placed in an Auction conducted on the Business Day
immediately preceding the first day of each Auction Period and in such other
manner as described in the Indenture.
The Auction Period, the applicable Auction Note Interest Rate, the method
of determining the applicable Auction Note Interest Rate, the Distribution
Dates, and the Auction Procedures related thereto will be determined upon the
terms and conditions, including required notices thereof to the beneficial
owners thereof, provided in the Indenture, to which provisions
Exhibit A-36
specific reference is hereby made, and all of which provisions are hereby
specifically incorporated herein by reference.
In no event shall the applicable Auction Note Interest Rate exceed the
Maximum Rate. The excess of the amount of interest that would have accrued on
this Class A-4 Note at the lesser of the Auction Rate and the Maximum Rate
determined as if the ARS Student Loan Rate were not a component thereof over the
amount of interest actually accrued at the ARS Student Loan Rate, together with
the unreduced portion of any such excess from prior Accrual Periods will accrue
as the Carry-over Amount as provided in the Indenture. Any Carry-over Amount on
this Class A-4 Note and any interest accrued thereon, is due and payable only if
and to the extent as set forth in the Indenture. Any such payment obligation is
extinguished when this Class A-4 Note is paid at maturity or by earlier
redemption.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment, and the mailing of such check shall constitute payment of
the amount thereof regardless of whether such check is returned undelivered. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Distribution Date shall be binding
upon all future Noteholders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Distribution Date, then the Indenture Trustee, in the name of and
on behalf of the Issuer, shall notify the Person who was the Noteholder hereof
as of the preceding Record Date by notice mailed no later than five days prior
to such Distribution Date and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
Corporate Trust Office or at the office of the Indenture Trustee's agent
appointed for such purposes located in the Borough of Manhattan, The City of New
York.
The Issuer shall pay interest on overdue installments of interest on this
Note at the Class A-4 Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in
Exhibit A-37
the same aggregate principal amount shall be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Trustee in
its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Upon acquisition or transfer of a Note or a beneficial interest in a Note,
as the case may be, by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section 4975 of
the Code, such Noteholder or Note Owner, as applicable, shall be deemed to have
represented that such acquisition or purchase will not constitute or otherwise
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA or Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of such
representation shall be null and void and of no effect.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance
Exhibit A-38
by the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
holder of this Note (or any one of more Predecessor Notes) shall be conclusive
and binding upon such holder and upon all future holders of this Note and of any
Note issued upon registration of transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note. The Indenture also permits the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of holders
of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of JPMorgan Chase Bank, in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Trustee for the sole purposes of binding the interests of the Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
Exhibit A-39
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
_______________________________________________________________________________
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated:
----------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit A-40
[FORM OF CLASS B NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER Principal Balance as of Closing Date $[Note Face Amount]
R-___ CUSIP NO. 78443C AQ7
ISIN NO. US78443C AQ78
COMMON CODE NO. 017143930
Exhibit A-41
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
FLOATING RATE CLASS B STUDENT LOAN-BACKED NOTES
SLM Private Credit Student Loan Trust 2003-B, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] payable to Class B
Noteholders on each Distribution Date in respect of principal of the Notes
pursuant to Section 3.01 of the Indenture dated as of June 1, 2003, among the
Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Trustee on behalf of the Issuer, and JPMorgan Chase Bank, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein being defined in Appendix A-1 and
Appendix A-2 to the Indenture, which also contains rules as to usage that shall
be applicable herein); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the March 15, 2033 Distribution
Date (the "Class B Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class B Rate (as defined on the reverse hereof), on each Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date (or, in the case of the first Accrual Period, the
Closing Date) to but excluding the following Distribution Date (each an "Accrual
Period"). Interest shall be calculated on the basis of the actual number of days
elapsed in each Accrual Period divided by 360. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
Exhibit A-42
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SLM PRIVATE CREDIT STUDENT LOAN TRUST
2003-B
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee
under the Trust Agreement,
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Indenture Trustee under
the Indenture,
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
Exhibit A-43
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class B Student Loan-Backed Notes (the "Class B
Notes"), which, together with the Issuer's Floating Rate Class A-1 Student
Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2 Student
Loan-Backed Notes (the "Class A-2 Notes"), Auction Rate Class A-3 Student
Loan-Backed Notes (the "Class A-3 Notes"), Auction Rate Class A-4 Student
Loan-Backed Notes (the "Class A-4 Notes") and Floating Rate Class C Student
Loan-Backed Notes (the "Class C Notes" and, together with the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes, the
"Notes") are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class B Notes are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture. The Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes and the Class A-4 Notes are prior in
order of principal payment, and are senior, to the Class B Notes and the Class C
Notes as and to the extent provided in the Indenture. The Class B Notes are
prior in order of principal payment, and are senior, to the Class C Notes as and
to the extent provided in the Indenture.
Principal of the Class B Notes shall be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the 15th
day of each March, June, September and December or, if any such date is not a
Business Day, the next succeeding Business Day, commencing September 15, 2003.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class B Maturity Date. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Class B Notes shall be made
pro rata to the Noteholders entitled thereto.
Interest on the Class B Notes shall be payable on each Distribution Date on
the principal amount outstanding of the Class B Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Class B Rate. The
"Class B Rate" for each Accrual Period other than the initial Accrual Period
shall be equal to Three-Month LIBOR as determined on the second Business Day
before the beginning of that Accrual Period plus 0.70%. For the initial Accrual
Period, the Class B Rate shall mean the rate determined by the following
formula: x + [19/33 * (y-x)] where: x = Two-Month LIBOR, and y = Three-Month
LIBOR, as determined on the second Business Day before the beginning of the
Accrual Period.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless
Exhibit A-44
Definitive Notes have been issued (initially, such nominee to be Cede & Co.),
payments shall be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment, and the mailing of such check shall
constitute payment of the amount thereof regardless of whether such check is
returned undelivered. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Noteholders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Distribution Date, then the Indenture
Trustee, in the name of and on behalf of the Issuer, shall notify the Person who
was the Noteholder hereof as of the preceding Record Date by notice mailed no
later than five days prior to such Distribution Date and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located in the Borough of Manhattan,
The City of New York.
The Issuer shall pay interest on overdue installments of interest on this
Note at the Class B Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Trustee in
its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Exhibit A-45
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder or Note Owner will not
at any time institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency, receivership or liquidation proceedings
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
Upon acquisition or transfer of a Note or a beneficial interest in a Note,
as the case may be, by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section 4975 of
the Code, such Noteholder or Note Owner, as applicable, shall be deemed to have
represented that such acquisition or purchase will not constitute or otherwise
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA or Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of such
representation shall be null and void and of no effect.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
Exhibit A-46
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of JPMorgan Chase Bank in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Trustee for the sole purposes of binding the interests of the Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
Exhibit A-47
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
----------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
------------
*/NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit A-48
[FORM OF CLASS C NOTE]
SEE REVERSE FOR CERTAIN DEFINITIONS
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any Note issued is registered in the name of Cede & Co. or in such other
name as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS NOT GUARANTEED OR
INSURED BY ANY GOVERNMENTAL AGENCY.
NUMBER Principal Balance as of Closing Date $[Note Face Amount]
R-____ CUSIP NO. 78443C AR5
ISIN NO. US78443C AR51
COMMON CODE NO. 017143999
Exhibit A-49
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
FLOATING RATE CLASS C STUDENT LOAN-BACKED NOTES
SLM Private Credit Student Loan Trust 2003-B, a statutory trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of [Note Face Amount] payable to Class C
Noteholders on each Distribution Date in respect of principal of the Notes
pursuant to Section 3.01 of the Indenture dated as of June 1, 2003, among the
Issuer, Chase Manhattan Bank USA, National Association, a national banking
association, as Trustee on behalf of the Issuer, and JPMorgan Chase Bank, a New
York banking corporation, as Indenture Trustee (the "Indenture Trustee")
(capitalized terms used but not defined herein being defined in Appendix A-1 and
Appendix A-2 to the Indenture, which also contains rules as to usage that shall
be applicable herein); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the March 15, 2033 Distribution
Date (the "Class C Maturity Date").
The Issuer shall pay interest on this Note at the rate per annum equal to
the Class C Rate (as defined on the reverse hereof), on each Distribution Date
until the principal of this Note is paid or made available for payment, on the
principal amount of this Note outstanding on the preceding Distribution Date
(after giving effect to all payments of principal made on the preceding
Distribution Date), subject to certain limitations contained in Section 3.01 of
the Indenture. Interest on this Note shall accrue from and including the
preceding Distribution Date (or, in the case of the first Accrual Period, the
Closing Date) to but excluding the following Distribution Date (each an "Accrual
Period"). Interest shall be calculated on the basis of the actual number of days
elapsed in each Accrual Period divided by 360. Such principal of and interest on
this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
Exhibit A-50
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed, manually or in facsimile, as of the date set forth below.
SLM PRIVATE CREDIT STUDENT LOAN TRUST
2003-B
By: CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Trustee
under the Trust Agreement,
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
JPMORGAN CHASE BANK,
not in its individual capacity but
solely as Indenture Trustee under
the Indenture,
By: /s/
-------------------------------
Authorized Signatory
Date: June 27, 2003
Exhibit A-51
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Floating Rate Class C Student Loan-Backed Notes (the "Class C
Notes"), which, together with the Issuer's Floating Rate Class A-1 Student
Loan-Backed Notes (the "Class A-1 Notes"), Floating Rate Class A-2 Student
Loan-Backed Notes (the "Class A-2 Notes"), Auction Rate Class A-3 Student
Loan-Backed Notes (the "Class A-3 Notes"), Auction Rate Class A-4 Student
Loan-Backed Notes (the "Class A-4 Notes") and Floating Rate Class B Student
Loan-Backed Notes (the "Class B Notes" and, together with the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class C Notes, the
"Notes") are issued under and secured by the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the Noteholders. The Notes are subject to all terms of the
Indenture.
The Class C Notes are and will be equally and ratably secured by the
Collateral pledged as security therefor as provided in the Indenture. The Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and the Class B
Notes are prior in order of principal payment, and are senior, to the Class C
Notes as and to the extent provided in the Indenture.
Principal of the Class C Notes shall be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the 15th
day of each March, June, September and December or, if any such date is not a
Business Day, the next succeeding Business Day, commencing September 15, 2003.
As described on the face hereof, the entire unpaid principal amount of this
Note shall be due and payable on the Class C Maturity Date. Notwithstanding the
foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which (i) an Event of Default shall have occurred and be
continuing and (ii) the Indenture Trustee or the Noteholders representing not
less than a majority of the Outstanding Amount of the Notes shall have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02 of the Indenture. All principal payments on the Class C Notes shall be made
pro rata to the Noteholders entitled thereto.
Interest on the Class C Notes shall be payable on each Distribution Date on
the principal amount outstanding of the Class C Notes until the principal amount
thereof is paid in full, at a rate per annum equal to the Class C Rate. The
"Class C Rate" for each Accrual Period (other than the initial Accrual Period)
shall be equal to Three-Month LIBOR as determined on the second Business Day
before the beginning of that Accrual Period plus 1.60%. For the initial Accrual
Period, the Class C Rate shall mean the rate determined by the following
formula: x + [19/33 * (y-x)] where: x = Two-Month LIBOR, and y = Three-Month
LIBOR, as determined on the second Business Day before the beginning of that
Accrual Period.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person whose name appears as the
Registered Holder of this Note (or one or more Predecessor Notes) on the Note
Register on the Record Date, except that with respect to Notes registered on the
Record Date in the name of the nominee of the Clearing Agency, unless Definitive
Notes have been issued (initially, such nominee to be Cede & Co.), payments
shall be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such
Exhibit A-52
Person as it appears on the Note Register as of the applicable Record Date
without requiring that this Note be submitted for notation of payment, and the
mailing of such check shall constitute payment of the amount thereof regardless
of whether such check is returned undelivered. Any reduction in the principal
amount of this Note (or any one or more Predecessor Notes) effected by any
payments made on any Distribution Date shall be binding upon all future
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Distribution Date, then the Indenture Trustee, in the name of and on behalf of
the Issuer, shall notify the Person who was the Noteholder hereof as of the
preceding Record Date by notice mailed no later than five days prior to such
Distribution Date and the amount then due and payable shall be payable only upon
presentation and surrender of this Note at the Indenture Trustee's Corporate
Trust Office or at the office of the Indenture Trustee's agent appointed for
such purposes located in the Borough of Manhattan, The City of New York.
The Issuer shall pay interest on overdue installments of interest on this
Note at the Class C Rate to the extent lawful.
As provided in the Indenture and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or his attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which requirements
include membership or participation in Securities Transfer Agent's Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP
(all in accordance with the Exchange Act), and such other documents as the
Indenture Trustee may require, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount shall be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer or the Indenture Trustee on the Notes or under the Indenture or
any certificate or other writing delivered in connection therewith, against (i)
the Indenture Trustee or the Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Trustee in
its individual capacity, any holder or owner of a beneficial interest in the
Issuer, the Trustee or the Indenture Trustee or of any successor or assign
thereof in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the
Exhibit A-53
Indenture such Noteholder or Note Owner will not at any time institute against
the Depositor or the Issuer, or join in any institution against the Depositor or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency,
receivership or liquidation proceedings or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the other Basic Documents.
Upon acquisition or transfer of a Note or a beneficial interest in a Note,
as the case may be, by, for or with the assets of, an employee benefit plan or
other retirement arrangement subject to Section 406 of ERISA or Section 4975 of
the Code, such Noteholder or Note Owner, as applicable, shall be deemed to have
represented that such acquisition or purchase will not constitute or otherwise
result in a non-exempt prohibited transaction in violation of Section 406 of
ERISA or Section 4975 of the Code which is not covered by a class or other
applicable exemption. Any transfer found to have been made in violation of such
representation shall be null and void and of no effect.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes whether or not this Note be
overdue, and neither the Issuer, the Indenture Trustee nor any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders representing a majority of the
Outstanding Amount of all Notes at the time outstanding. The Indenture also
contains provisions permitting the Noteholders representing specified
percentages of the Outstanding Amount of the Notes, on behalf of all the
Noteholders, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the holder of this Note (or any one of more
Predecessor Notes) shall be conclusive and binding upon such holder and upon all
future holders of this Note and of any Note issued upon registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as provided
in the Indenture, subject to certain limitations therein set forth.
Exhibit A-54
This Note shall be construed in accordance with the laws of the State of
New York, without reference to its conflict of law provisions, and the
obligations, rights and remedies of the parties hereunder and thereunder shall
be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place, and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of JPMorgan Chase Bank in its individual
capacity, Chase Manhattan Bank USA, National Association in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on, or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture; it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Trustee for the sole purposes of binding the interests of the Trustee in
the assets of the Issuer. The Noteholder of this Note by the acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the Noteholder shall have no claim
against any of the foregoing for any deficiency, loss or claim therefrom;
provided, however, that nothing contained herein shall be taken to prevent
recourse to, and enforcement against, the assets of the Issuer for any and all
liabilities, obligations and undertakings contained in the Indenture or in this
Note.
Exhibit A-55
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:
----------------
*/
---------------------------
Signature Guaranteed:
*/
---------------------------
------------
*/NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
Exhibit A-56
EXHIBIT B
TO THE INDENTURE
Note Depository Agreement
-------------------------
Exhibit B-1
EXHIBIT C
TO THE INDENTURE
NOTICE OF PAYMENT DEFAULT
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
STUDENT LOAN-BACKED NOTES
CLASS [A-3] [A-4] AUCTION RATE NOTES
NOTICE IS HEREBY GIVEN that a Payment Default has occurred and is
continuing with respect to the Auction Rate Notes identified above. The next
Auction for the Auction Rate Notes will not be held. The Auction Rate for the
Auction Rate Notes for the next succeeding Accrual Period shall be the
Non-Payment Rate.
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee
Dated:
------------------
By:
---------------------------
Exhibit C-1
EXHIBIT D
TO THE INDENTURE
NOTICE OF CURE OF PAYMENT DEFAULT
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
STUDENT LOAN-BACKED NOTES
CLASS [A-3] [A-4] AUCTION RATE NOTES
NOTICE IS HEREBY GIVEN that a Payment Default with respect to the Auction
Rate Notes identified above has been waived or cured. The next Payment Date is
_____________ and the Auction Date is _________________.
JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee
Dated:
------------------
By:
---------------------------
Exhibit D-1
EXHIBIT E
TO THE INDENTURE
NOTICE OF PROPOSED CHANGE IN LENGTH
OF ONE OR MORE AUCTION PERIODS
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
STUDENT LOAN-BACKED NOTES
CLASS [A-3] [A-4] AUCTION RATE NOTES
Notice is hereby given that the Issuer proposes to change the length of one
or more Auction Periods pursuant to the Indenture as follows:
1. The change shall take effect on ____________, the Interest Rate
Adjustment Date for the next Auction Period (the "Effective Date").
2. The Auction Period Adjustment in Paragraph 1 shall take place only if
(a) the Indenture Trustee and the Auction Agent receive, by 11:00 a.m., eastern
time, on the Business Day before the Auction Date for the Auction Period
commencing on the Effective Date, a certificate from the Issuer, as required by
the Indenture authorizing the change in length of one or more Auction Periods
and (b) Sufficient Bids exist on the Auction Date for the Auction Period
commencing on the Effective Date.
3. If the condition referred to in (a) above is not met, the Auction Rate
for the Auction Period commencing on the Effective Date will be determined
pursuant to the Auction Procedures and the Auction Period shall be the Auction
Period determined without reference to the proposed change. If the condition
referred to in (a) is met but the condition referred to in (b) above is not met,
the Auction Rate for the Auction Period commencing on the Effective Date shall
be the Maximum Rate and the Auction Period shall be the Auction Period
determined without reference to the proposed change.
4. It is hereby represented, upon advice of the Auction Agent for the
Class __ Notes described herein, that there were Sufficient Bids for such Class
[A-3] [A-4] Notes at the Auction immediately preceding the date of this Notice.
5. Terms not defined in this Notice shall have the meanings set forth in
the Indenture entered into in connection with the Class [A-3] [A-4] Notes.
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
Dated:
------------------
By:
---------------------------
Exhibit E-1
EXHIBIT F
TO THE INDENTURE
NOTICE ESTABLISHING CHANGE IN LENGTH
OF ONE OR MORE AUCTION PERIODS
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
STUDENT LOAN-BACKED NOTES
CLASS [A-3] [A-4] AUCTION RATE NOTES
Notice is hereby given that the Issuer hereby establishes new lengths for
one or more Auction Periods pursuant to the Indenture of Trust, as follows:
1. The change shall take effect on ____________, the Interest Rate
Adjustment Date for the next Auction Period (the "Effective Date").
2. The Auction Period commencing on the Effective Date, the Interest Rate
Adjustment Date shall be ___________________, or the next succeeding Business
Day if such date is not a Business Day.
3. For Auction Periods occurring after the Auction Period commencing on
the Effective Date, the Interest Rate Adjustment Date shall be [_______________
(date) and every ___________ (number) ___________ (day of week) thereafter]
[every __________ (number) ______________ (day of week) after the date set forth
in paragraph 2 above], or the next Business Day if any such day is not a
Business Day; provided, however, that the length of subsequent Auction Periods
shall be subject to further change hereafter as provided in the Indenture of
Trust.
4. The changes described in paragraphs 2 and 3 above shall take place
only upon delivery of this Notice and the satisfaction of other conditions set
forth in the Indenture of Trust and our prior notice dated __________ regarding
the proposed change.
5. Terms not defined in this Notice shall have the meanings set forth in
the Indenture entered into in connection with the Class [A-3] [A-4] Notes.
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
Dated:
------------------
By:
---------------------------
Exhibit F-1
EXHIBIT G
TO THE INDENTURE
NOTICE OF CHANGE IN AUCTION DATE
SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-B
STUDENT LOAN-BACKED NOTES
CLASS [A-3] [A-4]AUCTION RATE NOTES
Notice is hereby given by [_________], as Broker-Dealer for the Auction
Rate Notes, that with respect to the Auction Rate Notes, the Auction Date is
hereby changed as follows:
1. With respect to Class [A-3] [A-4] Notes, the definition of "Auction
Date" shall be deemed amended by substituting "______________ (number) Business
Day" in the second line thereof and by substituting "______________ (number)
Business Days" for "two Business Days" in subsection (d) thereof.
2. This change shall take effect on ____________, which shall be the
Auction Date for the Auction Period commencing on ______________.
3. The Auction Date for the Class [A-3] [A-4] Notes shall be subject to
further change hereafter as provided in the Indenture.
5. Terms not defined in this Notice shall have the meanings set forth in
the Indenture, as amended, relating to the Class [A-3] [A-4] Notes.
[BROKER-DEALER], as Broker-Dealer
Dated:
------------------
By:
---------------------------
Exhibit G-1
