-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Cya7G2PqP9DFFRGX59SPgPuiHte1B5MhVH2Z3LZSmU57H1rfW2IxyIJWWls40YIY zFYry+gLrL59Xtgo827W0Q== 0001193125-03-061143.txt : 20031014 0001193125-03-061143.hdr.sgml : 20031013 20031014130947 ACCESSION NUMBER: 0001193125-03-061143 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 9 CONFORMED PERIOD OF REPORT: 20031001 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SLM EDUCATION CREDIT FUNDING LLC CENTRAL INDEX KEY: 0001179550 STANDARD INDUSTRIAL CLASSIFICATION: FEDERAL & FEDERALLY-SPONSORED CREDIT AGENCIES [6111] IRS NUMBER: 043480392 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-98169 FILM NUMBER: 03938880 BUSINESS ADDRESS: STREET 1: 20 HEMINGWAY DRIVE CITY: PROVIDENCE STATE: RI ZIP: 02915 BUSINESS PHONE: 7038107677 MAIL ADDRESS: STREET 1: 20 HEMINGWAY DRIVE CITY: PROVIDENCE STATE: RI ZIP: 02915 8-K 1 d8k.txt FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 1, 2003 SLM EDUCATION CREDIT FUNDING LLC -------------------------------- (Exact name of registrant as specified in its charter) (Originator of the SLM Private Credit Student Loan Trust 2003-C) Delaware 333-98169 04-03480392 -------- --------- ----------- (State or other (Commission File (I.R.S. employer Jurisdiction of Numbers) Identification No.) Incorporation) 20 Hemingway Drive East Providence, Rhode Island 02915 ---------------------------------------- (Address of principal executive offices) Registrant's telephone number: (401) 438-4500 Page 1 of 5 Exhibit Index appears on Page 5 Item 5. Other Events. Closing of SLM Private Credit Student Loan Trust 2003-C Effective as of October 1, 2003, SLM Education Credit Funding LLC ("SLM Education Credit") and Chase Manhattan Bank USA, National Association, not in its individual capacity but solely as trustee (the "Trustee") executed and delivered the Trust Agreement dated as of October 1, 2003 pursuant to which the SLM Private Credit Student Loan Trust 2003-C was formed (the "Trust"). On October 2, 2003, the following agreements were executed and delivered by the respective parties thereto: the Underwriting Agreement and the Pricing Agreement relating to certain Student Loan-Backed Notes, each dated October 2, 2003, among SLM Education Credit, SLM Education Credit Management Corporation, SLM Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities Inc. and Lehman Brothers Inc. (the "Underwriters"). In connection with the foregoing, the following agreements were executed and delivered by the respective parties thereto: (a) the Issuer Sale Agreement, dated as of October 9, 2003, by and between SLM Education Credit Management Corporation and SLM Education Credit; (b) the Depositor Sale Agreement dated October 9, 2003 between SLM Education Credit and the Trust; (c) the Indenture, dated as of October 1, 2003, by and between the Trust and JP Morgan Chase Bank, not in its individual capacity but solely as the trustee under the Indenture (the "Indenture Trustee"); Page 2 of 5 Exhibit Index appears on Page 5 (d) the Administration Agreement, dated as of October 9, 2003, by and among the Trust, Sallie Mae, Inc.(the "Administrator"), Sallie Mae Servicing L.P. (the "Servicer"), SLM Education Credit and the Indenture Trustee, and (f) the Servicing Agreement, dated as of October 9, 2003, by and among the Servicer, the Administrator, Inc., the Trust, and the Indenture Trustee. On October 9, 2003, the Trust issued $1,346,013,000 of its Floating Rate Student Loan-Backed Notes. Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits (c) Exhibits 1.1 Underwriting Agreement relating to the Student Loan-Backed Notes, dated October 2, 2003, by and among SLM Education Credit, SLM Education Credit Management Corporation, SLM Corporation and the Underwriters. 1.2 Pricing Agreement relating to the Student Loan-Backed Notes, dated October 2, 2003, by and among SLM Education Credit, SLM Education Credit Management Corporation, SLM Corporation and the Underwriters. 4.1 Trust Agreement, dated as of October 1, 2003, by and between SLM Education Credit and the Trustee. Page 3 of 5 Exhibit Index appears on Page 5 4.2 Indenture, dated as of October 1, 2003, by and between the Trust and the Indenture Trustee. 99.1 Issuer Sale Agreement, dated as of October 9, 2003, by and between SLM Education Credit and SLM Education Credit Management Corporation. 99.2 Depositor Sale Agreement, dated as of October 9, 2003, by and between SLM Education Credit and the Trust. 99.3 Administration Agreement, dated as of October 9, 2003, by and among the Trust, the Administrator, SLM Education Credit, the Servicer and the Indenture Trustee. 99.4 Servicing Agreement, dated as of October 9, 2003, by and among the Servicer, the Administrator, SLM Education Credit, the Trust and the Indenture Trustee. Page 4 of 5 Exhibit Index appears on Page 5 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: October 14, 2003 SLM EDUCATION CREDIT FUNDING LLC By: /s/ J. LANCE FRANKE --------------------------- Name: J. Lance Franke Title: Vice President INDEX TO EXHIBIT Exhibit Number Exhibit - ------ ------- 1.1 Underwriting Agreement relating to the Student Loan-Backed Notes, dated October 2, 2003, by and among SLM Education Credit, SLM Education Credit Management Corporation, SLM Corporation and the Underwriters. 1.2 Pricing Agreement relating to the Student Loan-Backed Notes, dated October 2, 2003, by and among SLM Education Credit, SLM Education Credit Management Corporation, SLM Corporation and the Underwriters. 4.1 Trust Agreement, dated as of October 1, 2003, by and between SLM Education Credit and the Trustee. 4.2 Indenture, dated as of October 1, 2003, by and between the Trust and the Indenture Trustee. 99.1 Issuer Sale Agreement, dated as of October 9, 2003, by and between SLM Education Credit and SLM Education Credit Management Corporation. 99.2 Depositor Sale Agreement, dated as of October 9, 2003, by and between SLM Education Credit and the Trust. 99.3 Administration Agreement, dated as of October 9, 2003, by and among the Trust, the Administrator, SLM Education Credit, the Servicer and the Indenture Trustee. 99.4 Servicing Agreement, dated as of October 9, 2003, by and among the Servicer, the Administrator, SLM Education Credit, the Trust and the Indenture Trustee. Page 5 of 5 Exhibit Index appears on Page 5 EX-1.1 3 dex11.txt EXHIBIT 1.1 Exhibit 1.1 SLM Education Credit Funding LLC Student Loan-Backed Notes ---------- Underwriting Agreement ---------------------- October 2, 2003 J.P. Morgan Securities Inc. 270 Park Avenue 10th Floor New York, New York 10017 Lehman Brothers Inc. 745 7/th/ Avenue New York, New York 10019 Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 WFCN, 10th Floor New York, New York 10080 Ladies and Gentlemen: From time to time, SLM Education Credit Management Corporation, a Delaware corporation ("SLM Education Credit"), and SLM Education Credit Funding LLC, a Delaware limited liability company and a wholly-owned subsidiary of SLM Education Credit (the "Company"), propose to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the form of Annex I hereto, with such additions and deletions as the parties thereto may determine. Subject to the terms and conditions stated herein and therein, the Company proposes to cause the Trust specified in the applicable Pricing Agreement to issue and sell to the firms named in Schedule I to the applicable Pricing Agreement (each firm constituting the "Underwriter" with respect to such Pricing Agreement and the securities specified therein) certain of such Trust's Student Loan-Backed Notes (the "Notes") specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, the "Designated Securities"), less the principal amount of Designated Securities covered by Delayed Delivery Contracts, if any, as provided in Section 3 hereof and as may be specified in Schedule II to such Pricing Agreement (with respect to such Pricing Agreement, any Designated Securities to be covered by Delayed Delivery Contracts are herein sometimes referred to as "Contract Securities" and the Designated Securities to be purchased by the Underwriters (after giving effect to the deduction, if any, for Contract Securities) are herein sometimes referred to as "Underwriters' Securities"). The Securities may be sold from time to time in one or more Series. Each Series of Securities, which will include one or more classes of Notes and may include one or more classes of Student Loan-Backed Certificates (the "Certificates," and, together with the Notes, the "Securities") will be issued by a Trust to be formed with respect to such Series (each, a "Trust"). Each Trust will be formed pursuant to a trust agreement (a "Trust Agreement") to be entered into between the Company and the Trustee specified in the related Pricing Agreement (the "Trustee"). The Notes of each Series will be issued and secured pursuant to an indenture (an "Indenture") between the Trust and the Indenture Trustee specified in the related Pricing Agreement (the "Indenture Trustee"). The Certificates of a Series will be issued pursuant to the related Trust Agreement and will represent fractional undivided interests in the Trust created thereby. The property of each Trust will include, among other things, educational student loans to students and/or parents of dependent students ("Student Loans"). With respect to each Trust, (i) the Company will acquire the related Student Loans from SLM Education Credit pursuant to a Seller Sale Agreement and (ii) the Company will sell the related Student Loans to such Trust pursuant to a Depositor Sale Agreement. With respect to each Series, Sallie Mae Servicing L.P., as servicer (the "Servicer"), will enter into a servicing agreement (a "Servicing Agreement") with the Trust, the Administrator, the Trustee and the Indenture Trustee with respect to the related Student Loans. Sallie Mae, Inc. ("Sallie Mae"), as administrator (in such capacity, the "Administrator"), will enter into an Administration Agreement with the Company, the Servicer, the Indenture Trustee and the Trust, dated as of October 1, 2003, with respect to the Student Loans to be held by the Trust. The terms and conditions of any particular issuance of Designated Securities shall be as specified in the Pricing Agreement relating thereto and in or pursuant to the related Indenture. Capitalized terms used but not defined herein or in any Pricing Agreement shall have the meanings ascribed thereto in the related Indenture. 1. Particular sales of Designated Securities may be made from time to time to the Underwriter of such Securities, for whom the firms designated as representatives of the Underwriter of such Securities in the Pricing Agreement relating thereto will act as representatives (the "Representatives"). The term "Representatives" also refers to a single firm acting as sole representative of the Underwriters and to an Underwriter or Underwriters who act without any firm being designated as its or their representatives. This Underwriting Agreement shall not be construed as an obligation of the Company to sell any of the Securities or as an obligation of any of the Underwriters to purchase the Securities. The obligation of the Company to issue and sell any of the Securities and the obligation of any of the Underwriters to purchase any of the Securities shall be evidenced by the Pricing Agreement with respect to the Designated Securities specified therein. Each Pricing Agreement shall specify the aggregate principal amount of such Designated Securities, the initial public offering price of such Designated Securities, the purchase price to the Underwriter of such Designated Securities, the names of the Underwriter of such Designated Securities, the names of the Representatives of such Underwriter and the principal amount of such Designated Securities to be purchased by each Underwriter and whether any of such Designated Securities shall be covered by Delayed Delivery Contracts (as defined in Section 3 hereof) and shall set forth the date, time and manner of delivery of such Designated Securities and payment therefor. The Pricing Agreement shall also specify (to the 2 extent not set forth in the Indenture and the registration statement and prospectus with respect thereto) the terms of such Designated Securities. A Pricing Agreement shall be in the form of an executed writing (which may be in counterparts), and may be evidenced by an exchange of telegraphic communications or any other rapid transmission device designed to produce a written record of communications transmitted. The obligations of the Underwriters under this Agreement and each Pricing Agreement shall be several and not joint. 2. The Company and SLM Education Credit represent and warrant to, and agree with, each of the Underwriters as follows (it being agreed and understood that the statements set forth in clauses (d), (e), (g), (h), (j), (k), (m), (o) and (p) of this Section 2 with respect to SLM Education Credit or the Servicer constitute representations, warranties and agreements of SLM Education Credit only and not of the Company): (a) A registration statement on Form S-3 (File No. 333-98169), including a form of prospectus, in respect of the Securities has been filed with the Securities and Exchange Commission (the "Commission"); such registration statement and any post-effective amendment thereto, each in the form heretofore delivered or to be delivered to the Representatives and, excluding exhibits to such registration statement, but including all documents incorporated by reference in the prospectus contained therein, to the Representatives for each of the other Underwriters, have been declared effective by the Commission in such form; no other document with respect to such registration statement or document incorporated by reference therein has heretofore been filed or transmitted for filing with the Commission (other than prospectuses filed pursuant to Rule 424(b) of the rules and regulations of the Commission under the Securities Act of 1933, as amended (the "Act"), each in the form heretofore delivered to the Representatives); and no stop order suspending the effectiveness of such registration statement has been issued and no proceeding for that purpose has been initiated or, to the best of SLM Education Credit's or the Company's knowledge, threatened by the Commission (any preliminary prospectus included in such registration statement or filed with the Commission pursuant to Rule 424(a) under the Act, is hereinafter called a "Preliminary Prospectus;" the various parts of such registration statement, including all exhibits thereto and the documents incorporated by reference in the prospectus contained in the registration statement at the time such part of the registration statement became effective but excluding Form T-1, each as amended at the time such part of the registration statement became effective, are hereinafter collectively called the "Registration Statement"; the prospectus relating to the Securities, in the form in which it has most recently been filed, or transmitted for filing, with the Commission on or prior to the date of this Agreement, being hereinafter called the "Prospectus"; any reference herein to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to the applicable form under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed 3 pursuant to Sections 13(a) or 15(d) of the Exchange Act after the effective date of the Registration Statement that is incorporated by reference in the Registration Statement; and any reference to the Prospectus as amended or supplemented shall be deemed to refer to the Prospectus as amended or supplemented in relation to the applicable Designated Securities in the form in which it is filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, including any documents incorporated by reference therein as of the date of such filing); (b) The documents incorporated by reference in the Prospectus, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act, the Exchange Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further documents so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act, the Exchange Act and the Trust Indenture Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Designated Securities; (c) The Registration Statement and the Prospectus conform, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act, as applicable, and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Designated Securities; (d) None of the Company, SLM Education Credit or any of their subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus Supplement; and, since such date, there has not been any material adverse change in the capital stock or long-term debt of the Company or SLM Education Credit 4 or any of their subsidiaries or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company or SLM Education Credit or any of their subsidiaries or the transactions contemplated hereby, otherwise than as set forth or contemplated in the Prospectus Supplement; (e) The Company has been duly formed and is validly existing as a limited liability company in good standing under the laws of the state of Delaware, with power and authority (limited liability company and otherwise) to own its properties and conduct its business as described in the Prospectus and to consummate the transactions contemplated therein and herein, and is a wholly-owned subsidiary of SLM Education Credit. SLM Education Credit has been duly incorporated and is validly existing as a corporation in good standing under the laws of the state of Delaware, with power and authority (corporate and otherwise) to own its properties and conduct its business as described in the Prospectus and to consummate the transactions contemplated therein and herein, and is a wholly-owned subsidiary of SLM Corporation. The Servicer has been duly formed and is validly existing as a limited partnership in good standing under the laws of the State of Delaware, with power and authority (limited partnership and otherwise) to own its properties and conduct its business as described in the Prospectus and to consummate the transactions contemplated therein and herein, and is a wholly-owned subsidiary of SLM Corporation; (f) All of the issued membership interests of the Company have been duly and validly authorized and issued and are owned beneficially and of record by SLM Education Credit; (g) This Agreement has been, and each Pricing Agreement with respect to the Designated Securities upon its execution and delivery by the Company and SLM Education Credit will have been, duly authorized, executed and delivered by the Company and SLM Education Credit. The Securities have been duly authorized, and, when Designated Securities are issued and delivered pursuant to this Agreement and the Pricing Agreement with respect to such Designated Securities, and, in the case of any Contract Securities, pursuant to Delayed Delivery Contracts with respect to such Contract Securities, such Designated Securities and Contract Securities will have been duly executed, authenticated, issued and delivered. The Designated Securities will constitute valid and legally binding obligations of the related Trust entitled to the benefits provided by the Indenture, which will be substantially in the form filed as an exhibit to the Registration Statement. The Indenture has been duly authorized and duly qualified under the Trust Indenture Act. The related Certificates are intended to represent undivided ownership interests in the Trust created by the Trust Agreement, which will be substantially in the form filed as an exhibit to the Registration Statement, and will be entitled to the benefits provided by the Trust Agreement. At the Time of Delivery (as defined in Section 4 hereof) for the Designated Securities, the Indenture and the Trust Agreement will each constitute a valid and legally binding instrument, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles. The Indenture and Trust Agreement conform, and 5 the Designated Securities and the related Certificates will conform, to the descriptions thereof contained in the Prospectus as amended or supplemented with respect to the Designated Securities; (h) The issue and sale of the Securities and the compliance by the Company with all of the provisions of the Securities, the Indenture, the Trust Agreement, each of the Delayed Delivery Contracts, this Agreement and any Pricing Agreement, and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or SLM Education Credit is a party or by which the Company or SLM Education Credit is bound or to which any of the property or assets of the Company or SLM Education Credit is subject, nor will such action result in any violation of the provisions of the Company's certificate of formation or operating agreement, SLM Education Credit's certificate of incorporation or by-laws, or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or SLM Education Credit or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the issue and sale of the Securities or the consummation by the Company or SLM Education Credit of the transactions contemplated by this Agreement or any Pricing Agreement or the Indenture or any Delayed Delivery Contract, except such as have been, or will have been prior to the Time of Delivery, obtained under the Act and the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or Blue Sky laws in connection with the purchase and distribution of the Designated Securities by the Underwriter; (i) The statements set forth in the Prospectus under the captions "Description of the Notes" and "Description of the Certificates" and set forth in the Prospectus Supplement under the caption "Description of the Notes," insofar as they purport to constitute a summary of the terms of the Notes and the Certificates, are accurate, complete and fair; (j) SLM Education Credit is not in violation of its Certificate of Incorporation or By-laws, and the Company is not in violation of its Certificate of Formation or Operating Agreement, and neither SLM Education Credit nor the Company is in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound; (k) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company or SLM Education Credit or any of its subsidiaries is a party or of which any property of the Company or SLM Education Credit or any of its subsidiaries is the subject which, if determined adversely to the Company or SLM Education Credit or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the current or future consolidated financial position, 6 shareholders' equity or results of operations of the Company or SLM Education Credit or any of its subsidiaries or on the consummation of the transactions contemplated hereby; and, to the best of the Company's and SLM Education Credit's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (l) The Company is not and, after giving effect to the offering and sale of the Securities, will not be an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended; (m) Neither the Company, SLM Education Credit nor any of their affiliates does business with the government of Cuba or with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida Statutes; (n) PricewaterhouseCoopers LLP are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder; (o) At the Time of Delivery of the Designated Securities, SLM Education Credit's representations and warranties in the related Seller Sale Agreement and the Administration Agreement, the Company's representations and warranties in the related Depositor Sale Agreement and Trust Agreement and the Servicer's representations and warranties in the Servicing Agreement will be true and correct in all material respects; and (p) In the event any of the Securities are purchased pursuant to Delayed Delivery Contracts, each of such Delayed Delivery Contracts has been duly authorized by the Company and SLM Education Credit and, when executed and delivered by the Company and the purchaser named therein, will constitute a valid and legally binding agreement of the Company enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and any Delayed Delivery Contracts conform to the description thereof in the Prospectus. 3. Upon the execution of the Pricing Agreement applicable to any Designated Securities and authorization by the Representatives of the release of the Underwriters' Securities, the several Underwriters propose to offer such Underwriters' Securities for sale upon the terms and conditions set forth in the Prospectus as amended or supplemented. The Company may specify in Schedule II to the Pricing Agreement applicable to any Designated Securities that the Underwriters are authorized to solicit offers to purchase Designated Securities from the Company pursuant to delayed delivery contracts (herein called "Delayed Delivery Contracts"), substantially in the form of Annex III attached hereto but with such changes therein as the Representatives and the Company may authorize or approve. If so specified, the Underwriters will endeavor to make such arrangements, and as compensation therefor the Company will pay to the Representatives, for the accounts of the Underwriters, at the Time of Delivery, such commission, if any, as may be set forth in such Pricing Agreement. 7 Delayed Delivery Contracts, if any, are to be with investors of the types described in the Prospectus and subject to other conditions therein set forth. The Underwriters will not have any responsibility with respect to the validity or performance of any Delayed Delivery Contracts. The principal amount of Contract Securities to be deducted from the principal amount of Designated Securities to be purchased by each Underwriter as set forth in Schedule I to the Pricing Agreement applicable to such Designated Securities shall be, in each case, the principal amount of Contract Securities which the Company has been advised by the Representatives have been attributed to such Underwriter, provided that, if the Company has not been so advised, the amount of Contract Securities to be so deducted shall be, in each case, that proportion of Contract Securities which the principal amount of Designated Securities to be purchased by such Underwriter under such Pricing Agreement bears to the total principal amount of the Designated Securities (rounded as the Representatives may determine). The total principal amount of Underwriters' Securities to be purchased by all the Underwriters pursuant to such Pricing Agreement shall be the total principal amount of Designated Securities set forth in Schedule I to such Pricing Agreement less the principal amount of the Contract Securities. The Company will deliver to the Representatives not later than 3:30 p.m., New York City time, on the third business day preceding the Time of Delivery specified in the applicable Pricing Agreement (or such other time and date as the Representatives and the Company may agree upon in writing), a written notice setting forth the principal amount of Contract Securities. 4. Underwriters' Securities to be purchased by each Underwriter pursuant to the Pricing Agreement relating thereto, in the form specified in such Pricing Agreement, and in such authorized denominations and registered in such names as the Representatives may request upon at least forty-eight hours' prior notice to the Company, shall be delivered by or on behalf of the Company to the Representatives for the account of such Underwriter, against payment by such Underwriter or on its behalf of the purchase price therefor by wire transfer or by certified or official bank check or checks, payable to the order of the Company in the funds specified in such Pricing Agreement, all in the manner and at the place and time and date specified in such Pricing Agreement or at such other place and time and date as the Representatives and the Company may agree upon in writing, such time and date being herein called the "Time of Delivery" for such Securities. Concurrently with the delivery of and payment for the Underwriters' Securities, the Company will deliver to the Representatives for the accounts of the Underwriters a check payable to the order of the party designated in the Pricing Agreement relating to such Underwriters' Securities in the amount of any compensation payable by the Company to the Underwriters in respect of any Delayed Delivery Contracts as provided in Section 3 hereof and the Pricing Agreement relating to such Securities. 5. The Company agrees with each of the Underwriters of any Designated Securities, and SLM Education Credit agrees with such Underwriters that it will cause the Company: (a) To prepare the Prospectus as amended or supplemented in relation to the applicable Designated Securities in a form approved by the Representatives and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of the 8 Pricing Agreement relating to the applicable Designated Securities or, if applicable, such earlier time as may be required by Rule 424(b); to make no further amendment or any supplement to the Registration Statement or Prospectus as amended or supplemented after the date of the Pricing Agreement relating to such Designated Securities and prior to the Time of Delivery for such Designated Securities which shall be disapproved by the Representatives for such Designated Securities promptly after reasonable notice thereof; to advise the Representatives promptly of any such amendment or supplement after such Time of Delivery and furnish the Representatives with copies thereof; to file promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for so long as the delivery of a prospectus is required in connection with the offering or sale of such Designated Securities, and during such same period to advise the Representatives, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed with the Commission, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any prospectus relating to the Designated Securities, of the suspension of the qualification of such Designated Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any such stop order or of any such order preventing or suspending the use of any prospectus relating to the Designated Securities or suspending any such qualification, to promptly use its best efforts to obtain the withdrawal of such order; (b) Promptly from time to time to take such action as the Representatives may reasonably request to qualify the Designated Securities for offering and sale under the securities laws of such jurisdictions as the Representatives may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of such Designated Securities, provided that in connection therewith the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction; (c) To furnish the Underwriters with copies of the Prospectus as amended or supplemented, in such quantities as the Representatives may from time to time reasonably request, and, if the delivery of a Prospectus is required at any time in connection with the offering or sale of the Designated Securities and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such same period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act, the Exchange Act or the Trust Indenture Act, to notify the Representatives and, upon their request, to file such document and to prepare and furnish without charge to each 9 Underwriter and to any dealer in securities as many copies as the Representatives may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance; (d) To cause the Trust to make generally available to holders of Designated Securities, as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Trust (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158); and (e) To apply the net proceeds of the offering and sale of the Designated Securities and the related Certificates that it receives in the manner set forth in the Prospectus. 6. The Company and SLM Education Credit covenant and agree with the several Underwriters that the Company or SLM Education Credit will pay or cause to be paid the following: (i) the reasonable fees, disbursements and expenses of the Company's and SLM Education Credit's counsel and accountants in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, any Pricing Agreement, any Indenture, any Trust Agreement, any Delayed Delivery Contracts, any Blue Sky and Legal Investment Memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Designated Securities; (iii) all expenses in connection with the qualification of the Designated Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky and Legal Investment Surveys; (iv) any fees charged by securities rating services for rating the Designated Securities; (v) the cost of preparing the Designated Securities; (vi) the reasonable fees and expenses of the Trustee and the Indenture Trustee and any agent of the Trustee or the Indenture Trustee and the fees and disbursements of counsel for the Trustee and the Indenture Trustee in connection with any Indenture and Trust Agreement and the Designated Securities; and (vii) all other costs and expenses incident to the performance of its obligations hereunder and under any Delayed Delivery Contracts that are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make. 7. The obligations of the Underwriters of any Designated Securities under the Pricing Agreement relating to such Designated Securities shall be subject, in the reasonable discretion of the Representatives, to the condition that all representations and warranties and other statements of the Company and SLM Education Credit in or incorporated by reference in the Pricing Agreement relating to such Designated Securities are, at and as of the Time of Delivery for such Designated Securities, true and correct, the condition that the Company and SLM Education 10 Credit shall have performed all of their obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus as amended or supplemented in relation to the applicable Designated Securities shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with; (b) Counsel for the Underwriters shall have furnished Representatives such opinion or opinions, substantially in the form attached hereto as Annex II(a), dated the Time of Delivery for such Designated Securities, with respect to the Designated Securities and such other related matters as the Representatives may reasonably request; (c) Internal counsel for the Company, SLM Education Credit and the Servicer, satisfactory to the Representatives, shall have furnished to the Representatives a written opinion or opinions, dated the Time of Delivery for such Designated Securities, substantially in the form attached hereto as Annex II(b) or as is otherwise satisfactory to the Representatives; (d) Special counsel for the Company, SLM Education Credit and the Servicer, satisfactory to the Representatives, shall have furnished to the Representatives a written opinion or opinions, dated the Time of Delivery for such Designated Securities, substantially in the form attached hereto as Annex II(a) or as is otherwise satisfactory to the Representatives; (e) Counsel for the Trustee, satisfactory to the Representatives, shall have furnished to the Representatives a written opinion or opinions, dated the Time of Delivery for such Designated Securities, substantially in the form attached hereto as Annex II(c) or as is otherwise satisfactory to the Representatives; (f) Counsel for the Indenture Trustee, satisfactory to the Representatives, shall have furnished to the Representatives a written opinion or opinions, dated the Time of Delivery for such Designated Securities, substantially in the form attached hereto as Annex II(d) or as is otherwise satisfactory to the Representatives; (g) At the time a Preliminary Prospectus relating to such Designated Securities was distributed and on the date of the Pricing Agreement for such Designated Securities, the independent public accountants of the Company and SLM Education Credit shall have furnished to the Representatives a letter or letters with respect to the Company, SLM Education Credit, the statistical and financial information contained in the Preliminary Prospectus and the Prospectus and certain agreed upon procedures with respect to the issuance and offering of the Designated Securities and the related Student Loans, in form and substance satisfactory to the Representatives and in each case 11 confirming that such accountants are independent public accountants with the meaning of the Act and the applicable rules and regulations thereunder; (h) (i) Neither the Company nor SLM Education Credit shall have sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus Supplement, and (ii) since such date, there shall not have been any material adverse change in the capital stock or long-term debt of the Company or SLM Education Credit or any such change, or any development involving a prospective such change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company or SLM Education Credit otherwise than as set forth or contemplated in the Prospectus Supplement, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Underwriters' Securities on the terms and in the manner contemplated in the Prospectus as first amended or supplemented relating to the Designated Securities; (i) On or after the date of the Pricing Agreement relating to the Designated Securities there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange or any setting of minimum prices for trading on such exchange; (ii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities; or (iii) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event specified in this clause (iii) in the reasonable judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Underwriters' Securities on the terms and in the manner contemplated in the Prospectus as theretofore amended or supplemented relating to the Designated Securities; (j) Each of the Company and SLM Education Credit shall have furnished or caused to be furnished to the Representatives at the Time of Delivery for the Designated Securities a certificate or certificates of officers of the Company or SLM Education Credit, as the case may be, satisfactory to the Representatives as to the accuracy of the representations and warranties of the Company or SLM Education Credit, as the case may be, herein at and as of such Time of Delivery, as to the performance by the Company or SLM Education Credit, as the case may be, of all of their obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a), (h) and (i) of this Section and as to such other matters as the Representatives may reasonably request; (k) At the Time of Delivery, the aggregate principal amount of the Underwriters' Securities as specified in the related Pricing Agreement for the Designated Securities shall have been sold by the Company to the Underwriters, and the aggregate amount of the related Certificates, if any, as specified in the related underwriting agreement for such Certificates shall have been sold by the Company to the underwriters specified in such underwriting agreement; and 12 (l) The Designated Securities shall be rated as set forth in the related Prospectus by the Rating Agency (or Agencies) specified in such Prospectus, and such Rating Agency or Agencies shall not have placed the Designated Securities under surveillance or review with negative implications. 8. (a) The Company, SLM Education Credit and SLM Corporation, jointly and severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Designated Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company, SLM Education Credit and SLM Corporation shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company, SLM Education Credit or SLM Corporation by any Underwriter of Designated Securities through the Representatives expressly for use in the Prospectus as amended or supplemented relating to such Securities. (b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the Company and SLM Education Credit against any losses, claims, damages or liabilities to which they may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Securities, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, any preliminary prospectus supplement, the Registration Statement, the Prospectus as amended or supplemented and any other prospectus relating to the Designated Securities, or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company or SLM Education Credit by such Underwriter through the Representatives expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. 13 (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and SLM Education Credit, on the one hand and the Underwriters of the Designated Securities on the other from the offering of the Designated Securities to which such loss, claim, damage or liability (or action in respect thereof) relates. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and SLM Education Credit, on the one hand and the Underwriters of the Designated Securities on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and SLM Education Credit, on the one hand, and such Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from such offering (before deducting expenses) received by the Company and SLM Education Credit bear to the total underwriting discounts and commissions received by such Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or SLM 14 Education Credit, on the one hand, or such Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, SLM Education Credit and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the applicable Designated Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Underwriters of Designated Securities in this subsection (d) to contribute are several in proportion to their respective underwriting obligations with respect to such Securities and not joint. (e) The obligations of the Company, SLM Education Credit and SLM Corporation under this Section 8 shall be in addition to any liability which the Company, SLM Education Credit and SLM Corporation may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 8 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company, SLM Education Credit and SLM Corporation and to each person, if any, who controls the Company, SLM Education Credit and SLM Corporation within the meaning of the Act. 9. (a) If any Underwriter shall default in its obligation to purchase the Underwriters' Securities which it has agreed to purchase under the Pricing Agreement relating to such Underwriters' Securities, the Representatives may in their discretion arrange for themselves or another party or other parties to purchase such Underwriters' Securities on the terms contained herein and therein. If within thirty-six hours after such default by any Underwriter the Representatives do not arrange for the purchase of such Underwriters' Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to the Representatives to purchase such Underwriters' Securities on such terms. In the event that, within the respective prescribed period, the Representatives notify the Company that they have so arranged for the purchase of such Underwriters' Securities, or the Company notifies the Representatives that it has so arranged for the purchase of such Underwriters' Securities, the Representatives or the Company shall have the right to postpone the Time of Delivery for such Underwriters' Securities for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus as amended or supplemented, or in any other documents or arrangements, and the Company agrees to file promptly any amendments or 15 supplements to the Registration Statement or the Prospectus which in the opinion of the Representatives may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to the Pricing Agreement with respect to such Designated Securities. (b) If, after giving effect to any arrangements for the purchase of the Underwriters' Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of such Underwriters' Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of the Designated Securities, then the Company shall have the right (i) to require each non-defaulting Underwriter to purchase the principal amount of Underwriters' Securities which such non-defaulting Underwriter agreed to purchase under the Pricing Agreement relating to such Designated Securities and, in addition, (ii) to require each non-defaulting Underwriter to purchase its pro rata share of the Underwriters' Securities of such defaulting Underwriter or Underwriters for which such arrangements have not been made (which share only shall pertain to and be based on the principal amount of the Designated Securities which such non-defaulting Underwriter or Underwriters previously agreed to purchase under such Pricing Agreement, it being acknowledged and agreed that such non-defaulting Underwriter or Underwriters shall not be required to purchase a share of any class of Underwriters' Securities of a defaulting Underwriter or Underwriters which the non-defaulting Underwriter or Underwriters had not previously agreed to purchase under such Pricing Agreement). Nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) (i) If, after giving effect to any arrangements for the purchase of the Underwriters' Securities of a defaulting Underwriter or Underwriters by the Representatives and the Company as provided in subsection (a) above, the aggregate principal amount of Underwriters' Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of the Designated Securities, as referred to in subsection (b) above, or (ii) if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Underwriters' Securities of a defaulting Underwriter or Underwriters, then the Pricing Agreement relating to such Designated Securities shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of the Company, SLM Education Credit, the several Underwriters and, to the extent provided in Section 8, SLM Corporation, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, SLM Education Credit or SLM Corporation or any officer or director or controlling person of the Company, SLM Education Credit or SLM Corporation, and shall survive delivery of and payment for the Securities. 16 11. If any Pricing Agreement shall be terminated pursuant to Section 9 or Section 7(i) hereof, the Company and SLM Education Credit shall not then be under any liability to any Underwriter with respect to the Designated Securities covered by such Pricing Agreement except as provided in Sections 6 and 8 hereof; but, if for any other reason Underwriters' Securities are not delivered by or on behalf of the Company as provided herein, the Company and SLM Education Credit will reimburse the Underwriters through the Representatives for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of such Designated Securities, but the Company and SLM Education Credit shall then be under no further liability to any Underwriter with respect to such Designated Securities except as provided in Sections 6 and 8 hereof. 12. In all dealings hereunder, the Representatives of the Underwriters of Designated Securities shall act on behalf of each of such Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by such Representatives jointly or by such of the Representatives, if any, as may be designated for such purpose in the Pricing Agreement. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the address of the Representatives as set forth in the Pricing Agreement; and if to the Company or SLM Education Credit shall be delivered or sent by mail, telex or facsimile transmission to: SLM Education Credit Funding LLC 20 Hemingway Drive East Providence, Rhode Island 02915 Facsimile: (401) 435-5649 Attention: Mary Jo Feldman President SLM Education Credit Management Corporation 20 Hemingway Drive East Providence, Rhode Island 02915 Facsimile: (401) 435-5649 Attention: Mary Jo Feldman President With copies to: Sallie Mae, Inc. 11600 Sallie Mae Drive Reston, Virginia 20193 Facsimile: (703) 810-7586 Attention: Mike Sheehan Vice President 17 provided, however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company or SLM Education Credit by the Representatives upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 13. This Agreement and each Pricing Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company, SLM Education Credit and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of the Company and SLM Education Credit and each person who controls the Company, SLM Education Credit or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement or any such Pricing Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 14. Time shall be of the essence of each Pricing Agreement. As used herein, "business day" shall mean any day when banking institutions are open for business in New York City, New York. 15. This Agreement and each Pricing Agreement shall be governed by and construed in accordance with the laws of the State of New York. 16. This Agreement and each Pricing Agreement may be executed by any one or more of the parties hereto and thereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 18 If the foregoing is in accordance with your understanding, please sign and return to us 7 counterparts hereof. Very truly yours, SLM Education Credit Funding LLC By: /s/ J. LANCE FRANKE Name: J. Lance Franke Title: Vice President SLM Education Credit Management Corporation By: /s/ J. LANCE FRANKE Name: J. Lance Franke Title: Vice President Accepted and agreed with respect to Section 8 of this Agreement: SLM Corporation By: /s/ JOHN F. REMONDI Name: John F. Remondi Title: Vice President Accepted as of the date hereof: J.P. Morgan Securities Inc. By: /s/ MICHAEL K. CLARE Name: Michael K. Clare Title: Managing Director Lehman Brothers Inc. By: /s/ NELSON SOARES Name: Nelson Soares Title: Managing Director Merrill Lynch, Pierce, Fenner & Smith Incorporated By: /s/ GEOFFREY R. WITT Name: Geoffrey R. Witt Title: Managing Director ANNEX I Pricing Agreement ----------------- - ---------------------- As Representatives of the several Underwriters named on Schedule I hereto, c/o ------------------ - ---------------------- - ---------------------- , 200_ Ladies and Gentlemen: SLM Education Credit Funding LLC, a Delaware limited liability company (the "Company"), and SLM Education Credit Management Corporation, a Delaware corporation ("SLM Education Credit"), propose, subject to the terms and conditions stated herein and in the Underwriting Agreement, dated __________, 200__ (the "Underwriting Agreement"), between the Company and SLM Education Credit, on the one hand, and _____________, on the other hand, that the Company will cause the trust (the "Trust") formed pursuant to the Trust Agreement dated as of _______, 200__ between the Company and _______, as trustee (the "Trustee"), to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") the Student Loan-Backed Notes (the "Notes") specified in Schedule II hereto (the "Designated Securities"). The Notes will be issued and secured pursuant to the Indenture, dated ___________ (the "Indenture"), between the Trust and _________, as trustee (the "Indenture Trustee"). Each of the provisions of the Underwriting Agreement is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein; and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Pricing Agreement, except that each representation and warranty which refers to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation or warranty as of the date of the Underwriting Agreement in relation to the Prospectus (as therein defined), and also a representation and warranty as of the date of this Pricing Agreement in relation to the Prospectus as amended or supplemented relating to the Designated Securities which are the subject of this Pricing Agreement. Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representatives designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto. A-1 An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission. Subject to the terms and conditions set forth herein and in the Underwriting Agreement incorporated herein by reference, the Company agrees to cause the Trust to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the principal amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto, less the principal amount of Designated Securities covered by Delayed Delivery Contracts, if any, as may be specified in Schedule II. During the period beginning from the date of this Pricing Agreement for the Designated Securities and continuing to and including [Closing Date], the Company agrees, and SLM Education Credit agrees that it will cause the Company, not to, and not to permit any affiliated entity to, offer, sell, contract to sell or otherwise dispose of, any securities (other than the Designated Securities) collateralized by, or any securities (other than the related Certificates) evidencing an ownership in, Student Loans, without the prior written consent of the Representatives. Each Underwriter represents and agrees that (a) it has not offered or sold and will not offer or sell any Notes [or Certificates] to persons in the United Kingdom prior to the expiration of the period of six months from the issue date of the Notes [and the Certificates] except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity, within the meaning of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"), received by it in connection with the issue or sale of the Notes [or the Certificates] in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes [and the Certificates] in, from or otherwise involving the United Kingdom. The Company represents and agrees that it has been informed of the existence of the FSA stabilizing guidance contained in Section MAR2, Ann 2G of the FSA Handbook (the Handbook of rules and guidance issued by the Financial Services Authority). If the foregoing is in accordance with your understanding, please sign and return to us ______ counterparts hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters and the Company and SLM Education Credit. It is understood that your acceptance of this letter on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company and SLM Education Credit for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers thereof. A-2 Very truly yours, SLM Education Credit Funding LLC By: ------------------------------------- Name: Title: SLM Education Credit Management Corporation By: ------------------------------------- Name: Title: A-3 Accepted as of the date hereof: [Underwriter] By: ---------------------------- On behalf of each of the Underwriters A-4 SCHEDULE I Principal Amount of Designated Securities to be Purchased Underwriter Class ___ Class ___ Class ___ SCHEDULE II Title of each Class of Designated Securities: Aggregate principal amount of each Class: Price to Public of each Class: Purchase Price by Underwriters of each Class: Specified funds for payment of purchase price: Indenture: Maturity: Interest Rate: Form of Designated Securities: Time of Delivery: Closing location for delivery of Designated Securities: Names and addresses of Representatives: Designated Representatives: Address for Notices, etc.: ANNEX II(a) The Company, SLM Education Credit, the Servicer and the Underwriters: --------------------------------------------------------------------- Outside Counsel Opinions ------------------------ [Opinions to be issued, which together will be substantially in the form provided for SLM Private Credit Student Loan Trust 2003-B] B-1 ANNEX II(b) The Company, SLM Education Credit and the Servicer: Internal Counsel Opinion ---------------------------------------------------------------------------- [Opinion to be issued substantially in the form provided for SLM Private Credit Student Loan Trust 2003-B] C-1 ANNEX II(c) Trustee/Eligible Lender Trustee: Counsel Opinion ------------------------------------------------ [Opinion to be issued substantially in the form provided for SLM Private Credit Student Loan Trust 2003-B] D-1 ANNEX II(d) Indenture Trustee: Counsel Opinion ---------------------------------- [Opinion to be issued substantially in the form provided for SLM Private Credit Student Loan Trust 2003-B] E-1 ANNEX III DELAYED DELIVERY CONTRACT ------------------------- SLM Education Credit Funding LLC c/o ____________________ ________________________ ________________________ Attention: ____________________ ____________, 20__ Ladies and Gentlemen: The undersigned hereby agrees to purchase from SLM Education Credit Funding LLC (hereinafter called the "Company"), and the Company agrees to sell to the undersigned, $___ principal amount of the Company's ________ (hereinafter called the "Designated Securities"), offered by the Company's Prospectus, dated ______________, 20__, as amended or supplemented, receipt of a copy of which is hereby acknowledged, at a purchase price of .....% of the principal amount thereof, plus accrued interest from the date from which interest accrues as set forth below, and on the further terms and conditions set forth below. The undersigned will purchase the Designated Securities from the Company on ______________, 20__ (the "Delivery Date") and interest on the Designated Securities so purchased will accrue from ______________, 20__ [The undersigned will purchase the Designated Securities from the Company on the delivery date or dates and in the principal amount or amounts set forth below: Principal Date from Which Delivery Date Amount Interest Accrues - --------------------------- -------------- --------------------------- ___________________, 20__ $__ _____________________, 20__ ___________________, 20__ $__ _____________________, 20__ Each such date on which Designated Securities are to be purchased hereunder is hereinafter referred to as a "Delivery Date."(4)] Payment for the Designated Securities which the undersigned has agreed to purchase on [the] [each] Delivery Date shall be made to the Company or its order by certified or official bank check in .......... Clearing House funds at the office of .........., ........., .........., or by wire transfer to a bank account specified by the Company, on [the] [such] Delivery Date upon delivery to the undersigned of the Designated Securities then to be purchased by the undersigned in definitive fully registered form and in such denominations and registered in such names as the F-1 undersigned may designate by written, telex or facsimile communication addressed to the Company not less than five full business days prior to [the] [such] Delivery Date. The obligation of the undersigned to take delivery of and make payment for Designated Securities on [the] [each] Delivery Date shall be subject to the condition that the purchase of Designated Securities to be made by the undersigned shall not on [the] [such] Delivery Date be prohibited under the laws of the jurisdiction to which the undersigned is subject. The obligation of the undersigned to take delivery of and make payment for Designated Securities shall not be affected by the failure of any purchaser to take delivery of and make payment for Designated Securities pursuant to other contracts similar to this contract. [The undersigned understands that Underwriters (the "Underwriters") are also purchasing Designated Securities from the Company, but that the obligations of the Undersigned hereunder are not contingent on such purchases]. Promptly after completion of the sale to the Underwriters the Company will mail or deliver to the undersigned at its address set forth below notice to such effect, accompanied by a copy of the Opinion of Counsel for the Company delivered to the Underwriters in connection therewith. The undersigned represents and warrants that, as of the date of this contract, the undersigned is not prohibited from purchasing the Designated Securities hereby agreed to be purchased by it under the laws of the jurisdiction to which the undersigned is subject. This contract will inure to the benefit of and be binding upon the parties hereto and their respective successors, but will not be assignable by either party hereto without the written consent of the other. This contract may be executed by either of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. F-2 It is understood that the acceptance by the Company of any Delayed Delivery Contract (including this contract) is in the Company's sole discretion and that, without limiting the foregoing, acceptances of such contracts need not be on a first-come, first-served basis. If this contract is acceptable to the Company, it is requested that the Company sign the form of acceptance below and mail or deliver one of the counterparts hereof to the undersigned at its address set forth below. This will become a binding contract between the Company and the undersigned when such counterpart is so mailed or delivered by the Company. Yours very truly, ---------------------------------------- By: ------------------------------------- (Authorized Signature) Name: Title: ---------------------------------------- (Address) Accepted: ___________________, 20__ SLM Education Credit Funding LLC By: ------------------------------------ Name: Title: F-3 EX-1.2 4 dex12.txt EXHIBIT 1.2 Exhibit 1.2 Pricing Agreement ----------------- October 2, 2003 J.P. Morgan Securities Inc. 270 Park Avenue 10th Floor New York, New York 10017 Lehman Brothers Inc. 745 7/th/ Avenue New York, New York 10019 Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 WFCN, 10th Floor New York, New York 10080 Ladies and Gentlemen: SLM Education Credit Funding LLC, a Delaware limited liability company (the "Company"), and SLM Education Credit Management Corporation, a Delaware corporation ("SLM Education Credit"), propose, subject to the terms and conditions stated in this letter agreement and in the Underwriting Agreement, dated October 2, 2003 (the "Underwriting Agreement"), between the Company and SLM Education Credit, on the one hand, and J.P. Morgan Securities Inc., Lehman Brothers Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriters"), on the other hand, that the Company will cause the trust (the "Trust") formed pursuant to the Trust Agreement, dated as of October 1, 2003, among the Company, Chase Manhattan Bank USA, National Association, as trustee (the "Trustee") and JPMorgan Chase Bank (the "Indenture Trustee"), to issue and sell to the Underwriters the Student Loan-Backed Notes (the "Notes") specified in Schedule II hereto (the "Designated Securities"). The Notes will be issued and secured pursuant to the Indenture, dated as of October 1, 2003, between the Trust and the Indenture Trustee. Unless otherwise defined in this letter agreement, terms defined in the Underwriting Agreement are used in this letter agreement. Except as modified pursuant to Schedule II hereto, each of the provisions of the Underwriting Agreement is incorporated in this letter agreement by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full in this letter agreement; and each of the representations and warranties set forth in this letter agreement shall be deemed to have been made at and as of the date of this letter agreement, except that each representation and warranty in Section 2 of the Underwriting Agreement which refers to the Prospectus shall be deemed to be a representation or warranty in relation to the Prospectus, as of the date of the Underwriting Agreement, and also a representation and warranty in relation to the Prospectus as amended or supplemented relating to the Designated Securities which are the subject of this letter agreement, as of the date of this letter agreement. Each reference to the Representatives in this letter agreement and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. The Representative designated to act on behalf of the Representatives and on behalf of each of the Underwriters of the Designated Securities pursuant to Section 12 of the Underwriting Agreement and the address of the Representatives referred to in such Section 12 are set forth at the end of Schedule II hereto. An amendment to the Registration Statement, or a supplement to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you is now proposed to be filed with the Commission. Subject to the terms and conditions set forth in this letter agreement and in the Underwriting Agreement incorporated in this letter agreement by reference, the Company agrees to cause the Trust to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Trust, at the time and place and at the purchase price to the Underwriters set forth in Schedule II hereto, the amount of Designated Securities set forth opposite the name of such Underwriter in Schedule I hereto, less the amount of Designated Securities covered by Delayed Delivery Contracts, if any, as may be specified in Schedule II. During the period beginning from the date of this letter agreement for the Designated Securities and continuing to and including October 9, 2003, the Company agrees, and SLM Education agrees that it will cause the Company, not to, and not to permit any affiliated entity to, offer, sell, contract to sell or otherwise dispose of, any securities (other than the Designated Securities) evidencing an ownership in, or any securities (other than the related Notes) collateralized by, private credit student loans, which are educational loans to students or parents of students that are not guaranteed or reinsured under the Federal Family Education Loan Program of any other federal student loan program, without the prior written consent of the Representatives. Each Underwriter represents and agrees that (a) it has not offered or sold and will not offer or sell any Notes to persons in the United Kingdom prior to the expiration of the period of six months from the issue date of the Notes except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (b) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity, within the meaning of section 21 of the Financial Services and Markets Act 2000 (the "FSMA"), received by it in connection with the issue or sale of the Notes in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (c) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom. The Company represents and agrees that it has been informed of the existence of the FSA stabilizing 2 guidance contained in Section MAR2, Ann 2G of the FSA Handbook (the Handbook of rules and guidance issued by the Financial Services Authority). If the foregoing is in accordance with your understanding, please sign and return to us 7 counterparts of this letter agreement, and upon acceptance of this letter agreement by you, on behalf of each of the Underwriters, this letter agreement and such acceptance of this letter agreement, including the provisions of the Underwriting Agreement incorporated in this letter agreement by reference, shall constitute a binding agreement between each of the Underwriters, the Company and SLM Education Credit. It is understood that your acceptance of this letter agreement on behalf of each of the Underwriters is or will be pursuant to the authority set forth in a form of agreement among Underwriters, the form of which shall be submitted to the Company and SLM Education Credit for examination upon request, but without warranty on the part of the Representatives as to the authority of the signers of this letter agreement. Very truly yours, SLM Education Credit Funding LLC By: /s/ J. LANCE FRANKE Name: J. Lance Franke Title: Vice President SLM Education Credit Management Corporation By: /s/ J. LANCE FRANKE Name: J. Lance Franke Title: Vice President Accepted as of the date of this letter agreement: J.P. Morgan Securities Inc. By: /s/ MICHAEL K. CLARE Name: Michael K. Clare Title: Managing Director Lehman Brothers Inc. By: /s/ NELSON SOARES Name: Nelson Soares Title: Managing Director Merrill Lynch, Pierce, Fenner & Smith Incorporated By: /s/ GEOFFREY R. WITT Name: Geoffrey R. Witt Title: Managing Director SCHEDULE I Amount of Designated Securities to be Purchased
Underwriter Class A-1 Class A-2 Class A-3 Class A-4 Class A-5 Class B Class C J.P. Morgan Securities Inc. $ 200,000,000 $ 140,391,000 $ 0 $ 0 $ 0 $ 14,655,000 $ 20,291,667 Lehman Brothers Inc. $ 200,000,000 $ 140,391,000 $ 0 $ 0 $ 70,000,000 $ 14,655,000 $ 20,291,667 Merrill Lynch, Pierce, Fenner & Smith Incorporated $ 200,000,000 $ 140,391,000 $ 75,000,000 $ 75,000,000 $ 0 $ 14,655,000 $ 20,291,666 Total $ 600,000,000 $ 421,173,000 $ 75,000,000 $ 75,000,000 $ 70,000,000 $ 43,965,000 $ 60,875,000 ============= ============= ============ ============ ============ ============ ============
SCHEDULE II Title of each Class of Designated Securities: Floating Rate Class A-1 Student Loan-Backed Notes (for purposes of this Schedule II, "Class A-1") Floating Rate Class A-2 Student Loan-Backed Notes (for purposes of this Schedule II, "Class A-2") Auction Rate Class A-3 Student Loan-Backed Notes (for purposes of this Schedule II, "Class A-3") Auction Rate Class A-4 Student Loan-Backed Notes (for purposes of this Schedule II, "Class A-4") Auction Rate Class A-5 Student Loan-Backed Notes (for purposes of this Schedule II, "Class A-5") Floating Rate Class B Student Loan-Backed Notes (for purposes of this Schedule II, "Class B") Floating Rate Class C Student Loan-Backed Notes (for purposes of this Schedule II, "Class C") Aggregate principal amount of each Class: Class A-1: $600,000,000 Class A-2: $421,173,000 Class A-3: $ 75,000,000 Class A-4: $ 75,000,000 Class A-5 $ 70,000,000 Class B: $ 43,965,000 Class C: $ 60,875,000 Price to Public of each Class: Class A-1: 100.00000% Class A-2: 100.00000% Class A-3: 100.00000% Class A-4: 100.00000% Class A-5: 100.00000% Class B: 100.00000% Class C: 100.00000% Purchase Price by Underwriters of each Class: Class A-1: 99.750% Class A-2: 99.700% Class A-3: 99.800% Class A-4: 99.800% Class A-5: 99.800% Class B: 99.600% Class C: 99.350% -2- Specified funds for payment of purchase price: Same Day Funds Indenture: Indenture, dated as of October 1, 2003, between JPMorgan Chase Bank, as Indenture Trustee, and SLM Private Credit Student Loan Trust 2003-C. Maturity: Class A-1: September 2016 Distribution Date Class A-2: September 2020 Distribution Date Class A-3 September 2032 Distribution Date Class A-4 September 2032 Distribution Date Class A-5: September 2032 Distribution Date Class B: September 2032 Distribution Date Class C: September 2032 Distribution Date Interest Rate: Class A-1: interpolated 2 month/3 month LIBOR* plus 0.10% Class A-2: interpolated 2 month/3 month LIBOR* plus 0.39% Class A-3: Auction Rate Class A-4: Auction Rate Class A-5: Auction Rate Class B: interpolated 2 month/3 month LIBOR* plus 0.80% Class C: interpolated 2 month/3 month LIBOR* plus 1.60% - ---------- * As to initial Accrual Period; thereafter, Three-month LIBOR. Form of Designated Securities: Book-Entry (DTC) Time of Delivery: October 9, 2003 Closing location for delivery of Designated Securities: Sallie Mae, Inc. 11600 Sallie Mae Drive Reston, VA 20193 -3- Names and addresses of Representatives: Designated Representatives: Merrill Lynch, Pierce, Fenner & Smith Incorporated Address for Notices, etc.: Merrill Lynch, Pierce, Fenner & Smith Incorporated 4 WFCN, 10th Floor New York, New York 10080 Attn: Geoffrey Witt Modifications to Underwriting Agreement (solely for purposes of this Pricing Agreement): 1. The following sentence is hereby added to the end of the second paragraph of the Underwriting Agreement: In addition, the Trust will enter into a separate swap agreements (the "Swap Agreements") with JP Morgan Chase Bank and Merrill Lynch Derivative Products AG (the "Swap Counterparties"). 2. The following paragraph is hereby added to Section 7 of the Underwriting Agreement: (m) The Swap Agreements shall have been entered into by the Trust and the Swap Counterparties and the Underwriters shall have received a copy, addressed to them or on which they are otherwise entitled to rely, of each opinion of counsel required to be delivered thereunder at or before the Time of Delivery, and a copy of each certificate required to be delivered thereunder at or before the Time of Delivery. 3. The following sentence is hereby added to the end of Section 9(b) of the Underwriting Agreement: For purposes of this Section 9(b), the term "class" shall be deemed to refer to Classes A-3, A-4 and A-5 collectively. -4- EX-4.1 5 dex41.txt EXHIBIT 4.1 Exhibit 4.1 ================================================================================ TRUST AGREEMENT among SLM EDUCATION CREDIT FUNDING LLC, as Depositor CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely, as Trustee, and JPMORGAN CHASE BANK, not in its individual capacity but solely as Indenture Trustee Dated as of October 1, 2003 ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS AND USAGE Section 1.01. Definitions and Usage..........................................1 ARTICLE II ORGANIZATION Section 2.01. Creation of Trust; Name........................................1 Section 2.02. Office.........................................................1 Section 2.03. Purposes and Powers............................................1 Section 2.04. Appointment of Trustee.........................................2 Section 2.05. Initial Capital Contribution of Trust Estate...................2 Section 2.06. Declaration of Trust...........................................2 Section 2.07. Liability of the Holders of Excess Distribution Certificate....................................................3 Section 2.08. Title to Trust Property........................................3 Section 2.09. Representations, Warranties, and Covenants of the Depositor....3 ARTICLE III BENEFICIAL OWNERSHIP AND EXCESS DISTRIBUTION CERTIFICATE Section 3.01. Initial Beneficial Ownership...................................4 Section 3.02. Corporate Trust Office.........................................4 Section 3.03. The Excess Distribution Certificate............................4 ARTICLE IV ACTIONS BY TRUSTEE Section 4.01. Prior Notice to the Holder of the Excess Distribution Certificate With Respect to Certain Matters....................9 Section 4.02. Action with Respect to Sale of the Trust Student Loans........10 Section 4.03. Action with Respect to Bankruptcy.............................10 Section 4.04. Restrictions..................................................10 Page ---- ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES Section 5.01. Application of Trust Funds....................................10 Section 5.02. Method of Payment.............................................10 Section 5.03. No Segregation of Moneys; No Interest.........................11 Section 5.04. Reports to the Holder of the Excess Distribution Certificate, the Internal Revenue Service and Others..........11 Section 5.05. Signature on Returns; Tax Matters Partner.....................11 ARTICLE VI AUTHORITY AND DUTIES OF TRUSTEE Section 6.01. General Authority.............................................11 Section 6.02. General Duties................................................12 Section 6.03. Action upon Instruction.......................................12 Section 6.04. No Duties Except as Specified in this Agreement or in Instructions..................................................13 Section 6.05. No Action Except Under Specified Documents or Instructions....13 Section 6.06. Restrictions..................................................13 ARTICLE VII CONCERNING THE TRUSTEE Section 7.01. Acceptance of Trusts and Duties...............................13 Section 7.02. Reserved......................................................15 Section 7.03. Representations and Warranties................................15 Section 7.04. Reliance; Advice of Counsel...................................15 Section 7.05. Not Acting in Individual Capacity.............................16 Section 7.06. Trustee Not Liable for Excess Distribution Certificates or Trust Student Loans...........................................16 Section 7.07. Trustee May Own Notes.........................................16 ARTICLE VIII COMPENSATION AND INDEMNITY OF TRUSTEE Section 8.01. Trustee's Fees and Expenses...................................16 Section 8.02. Payments to the Trustee.......................................17 Section 8.03. Indemnity.....................................................17 ii Page ---- ARTICLE IX TERMINATION OF TRUST AGREEMENT Section 9.01. Termination of Trust Agreement................................17 ARTICLE X SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES Section 10.01. Eligibility Requirements for Trustee..........................17 Section 10.02. Resignation or Removal of Trustee.............................18 Section 10.03. Successor Trustee.............................................18 Section 10.04. Merger or Consolidation of Trustee............................19 Section 10.05. Appointment of Co-Trustee or Separate Trustee.................19 ARTICLE XI MISCELLANEOUS Section 11.01. Supplements and Amendments....................................20 Section 11.02. No Legal Title to Trust Estate in Holder of the Excess Distribution Certificate......................................21 Section 11.03. Limitations on Rights of Others...............................22 Section 11.04. Notices.......................................................22 Section 11.05. Severability..................................................22 Section 11.06. Separate Counterparts.........................................22 Section 11.07. Successors and Assigns........................................22 Section 11.08. No Petition...................................................22 Section 11.09. No Recourse...................................................23 Section 11.10. Headings......................................................23 Section 11.11. Governing Law.................................................23 Exhibit A Form of Excess Distribution Certificate Exhibit B Form of Certificate of Trust Exhibit C Form of Transferor Letter Exhibit D-1 Form of Transferee Letter (Non-Rule 144A) Exhibit D-2 From of Transferee Letter (Rule 144A) Appendix A to Trust Agreement iii TRUST AGREEMENT This TRUST AGREEMENT, dated as of October 1, 2003 (the "Agreement"), is among SLM EDUCATION CREDIT FUNDING LLC, a Delaware limited liability company, as depositor (the "Depositor"), CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, a national banking association, not in its individual capacity but solely as the Trustee (the "Trustee") and JPMORGAN CHASE BANK, not in its individual capacity but solely as the Indenture Trustee (the "Indenture Trustee"). WITNESSETH: WHEREAS, the Depositor and the Trustee desire to establish the SLM Private Credit Student Loan Trust 2003-C. NOW, THEREFORE, the Depositor, the Trustee and the Indenture Trustee hereby agree as follows: 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 hereto, which also contains rules as to usage that shall be applicable herein. ARTICLE II ORGANIZATION Section 2.01. Creation of Trust; Name. There is hereby created a Trust which shall be known as "SLM Private Credit Student Loan Trust 2003-C", in which name the Trustee may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued. The Trust shall constitute a statutory trust within the meaning of Section 3801(a) of the Delaware Statutory Trust Act for which the Trustee has filed a certificate of trust with the Secretary of State of the State of Delaware pursuant to Section 3810(a) of the Delaware Statutory Trust Act. Section 2.02. Office. The office of the Trust shall be in care of the Trustee at its Corporate Trust Office or at such other address as the Trustee may designate by written notice to the Depositor. Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in the following activities: 10.1 Trust Agreement (i) to issue the Notes pursuant to the Indenture and the Excess Distribution Certificate pursuant to this Agreement and to sell the Notes in one or more transactions; (ii) with the proceeds of the sale of the Notes, to fund the Reserve Account and the Cash Capitalization Account pursuant to Section 2.08 the Administration Agreement and to purchase the Trust Student Loans pursuant to the Depositor Sale Agreement; (iii) to Grant the Trust Estate to the Indenture Trustee pursuant to the Indenture, and to hold, manage and distribute to the holder of the Excess Distribution Certificate pursuant to the terms of this Agreement any portion of the Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture; (iv) to enter into and perform its obligations under the Basic Documents to which it is to be a party, including, but not limited to, any payments that may be owed by the Trust under the Swap Agreements and the upfront payment owed by the Trust under the Interest Rate Cap Agreement; (v) to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and (vi) subject to compliance with the Basic Documents, to engage in such other activities as may be required in connection with conservation of the Trust Estate and the making of distributions to the Noteholders and the others specified in Sections 2.07 and 2.08 of the Administration Agreement. The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of this Agreement or the other Basic Documents. Section 2.04. Appointment of Trustee. The Depositor hereby appoints the Trustee as trustee of the Trust, effective as of the date hereof, to have all the rights, powers and duties set forth herein. Section 2.05. Initial Capital Contribution of Trust Estate. The Depositor hereby sells, assigns, transfers, conveys and sets over to the Trustee, as of the date hereof, the sum of $100.00. The Trustee hereby acknowledges receipt in trust from the Depositor, as of the date hereof, of the foregoing contribution, which shall constitute the Initial Trust Estate and shall be deposited in the Collection Account. The Depositor shall pay the organizational expenses of the Trust as they may arise or shall, upon the request of the Trustee, promptly reimburse the Trustee for any such expenses paid by the Trustee. Section 2.06. Declaration of Trust. The Trustee hereby declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the holder of the Excess Distribution Certificate, subject to the obligations of the Trust under the other Basic Documents. It is the intention of the parties hereto that the Trust constitute a statutory trust under Delaware law and that this Agreement constitute the governing instrument 2 of such trust. Effective as of the date hereof, the Trustee shall have all rights, powers and duties set forth herein with respect to accomplishing the purposes of the Trust. Section 2.07. Liability of the Holders of Excess Distribution Certificate. (a) Notwithstanding the provisions of Section 3803 of the Delaware Statutory Trust Act, the Depositor shall be liable directly to and shall indemnify the injured party for all losses, claims, damages, liabilities and expenses of the Trust (including Expenses, to the extent that the assets of the Trust that would remain if all of the Notes were paid in full would not be sufficient to pay any such liabilities, or if such liabilities in fact are not paid out of the Trust Estate) to the extent that the Depositor would be liable if the Trust were a partnership under the Delaware Revised Uniform Limited Partnership Act in which the Depositor were a general partner; provided, however, that the Depositor shall not be liable for any losses incurred by a beneficial owner of a Note in its capacity as a holder of limited recourse debt or to any holder of the Excess Distribution Certificate. In addition, any third party creditors of the Trust (other than in connection with the obligations to Noteholders excepted above) shall be third party beneficiaries of this paragraph. (b) No holder of the Excess Distribution Certificate (in such capacity) shall have any personal liability for any liability or obligation of the Trust. Section 2.08. Title to Trust Property. Legal title to all of the Trust Estate shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to be vested in the Trustee, a co-trustee and/or a separate trustee, as the case may be. Section 2.09. Representations, Warranties, and Covenants of the Depositor. The Depositor hereby represents, warrants and covenants to the Trustee as follows: (a) The Depositor is duly organized and validly existing as a Delaware limited liability company in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted. (b) The Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Trust and the Depositor has duly authorized such sale and assignment and deposit to the Trust by all necessary action; and the execution, delivery and performance of this Agreement has been duly authorized by the Depositor by all necessary action. (c) This Agreement constitutes a legal, valid and binding obligation of the Depositor enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and similar laws relating to creditors' rights generally and subject to general principles of equity. 3 (d) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Certificate of Formation or Limited Liability Company Operating Agreement of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the Depositor's knowledge, any order, rule or regulation applicable to the Depositor of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. (e) The Depositor agrees for the benefit of the Noteholders and the holder of the Excess Distribution Certificate that it will comply with each of the requirements set forth in its Certificate of Formation or Limited Liability Company Operating Agreement. ARTICLE III BENEFICIAL OWNERSHIP AND EXCESS DISTRIBUTION CERTIFICATE Section 3.01. Initial Beneficial Ownership. Upon the formation of the Trust by the contribution by the Depositor pursuant to Section 2.05 and until the issuance of the Excess Distribution Certificate, the Depositor shall be the sole beneficial owner of the Trust. Section 3.02. Corporate Trust Office. The Trustee initially designates Christiana Center/OPS4, 500 Stanton Christiana Road, Newark, Delaware 19713, as its principal Corporate Trust Office, at which it shall act as Trustee of the Trust. The Excess Distribution Certificate Registrar's New York office and its authenticating agent's office are located at 450 West 33rd Street, 15th Floor, New York, New York 10001, Attention: Structured Finance Services. Section 3.03. The Excess Distribution Certificate. (a) General. The Excess Distribution Certificate shall be issued in one or more registered, definitive, physical certificates substantially in the form of Exhibit A hereto, in minimum percentage interests of at least 10% and integral multiples of 10% in excess thereof. The Excess Distribution Certificate shall receive payments as provided in Section 2.07(c)(xvii) and Section 2.08 of the Administration Agreement. The Excess Distribution Certificate shall be executed on behalf of the Trust by manual or facsimile signature of an authorized officer of the Trustee. An Excess Distribution Certificate bearing the manual or facsimile signatures of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Trust, shall be valid and binding obligations of the Trust, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Excess Distribution Certificate or did not hold such offices at the date of authentication and delivery of such Excess Distribution Certificate. 4 (b) Authentication. Concurrently with the sale of the Trust Student Loans to the Trust pursuant to the Depositor Sale Agreement, the Trustee shall cause the Excess Distribution Certificate to be executed on behalf of the Trust, authenticated and delivered to or upon the written order of the Depositor, signed by its chairman of the board, its president or any vice president, without further action by the Depositor. No Excess Distribution Certificate shall entitle its holder to any benefit under this Agreement, or shall be valid for any purpose, unless there shall appear on such Excess Distribution Certificate a certificate of authentication substantially in the form set forth in Exhibit A, executed by the Trustee or JPMorgan Chase Bank, as the Trustee's authenticating agent, by manual signature; such authentication shall constitute conclusive evidence that such Excess Distribution Certificate shall have been duly authenticated and delivered hereunder. The Excess Distribution Certificate shall be dated the date of its authentication. No further Excess Distribution Certificates shall be issued except pursuant to clause (c) or (d) below. (c) Registration of Transfer and Exchange. The Excess Distribution Certificate Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to clause (f) below, an Excess Distribution Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Trustee shall provide for the registration of the Excess Distribution Certificate and of transfers and exchanges of the Excess Distribution Certificate as herein provided. JPMorgan Chase Bank shall be the initial Excess Distribution Certificate Registrar. Upon surrender for registration of transfer of the Excess Distribution Certificate at the office or agency maintained pursuant to clause (f) below, the Trustee shall execute, authenticate and deliver (or shall cause JPMorgan Chase Bank as its authenticating agent to authenticate and deliver), in the name of the designated transferee, a new Excess Distribution Certificate dated the date of authentication by the Trustee or any authenticating agent. At the option of the holder of the Excess Distribution Certificate, the Excess Distribution Certificate may be exchanged for another Excess Distribution Certificate upon surrender of the Excess Distribution Certificate to be exchanged at the office or agency maintained pursuant to clause (f) below. An Excess Distribution Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Excess Distribution Certificate Registrar duly executed by the holder thereof or his attorney duly authorized in writing, with such signature guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. An Excess Distribution Certificate surrendered for registration of transfer or exchange shall be cancelled and subsequently disposed of by the Excess Distribution Certificate Registrar in accordance with its customary practice. No service charge shall be made for any registration of transfer or exchange of the Excess Distribution Certificate, but the Excess Distribution Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of the Excess Distribution Certificate. The preceding provisions of this Section notwithstanding, the Trustee shall not be required to make and the Excess Distribution Certificate Registrar need not register transfers or 5 exchanges of the Excess Distribution Certificate for a period of 15 days preceding any Distribution Date with respect to the Excess Distribution Certificate. The Excess Distribution Certificate and any beneficial interest in the Excess Distribution Certificate may not be acquired by (i) employee benefit plans (as defined in section 3(3) of ERISA) that are subject to the provisions of Title I of ERISA, (ii) plans described in section 4975(e)(1) of the Code, including individual retirement accounts described in Section 408(a) of the Code or Keogh plans, or (iii) Benefit Plans. By accepting and holding the Excess Distribution Certificate or an interest therein, the holder thereof shall be deemed to have represented and warranted that it is not a Benefit Plan, is not purchasing the Excess Distribution Certificate on behalf of a Benefit Plan and is not using assets of a Plan to purchase the Excess Distribution Certificate and to have agreed that if the Excess Distribution Certificate is deemed to be a plan asset, the holder thereof will promptly dispose of the Excess Distribution Certificate. The provisions of Sections 7.01, 7.03, 7.04, 7.05, 8.01 and 8.03 shall apply to the Indenture Trustee also in its role as Excess Distribution Certificate Registrar, for so long as the Indenture Trustee shall act as Excess Distribution Certificate Registrar and, to the extent applicable, to any other certificate registrar appointed hereunder. (d) Mutilated, Destroyed, Lost or Stolen Excess Distribution Certificate. If (i) the mutilated Excess Distribution Certificate shall be surrendered to the Excess Distribution Certificate Registrar, or if the Excess Distribution Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of the Excess Distribution Certificate, and (ii) there shall be delivered to the Excess Distribution Certificate Registrar and the Trustee such security or indemnity as may be required by them to save each of them and the Trust harmless, then in the absence of notice that such Excess Distribution Certificate shall have been acquired by a bona fide purchaser, the Trustee on behalf of the Trust shall execute and the Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Excess Distribution Certificate, a new Excess Distribution Certificate of like tenor. In connection with the issuance of any new Excess Distribution Certificate under this Section, the Excess Distribution Certificate Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Excess Distribution Certificate issued pursuant to this paragraph shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Excess Distribution Certificate shall be found at any time. (e) Persons Deemed Owners. Prior to due presentation of the Excess Distribution Certificate for registration of transfer, the Trustee and the Excess Distribution Certificate Registrar and any agent of either of them may treat the Person in whose name the Excess Distribution Certificate shall be registered in the Excess Distribution Certificate Register as the owner of such Excess Distribution Certificate for the purpose of receiving distributions thereon and for all other purposes whatsoever, and neither the Trustee, the Excess Distribution Certificate Registrar nor any agent thereof shall be bound by any notice to the contrary. (f) Maintenance of Office or Agency. The Trustee shall maintain in the Borough of Manhattan, The City of New York, an office or offices or agency or agencies where the Excess Distribution Certificate may be surrendered for registration of transfer or exchange and where 6 notices and demands to or upon the Trustee in respect of the Excess Distribution Certificate may be served. (g) Appointment of Excess Distribution Certificate Paying Agent. The Excess Distribution Certificate Paying Agent shall make distributions to the holder of the Excess Distribution Certificate from the amounts received from the Indenture Trustee pursuant to Section 2.07(c)(xvii) and Section 2.08 of the Administration Agreement and shall report the amounts of such distributions to the Indenture Trustee (if the Excess Distribution Certificate Paying Agent is not the Indenture Trustee). Any Excess Distribution Certificate Paying Agent shall have the revocable power to receive such funds from the Indenture Trustee for the purpose of making the distributions referred to above. The Trustee may revoke such power and remove the Excess Distribution Certificate Paying Agent if the Trustee determines in its sole discretion that the Excess Distribution Certificate Paying Agent shall have failed to perform its obligations under this Agreement in any material respect. The Excess Distribution Certificate Paying Agent shall initially be the Indenture Trustee, and any co-paying agent chosen by the Trustee and consented to by the Administrator (which consent shall not be unreasonably withheld). The Indenture Trustee shall be permitted to resign as Excess Distribution Certificate Paying Agent upon 30 days' written notice to the Trustee. In the event that the Indenture Trustee shall no longer be the Excess Distribution Certificate Paying Agent, the Trustee shall appoint a successor to act as Excess Distribution Certificate Paying Agent (which shall be a bank or trust company). The Trustee shall cause such successor Excess Distribution Certificate Paying Agent or any additional Excess Distribution Certificate Paying Agent appointed by the Trustee to execute and deliver to the Trustee an instrument in which such successor Excess Distribution Certificate Paying Agent or additional Excess Distribution Certificate Paying Agent shall agree with the Trustee that as Excess Distribution Certificate Paying Agent, such successor Excess Distribution Certificate Paying Agent or additional Excess Distribution Certificate Paying Agent will hold all sums, if any, held by it for payment to the holder of the Excess Distribution Certificate in trust for the benefit of such holder until such sums shall be paid to such holder. The Excess Distribution Certificate Paying Agent shall return all unclaimed funds to the Trustee and upon removal of an Excess Distribution Certificate Paying Agent such Excess Distribution Certificate Paying Agent shall also return all funds in its possession to the Trustee. The provisions of Sections 7.01, 7.03, 7.04, 7.05, 8.01 and 8.03 shall apply to the Indenture Trustee also in its role as Excess Distribution Certificate Paying Agent, for so long as the Indenture Trustee shall act as Excess Distribution Certificate Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Excess Distribution Certificate Paying Agent shall include any co-paying agent unless the context requires otherwise. (h) Restrictions on Transfer of the Excess Distribution Certificate. (i) The Excess Distribution Certificate may be transferred to the Depositor or to any Affiliate of the Depositor, without any requirement to provide any officer's certificates or legal opinions that would otherwise be required if such proposed transfer was being made to a Person who is not an Affiliate of the Depositor. (ii) Except as provided above, the Excess Distribution Certificate shall not be sold, pledged, transferred or assigned except as provided below: 7 A. The Excess Distribution Certificate has not been registered or qualified under the Securities Act of 1933, as amended (the "Securities Act") or any state securities law. No transfer, sale, pledge or other disposition of the Excess Distribution Certificate or any interest therein shall be made unless such transfer is made pursuant to an effective registration statement under the Securities Act and effective registration or qualification under applicable state securities laws, or is made in a transaction which does not require such registration or qualification. In the event that a transfer is to be made without registration or qualification, the Trustee shall require, in order to assure compliance with such laws, that the prospective transferor and transferee each certify to the Trustee, the Excess Distribution Certificate Registrar, the Administrator, and, if it is not the proposed transferor, the Depositor, in writing, the facts surrounding the transfer. Such certifications shall be substantially in the forms of Exhibits C and D-1 or D-2 hereto, respectively. In the event that such a transfer is to be made within two years from the date of the initial issuance of the Excess Distribution Certificate pursuant hereto (other than a transfer as to which the proposed transferee has provided a certificate in the form of Exhibit D-2), the Trustee in its sole discretion, may require that there shall also be delivered to the Trustee, the Excess Distribution Certificate Registrar, the Administrator, and, if it is not the proposed transferor, the Depositor, at the expense of the transferor, an opinion of counsel that such transfer may be made pursuant to an exemption from the Securities Act and such state securities laws. Any such opinion of counsel shall not be an expense of the Trustee, the Excess Distribution Certificate Registrar, the Administrator, and, if it is not the proposed transferor, the Depositor. None of the Depositor, the Administrator or the Trustee is obligated to register or qualify the Excess Distribution Certificate under the Securities Act or any other securities law or to take any action not otherwise required under this Agreement to permit the transfer of the Excess Distribution Certificate without registration or qualification. Any such holder of the Excess Distribution Certificate desiring to effect such transfer shall, and does hereby agree to, indemnify the Trustee, the Excess Distribution Certificate Registrar, the Administrator, and, if it is not the proposed transferor, the Depositor, against any liability that may result if the transfer is not so exempt or is made in accordance with such applicable federal and state laws. B. No transfer of the Excess Distribution Certificate will be registered by the Trustee or the Excess Distribution Certificate Registrar unless the Trustee, the Certificate Registrar, the Administrator, and, if it is not the proposed transferor, the Depositor receives a representation from the proposed transferee of the Excess Distribution Certificate, substantially in the form of Exhibit D-1 or D-2, as the case may be, that such transferee is not acquiring the Excess Distribution Certificate directly or indirectly for, on behalf of or with the assets of a Plan. If any proposed transferee shall become a holder of the Excess Distribution Certificate in violation of these provisions, then the last preceding permitted transferee shall be restored, to the extent permitted by law, to all rights as holder of the Excess Distribution Certificate, retroactive to the date of registration of such transfer of the Excess Distribution Certificate. Neither the Trustee nor the Excess Distribution Certificate Registrar shall have any liability to any person for any registration or transfer of the Excess Distribution Certificate that is not permitted or for making any payments due on the Excess Distribution Certificate to the holder or taking any action with respect to such holder under this Agreement. Any proposed 8 transferee who becomes a holder of the Excess Distribution Certificate shall agree to indemnify the Trustee, the Excess Distribution Certificate Registrar, the Swap Counterparties, the Administrator, if it is not the proposed transferor, the Cap Counterparty, and, if it is not the proposed transferor, the Depositor, against any loss, damage or penalty incurred as a result of the transfer of the Excess Distribution Certificate to such proposed transferee in violation of such restrictions. C. The prospective transferee shall be aware that the Excess Distribution Certificate shall bear legends referring to the restrictions contained in sub-clauses (A) and (B) above and by its acceptance of the Excess Distribution Certificate agrees to abide by such restrictions. D. The prospective transferee shall deliver an opinion of counsel addressed to the Trustee, the Swap Counterparties, the Administrator, if it is not the proposed transferor, the Cap Counterparty, and, if it is not the proposed transferor, the Depositor, to the effect that, (1) as a matter of federal income tax law, such prospective transferee is permitted to accept the transfer of the Excess Distribution Certificate, (2) such transfer or pledge would not jeopardize the tax treatment of the Trust, (3) such transfer or pledge would not subject the Trust to any entity-level tax, (4) such transfer or pledge would not jeopardize the status of the Notes as debt for all purposes, and (5) such pledge or transfer would not cause the Trust to be treated, for federal income tax purposes, as an association or a publicly traded partnership taxable as a corporation. E. No pledge or transfer of the Excess Distribution Certificate shall be effective unless such purchase or transfer is to a single beneficial owner who shall be the registered holder of the Excess Distribution Certificate. ARTICLE IV ACTIONS BY TRUSTEE Section 4.01. Prior Notice to the Holder of the Excess Distribution Certificate With Respect to Certain Matters. With respect to the following matters, the Trustee shall not take action unless at least 30 days before the taking of such action, the Trustee shall have notified the holder of the Excess Distribution Certificate and each of the Rating Agencies in writing of the proposed action and the holder shall not have notified the Trustee in writing prior to the 30th day after such notice is given that it has withheld consent or provided alternative direction: (a) the initiation of any material claim or lawsuit by the Trust (except claims or lawsuits brought in connection with the collection of the Trust Student Loans) and the compromise of any material action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of Trust Student Loans); (b) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any class of Noteholders is required; 9 (c) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any class of Noteholder is not required and such amendment materially adversely affects the interest of the holder of the Excess Distribution Certificate; or (d) the amendment of a Swap Agreement or the Interest Rate Cap Agreement in circumstances where the consent of any class of Noteholders is required or in circumstances where the consent of Noteholders is not required but where such amendment materially adversely affects the interest of the holder of the Excess Distribution Certificate. Section 4.02. Action with Respect to Sale of the Trust Student Loans. The Trustee shall not have the power, except upon the written direction of the Depositor and except as expressly provided in the Basic Documents, to sell the Trust Student Loans after the payment in full of the Notes. Section 4.03. Action with Respect to Bankruptcy. The Trustee shall not have the power to commence a voluntary proceeding in bankruptcy relating to the Trust without the prior approval of the Depositor and the delivery to the Trustee by the Depositor of a certificate certifying that the Depositor reasonably believes that the Trust is insolvent. Section 4.04. Restrictions. Neither the Depositor nor the holder of the Excess Distribution Certificate shall direct the Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Trustee under this Agreement or any of the other Basic Documents or would be contrary to Section 2.03 nor shall the Trustee be permitted to follow any such direction, if given. ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES Section 5.01. Application of Trust Funds. (a) On each Distribution Date, the Trustee shall distribute to the holder of the Excess Distribution Certificate any amounts payable in respect of the Excess Distribution Certificate in accordance with the Administration Agreement. (b) In the event that any withholding tax is imposed on the Trust's payment to the holder of the Excess Distribution Certificate, such tax shall reduce the amount otherwise distributable on the Excess Distribution Certificate. Section 5.02. Method of Payment. Distributions required to be made to the holder of the Excess Distribution Certificate on any Distribution Date shall be made to the holder of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of such holder at a bank or other entity having appropriate facilities therefor, if such holder shall have provided to the Excess Distribution Certificate Registrar appropriate written instructions signed by two authorized officers, if any, at least five Business Days prior to such Distribution 10 Date, or, if not, by check mailed to such holder at the address of such holder appearing in the Excess Distribution Certificate Register. Section 5.03. No Segregation of Moneys; No Interest. Subject to Section 5.01, moneys received by the Trustee hereunder need not be segregated in any manner except to the extent required by law or the Administration Agreement and may be deposited under such general conditions as may be prescribed by law, and the Trustee shall not be liable for any interest thereon. Section 5.04. Reports to the Holder of the Excess Distribution Certificate, the Internal Revenue Service and Others. The Trustee shall provide (or cause to be provided) any reports or other information required to be provided to the holder of the Excess Distribution Certificate pursuant to the Code, the regulations promulgated thereunder or other applicable law. In addition, the Trustee shall provide (or cause to be provided) any information concerning the Excess Distribution Certificate to the Internal Revenue Service or other taxing authority as required under the Code, the regulations promulgated thereunder or other applicable law. The Trustee shall be entitled to hire an independent accounting firm to perform the functions described in this Section 5.04, the reasonable fees and expenses of which shall be paid by the Depositor. Section 5.05. Signature on Returns; Tax Matters Partner. (a) The Trustee shall sign on behalf of the Trust the tax returns of the Trust, unless applicable law requires a Certificateholder to sign such documents, in which case such documents shall be signed by the Depositor or the then holder of the Excess Distribution Certificate. (b) The Depositor shall be designated the "tax matters partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury Regulations. ARTICLE VI AUTHORITY AND DUTIES OF TRUSTEE Section 6.01. General Authority. The Trustee is authorized and directed to execute and deliver the Basic Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to be a party, in each case, in such form as the Depositor shall approve as evidenced conclusively by the Trustee's execution thereof, and, on behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver Notes in the aggregate principal amount of $1,346,013,000. In addition to the foregoing, the Trustee is authorized to take all actions required of the Trust pursuant to the Basic Documents. The Trustee is further authorized from time to time to take such action as the Administrator directs or instructs with respect to the Basic Documents and is directed to take such action to the extent that the Administrator is expressly required pursuant to the Basic Documents to cause the Trustee to act. 11 Section 6.02. General Duties. It shall be the duty of the Trustee to discharge (or cause to be discharged) all its responsibilities pursuant to the terms of this Agreement, the other Basic Documents to which the Trust is a party and to administer the Trust in the interest of the Noteholders and the holder of the Excess Distribution Certificate subject to and in accordance with the provisions of this Agreement and the other Basic Documents. Without limiting the foregoing, the Trustee shall on behalf of the Trust file and prove any claim or claims that may exist on behalf of the Trust against the Depositor in connection with any claims paying procedure as part of an insolvency or a receivership proceeding involving the Depositor. Notwithstanding the foregoing, the Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the other Basic Documents to the extent the Administrator has agreed in the Administration Agreement to perform and act or to discharge any duty of the Trustee hereunder or under any other Basic Document, and the Trustee shall not be held liable for the default or failure of the Administrator to carry out its obligations under the Administration Agreement. Except as expressly provided in the Basic Documents, the 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. Section 6.03. Action Upon Instruction. (a) Reserved. (b) The Trustee shall not be required to take any action hereunder or under any other Basic Document if the Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Trustee or is contrary to the terms hereof, any other Basic Document or is otherwise contrary to law. (c) Whenever the Trustee is unable to determine the appropriate course of action between alternative courses and actions permitted or required by the terms of this Agreement or under any other Basic Document, the Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Depositor requiring instruction as to the course of action to be adopted, and to the extent the Trustee acts in good faith in accordance with any written instruction of the Depositor received, the Trustee shall not be liable on account of such action to any Person. If the Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement, the other Basic Documents, as it shall deem to be in the best interests of the Depositor, and shall have no liability to any Person for such action or inaction. (d) In the event that the Trustee is unsure as to the application of any provision of this Agreement, any other Basic Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Trustee or is silent or is incomplete as to the course of action that the Trustee is required to take with respect to a particular set of facts, the Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Depositor requesting instruction and, to the extent that the Trustee acts or refrains from acting in good faith 12 in accordance with any such instruction received, the Trustee shall not be liable, on account of such action or inaction, to any Person. If the Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the other Basic Documents, as it shall deem to be in the best interest of the holder of the Excess Distribution Certificate, and shall have no liability to any Person for such action or inaction. Section 6.04. No Duties Except as Specified in this Agreement or in Instructions. The Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, service, dispose of or otherwise deal with the Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Trustee is a party, except as expressly provided by the terms of this Agreement or in any document or written instruction received by the Trustee pursuant to Section 6.03; and no implied duties or obligations shall be read into this Agreement or any other Basic Document against the Trustee. The Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to prepare or file any Commission filing for the Trust or to record this Agreement or any other Basic Document. The Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any Liens on any part of the Trust Estate that result from actions by, or claims against, Chase Manhattan Bank USA, National Association in its individual capacity or as the Trustee that are not related to the ownership or the administration of the Trust Estate. Section 6.05. No Action Except Under Specified Documents or Instructions. The Trustee shall not otherwise deal with any part of the Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Trustee pursuant to this Agreement, (ii) in accordance with the other Basic Documents to which it is a party and (iii) in accordance with any document or instruction delivered to the Trustee pursuant to Section 6.03. Section 6.06. Restrictions. The Trustee shall not take any action (a) that is inconsistent with the purposes of the Trust set forth in Section 2.03 or (b) that, to the actual knowledge of the Trustee, would result in the Trust's becoming taxable as a corporation for Federal income tax purposes. Neither the Depositor nor the holder of the Excess Distribution Certificate shall direct the Trustee to take action that would violate the provisions of this Section. ARTICLE VII CONCERNING THE TRUSTEE Section 7.01. Acceptance of Trusts and Duties. The Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement. The Trustee also agrees to disburse all moneys actually received by it constituting part of the Trust Estate upon the terms of this Agreement and the other Basic 13 Documents. The Trustee shall not be answerable or accountable hereunder or under any other Basic Document under any circumstances, except (i) for its own willful misconduct or negligence or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 7.03 expressly made by the Trustee. In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence): (a) the Trustee shall not be liable for any error of judgment made by a responsible officer of the Trustee; (b) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the direction or instructions of the Administrator, the Depositor or the holder of the Excess Distribution Certificate; (c) no provision of this Agreement or any other Basic Document shall require the Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any other Basic Document, if the Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it; (d) under no circumstances shall the Trustee be liable for indebtedness evidenced by or arising under any of the Basic Documents, including the principal of and interest on the Notes; (e) the Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate or for or in respect of the validity or sufficiency of the Basic Documents, other than the certificate of authentication on the Excess Distribution Certificate, and the Trustee shall in no event assume or incur any liability, duty, or obligation to any Noteholder or the holder of the Excess Distribution Certificate, other than as expressly provided for herein and in the other Basic Documents; (f) the Trustee shall not be liable for the action or inaction, default or misconduct of the Administrator, the Depositor, the Indenture Trustee, the Servicer, the Swap Counterparties or the Cap Counterparty under any of the other Basic Documents or otherwise and the Trustee shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the other Basic Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture, the Servicer under the Servicing Agreement, a Swap Counterparty under its related Swap Agreement or the Cap Counterparty under the Interest Rate Cap Agreement; and (g) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement, any other Basic Document, at the request, order or direction of the Depositor or holder of the Excess Distribution Certificate, unless the Depositor or such holder has offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Trustee therein or thereby. The right of the Trustee to perform any discretionary act enumerated in this Agreement or in any other Basic Document shall not be construed as a duty, and the Trustee shall not be 14 answerable for other than its negligence or willful misconduct in the performance of any such act. Section 7.02. Reserved. Section 7.03. Representations and Warranties. The Trustee hereby represents and warrants to the Depositor, for the benefit of the Noteholders and the holder of the Excess Distribution Certificate, that: (a) It is a national banking association duly organized and validly existing in good standing under the laws of the United States and has its principal office located within the State of Delaware. It has all requisite banking power and authority to execute, deliver and perform its obligations under this Agreement. (b) It has taken all action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf. (c) Neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any Federal or Delaware state law, governmental rule or regulation governing the banking or trust powers of the Trustee or any judgment or order binding on it, or constitute any default under its charter documents or by-laws or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be bound. Section 7.04. Reliance; Advice of Counsel. (a) The Trustee shall incur no liability to anyone in acting upon any signature, instrument, direction, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the method of the determination of which is not specifically prescribed herein, the Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such fact or matter and such certificate shall constitute full protection to the Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. (b) In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the other Basic Documents, the Trustee (i) may act directly or through its agents or attorneys pursuant to agreements entered into with any of them and the Trustee shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Trustee with reasonable care, and (ii) may consult with counsel and accountants to be selected with reasonable care and employed by it. The Trustee shall not be liable for anything done, suffered or omitted in good 15 faith by it in accordance with the written opinion or advice of any such counsel or accountants and not contrary to this Agreement or any other Basic Document. Section 7.05. Not Acting in Individual Capacity. Except as provided in this Article VII, in accepting the trusts hereby created Chase Manhattan Bank USA, National Association acts solely as Trustee hereunder and not in its individual capacity and all Persons having any claim against the Trustee by reason of the transactions contemplated by this Agreement or any other Basic Document shall look only to the Trust Estate for payment or satisfaction thereof. Section 7.06. Trustee Not Liable for Excess Distribution Certificate or Trust Student Loans. The recitals contained herein and in the Excess Distribution Certificate (other than the signature of and authentication by the Trustee on the Excess Distribution Certificate) shall be taken as the statements of the Depositor and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Agreement, the Excess Distribution Certificate, or any other Basic Document (other than the signature of and authentication by the Trustee on the Excess Distribution Certificate), or the Notes, or of any Trust Student Loan or related documents. The Trustee shall at no time have any responsibility for or with respect to the legality, validity and enforceability of any Trust Student Loan, or for or with respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to the holder of the Excess Distribution Certificate under this Agreement or the Noteholders under the Indenture, including the existence and contents of any computer or other record of any Trust Student Loan; the validity of the assignment of any Trust Student Loan to the Trustee on behalf of the Trust; the completeness of any Trust Student Loan; the performance or enforcement (except as expressly set forth in any Basic Document) of any Trust Student Loan; the compliance by the Depositor or the Servicer with any warranty or representation made under any Basic Document or in any related document or the accuracy of any such warranty or representation or any action or inaction of the Administrator, the Indenture Trustee or the Servicer or any subservicer taken in the name of the Trustee. Section 7.07. Trustee May Own Notes. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may deal with the Depositor, the Administrator, the Indenture Trustee, the Servicer, the Swap Counterparties or the Cap Counterparty in banking transactions with the same rights as if it were owner of the Notes and not acting as Trustee. ARTICLE VIII COMPENSATION AND INDEMNITY OF TRUSTEE Section 8.01. Trustee's Fees and Expenses. The Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between the Depositor and the Trustee, and the Trustee shall be entitled to be reimbursed by the Depositor, to the extent provided in such separate agreement, for its other reasonable expenses (including the reasonable fees and expenses of counsel and independent accountants) hereunder. 16 Section 8.02. Payments to the Trustee. Any amounts paid to the Trustee pursuant to Section 8.01 hereof or pursuant to Section 9.01 of the Depositor Sale Agreement, Section 4.02 of the Administration Agreement or Section 4.02 of the Servicing Agreement shall be deemed not to be a part of the Trust Estate immediately after such payment. Section 8.03. Indemnity. The Depositor shall cause the Administrator to indemnify the Trustee in its individual capacity and any of its officer, directors, employees and agents as and to the extent provided for in Section 4.02 of the Administration Agreement. ARTICLE IX TERMINATION OF TRUST AGREEMENT Section 9.01. Termination of Trust Agreement. (a) This Agreement (other than Article VIII) and the Trust shall terminate and be of no further force or effect upon the final distribution by the Trustee of all moneys or other property or proceeds of the Trust Estate in accordance with the terms of the Indenture, the Administration Agreement and Article V of this Agreement. The bankruptcy, liquidation, dissolution, death or incapacity of the holder of the Excess Distribution Certificate, shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle such holder's legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Trust Estate nor (z) otherwise affect the rights, obligations and liabilities of the parties hereto. (b) Except as provided in Section 9.01(a), none of the Depositor, any Noteholder or the holder of the Excess Distribution Certificate shall be entitled to revoke or terminate the Trust. Upon final distribution of any funds remaining in the Trust, the Trustee shall file a certificate of cancellation of the Trust's certificate of trust pursuant to Section 3810(c) of the Delaware Statutory Trust Act. ARTICLE X SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES Section 10.01. Eligibility Requirements for Trustee. The Trustee shall at all times (i) be an entity having its principal place of business in the State of Delaware and otherwise complying with Section 3807 of the Delaware Statutory Trust Act, (ii) be authorized to exercise statutory trust powers, (iii) have a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or state authorities and (iv) have (or have a parent which has) a rating in respect of its long-term senior unsecured debt of at least BBB- (or the equivalent) by each of the Rating Agencies (or which, if the long-term senior unsecured debt of such entity is not rated by any Rating Agency, shall have provided to the Indenture Trustee written 17 confirmation from such Rating Agency that the appointment of such entity to serve as Trustee will not result in and of itself in a reduction or withdrawal of the then current rating of any of the Notes). If the Trustee shall publish reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of the Trustee shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 10.02. Section 10.02. Resignation or Removal of Trustee. The Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Administrator. Upon receiving such notice of resignation, the Administrator shall promptly appoint a successor Trustee meeting the eligibility requirements of Section 10.01 by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor Trustee. If no successor Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee; provided, however, that such right to appoint or to petition for the appointment of any such successor shall in no event relieve the resigning Trustee from any obligations otherwise imposed on it under the Basic Documents until such successor has in fact assumed such appointment. If at any time the Trustee shall cease to be or shall be likely to cease to be eligible in accordance with the provisions of Section 10.01 and shall fail to resign after written request therefor by the Administrator, or if at any time an Insolvency Event with respect to the Trustee shall have occurred and be continuing, then the Administrator may remove the Trustee. If the Administrator shall remove the Trustee under the authority of the immediately preceding sentence, the Administrator shall promptly appoint a successor Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the outgoing Trustee so removed and one copy to the successor Trustee and payment of all fees owed to the outgoing Trustee. Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Trustee pursuant to Section 10.03, payment of all fees and expenses owed to the outgoing Trustee and the filing of a certificate of amendment to the Trust's certificate of trust pursuant to Section 3810(b) of the Delaware Statutory Trust Act. The Administrator shall provide notice of such resignation or removal of the Trustee and to each of the Rating Agencies. Section 10.03. Successor Trustee. Any successor Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to the Administrator and to its predecessor Trustee an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under this Agreement, with like effect as if originally named as Trustee. The predecessor Trustee shall upon payment of its fees and expenses deliver to the successor Trustee all documents, statements, moneys and properties held 18 by it under this Agreement; and the Administrator and the predecessor Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Trustee all such rights, powers, duties and obligations. No successor Trustee shall accept such appointment as provided in this Section unless at the time of such acceptance such successor Trustee shall be eligible pursuant to Section 10.01. Upon acceptance of appointment by a successor Trustee pursuant to this Section, the Administrator shall mail notice of the successor of such Trustee to the holder of the Excess Distribution Certificate, the Indenture Trustee, the Noteholders, the Rating Agencies, the Swap Counterparties and the Cap Counterparty. If the Administrator shall fail to mail such notice within 10 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Administrator. Section 10.04. Merger or Consolidation of Trustee. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding, be the successor of the Trustee hereunder; provided, that such corporation shall be eligible pursuant to Section 10.01; and provided, further, that the Trustee shall mail notice of such merger or consolidation to the Rating Agencies not less than 15 days prior to the effective date thereof. Section 10.05. Appointment of Co-Trustee or Separate Trustee. Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust may at the time be located, the Administrator and the Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Trustee, meeting the eligibility requirements of clauses (i) through (iii) of Section 10.01, to act as co-trustee, jointly with the Trustee, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person, in such capacity, such title to the Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Administrator and the Trustee may consider necessary or desirable. If the Administrator shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Trustee alone shall have the power to make such appointment. No co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor trustee pursuant to clauses (iv), (v) and (vi) of Section 10.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.03. Each 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 Trustee shall be conferred upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co- 19 trustee is not authorized to act separately without the 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 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 Trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, solely at the direction of the Trustee; (ii) no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and (iii) the Administrator and the Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee. Any notice, request or other writing given to the 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 Agreement and the conditions of this Article. 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 Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Each such instrument shall be filed with the Trustee and a copy thereof given to the Administrator. Any separate trustee or co-trustee may at any time appoint the Trustee as 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 Agreement 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 Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. ARTICLE XI MISCELLANEOUS Section 11.01. Supplements and Amendments. This Agreement may be amended by the Depositor and the Trustee, with prior written notice to the Rating Agencies, without the consent of any of the Noteholders, the Swap Counterparties or the Cap Counterparty, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or modifying in any manner the rights of the Noteholders, the Swap Counterparties or the Cap Counterparty; 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, the Swap Counterparties or the Cap Counterparty. 20 This Agreement may also be amended from time to time by the Depositor and the Trustee, with prior written notice to the Rating Agencies, with the consent of Noteholders evidencing not less than a majority of the Outstanding Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Trust Student Loans or distributions that shall be required to be made for the benefit of the Noteholders or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes required to consent to any such amendment, without the consent of all the outstanding Noteholders. This Agreement may also be amended from time to time by the Depositor and the Trustee, with prior written notice to the Rating Agencies, with the consent of the Swap Counterparties or the Cap Counterparty for the purpose of adding any provisions to, changing in any manner, or eliminating any of the provisions of this Agreement or modifying in any manner the rights of the Swap Counterparties or the Cap Counterparty, respectively, if in the Opinion of Counsel such amendment materially adversely affects the interests of the Swap Counterparties or the Cap Counterparty, respectively. Promptly after the execution of any such amendment or consent, the Trustee shall furnish written notification of the substance of such amendment or consent to the holder of the Excess Distribution Certificate, the Indenture Trustee, the Swap Counterparties, the Cap Counterparty and each of the Rating Agencies. It shall not be necessary for the consent of the Noteholders, the Indenture Trustee, the Swap Counterparties or the Cap Counterparty pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents (and any other consents of provided for in this Agreement or in any other Basic Document) and of evidencing the authorization of the execution thereof shall be subject to such reasonable requirements as the Trustee may prescribe. Prior to the execution of any amendment to this Agreement, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's own rights, duties or immunities under this Agreement or otherwise. Section 11.02. No Legal Title to Trust Estate in Holder of the Excess Distribution Certificate. The holder of the Excess Distribution Certificate shall not have legal title to any part of the Trust Estate. The holder of the Excess Distribution Certificate shall be entitled to receive distributions with respect to its undivided beneficial ownership interest therein only in accordance with Section 3.03 of this Agreement. No transfer, by operation of law or otherwise, of any right, title, or interest of the holder of the Excess Distribution Certificate to and in its beneficial ownership interest in the Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Trust Estate. 21 Section 11.03. Limitations on Rights of Others. Except for Section 2.07, the provisions of this Agreement are solely for the benefit of the Trustee, the Depositor, the holder of the Excess Distribution Certificate, the Administrator and, to the extent expressly provided herein, the Indenture Trustee, the Noteholders, the Swap Counterparties and the Cap Counterparty, and nothing in this Agreement (other than Section 2.07), whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. Section 11.04. Notices. Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing and shall be deemed given upon receipt by the intended recipient or three Business Days after mailing if mailed by certified mail, postage prepaid (except that notice to the Trustee shall be deemed given only upon actual receipt by the Trustee), if to the Trustee, addressed to its Corporate Trust Office; if to the Depositor, addressed to SLM Education Credit Funding LLC, 20 Hemingway Drive, East Providence, Rhode Island 02915, or, as to each party, at such other address as shall be designated by such party in a written notice to each other party. Section 11.05. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Section 11.06. Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. Section 11.07. Successors and Assigns. All covenants and agreements contained herein shall be binding upon to the benefit of, the Depositor and its successors, the Trustee and its successors, each holder of the Excess Distribution Certificate and its successors and permitted assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by a Noteholder or the holder of the Excess Distribution Certificate shall bind the successors and assigns of such holder. Section 11.08. No Petition. (a) The Depositor will not at any time institute against the Trust any bankruptcy proceedings under any United States Federal or state bankruptcy or similar law in connection with any obligations relating to the Excess Distribution Certificate, the Notes, this Agreement or any of the other Basic Documents. (b) The Trustee (not in its individual capacity but solely as Trustee), by entering into this Agreement, the holder of the Excess Distribution Certificate by accepting the Excess Distribution Certificate, and the Indenture Trustee and each Noteholder by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Depositor or the Trust, or join in any institution against the Depositor or the Trust of, any 22 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 Agreement or any of the other Basic Documents. Section 11.09. No Recourse. Each holder of the Excess Distribution Certificate by accepting the Excess Distribution Certificate acknowledges that such holder's certificate represents beneficial interests in the Trust only and do not represent interests in or obligations of the Depositor, the Servicer, the Administrator, the Trustee, the Indenture Trustee, the Swap Counterparties, the Cap Counterparty or any Affiliate thereof or any officer, director or employee of any thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Excess Distribution Certificate or the other Basic Documents. Section 11.10. Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. Section 11.11. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. 23 IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: /s/ JOHN J. CASHIN ---------------------------------------- Name: John J. Cashin Title: Vice President SLM EDUCATION CREDIT FUNDING LLC, as Depositor By: /s/ J. LANCE FRANKE ---------------------------------------- Name: J. Lance Franke Title: Vice President JPMORGAN CHASE BANK, not in its individual capacity but solely as Indenture Trustee By: /s/ DAVID CONTINO ---------------------------------------- Name: David Contino Title: Trust Officer 24 EXHIBIT A TO THE TRUST AGREEMENT [FORM OF EXCESS DISTRIBUTION CERTIFICATE] SEE REVERSE FOR CERTAIN DEFINITIONS No. [ ] [ ]% Percentage Interest THIS EXCESS DISTRIBUTION CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR, THE TRUSTEE, THE SERVICER, THE SWAP COUNTERPARTIES, THE INTEREST RATE CAP COUNTERPARTY, THE ADMINISTRATOR OR ANY OF THEIR RESPECTIVE AFFILIATES. THIS EXCESS DISTRIBUTION CERTIFICATE IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR INSTRUMENTALITY OR BY ANY PRIVATE INSURER. THIS EXCESS DISTRIBUTION CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF THE TRUST THAT THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (II) TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS AN INSTITUTIONAL ACCREDITED INVESTOR TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON REGULATION D, AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER JURISDICTION, OR (III) TO A PERSON IN A TRANSACTION THAT IS REGISTERED UNDER THE SECURITIES ACT OR THAT IS OTHERWISE EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS EXCESS DISTRIBUTION CERTIFICATE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE DEPOSITOR, THE ADMINISTRATOR, THE TRUSTEE THE SWAP COUNTERPARTIES AND THE INTEREST RATE CAP COUNTERPARTY THAT: IT IS EITHER A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, OR AN INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1)-(3) AND (7) OF REGULATION D UNDER THE SECURITIES ACT) OR AN ENTITY IN WHICH ALL THE EQUITY OWNERS COME WITHIN SUCH PARAGRAPHS, OR THAT ITS PURCHASE OF THIS EXCESS DISTRIBUTION CERTIFICATE IS OTHERWISE EXEMPT Exhibit A-1 FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND THAT IT IS HOLDING THIS EXCESS DISTRIBUTION CERTIFICATE FOR INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION. NO TRANSFER OF THIS EXCESS DISTRIBUTION CERTIFICATE WILL BE REGISTERED (EXCEPT TO AN AFFILIATE OF THE DEPOSITOR) UNLESS THERE IS PROVIDED A REPRESENTATION SATISFACTORY TO THE TRUSTEE THAT THIS EXCESS DISTRIBUTION CERTIFICATE IS NOT BEING ACQUIRED DIRECTLY OR INDIRECTLY FOR, ON BEHALF OF OR WITH THE ASSETS OF, AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") AND/OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH A "PLAN"). THIS EXCESS DISTRIBUTION CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW). THIS CERTIFICATE IS NOT GUARANTEED OR INSURED BY ANY GOVERNMENTAL AGENCY. Exhibit A-2 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C EXCESS DISTRIBUTION CERTIFICATE evidencing a fractional undivided interest in the Trust, as defined below, the property of which includes a pool of student loans sold to the Trust by SLM Education Credit Funding LLC. (This Excess Distribution Certificate does not represent an interest in or obligation of SLM Education Credit Funding LLC, the Servicer, the Trustee or any of their respective affiliates.) Exhibit A-3 THIS CERTIFIES THAT SLM EDUCATION CREDIT FUNDING LLC is the registered owner of a 100% percentage interest in this Excess Distribution Certificate. The SLM Private Credit Student Loan Trust 2003-C (the "Trust") was formed under the laws of the State of Delaware by SLM Education Credit Funding LLC, a Delaware limited liability company (the "Depositor"). The Trust was created pursuant to a trust agreement, dated as of October 1, 2003, by and among the Depositor, the Indenture Trustee and the Trustee (the "Trust Agreement"), a summary of certain of the pertinent provisions of which is set forth below. To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in Appendix A to the Trust Agreement. Issued under the Indenture dated as of October 1, 2003, between the Trust and JPMorgan Chase Bank, as Indenture Trustee, are Notes designated as "Floating Rate Student Loan-Backed Notes" and "Auction Rate Student Loan-Backed Notes" (together, the "Notes"). This Excess Distribution Certificate is issued under and is subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the holder of this Excess Distribution Certificate by virtue of the acceptance hereof assents and by which such holder is bound. The property of the Trust includes a pool of student loans (the "Trust Student Loans"), all moneys paid thereunder on or after August 18, 2003, certain bank accounts and the proceeds thereof and certain other rights under the Trust Agreement, the Seller Sale Agreement, the Depositor Sale Agreement, the Auction Agent Agreement, the Broker-Dealer Agreements, the Administration Agreement, the Swap Agreements, the Interest Rate Cap Agreement and the Servicing Agreement and all proceeds of the foregoing. To the extent of funds available therefor, amounts owing hereon will be distributed on the 15th day of each March, June, September and December (or, if such 15th day is not a Business Day, the next succeeding Business Day) (each a "Quarterly Distribution Date"), commencing on December 15, 2003, to the person in whose name this Excess Distribution Certificate is registered as of the close of business on the day immediately preceding the Quarterly Distribution Date (such day the "Record Date"), in each case to the extent of such holder's fractional and undivided interest in the amount to be distributed hereon on such Quarterly Distribution Date pursuant to Sections 2.07 and 2.08 of the Administration Agreement. The holder of this Excess Distribution Certificate acknowledges and agrees that its rights to receive distributions in respect of this Excess Distribution Certificate are subordinated to the rights of the Noteholders as described in the Basic Documents. It is the intent of the Depositor, and the holder of this Excess Distribution Certificate that, for purposes of Federal, state and local income and franchise and any other income taxes, (a) the Notes will be treated as newly-issued debt of the Trust, (b) the holder of this Excess Distribution Certificate will be treated as owning all of the assets, and as assuming all of the liabilities (albeit on a non-recourse basis), of the Trust and (c) such holder will be attributed all of the income, deductions, credits and other tax attributes of the Trust. The holder of this Excess Distribution Certificate agrees to report all relevant items on its tax return consistent with, and to take no action inconsistent with, the intended treatment indicated in the preceding sentence for such tax purposes. Exhibit A-4 The holder of this Excess Distribution Certificate, by its acceptance of this Excess Distribution Certificate, covenants and agrees that it will not at any time institute against the Depositor or the Trust, or join in any institution against the Depositor or the Trust 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 this Excess Distribution Certificate, the Notes, the Trust Agreement or any of the other Basic Documents. Distributions on this Excess Distribution Certificate will be made as provided in the Administration Agreement to the holder of record hereof without the presentation or surrender of this Excess Distribution Certificate or the making of any notation hereon. Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Excess Distribution Certificate will be made after due notice by the Administrator of the pendency of such distribution and only upon presentation and surrender of this Excess Distribution Certificate at the office or agency maintained for the purpose by the Trustee in the Borough of Manhattan, The City of New York. Reference is hereby made to the further provisions of this Excess Distribution Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Trustee or its authenticating agent, by manual signature, this Excess Distribution Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement or the Administration Agreement or be valid for any purpose. Exhibit A-5 IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its individual capacity has caused this Excess Distribution Certificate to be duly executed as of the date set forth below. SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: ------------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-6 TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is the Excess Distribution Certificate referred to in the within-mentioned Trust Agreement. CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: ------------------------------------- Authorized Signatory OR JPMORGAN CHASE BANK, solely in its capacity as Authenticating Agent for the Trustee By: ------------------------------------- Authenticating Agent Date: October 9, 2003 Exhibit A-7 [Reverse of Excess Distribution Certificate] This Excess Distribution Certificate does not represent an obligation of, or an interest in, the Depositor, Sallie Mae Servicing L.P., as servicer (the "Servicer"), Sallie Mae, Inc., as administrator (the "Administrator"), the Trustee or any affiliates of any of them, and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated herein, in the Trust Agreement or in the other Basic Documents. In addition, this Excess Distribution Certificate is not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections with respect to the Trust Student Loans, all as more specifically set forth in the Administration Agreement. A copy of each of the Trust Agreement, the Depositor Sale Agreement, the Seller Sale Agreement, the Administration Agreement, the Servicing Agreement, the Swap Agreements, the Interest Rate Cap Agreement and the Indenture may be examined during normal business hours at the principal office of the Administrator, and at such other places, if any, designated by the Administrator, by the holder of this Excess Distribution Certificate upon request. The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the certification of the rights and obligations of the Depositor and the rights of the holders of this Excess Distribution Certificate under the Trust Agreement at any time by the Depositor and the Trustee with the consent of the holders of the Notes evidencing not less than a majority of the outstanding principal balance of the Notes. The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Noteholders. As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Excess Distribution Certificate is registerable in the Excess Distribution Certificate Register upon surrender of this Excess Distribution Certificate for registration of transfer at the offices or agencies maintained by Chase Manhattan Bank USA, National Association in its capacity as Excess Distribution Certificate Registrar, or by any successor Excess Distribution Certificate Registrar, in the Borough of Manhattan, The City of New York, accompanied by a written instrument of transfer in form satisfactory to the Trustee and the Excess Distribution Certificate Registrar duly executed by the holder hereof or such holder's attorney duly authorized in writing, and thereupon a new Excess Distribution Certificate will be issued to the designated transferee. As provided in the Trust Agreement and subject to certain limitations therein set forth, this Excess Distribution Certificate is exchangeable for a new Excess Distribution Certificate as requested by the holder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Trustee or the Excess Distribution Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith. The Trustee, the Certificate Registrar and any agent of the Trustee or the Excess Distribution Certificate Registrar may treat the person in whose name this Excess Distribution Certificate is registered as the owner hereof for all purposes, and none of the Trustee or the Excess Distribution Certificate Registrar or any such agent shall be affected by any notice to the contrary. Exhibit A-8 This Excess Distribution Certificate (including any beneficial interest herein) may not be acquired by or for the account of (i) an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a plan described in section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), including an individual retirement account described in Section 408(a) of the Code or a Keogh plan or (iii) any entity whose underlying assets include plan assets by reason of a plan's investment in the entity (each, a "Benefit Plan"). By accepting and holding this Excess Distribution Certificate, the holder hereof shall be deemed to have represented and warranted that it is not a Benefit Plan, it is not purchasing this Excess Distribution Certificate on behalf of a Benefit Plan, is not using assets of a Benefit Plan to purchase this Excess Distribution Certificate and to have agreed that if this Excess Distribution Certificate is deemed to be a plan asset, the Holder will promptly dispose of this Excess Distribution Certificate. The obligations and responsibilities created by the Trust Agreement and the Trust created thereby shall terminate upon the payment to Noteholders and the holder of this Excess Distribution Certificate of all amounts required to be paid to them pursuant to the Trust Agreement, the Administration Agreement and the Indenture and the disposition of all property held as part of the Trust. The Servicer may at its option purchase the corpus of the Trust at a price specified in the Administration Agreement; provided, however, such right of purchase is exercisable only on any Distribution Date on or after the date on which the Pool Balance is less than or equal to 10% of the Initial Pool Balance. Certain delinquent Trust Student Loans may be purchased by the Servicer, at its option, at a price specified in the Servicing Agreement. Any Trust Student Loans remaining in the Trust as of the end of the Collection Period immediately preceding the Trust Auction Date will be offered for sale by the Indenture Trustee by auction in accordance with the procedure described in the Indenture. This Excess Distribution Certificate shall be construed in accordance with the laws of the State of Delaware, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. Exhibit A-9 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________ (Please print or type name and address, including postal zip code, of assignee) ________________________________________________________________________________ the within Excess Distribution Certificate, and all rights thereunder, hereby irrevocably constituting and appointing ___________________________________________________________________Attorney to transfer said Excess Distribution Certificate on the books of the Excess Distribution Certificate Registrar, with full power of substitution in the premises. Dated: ______________________________* Signature Guaranteed: ______________________________* * NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within the Excess Distribution Certificate in every particular, without alteration, enlargement or any change whatever. Such signature must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. Exhibit A-10 EXHIBIT B FORM OF CERTIFICATE OF TRUST OF SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C This Certificate of Trust of SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C (the "Trust") is being duly executed and filed on behalf of the Trust by the undersigned, as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C. Section 3801 et seq.) (the "Act"). 1. Name. The name of the statutory trust formed by this Certificate of Trust is SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C. 2. Delaware Trustee. The name and business address of the trustee of the Trust in the State of Delaware are the Chase Manhattan Bank USA, National Association, c/o JPMorgan Chase Bank, 500 Stanton Christiana Road, Christiana Center/OPS4/3/rd/ Floor, Newark, Delaware 19713. Attn: Institutional Trust Services. 3. Effective Date. This Certificate of Trust shall be effective upon filing. IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act. CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: ------------------------------------- Name: Title: Exhibit B-1 EXHIBIT C [FORM OF TRANSFEROR LETTER] [Date] Sallie Mae, Inc. as Administrator 11600 Sallie Mae Drive Reston, Virginia 20193 Chase Manhattan Bank USA, National Association as Trustee and Excess Distribution Certificate Registrar Christiana Center/OPS4 500 Stanton Christiana Road Newark, Delaware 19713 Re: SLM Private Credit Student Loan Trust 2003-C, Excess Distribution Certificate (the "Certificate") Ladies and Gentlemen: In connection with our disposition of the above Certificate, we certify that (a) we understand that the Certificate has not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and is being disposed by us in a transaction that is exempt from the registration requirements of the Securities Act, and (b) we have not offered or sold the Certificate to, or solicited offers to buy the Certificate from, any person, or otherwise approached or negotiated with any person with respect thereto, in a manner that would be deemed, or taken any other action would result in, a violation of Section 5 of the Securities Act. Very truly yours, - ------------------------------------ [Print Name of Transferor] By: --------------------------------- Authorized Officer Exhibit C-1 EXHIBIT D-1 [FORM OF TRANSFEREE LETTER (NON-RULE 144A)] [Date] Sallie Mae, Inc. as Administrator 11600 Sallie Mae Drive Reston, Virginia 20193 Chase Manhattan Bank USA, National Association as Trustee and Excess Distribution Certificate Registrar Christiana Center/OPS4 500 Stanton Christiana Road Newark, Delaware 19713 Re: SLM Private Credit Student Loan Trust 2003-C, Excess Distribution Certificate (the "Certificate") Ladies and Gentlemen: In connection with our acquisition of the above Certificate, we certify that (a) we understand that the Certificate is not being registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Securities Act and any such laws, (b) we are an institutional "accredited investor," as defined in Rule 501 (a) (1), (2), (3) or (7) of Regulation D under the Securities Act or an entity in which all of the equity owners come within such paragraphs, and have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificate, (c) we have had the opportunity to ask questions of and receive answers from the Depositor concerning the purchase of the Certificate and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificate, (d) we are not acquiring the Certificate for, on behalf of or with the assets of, an employee benefit plan or other retirement arrangement (a "Plan") which is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and/or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), (e) we are acquiring the Certificate for investment for our own account and not with a view to any distribution of the Certificate (but without prejudice to our right at all times to sell or otherwise dispose of the Certificate in accordance with clause (g) below), (f) we have not offered or sold the Certificate to, or solicited offers to buy the Certificate from, any person, or otherwise approached or negotiated with any person with respect thereto, or taken any other action which would result in a violation of Section 5 of the Securities Act, and (g) we will not sell, transfer or otherwise dispose of the Certificate unless (1) such sale, transfer or other disposition is made pursuant to an effective registration statement under the Securities Act or is exempt from such registration requirements, and if requested, we will at our expense provide an opinion of counsel satisfactory to the addressees of this Letter that such sale, transfer Exhibit D-1-1 or other disposition may be made pursuant to an exemption from the Securities Act, (2) the purchaser or transferee of such Certificate has executed and delivered to you a certificate to substantially the same effect as this certificate and (3) the purchaser or transferee has otherwise complied with any conditions for transfer set forth in the Trust Agreement relating to the Certificate. Very truly yours, ---------------------------------------- [Print Name of Transferee] By: ------------------------------------- Authorized Officer Exhibit D-1-2 EXHIBIT D-2 [FORM OF TRANSFEREE LETTER (RULE 144A)] [Date] Sallie Mae, Inc. as Administrator 11600 Sallie Mae Drive Reston, Virginia 20193 Chase Manhattan Bank USA, National Association as Trustee and Excess Distribution Certificate Registrar Christiana Center/OPS4 500 Stanton Christiana Road Newark, Delaware 19713 Re: SLM Private Credit Student Loan Trust 2003-C, Excess Distribution Certificate (the "Certificate") Ladies and Gentlemen: In connection with our acquisition of the above Certificate, we certify that (a) we understand that the Certificate is not being registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Securities Act and any such laws, (b) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificate, (c) we have had the opportunity to ask questions of and receive answers from the Depositor concerning the purchase of the Certificate and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificate, (d) we are not acquiring the Certificate for, on behalf of or with the assets of, an employee benefit plan or other retirement arrangement (a "Plan") which is subject to Title I of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and/or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), (e) we have not, nor has anyone acting on our behalf offered, transferred, pledged, sold or otherwise disposed of the Certificate, any interest in the Certificate or any other similar security to, or solicited any offer to buy or accept a transfer, pledge or other disposition of the Certificate, any interest in the Certificate or any other similar security from, or otherwise approached or negotiated with respect to the Certificate, any interest in the Certificate or any other similar security with, any person in any manner, or made any general solicitation by means of general advertising or in any other manner, or taken any other action, that would constitute a distribution of the Certificate under the Securities Act or that would render the disposition of the Certificate a violation of Section 5 of the Securities Act or require registration pursuant thereto, nor will act, nor has authorized or will authorize any person to act, in such manner with respect to the Certificate, (f) we are a "qualified institutional buyer" as that term is defined in Rule 144A under the Securities Act ("Rule 144A") and have completed either of the forms of certification to Exhibit D-2-1 that effect attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being made in reliance on Rule 144A. We are acquiring the Certificate for our own account or for resale pursuant to Rule 144A and further understand that the Certificate may be resold, pledged or transferred only (1) to a person reasonably believed to be a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant to another exemption from registration under the Securities Act. Very truly yours, ---------------------------------------- [Print Name of Transferee] By: ------------------------------------- Authorized Officer Exhibit D-2-2 ANNEX 1 QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A [For Transferees Other Than Registered Investment Companies] The undersigned (the "Buyer") hereby certifies as follows to the parties listed in the Rule 144A Transferee Letter to which this certification relates with respect to the Certificate described therein: 1. As indicated below, the undersigned is the President, Chief Financial Officer, Senior Vice President or other executive officer of the Buyer. 2. In connection with purchases by the Buyer, the Buyer is a "qualified institutional buyer" as that term is defined in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or invested on a discretionary basis $____________/1/ in securities (except for the excluded securities referred to below) as of the end of the Buyer's most recent fiscal year (such amount being calculated in accordance with Rule 144A and (ii) the Buyer satisfies the criteria in the category marked below. ___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and loan association or similar institution), Massachusetts or similar business trust, partnership, or charitable organization described in Section 501 (c) (3) of the Internal Revenue Code of 1986, as amended. ___ Bank. The Buyer (a) is a national bank or banking institution organized under the laws of any State, territory or the District of Columbia, the business of which is substantially confined to banking and is supervised by the State or territorial banking commission or similar official or is a foreign bank or equivalent institution, and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto. ___ Savings and Loan. The Buyer (a) is a savings and loan association, building and loan association, cooperative bank, homestead association or similar institution, which is supervised and examined by a State or Federal authority having supervision over any such institutions or is a foreign savings and loan association or equivalent institution and (b) has an audited net worth of at least $25,000,000 as demonstrated in its latest annual financial statements, a copy of which is attached hereto. - ---------- /1/ Buyer must own and/or invest on a discretionary basis at least $100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or invest on a discretionary basis at least $10,000,000 in securities. Annex 1-1 ___ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934. ___ Insurance Company. The Buyer is an insurance company whose primary and predominant business activity is the writing of insurance or the reinsuring of risks underwritten by insurance companies and which is subject to supervision by the insurance commissioner or a similar official or agency of a State, territory or the District of Columbia. ___ State or Local Plan. The Buyer is a plan established and maintained by a State, its political subdivisions, or any agency or instrumentality of the State or its political subdivisions, for the benefit of its employees. ___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974. ___ Investment Advisor. The Buyer is an investment advisor registered under the Investment Advisors Act of 1940. ___ Small Business Investment Company. The Buyer is a small business investment company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958. ___ Business Development Company. The Buyer is a business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940. ___ Qualified Institutional Buyers. The Buyer owned and/or invested on a discretionary basis less than $100,000,000, but it is an entity in which all of the equity owners are qualified institutional buyers. 3. The term "securities" as used herein does not include (i) securities of issuers that are affiliated with the Buyer, (ii) securities that are part of an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iv) bank deposit notes and certificates of deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities owned but subject to a repurchase agreement and (viii) currency, interest rate and commodity swaps. 4. For purposes of determining the aggregate amount of securities owned and/or invested on a discretionary basis by the Buyer, the Buyer used the cost of such securities to the Buyer and did not include any of the securities referred to in the preceding paragraph, except (i) where the Buyer reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, the securities may be valued at market. Further, in determining such aggregate amount, the Buyer may have included securities owned by subsidiaries of the Buyer, but only if such Annex 1-2 subsidiaries are consolidated with the Buyer in its financial statements prepared in accordance with generally accepted accounting principles and if the investments of such subsidiaries are managed under the Buyer's direction. However, such securities were not included if the Buyer is a majority-owned, consolidated subsidiary of another enterprise and the Buyer is not itself a reporting company under the Securities Exchange Act of 1934, as amended. 5. The Buyer acknowledges that it is familiar with Rule 144A and understands that the seller to it and other parties related to the Certificate are relying and will continue to rely on the statements made herein because one or more sales to the Buyer may be in reliance on Rule 144A. 6. Until the date of purchase of the Rule 144A Securities, the Buyer will notify each of the parties to which this certification is made of any changes in the information and conclusions herein. Until such notice is given, the Buyer's purchase of the Certificate will constitute a reaffirmation of this certification as of the date of such purchase. In addition, if the Buyer is a bank or savings and loan is provided above, the Buyer agrees that it will furnish to such parties updated annual financial statements promptly after they become available. - ------------------------------------ [Print Name of Transferee] By: --------------------------------- Name: Title: Date: ------------------------------- Annex 1-3 ANNEX 2 QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A [For Transferees That are Registered Investment Companies] The undersigned (the "Buyer") hereby certifies as follows to the parties listed in the Rule 144A Transferee Letter to which this certification relates with respect to the Certificate described therein: 1. As indicated below, the undersigned is the President, Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified institutional buyer" as that term is defined in Rule 144A under the Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a Family of Investment Companies (as defined below), is such an officer of the Adviser. 2. In connection with purchases by Buyer, the Buyer is a "qualified institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an investment company registered under the Investment Company Act of 1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of Investment Companies, owned at least $100,000,000 in securities (other than the excluded securities referred to below) as of the end of the Buyer's most recent fiscal year. For purposes of determining the amount of securities owned by the Buyer or the Buyer's Family of Investment Companies, the cost of such securities was used, except (i) where the Buyer or the Buyer's Family of Investment Companies reports its securities holdings in its financial statements on the basis of their market value, and (ii) no current information with respect to the cost of those securities has been published. If clause (ii) in the preceding sentence applies, the securities may be valued at market. ___ The Buyer owned $______________ in securities (other than the excluded securities referred to below) as of the end of the Buyer's most recent fiscal year (such amount being calculated in accordance with Rule 144A). ___ The Buyer is part of a Family of Investment Companies which owned in the aggregate $_____________ in securities (other than the excluded securities referred to below) as of the end of the Buyer's most recent fiscal year (such amount being calculated in accordance with Rule 144A). 3. The term "Family of Investment Companies" as used herein means two or more registered investment companies (or series thereof) that have the same investment adviser or investment advisers that are affiliated (by virtue of being majority owned subsidiaries of the same parent or because one investment adviser is a majority owned subsidiary of the other). 4. The tern "securities" as used herein does not include (i) securities of issuers that are affiliated with the Buyer or are part of the Buyer's Family of Investment Annex 2-1 Companies, (ii) securities issued or guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes and certificates of deposit, (iv) loan participations, (v) repurchase agreements, (vi) securities owned but subject to a repurchase agreement and (vii) currency, interest rate and commodity swaps. 5. The Buyer is familiar with Rule 144A and understands that the parties listed in the Rule 144A Transferee Letter to which this certification relates are relying and will continue to rely on the statements made herein because one or more sales to the Buyer will be in reliance on Rule 144A. In addition, the Buyer will only purchase for the Buyer's own account. 6. Until the date of purchase of the Certificate, the undersigned will notify the parties listed in the Rule 144A Transferee Letter to which this certification relates of any changes in the information and conclusions herein. Until such notice is given, the Buyer's purchase of the Certificate will constitute a reaffirmation of this certification by the undersigned as of the date of such purchase. ---------------------------------------- Print Name of Buyer or Adviser By: ------------------------------------- Name: Title: [IF AN ADVISER:] ---------------------------------------- Print Name of Buyer Date: ----------------------------------- Annex 2-2 EX-4.2 6 dex42.txt EXHIBIT 4.2 Exhibit 4.2 ================================================================================ INDENTURE between SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Issuer and JPMORGAN CHASE BANK, not in its individual capacity but solely as Indenture Trustee Dated as of October 1, 2003 ================================================================================ TABLE OF CONTENTS Page ---- 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 i Page ---- 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 ii Page ---- 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 iii Page ---- 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 iv INDENTURE This INDENTURE, dated as of October 1, 2003, is between SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, 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 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. 2 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 $1,346,013,000, of which $600,000,000 shall be denominated Class A-1 Notes, $421,173,000 shall be denominated Class A-2 Notes, $75,000,000 shall be denominated Class A-3 Notes, $75,000,000 shall be denominated Class A-4 Notes, $70,000,000 shall be denominated Class A-5 Notes, $43,965,000 shall be denominated Class B Notes and $60,875,000 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. 3 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. 4 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. 5 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, Appendix A-2, 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 6 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; 7 (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 ("Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of ERISA or Section 4975 of the Code, 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. 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 8 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 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 of a Definitive Note by, for or with the assets of, a Plan, such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of ERISA or Section 4975 of the Code, 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 and (ii) in the case of a Plan subject to a substantially Similar Law, a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed 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 9 Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands. 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 10 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 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 11 (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 and the other Basic Documents 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-C 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-C 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. 18 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 19 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 20 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 21 (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 22 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; 23 (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; 24 (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) if 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 25 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 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 a related Swap Agreement is in effect, to the related Class A Noteholders, ratably, an amount sufficient to reduce their respective Class A Note Balance to zero; and B: if the related Swap Agreement is not in effect, pro rata (1) to the related Class A Noteholders, ratably, an amount sufficient to reduce the respective principal balances of the Class A Notes to zero and (2) to each Swap Counterparty under a terminated Swap Agreement, the amount (to the extent not paid under clause (vi) above) of any Swap Termination Payment due to such Swap Counterparty due to a Termination Event resulting from a "Cross Default" under 5(a)(vi) of such Swap Agreement by the Issuer. For the avoidance of doubt, any Swap Termination Payment due to a 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. 26 (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) and (vii) 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; 27 (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 28 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. 29 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 30 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 31 (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 32 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 33 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; 34 (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. 35 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. 36 (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. 37 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 http://www.jpmorgan.com/absmbs. 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. 39 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 40 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 41 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 42 (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"; 43 (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 44 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 45 (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 46 (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 47 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. 48 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-C, in care of the Trustee, Christiana Center/OPS4, 500 Stanton Christiana Road, Newark, Delaware 19713, 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-C, 11600 Sallie Mae Drive, Reston, Virginia 20193, 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, 99 Church Street, New York, New York 10007, (ii) in the case of Standard & Poor's, at the following address: 55 Water Street, New York, New York 10041-0003, Attention: Asset Backed Surveillance Department, 32nd Floor, and (iii) in the case of Fitch, at the following address: One State Street Plaza, New York, New York 10004, 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: /s/ JOHN J. CASHIN Name: John J. Cashin Title: Vice President JPMORGAN CHASE BANK, not in its individual capacity but solely as Indenture Trustee By: /s/ DAVID CONTINO Name: David Contino Title: Trust Officer 53 APPENDIX A-1 TO THE INDENTURE Definitions and Usage --------------------- 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 assignment, assumption, 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. Appendix A-1-1 (f) Capitalized terms used herein but not defined herein are defined in Appendix A-2 to the Indenture, which to the extent any instrument is governed thereby are incorporated herein as if such defined terms were set forth herein. 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(c)(xiv) of the Administration Agreement. "Administration Agreement" means the Administration Agreement, dated as of October 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 Sallie Mae, 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. Appendix A-1-2 "Asset Balance" means, with respect to any Quarterly Distribution Date, an amount equal to: PB + CI - R 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 $1,352,777,122, and that, for all Quarterly Distribution Dates occurring on or after the March 2007 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, the Class A-4 Noteholders and the Class A-5 Noteholders. "Auction Rate Notes" means the Class A-3 Notes, the Class A-4 Notes and the Class A-5 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 Appendix A-1-3 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 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 September 2004 through March 2007 shall include all funds released from the Cash Capitalization Account for deposit into the Collection Account on those Distribution Dates. Appendix A-1-4 "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. "Bill 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 Merrill Lynch Derivative Products AG, 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 $102,811,061. "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. Appendix A-1-5 "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, a Class A-4 Note or a Class A-5 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, the Class A-4 Note Balance and the Class A-5 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 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, the Class A-4 Rate or the Class A-5 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 Appendix A-1-6 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, the Class A-4 Maturity Date or the Class A-5 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, Class A-4 Note Balance or Class A-5 Note Balance, as applicable, to zero. "Class A-1 Maturity Date" means the September 15, 2016 Distribution Date. "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 $600,000,000 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 + [6/31 * (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. Appendix A-1-7 "Class A-2 Maturity Date" means the September 15, 2020 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 $421,173,000 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 0.39%, 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: x + [6/31 * (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 0.39%, based on the actual number of days in such Accrual Period divided by 360. "Class A-3 Maturity Date" means the September 15, 2032 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 $75,000,000 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 1.14%. "Class A-4 Maturity Date" means the September 15, 2032 Distribution Date. Appendix A-1-8 "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 $75,000,000 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 1.14%. "Class A-5 Maturity Date" means the September 15, 2032 Distribution Date. "Class A-5 Note Balance" means, with respect to any Distribution Date, the Outstanding Amount of the Class A-5 Notes. "Class A-5 Noteholder" means the Person in whose name a Class A-5 Note is registered in the Note Register. "Class A-5 Notes" means the $70,000,000 Auction Rate Class A-5 Student Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-5 thereto. "Class A-5 Rate" means, for any Accrual Period after the initial Auction Date, the Auction Note Interest Rate for the Class A-5 Notes. For the initial Accrual Period, the Class A-5 Rate shall mean 1.14%. "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 September 15, 2032 Distribution Date. "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 Appendix A-1-9 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. "Class B Notes" means the $43,965,000 Floating Rate Class B Student Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-6 thereto. Appendix A-1-10 "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 0.80%, 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 + [6/31 * (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 0.80%, 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 September 15, 2032 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-1-11 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 $60,875,000 Floating Rate Class C Student Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A-7 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 + [6/31 * (y - x)] where: x = Two-Month LIBOR, and y = Three-Month LIBOR, Appendix A-1-12 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 October 9, 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 November 30, 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 4 New York Plaza, 6/th/ Floor, New York, New York 10004, Attention: Corporate Trust and Agency Group, Structured Finance Team (telephone: (212) 623-5600; facsimile: (212) 623-4498) 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, 500 Stanton Christiana Road, Newark, Delaware 19713, Attention: Corporate Trust Department (telephone: (302) 552-6279; facsimile: (302) 552-6280); Appendix A-1-13 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). "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 - ------------------------------------------- -------------------- December 2003 to June 2008................. 15% September 2008 to June 2011................ 18% September 2011 and thereafter.............. 20% "Cutoff Date" means August 18, 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 Appendix A-1-14 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; (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 October 9, 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 December 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 Appendix A-1-15 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 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; Appendix A-1-16 (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 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. Appendix A-1-17 "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. "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; Appendix A-1-18 . 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, the Class A-4 Maturity Date and the Class A-5 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, the Class A-4 Note Balance and the Class A-5 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. "Grant" means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create and grant a lien 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 October 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 Appendix A-1-19 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 October 9, 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 $1,249,966,061. "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. "Interest Rate Cap Agreement" means the agreement between the Trust and the Cap Counterparty, dated October 2, 2003, documented under a 1992 ISDA Master Agreement (Multicurrency-Cross Border), including the related schedule and confirmations, 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 September 2006 Quarterly Distribution Date. Appendix A-1-20 "Interest Rate Cap Counterparty" see "Cap Counterparty." "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. "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 November 17, 2003. "Moody's" means Moody's Investors Service, Inc. "Note Depository Agreement" means the Letter of Representations, dated October 9, 2003, between the Trust, the Trustee and the Indenture Trustee in favor of the Depository Trust Company. Appendix A-1-21 "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 A-5 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 A-5 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. "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 A-5 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 Appendix A-1-22 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 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, Appendix A-1-23 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. "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. Appendix A-1-24 "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 December 15, 2003. "Rating Agency" means Moody's, 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. "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. Appendix A-1-25 "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 Distribution Amount, the Second Priority Principal Distribution Amount and the Third Principal Distribution Amount, if any, on Appendix A-1-26 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 $3,124,915. "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 Bill 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 Appendix A-1-27 (ii) the Class B Noteholders' Principal Distribution Amount less (b) the First Priority Principal Distribution Amount; . 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 October 9, 2003, between the Seller and the Depositor. "Servicer" means Sallie 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 October 9, 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. Appendix A-1-28 "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 $3,124,915 and the Class Note Balance. "Standard & Poor's" means Standard & Poor's, a division of The McGraw-Hill Companies, Inc. "State" means any one of the 50 States of the United States of America or the District of Columbia. "Stepdown Date" means the earlier to occur of (a) the September 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 JP Morgan Chase Bank dated as of October 2, 2003, including the related schedule and confirmation, and the ISDA Master Agreement by and between the Trust and Merrill Lynch Derivative Products AG dated as of October 2, 2003, including the related schedule and confirmation (collectively, the "Swap Agreements"). "Swap Counterparty" means each of JP Morgan Chase Bank , together with its successors and permitted assigns and Merrill Lynch 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: Appendix A-1-29 (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; 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-C, a Delaware statutory trust established pursuant to the Trust Agreement. Appendix A-1-30 "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. "Trust Agreement" means the Trust Agreement dated as of October 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 A-1-31 APPENDIX A-2 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 Effective Interest Rate minus 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 Fee" has the meaning set forth in the Auction Agent Agreement. "Auction Date" shall mean, initially, November 3, 2003 with respect to the Class A-3 Notes , November 10, 2003 with respect to the Class A-4 Notes and November 19, 2003 with respect to the Class A-5 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; (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. Appendix A-2-1 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, the Class A-4 Notes and the Class A-5 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 one-hundredth of one percent." "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. Appendix A-2-2 "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 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" has the meaning 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 Appendix A-2-3 plus (ii) (a) the Administration Fees payable during the Collection Period in which that month occurs divided by (b) the total principal balance of the Notes outstanding, 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 Agreement" shall mean, the Auction Agent Agreement dated as of October 9, 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 1.14% for the Class A-3 Notes, 1.14% for the Class A-4 Notes and 1.14% for the Class A-5 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. "Maximum Rate" means the least of (a) either (i) the Applicable LIBOR Rate plus 1.50% (if the ratings assigned by Moody's, 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 Moody's, 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 Moody's, 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." See "One-Month LIBOR" in Appendix A-1. "Order" has the meaning set forth in Section 2.02(a)(i)(A) of this Appendix A-2. Appendix A-2-4 "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). "S&P" shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., its successors and assigns. "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. Appendix A-2-5 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 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 Auction Rate 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 Appendix A-2-6 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 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 Appendix A-2-7 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 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 Appendix A-2-8 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 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: Appendix A-2-9 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 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; Appendix A-2-10 (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 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 Appendix A-2-11 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). (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. Appendix A-2-12 (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 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; Appendix A-2-13 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 determination made by the Administrator, the Indenture Trustee and the Broker-Dealers 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 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 Appendix A-2-14 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 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 Appendix A-2-15 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 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. Appendix A-2-16 (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 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 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 Appendix A-2-17 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 Indenture Trustee who 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 Business 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. Appendix A-2-19 (iii) The Auction Agent is acting as agent for the Issuer in connection with Auctions. In the absence of bad faith, negligent failure to act or negligence on its part, the Auction Agent shall not be liable for any action taken, suffered or omitted or any error of judgment made by it in the performance of its duties under the Auction Agent Agreement and shall not be liable for any error of judgment made in good faith unless the Auction Agent shall have been negligent in ascertaining (or failing to ascertain) the pertinent facts. (f) Broker-Dealer. (i) The Auction Agent will enter into Broker-Dealer Agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated and Lehman Brothers 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 Appendix A-2-20 the Auction Period determined without reference to the proposed change. If the condition referred to in (A) is met but the condition referred in (B) above is not met, the applicable Auction Note Interest Rate for the next Auction Period shall be the applicable Maximum Rate and the Auction Period shall be the Auction Period determined without reference to the proposed change. In connection with any Auction Period Adjustment, the Auction Agent shall provide such further notice to such parties as is specified in Section 2.03 of the Auction Agent Agreement. (h) Changes in the Auction Date. The applicable Broker-Dealer, 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 Appendix A-2-21 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-2-22 SCHEDULE A TO THE INDENTURE Schedule of Trust Student Loans ------------------------------- [See Schedule A to the Bill 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-1 [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-1 CUSIP NO. 78443C AY0 ISIN NO. US78443C AY03 COMMON CODE NO. 017786466 Exhibit A-1-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C FLOATING RATE CLASS A-1 STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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 $600,000,000 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 October 1, 2003, between 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 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, 2016 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-1-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement By: ------------------------------------- Authorized Signatory Date: October 9, 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: ------------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-1-3 [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"), Auction Rate Class A-5 Student Loan-Backed Notes (the "Class A-5 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, Class A-5 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 A-5 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 December 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%. The Class A-1 Rate for the initial Accrual Period shall mean the rate determined by the following formula: x + [ 6/31 * (y-x) ] where: x = Two-Month LIBOR, and Exhibit A-1-4 y = Three-Month LIBOR, in each case, as determined on the second Business Day before the beginning of the initial Accrual Period, plus 0.10%, based on the actual number of days in the initial Accrual Period divided by 360. 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-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. Exhibit A-1-5 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed 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-1-6 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-1-7 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-1-8 Exhibit A-2 [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-2 CUSIP NO. 78443C AY0 ISIN NO. US78443C AY03 COMMON CODE NO. 017786466 Exhibit A-2-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C FLOATING RATE CLASS A-1 STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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 [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 $100,000,000 and the denominator of which is $600,000,000 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 October 1, 2003, between 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 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, 2016 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-2-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement By: ------------------------------------- Authorized Signatory Date: October 9, 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: ------------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-2-3 [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"), Auction Rate Class A-5 Student Loan-Backed Noted (the "Class A-5 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, Class A-5 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 A-5 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 December 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%. The Class A-1 Rate for the initial Accrual Period shall mean the rate determined by the following formula: x + [ 6/31 * (y-x) ] where: x = Two-Month LIBOR, and Exhibit A-2-4 y = Three-Month LIBOR, in each case, as determined on the second Business Day before the beginning of the initial Accrual Period, plus 0.10%, based on the actual number of days in the initial Accrual Period divided by 360. 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-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. Exhibit A-2-5 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed 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-2-6 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-2-7 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-2-8 Exhibit A-3 [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-1 CUSIP NO.78443C AZ7 ISIN NO. US78443C AZ77 COMMON CODE NO. 017786539 Exhibit A-3-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C FLOATING RATE CLASS A-2 STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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 such Distribution Date in respect of principal of the Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2003, between 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 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, 2020 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-3-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement By: ------------------------------------- Authorized Signatory Date: October 9, 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: ------------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-3-3 [REVERSE OF NOTE] This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Floating Rate Class A-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"), Auction Rate Class A-5 Student Loan-Backed Notes (the "Class A-5 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, Class A-5 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 A-5 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 December 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 0.39%. The Class A-2 Rate for the initial Accrual Period shall mean the rate determined by the following formula: x + [ 6/31 * (y-x) ] where: x = Two-Month LIBOR, and y = Three-Month LIBOR, Exhibit A-3-4 in each case, as determined on the second Business Day before the beginning of initial Accrual Period, plus 0.39%, based on the actual number of days in the initial Accrual Period divided by 360. 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-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 Exhibit A-3-5 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed 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 Exhibit A-3-6 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-3-7 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-3-8 Exhibit A-4 [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-1 CUSIP NO. 78443C BA1 ISIN NO. US78443C BA18 COMMON CODE NO. 017786563 Exhibit A-4-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C AUCTION RATE CLASS A-3 STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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 such Distribution Date in respect of principal of the Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2003, between 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, 2032 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-4-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement, By: --------------------------------- Authorized Signatory Date: October 9, 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: --------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-4-3 [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"), Auction Rate Class A-5 Student Loan-Backed Notes (the "Class A-5 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, Class A-5 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 are paid pari passu and principal on the Class A-3 Notes are paid pari passu, in lots of $50,000, with the Class A-4 Notes and Class A-5 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 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 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 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 Exhibit A-4-4 owners thereof, provided in the Indenture, to which provisions 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 the same aggregate principal amount shall be issued to the designated transferee or transferees. No service Exhibit A-4-5 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed 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 Exhibit A-4-6 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. 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-4-7 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-4-8 Exhibit A-5 [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-1 CUSIP NO. 78443C BB9 ISIN NO. US78443C BB90 COMMON CODE NO. 017786601 Exhibit A-5-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C AUCTION RATE CLASS A-4 STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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 such Distribution Date in respect of principal of the Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2003, between 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, 2032 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-5-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement, By: ------------------------------- Authorized Signatory Date: October 9, 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: ------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-5-3 [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"), Auction Rate Class A-5 Student Loan-Backed Notes (the "Class A-5 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, Class A-5 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 are paid pari passu and principal on the Class A-4 Notes are paid pari passu, in lots of $50,000, with the Class A-3 Notes and Class A-5 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 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 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 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. Exhibit A-5-4 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 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 Exhibit A-5-5 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 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed representation shall be null and void and of no effect. Exhibit A-5-6 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. 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 Exhibit A-5-7 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-5-8 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-5-9 Exhibit A-6 [FORM OF CLASS A-5 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-1 CUSIP NO. 78443C BC7 ISIN NO. US78443C BC73 COMMON CODE NO. 017786628 Exhibit A-6-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C AUCTION RATE CLASS A-5 STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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-5 Noteholders on such Distribution Date in respect of principal of the Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2003, between 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, 2032 Distribution Date (the "Class A-5 Maturity Date"). The Issuer shall pay interest on this Note at the rate per annum equal to the Class A-5 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-5 Notes (or, in the case of the first Accrual Period, the Closing Date) to but excluding the following Distribution Date for the Class A-5 Notes (or, in the case of the first Accrual Period, to and including the initial Auction Date for the Class A-5 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-6-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement, By: ------------------------------- Authorized Signatory Date: October 9, 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: ------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-6-3 [REVERSE OF NOTE] This Note is one of a duly authorized issue of Notes of the Issuer, designated as its Auction Rate Class A-5 Student Loan-Backed Notes (the "Class A-5 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"), 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, Class A-5 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-5 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-5 Notes, interest on the Class A-5 Notes are paid pari passu and principal on the Class A-5 Notes are paid pari passu, in lots of $50,000, with the Class A-3 Notes and Class A-4 Notes, and the Class A-5 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-5 Notes shall be payable on each Distribution Date in an amount described on the face hereof. "Distribution Date" means (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 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-5 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-5 Notes shall be made pro rata to the Noteholders entitled thereto. Interest on the Class A-5 Notes shall be payable on each Distribution Date on the principal amount outstanding of the Class A-5 Notes until the principal amount thereof is paid in full, at a rate per annum equal to the Class A-5 Rate. The "Class A-5 Rate" for each Accrual Period shall be equal to the Auction Note Interest Rate for the Class A-5 Notes. 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. Exhibit A-6-4 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 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-5 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-5 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-5 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-5 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 Exhibit A-6-5 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 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed representation shall be null and void and of no effect. Exhibit A-6-6 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. 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 Exhibit A-6-7 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-6-8 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-6-9 Exhibit A-7 [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-1 CUSIP NO. 78443C BD5 ISIN NO. US78443C BD56 COMMON CODE NO. 017786679 Exhibit A-7-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C FLOATING RATE CLASS B STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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 such Distribution Date in respect of principal of the Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2003, between 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 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, 2032 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-7-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement, By: --------------------------------- Authorized Signatory Date: October 9, 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: -------------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-7-3 [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"), Auction Rate Class A-5 Student Loan-Backed Notes (the "Class A-5 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, Class A-5 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, Class A-4 Notes and Class A-5 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 December 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 0.80%. The Class B Rate for the initial Accrual Period shall mean the rate determined by the following formula: x + [ 6/31 * (y-x) ] where: x = Two-Month LIBOR, and Exhibit A-7-4 y = Three-Month LIBOR, in each case, as determined on the second Business Day before the beginning of the initial Accrual Period, plus 0.80%, based on the actual number of days in the initial Accrual Period divided by 360. 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 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. Exhibit A-7-5 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed 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-7-6 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-7-7 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-7-8 Exhibit A-8 [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-1 CUSIP NO. 78443C BE3 ISIN NO. US78443C BE30 COMMON CODE NO. 017786695 Exhibit A-8-1 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C FLOATING RATE CLASS C STUDENT LOAN-BACKED NOTES SLM Private Credit Student Loan Trust 2003-C, 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 such Distribution Date in respect of principal of the Notes pursuant to Section 3.01 of the Indenture dated as of October 1, 2003, between 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 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, 2032 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-8-2 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-C By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee under the Trust Agreement By: ----------------------------- Authorized Signatory Date: October 9, 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: ---------------------------------- Authorized Signatory Date: October 9, 2003 Exhibit A-8-3 [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"), Auction Rate Class A-5 Student Loan-Backed Notes (the "Class A-5 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, Class A-5 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, Class A-5 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 December 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%. The Class C Rate for the initial Accrual Period shall mean the rate determined by the following formula: x + [ 6/31 * (y-x) ] where: x = Two-Month LIBOR, and Exhibit A-8-4 y = Three-Month LIBOR, in each case, as determined on the second Business Day before the beginning of the initial Accrual Period, plus 1.60%, based on the actual number of days in the initial Accrual Period divided by 360. 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 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. Exhibit A-8-5 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 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 (a "Plan"), such Note Owner shall be deemed to have represented that such acquisition or purchase will not constitute or otherwise result in: (i) in the case of a Plan subject to Section 406 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), 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 and (ii) in the case of a Plan subject to a substantially similar federal, state, local or foreign law ("Similar Law"), a non-exempt violation of such substantially Similar Law. Any transfer found to have been made in violation of such deemed 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-8-6 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-8-7 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-8-8 EXHIBIT B TO THE INDENTURE Note Depository Agreement ------------------------- [See Tab 65.1 - Letter of Representation to DTC] Exhibit B-1 EXHIBIT C TO THE INDENTURE NOTICE OF PAYMENT DEFAULT SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C STUDENT LOAN-BACKED NOTES CLASS [A-3] [A-4] [A-5] 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-C STUDENT LOAN-BACKED NOTES CLASS [A-3] [A-4] [A-5] 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-C STUDENT LOAN-BACKED NOTES CLASS [A-3] [A-4] [A-5] 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] [A-5] 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] [A-5] Notes. SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C 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-C STUDENT LOAN-BACKED NOTES CLASS [A-3] [A-4] [A-5] 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] [A-5] Notes. SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C Dated: -------------------------- By: ----------------------------------- Exhibit F-1 EXHIBIT G TO THE INDENTURE NOTICE OF CHANGE IN AUCTION DATE SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C STUDENT LOAN-BACKED NOTES CLASS [A-3] [A-4] [A-5] 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] [A-5] 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] [A-5] 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] [A-5] Notes. [BROKER-DEALER], as Broker-Dealer Dated: -------------------------- By: ----------------------------------- Exhibit G-1 EX-99.1 7 dex991.txt EXHIBIT 99.1 Exhibit 99.1 ================================================================================ SALE AGREEMENT MASTER SECURITIZATION TERMS NUMBER 1000 between SLM EDUCATION CREDIT FUNDING LLC, as Seller and SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Purchaser Dated as of October 9, 2003 ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I TERMS Section 1.01. Terms..........................................................1 ARTICLE II DEFINITIONS Section 2.01. Definitions....................................................1 ARTICLE III SALE AND PURCHASE Section 3.01. Consummation of Sale and Purchase..............................4 Section 3.02. Settlement of the Initial Payment..............................4 Section 3.03. Special Programs...............................................4 ARTICLE IV CONDITIONS PRECEDENT TO SALE AND PURCHASE Section 4.01. Activities Prior to the Sale...................................4 Section 4.02. Continued Servicing............................................4 Section 4.03. Bill of Sale/Loan Transmittal Summary Form.....................4 Section 4.04. Endorsement....................................................5 Section 4.05. Officer's Certificate..........................................5 Section 4.06. Reserved.......................................................5 Section 4.07. Power of Attorney..............................................5 ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER Section 5.01. General........................................................5 Section 5.02. Particular.....................................................5 ARTICLE VI PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT Section 6.01. Purchase of Trust Student Loans; Reimbursement.................7 Section 6.02. Substitution...................................................8 i Page ---- ARTICLE VII OBLIGATION TO REMIT SUBSEQUENT PAYMENTS AND FORWARD COMMUNICATIONS Section 7.01. Obligation to Remit Subsequent Payments........................8 Section 7.02. Forward Communications.........................................9 ARTICLE VIII CONTINUING OBLIGATION OF SELLER Section 8.01. Continuing Obligation of Seller................................9 ARTICLE IX LIABILITY OF SELLER; INDEMNITIES Section 9.01. Liability of Seller; Indemnities...............................9 ARTICLE X MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF SELLER Section 10.01. Merger of Consolidation of, or Assumption of the Obligations of Seller.....................................10 ARTICLE XI LIMITATION ON LIABILITY OF SELLER AND OTHERS Section 11.01. Limitation on Liability of Seller and Others..................11 ARTICLE XII EXPENSES Section 12.01. Expenses......................................................11 ARTICLE XIII SURVIVAL OF COVENANTS/SUPERSESSION Section 13.01. Survival of Covenants/Suppression.............................12 ARTICLE XIV COMMUNICATION AND NOTICE REQUIREMENTS Section 14.01 Communication and Notice Requirements.........................12 ARTICLE XV FORM OF INSTRUMENTS Section 15.01. Form of Instruments...........................................12 ii Page ---- ARTICLE XVI AMENDMENT Section 16.01. Amendment.....................................................13 ARTICLE XVII NONPETITION COVENANTS Section 17.01. Nonpetition Covenants.........................................14 ARTICLE XVIII ASSIGNMENT Section 18.01. Assignment....................................................14 ARTICLE XIX GOVERNING LAW Section 19.01. Governing Law.................................................14 iii SALE AGREEMENT MASTER SECURITIZATION TERMS NUMBER 1000 These Sale Agreement Master Securitization Terms Number 1000 ("Master Sale Terms"), dated as of October 9, 2003, between SLM Education Credit Funding LLC, in its capacity as seller (in such capacity, the "Seller"), and SLM Private Credit Student Loan Trust 2003-C, as purchaser (the "Purchaser"), shall be effective upon execution by the parties hereto. WHEREAS, the Seller is the owner of certain Student Loans; and WHEREAS, the Seller may desire to sell its interest in such loans from time to time and Purchaser may desire to purchase such loans from Seller. NOW, THEREFORE, in connection with the mutual promises contained herein, the parties hereto agree as follows: ARTICLE I TERMS Section 1.01. Terms. These Master Sale Terms establish the terms under which Seller may sell and Purchaser may purchase the Loans (and all obligations of the Borrowers thereunder) specified on each Sale Agreement (each, a "Sale Agreement") as the parties may execute from time to time pursuant to these Master Sale Terms. Each such Sale Agreement shall be substantially in the form of Attachment A hereto, incorporating by reference the terms of these Master Sale Terms, and shall be a separate agreement between the Seller and the Purchaser with respect to the Loans covered by the terms of such Sale Agreement for all purposes. If the terms of a Sale Agreement conflict with the terms of these Master Sale Terms, the terms of such Sale Agreement shall supersede and govern. ARTICLE II DEFINITIONS Section 2.01. Definitions. Capitalized terms used but not otherwise defined herein shall have the definitions set forth in Appendix A hereto. For purposes hereof: (a) "Bill of Sale" means that document executed by an authorized officer of the Seller which shall set forth the Loans offered by the Seller and accepted for purchase by the Purchaser and which shall sell, assign and convey to the Purchaser and its assignees all right, title and interest of the Seller in the Loans listed on the Bill of Sale and will certify that the 1 representations and warranties made by the Seller pursuant to Section 5.02 of these Master Sale Terms are true and correct. (b) "Borrower" means the obligor on a Loan. (c) [Reserved]. (d) "Cutoff Date" means August 18, 2003, and with respect to subsequent sales hereunder, a date agreed to by Seller and Purchaser to use in determining the Principal Balance and accrued interest to be capitalized for purposes of completing the Loan Transmittal Summary Form. (e) "Delinquent" means the period where any payment of principal or interest due on the Loan is overdue (after giving effect to all grace, forbearance and deferment periods). (f) "Eligible Loan" means a Loan offered for sale by Seller under the Sale Agreement which as of the Cutoff Date is current or no more Delinquent than permitted under the Sale Agreement in payment of principal or interest and which meets the following criteria as of the effective date of the Bill of Sale: (i) is a Student Loan; (ii) is owned by Seller and is fully disbursed; (iii) bears interest at a stated rate of not more than the maximum rate permitted under applicable law; (iv) is supported by the following documentation: (A) for each Loan: (1) loan application, and any supplement thereto, (2) original promissory note and any addendum thereto or the electronic records therefor, (3) any other document and/or record which Purchaser may be required to retain pursuant to the Program under which the Loan was originated and (B) for each Loan, if applicable: (1) payment history (or similar documentation) including (i) an indication of the Principal Balance and the date through which interest has been paid, each as of the Cutoff Date and (ii) an accounting of the allocation of all payments by Borrower or on Borrower's behalf to principal and interest on the Loan, 2 (2) documentation which supports periods of current or past deferment or past forbearance, (3) a collection history, if the Loan was ever in a delinquent status, including detailed summaries of contacts and including the addresses or telephone numbers used in contacting or attempting to contact Borrower and any endorser, (4) evidence of all requests for skip-tracing assistance and current address of Borrower, if located, (5) evidence of requests for pre-claims assistance, and evidence that the Borrower's school(s) has/have been notified, and (6) a record of any event resulting in a change to or confirmation of any data in the Loan file. (g) "Excess Distribution Certificate" means the certificate, substantially in the form of Exhibit A to the Trust Agreement. (h) "Initial Payment" means the dollar amount specified in the applicable Sale Agreement. (i) "Loan" means the Note or Notes offered for sale pursuant to the Sale Agreement and related documentation together with any guaranties and other rights relating thereto. (j) "Loan Transmittal Summary Forms" means the forms provided to Seller by Purchaser and completed by Seller which list, by Borrower, the Loans subject to the Bill of Sale and the outstanding Principal Balance and accrued interest thereof as of the Cutoff Date. (k) "Note" means the promissory note of the Borrower and any amendment thereto evidencing the Borrower's obligation. (l) "Principal Balance" means the outstanding principal amount of the Loan, plus accrued interest to be capitalized (if any). (m) "Purchase Price" means the Initial Payment and the Excess Distribution Certificate. 3 ARTICLE III SALE AND PURCHASE Section 3.01. Consummation of Sale and Purchase. The sale and purchase of Eligible Loans pursuant to a Sale Agreement shall be consummated upon Purchaser's receipt from the Seller of the Bill of Sale and the payment by Purchaser to Seller of the Initial Payment, and when consummated such sale and purchase shall be effective as of the date of the Bill of Sale. Seller and Purchaser shall use their best efforts to perform promptly their respective obligations pursuant to such Sale Agreement. Section 3.02. Settlement of the Initial Payment. Purchaser on the date of the Bill of Sale shall pay Seller the Initial Payment by wire transfer in immediately available funds to the account specified by Seller. Section 3.03. Special Programs. In consideration of the sale of the Eligible Loans under these Master Sale Terms and each Sale Agreement, Purchaser agrees to cause the Servicer to offer borrowers of Trust Student Loans all special programs whether or not in existence as of the date of any Sale Agreement generally offered to the obligors of comparable loans owned by Sallie Mae subject to the terms and conditions of Section 3.12 of the Servicing Agreement. The Seller is selling the Trust Student Loans to the Purchaser without regard to the effect of the special programs. The Seller shall remit to the Purchaser any amounts by which payments on the Trust Student Loans are reduced by the special payments as set forth in Section 3.12 of the Servicing Agreement. ARTICLE IV CONDITIONS PRECEDENT TO SALE AND PURCHASE Section 4.01. Activities Prior to the Sale. Following the execution of a Sale Agreement, Seller shall provide any assistance requested by Purchaser in determining that all required documentation on the Loans is present and correct. Section 4.02. Continued Servicing. Seller shall service, or cause to be serviced, all Loans until the date of the Bill of Sale. Section 4.03. Bill of Sale/Loan Transmittal Summary Form. Seller shall deliver to Purchaser: (a) A Bill of Sale executed by an authorized officer of the Seller covering Loans offered by the Seller and accepted by Purchaser as set forth thereon, selling, assigning and conveying to the Purchaser and its assignees all right, title and interest of the Seller, in each of the Loans (excluding any and all surety bonds relating to the Loans and including any Back-End Fees relating to the Loans), and stating that the representations and warranties made by Seller in Article V of these Master Sale Terms are true and correct on and as of the date of the Bill of Sale; and 4 (b) The Loan Transmittal Summary Form, attached to the Bill of Sale, identifying each of the Eligible Loans which is the subject of the Bill of Sale and setting forth the unpaid Principal Balance of each such Loan. Section 4.04. Endorsement. The Seller shall provide a blanket endorsement transferring the entire interest of the Seller in the Loans to the Trustee for the benefit of the Purchaser with the form of endorsement provided for in the Sale Agreement. At the direction of and in such form as Purchaser may designate, the Seller also agrees to individually endorse any Eligible Loan as Purchaser may request from time to time. Section 4.05. Officer's Certificate. Seller shall furnish to Purchaser, with each Bill of Sale provided in connection with each sale of Loans pursuant to these Master Sale Terms, an Officer's Certificate, dated as of the date of such Bill of Sale. Section 4.06. Reserved. Section 4.07. Power of Attorney. Seller hereby grants to the Trustee on behalf of the Purchaser an irrevocable power of attorney, which power of attorney is coupled with an interest, to individually endorse or cause to be individually endorsed in the name of the Seller any Eligible Loan to evidence the transfer of such Eligible Loan to the Trustee on behalf of the Purchaser and to transfer or to cause to be transferred physical possession of any Note from Sallie Mae or the Servicer to the Trustee or the Indenture Trustee or any other custodian on behalf of either of them. ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER Section 5.01. General. Seller represents and warrants to Purchaser that as of the date of each Sale Agreement and Bill of Sale; (a) The Seller is duly organized and existing under the laws of the State of Delaware; and (b) The Seller has all requisite power and authority to enter into and to perform the terms of these Master Sale Terms and each Sale Agreement. Section 5.02. Particular. Seller represents and warrants to Purchaser as to the Loans purchased by Purchaser under each Sale Agreement and each Bill of Sale executed pursuant to these Master Sale Terms: (a) Seller has good and marketable title to, and is the sole owner of, the Loans, free and clear of all security interests, liens, charges, claims, offsets, defenses, counterclaims or 5 encumbrances of any nature and no right of rescission, offsets, defenses, or counterclaims have been asserted or threatened with respect to the Loans; (b) This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Loans in favor of the Purchaser, which security interest is prior to all other security interests, liens, charges, claims, offsets, defenses, counterclaims or encumbrances, and is enforceable as such as against creditors of and purchasers from the Seller; (c) The Loans constitute "instruments" within the meaning of the applicable UCC; (d) The Loans are Eligible Loans and the description of the Loans set forth in the Sale Agreement and the Loan Transmittal Summary Form is true and correct; (e) The Seller is authorized to sell, assign, transfer and repurchase the Loans; and the sale, assignment and transfer of such Loans is or, in the case of a Loan repurchased by the Seller, will be made pursuant to and consistent with the laws and regulations under which the Seller operates, and will not violate any decree, judgment or order of any court or agency, or conflict with or result in a breach of any of the terms, conditions or provisions of any agreement or instrument to the Seller is a party or by which the Seller or its property is bound, or constitute a default (or an event which could constitute a default with the passage of time or notice or both) thereunder; (f) The Loans are each in full force and effect in accordance with their terms and are legal, valid and binding obligations of the respective Borrowers thereunder subject to no defenses (except the defense of infancy); (g) No consents and approvals are required by the terms of the Loans to the sale of the Loans hereunder to the Seller; (h) Each Loan has been duly made and serviced in accordance with the guidelines of one of the Programs under which the Loan was originated; (i) Any payments on the Loans received by the Seller which have been allocated to reduction of principal and interest on such Loans have been allocated on a simple interest basis; the information with respect to the Loans as of the Cutoff Date as stated on the Loan Transmittal Summary Form is true and correct; (j) Due diligence and reasonable care have been exercised in the making, administering, servicing and collecting of the Loans; (k) Each Loan has been duly made and serviced in accordance with the provisions of all applicable Federal and state laws; (l) No Loan is more than sixty (60) days Delinquent as of the Cutoff Date and no default, breach, violation or event permitting acceleration under the terms of any Loan has arisen; and neither the Seller nor any predecessor holder of any Loan has waived any of the foregoing other than as permitted by the Basic Documents; 6 (m) It is the intention of Seller and the Purchaser, and the Seller hereby warrants, that the transfer and assignment herein contemplated constitute a valid sale of the Loans from Seller to the Purchaser and that the beneficial interest in and title to such Loans not be part of the Seller's estate in the event of the bankruptcy of the Seller or the appointment of a receiver with respect to Seller; (n) The Seller has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Loans granted to the Trustee hereunder; (o) There is only one original executed copy of the promissory note evidencing each Loan or the electronic records evidencing the same. The Seller has in its possession a copy of the endorsement and Loan Transmittal Summary Form identifying the Notes that constitute or evidence the Loans. The Notes that constitute or evidence the Loans do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Trustee; (p) Other than the security interest granted to the Purchaser pursuant to this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Loans. The Seller has not authorized the filing of and is not aware of any financing statements against the Seller that include a description of collateral covering the Loans other than any financing statement relating to the security interest granted to the Purchaser hereunder or that has been terminated or released. The Seller is not aware of any judgment or tax lien filings against the Seller; and (q) No Borrower of any Loan as of the Cutoff Date is noted in the related Loan File as being currently involved in a bankruptcy proceeding. ARTICLE VI PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT Section 6.01. Purchase of Trust Student Loans; Reimbursement. Each party to this Agreement shall give notice to the other such parties and to the Servicer, the Administrator and Sallie Mae promptly, in writing, upon the discovery of any breach of Seller's representations and warranties made pursuant to Article V hereof which has a materially adverse effect on the interest of the Purchaser in any Trust Student Loan. In the event of such a material breach, Seller shall cure or repurchase any affected Trust Student Loan not later than 270 days following the date of discovery of such material breach. The Seller shall also remit as provided in Section 2.06 of the Administration Agreement on the date of purchase of any Trust Student Loan pursuant to this Article VI an amount equal to all interest amounts with respect to such Trust Student Loan. In consideration of the purchase of any such Trust Student Loan pursuant to this Article VI, the Seller shall remit the Purchase Amount in the manner specified in Section 2.06 of the Administration Agreement. 7 Section 6.02. Substitution. In lieu of repurchasing Trust Student Loans pursuant to this Article VI, the Seller may, at its option, substitute Eligible Loans or arrange for the substitution of Eligible Loans which are substantially similar on an aggregate basis as of the date of substitution to the Trust Student Loans for which they are being substituted with respect to the following characteristics: (i) status (i.e., in-school, grace, deferment, forbearance or repayment); (ii) Program type (i.e., Med Loans, Law Loans, MBA Loans or Signature Loans); (iii) school type; (iv) total return; (v) principal balance; and (vi) remaining term to maturity. In addition, each substituted Eligible Loan will comply, as of the date of substitution, with all of the representations and warranties made hereunder. In choosing Eligible Loans to be substituted pursuant to this Article VI, the Seller shall make a reasonable determination that the Eligible Loans to be substituted will not have a material adverse effect on the Noteholders. In the event that Seller elects to substitute Eligible Loans pursuant to this Article VI, the Seller will remit to the Administrator the amount of any shortfall between the Purchase Amount of the substituted Eligible Loans and the Purchase Amount of the Trust Student Loans for which they are being substituted. The Seller shall also remit to the Administrator an amount equal to all interest amounts with respect to the Trust Student Loans in the manner provided in Section 2.06 of the Administration Agreement. The sole remedy of the Purchaser, the Trustee, the Noteholders and the Certificateholders with respect to a breach by the Seller pursuant to Article V hereof shall be to require the Seller to purchase Trust Student Loans, to reimburse the Purchaser as provided above or to substitute Student Loans pursuant to this Article VI. Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the purchase of any Trust Student Loan or the reimbursement for any interest penalty pursuant to this Article VI. ARTICLE VII OBLIGATION TO REMIT SUBSEQUENT PAYMENTS AND FORWARD COMMUNICATIONS Section 7.01. Obligation to Remit Subsequent Payments. Any payment received by Seller with respect to amounts accrued after the Date of the Bill of Sale for any Loan sold to Purchaser, which payment is not reflected in the Loan Transmittal Summary Form, shall be 8 received by Seller in trust for the account of Purchaser and the Seller hereby disclaims any title to or interest in any such amounts. Within two (2) business days following the date of receipt, Seller shall remit to Purchaser an amount equal to any such payments along with a listing on a form provided by Purchaser identifying the Loans with respect to which such payments were made, the amount of each such payment and the date each such payment was received. Section 7.02. Forward Communications. Any written communication received at any time by Seller with respect to any Loan subject to any Sale Agreement shall be transmitted by Seller to Servicer within two (2) business days of receipt. Such communications shall include, but not be limited to, letters, notices of death or disability, notices of bankruptcy, forms requesting deferment of repayment or loan cancellation, and like documents. ARTICLE VIII CONTINUING OBLIGATION OF SELLER Section 8.01. Continuing Obligation of Seller. The Seller shall provide all reasonable assistance necessary for Purchaser to resolve account problems raised by any Borrower provided such account problems are attributable to or are alleged to be attributable to (a) an event occurring during the period Seller owned the Loan, or (b) a payment made or alleged to have been made to Seller. Further, the Seller agrees to execute any financing statements at the request of the Purchaser in order to reflect the Purchaser's interest in the Loans. ARTICLE IX LIABILITY OF SELLER; INDEMNITIES Section 9.01. Liability of Seller; Indemnities. The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Sale Agreement. (a) The Seller shall indemnify, defend and hold harmless the Purchaser and the Trustee in its individual capacity and their officers, directors, employees and agents from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated herein and in the other Basic Documents (except any such income taxes arising out of fees paid to the Trustee), including any sales, gross receipts, general corporation, tangible and intangible personal property, privilege or license taxes and costs and expenses in defending against the same. (b) The Seller shall indemnify, defend and hold harmless the Purchaser and the Trustee in its individual capacity and their officers, directors, employees and agents of the Purchaser and the Trustee from and against any and all costs, expenses, losses, claims, damages and liabilities arising out of, or imposed upon such Person through, the Seller's willful misfeasance, bad faith or gross negligence in the performance of its duties under the Sale 9 Agreement, or by reason of reckless disregard of its obligations and duties under the Sale Agreement. (c) The Seller shall be liable as primary obligor for, and shall indemnify, defend and hold harmless the Trustee in its individual capacity and its officers, directors, employees and agents from and against, all costs, expenses, losses, claims, damages, obligations and liabilities arising out of, incurred in connection with or relating to the Sale Agreement, the other Basic Documents, the acceptance or performance of the trusts and duties set forth herein and in the Sale Agreement or the action or the inaction of the Trustee hereunder, except to the extent that such cost, expense, loss, claim, damage, obligation or liability: (i) shall be due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Trustee, (ii) shall arise from any breach by the Trustee of its covenants in its individual capacity under any of the Basic Documents; or (iii) shall arise from the breach by the Trustee of any of its representations or warranties in its individual capacity set forth in these Master Sale Terms or any Sale Agreement. In the event of any claim, action or proceeding for which indemnity will be sought pursuant to this paragraph, the Trustee's choice of legal counsel shall be subject to the approval of the Seller, which approval shall not be unreasonably withheld. Indemnification under this Section shall survive the resignation or removal of the Trustee and the termination of these Master Sale Terms and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Seller shall have made any indemnity payments pursuant to this Section and the Person to or for the benefit of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Seller, without interest. ARTICLE X MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF SELLER Section 10.01. Merger or Consolidation of, or Assumption of the Obligations of Seller. Any Person (a) into which the Seller may be merged or consolidated, (b) which may result from any merger or consolidation to which the Seller shall be a party or (c) which may succeed to the properties and assets of the Seller substantially as a whole, shall be the successor to the Seller without the execution or filing of any document or any further act by any of the parties to these Master Sale Terms; provided, however, that the Seller hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Person, if other than the Seller, executes an agreement of assumption to perform every obligation of the Seller under these Master Sale Terms, (ii) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 5 herein shall have been breached, (iii) the surviving Person, if other than the Seller, shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in these Master Sale Terms relating to such transaction have been complied with, and that the Rating Agency Condition shall have been satisfied with 10 respect to such transaction, (iv) if the Seller is not the surviving entity, such transaction will not result in a material adverse Federal or state tax consequence to the Purchaser or the Noteholders or the Certificateholders and (v) if the Seller is not the surviving entity, the Seller shall have delivered to the Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Purchaser and the Trustee, respectively, in the Loans and reciting the details of such filings, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests. ARTICLE XI LIMITATION ON LIABILITY OF SELLER AND OTHERS Section 11.01. Limitation on Liability of Seller and Others. The Seller and any director or officer or employee or agent thereof may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder (provided that such reliance shall not limit in any way the Seller's obligations under Article V herein). The Seller shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under these Master Sale Terms or any Sale Agreement, and that in its opinion may involve it in any expense or liability. Except as provided herein, the repurchase (or substitution) and reimbursement obligations of Seller will constitute the sole remedy available to Purchaser for uncured breaches; provided, however, that the information with respect to the Loans listed on the Bill of Sale may be adjusted in the ordinary course of business subsequent to the date of the Bill of Sale and to the extent that the aggregate Principal Balance listed on the Bill of Sale is less than the aggregate Principal Balance stated on the Bill of Sale, Seller shall remit such amount to the Trustee for the benefit of the Purchaser. Such reconciliation payment shall be made from time to time but no less frequently than semi-annually. ARTICLE XII EXPENSES Section 12.01. Expenses. Except as otherwise provided herein, each party to these Master Sale Terms or any Sale Agreement shall pay its own expense incurred in connection with the preparation, execution and delivery of these Master Sale Terms or any Sale Agreement and the transactions contemplated herein or therein. 11 ARTICLE XIII SURVIVAL OF COVENANTS/SUPERSESSION Section 13.01. Survival of Covenants/Suppression. All covenants, agreements, representations and warranties made herein and in or pursuant to any Sale Agreements executed pursuant to these Master Sale Terms shall survive the consummation of the purchase of the Loans provided for in each Sale Agreement. All covenants, agreements, representations and warranties made or furnished pursuant hereto by or for the benefit of Seller shall bind and inure to the benefit of any successors or assigns of Purchaser and shall survive with respect to each Loan. Each Sale Agreement supersedes all previous agreements and understandings between Purchaser and Seller with respect to the subject matter thereof. A Sale Agreement may be changed, modified or discharged, and any rights or obligations hereunder may be waived, only by a written instrument signed by a duly authorized officer of the party against whom enforcement of any such waiver, change, modification or discharge is sought. The waiver by Purchaser of any covenant, agreement, representation or warranty required to be made or furnished by Seller or the waiver by Purchaser of any provision herein contained or contained in any Sale Agreement shall not be deemed to be a waiver of any breach of any other covenant, agreement, representation, warranty or provision herein contained or contained in any Sale Agreement, nor shall any waiver or any custom or practice which may evolve between the parties in the administration of the terms hereof or of any Sale Agreement, be construed to lessen the right of Purchaser to insist upon the performance by Seller in strict accordance with said terms. ARTICLE XIV COMMUNICATION AND NOTICE REQUIREMENTS Section 14.01. Communication and Notice Requirements. All communications, notices and approvals provided for hereunder shall be in writing and mailed or delivered to Seller or Purchaser, as the case may be, addressed as set forth in the Sale Agreement or at such other address as either party may hereafter designate by notice to the other party. Notice given in any such communication, mailed to Seller or Purchaser by appropriately addressed registered mail, shall be deemed to have been given on the day following the date of such mailing. ARTICLE XV FORM OF INSTRUMENTS Section 15.01. Form of Instruments. All instruments and documents delivered in connection with these Master Sale Terms and any Sale Agreement, and all proceedings to be taken in connection with these Master Sale Terms and any Sale Agreement and the transactions contemplated herein and therein, shall be in a form as set forth in the attachments hereto, and Purchaser shall have received copies of such documents as it or its counsel shall reasonably 12 request in connection therewith. Any instrument or document which is substantially in the same form as an Attachment hereto or a recital herein will be deemed to be satisfactory as to form. ARTICLE XVI AMENDMENT Section 16.01. Amendment. These Master Sale Terms and any Sale Agreement may be amended by the parties thereto without the consent of the related Noteholders for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of such Master Sale Terms and Sale Agreements or of modifying in any manner the rights of such Noteholders; provided that such action will not, in the opinion of counsel satisfactory to the related Indenture Trustees, materially and adversely affect the interest of any such Noteholder. In addition, these Master Sale Terms and any Sale Agreement may also be amended from time to time by the Seller and the Purchaser, with the consent of the Noteholders of Notes evidencing a majority of the Outstanding Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of these Master Sale Terms or any Sale Agreement or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the time of, collections of payments with respect to Loans or distributions that shall be required to be made for the benefit of the Noteholders or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders of which are required to consent to any such amendment, without the consent of all outstanding Noteholders. Promptly after the execution of any such amendment or consent (or, in the case of the Rating Agencies, five Business Days prior thereto), the Trustee shall furnish written notification of the substance of such amendment or consent to the Indenture Trustee, and each of the Rating Agencies. It shall not be necessary for the consent of Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. Prior to the execution of any amendment to these Master Sale Terms, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that execution of such amendment is authorized or permitted by this Sale Agreement and the Opinion of Counsel referred to in Section 7.01(i) of the Administration Agreement. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's own rights, duties or immunities under this Agreement or otherwise. 13 ARTICLE XVII NONPETITION COVENANTS Section 17.01. Nonpetition Covenants. Notwithstanding any prior termination of these Master Sale Terms, the Seller shall not acquiesce, petition or otherwise invoke or cause the Purchaser to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Purchaser under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Purchaser. Notwithstanding any prior termination of these Master Sale Terms, the Purchaser shall not acquiesce, petition or otherwise invoke or cause the Seller to invoke the process of commencing or sustaining a case against the Seller under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Seller or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Purchaser. ARTICLE XVIII ASSIGNMENT Section 18.01. Assignment. Seller hereby assigns its entire right, title and interest as purchaser under this Agreement and any Sale Agreement thereunder to the Purchaser as of the date hereof and acknowledges that the Purchaser will assign the same, together with the right, title and interest of the Purchaser and the Trustee hereunder, to the Indenture Trustee under the Indenture. ARTICLE XIX GOVERNING LAW Section 19.01. Governing Law. THESE MASTER SALE TERMS AND ANY SALE AGREEMENTS SHALL BE GOVERNED BY AND 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 SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 14 IN WITNESS WHEREOF, the parties hereto have caused this Sale Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT FUNDING LLC, as Seller By: /s/ J. LANCE FRANKE ------------------------------------- Name: J. Lance Franke Title: Vice President SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Purchaser By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as the Trustee By: /s/ JOHN J. CASHIN ------------------------------------- Name: John J. Cashin Title: Vice President 15 Attachment A SALE AGREEMENT Dated as of October 9, 2003 SALE AGREEMENT NUMBER 1 SLM Education Credit Funding LLC (the "Seller") hereby offers for sale to SLM Private Credit Student Loan Trust 2003-C (the "Purchaser") the entire right, title and interest of the Seller in the Loans described in the Bill of Sale and Loan Transmittal Summary Form incorporated herein and, to the extent indicated below, the Purchaser accepts the Seller's offer. In order to qualify as Eligible Loans, no payment of principal or interest shall be more than sixty (60) days Delinquent as of the Cutoff Date, which date shall be August 18, 2003. TERMS, CONDITIONS AND COVENANTS ------------------------------- In consideration of the Purchase Price, the Seller hereby sells to the Purchaser the entire right, title and interest of the Seller in the Loans accepted for purchase, subject to all the terms and conditions of the Sale Agreement Master Securitization Terms Number 1000 ("Master Sale Terms") and amendments, each incorporated herein by reference, between the Seller and the Purchaser. The Initial Payment of the Loans shall equal $1,234,345,457 (equal to $1,342,237,933 (representing the sale price of the Notes less underwriters' commissions) less $3,124,915 (representing the Reserve Account Initial Deposit) less $102,811,061 (representing the Cash Capitalization Account Initial Deposit) less $1,956,500 (representing the upfront payment of the Interest Rate Cap Agreement)) and the Excess Distribution Certificate. This document shall constitute a Sale Agreement as referred to in the Master Sale Terms and, except as modified herein, each term used herein shall have the same meaning as in the Master Sale Terms. All references in the Master Sale Terms to Loans or Eligible Loans shall be deemed to refer to the Loans governed by this Sale Agreement. Seller hereby makes, as of the date hereof, all the representations and warranties contained in the Master Sale Terms and makes such representations and warranties with respect to the Loans governed by this Sale Agreement. The parties hereto intend that the transfer of Loans described in the Bill of Sale and Loan Transmittal Summary Form be, and be construed as, a valid sale of such Loans. However, in the event that notwithstanding the intentions of the parties, such transfer is deemed to be a transfer for security, then the Seller hereby grants to the Purchaser a first priority security interest in and to all Loans described in the Bill of Sale and Loan Transmittal Summary Form to secure a loan in an amount equal to the Purchase Price of such Loans. 1 IN WITNESS WHEREOF, the parties hereto have caused this Sale Agreement Number 1 to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT FUNDING LLC, as Seller By: /s/ J. LANCE FRANKE ------------------------------------- Name: J. Lance Franke Title: Vice President SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Purchaser By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as the Trustee By: /s/ JOHN J. CASHIN ------------------------------------- Name: John J. Cashin Title: Vice President 2 SALE AGREEMENT NUMBER 1 BLANKET ENDORSEMENT DATED OCTOBER 9, 2003 ----------------------------------------- SLM Education Credit Funding LLC (the "Seller"), by execution of this instrument, hereby endorses the attached promissory note which is one of the promissory notes (the "Notes") described in the Bill of Sale executed by the Seller in favor of Chase Manhattan Bank USA, National Association, as the Trustee on behalf of SLM Private Credit Student Loan Trust 2003-C (the "Purchaser"). This endorsement is in blank, unrestricted form and without recourse except as provided in Article VI of the Master Sale Terms referred to in the Sale Agreement between the Seller and the Purchaser which covers this promissory note. This endorsement may be effected by attaching either this instrument or a facsimile hereof to each or any of the Notes. Notwithstanding the foregoing, the Seller agrees to individually endorse each Note in the form provided by Purchaser as Purchaser may from time to time require. THE SALE AND PURCHASE OF THE LOANS SHALL BE SUBJECT TO THE TERMS, CONDITIONS AND COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE SALE AGREEMENT MASTER LOAN SECURITIZATION TERMS 1000. BY EXECUTION HEREOF, THE SELLER ACKNOWLEDGES THAT THE SELLER HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND COVENANTS OF THE SALE AGREEMENT (" SALE AGREEMENT"). THE SALE AND PURCHASE SHALL BE CONSUMMATED UPON PURCHASER'S PAYMENT TO SELLER OF THE INITIAL PAYMENT AS DEFINED IN THE MASTER SALE TERMS AND, UNLESS OTHERWISE AGREED BY SELLER AND PURCHASER, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL OF SALE. 1 IN WITNESS WHEREOF, the parties hereto have caused this Blanket Endorsement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT FUNDING LLC, as Seller By: /s/ J. LANCE FRANKE ------------------------------------- Name: J. Lance Franke Title: Vice President SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Purchaser By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as the Trustee By: /s/ JOHN J. CASHIN ------------------------------------- Name: John J. Cashin Title: Vice President 2 BILL OF SALE DATED OCTOBER 9, 2003 The undersigned SLM Education Credit Funding LLC (the "Seller") for value received and pursuant to the terms and conditions of Sale Agreement Number 1 (the "Sale Agreement") between Seller and SLM Private Credit Student Loan Trust 2003-C (the "Purchaser") does hereby sell, assign and convey to the Purchaser and its assignees all right, title and interest of, in the Loans (excluding any and all surety bonds relating to the Loans and including any Back-End Fees relating to the Loans) identified herein which the Purchaser has accepted for purchase. The portfolio accepted for purchase by the Purchaser and the effective date of sale and purchase are described below and the individual Loans are listed on the Schedule A attached hereto. The Seller hereby makes the representations and warranties set forth in Article V of the Sale Agreement Master Securitization Terms Number 1000 incorporated by reference in the Sale Agreement. LISTING OF LOANS ON FOLLOWING PAGE 1 Table to be provided soon 2 ADDITIONAL LOAN CRITERIA - ------------------------ .. Not in claims status, not previously rejected .. Not in litigation .. Last disbursement is greater than 120 days from cutoff date .. Loan is not swap-pending *Based upon Seller's estimated calculations, which may be adjusted upward or downward based upon Purchaser's reconciliation. **Includes interest to be capitalized. 3 IN WITNESS WHEREOF, the parties hereto have caused this Bill of Sale to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT FUNDING LLC, as Seller By: /s/ J. LANCE FRANKE ------------------------------------- Name: J. Lance Franke Title: Vice President SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Purchaser By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as the Trustee By: /s/ JOHN J. CASHIN ------------------------------------- Name: John J. Cashin Title: Vice President 4 EX-99.2 8 dex992.txt EXHIBIT 99.2 Exhibit 99.2 ================================================================================ SALE AGREEMENT MASTER SECURITIZATION TERMS NUMBER 1000 between SLM EDUCATION CREDIT MANAGEMENT CORPORATION, as Seller and SLM EDUCATION CREDIT FUNDING LLC, as Purchaser Dated as of October 9, 2003 ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I TERMS Section 1.01. Terms ..................................................... 1 ARTICLE II DEFINITIONS Section 2.01. Definitions ............................................... 1 ARTICLE III SALE AND PURCHASE Section 3.01. Consummation of Sale and Purchase ......................... 4 Section 3.02. Settlement of the Initial Payment ......................... 4 Section 3.03. Special Programs .......................................... 4 ARTICLE IV CONDITIONS PRECEDENT TO SALE AND PURCHASE Section 4.01. Activities Prior to the Sale .............................. 4 Section 4.02. Continued Servicing ....................................... 4 Section 4.03. Bill of Sale/Loan Transmittal Summary Form ................ 4 Section 4.04. Endorsement ............................................... 5 Section 4.05. Officer's Certificate ..................................... 5 Section 4.06. Reserved .................................................. 5 Section 4.07. Power of Attorney ......................................... 5 ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER Section 5.01. General ................................................... 5 Section 5.02. Particular ................................................ 5 ARTICLE VI PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT Section 6.01. Purchase of Trust Student Loans; Reimbursement ............ 7 Section 6.02. Substitution .............................................. 8 i Page ---- ARTICLE VII OBLIGATION TO REMIT SUBSEQUENT PAYMENTS AND FORWARD COMMUNICATIONS Section 7.01. Obligation to Remit Subsequent Payments .................. 8 Section 7.02. Forward Communications ................................... 9 ARTICLE VIII CONTINUING OBLIGATION OF SELLER Section 8.01. Continuing Obligation of Seller .......................... 9 ARTICLE IX LIABILITY OF SELLER; INDEMNITIES Section 9.01. Liability of Seller; Indemnities ......................... 9 ARTICLE X MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF SELLER Section 10.01. Merger of Consolidation of, or Assumption of the Obligations of Seller .................................... 10 ARTICLE XI LIMITATION ON LIABILITY OF SELLER AND OTHERS Section 11.01. Limitation on Liability of Seller and Others ............. 11 ARTICLE XII EXPENSES Section 12.01. Expenses ................................................. 11 ARTICLE XIII SURVIVAL OF COVENANTS/SUPERSESSION Section 13.01. Survival of Covenants/Suppression ........................ 12 ARTICLE XIV COMMUNICATION AND NOTICE REQUIREMENTS Section 14.01. Communication and Notice Requirements .................... 12 ARTICLE XV FORM OF INSTRUMENTS Section 15.01. Form of Instruments ...................................... 12 ii Page ---- ARTICLE XVI AMENDMENT Section 16.01. Amendment ................................................ 13 ARTICLE XVII NONPETITION COVENANTS Section 17.01. Nonpetition Covenants .................................... 14 ARTICLE XVIII ASSIGNMENT Section 18.01. Assignment ............................................... 14 ARTICLE XIX GOVERNING LAW Section 19.01. Governing Law ........................................... 14 iii SALE AGREEMENT MASTER SECURITIZATION TERMS NUMBER 1000 These Sale Agreement Master Securitization Terms Number 1000 ("Master Sale Terms"), dated as of October 9, 2003, between SLM Education Credit Management Corporation, in its capacity as seller (in such capacity, the "Seller"), and SLM Education Credit Funding LLC, as purchaser (the "Purchaser"), shall be effective upon execution by the parties hereto. WHEREAS, the Seller is the owner of certain Student Loans; and WHEREAS, the Seller may desire to sell its interest in such loans from time to time and Purchaser may desire to purchase such loans from Seller. NOW, THEREFORE, in connection with the mutual promises contained herein, the parties hereto agree as follows: ARTICLE I TERMS Section 1.01. Terms. These Master Sale Terms establish the terms under which Seller may sell and Purchaser may purchase the Loans (and all obligations of the Borrowers thereunder) specified on each Sale Agreement (each, a "Sale Agreement") as the parties may execute from time to time pursuant to these Master Sale Terms. Each such Sale Agreement shall be substantially in the form of Attachment A hereto, incorporating by reference the terms of these Master Sale Terms, and shall be a separate agreement between the Seller and the Purchaser with respect to the Loans covered by the terms of such Sale Agreement for all purposes. If the terms of a Sale Agreement conflict with the terms of these Master Sale Terms, the terms of such Sale Agreement shall supersede and govern. ARTICLE II DEFINITIONS Section 2.01. Definitions. Capitalized terms used but not otherwise defined herein shall have the definitions set forth in Appendix A hereto. For purposes hereof: (a) "Bill of Sale" means that document executed by an authorized officer of the Seller which shall set forth the Loans offered by the Seller and accepted for purchase by the Purchaser and which shall sell, assign and convey to the Purchaser and its assignees all right, title and interest of the Seller in the Loans listed on the Bill of Sale and will certify that the 1 representations and warranties made by the Seller pursuant to Section 5.02 of these Master Sale Terms are true and correct. (b) "Borrower" means the obligor on a Loan. (c) [Reserved]. (d) "Cutoff Date" means August 18, 2003, and with respect to subsequent sales hereunder, a date agreed to by Seller and Purchaser to use in determining the Principal Balance and accrued interest to be capitalized for purposes of completing the Loan Transmittal Summary Form. (e) "Delinquent" means the period where any payment of principal or interest due on the Loan is overdue (after giving effect to all grace, forbearance and deferment periods). (f) "Eligible Loan" means a Loan offered for sale by Seller under the Sale Agreement which as of the Cutoff Date is current or no more Delinquent than permitted under the Sale Agreement in payment of principal or interest and which meets the following criteria as of the effective date of the Bill of Sale: (i) is a Student Loan; (ii) is owned by Seller and is fully disbursed; (iii) bears interest at a stated rate of not more than the maximum rate permitted under applicable law; (iv) is supported by the following documentation: (A) for each Loan: (1) loan application, and any supplement thereto, (2) original promissory note and any addendum thereto or the electronic records therefor, (3) any other document and/or record which Purchaser may be required to retain pursuant to the Program under which the Loan was originated and (B) for each Loan, if applicable: (1) payment history (or similar documentation) including (i) an indication of the Principal Balance and the date through which interest has been paid, each as of the Cutoff Date and (ii) an accounting of the allocation of all payments by Borrower or on Borrower's behalf to principal and interest on the Loan, 2 (2) documentation which supports periods of current or past deferment or past forbearance, (3) a collection history, if the Loan was ever in a delinquent status, including detailed summaries of contacts and including the addresses or telephone numbers used in contacting or attempting to contact Borrower and any endorser, (4) evidence of all requests for skip-tracing assistance and current address of Borrower, if located, (5) evidence of requests for pre-claims assistance, and evidence that the Borrower's school(s) has/have been notified, and (6) a record of any event resulting in a change to or confirmation of any data in the Loan file. (g) "Excess Distribution Certificate" means the certificate, substantially in the form of Exhibit A to the Trust Agreement. (h) "Initial Payment" means the dollar amount specified in the applicable Sale Agreement. (i) "Loan" means the Note or Notes offered for sale pursuant to the Sale Agreement and related documentation together with any guaranties and other rights relating thereto. (j) "Loan Transmittal Summary Forms" means the forms provided to Seller by Purchaser and completed by Seller which list, by Borrower, the Loans subject to the Bill of Sale and the outstanding Principal Balance and accrued interest thereof as of the Cutoff Date. (k) "Note" means the promissory note of the Borrower and any amendment thereto evidencing the Borrower's obligation. (l) "Principal Balance" means the outstanding principal amount of the Loan, plus accrued interest to be capitalized (if any). (m) "Purchase Price" means the Initial Payment and the Excess Distribution Certificate. 3 ARTICLE III SALE AND PURCHASE Section 3.01. Consummation of Sale and Purchase. The sale and purchase of Eligible Loans pursuant to a Sale Agreement shall be consummated upon Purchaser's receipt from the Seller of the Bill of Sale and the payment by Purchaser to Seller of the Initial Payment, and when consummated such sale and purchase shall be effective as of the date of the Bill of Sale. Seller and Purchaser shall use their best efforts to perform promptly their respective obligations pursuant to such Sale Agreement. Section 3.02. Settlement of the Initial Payment. Purchaser on the date of the Bill of Sale shall pay Seller the Initial Payment by wire transfer in immediately available funds to the account specified by Seller. Section 3.03. Special Programs. In consideration of the sale of the Eligible Loans under these Master Sale Terms and each Sale Agreement, Purchaser agrees to cause the Servicer to offer borrowers of Trust Student Loans all special programs whether or not in existence as of the date of any Sale Agreement generally offered to the obligors of comparable loans owned by Sallie Mae subject to the terms and conditions of Section 3.12 of the Servicing Agreement. The Seller is selling the Trust Student Loans to the Purchaser without regard to the effect of the special programs. The Seller shall remit to the Purchaser any amounts by which payments on the Trust Student Loans are reduced by the special payments as set forth in Section 3.12 of the Servicing Agreement. ARTICLE IV CONDITIONS PRECEDENT TO SALE AND PURCHASE Section 4.01. Activities Prior to the Sale. Following the execution of a Sale Agreement, Seller shall provide any assistance requested by Purchaser in determining that all required documentation on the Loans is present and correct. Section 4.02. Continued Servicing. Seller shall service, or cause to be serviced, all Loans until the date of the Bill of Sale. Section 4.03. Bill of Sale/Loan Transmittal Summary Form. Seller shall deliver to Purchaser: (a) A Bill of Sale executed by an authorized officer of the Seller covering Loans offered by the Seller and accepted by Purchaser as set forth thereon, selling, assigning and conveying to the Purchaser and its assignees all right, title and interest of the Seller, in each of the Loans (excluding any and all surety bonds relating to the Loans and including any Back-End Fees relating to the Loans), and stating that the representations and warranties made by Seller in Article V of these Master Sale Terms are true and correct on and as of the date of the Bill of Sale; and 4 (b) The Loan Transmittal Summary Form, attached to the Bill of Sale, identifying each of the Eligible Loans which is the subject of the Bill of Sale and setting forth the unpaid Principal Balance of each such Loan. Section 4.04. Endorsement. The Seller shall provide a blanket endorsement transferring the entire interest of the Seller in the Loans to the Trustee for the benefit of the Purchaser with the form of endorsement provided for in the Sale Agreement. At the direction of and in such form as Purchaser may designate, the Seller also agrees to individually endorse any Eligible Loan as Purchaser may request from time to time. Section 4.05. Officer's Certificate. Seller shall furnish to Purchaser, with each Bill of Sale provided in connection with each sale of Loans pursuant to these Master Sale Terms, an Officer's Certificate, dated as of the date of such Bill of Sale. Section 4.06. Reserved. Section 4.07. Power of Attorney. Seller hereby grants to the Trustee on behalf of the Purchaser an irrevocable power of attorney, which power of attorney is coupled with an interest, to individually endorse or cause to be individually endorsed in the name of the Seller any Eligible Loan to evidence the transfer of such Eligible Loan to the Trustee on behalf of the Purchaser and to transfer or to cause to be transferred physical possession of any Note from Sallie Mae or the Servicer to the Trustee or the Indenture Trustee or any other custodian on behalf of either of them. ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER Section 5.01. General. Seller represents and warrants to Purchaser that as of the date of each Sale Agreement and Bill of Sale; (a) The Seller is duly organized and existing under the laws of the State of Delaware; and (b) The Seller has all requisite power and authority to enter into and to perform the terms of these Master Sale Terms and each Sale Agreement. Section 5.02. Particular. Seller represents and warrants to Purchaser as to the Loans purchased by Purchaser under each Sale Agreement and each Bill of Sale executed pursuant to these Master Sale Terms: (a) Seller has good and marketable title to, and is the sole owner of, the Loans, free and clear of all security interests, liens, charges, claims, offsets, defenses, counterclaims or 5 encumbrances of any nature and no right of rescission, offsets, defenses, or counterclaims have been asserted or threatened with respect to the Loans; (b) This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Loans in favor of the Purchaser, which security interest is prior to all other security interests, liens, charges, claims, offsets, defenses, counterclaims or encumbrances, and is enforceable as such as against creditors of and purchasers from the Seller; (c) The Loans constitute "instruments" within the meaning of the applicable UCC; (d) The Loans are Eligible Loans and the description of the Loans set forth in the Sale Agreement and the Loan Transmittal Summary Form is true and correct; (e) The Seller is authorized to sell, assign, transfer and repurchase the Loans; and the sale, assignment and transfer of such Loans is or, in the case of a Loan repurchased by the Seller, will be made pursuant to and consistent with the laws and regulations under which the Seller operates, and will not violate any decree, judgment or order of any court or agency, or conflict with or result in a breach of any of the terms, conditions or provisions of any agreement or instrument to the Seller is a party or by which the Seller or its property is bound, or constitute a default (or an event which could constitute a default with the passage of time or notice or both) thereunder; (f) The Loans are each in full force and effect in accordance with their terms and are legal, valid and binding obligations of the respective Borrowers thereunder subject to no defenses (except the defense of infancy); (g) No consents and approvals are required by the terms of the Loans to the sale of the Loans hereunder to the Seller; (h) Each Loan has been duly made and serviced in accordance with the guidelines of one of the Programs under which the Loan was originated; (i) Any payments on the Loans received by the Seller which have been allocated to reduction of principal and interest on such Loans have been allocated on a simple interest basis; the information with respect to the Loans as of the Cutoff Date as stated on the Loan Transmittal Summary Form is true and correct; (j) Due diligence and reasonable care have been exercised in the making, administering, servicing and collecting of the Loans; (k) Each Loan has been duly made and serviced in accordance with the provisions of all applicable Federal and state laws; (l) No Loan is more than sixty (60) days Delinquent as of the Cutoff Date and no default, breach, violation or event permitting acceleration under the terms of any Loan has arisen; and neither the Seller nor any predecessor holder of any Loan has waived any of the foregoing other than as permitted by the Basic Documents; 6 (m) It is the intention of Seller and the Purchaser, and the Seller hereby warrants, that the transfer and assignment herein contemplated constitute a valid sale of the Loans from Seller to the Purchaser and that the beneficial interest in and title to such Loans not be part of the Seller's estate in the event of the bankruptcy of the Seller or the appointment of a receiver with respect to Seller; (n) The Seller has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Loans granted to the Trustee hereunder; (o) There is only one original executed copy of the promissory note evidencing each Loan or the electronic records evidencing the same. The Seller has in its possession a copy of the endorsement and Loan Transmittal Summary Form identifying the Notes that constitute or evidence the Loans. The Notes that constitute or evidence the Loans do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Trustee; (p) Other than the security interest granted to the Purchaser pursuant to this Agreement, the Seller has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Loans. The Seller has not authorized the filing of and is not aware of any financing statements against the Seller that include a description of collateral covering the Loans other than any financing statement relating to the security interest granted to the Purchaser hereunder or that has been terminated or released. The Seller is not aware of any judgment or tax lien filings against the Seller; and (q) No Borrower of any Loan as of the Cutoff Date is noted in the related Loan File as being currently involved in a bankruptcy proceeding. ARTICLE VI PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT Section 6.01. Purchase of Trust Student Loans; Reimbursement. Each party to this Agreement shall give notice to the other such parties and to the Servicer, the Administrator and Sallie Mae promptly, in writing, upon the discovery of any breach of Seller's representations and warranties made pursuant to Article V hereof which has a materially adverse effect on the interest of the Purchaser in any Trust Student Loan. In the event of such a material breach, Seller shall cure or repurchase any affected Trust Student Loan not later than 270 days following the date of discovery of such material breach. The Seller shall also remit as provided in Section 2.06 of the Administration Agreement on the date of purchase of any Trust Student Loan pursuant to this Article VI an amount equal to all interest amounts with respect to such Trust Student Loan. In consideration of the purchase of any such Trust Student Loan pursuant to this Article VI, the Seller shall remit the Purchase Amount in the manner specified in Section 2.06 of the Administration Agreement. 7 Section 6.02. Substitution. In lieu of repurchasing Trust Student Loans pursuant to this Article VI, the Seller may, at its option, substitute Eligible Loans or arrange for the substitution of Eligible Loans which are substantially similar on an aggregate basis as of the date of substitution to the Trust Student Loans for which they are being substituted with respect to the following characteristics: (i) status (i.e., in-school, grace, deferment, forbearance or repayment); (ii) Program type (i.e., Med Loans, Law Loans, MBA Loans or Signature Loans); (iii) school type; (iv) total return; (v) principal balance; and (vi) remaining term to maturity. In addition, each substituted Eligible Loan will comply, as of the date of substitution, with all of the representations and warranties made hereunder. In choosing Eligible Loans to be substituted pursuant to this Article VI, the Seller shall make a reasonable determination that the Eligible Loans to be substituted will not have a material adverse effect on the Noteholders. In the event that Seller elects to substitute Eligible Loans pursuant to this Article VI, the Seller will remit to the Administrator the amount of any shortfall between the Purchase Amount of the substituted Eligible Loans and the Purchase Amount of the Trust Student Loans for which they are being substituted. The Seller shall also remit to the Administrator an amount equal to all interest amounts with respect to the Trust Student Loans in the manner provided in Section 2.06 of the Administration Agreement. The sole remedy of the Purchaser, the Trustee, the Noteholders and the Certificateholders with respect to a breach by the Seller pursuant to Article V hereof shall be to require the Seller to purchase Trust Student Loans, to reimburse the Purchaser as provided above or to substitute Student Loans pursuant to this Article VI. Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the purchase of any Trust Student Loan or the reimbursement for any interest penalty pursuant to this Article VI. ARTICLE VII OBLIGATION TO REMIT SUBSEQUENT PAYMENTS AND FORWARD COMMUNICATIONS Section 7.01. Obligation to Remit Subsequent Payments. Any payment received by Seller with respect to amounts accrued after the Date of the Bill of Sale for any Loan sold to Purchaser, which payment is not reflected in the Loan Transmittal Summary Form, shall be 8 received by Seller in trust for the account of Purchaser and the Seller hereby disclaims any title to or interest in any such amounts. Within two (2) business days following the date of receipt, Seller shall remit to Purchaser an amount equal to any such payments along with a listing on a form provided by Purchaser identifying the Loans with respect to which such payments were made, the amount of each such payment and the date each such payment was received. Section 7.02. Forward Communications. Any written communication received at any time by Seller with respect to any Loan subject to any Sale Agreement shall be transmitted by Seller to Servicer within two (2) business days of receipt. Such communications shall include, but not be limited to, letters, notices of death or disability, notices of bankruptcy, forms requesting deferment of repayment or loan cancellation, and like documents. ARTICLE VIII CONTINUING OBLIGATION OF SELLER Section 8.01. Continuing Obligation of Seller. The Seller shall provide all reasonable assistance necessary for Purchaser to resolve account problems raised by any Borrower provided such account problems are attributable to or are alleged to be attributable to (a) an event occurring during the period Seller owned the Loan, or (b) a payment made or alleged to have been made to Seller. Further, the Seller agrees to execute any financing statements at the request of the Purchaser in order to reflect the Purchaser's interest in the Loans. ARTICLE IX LIABILITY OF SELLER; INDEMNITIES Section 9.01. Liability of Seller; Indemnities. The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Sale Agreement. (a) The Seller shall indemnify, defend and hold harmless the Purchaser and the Trustee in its individual capacity and their officers, directors, employees and agents from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated herein and in the other Basic Documents (except any such income taxes arising out of fees paid to the Trustee), including any sales, gross receipts, general corporation, tangible and intangible personal property, privilege or license taxes and costs and expenses in defending against the same. (b) The Seller shall indemnify, defend and hold harmless the Purchaser and the Trustee in its individual capacity and their officers, directors, employees and agents of the Purchaser and the Trustee from and against any and all costs, expenses, losses, claims, damages and liabilities arising out of, or imposed upon such Person through, the Seller's willful misfeasance, bad faith or gross negligence in the performance of its duties under the Sale 9 Agreement, or by reason of reckless disregard of its obligations and duties under the Sale Agreement. (c) The Seller shall be liable as primary obligor for, and shall indemnify, defend and hold harmless the Trustee in its individual capacity and its officers, directors, employees and agents from and against, all costs, expenses, losses, claims, damages, obligations and liabilities arising out of, incurred in connection with or relating to the Sale Agreement, the other Basic Documents, the acceptance or performance of the trusts and duties set forth herein and in the Sale Agreement or the action or the inaction of the Trustee hereunder, except to the extent that such cost, expense, loss, claim, damage, obligation or liability: (i) shall be due to the willful misfeasance, bad faith or negligence (except for errors in judgment) of the Trustee, (ii) shall arise from any breach by the Trustee of its covenants in its individual capacity under any of the Basic Documents; or (iii) shall arise from the breach by the Trustee of any of its representations or warranties in its individual capacity set forth in these Master Sale Terms or any Sale Agreement. In the event of any claim, action or proceeding for which indemnity will be sought pursuant to this paragraph, the Trustee's choice of legal counsel shall be subject to the approval of the Seller, which approval shall not be unreasonably withheld. Indemnification under this Section shall survive the resignation or removal of the Trustee and the termination of these Master Sale Terms and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Seller shall have made any indemnity payments pursuant to this Section and the Person to or for the benefit of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Seller, without interest. ARTICLE X MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS OF SELLER Section 10.01. Merger or Consolidation of, or Assumption of the Obligations of Seller. Any Person (a) into which the Seller may be merged or consolidated, (b) which may result from any merger or consolidation to which the Seller shall be a party or (c) which may succeed to the properties and assets of the Seller substantially as a whole, shall be the successor to the Seller without the execution or filing of any document or any further act by any of the parties to these Master Sale Terms; provided, however, that the Seller hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Person, if other than the Seller, executes an agreement of assumption to perform every obligation of the Seller under these Master Sale Terms, (ii) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 5 herein shall have been breached, (iii) the surviving Person, if other than the Seller, shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section and that all conditions precedent, if any, provided for in these Master Sale Terms relating to such transaction have been complied with, and that the Rating Agency Condition shall have been satisfied with 10 respect to such transaction, (iv) if the Seller is not the surviving entity, such transaction will not result in a material adverse Federal or state tax consequence to the Purchaser or the Noteholders or the Certificateholders and (v) if the Seller is not the surviving entity, the Seller shall have delivered to the Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Purchaser and the Trustee, respectively, in the Loans and reciting the details of such filings, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests. ARTICLE XI LIMITATION ON LIABILITY OF SELLER AND OTHERS Section 11.01. Limitation on Liability of Seller and Others. The Seller and any director or officer or employee or agent thereof may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder (provided that such reliance shall not limit in any way the Seller's obligations under Article V herein). The Seller shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under these Master Sale Terms or any Sale Agreement, and that in its opinion may involve it in any expense or liability. Except as provided herein, the repurchase (or substitution) and reimbursement obligations of Seller will constitute the sole remedy available to Purchaser for uncured breaches; provided, however, that the information with respect to the Loans listed on the Bill of Sale may be adjusted in the ordinary course of business subsequent to the date of the Bill of Sale and to the extent that the aggregate Principal Balance listed on the Bill of Sale is less than the aggregate Principal Balance stated on the Bill of Sale, Seller shall remit such amount to the Trustee for the benefit of the Purchaser. Such reconciliation payment shall be made from time to time but no less frequently than semi-annually. ARTICLE XII EXPENSES Section 12.01. Expenses. Except as otherwise provided herein, each party to these Master Sale Terms or any Sale Agreement shall pay its own expense incurred in connection with the preparation, execution and delivery of these Master Sale Terms or any Sale Agreement and the transactions contemplated herein or therein. 11 ARTICLE XIII SURVIVAL OF COVENANTS/SUPERSESSION Section 13.01. Survival of Covenants/Suppression. All covenants, agreements, representations and warranties made herein and in or pursuant to any Sale Agreements executed pursuant to these Master Sale Terms shall survive the consummation of the purchase of the Loans provided for in each Sale Agreement. All covenants, agreements, representations and warranties made or furnished pursuant hereto by or for the benefit of Seller shall bind and inure to the benefit of any successors or assigns of Purchaser and shall survive with respect to each Loan. Each Sale Agreement supersedes all previous agreements and understandings between Purchaser and Seller with respect to the subject matter thereof. A Sale Agreement may be changed, modified or discharged, and any rights or obligations hereunder may be waived, only by a written instrument signed by a duly authorized officer of the party against whom enforcement of any such waiver, change, modification or discharge is sought. The waiver by Purchaser of any covenant, agreement, representation or warranty required to be made or furnished by Seller or the waiver by Purchaser of any provision herein contained or contained in any Sale Agreement shall not be deemed to be a waiver of any breach of any other covenant, agreement, representation, warranty or provision herein contained or contained in any Sale Agreement, nor shall any waiver or any custom or practice which may evolve between the parties in the administration of the terms hereof or of any Sale Agreement, be construed to lessen the right of Purchaser to insist upon the performance by Seller in strict accordance with said terms. ARTICLE XIV COMMUNICATION AND NOTICE REQUIREMENTS Section 14.01. Communication and Notice Requirements. All communications, notices and approvals provided for hereunder shall be in writing and mailed or delivered to Seller or Purchaser, as the case may be, addressed as set forth in the Sale Agreement or at such other address as either party may hereafter designate by notice to the other party. Notice given in any such communication, mailed to Seller or Purchaser by appropriately addressed registered mail, shall be deemed to have been given on the day following the date of such mailing. ARTICLE XV FORM OF INSTRUMENTS Section 15.01. Form of Instruments. All instruments and documents delivered in connection with these Master Sale Terms and any Sale Agreement, and all proceedings to be taken in connection with these Master Sale Terms and any Sale Agreement and the transactions contemplated herein and therein, shall be in a form as set forth in the attachments hereto, and Purchaser shall have received copies of such documents as it or its counsel shall reasonably 12 request in connection therewith. Any instrument or document which is substantially in the same form as an Attachment hereto or a recital herein will be deemed to be satisfactory as to form. ARTICLE XVI AMENDMENT Section 16.01. Amendment. These Master Sale Terms and any Sale Agreement may be amended by the parties thereto without the consent of the related Noteholders for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of such Master Sale Terms and Sale Agreements or of modifying in any manner the rights of such Noteholders; provided that such action will not, in the opinion of counsel satisfactory to the related Indenture Trustees, materially and adversely affect the interest of any such Noteholder. In addition, these Master Sale Terms and any Sale Agreement may also be amended from time to time by the Seller and the Purchaser, with the consent of the Noteholders of Notes evidencing a majority of the Outstanding Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of these Master Sale Terms or any Sale Agreement or of modifying in any manner the rights of the Noteholders; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the time of, collections of payments with respect to Loans or distributions that shall be required to be made for the benefit of the Noteholders or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders of which are required to consent to any such amendment, without the consent of all outstanding Noteholders. Promptly after the execution of any such amendment or consent (or, in the case of the Rating Agencies, five Business Days prior thereto), the Trustee shall furnish written notification of the substance of such amendment or consent to the Indenture Trustee, and each of the Rating Agencies. It shall not be necessary for the consent of Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. Prior to the execution of any amendment to these Master Sale Terms, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that execution of such amendment is authorized or permitted by this Sale Agreement and the Opinion of Counsel referred to in Section 7.01(i) of the Administration Agreement. The Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's own rights, duties or immunities under this Agreement or otherwise. 13 ARTICLE XVII NONPETITION COVENANTS Section 17.01. Nonpetition Covenants. Notwithstanding any prior termination of these Master Sale Terms, the Seller shall not acquiesce, petition or otherwise invoke or cause the Purchaser to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Purchaser under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Purchaser or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Purchaser. Notwithstanding any prior termination of these Master Sale Terms, the Purchaser shall not acquiesce, petition or otherwise invoke or cause the Seller to invoke the process of commencing or sustaining a case against the Seller under any federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Seller or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Purchaser. ARTICLE XVIII ASSIGNMENT Section 18.01. Assignment. Seller hereby assigns its entire right, title and interest as purchaser under this Agreement and any Sale Agreement thereunder to the Purchaser as of the date hereof and acknowledges that the Purchaser will assign the same, together with the right, title and interest of the Purchaser and the Trustee hereunder, to the Indenture Trustee under the Indenture. ARTICLE XIX GOVERNING LAW Section 19.01. Governing Law. THESE MASTER SALE TERMS AND ANY SALE AGREEMENTS SHALL BE GOVERNED BY AND 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 SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 14 IN WITNESS WHEREOF, the parties hereto have caused this Sale Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT MANAGEMENT CORPORATION, as Seller By: /s/ J. LANCE FRANKE ----------------------------------------- Name: J. Lance Franke Title: Vice President SLM EDUCATION CREDIT FUNDING LLC, as Purchaser By: /s/ J. LANCE FRANKE ----------------------------------------- Name: J. Lance Franke Title: Vice President 15 Attachment A SALE AGREEMENT Dated as of October 9, 2003 SALE AGREEMENT NUMBER 1 SLM Education Credit Management Corporation (the "Seller") hereby offers for sale to SLM Education Credit Funding LLC (the "Purchaser") the entire right, title and interest of the Seller in the Loans described in the Bill of Sale and Loan Transmittal Summary Form incorporated herein and, to the extent indicated below, the Purchaser accepts the Seller's offer. In order to qualify as Eligible Loans, no payment of principal or interest shall be more than sixty (60) days Delinquent as of the Cutoff Date, which date shall be August 18, 2003. TERMS, CONDITIONS AND COVENANTS In consideration of the Purchase Price, the Seller hereby sells to the Purchaser the entire right, title and interest of the Seller in the Loans accepted for purchase, subject to all the terms and conditions of the Sale Agreement Master Securitization Terms Number 1000 ("Master Sale Terms") and amendments, each incorporated herein by reference, between the Seller and the Purchaser. The Initial Payment of the Loans shall equal $1,234,345,457 (equal to $1,342,237,933 (representing the sale price of the Notes less underwriters' commissions) less $3,124,915 (representing the Reserve Account Initial Deposit) less $102,811,061 (representing the Cash Capitalization Account Initial Deposit) less $1,956,500 (representing the upfront payment of the Interest Rate Cap Agreement)) and the Excess Distribution Certificate. This document shall constitute a Sale Agreement as referred to in the Master Sale Terms and, except as modified herein, each term used herein shall have the same meaning as in the Master Sale Terms. All references in the Master Sale Terms to Loans or Eligible Loans shall be deemed to refer to the Loans governed by this Sale Agreement. Seller hereby makes, as of the date hereof, all the representations and warranties contained in the Master Sale Terms and makes such representations and warranties with respect to the Loans governed by this Sale Agreement. The parties hereto intend that the transfer of Loans described in the Bill of Sale and Loan Transmittal Summary Form be, and be construed as, a valid sale of such Loans. However, in the event that notwithstanding the intentions of the parties, such transfer is deemed to be a transfer for security, then the Seller hereby grants to the Purchaser a first priority security interest in and to all Loans described in the Bill of Sale and Loan Transmittal Summary Form to secure a loan in an amount equal to the Purchase Price of such Loans. 1 IN WITNESS WHEREOF, the parties hereto have caused this Sale Agreement Number 1 to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT MANAGEMENT CORPORATION, as Seller By: /s/ J. LANCE FRANKE ----------------------------------------- Name: J. Lance Franke Title: Vice President SLM EDUCATION CREDIT FUNDING LLC, as Purchaser By: /s/ J. LANCE FRANKE ----------------------------------------- Name: J. Lance Franke Title: Vice President 2 SALE AGREEMENT NUMBER 1 BLANKET ENDORSEMENT DATED OCTOBER 9, 2003 SLM Education Credit Management Corporation (the "Seller"), by execution of this instrument, hereby endorses the attached promissory note which is one of the promissory notes (the "Notes") described in the Bill of Sale executed by the Seller in favor SLM Education Credit Funding LLC (the "Purchaser"). This endorsement is in blank, unrestricted form and without recourse except as provided in Article VI of the Master Sale Terms referred to in the Sale Agreement between the Seller and the Purchaser which covers this promissory note. This endorsement may be effected by attaching either this instrument or a facsimile hereof to each or any of the Notes. Notwithstanding the foregoing, the Seller agrees to individually endorse each Note in the form provided by Purchaser as Purchaser may from time to time require. THE SALE AND PURCHASE OF THE LOANS SHALL BE SUBJECT TO THE TERMS, CONDITIONS AND COVENANTS, INCLUDING THE BLANKET ENDORSEMENT, AS SET FORTH IN THE SALE AGREEMENT MASTER LOAN SECURITIZATION TERMS 1000. BY EXECUTION HEREOF, THE SELLER ACKNOWLEDGES THAT THE SELLER HAS READ, UNDERSTANDS AND AGREES TO BE BOUND BY ALL TERMS, CONDITIONS AND COVENANTS OF THE SALE AGREEMENT (" SALE AGREEMENT"). THE SALE AND PURCHASE SHALL BE CONSUMMATED UPON PURCHASER'S PAYMENT TO SELLER OF THE INITIAL PAYMENT AS DEFINED IN THE MASTER SALE TERMS AND, UNLESS OTHERWISE AGREED BY SELLER AND PURCHASER, SHALL BE EFFECTIVE AS OF THE DATE OF THE BILL OF SALE. 1 IN WITNESS WHEREOF, the parties hereto have caused this Blanket Endorsement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT MANAGEMENT CORPORATION, as Seller By: /s/ J. LANCE FRANKE --------------------------------------------- Name: J. Lance Franke Title: Vice President SLM EDUCATION CREDIT FUNDING LLC, as Purchaser By: /s/ J. LANCE FRANKE --------------------------------------------- Name: J. Lance Franke Title: Vice President 2 BILL OF SALE DATED OCTOBER 9, 2003 The undersigned SLM Education Credit Management Corporation (the "Seller") for value received and pursuant to the terms and conditions of Sale Agreement Number 1 (the "Sale Agreement") between Seller and SLM Education Credit Funding LLC (the "Purchaser") does hereby sell, assign and convey to the Purchaser and its assignees all right, title and interest of, in the Loans (excluding any and all surety bonds relating to the Loans and including any Back-End Fees relating to the Loans) identified herein which the Purchaser has accepted for purchase. The portfolio accepted for purchase by the Purchaser and the effective date of sale and purchase are described below and the individual Loans are listed on the Schedule A attached hereto. The Seller hereby makes the representations and warranties set forth in Article V of the Sale Agreement Master Securitization Terms Number 1000 incorporated by reference in the Sale Agreement. LISTING OF LOANS ON FOLLOWING PAGE 1 Table to be provided soon 2 ADDITIONAL LOAN CRITERIA .. Not in claims status, not previously rejected .. Not in litigation .. Last disbursement is greater than 120 days from cutoff date .. Loan is not swap-pending *Based upon Seller's estimated calculations, which may be adjusted upward or downward based upon Purchaser's reconciliation. **Includes interest to be capitalized. 3 IN WITNESS WHEREOF, the parties hereto have caused this Bill of Sale to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written. SLM EDUCATION CREDIT MANAGEMENT CORPORATION, as Seller By: /s/ J. LANCE FRANKE ------------------------------------------ Name: J. Lance Franke Title: Vice President SLM EDUCATION CREDIT FUNDING LLC, as Purchaser By: /s/ J. LANCE FRANKE ------------------------------------------ Name: J. Lance Franke Title: Vice President 4 EX-99.3 9 dex993.txt EXHIBIT 99.3 Exhibit 99.3 ================================================================================ ADMINISTRATION AGREEMENT among SALLIE MAE SERVICING L.P., as Servicer SLM EDUCATION CREDIT FUNDING LLC, as Depositor SALLIE MAE, INC., as Administrator JPMORGAN CHASE BANK, as Indenture Trustee and SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Issuer Dated as of October 1, 2003 ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I Section 1.01. Definitions and Usage...........................................1 ARTICLE II Section 2.01. Duties with Respect to the Indenture............................2 Section 2.02. Duties with Respect to the Issuer...............................3 Section 2.03. Establishment of Trust Accounts.................................4 Section 2.04. Collections.....................................................7 Section 2.05. Application of Collections......................................7 Section 2.06. Additional Deposits.............................................7 Section 2.07. Distributions...................................................8 Section 2.08. Cash Capitalization Account and Reserve Account................13 Section 2.09. Statements to Certificateholders and Noteholders...............15 Section 2.10. Non-Ministerial Matters........................................17 Section 2.11. Exceptions.....................................................17 Section 2.12. Compensation...................................................17 Section 2.13. Servicer and Administrator Expenses............................17 ARTICLE III Section 3.01. Administrator's Certificate; Servicer's Report.................18 Section 3.02. Annual Statement as to Compliance; Notice of Default; Financial Statements.................................18 Section 3.03. Annual Independent Certified Public Accountants' Reports.......19 ARTICLE IV Section 4.01. Representations of Administrator...............................20 Section 4.02. Liability of Administrator; Indemnities........................21 Section 4.03. Merger or Consolidation of, or Assumption of the Obligations of, Administrator.................................22 Section 4.04. Limitation on Liability of Depositor, Administrator and Others....................................................23 Section 4.05. Administrator May Own Certificates or Notes....................24 Section 4.06. Sallie Mae, Inc. Not to Resign as Administrator................24 ARTICLE V Section 5.01. Administrator Default..........................................24 Section 5.02. Appointment of Successor.......................................25 Section 5.03. Notification to Noteholders and Certificateholders.............26 Section 5.04. Waiver of Past Defaults........................................26 i Page ---- ARTICLE VI Section 6.01. Termination....................................................26 ARTICLE VII Section 7.01. Protection of Interests in Trust...............................27 ARTICLE VIII Section 8.01. Independence of the Administrator..............................29 Section 8.02. No Joint Venture...............................................30 Section 8.03. Other Activities of Administrator..............................30 Section 8.04. Powers of Attorney.............................................30 Section 8.05. Amendment......................................................30 Section 8.06. Assignment.....................................................31 Section 8.07. Limitations on Rights of Others................................31 Section 8.08. Assignment to Indenture Trustee................................31 Section 8.09. Nonpetition Covenants..........................................31 Section 8.10. Limitation of Liability of Trustee and Indenture Trustee.......32 Section 8.11. Governing Law..................................................32 Section 8.12. Headings.......................................................32 Section 8.13. Counterparts...................................................32 Section 8.14. Severability...................................................33 Appendix ii ADMINISTRATION AGREEMENT This ADMINISTRATION AGREEMENT, dated as of October 1, 2003, is among SALLIE MAE, INC., as administrator (the "Administrator"), SALLIE MAE SERVICING L.P., as servicer (the "Servicer"), SLM EDUCATION CREDIT FUNDING LLC, as depositor (the "Depositor"), JPMORGAN CHASE BANK, a New York banking corporation, not in its individual capacity but solely as indenture trustee (the "Indenture Trustee"), and SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as issuer (the "Issuer"). WITNESSETH: WHEREAS, the Issuer is issuing six classes of Student Loan-Backed Notes (collectively, the "Notes") pursuant to the Indenture, dated as of October 1, 2003 (the "Indenture"), between the Issuer and the Indenture Trustee and one class of Student Loan-Backed Certificates (the "Certificates") pursuant to the Trust Agreement, dated as of October 1, 2003 (the "Trust Agreement"), among the Depositor, the Trustee and the Indenture Trustee; WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Notes and the Certificates, including the Servicing Agreement, the Depositor Sale Agreement, the Swap Agreements, the Interest Rate Cap Agreement and the Indenture; WHEREAS, pursuant to certain Basic Documents, the Issuer and the Trustee are required to perform certain duties in connection with (a) the Notes and the Collateral therefor pledged pursuant to the Indenture and (b) the Certificates; WHEREAS, the Issuer and the Trustee desire to have the Administrator and the Servicer perform certain of the duties of the Issuer and the Trustee referred to in the preceding clause, and to provide such additional services consistent with the terms of this Agreement and the Basic Documents as the Issuer and the Trustee may from time to time request; and WHEREAS, the Administrator and the Servicer have the capacity to provide the services required hereby and are willing to perform such services for the Issuer and the Trustee on the terms set forth herein. NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows: ARTICLE I 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 and Appendix A-2 hereto, which also contains rules as to usage that shall be applicable herein. 1 ARTICLE II Section 2.01. Duties with Respect to the Indenture. The Administrator agrees to consult with the Trustee regarding the duties of the Issuer under the Indenture and the Depository Agreements. The Administrator shall monitor the performance of the Issuer and shall advise the Trustee when action is necessary to comply with the Issuer's duties under the Indenture and the Depository Agreements. The Administrator shall prepare for execution by the Issuer or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer to prepare, file or deliver pursuant to the Indenture and the Depository Agreements. In furtherance of the foregoing, the Administrator shall take the actions with respect to the following matters that it is the duty of the Issuer or the Indenture Trustee to take pursuant to the Indenture (references being to Sections of the Indenture): (a) preparing or obtaining the documents and instruments required for authentication of the Notes and delivering the same to the Indenture Trustee (Section 2.02); (b) preparing, obtaining or filing the instruments, opinions and certificates and other documents required for the release of collateral (Section 2.09); (c) obtaining and preserving the Issuer's qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument and agreement included in the Indenture Trust Estate (Section 3.04); (d) preparing all supplements, amendments, financing statements, continuation statements, instruments of further assurance and other instruments, in accordance with Section 3.05 of the Indenture, necessary to protect the Indenture Trust Estate (Section 3.05); (e) the delivery by the Issuer of the Opinion of Counsel on the Closing Date and the annual delivery of Opinions of Counsel, in accordance with Section 3.06 of the Indenture, as to the Indenture Trust Estate, and the annual delivery of the Officers' Certificate of the Issuer and certain other statements, in accordance with Section 3.09 of the Indenture, as to compliance with the Indenture (Sections 3.06 and 3.09); (f) in the event of a Servicer Default, the taking of all reasonable steps available to enforce the Issuer's rights under the Basic Documents in respect of such Servicer Default (Section 3.07(d)); (g) the preparation and obtaining of documents and instruments required for the release of the Issuer from its obligations under the Indenture (Section 3.10); (h) monitoring the Issuer's obligations as to the satisfaction and discharge of the Indenture and preparation of an Officers' Certificate of the Issuer and obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.01); 2 (i) sale of the Indenture Trust Estate in a commercially reasonable manner if an Event of Default has occurred and is continuing (Section 5.04) or an Insolvency Event with respect to the Depositor has occurred and is continuing (Section 6.05(b)); (j) preparing and, after execution by the Issuer, filing with the Commission, any applicable State agencies and the Indenture Trustee of documents required to be filed on a periodic basis with, and summaries thereof as may be required by rules and regulations prescribed by, the Commission and any applicable State agencies (Section 7.03); (k) the opening of one or more accounts in the Issuer's name, the preparation of Issuer Orders, Officers' Certificates of the Issuer and Opinions of Counsel and all other actions necessary with respect to investment and reinvestment of funds in the Trust Accounts (Sections 8.02 and 8.03); (l) the preparation of an Issuer Request and Officers' Certificate of the Issuer and the obtaining of an Opinion of Counsel and Independent Certificates, if necessary, for the release of the Indenture Trust Estate (Sections 8.04 and 8.05); (m) the preparation of Issuer Orders and the obtaining of Opinions of Counsel with respect to the execution of supplemental indentures (Sections 9.01, 9.02 and 9.03); (n) the preparation of or obtaining of the documents and instruments required for the execution and authentication of new Notes conforming to any supplemental indenture and the delivery of the same to the Trustee and the Indenture Trustee, respectively (Section 9.06); (o) the preparation of all Officers' Certificates of the Issuer, Opinions of Counsel and Independent Certificates with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.01(a)); (p) the preparation and delivery of Officers' Certificates of the Issuer and the obtaining of Independent Certificates, if necessary, for the release of property from the lien of the Indenture (Section 11.01(b)); (q) the preparation and delivery to Noteholders and the Indenture Trustee of any agreements with respect to alternate payment and notice provisions (Section 11.06); (r) the recording of the Indenture, if applicable (Section 11.15); (s) engaging or terminating any Broker-Dealers and taking other actions with respect to the Auction Rate Procedures (Appendix A-2); (t) approving persons to serve as a Broker-Dealer under the Broker-Dealer Agreements, and providing all such Broker-Dealer Agreements to the Indenture Trustee and the Auction Agent, as set forth in the Auction Rate Note Procedures (Appendix A-2 to the Indenture); 3 (u) the undertaking of all obligations required to be performed by the Administrator, and to act on behalf of the Trust in fulfilling all duties of the Trust, as set forth in the Auction Rate Note Procedures (Appendix A-2 to the Indenture); (v) the undertaking of all obligations required to be performed by the Administrator, including, without limitation, preparing and delivering all notices, communications, information and calculations, under any Swap Agreement or the Cap Agreement; (w) calculating prior to the fifth Business Day of each month, the ARS Student Loan Rate and notifying the Auction Agent, the Indenture Trustee and the Broker-Dealers promptly following the calculation date; (x) on the Closing Date, directing the Trustee to enter into the Interest Rate Cap Agreement (not in its individual capacity, but solely on behalf of the Trust) with the Interest Rate Cap Counterparty; (y) calculating the Carry-over Amount, if any, for each class of Auction Rate Notes and notifying each Auction Rate Noteholder, the Auction Agent and the Trust at least four Business Days prior to the related Auction Rate Distribution Date; (z) calculating on each Quarterly Distribution Date, as applicable: the Principal Distribution Amount and the applicable Specified Reserve Account Balance; (aa) calculating on or before each Distribution Date, as applicable, any amounts to be deposited in, or withdrawn from, each Trust Account; and (bb) prior to each Quarterly Distribution Date, calculating the ARS Student Loan Rate applicable for such date. Section 2.02. Duties with Respect to the Issuer. (a) In addition to the duties of the Administrator set forth above and in the other Basic Documents, the Administrator shall perform such calculations and shall prepare for execution by the Issuer or the Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuer or the Trustee to prepare, file or deliver pursuant to the Basic Documents, and at the request of the Trustee shall take all appropriate action that it is the duty of the Issuer to take pursuant to the Basic Documents. Subject to Section 8.01, and in accordance with the directions of the Trustee, the Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Basic Documents) as are not covered by any of the foregoing provisions and as are expressly requested by the Trustee and are reasonably within the capability of the Administrator. (b) The Administrator shall be responsible for performance of the duties of the Trustee set forth in Sections 5.04(a), (b), (c) and (d) of the Trust Agreement with respect to, among other things, accounting and reports to Certificateholders; provided, however, that the 4 Trustee shall retain responsibility for the distribution of the Schedule K-1's necessary to enable each Certificateholder to prepare its Federal and state income tax returns. (c) The Administrator shall perform the duties of the Administrator specified in Section 10.02 of the Trust Agreement required to be performed in connection with the resignation or removal of the Trustee, and any other duties expressly required to be performed by the Administrator under the Trust Agreement and the other Basic Documents. (d) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions with or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be, in the Administrator's opinion, no less favorable to the Issuer than would be available from unaffiliated parties. (e) The Administrator shall perform the notice obligations in the event of default by the Swap Counterparties or the Cap Counterparty specified in the related Swap Agreements and Interest Rate Cap Agreement, respectively. The Administrator shall also provide written notice to the Rating Agencies in the event that a Swap Counterparty's rating is withdrawn, downgraded below "Aa3" by Moody's, "A+" by S&P or "A-" by Fitch or put on watch for downgrade at a time when the related Swap Counterparty's rating is "Aa3" by Moody's, "A+" by S&P or "A-" by Fitch. Section 2.03. Establishment of Trust Accounts. (a) (i) The Administrator, for the benefit of the Issuer, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Collection Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Issuer. The Collection Account will initially be established as a segregated trust account in the name of the Indenture Trustee with the corporate trust department of JPMorgan Chase Bank. (ii) The Administrator, for the benefit of the Issuer, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Reserve Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Issuer. The Reserve Account will initially be established as a segregated trust account in the name of the Indenture Trustee with the corporate trust department of JPMorgan Chase Bank. (iii) The Administrator, for the benefit of the Issuer, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Cash Capitalization Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Issuer. The Cash Capitalization Account will initially be established as a segregated trust account in the name of the Indenture Trustee with the corporate trust department of JPMorgan Chase Bank. 5 (iv) The Administrator, for the benefit of the Issuer, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Principal Distribution Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Issuer. The Principal Distribution Account will initially be established as a segregated trust account in the name of the Indenture Trustee with the corporate trust department of JPMorgan Chase Bank. (v) The Administrator, for the benefit of the Issuer, shall establish and maintain in the name of the Indenture Trustee an Eligible Deposit Account (the "Future Distribution Account"), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Issuer. The Future Distribution Account will initially be established as a segregated trust account in the name of the Indenture Trustee with the corporate trust department of JPMorgan Chase Bank. (b) Funds on deposit in the Collection Account, the Reserve Account, the Cash Capitalization Account and the Future Distribution Account (collectively, the "Trust Accounts") shall be invested by the Indenture Trustee (or any custodian or designated agent with respect to any amounts on deposit in such accounts) in Eligible Investments pursuant to written instructions by the Administrator; provided, however, it is understood and agreed that the Indenture Trustee shall not be liable for the selection of, or any loss arising from such investment in, Eligible Investments. All such Eligible Investments shall be held by (or by any custodian on behalf of) the Indenture Trustee for the benefit of the Issuer; provided, that on the Business Day preceding each Distribution Date all interest and other investment income (net of losses and investment expenses) on funds on deposit therein shall be deposited into the Collection Account and shall be deemed to constitute a portion of the Available Funds for such Distribution Date. Other than as described in the following proviso or as otherwise permitted by the Rating Agencies, funds on deposit in the Trust Accounts shall be invested in Eligible Investments that will mature so that such funds will be available at the close of business on the Business Day preceding the following Monthly Servicing Payment Date (to the extent necessary to pay the Primary Servicing Fee payable on such date) or Distribution Date; provided, however, that funds on deposit in Trust Accounts may be invested in Eligible Investments of the Indenture Trustee which may mature so that such funds will be available on such Monthly Servicing Payment Date or Distribution Date. (c) (i) The Issuer has pledged to the Indenture Trustee all of their respective right, title and interest in all funds on deposit from time to time in the Trust Accounts and in all proceeds thereof (including all income thereon) and all such funds, investments, proceeds and income shall be part of the Trust Estate. Subject to the Administrator's power to instruct the Indenture Trustee pursuant to clause (b) above and paragraph (c)(iii) below, the Trust Accounts shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Noteholders and the Issuer. If, at any time, any of the Trust Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee (or the Administrator on its behalf) agrees, by its acceptance hereto, that it shall within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which each Rating Agency may consent) establish a new Trust Account as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Trust Account. In connection with the foregoing, the Administrator agrees that, in the event that any of the Trust Accounts are not accounts with the Indenture Trustee, the Administrator shall 6 notify the Indenture Trustee in writing promptly upon any of such Trust Accounts ceasing to be an Eligible Deposit Account. (ii) With respect to the Trust Account Property, the Indenture Trustee agrees, by its acceptance hereof, that: (A) any Trust Account Property that is held in deposit accounts shall be held solely in Eligible Deposit Accounts, subject to the last sentence of Section 2.03(c)(i) and, subject to Section 2.03(b), each such Eligible Deposit Account shall be subject to the exclusive custody and control of the Indenture Trustee, and the Indenture Trustee shall have sole signature authority with respect thereto; (B) any Trust Account Property that constitutes Physical Property shall be Delivered to the Indenture Trustee in accordance with paragraph (a) of the definition of "Delivery" and shall be held, pending maturity or disposition, solely by the Indenture Trustee or a financial intermediary (as such term is defined in Section 8-313(4) of the UCC) acting solely for the Indenture Trustee; (C) any Trust Account Property that is a book-entry security held through the Federal Reserve System pursuant to Federal book-entry regulations shall be Delivered in accordance with paragraph (b) of the definition of "Delivery" and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continuous book-entry registration of such Trust Account Property as described in such paragraph; and (D) any Trust Account Property that is an "uncertificated security" under Article 8 of the UCC and that is not governed by clause (C) above shall be Delivered to the Indenture Trustee in accordance with paragraph (c) of the definition of "Delivery" and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued registration of the Indenture Trustee's (or its nominee's) ownership of such security. (iii) The Administrator shall have the power, revocable for cause or upon the occurrence and during the continuance of an Administrator Default by the Indenture Trustee or by the Trustee with the consent of the Indenture Trustee, to instruct the Indenture Trustee to make withdrawals and payments from the Trust Accounts for the purpose of permitting the Servicer, the Administrator or the Trustee to carry out its respective duties hereunder or permitting the Indenture Trustee to carry out its duties under the Indenture. Section 2.04. Collections. The Servicer shall remit within two Business Days of receipt thereof to the Collection Account all payments by or on behalf of the Obligors with respect to the Trust Student Loans (other than Purchased Student Loans), and all Recoveries, as collected 7 during the Collection Period. Notwithstanding the foregoing, for so long as no Administrator Default shall have occurred and be continuing, the Servicer and the Trustee shall remit such collections within two Business Days of receipt thereof to the Administrator, and the Administrator need not deposit such collections into the Collection Account until one Business Day immediately prior to the next following Monthly Servicing Payment Date together with interest on such amounts (less Servicing Fees paid during such period) calculated on a daily basis from the first day of the month following receipt thereof by the Administrator through the last day of the related Collection Period at a rate not less than the Federal Funds Rate less 0.20%. In the event that the foregoing condition for ceasing daily remittances shall no longer be satisfied, then the Administrator shall deposit all collections held by it into the Collection Account within two Business Days thereof. Section 2.05. Application of Collections. (a) With respect to each Trust Student Loan, all collections with respect thereto for each Collection Period shall be applied to interest and principal on such Trust Student Loan by the Servicer in accordance with its customary practice. (b) All Recoveries shall be applied to the related Trust Student Loan. Section 2.06. Additional Deposits. (a) The Servicer shall deposit or cause to be deposited in the Collection Account the aggregate purchase price with respect to Purchased Student Loans as determined pursuant to Section 3.05 of the Servicing Agreement and all other amounts to be paid by the Servicer under Section 3.05 of the Servicing Agreement when such amounts are due, and the Depositor shall deposit or cause to be deposited in the Collection Account the aggregate Purchase Amount with respect to Purchased Student Loans and all other amounts to be paid by the Depositor under Article VI of the Depositor Sale Agreement when such amounts are due. (b) Notwithstanding anything to the contrary set forth in clause (a) above, if daily deposits to the Collection Account are not required pursuant to Section 2.04, the Servicer shall pay the amounts referred to in clause (a) above that would otherwise be deposited into the Collection Account to the Administrator. The Administrator shall not be required to deposit such amounts into the Collection Account until the Business Day preceding each Quarterly Distribution Date; provided, however, that (1) on or before the Business Day preceding each Monthly Servicing Payment Date that is not a Quarterly Distribution Date, the Administrator shall deposit into the Collection Account that portion of such amounts received by it that is equal to the Primary Servicing Fee payable on such date and (2) the Administrator shall also deposit into the Collection Account (a) on or before the fifteenth calendar day of each month, an amount sufficient to make the allocations described under Section 2.07(e) and (b) on or before the Business Day preceding each Distribution Date that is not a Quarterly Distribution Date any amounts required to make distributions on such Distribution Date not previously deposited pursuant to clause (a) above, in each case, to the extent it has collected such amounts during the related Collection Period; and provided, further, that the Administrator shall also deposit into the Collection Account on such date interest on such amounts (less Servicing Fees paid during such period) calculated on a daily basis from the first day of the month following receipt thereof by 8 the Administrator through the last day of the related Collection Period at a rate equal to the Federal Funds Rate less 0.20%. (c) The Administrator shall deposit all payments received by the Issuer from the Swap Counterparties and Cap Counterparty during the Collection Period into the Collection Account. Section 2.07. Distributions. (a) On each Determination Date, the Administrator shall calculate all amounts required to determine the amounts to be deposited in the Collection Account from the Cash Capitalization Account and the Reserve Account and the amounts to be distributed therefrom on the related Distribution Date. On or before the Business Day immediately preceding each Distribution Date that is not a Quarterly Distribution Date, the Administrator shall calculate all amounts required to be deposited in the Collection Account from the Reserve Account and the Cash Capitalization Account and the amount to be distributed therefrom on the related Distribution Date. On or before the Business Day immediately preceding each Distribution Date, the Administrator shall calculate any amounts to be withdrawn from the Future Distribution Account with respect to each applicable entity. On the fifth Business Day preceding each Monthly Servicing Payment Date that is not a Distribution Date, the Administrator shall calculate all amounts required to determine the amounts to be deposited in the Collection Account from the Cash Capitalization Account and the Reserve Account and the amounts to be distributed therefrom on the related Monthly Servicing Payment Date. (b) The Administrator shall instruct the Indenture Trustee in writing no later than the second Business Day preceding each Monthly Servicing Payment Date that is not a Quarterly Distribution Date (based on the information contained in the Administrator's Certificate and the related Servicer's Report delivered pursuant to Section 3.01 (a) and (b)) to distribute to the Servicer, by 1.00 p.m. (New York time) on such Monthly Servicing Payment Date, from and to the extent of funds on deposit in the Future Distribution Account (with respect to funds allocated to the Servicer) and, if amounts on deposit therein are insufficient, from Available Funds on deposit in the Collection Account, the Primary Servicing Fee due with respect to the preceding calendar month, and the Indenture Trustee shall comply with such instructions. (c) The Administrator shall instruct the Indenture Trustee in writing no later than the second Business Day preceding each Quarterly Distribution Date (based on the information contained in the Administrator's Certificate and the related Servicer's Report delivered pursuant to Section 3.01(a) and 3.01(c)) to make the following deposits and distributions with respect to Notes that have a Distribution Date on that Quarterly Distribution Date, and in the case of a Quarterly Distribution Date that is not an Auction Rate Distribution Date for one or more classes of the Auction Rate Notes, allocations to the Future Distribution Account with respect to those Auction Rate Notes (for principal and Carry-over Amounts), to the Persons or to the account specified below by 1:00 p.m. (New York time) on such Quarterly Distribution Date (to the extent that funds are not required to be distributed pursuant to Section 5.04(b) of the Indenture), to the extent of the amount of Available Funds in the Collection Account plus amounts transferred to the Collection Account pursuant to Section 2.08 of this Agreement, and, as applicable, amounts 9 on deposit in the Future Distribution Account, in the following order of priority, and the Indenture Trustee shall comply with such instructions: (i) to the Servicer, the Primary Servicing Fee due on such Distribution Date; (ii) to the Administrator, the Administration Fee due on such Distribution Date, plus any unpaid Administration Fees from previous Distribution Dates; (iii) pro rata, to the Auction Agent any Auction Agent Fees and to the Broker-Dealers, any Broker-Dealer Fees; (iv) to the Swap Counterparties, any Swap Payment payable by the Issuer to each Swap Counterparty under its Swap Agreement for such Distribution Date; (v) pro rata, based on the aggregate principal balance of the Notes and the amount of any Swap Termination Payment due and payable by the Issuer to a Swap Counterparty under this clause (v): (A) to the Class A Noteholders, the Class A Noteholders' Interest Distribution Amount; and (B) to the Swap Counterparties, the amount of any Swap Termination Payment 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 the Class A Noteholders' Interest Distribution Amount as of such Distribution Date, such amounts shall be applied to pay the portion, if any, of any Swap Termination Payment referred to above remaining unpaid; (vi) to the Principal Distribution Account, the First Priority Principal Distribution Amount, if any; (vii) to the Class B Noteholders, the Class B Noteholders' Interest Distribution Amount; (viii) to the Principal Distribution Account, the Second Priority Principal Distribution Amount, if any; (ix) to the Class C Noteholders, the Class C Noteholders' Interest Distribution Amount; (x) to the Principal Distribution Account, the Third Priority Principal Distribution Amount, if any; (xi) to the Reserve Account, the amount required to reinstate the amount in the Reserve Account up to the Specified Reserve Account Balance; 10 (xii) to the Principal Distribution Account, the Regular Principal Distribution Amount, if any; (xiii) to the Servicer, all Carryover Servicing Fees, if any; (xiv) to the Auction Rate Noteholders, any Carry-over Amounts due to the Auction Rate Notes; (xv) to each Swap Counterparty, the amount of any Swap Termination Payments owed by the Issuer to that Swap Counterparty under its Swap Agreement and not payable in clause (v) above; (xvi) to the Principal Distribution Account, the Additional Principal Distribution Amount, if any; and (xvii) to the Certificateholders, any remaining funds. (d) The Administrator shall instruct the Indenture Trustee to make the following distributions and allocations from the Principal Distribution Account on each Quarterly Distribution Date: (i) Principal payable to a class of Auction Rate Notes will be allocated to such class of Auction Rate Notes on a Quarterly Distribution Date that is not an Auction Rate Distribution Date and deposited in the Future Distribution Account and then paid to the applicable class of Auction Rate Notes on the first Auction Rate Distribution Date for such class after the Quarterly Distribution Date on which principal was allocated to such class. (ii) With respect to each Quarterly Distribution Date (x) before the Stepdown Date or (y) with respect to which a Trigger Event is in effect, to pay Holders of the Class A Notes 100% of the Principal Distribution Amount for such Quarterly Distribution Date, such amount to be paid sequentially first, to the Class A-1 Notes, second, to the Class A-2 Notes, and third, pro rata, to the Class A-3 Notes, Class A-4 Notes and Class A-5 Notes, until the Class A Note Balance has been reduced to zero. Once the Class A Note Balance has been reduced to zero, to pay the Holders of the Class B Notes 100% of the Principal Distribution Amount for that Quarterly Distribution Date until the Class B Note Balance has been reduced to zero. Once the Class B Note Balance has been reduced to zero, to pay the Holders of the Class C Notes 100% of the Principal Distribution Amount for that Quarterly Distribution Date until the Class C Note Balance has been reduced to zero. (iii) On each Quarterly Distribution Date (x) on or after the Stepdown Date and (y) as long as a Trigger Event and is not in effect, the Indenture Trustee shall pay the Holders of all Classes of Notes (or with respect to the Auction Rate Notes, allocate) payments of principal, in the order of priority and in the amounts set forth below to the extent funds are available in the Principal Distribution Account: 11 (A) an amount up to the Class A Noteholders' Principal Distribution Amount sequentially first, to the Class A-1 Notes, second, to the Class A-2 Notes, and third, pro rata, to the Class A-3 Notes, Class A-4 Notes and Class A-5 Notes, until the Class A Note Balances have been reduced to zero; provided, however, that on any Distribution Date on which the Class A Note Parity Trigger is in effect, the Indenture Trustee shall distribute (or with respect to the Auction Rate Notes, allocate) the Class A Noteholders' Principal Distribution Amount, pro rata, to the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes (in lots of $50,000), the Class A-4 Notes (in lots of $50,000) and the Class A-5 Notes (in lots of $50,000) based on their Outstanding Amount, until the Class A Note Balances have been reduced to zero; (B) amounts remaining in the Principal Distribution Account up to the related Class B Noteholders' Principal Distribution Amount to the Class B Notes, until the Class B Note Balance has been reduced to zero; (C) amounts remaining in the Principal Distribution Account up to the related Class C Noteholders Principal Distribution Amount to the Class C Notes, until the Class C Note Balance thereof has been reduced to zero; and (D) amounts remaining in the Principal Distribution Amount sequentially, to the Class C Notes until the Class C Note Balance has been reduced to zero, then to the Class B Notes until the Class B Note Balance has been reduced to zero, then to the Class A Notes (or, with respect to the Auction Rate Notes, be allocated) until the Class A Note Balance has been reduced to zero. (e) On or prior to the fifth business day of each month, the Administrator shall instruct the Indenture Trustee to make the following allocations on or before the fifteenth calendar day of the same month with funds on deposit in the Collection Account in the following order of priority: (i) deposit into the Future Distribution Account for the Servicer and the Administrator, pro rata, the amount of the Servicing Fee and Administration Fee that will accrue for the related calendar month plus any previously accrued and unpaid or set aside Servicing Fee and Administration Fee, (ii) deposit into the Future Distribution Account, pro rata, for the Auction Agent and the Broker-Dealers an amount equal to their Auction Agent Fees and Broker-Dealer Fees, respectively, expected to be payable from the calendar day after the current calendar month's Quarterly Distribution Date or Monthly Servicing Payment Date through the following month's Quarterly Distribution Date or Monthly Servicing 12 Payment Date, as the case may be, plus previously accrued and unpaid or set aside Auction Agent Fees and Broker-Dealer Fees, (iii) deposit into the Future Distribution Account for the Swap Counterparties an amount equal to Swap Payments to each Swap Counterparty expected to accrue on the Class A Notes from the calendar day after the current calendar month's Quarterly Distribution Date or Monthly Servicing Payment Date through the following month's Quarterly Distribution Date or Monthly Servicing Payment Date, as the case may be, plus previously accrued and unpaid or set aside Swap Payments, net of payments expected to accrue for this period from the related Swap Counterparty, and (iv) deposit into the Future Distribution Account, pro rata, for (a) each class of the Class A Notes an amount equal to interest expected to accrue on the Class A Notes from the calendar day after the current calendar month's Quarterly Distribution Date or Monthly Servicing Payment Date through the following month's Quarterly Distribution Date or Monthly Servicing Payment Date, as the case may be, plus previously accrued and unpaid or set aside interest and (b) each Swap Counterparty, Swap Termination Payments described under Section 2.07(c)(v)(B) due to that Swap Counterparty under its Swap Agreement. (f) On each Auction Rate Distribution Date that is not a Quarterly Distribution Date, the Administrator shall instruct the Indenture Trustee to make the following distributions in the following order of priority: (i) from amounts deposited in the Future Distribution Account that were allocated to the Auction Agent and the Broker-Dealers, and then from amounts on deposit in the Collection Account, pro rata, to the Auction Agent and the Broker-Dealers, the Auction Agent Fees of the Auction Agent and the Broker-Dealer Fees of the Broker-Dealers; and (ii) from amounts deposited in the Future Distribution Account for the benefit of the Auction Rate Notes with a Distribution Date on this Auction Rate Distribution Date, and then from amounts on deposit in the Collection Account, pro rata, to the Auction Rate Notes with a Distribution Date on the Auction Rate Distribution Date, an amount equal to the Class A Noteholders' Interest Distribution Amount on such Auction Rate Notes. (g) All amounts deposited in the Future Distribution Account shall be deposited therein for the benefit of an entity or a class of Notes. Each such amount shall only be distributable to the entity or the class of Notes for whom it was so deposited. Amounts on deposit in the Future Distribution Account with respect to principal and Carry-Over Amounts allocated to the Auction Rate Notes shall be paid to the Auction Rate Notes on their Auction Rate Distribution Dates. (h) If less than all of the Auction Rate Notes are to be paid or allocated principal sufficient to repay them in full on a Quarterly Distribution Date, the Administrator shall determine the particular classes of Auction Rate Notes which will be paid or allocated principal 13 on a Quarterly Distribution Date. The Administrator shall make such determination as follows: (1) first, the Administrator shall compute the number of $50,000 increments of principal that are available to be paid or allocated to the Auction Rate Notes and (2) second, the Administrator shall pay or allocate such $50,000 increments in a manner that will preserve as nearly as practicable, the respective original proportions of such Classes that remain outstanding, with any excess increment that cannot be so paid or allocated being chosen by random lot. If less than all of the Auction Rate Notes of a given class are to be paid or allocated principal on a Quarterly Distribution Date in an amount sufficient to pay such class in full, the particular Auction Rate Notes to be paid shall be selected by the Administrator by random lots of $50,000. If there are any amounts available to pay or allocate principal to the Auction Rate Notes that are not in $50,000 increments, the Administrator shall deposit such amounts to the Future Distribution Account to pay principal to the Auction Rate Notes in the future. Section 2.08. Cash Capitalization Account and Reserve Account. (a) On the Closing Date, the Issuer shall deposit the Cash Capitalization Account Initial Deposit into the Cash Capitalization Account and the Reserve Account Initial Deposit into the Reserve Account. (i) The Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Cash Capitalization Account and deposit such amounts into the Collection Account if Available Funds for a Distribution Date are insufficient to make the payment described under Section 2.07(b) for a Monthly Servicing Payment Date that is not a Quarterly Distribution Date in an amount equal to the shortfall. (ii) The Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Cash Capitalization Account and deposit such amounts into the Collection Account if Available Funds for a Distribution Date are insufficient to make the payments described under Sections 2.07(c)(i) through (x) for a Quarterly Distribution Date in an amount equal to the shortfall. (iii) The Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Cash Capitalization Account and deposit such amounts into the Collection Account if amounts on deposit in the Future Distribution Account and in the Collection Account for a Distribution Date are insufficient to make the payments described under Section 2.07(f) for a Distribution Date in an amount equal to the shortfall. (iv) The Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Reserve Account and deposit such amounts into the Collection Account if Available Funds and amounts withdrawn from the Cash Capitalization Account and deposited into the Collection Account pursuant to clause (i) above for a Distribution Date are insufficient to make the payment described under Section 2.07(b) for a Monthly Servicing Payment Date that is not a Quarterly Distribution Date in an amount equal to the shortfall. 14 (v) The Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Reserve Account and deposit such amounts into the Collection Account if amounts on deposit in the Future Distribution Account and in the Collection Account and amounts withdrawn from the Cash Capitalization Account and deposited into the Collection Account pursuant to clause (iii) above for a Distribution Date are insufficient to make the payments described under Section 2.07(f) for a Distribution Date in an amount equal to the shortfall. (vi) The Administrator shall instruct the Indenture Trustee to withdraw funds on deposit in the Reserve Account and deposit such amounts into the Collection Account if Available Funds and amounts withdrawn from the Cash Capitalization Account and deposited into the Collection Account pursuant to clause (ii) above for a Quarterly Distribution Date are insufficient to make the payments described under Sections 2.07(c)(i) through (v), (vii) and (ix) for a Quarterly Distribution Date in an amount equal to the shortfall. (vii) The Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Reserve Account and deposit such amounts in the Collection Account if Available Funds and amounts withdrawn from the Cash Capitalization Account and deposited in the Collection Account for a Distribution Date are insufficient to make the payments described under Sections 2.07(vi), (viii) and (x) on the respective Note Final Maturity Date of each Class of Notes in an amount equal to the unpaid Outstanding Amount of the maturing Class of Notes and, as applicable, amounts on deposit in the Future Distribution Account. (viii) On each Quarterly Distribution Date from the September 2004 Quarterly Distribution Date through the March 2007 Quarterly Distribution Date, the Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Cash Capitalization Account in the amount by which CI (as defined in the definition of Asset Balance) for such Quarterly Distribution Date is in excess of 5.50% of the Asset Balance on the Closing Date, deposit such amounts into the Collection Account and treat such amount as Available Funds if: (A) the sum of (1) the Pool Balance as of the last day of the second preceding Collection Period and (2) the amount on deposit in the Cash Capitalization Account immediately following the preceding Quarterly Distribution Date, minus the aggregate outstanding balance of the Notes immediately following the preceding Quarterly Distribution Date is greater than or equal to $6,764,122; and (B) at least 45% of the Trust Student Loans by principal balance are in repayment and are not more than 30 days past due as of the end of the Collection Period for the current Quarterly Distribution Date. (ix) On each Quarterly Distribution Date from the September 2005 Quarterly Distribution Date through the March 2007 Quarterly Distribution Date, the Administrator shall instruct the Indenture Trustee in writing to withdraw funds on deposit in the Cash 15 Capitalization Account in the amount by which CI (as defined in the definition of Asset Balance) for such Quarterly Distribution Date is in excess of 3.50% of the Asset Balance on the Closing Date, deposit such amounts into the Collection Account and treat such amount as Available Funds if: (A) the sum of (1) the Pool Balance as of the last day of the second preceding Collection Period and (2) the amount on deposit in the Cash Capitalization Account immediately following the preceding Quarterly Distribution Date, minus the aggregate outstanding balance of the Notes immediately following the preceding Quarterly Distribution Date is greater than or equal to $13,528,244; and (B) at least 60% of the Trust Student Loans by principal balance are in repayment and are not more than 30 days past due as of the end of the Collection Period for the current Quarterly Distribution Date. (b) The Indenture Trustee shall withdraw all amounts on deposit in the Cash Capitalization Account on the March 2007 Quarterly Distribution Date and deposit such amount to the Collection Account and treat such amounts as Available Funds. (c) On the final Distribution Date upon termination of the Trust and following the payment in full of the Class Note Balance and of all other amounts (other than Carryover Servicing Fees, Carry-over Amounts and Swap Termination Payments) owing or to be distributed hereunder or under the Indenture or the Trust Agreement to Noteholders, the Servicer, the Swap Counterparties or the Administrator, to the extent that Available Funds on such date are insufficient to make the following payments, amounts remaining in the Reserve Account shall be used first to pay any Carryover Servicing Fees, second to pay any Carry-over Amounts to the Auction Rate Noteholders and third to pay any Swap Termination Payments. Any amount remaining on deposit in the Reserve Account after such payments have been made shall be distributed to the Certificateholders. The Certificateholders shall in no event be required to refund any amounts properly distributed pursuant to this Section 2.08(c). (d) Anything in this Section 2.08 to the contrary notwithstanding, if the market value of securities and cash in the Reserve Account and any other Available Funds is on any Distribution Date sufficient to pay the remaining principal amount of and interest accrued on the Notes, any amount owing to the Swap Counterparties, any unpaid Primary Servicing Fees and Administration Fees and all other amounts due by the Trust on such Distribution Date, such amount shall be so applied on such Distribution Date and the Administrator shall instruct the Indenture Trustee to use all amounts in the Reserve Account and all other Available Funds to pay such amounts due or outstanding. Section 2.09. Statements to Certificateholders and Noteholders. On each Determination Date preceding a Distribution Date, the Administrator shall provide to the Indenture Trustee and the Trustee (with a copy to the Rating Agencies) for the Indenture Trustee to forward on such succeeding Distribution Date to each Noteholder of record and for the Trustee to forward on such succeeding Distribution Date to each Certificateholder of record a statement, setting forth at 16 least the following information with respect to such Distribution Date as to the Notes and the Certificates to the extent applicable: (a) the amount of such distribution allocable to principal of each class of the Notes; (b) the amount of the distribution allocable to interest on each class of the Notes; (c) the amount of the distribution allocable to the Certificates; (d) the amount of Swap Payments payable by the Issuer to each Swap Counterparty, the amount payable by each Swap Counterparty to the Issuer and the amount of Swap Termination Payments payable by either the Issuer or a Swap Counterparty; (e) the Pool Balance as of the close of business on the last day of the preceding Collection Period; (f) the aggregate outstanding principal balance of the Notes, the Note Pool Factor, as of such Distribution Date, after giving effect to payments allocated to principal reported under clauses (a) and (c) above; (g) the Note Rate for the next period for any class of Notes; (h) the amount of the Primary Servicing Fee and any Carryover Servicing Fee paid to the Servicer on such Distribution Date and on the two preceding Monthly Servicing Payment Dates, and the amount, if any, of the Carryover Servicing Fee remaining unpaid after giving effect to any such payments; (i) the amount of the Administration Fee paid to the Administrator on such Distribution Date; (j) the amount of the aggregate principal balances of Trust Student Loans that became Charged-Off Loans, if any, for the related Collection Period and the balance of Trust Student Loans that are delinquent in each delinquency period as of the end of such Collection Period; (k) the amount of any Note Interest Shortfall, if any, in each case as applicable to each class of Notes, and the change in such amounts from the preceding statement; (l) the aggregate Purchase Amounts for Trust Student Loans, if any, that were repurchased by the Depositor or the Seller or purchased by the Servicer from the Issuer in such Collection Period; (m) whether the Cumulative Realized Loss Test is satisfied on such Distribution Date; and (n) the respective balance of the Reserve Account and the Cash Capitalization Account on such Distribution Date, after giving effect to changes therein on such Distribution Date. 17 Each amount set forth pursuant to clauses (a), (b), (c), (e), (i), (j) and (l) above shall be expressed as a dollar amount per $1,000 of original principal balance of a Certificate or Note, as applicable. A copy of the statements referred to above may be obtained by any Certificate Owner or Note Owner by a written request to the Trustee or the Indenture Trustee, respectively, addressed to the respective Corporate Trust Office. Section 2.10. Non-Ministerial Matters. With respect to matters that in the reasonable judgment of the Administrator are nonministerial, the Administrator shall not take any action unless within a reasonable time before the taking of such action, the Administrator shall have notified the Trustee of the proposed action and the Trustee shall not have withheld consent or provided an alternative direction. For the purpose of the preceding sentence, "non-ministerial matters" shall include: (a) the amendment of or any supplement to the Indenture; (b) the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Trust Student Loans); (c) the amendment, change or modification of the Basic Documents; (d) the appointment of successor Note Registrars, successor Paying Agents and successor Indenture Trustees pursuant to the Indenture or the appointment of Successor Administrators or Successor Servicers, or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee of its obligations under the Indenture; and (e) the removal of the Indenture Trustee. Section 2.11. Exceptions. Notwithstanding anything to the contrary in this Agreement, except as expressly provided herein or in the other Basic Documents, the Administrator shall not be obligated to, and shall not, (i) make any payments to the Noteholders under the Basic Documents, (ii) sell the Indenture Trust Estate pursuant to Section 5.04 of the Indenture, (iii) take any other action that the Issuer directs the Administrator not to take on its behalf, (iv) in connection with its duties hereunder assume any indemnification obligation of any other Person or (v) service the Trust Student Loans. Section 2.12. Compensation. As compensation for the performance of the Administrator's obligations under this Agreement and as reimbursement for its expenses related thereto, the Administrator shall be entitled to $20,000 for each Collection Period payable on the related Quarterly Distribution Date (the "Administration Fees") payable in arrears which shall be solely an obligation of the Issuer. Section 2.13. Servicer and Administrator Expenses. Each of the Servicer and the Administrator shall be severally required to pay all expenses incurred by it in connection with its activities hereunder, including fees and disbursements of independent accountants, taxes imposed on the Servicer or the Administrator, as the case may be, and expenses incurred in connection with distributions and reports to the Administrator or to the Certificateholders and the Noteholders, as the case may be. 18 ARTICLE III Section 3.01. Administrator's Certificate; Servicer's Report. (a) On or before the tenth day of each month (or, if any such day is not a Business Day, on the next succeeding Business Day), the Servicer shall deliver to the Administrator a Servicer's Report with respect to the preceding month containing all information necessary for the Administrator to receive in connection with the preparation of the Administrator's Officers' Certificate and the Administrator's Certificate covering such calendar month referred to in clause (b) below. On or before the tenth day (or, if any such day is not a Business Day, on the next succeeding Business Day), preceding each Quarterly Distribution Date the Servicer shall deliver to the Administrator a Servicer's Report with respect to the preceding Collection Period containing all information necessary for the Administrator to receive in connection with the preparation of the Administrator's Officers' Certificate and the Administrator's Certificate covering such calendar month referred to in clause (c) below. (b) On the second Business Day prior to each Monthly Servicing Payment Date that is not a Distribution Date, the Administrator shall deliver to the Trustee and the Indenture Trustee, an Officer's Certificate of the Administrator containing all information necessary to pay the Servicer the Primary Servicing Fee due on such Monthly Servicing Payment Date pursuant to Section 2.07(b). (c) On each Determination Date prior to a Distribution Date, the Administrator shall deliver to the Trustee and the Indenture Trustee, with a copy to the Rating Agencies, an Administrator's Certificate containing all information necessary to make the distributions pursuant to Sections 2.07 and 2.08, if applicable, for the Collection Period preceding the date of such Administrator's Certificate. (d) Prior to each Determination Date, the Administrator shall determine the Note Rates that will be applicable to the Distribution Date following such Determination Date, in compliance with its obligation to prepare and deliver an Administrator's Certificate on such Determination Date pursuant to this Section 3.01. The Administrator shall furnish to the Issuer from time to time such information regarding the Collateral as the Issuer shall reasonably request. Section 3.02. Annual Statement as to Compliance; Notice of Default; Financial Statements. (a) Each of the Servicer and the Administrator shall deliver to the Trustee and the Indenture Trustee on or before 120 days after the end of the fiscal year of the Servicer and the Administrator, an Officer's Certificate of the Servicer or the Administrator, as the case may be, dated as of December 31 of the preceding year, stating that (i) a review of the activities of the Servicer or the Administrator, as the case may be, during the preceding 12-month period (or, in the case of the first such certificate, during the period from the Closing Date to December 31, 2003) and of its performance under this Agreement has been made under such officers' supervision and (ii) to the best of such officers' knowledge, based on such review, the Servicer or the Administrator, as the case may be, has fulfilled its obligations in all material respects 19 under this Agreement and, with respect to the Servicer, the Servicing Agreement throughout such year or, if there has been a material default in the fulfillment of any such obligation, specifying each such material default known to such officers and the nature and status thereof. The Indenture Trustee shall send a copy of each such Officers' Certificate and each report referred to in Section 3.01 to the Rating Agencies. A copy of each such Officers' Certificate and each report referred to in Section 3.01 may be obtained by any Certificateholder, Certificate Owner, Noteholder or Note Owner by a request in writing to the Trustee addressed to its Corporate Trust Office, together with evidence satisfactory to the Trustee that such Person is one of the foregoing parties. Upon the telephone request of the Trustee, the Indenture Trustee will promptly furnish the Trustee a list of Noteholders as of the date specified by the Trustee. (b) The Servicer shall deliver to the Trustee, the Indenture Trustee and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice in an Officers' Certificate of the Servicer of any event which with the giving of notice or lapse of time, or both, would become a Servicer Default under Section 5.01 of the Servicing Agreement. (c) The Administrator shall deliver to the Trustee, the Indenture Trustee and the Rating Agencies, promptly after having obtained knowledge thereof, but in no event later than five Business Days thereafter, written notice in an Officers' Certificate of the Administrator of any event which with the giving of notice or lapse of time, or both, would become an Administrator Default under Sections 5.01(a) or (b) or would cause the Student Loan Marketing Association to fail to meet the requirement of clause (i) of Section 2.04. (d) The Administrator shall provide to the Trustee, the Indenture Trustee and the Rating Agencies (i) as soon as possible and in no event more than 120 days after the end of each fiscal year of the Administrator audited financials as at the end of and for such year and (ii) as soon as possible and in no event more than 45 days after the end of each quarterly accounting period of the Administrator unaudited financials as at the end of and for such period. Section 3.03. Annual Independent Certified Public Accountants' Reports. Each of the Servicer and the Administrator shall cause a firm of independent certified public accountants, which may also render other services to the Servicer or the Administrator, as the case may be, to deliver to the Trustee, the Indenture Trustee and the Rating Agencies on or before March 31 of each year, a report addressed to the Servicer or the Administrator, as the case may be, the Trustee and the Indenture Trustee, to the effect that such firm has examined certain documents and records relating to the servicing of the Trust Student Loans, or the administration of the Trust Student Loans and of the Trust, as the case may be, during the preceding calendar year (or, in the case of the first such report, during the period from the Closing Date to December 31, 2003) and that, on the basis of the accounting and auditing procedures considered appropriate under the circumstances, such firm is of the opinion that such servicing or administration, respectively, was conducted in compliance with those terms of this Agreement and in the case of the Servicer, the Servicing Agreement, including any applicable statutory provisions incorporated therein and such additional terms and statutes as may be specified from time to time by the Administrator, except for (i) such exceptions as such firm shall believe to be immaterial and (ii) such other exceptions as shall be set forth in such report. 20 Such report will also indicate that the firm is independent of the Servicer or the Administrator, as the case may be, within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants. ARTICLE IV Section 4.01. Representations of Administrator. Sallie Mae, Inc., as Administrator, makes the following representations on which the Issuer is deemed to have relied in acquiring the Trust Student Loans. The representations speak as of the execution and delivery of this Agreement and as of the Closing Date and shall survive the sale of the Trust Student Loans to the Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (a) Organization and Good Standing. The Administrator is duly organized and validly existing as a corporation under the laws of the State of Delaware, with the power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted. (b) Power and Authority. The Administrator has the corporate power and authority to execute and deliver this Agreement and to carry out its terms, and the execution, delivery and performance of this Agreement have been duly authorized by the Administrator by all necessary corporate action. (c) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Administrator enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization and similar laws relating to creditors' rights generally and subject to general principles of equity. (d) No Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof or thereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time or both) a default under, the charter or by-laws of the Administrator, or any indenture, agreement or other instrument to which the Administrator is a party or by which it shall be bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the knowledge of the Administrator, any order, rule or regulation applicable to the Administrator of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Administrator or its properties. (e) No Proceedings. There are no proceedings or investigations pending against the Administrator or, to its best knowledge, threatened against the Administrator, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Administrator or its properties: (i) asserting the invalidity of this Agreement or any of the other Basic Documents, the Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes or the Certificates or the consummation of any of the transactions contemplated by this 21 Agreement or any of the other Basic Documents, (iii) seeking any determination or ruling that could reasonably be expected to have a material and adverse effect on the performance by the Administrator of its obligations under, or the validity or enforceability of, this Agreement, any of the other Basic Documents, the Notes or the Certificates or (iv) seeking to affect adversely the Federal or state income tax attributes of the Issuer, the Notes or the Certificates. (f) All Consents. All authorizations, consents, orders or approvals of or registrations or declarations with any court, regulatory body, administrative agency or other government instrumentality required to be obtained, effected or given by the Administrator in connection with the execution and delivery by the Administrator of this Agreement and the performance by the Administrator of the transactions contemplated by this Agreement have been duly obtained, effected or given and are in full force and effect. Section 4.02. Liability of Administrator; Indemnities. The Administrator shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Administrator under this Agreement. The Administrator shall indemnify, defend and hold harmless the Issuer, the Certificateholders and the Noteholders and any of the officers, directors, employees and agents of the Issuer from and against any and all costs, expenses, losses, claims, damages and liabilities to the extent that such cost, expense, loss, claim, damage or liability arose out of, or was imposed upon any such Person through, the gross negligence, willful misfeasance or bad faith of the Administrator in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations and duties hereunder or thereunder. The Administrator shall indemnify the Indenture Trustee in its individual capacity and any of its officers, directors, employees and agents against any and all loss, liability or expense (including attorneys' fees) incurred by it in connection with the performance of its duties under the Indenture and 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 Administrator shall 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 the fees and expenses of which shall be paid by the Administrator on behalf of the Issuer. Neither the Issuer nor the Administrator need to 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 Administrator shall indemnify the Trustee in its individual capacity and any of its officers, directors, employees and agents against any and all loss, liability, claims, damages, costs, penalties, taxes (excluding taxes payable by it on any compensation received by it for its services as trustee) or expense (including attorneys' fees) incurred by it in connection with the performance of its duties under the Trust Agreement and the other Basic Documents. 22 Without limiting the generality of the foregoing, the Administrator shall indemnify the Trustee in its individual capacity and any of its officers, directors, employees and agents against any and all liability relating to or resulting from any of the following: (i) any claim that the Trust Student Loans (or any guarantee with respect thereto) are delinquent, uncollectable, uninsured, illegal, invalid or unenforceable; (ii) any claim that the Trust Student Loans have not been made, administered, serviced or collected in accordance with applicable federal and state laws or the requirements of any Guarantor; or (iii) any claim that any original note or other document evidencing or relating to the Trust Student Loans has been lost, misplaced or destroyed. The Trustee shall notify the Administrator promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Administrator shall not relieve the Administrator of its obligations hereunder and under the other Basic Documents. The Administrator shall defend the claim and the Administrator shall not be liable for the legal fees and expenses of the Trustee after it has assumed such defense; provided, however, that, in the event that there may be a conflict between the positions of the Trustee and the Administrator in conducting the defense of such claim, the Trustee shall be entitled to separate counsel the 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 Trustee through the Trustee's own willful misconduct, negligence or bad faith. The Depositor shall pay reasonable compensation to the Indenture Trustee and shall reimburse the Indenture Trustee for all reasonable expenses, disbursements and advances in accordance with a separate agreement between the Depositor and the Indenture Trustee. For purposes of this Section, in the event of the termination of the rights and obligations of the Administrator (or any successor thereto pursuant to Section 4.03) as Administrator pursuant to Section 5.01, or a resignation by such Administrator pursuant to this Agreement, such Administrator shall be deemed to be the Administrator pending appointment of a successor Administrator pursuant to Section 5.02. Indemnification under this Section shall survive the resignation or removal of the Trustee or the Indenture Trustee or the termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Administrator shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter collects any of such amounts from others, such Person shall promptly repay such amounts to the Administrator, without interest. Section 4.03. Merger or Consolidation of, or Assumption of the Obligations of, Administrator. Any Person (a) into which the Administrator may be merged or consolidated, (b) which may result from any merger or consolidation to which the Administrator shall be a party or (c) which may succeed to the properties and assets of the Administrator substantially as a whole, shall be the successor to the Administrator without the execution or filing of any 23 document or any further act by any of the parties to this Agreement; provided, however, that the Administrator hereby covenants that it will not consummate any of the foregoing transactions except upon satisfaction of the following: (i) the surviving Administrator, if other than Sallie Mae, Inc., executes an agreement of assumption to perform every obligation of the Administrator under this Agreement, (ii) immediately after giving effect to such transaction, no representation or warranty made pursuant to Section 4.01 shall have been breached and no Administrator Default, and no event that, after notice or lapse of time, or both, would become an Administrator Default shall have occurred and be continuing, (iii) the surviving Administrator, if other than Sallie Mae, Inc., shall have delivered to the Trustee and the Indenture Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such agreement of assumption comply with this Section 4.03 and that all conditions precedent, if any, provided for in this Agreement relating to such transaction have been complied with, and that the Rating Agency Condition shall have been satisfied with respect to such transaction, (iv) unless Sallie Mae, Inc. is the surviving entity, such transaction will not result in a material adverse Federal or state tax consequence to the Issuer, the Noteholders or the Certificateholders and (v) unless Sallie Mae, Inc. is the surviving entity, the Administrator shall have delivered to the Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion of such counsel, all financing statements and continuation statements and amendments thereto have been executed and filed that are necessary fully to preserve and protect the interest of the Trustee and Indenture Trustee, respectively, in the Trust Student Loans and reciting the details of such filings, or (B) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interests. Anything in this Section 4.03 to the contrary notwithstanding, the Administrator may at any time assign its rights, obligations and duties under this Agreement to an Affiliate provided that the Rating Agencies confirm that such assignment will not result in a downgrading or a withdrawal of the ratings then applicable to the Notes. Section 4.04. Limitation on Liability of Administrator and Others. Neither the Administrator nor any of its directors, officers, employees or agents shall be under any liability to the Issuer, the Noteholders or the Certificateholders, or to the Indenture Trustee or the Trustee except as provided under this Agreement for any action taken or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however, that these provisions shall not protect the Administrator or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties under this Agreement. The Administrator and any of its directors, officers, employees or agents may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder. Except as provided in this Agreement, the Administrator shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its duties to administer the Trust Student Loans and the Trust in accordance with this Agreement and that in its opinion may involve it in any expense or liability; provided, however, that the Administrator may undertake any reasonable action that it may deem necessary or desirable in respect of this Agreement and the other Basic Documents and the rights and duties of the parties to this Agreement and the other Basic Documents and the interests of the Certificateholders under this Agreement and the Noteholders under the Indenture and under this Agreement. 24 Section 4.05. Administrator May Own Certificates or Notes. The Administrator and any Affiliate thereof may in its individual or any other capacity become the owner or pledgee of Certificates or Notes with the same rights as it would have if it were not the Administrator or an Affiliate thereof, except as expressly provided herein or in any other Basic Document. Section 4.06. Sallie Mae, Inc. Not to Resign as Administrator. Subject to the provisions of Section 4.03, Sallie Mae, Inc. shall not resign from the obligations and duties imposed on it as Administrator under this Agreement except upon determination that the performance of its duties under this Agreement shall no longer be permissible under applicable law or shall violate any final order of a court or administrative agency with jurisdiction over Sallie Mae, Inc. or its properties. Notice of any such determination permitting or requiring the resignation of Sallie Mae, Inc. shall be communicated to the Trustee and the Indenture Trustee at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee and the Indenture Trustee concurrently with or promptly after such notice. No such resignation shall become effective until the Indenture Trustee or a successor Administrator shall have assumed the responsibilities and obligations of Sallie Mae, Inc. in accordance with Section 5.02. Anything in this Section 4.06 to the contrary notwithstanding, the Administrator may resign at any time subsequent to the assignment of its duties and obligations hereunder pursuant to Section 4.03. ARTICLE V Section 5.01. Administrator Default. If any one of the following events (an "Administrator Default") shall occur and be continuing: (a) (i) in the event that daily deposits into the Collection Account are not required, any failure by the Administrator to deliver to the Indenture Trustee for deposit in the Trust Accounts any Available Funds required to be paid on or before the Business Day immediately preceding any Monthly Servicing Payment Date or Distribution Date, as applicable, or (ii) any failure by the Administrator to direct the Indenture Trustee to make any required distributions from either of the Trust Accounts, which failure in case of either clause (i) or (ii) continues unremedied for five Business Days after written notice of such failure is received by the Administrator from the Indenture Trustee or the Trustee or after discovery of such failure by an officer of the Administrator; (b) any failure by the Administrator duly to observe or to perform in any material respect any other term, covenant or agreement of the Administrator set forth in this Agreement or any other Basic Document, which failure shall (i) materially and adversely affect the rights of Noteholders or Certificateholders and (ii) continue unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Administrator by the Indenture Trustee or the Trustee or (B) to the Administrator, the Indenture Trustee and the Trustee by the Noteholders or Certificateholders, as applicable, representing not less than 50% of the Outstanding Amount of the Controlling Notes or 50% of the outstanding Certificates (including any Certificates owned by the Depositor); or 25 (c) an Insolvency Event occurs with respect to the Administrator; then, and in each and every case, so long as the Administrator Default shall not have been remedied, either the Indenture Trustee or the Noteholders evidencing not less than a majority of the Outstanding Amount of the Controlling Notes, by notice then given in writing to the Administrator (and to the Indenture Trustee and the Trustee if given by the Noteholders) may terminate all the rights and obligations (other than the obligations set forth in Section 4.02) of the Administrator under this Agreement. On or after the receipt by the Administrator of such written notice, all authority and power of the Administrator under this Agreement, whether with respect to the Notes, the Certificates, the Trust Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such successor Administrator as may be appointed under Section 5.02; and, without limitation, the Indenture Trustee and the Trustee are hereby authorized and empowered to execute and deliver, for the benefit of the predecessor Administrator, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination. The predecessor Administrator shall cooperate with the successor Administrator, the Indenture Trustee and the Trustee in effecting the termination of the responsibilities and rights of the predecessor Administrator under this Agreement. All reasonable costs and expenses (including attorneys' fees) incurred in connection with amending this Agreement to reflect such succession as Administrator pursuant to this Section shall be paid by the predecessor Administrator (other than the Indenture Trustee acting as the Administrator under this Section 5.01) upon presentation of reasonable documentation of such costs and expenses. Upon receipt of notice of the occurrence of an Administrator Default, the Trustee shall give notice thereof to the Rating Agencies. Section 5.02. Appointment of Successor. (a) Upon receipt by the Administrator of notice of termination pursuant to Section 5.01, or the resignation by the Administrator in accordance with the terms of this Agreement, the predecessor Administrator shall continue to perform its functions as Administrator under this Agreement in the case of termination, only until the date specified in such termination notice or, if no such date is specified in a notice of termination, until receipt of such notice and, in the case of resignation, until the later of (x) the date 120 days from the delivery to the Trustee and the Indenture Trustee of written notice of such resignation (or written confirmation of such notice) in accordance with the terms of this Agreement and (y) the date upon which the predecessor Administrator shall become unable to act as Administrator as specified in the notice of resignation and accompanying Opinion of Counsel (the "Transfer Date"). In the event of the termination hereunder of the Administrator the Issuer shall appoint a successor Administrator acceptable to the Indenture Trustee, and the successor Administrator shall accept its appointment by a written assumption in form acceptable to the Indenture Trustee. In the event that a successor Administrator has not been appointed at the time when the predecessor Administrator has ceased to act as Administrator in accordance with this Section, the Indenture Trustee without further action shall automatically be appointed the successor Administrator and the Indenture Trustee shall be entitled to the Administration Fee. Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling or legally unable so to act, appoint or petition a court of competent jurisdiction to appoint any established institution whose regular business shall include the servicing of student loans, as the successor to the Administrator under this Agreement. 26 (b) Upon appointment, the successor Administrator (including the Indenture Trustee acting as successor Administrator), shall be the successor in all respects to the predecessor Administrator and shall be subject to all the responsibilities, duties and liabilities placed on the predecessor Administrator that arise thereafter or are related thereto and shall be entitled to an amount agreed to by such successor Administrator (which shall not exceed the Administration Fee unless such compensation arrangements will not result in a downgrading or withdrawal of any rating on the Notes or the Certificates by any Rating Agency) and all the rights granted to the predecessor Administrator by the terms and provisions of this Agreement. (c) The Administrator may not resign unless it is prohibited from serving as such by law as evidenced by an Opinion of Counsel to such effect delivered to the Indenture Trustee and the Trustee. Notwithstanding the foregoing or anything to the contrary herein or in the other Basic Documents, the Indenture Trustee, to the extent it is acting as successor Administrator pursuant hereto and thereto, shall be entitled to resign to the extent a qualified successor Administrator has been appointed and has assumed all the obligations of the Administrator in accordance with the terms of this Agreement and the other Basic Documents. Section 5.03. Notification to Noteholders and Certificateholders. Upon any termination of, or appointment of a successor to, the Administrator pursuant to this Article V, the Trustee shall give prompt written notice thereof to Certificateholders and the Indenture Trustee shall give prompt written notice thereof to Noteholders and the Rating Agencies (which, in the case of any such appointment of a successor, shall consist of prior written notice thereof to the Rating Agencies). Section 5.04. Waiver of Past Defaults. The Noteholders of Notes evidencing a majority of the Outstanding Amount of the Controlling Notes (or the Certificateholders evidencing a majority of the outstanding Certificates, in the case of any default which does not adversely affect the Indenture Trustee or the Noteholders) may, on behalf of all Noteholders and Certificateholders, waive in writing any default by the Administrator in the performance of its obligations hereunder and any consequences thereof, except a default in making any required deposits to or payments from any of the Trust Accounts (or giving instructions regarding the same) in accordance with this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Administrator Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. ARTICLE VI Section 6.01. Termination. (a) Optional Purchase of All Trust Student Loans. The Administrator shall notify the Depositor, the Servicer, the Trustee and the Indenture Trustee in writing, within 15 days after the last day of any Collection Period as of which the then outstanding Pool Balance is 12% or less of the Initial Pool Balance, of the percentage that the then outstanding Pool Balance bears to the Initial Pool Balance. As of the last day of any Collection Period immediately preceding a Distribution Date as of which the then outstanding Pool Balance is 10% or less of the Initial Pool 27 Balance, the Servicer shall have the option to purchase the Trust Estate, other than the Trust Accounts. To exercise such option, the Servicer shall deposit pursuant to Section 2.06 in the Collection Account an amount equal to the aggregate Purchase Amount for the Trust Student Loans and the related rights with respect thereto, plus the appraised value of any such other property held by the Trust other than the Trust Accounts, such value to be determined by an appraiser mutually agreed upon by the Servicer, the Trustee and the Indenture Trustee, and shall succeed to all interests in and to the Trust; provided, however, that the Servicer may not effect such purchase if such aggregate Purchase Amounts do not equal or exceed the Minimum Purchase Amount plus any Carryover Servicing Fees and any amounts owing to the Swap Counterparties. In the event the Servicer fails to notify the Trustee and the Indenture Trustee in writing prior to the acceptance by the Indenture Trustee of a bid to purchase the Trust Estate pursuant to Section 4.04 of the Indenture that the Servicer intends to exercise its option to purchase the Trust Estate, the Servicer shall be deemed to have waived its option to purchase the Trust Estate as long as the Servicer has received five (5) business days' notice from the Indenture Trustee as provided in Section 4.04 of the Indenture. (b) Reserved. (c) Notice. Notice of any termination of the Trust shall be given by the Administrator to the Trustee and the Indenture Trustee as soon as practicable after the Administrator has received notice thereof. (d) Succession. Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Certificateholders shall succeed to the rights of the Noteholders hereunder and the Trustee shall succeed to the rights of, and assume the obligations of, the Indenture Trustee pursuant to this Agreement and any other Basic Documents. ARTICLE VII Section 7.01. Protection of Interests in Trust. (a) The Administrator shall, on behalf of the Depositor, execute and file such financing statements and cause to be executed and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain, and protect the interest of the Issuer, the Trustee and the Indenture Trustee in the Trust Student Loans and in the proceeds thereof. The Administrator shall deliver (or cause to be delivered) to the Trustee and the Indenture Trustee file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing. (b) Neither the Depositor nor the Servicer shall change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed in accordance with clause (a) above seriously misleading within the meaning of Section 9-402(7) of the UCC, unless it shall have given the Trustee and the Indenture Trustee at least five days' prior written notice thereof and shall have promptly filed appropriate amendments to all previously filed financing statements or continuation statements. 28 (c) Each of the Depositor and the Servicer shall have an obligation to give the Trustee and the Indenture Trustee at least 60 days' prior written notice of any relocation of its principal executive office if, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly file any such amendment. The Servicer shall at all times maintain each office from which it shall service Trust Student Loans, and its principal executive office, within the United States of America. (d) The Servicer shall maintain accounts and records as to each Trust Student Loan accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of such Trust Student Loan, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect to) each Trust Student Loan and the amounts from time to time deposited by the Servicer in the Collection Account in respect of such Trust Student Loan. (e) The Servicer shall maintain its computer systems so that, from and after the time of sale of the Trust Student Loans to the Trustee on behalf of the Issuer, the Servicer's master computer records (including any backup archives) that refer to a Trust Student Loan shall indicate clearly the interest of the Issuer, the Trustee and the Indenture Trustee in such Trust Student Loan and that such Trust Student Loan is owned by the Trustee on behalf of the Issuer and has been pledged to the Indenture Trustee. Indication of the Issuer's, the Trustee's and the Indenture Trustee's interest in a Trust Student Loan shall be deleted from or modified on the Servicer's computer systems when, and only when, the related Trust Student Loan shall have been paid in full or repurchased. (f) If at any time the Depositor or the Administrator shall propose to sell, grant a security interest in, or otherwise transfer any interest in student loans to any prospective purchaser, lender or other transferee, the Servicer shall give to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored from backup archives) that, if they refer in any manner whatsoever to any Trust Student Loan, indicate clearly that such Trust Student Loan has been sold and is owned by the Trustee on behalf of the Issuer and has been pledged to the Indenture Trustee. (g) Upon reasonable notice, the Servicer shall permit the Indenture Trustee and its agents at any time during normal business hours to inspect, audit and make copies of and abstracts from the Servicer's records regarding any Trust Student Loan. (h) Upon request, at any time the Trustee or the Indenture Trustee have reasonable grounds to believe that such request would be necessary in connection with its performance of its duties under the Basic Documents, the Servicer shall furnish to the Trustee or to the Indenture Trustee (in each case, with a copy to the Administrator), within five Business Days, a list of all Trust Student Loans (by borrower social security number, type of loan and date of issuance) then held as part of the Trust, and the Administrator shall furnish to the Trustee or to the Indenture Trustee, within 20 Business Days thereafter, a comparison of such list to the list of Initial Trust Student Loans set forth in Schedule A to the Indenture as of the Closing Date, and, for each Trust Student Loan that has been removed from the pool of loans held by the Trustee on behalf of the 29 Issuer, information as to the date as of which and circumstances under which each such Trust Student Loan was so removed. (i) The Depositor shall deliver to the Trustee and the Indenture Trustee: (A) promptly after the execution and delivery of this Agreement and of each amendment thereto and on each Transfer Date, an Opinion of Counsel either (1) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Trustee and the Indenture Trustee in the Trust Student Loans, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (2) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest; and (B) within 120 days after the beginning of each calendar year beginning with the first calendar year beginning more than three months after the Cutoff Date, an Opinion of Counsel, dated as of a date during such 120-day period, either (1) stating that, in the opinion of such counsel, all financing statements and continuation statements have been executed and filed that are necessary fully to preserve and protect the interest of the Trustee and the Indenture Trustee in the Trust Student Loans, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (2) stating that, in the opinion of such counsel, no such action shall be necessary to preserve and protect such interest; provided, that a single Opinion of Counsel may be delivered in satisfaction of the foregoing requirement and that of Section 3.06(b) of the Indenture. Each Opinion of Counsel referred to in clause (A) or (B) above shall specify (as of the date of such opinion and given all applicable laws as in effect on such date) any action necessary to be taken in the following year to preserve and protect such interest. (j) The Depositor shall, to the extent required by applicable law, cause the Certificates and the Notes to be registered with the Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time periods specified in such sections. ARTICLE VIII Section 8.01. Independence of the Administrator. For all purposes of this Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall 30 have no authority to act for or represent the Issuer or the Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Trustee. Section 8.02. No Joint Venture. Nothing contained in this Agreement (i) shall constitute the Administrator and either of the Issuer or the Trustee as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others. Section 8.03. Other Activities of Administrator. Nothing herein shall prevent the Administrator or its Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other person or entity even though such person or entity may engage in business activities similar to those of the Issuer, the Trustee or the Indenture Trustee. Section 8.04. Powers of Attorney. The Trustee and the Indenture Trustee shall upon the written request of the Administrator furnish the Administrator with any powers of attorney and other documents reasonably necessary or appropriate to enable the Administrator to carry out its administrative duties hereunder. Section 8.05. Amendment. This Agreement (other than Sections 2.01 and 2.02) may be amended by the Depositor, the Servicer, the Administrator, the Trustee and the Indenture Trustee, without the consent of any of the Noteholders or the Certificateholders, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that such action shall not, as evidenced by an Opinion of Counsel delivered to the Eligible Lender Trustee and the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder or Certificateholder. Sections 2.01 and 2.02 may be amended from time to time by a written amendment duly executed and delivered by the Trustee, the Indenture Trustee and the Administrator, without the consent of the Noteholders and the Certificateholders, for the purpose of adding any provision to or changing in any manner or eliminating any of the provisions of such Article; provided that such amendment will not, in an Opinion of Counsel obtained on behalf of the Issuer and satisfactory to the Indenture Trustee and the Trustee, materially and adversely affect the interest of any Noteholder or Certificateholder. This Agreement (other than Sections 2.01 and 2.02) may also be amended from time to time by the Depositor, the Servicer, the Administrator, the Indenture Trustee and the Trustee, and Sections 2.01 and 2.02 may also be amended by the Trustee, the Administrator and the Indenture Trustee, with the consent of the Noteholders of Notes evidencing a majority of the Outstanding Amount of the Notes and the consent of the Certificateholders evidencing a majority of the Certificates, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall (a) 31 increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments with respect to Trust Student Loans or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders or the Certificateholders of which are required to consent to any such amendment, without the consent of all outstanding Noteholders and Certificateholders. Promptly after the execution of any such amendment (or, in the case of the Rating Agencies, fifteen days prior thereto), the Trustee shall furnish written notification of the substance of such amendment to each Certificateholder, the Indenture Trustee and each of the Rating Agencies. It shall not be necessary for the consent of Certificateholders or Noteholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. Prior to the execution of any amendment to this Agreement, the Trustee and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 7.01(i)(A). The Trustee and the Indenture Trustee may, but shall not be obligated to, enter into any such amendment which affects the Trustee's or the Indenture Trustee's, as applicable, own rights, duties or immunities under this Agreement or otherwise. Section 8.06. Assignment. Notwithstanding anything to the contrary contained herein, except as provided in Section 4.03 of the Servicing Agreement and Section 4.03 of this Agreement, this Agreement may not be assigned by the Depositor, the Administrator or the Servicer. This Agreement may be assigned by the Trustee only to its permitted successor pursuant to the Trust Agreement. Section 8.07. Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Depositor, the Servicer, the Issuer, the Indenture Trustee and the Trustee and for the benefit of the Certificateholders and the Noteholders, as third party beneficiaries, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. Section 8.08. Assignment to Indenture Trustee. The Depositor hereby acknowledges and consents to any Grant by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of a security interest in all right, title and interest of the Issuer in, to and under the Trust Student Loans and the assignment of any or all of the Issuer's rights and obligations under this Agreement. The Servicer hereby acknowledges and consents to the assignment by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of any and all of the Issuer's rights and obligations under this Agreement. Section 8.09. Nonpetition Covenants. (a) Notwithstanding any prior termination of this Agreement, the Servicer, the Administrator, the Trustee and the Depositor shall not, prior to the date which is one year and 32 one day after the termination of this Agreement, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any Federal or state bankruptcy, insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer. (b) Notwithstanding any prior termination of this Agreement, the Servicer, the Administrator, the Issuer and the Trustee shall not, prior to the date which is one year and one day after the termination of this Agreement, acquiesce, petition or otherwise invoke or cause the Depositor to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Depositor under any insolvency or similar law or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Depositor or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Depositor. Section 8.10. Limitation of Liability of Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to the contrary, this Agreement has been signed by Chase Manhattan Bank USA, National Association not in its individual capacity but solely in its capacity as Trustee of the Issuer and in no event shall Chase Manhattan Bank USA, National Association in its individual capacity have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer or the Trustee hereunder or in any of the certificates, notices or agreements delivered pursuant hereto as to all of which recourse shall be had solely to the assets of the Issuer. (b) Notwithstanding anything contained herein to the contrary, this Agreement has been executed and signed by JPMorgan Chase Bank not in its individual capacity but solely as Indenture Trustee and in no event shall JPMorgan Chase Bank have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. (c) The rights and protections of the Indenture Trustee under the Indenture shall be incorporated as though explicitly set forth herein. Section 8.11. Governing Law. THIS AGREEMENT 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 SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 8.12. Headings. The section headings hereof have been inserted for convenience of reference only and shall not be construed to affect the meaning, construction or effect of this Agreement. Section 8.13. Counterparts. This Agreement may be executed in counterparts, each of which when so executed shall together constitute but one and the same agreement. 33 Section 8.14. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 34 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. SALLIE MAE, INC., as Administrator By: /s/ PETER W. STRANG ------------------------------------- Name: Peter W. Strang Title: Vice President SLM EDUCATION CREDIT FUNDING LLC, as Depositor By: /s/ J. LANCE FRANKE ------------------------------------- Name: J. Lance Franke Title: Vice President SALLIE MAE SERVICING L.P., as Servicer By: /s/ PETER W. STRANG ------------------------------------- Name: Peter W. Strang Title: Vice President JPMORGAN CHASE BANK, not in its individual capacity but solely as the Indenture Trustee By: /s/ DAVID CONTINO ------------------------------------- Name: David Contino Title: Trust Officer 35 SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Issuer By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: /s/ JOHN J. CASHIN Name: John J. Cashin Title: Vice President 36 EX-99.4 10 dex994.txt EXHIBIT 99.4 Exhibit 99.4 ================================================================================ SERVICING AGREEMENT among SALLIE MAE SERVICING L.P., as Servicer SALLIE MAE, INC., as Administrator SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Issuer CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee and JPMORGAN CHASE BANK, not in its individual capacity but solely as Indenture Trustee Dated as of October 9, 2003 ================================================================================ TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS AND USAGE Section 1.01. Definitions and Usage...........................................1 ARTICLE II THE TRUST STUDENT LOANS Section 2.01. Custody of Trust Student Loan Files.............................1 Section 2.02. Duties of Servicer as Custodian.................................2 Section 2.03. Maintenance of and Access to Records............................2 Section 2.04. Release of Documents............................................2 Section 2.05. Instructions; Authority To Act..................................3 Section 2.06. [Reserved.].....................................................3 Section 2.07. Effective Period and Termination................................3 ARTICLE III ADMINISTRATION AND SERVICING OF TRUST STUDENT LOANS Section 3.01. Duties of Servicer..............................................3 Section 3.02. Collection of Trust Student Loan Payments.......................4 Section 3.03. Realization upon Trust Student Loans............................5 Section 3.04. No Impairment...................................................5 Section 3.05. Purchase of Trust Student Loans; Reimbursement..................5 Section 3.06. Primary Servicing Fee; Carryover Servicing Fee..................6 Section 3.07. Access to Certain Documentation and Information Regarding Trust Student Loans.............................................6 Section 3.08. Servicer Expenses...............................................7 Section 3.09. Appointment of Subservicer......................................7 Section 3.10. Reports.........................................................7 Section 3.11. Covenants and Agreements of the Issuer, Administrator, Trustee and Servicer............................................8 Section 3.12. Special Programs................................................8 Section 3.13. Financial Statements............................................9 Section 3.14. Insurance.......................................................9 Section 3.15. Administration Agreement........................................9 Section 3.16. Servicer Optional Purchase......................................9 Section 3.17. Fees to be Charged at Repayment.................................9 ARTICLE IV THE SERVICER Section 4.01. Representations of Servicer.....................................9 i Page ---- Section 4.02. Indemnities of Servicer........................................11 Section 4.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer.......................................11 Section 4.04. Limitation on Liability of Servicer............................12 Section 4.05. Sallie Mae Servicing L.P. Not to Resign as Servicer............12 ARTICLE V SERVICER DEFAULT Section 5.01. Servicer Default...............................................13 Section 5.02. Appointment of Successor.......................................14 Section 5.03. Notification to Noteholders....................................15 Section 5.04. Waiver of Past Defaults........................................15 ARTICLE VI MISCELLANEOUS Section 6.01. Amendment......................................................15 Section 6.02. Notices........................................................16 Section 6.03. Counterparts...................................................17 Section 6.04. Entire Agreement; Severability.................................17 Section 6.05. Governing Law..................................................18 Section 6.06. Relationship of Parties........................................18 Section 6.07. Captions.......................................................18 Section 6.08. Nonliability of Directors, Officers and Employees of Servicer, the Trustee, the Indenture Trustee and the Administrator.......18 Section 6.09. Assignment.....................................................18 Section 6.10. Limitation of Liability of Trustee and Indenture Trustee.......18 Appendix Attachment A Schedule of Fees Attachment B Locations Attachment C Reports Attachment D Back-End Fees ii SERVICING AGREEMENT This SERVICING AGREEMENT, dated October 9, 2003, is among SALLIE MAE SERVICING L.P. (the "Servicer"), a Delaware limited partnership, SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C (the "Issuer"), CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but in its capacity as trustee of the Issuer (the "Trustee"), SALLIE MAE, INC., a Delaware corporation, as administrator (the "Administrator"), and JPMORGAN CHASE BANK, a New York banking corporation, not in its individual capacity but in its capacity as Indenture Trustee (the "Indenture Trustee). WHEREAS, the Trustee will acquire certain education loans to be held in the Trust formed pursuant to a trust agreement (the "Trust Agreement"), dated as of October 1, 2003, between SLM Education Credit Funding LLC and the Trustee; WHEREAS, the Issuer will issue (i) notes (the "Notes") pursuant to an indenture, dated as of October 1, 2003 (the "Indenture"), between the Issuer and the Indenture Trustee, and (ii) an excess distribution certificate (the "Certificate") pursuant to the Trust Agreement, which Notes are payable from the assets of the Issuer; and WHEREAS, the Issuer, the Administrator and the Trustee desire the Servicer to service education loans in the Trust, and the Servicer is willing to service said education loans for the Issuer, the Administrator, the Trustee and the Indenture Trustee. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows: 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 hereto, which also contains rules as to usage that shall be applicable herein. ARTICLE II THE TRUST STUDENT LOANS Section 2.01. Custody of Trust Student Loan Files. To assure uniform quality in servicing the Trust Student Loans and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts such appointment, to act for the benefit of the Issuer, the Trustee and the Indenture Trustee as custodian of the following documents or 1 instruments (collectively the "Trust Student Loan Files") which are hereby constructively delivered to the Indenture Trustee, as pledgee of the Issuer with respect to each Trust Student Loan: (a) the original fully executed copy of the note evidencing the Trust Student Loan; and (b) any and all other documents and computerized records that the Servicer shall keep on file, in accordance with its customary procedures, relating to such Trust Student Loan or any obligor with respect thereto. Section 2.02. Duties of Servicer as Custodian. The Servicer shall hold the Trust Student Loan Files for the benefit of the Issuer and the Indenture Trustee and maintain such accurate and complete accounts, records and computer systems pertaining to each Trust Student Loan File as shall enable the Issuer to comply with this Agreement. In performing its duties as custodian the Servicer shall act with reasonable care, using that degree of skill and attention that the Servicer exercises with respect to the student loan files relating to comparable student loans that the Servicer services on behalf of SLM Education Credit Management Corporation and shall ensure that it fully complies with all applicable Federal and state laws with respect thereto. The Servicer shall take all actions necessary with respect to the Trust Student Loan Files held by it under this Agreement and of the related accounts, records and computer systems, in order to enable the Issuer or the Indenture Trustee to verify the accuracy of the Servicer's record keeping with respect to the Servicer's obligations as custodian hereunder. The Servicer shall promptly report to the Issuer, the Administrator and the Indenture Trustee any material failure on its part to hold the Trust Student Loan Files and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial review or any periodic review by the Issuer, the Trustee or the Indenture Trustee of the Trust Student Loan Files. If in the reasonable judgment of the Trustee it is necessary to preserve the interests of the Noteholders and the Trust in the Trust Student Loans or at the request of the Administrator, the Servicer shall transfer physical possession of the notes evidencing the Trust Student Loans to the Trustee, the Indenture Trustee or any other custodian for either of them designated by the Trustee. Section 2.03. Maintenance of and Access to Records. The Servicer shall maintain each Trust Student Loan File at one of its offices specified in Attachment B to this Agreement or at such other office as shall be consented to by the Issuer and the Indenture Trustee upon written notice to the Issuer and the Indenture Trustee. Upon reasonable prior notice, the Servicer shall make available to the Issuer and the Indenture Trustee, or their respective duly authorized representatives, attorneys or auditors, a list of locations of the Trust Student Loan Files and the related accounts, records and computer systems maintained by the Servicer at such times during normal business hours as the Issuer or the Indenture Trustee shall instruct. Section 2.04. Release of Documents. Upon written instruction from the Indenture Trustee, the Servicer shall release any Trust Student Loan File to the Indenture Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee, as the case may be, at such place or places as the Indenture Trustee may reasonably designate, as soon as practicable. The 2 Indenture Trustee shall cooperate with the Servicer to provide the Servicer with access to the Trust Student Loan Files in order for the Servicer to continue to service the Trust Student Loans after the release of the Trust Student Loan Files. In the event the Servicer is not provided access to the Trust Student Loan Files, the Servicer shall not be deemed to have breached its obligations pursuant to Section 3.01, 3.02, 3.03 or 3.04 if it is unable to perform such obligations due to its inability to have access to the Trust Student Loans Files. The Servicer shall not be liable for any losses with respect to the servicing of such Trust Student Loans arising after the release of the related Trust Student Loan Files to the extent the losses are attributable to the Servicer's inability to have access to the related Trust Student Loan Files. Section 2.05. Instructions; Authority To Act. The Servicer shall be deemed to have received proper instructions with respect to the Trust Student Loan Files upon its receipt of written instructions signed by a Responsible Officer of the Indenture Trustee. Section 2.06. [Reserved.] Section 2.07. Effective Period and Termination. Sallie Mae Servicing L.P.'s appointment as custodian shall become effective as of the Closing Date and shall continue in full force and effect for so long as Sallie Mae Servicing L.P. shall remain the Servicer hereunder. If Sallie Mae Servicing L.P. or any successor Servicer shall resign as Servicer in accordance with the provisions of this Agreement or if all the rights and obligations of Sallie Mae Servicing L.P. or any such successor Servicer shall have been terminated under Section 5.01, the appointment of Sallie Mae Servicing L.P. or such successor Servicer as custodian shall be terminated simultaneously with the effectiveness of such resignation or termination. On or prior to the effective date of any resignation or termination of such appointment, the Servicer shall deliver the Trust Student Loan Files to the successor Servicer, the Indenture Trustee or the Indenture Trustee's agent, at the direction of the Indenture Trustee, at such place or places as the Indenture Trustee may reasonably designate. In establishing an effective date for the termination of the Servicer as custodian of the Trust Student Loan Files, the parties shall provide for a reasonable period for the Servicer to deliver the Trust Student Loan Files to its designated successor. ARTICLE III ADMINISTRATION AND SERVICING OF TRUST STUDENT LOANS Section 3.01. Duties of Servicer. The Servicer, for the benefit of the Issuer (to the extent provided herein), shall manage, service, administer and make collections on the Trust Student Loans with reasonable care, using that degree of skill and attention that the Servicer exercises with respect to comparable student loans that it services on behalf of SLM Education Credit Management Corporation from the Closing Date until the Trust Student Loans are paid in full. Without limiting the generality of the foregoing or of any other provision set forth in this Agreement and notwithstanding any other provision to the contrary set forth herein, the Servicer shall manage, service, administer and make collections with respect to the Trust Student Loans in accordance with, and otherwise comply with, all applicable Federal and state laws. 3 The Servicer's duties shall include, but shall not be limited to, collection and posting of all payments, responding to inquiries of borrowers on such Trust Student Loans, monitoring borrowers' status, making required disclosures to borrowers, performing due diligence with respect to borrower delinquencies, sending payment coupons to borrowers and otherwise establishing repayment terms, reporting tax information to borrowers, if applicable, accounting for collections and furnishing monthly statements with respect thereto to the Administrator. The Servicer shall follow its customary standards, policies and procedures in performing its duties as Servicer. Without limiting the generality of the foregoing, the Servicer is authorized and empowered to execute and deliver, on behalf of itself, the Issuer, the Trustee, the Indenture Trustee, and the Noteholders or any of them, instruments of satisfaction or cancellation, or partial or full release or discharge, and all other comparable instruments, with respect to such Trust Student Loans; provided, however, that the Servicer agrees that it will not (a) permit any rescission or cancellation of a Trust Student Loan except as ordered by a court of competent jurisdiction or governmental authority or as otherwise consented to in writing by the Trustee and the Indenture Trustee; provided, however, that the Servicer may write off any delinquent Trust Student Loan if the remaining balance of the borrower's account is less than $50 or (b) reschedule, revise, defer or otherwise compromise with respect to payments due on any Trust Student Loan except pursuant to any applicable interest only, deferral or forbearance periods or otherwise in accordance with all applicable standards, guidelines and requirements with respect to the servicing of Student Loans under the Programs; provided further, however, that the Servicer shall not agree to any reduction of yield with respect to any Trust Student Loan (either by reducing borrower payments or reducing principal balance) except as permitted in accordance with Section 3.12 or otherwise if, and to the extent, the Servicer, the Administrator or SLM Education Credit Management Corporation reimburses the Issuer in an amount sufficient to offset any such effective yield reduction made by the Servicer consistent with such customary servicing procedures as it follows with respect to comparable student loans which it services on behalf of SLM Education Credit Management Corporation. The Trustee on behalf of the Issuer hereby grants a power of attorney and all necessary authorization to the Servicer to maintain any and all collection procedures with respect to the Trust Student Loans, including taking any steps to enforce such Trust Student Loans such as commencing a legal proceeding to enforce a Trust Student Loan in the names of the Issuer, the Trustee, the Indenture Trustee, and the Noteholders. The Trustee shall upon the written request of the Servicer furnish the Servicer with any other powers of attorney and other documents reasonably necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder. Section 3.02. Collection of Trust Student Loan Payments. (a) The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Trust Student Loans as and when the same shall become due and shall follow such collection procedures as it follows with respect to comparable student loans that it services on behalf of SLM Education Credit Management Corporation. The Servicer shall allocate collections with respect to the Trust Student Loans between principal, interest and fees in accordance with Section 2.05 of the Administration Agreement. The Servicer may in its discretion waive any late payment charge or any other fees that may be collected in the ordinary course of servicing a Trust Student Loan as may be consistent with comparable student loans 4 which it services on behalf of SLM Education Credit Management Corporation. The Servicer may, at its option, retain any late payment charges that it collects. (b) The Servicer shall comply with all applicable laws and agreements with respect to claiming, pursuing and collecting payments on the Trust Student Loans and shall follow such practices and procedures as it follows with respect to comparable student loans that it services on behalf of SLM Education Credit Management Corporation. Section 3.03. Realization upon Trust Student Loans. For the benefit of the Issuer, the Servicer shall use reasonable efforts consistent with its servicing practices and procedures that it utilizes with respect to comparable student loans that it services on behalf of SLM Education Credit Management Corporation in its servicing of any delinquent Trust Student Loans. Section 3.04. No Impairment. The Servicer shall not impair the rights of the Issuer, the Trustee, the Indenture Trustee, or Noteholders in the Trust Student Loans. Section 3.05. Purchase of Trust Student Loans; Reimbursement. (a) The Servicer, the Administrator, the Trustee and the Indenture Trustee shall give notice to the other parties promptly, in writing, upon the discovery of any breach of the provisions of Section 3.01, 3.02, 3.03 or 3.04 which has a materially adverse effect on the interest of the Issuer. In the event of such a material breach, the Servicer shall cure the breach or purchase the affected Trust Student Loan not later than 120 days following the date of discovery of such material breach. The purchase price hereunder will be the unpaid principal amount of such Trust Student Loan plus accrued and unpaid interest with respect to such Trust Student Loan. The Servicer shall remit the purchase price to the Administrator as provided in Section 2.06 of the Administration Agreement on the date of purchase of any Trust Student Loan pursuant to this Section 3.05. In consideration of the purchase of any such Trust Student Loan pursuant to this Section 3.05, the Servicer shall remit the Purchase Amount in the manner specified in Section 2.06 of the Administration Agreement. (b) [Reserved.] (c) [Reserved.] (d) In lieu of repurchasing Trust Student Loans pursuant to this Section 3.05, the Servicer may, at its option, with the prior consent of the Administrator, substitute Student Loans or arrange for the substitution of Student Loans which are substantially similar as of the date of substitution on an aggregate basis to the Trust Student Loans for which they are being substituted with respect to the following characteristics: (i) status (i.e., in-school, grace, deferment, forbearance or repayment); (ii) Program type (i.e., Med Loan, LAW Loan, MBA Loan or Signature Loan); (iii) school type; 5 (iv) total return; (v) principal balance; and (vi) remaining term to maturity. In addition, each substituted Student Loan shall comply, as of the date of substitution, with the representations and warranties made by the Seller in the Seller Sale Agreement. In choosing Student Loans to be substituted pursuant to this subsection (d), the Servicer shall make a reasonable determination that the Student Loans to be substituted will not have a material adverse effect on the Noteholders. In the event the Servicer elects to substitute Student Loans pursuant to this Section 3.05(d) and the Administrator consents to such substitution, the Servicer will remit to the Administrator the amount of any shortfall between the Purchase Amount of the substituted Student Loans and the Purchase Amount of the Trust Student Loans for which they are being substituted. (e) The sole remedy of the Issuer, the Trustee, the Indenture Trustee and the Noteholders with respect to a breach pursuant to Section 3.01, 3.02, 3.03 or 3.04 shall be to require the Servicer to cure the breach, to purchase Trust Student Loans, to reimburse the Issuer as provided above or to substitute Student Loans pursuant to Section 3.05(d). (f) The Trustee shall have no duty to conduct any affirmative investigation as to the occurrence of any condition requiring the purchase of any Trust Student Loan or the reimbursement for any interest penalty pursuant to this Section 3.05. (g) The Servicer shall not be deemed to have breached its obligations pursuant to Section 3.01, 3.02, 3.03 or 3.04 if it is rendered unable to perform such obligations, in whole or in part, by a force outside the control of the parties hereto (including acts of God, acts of war, fires, earthquakes, hurricanes, floods and other disasters). The Servicer shall diligently perform its duties under this Agreement as soon as practicable following the termination of such interruption of business. Section 3.06. Primary Servicing Fee; Carryover Servicing Fee. The Primary Servicing Fee for each calendar month and any Carryover Servicing Fees payable on any Distribution Date in arrears by the Issuer shall be equal to the amounts determined by reference to the schedule of fees attached hereto as Attachment A. Notwithstanding anything to the contrary contained herein or in any other Basic Document, the Servicer shall be entitled to receive any Carryover Servicing Fee on any Distribution Date only if and to the extent that sufficient funds are available pursuant to Section 2.07(c) of the Administration Agreement. Section 3.07. Access to Certain Documentation and Information Regarding Trust Student Loans. Upon reasonable prior notice, the Servicer shall provide to the Administrator and its agents access to the Trust Student Loan Files and shall permit the Administrator to examine and make copies of, and abstracts from, the records and books of account of the Servicer relating to the Trust Student Loans and shall permit the Administrator to undertake periodic site reviews 6 of the Servicer's operations relating to the servicing of the Trust Student Loans (including on the premises of any agent of the Servicer). Reasonable access shall be afforded to the Administrator without charge, but only upon reasonable request and during the normal business hours at the respective offices of the Servicer. Nothing in this Section shall affect the obligation of the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors and the failure of the Servicer to provide access to information as a result of such obligation shall not constitute a breach of this Section. Section 3.08. Servicer Expenses. The Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder, including fees and disbursements of independent accountants, taxes imposed on the Servicer and expenses incurred in connection with distributions and reports to the Administrator; provided, however, the Carryover Servicing Fee will be subject to increase agreed to by the Administrator, the Trustee and the Servicer to the extent that a demonstrable and significant increase occurs in the costs incurred by the Servicer in providing the services to be provided hereunder, whether due to changes in applicable governmental regulations or postal rates. Notwithstanding anything to the contrary contained herein, the Servicer may, at its option, collect fees from the Borrowers in connection with sending payment histories and amortization schedules to Borrowers, faxing documents to Borrowers, providing credit reference letters to Borrowers, providing a "speed pay" payment option to Borrowers and for other similar optional services requested by a Borrower and may retain such fees. The Servicer may also, at its option, collect fees from Borrowers for returned check processing or other insufficient fund transactions and may assess such fees from the Borrower's Trust Student Loan payment and retain such fees. Section 3.09. Appointment of Subservicer. The Servicer may at any time, upon the written consent of the Administrator, appoint a subservicer to perform all or any portion of its obligations as Servicer hereunder; provided, however, that any applicable Rating Agency Condition shall have been satisfied in connection therewith; provided further that the Servicer shall remain obligated and be liable to the Issuer, the Trustee, the Indenture Trustee and the Noteholders for the servicing and administering of the Trust Student Loans in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such subservicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Trust Student Loans. The preceding Rating Agency Conditions shall be deemed to be satisfied with respect to HEMAR Insurance Corporation of America, as a subservicer. The fees and expenses of the subservicer shall be as agreed between the Servicer and its subservicer from time to time and none of the Issuer, the Trustee, the Indenture Trustee or the Noteholders shall have any responsibility therefor. With respect to satisfying the Rating Agency Condition referred to above, the term "subservicer" shall be deemed not to include systems providers, systems developers or systems maintenance contractors, collection agencies, credit bureaus, lock box providers, mail service providers and other similar types of service providers. Section 3.10. Reports. With respect to Trust Student Loans, the Servicer shall prepare reports and data and furnish the following information to the Issuer, the Administrator, the Trustee and the Indenture Trustee, unless otherwise noted, at the specified times: 7 (a) The reports and data listed in Attachment C, at the times indicated in the attachment; (b) To credit reporting agencies as may be selected by the Servicer, credit reporting agency reporting; (c) At any time the Trustee or the Indenture Trustee, as the case may be, shall have reasonable grounds to believe that such request would be necessary in connection with its performance of its duties under related documents, and within five (5) business days of receipt of a request therefor, the Servicer shall furnish to the Trustee or to the Indenture Trustee a list of all Trust Student Loans (by borrower social security number, type and outstanding principal balance) and any additional information requested relating to the Trust Student Loans; and (d) From time to time as may be reasonably requested, reports and data providing additional information on the Trust Student Loans. Section 3.11. Covenants and Agreements of the Issuer, Administrator, Trustee and Servicer. The Issuer, the Administrator, the Servicer and the Trustee each agree that: (a) Any payment and any communications received at any time by the Issuer, Administrator and the Trustee with respect to a Trust Student Loan shall be immediately transmitted to the Servicer. Such communications shall include, but not be limited to, requests or notices of loan cancellation, notices of borrower disqualification, letters, changes in address or status, notices of death or disability, notices of bankruptcy and forms requesting deferment of repayment or forbearance. (b) The Servicer may change any part or all of its equipment, data processing programs and any procedures and forms in connection with the services performed hereunder so long as Servicer continues to service the Trust Student Loans in conformance with the requirements herein. The Servicer shall not make any material change in its servicing system and operations with respect to the Trust Student Loans without the prior written consent of the Administrator, which consent will not be unreasonably withheld; provided, however, that no consent of the Administrator shall be required with respect to changes to the Servicer's systems which the Servicer reasonably determines are required or advisable to comply with the terms of each Program under which the Trust Student Loans were originated. Each written request for consent by the Servicer shall be acted upon promptly by the Administrator. (c) The Servicer may and, at the direction of the Administrator, shall include marketing or informational material generally provided to borrowers of loans owned by SLM Education Credit Management Corporation with communications sent to a borrower. (d) The Servicer may, in its discretion, if requested by a borrower of a Trust Student Loan, arrange for the sale of such Trust Student Loan to another lender which holds another student loan of such borrower at a price not less than the Purchase Amount. Section 3.12. Special Programs. The Servicer shall offer borrowers of the Trust Student Loans all special programs whether or not in existence as of the date of this Agreement, 8 generally offered to the obligors of comparable loans owned by SLM Education Credit Management Corporation and serviced by the Servicer; provided, however, to the extent any such program effectively reduces borrower interest rate or principal balances on the Trust Student Loans, such special program shall be applied to the Trust Student Loans only if and to the extent the Issuer receives payment from SLM Education Credit Management Corporation (and the Servicer receives notice of such payment) in an amount sufficient to offset such reductions. SLM Education Credit Management Corporation shall be deemed to be a third party beneficiary of this Section 3.12 and shall make appropriate arrangements to compensate the Servicer for increased costs associated with material changes to existing special programs or the implementation and support of any new special programs. Section 3.13. Financial Statements. The Servicer shall provide to the Indenture Trustee and the Administrator at any time that the Servicer is not an Affiliate of the Administrator (a) as soon as possible and in no event more than 120 days after the end of each fiscal year of the Servicer audited financials as at the end of and for such year and (b) as soon as possible and in no event more than 30 days after the end of each quarterly accounting period of the Servicer unaudited financials as at the end of and for such period. Section 3.14. Insurance. The Servicer shall maintain or cause to be maintained insurance with respect to its property and business against such casualties and contingencies and of such types and in such amounts as is customary in the case of institutions of the same type and size. Section 3.15. Administration Agreement. The Servicer agrees to perform all duties required of the Servicer under the Administration Agreement using that degree of skill and attention that the Servicer exercises with respect to its comparable business activities. Section 3.16. Servicer Optional Purchase. The Servicer shall have the right but not the obligation to purchase any Trust Student Loan that is 180 or more days Delinquent by depositing the Purchase Amount with respect to such Trust Student Loan pursuant to Section 3.05 of this Agreement into the Collection Account. This right to purchase a 180 day Delinquent Trust Student Loan shall terminate with respect to each Trust Student Loan that is 180 or more days Delinquent at the end of the calendar quarter in which it became 180 days Delinquent. Section 3.17. Fees to be Charged at Repayment. During the month that the status of any Trust Student Loan changes for the first time to "repayment" on the Servicer's servicing system, the Servicer shall add the applicable Back-End Fee to the outstanding principal balance of such Trust Student Loan. ARTICLE IV THE SERVICER Section 4.01. Representations of Servicer. The Servicer makes the following representations on which the Issuer is deemed to have relied in acquiring (through the Trustee) 9 the Trust Student Loans and appointing the Servicer as servicer hereunder. The representations speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Trust Student Loans to the Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture. (a) Organization and Good Standing. The Servicer is duly organized and validly existing as a limited partnership formed under the laws of the State of Delaware and in good standing under the laws of the State of Delaware, with the power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted, and had at all relevant times, and has, the power, authority and legal right to service the Trust Student Loans and to hold the Trust Student Loan Files as custodian. (b) Due Qualification. The Servicer is duly qualified to do business and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of property or the conduct of its business (including the servicing of the Trust Student Loans as required by this Agreement) shall require such qualifications. (c) Power and Authority. The Servicer has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement have been duly authorized by the Servicer by all necessary action. No registration with or approval of any governmental agency is required for the due execution and delivery by, and enforceability against, the Servicer of this Agreement. (d) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable in accordance with its terms subject to bankruptcy, insolvency and other similar laws affecting creditors rights generally and subject to equitable principles. (e) No Violation. The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof will not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time or both) a default under, the limited partnership agreement of the Servicer, or any indenture, agreement or other instrument to which the Servicer is a party or by which it shall be bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement and the other Basic Documents); nor violate any law or, to the best of the Servicer's knowledge, any order, rule or regulation applicable to the Servicer of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties. (f) No Proceedings. There are no proceedings or investigations pending, or, to the Servicer's best knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties: (i) asserting the invalidity of this Agreement or any of the other Basic Documents to which the Servicer is a party, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or any of the other Basic Documents to which the Servicer is a party, (iii) seeking any determination or ruling that could reasonably be expected to have a 10 material and adverse effect on the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement or any of the other Basic Documents to which the Servicer is a party, or (iv) relating to the Servicer and which might adversely affect the Federal or state income tax attributes of the Notes. Section 4.02. Indemnities of Servicer. The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Agreement. The Servicer shall pay for any loss, liability or expense, including reasonable attorneys' fees, that may be imposed on, incurred by or asserted against the Issuer, the Indenture Trustee or the Trustee, to the extent that such loss, liability or expense arose out of, or was imposed upon the Issuer, the Indenture Trustee or the Trustee through, the negligence, willful misfeasance or bad faith of the Servicer in the performance of its obligations and duties under this Agreement or by reason of the reckless disregard of its obligations and duties under this Agreement, where the final determination that any such loss, liability or expense arose out of, or was imposed upon the Issuer, the Indenture Trustee or the Trustee through, any such negligence, willful misfeasance, bad faith or recklessness on the part of the Servicer is established by a court of law, by an arbitrator or by way of settlement agreed to by the Servicer. Notwithstanding the foregoing, if the Servicer is rendered unable, in whole or in part, by a force outside the control of the parties hereto (including acts of God, acts of war, fires, earthquakes, hurricanes, floods and other disasters) to satisfy its obligations under this Agreement, the Servicer shall not be deemed to have breached any such obligation upon delivery of written notice of such event to the other parties hereto, for so long as the Servicer remains unable to perform such obligation as a result of such event. For purposes of this Section, in the event of the termination of the rights and obligations of Sallie Mae Servicing L.P. (or any successor thereto pursuant to Section 4.03) as Servicer pursuant to Section 5.01, or a resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a successor Servicer pursuant to Section 5.02. Liability of the Servicer under this Section shall survive the resignation or removal of the Trustee or the Indenture Trustee or the termination of this Agreement. If the Servicer shall have made any payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter collects any of such amounts from others, such Person shall promptly repay such amounts to the Servicer, without interest. Section 4.03. Merger or Consolidation of, or Assumption of the Obligations of, Servicer. The Servicer hereby agrees that, upon (a) any merger or consolidation of the Servicer into another Person, (b) any merger or consolidation to which the Servicer shall be a party resulting in the creation of another Person or (c) any Person succeeding to the properties and assets of the Servicer substantially as a whole, the Servicer shall (i) cause such Person (if other than the Servicer) to execute an agreement of assumption to perform every obligation of the Servicer hereunder, (ii) deliver to the Trustee and Indenture Trustee an Officers' Certificate and an Opinion of Counsel each stating that such consolidation, merger or succession and such 11 agreement of assumption comply with this Section and that all conditions precedent provided for in this Agreement relating to such transaction have been complied with, (iii) cause the Rating Agency Condition to have been satisfied with respect to such transaction and (iv) cure any existing Servicer Default or any continuing event which, after notice or lapse of time or both, would become a Servicer Default. Upon compliance with the foregoing requirements, such Person shall be the successor to the Servicer under this Agreement without further act on the part of any of the parties to this Agreement. Section 4.04. Limitation on Liability of Servicer. The Servicer shall not be under any liability to the Issuer, the Noteholders, the Administrator, the Trustee or the Indenture Trustee except as provided under this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement, for errors in judgment, for any incorrect or incomplete information provided by schools and borrowers, for the failure of any party to this Servicing Agreement or any other Basic Document to comply with its respective obligations hereunder or under any other Basic Document; provided, however, that this provision shall not protect the Servicer against its obligation to purchase Student Loans from the Trust pursuant to Section 3.05 hereof or to pay to the Trust amounts required pursuant to Section 3.05 hereof or against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties under this Agreement. The Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any person respecting any matters arising under this Agreement. Except as provided in this Agreement, the Servicer shall not be under any obligation to appear in, prosecute or defend any legal action where it is not named as a party; provided, however, that the Servicer may undertake any reasonable action that it may deem necessary or desirable in respect of this Agreement and the other Basic Documents and the rights and duties of the parties to this Agreement and the other Basic Documents and the interests of the Noteholders. To the extent that the Servicer is required to appear in or is made a defendant in any legal action or other proceeding relating to the servicing of the Trust Student Loans, the Issuer shall indemnify and hold the Servicer harmless from all cost, liability or expense of the Servicer not arising out of or relating to the failure of the Servicer to comply with the terms of this Agreement. Section 4.05. Sallie Mae Servicing L.P. Not to Resign as Servicer. Subject to the provisions of Section 4.03, Sallie Mae Servicing L.P. shall not resign from the obligations and duties hereby imposed on it as Servicer under this Agreement except upon determination that the performance of its duties under this Agreement are no longer permissible under applicable law. Notice of any such determination permitting the resignation of Sallie Mae Servicing L.P. shall be communicated to the Trustee and the Indenture Trustee at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee and the Indenture Trustee concurrently with or promptly after such notice. No such resignation shall become effective until the Indenture Trustee or a successor Servicer shall have assumed the responsibilities and obligations of Sallie Mae Servicing L.P. in accordance with Section 5.02. 12 ARTICLE V SERVICER DEFAULT Section 5.01. Servicer Default. If any one of the following events (a "Servicer Default") shall occur and be continuing: (a) any failure by the Servicer (i) to deliver to the Indenture Trustee for deposit in the Trust Accounts any payment required by the Basic Documents to which the Servicer is a signatory or (ii) in the event that daily deposits into the Collection Account are not required, to deliver to the Administrator any payment required by the Basic Documents, which failure in case of either clause (i) or (ii) continues unremedied for five Business Days after written notice of such failure is received by the Servicer from the Trustee, the Indenture Trustee or the Administrator or five Business Days after discovery of such failure by an officer of the Servicer; (b) any failure by the Servicer duly to observe or to perform in any material respect any other covenant or agreement of the Servicer set forth in this Agreement or any other Basic Document to which the Servicer is a signatory, which failure shall (i) materially and adversely affect the rights of Noteholders and (ii) continues unremedied for a period of 60 days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the Indenture Trustee, the Trustee or the Administrator or (B) to the Servicer, and to the Indenture Trustee and the Trustee by the Noteholders representing not less than 25% of the Outstanding Amount of the Notes; provided, however, that any breach of Sections 3.01, 3.02, 3.03 or 3.04 shall not be deemed a Servicer Default so long as the Servicer is in compliance with its repurchase and reimbursement obligations under Section 3.05; or (c) an Insolvency Event occurs with respect to the Servicer; then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Indenture Trustee, or the Noteholders of Notes evidencing not less than a majority of the Outstanding Amount of the Controlling Notes, by notice then given in writing to the Servicer (and to the Indenture Trustee and the Trustee if given by the Noteholders) may terminate all the rights and obligations (other than the obligations set forth in Section 3.05 and Section 4.02) of the Servicer under this Agreement. As of the effective date of termination of the Servicer, all authority and power of the Servicer under this Agreement, whether with respect to the Notes or the Trust Student Loans or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such successor Servicer as may be appointed under Section 5.02. The predecessor Servicer shall cooperate with the successor Servicer, the Indenture Trustee and the Trustee in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the successor Servicer for administration by it of all cash amounts that shall at the time be held by the predecessor Servicer for deposit, or shall thereafter be received by it with respect to a Trust Student Loan. All reasonable costs and expenses (including attorneys' fees) incurred in connection with transferring the Trust Student Loan Files to the successor Servicer and amending this Agreement and any other Basic Documents to reflect such succession as Servicer pursuant to this Section shall be paid by the predecessor Servicer (other than the Indenture Trustee acting as the Servicer under this Section 13 5.01) upon presentation of reasonable documentation of such costs and expenses. Upon receipt of notice of the occurrence of a Servicer Default, the Trustee shall give notice thereof to the Rating Agencies. Section 5.02. Appointment of Successor. (a) Upon receipt by the Servicer of notice of termination pursuant to Section 5.1, or the resignation by the Servicer in accordance with the terms of this Agreement, the predecessor Servicer shall continue to perform its functions as Servicer under this Agreement, in the case of termination, only until the date specified in such termination notice or, if no such date is specified in a notice of termination, until receipt of such notice and, in the case of resignation, until the Indenture Trustee or a successor Servicer shall have assumed the responsibilities and duties of Sallie Mae Servicing L.P. In the event of the termination hereunder of the Servicer, the Issuer shall appoint a successor Servicer acceptable to the Indenture Trustee, and the successor Servicer shall accept its appointment by a written assumption in form acceptable to the Indenture Trustee. In the event that a successor Servicer has not been appointed at the time when the predecessor Servicer has ceased to act as Servicer in accordance with this Section, the Indenture Trustee without further action shall automatically be appointed the successor Servicer and the Indenture Trustee shall be entitled to the Servicing Fee and any Carryover Servicing Fees. Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling or legally unable so to act, appoint or petition a court of competent jurisdiction to appoint any established institution whose regular business shall include the servicing of student loans, as the successor to the Servicer under this Agreement; provided, however, that such right to appoint or to petition for the appointment of any such successor Servicer 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. (b) Upon appointment, the successor Servicer (including the Indenture Trustee acting as successor Servicer) shall be the successor in all respects to the predecessor Servicer and shall be subject to all the responsibilities, duties and liabilities placed on the predecessor Servicer that arise thereafter or are related thereto and shall be entitled to an amount agreed to by such successor Servicer (which shall not exceed the Servicing Fee unless the Rating Agency Condition is satisfied with respect to such compensation arrangements) and all the rights granted to the predecessor Servicer by the terms and provisions of this Agreement; provided, that the successor Servicer shall assume no liability or responsibility for any acts, representations, obligations, and covenants of any predecessor Servicer prior to the date that the successor Servicer becomes Servicer hereunder. No successor Servicer shall have any obligations of advances hereunder. (c) The Servicer may not resign unless it is prohibited from serving as such by law as evidenced by an Opinion of Counsel to such effect delivered to the Indenture Trustee and the Trustee. Notwithstanding the foregoing or anything to the contrary herein or in the other Basic Documents, the Indenture Trustee, to the extent it is acting as successor Servicer pursuant hereto and thereto, shall be entitled to resign to the extent a qualified successor Servicer has been appointed and has assumed all the obligations of the Servicer in accordance with the terms of this Agreement and the other Basic Documents. 14 Section 5.03. Notification to Noteholders. Upon any termination of, or appointment of a successor to, the Servicer pursuant to this Article V, the Indenture Trustee shall give prompt written notice thereof to Noteholders, the Certificateholders and the Rating Agencies (which, in the case of any such appointment of a successor, shall consist of prior written notice thereof to the Rating Agencies). Section 5.04. Waiver of Past Defaults. The Noteholders of Notes evidencing a majority of the Outstanding Amount of the Controlling Notes may, on behalf of all Noteholders, waive in writing (a copy to be provided to the Indenture Trustee) any default by the Servicer in the performance of its obligations hereunder and any consequences thereof, except a default in making any required deposits to or payments from any of the Trust Accounts (or giving instructions regarding the same) in accordance with this Agreement. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement and the Administration Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto. ARTICLE VI MISCELLANEOUS Section 6.01. Amendment. (a) This Agreement may be amended by the Servicer, the Issuer, the Administrator, the Trustee and the Indenture Trustee, without the consent of any of the Noteholders or Certificateholders, to comply with any change in any applicable federal or state law, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement; provided, however, that such action shall not, as evidenced by an Opinion of Counsel delivered to the Trustee and the Indenture Trustee, adversely affect in any material respect the interests of any Noteholder or any Certificateholder. (b) This Agreement may also be amended from time to time by the Servicer, the Issuer, the Administrator, the Trustee and the Indenture Trustee, with the consent of the Noteholders of Notes evidencing a majority of the Outstanding Amount of the Notes and the consent of the Certificateholders, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments with respect to Trust Student Loans or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders of which are required to consent to any such amendment, without the consent of all outstanding Noteholders or (iii) reduce the aforesaid percentage of the Outstanding Amount of the Certificates, the 15 Certificateholders of which are required to consent to any such amendment, without the consent of all outstanding Certificateholders. It shall not be necessary for the consent of Noteholders pursuant to this clause (b) to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution of any amendment to this Agreement (or, in the case of the Rating Agencies, fifteen days prior thereto), the Trustee shall furnish written notification of the substance of such amendment to the Indenture Trustee and each of the Rating Agencies. Prior to the execution of any amendment to this Agreement, the Trustee and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement. The Indenture Trustee may, but shall not be obligated to, execute and deliver such amendment which affects its rights, powers, duties or immunities hereunder. Section 6.02. Notices. All notices hereunder shall be given by United States certified or registered mail, by facsimile or by other telecommunication device capable of creating written record of such notice and its receipt. Notices hereunder shall be effective when received and shall be addressed to the respective parties hereto at the addresses set forth below, or at such other address as shall be designated by any party hereto in a written notice to each other party pursuant to this section. If to the Servicer, to: Sallie Mae Servicing L.P. 11600 Sallie Mae Drive, Reston, Virginia 20193 Attn: Director of ABS Administration If to the Issuer, to: SLM Private Credit Student Loan Trust 2003-C c/o Chase Manhattan Bank USA, National Association Christiana Center/OPS4, 500 Stanton Christiana Road Newark, Delaware 19713 Attn: Corporate Trust Department with a copy to: JPMorgan Chase Bank, 450 West 33rd Street 14th Floor New York, New York 10001 Attn: Structured Finance Services 16 If to the Administrator, to: Sallie Mae, Inc. 11600 Sallie Mae Drive Reston, Virginia 20193 Attn: Director, Corporate Finance Operations If to the Trustee, to: Chase Manhattan Bank USA, National Association Christiana Center/OPS4 500 Stanton Christiana Road Newark, Delaware 19713 Attn: Corporate Trust Department with a copy to: JPMorgan Chase Bank 450 West 33rd Street 14th Floor New York, New York 10001 Attn: Structured Finance Services If to the Indenture Trustee, to: JPMorgan Chase Bank 450 West 33rd Street 14th Floor New York, New York 10001 Attn: Structured Finance Services Section 6.03. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, and such counterparts shall constitute one (1) and the same instrument. Section 6.04. Entire Agreement; Severability. This Agreement constitutes the entire agreement between the Issuer, the Administrator, the Trustee, the Indenture Trustee and the Servicer. All prior representations, statements, negotiations and undertakings with regard to the subject matter hereof are superseded hereby. If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remaining terms and provisions of this Agreement, or the application of such terms or provisions to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law. 17 Section 6.05. Governing Law. THE TERMS OF THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY 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 SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Section 6.06. Relationship of Parties. The Servicer is an independent contractor and, except for the services that it agrees to perform hereunder, the Servicer does not hold itself out as an agent of any other party hereto. Nothing herein contained shall create or imply an agency relationship among Servicer and any other party hereto, nor shall this Agreement be deemed to constitute a joint venture or partnership between the parties. Section 6.07. Captions. The captions used herein are for the convenience of reference only and not part of this Agreement, and shall in no way be deemed to define, limit, describe or modify the meanings of any provision of this Agreement. Section 6.08. Nonliability of Directors, Officers and Employees of Servicer, the Trustee, the Indenture Trustee and the Administrator. No member of the board of directors or any officer, employee or agent of the Servicer, the Administrator, the Trustee or the Indenture Trustee (or any Affiliate of any such party) shall be personally liable for any obligation incurred under this Agreement. Section 6.09. Assignment. This Agreement may not be assigned by the Servicer except as permitted under Sections 4.03, 4.05 and 5.02 hereof. This Agreement may not be assigned by the Administrator except as permitted under Sections 4.03 and 4.06 of the Administration Agreement. Section 6.10. Limitation of Liability of Trustee and Indenture Trustee. (a) Notwithstanding anything contained herein to the contrary, this Agreement has been signed by Chase Manhattan Bank USA, National Association, not in its individual capacity but solely in its capacity as Trustee of the Issuer and in no event shall Chase Manhattan Bank USA, National Association in its individual capacity or, except as expressly provided in the Trust Agreement, as Trustee have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer or the Trustee hereunder or in any of the certificates, notices or agreements delivered pursuant hereto as to all of which recourse shall be had solely to the assets of the Issuer. (b) Notwithstanding anything contained herein to the contrary, this Agreement has been signed by JPMorgan Chase Bank not in its individual capacity but solely as Indenture Trustee and in no event shall JPMorgan Chase Bank have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. (c) The rights and protections of the Indenture Trustee under the Indenture shall be incorporated as though explicitly set forth herein. 18 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on their behalf by their duly authorized officers as of October 9, 2003. SALLIE MAE SERVICING L.P. By: SALLIE MAE, INC., Its general partner By: /s/ PETER W. STRANG ------------------------------------ Name: Peter W. Strang Title: Vice President SALLIE MAE, INC., as Administrator By: /s/ PETER W. STRANG ------------------------------------ Name: Peter W. Strang Title: Vice President SLM PRIVATE CREDIT STUDENT LOAN TRUST 2003-C, as Issuer By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: /s/ JOHN J. CASHIN ------------------------------------ Name: John J. Cashin Title: Vice President 19 CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity but solely as Trustee By: /s/ JOHN J. CASHIN ------------------------------------ Name: John J. Cashin Title: Vice President JPMORGAN CHASE BANK, not in its individual capacity but solely as Indenture Trustee By: /s/ DAVID CONTINO ------------------------------------ Name: David Continio Title: Trust Officer 20 ATTACHMENT A SCHEDULE OF FEES The Servicer will receive a Primary Servicing Fee and a Carryover Servicing Fee (together, the "Servicing Fee"). The "Primary Servicing Fee" for any month is an amount equal to the sum of 1/12th of 0.70% of the outstanding principal amount of the Trust Student Loans as of the last day of the preceding calendar month, plus any such amounts from prior Monthly Servicing Payment Dates that remain unpaid. The Primary Servicing Fee will be payable out of Available Funds and amounts on deposit in the Reserve Account on the 15th day of each month (or, if any such date is not a business day, on the next succeeding business day), commencing November 17, 2003 (each, a "Monthly Servicing Payment Date"). The "Carryover Servicing Fee" is the sum of (a) the amount of certain increases in the costs incurred by the Servicer which are agreed to pursuant to Section 3.08 of the Servicing Agreement, (b) any Conversion Fees, Transfer Fees and Removal Fees (as defined below) incurred since the last Distribution Date and (c) any amounts described in (a) and (b) above that remain unpaid from prior Distribution Dates plus interest on such amounts for the period from the Distribution Date on which such amounts become due to the date such amounts are paid in full at a rate per annum for each Interest Period (as defined below) equal to the sum of (a) the average accepted auction price (expressed on a bond equivalent basis) for 91-day Treasury Bills sold at the most recent 91-day Treasury Bill auction prior to the Interest Period as reported by the U.S. Treasury Department and (b) 2.00%. "Interest Period" shall mean the period from each Distribution Date through the day before the next Distribution Date. The Carryover Servicing Fee will be payable to the Servicer on each succeeding Distribution Date out of Available Funds after payment on such Distribution Date of all senior amounts payable under Section 2.07(c) of the Administration Agreement. On the November 17, 2003 Monthly Servicing Payment Date, the Servicer shall receive a pro rata portion of the Primary Servicing Fee for the period from the Closing Date to and including October 31, 2003. Servicer will be paid a fee ("Conversion Fee") for any Student Loan added to the Trust Estate which Student Loan is not serviced on the Servicer's system unless such Student Loan is being substituted into the Trust Estate by the Servicer pursuant to Section 3.05 of this Agreement. The Conversion Fee is equal to the greater of $17.00 per account or the Servicer's verifiable costs plus 15%. Servicer will be paid a fee ("Transfer Fee") for any Student Loan transferred in or out of the Trust Estate which is at the time of transfer being serviced on the Servicer's system (regardless of the owner) unless such Student Loans are being removed or added to the Trust in order to comply with the Servicer's purchase/substitution obligation under Section 3.05 of this Agreement. The Transfer Fee is equal to $4.00 per account transaction. 1 Servicer will be paid a fee ("Removal Fee") for performing all activities required to remove a Trust Student Loan from the Servicer's system to another servicer unless such Trust Student Loan is being removed due to the termination of the Servicer pursuant to Section 5.01 of this Agreement. The Removal Fee is equal to $10.00 per account plus any verifiable direct expenses incurred for shipping such Trust Student Loan to the new servicer. 2 ATTACHMENT B LOCATIONS --------- Loan Servicing Center/Florida P.O. Box 2975 Panama City, Florida 32402-2975 (904) 271-9207 Loan Servicing Center/Indianapolis 11100 USA Parkway Fishers, Indiana 46038 (317) 849-6510 Loan Servicing Center/Pennsylvania 220 Lasley Avenue Hanover Industrial Estates Wilkes-Barre, Pennsylvania 18706 (717) 821-3600 Loan Servicing Center/Texas 777 Twin Creek Drive Killeen, Texas 76543 (817) 554-4500 Western Regional Center (Nevada) 10550 W. Charleston Blvd. Las Vegas, Nevada 89135 (702) 804-8437 1 ATTACHMENT C REPORTS ------- 1. CLASS Report 800 - Monthly activity summary report 2. CLASS Report 801 - Monthly average/ending balance report 3. CLASS Report 802 - Monthly activity detail 4. CLASS Report 803 - Monthly conversion/removal summary 5. CLASS Report 807 - Monthly delinquency aging report 6. CLASS Report 810 - Monthly characteristics summary 7. CLASS Report 866 - Monthly average/ending balance offset fee report 8. CLASS Report 882 - Reporting Borrower Benefit 9. Monthly Cash Reconciliation Report 10. Quarterly ED799 billing (prepared from CLASS Reports 824, 825, 827, 828 and 829; supporting detail CLASS Reports 865, 868, 870 and 871; and the OE799 SAS library) 11. Portfolio Characteristics, Financial Activity, Quarterly calculation of Accrued Interest to be capitalized, Delinquency Detail and Claims extracts. 1 ATTACHMENT D BACK-END FEES ------------- 2 -----END PRIVACY-ENHANCED MESSAGE-----