Document:

a51101_exhibit4-7.htm

 

 

 

 

 

 

 

 

INDENTURE

 

among

 

SLM STUDENT LOAN TRUST 2013-3,

as the Issuer,

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

not in its individual capacity but

solely as the Eligible Lender Trustee

 

and

 

DEUTSCHE BANK NATIONAL TRUST COMPANY,

not in its individual capacity but

solely as the Indenture Trustee

 

Dated as of June 20, 2013

 

 

 

 

 

 

 

 

 

  

  

  

TABLE OF CONTENTS

 

 

	 	 	Page
	
 

ARTICLE I

Definitions and Usage

 

	
SECTION 1.1  

	
Definitions and Usage

	
2

	
SECTION 1.2  

	
Incorporation by Reference of Trust Indenture Act

	
2

	
 

ARTICLE II

The Notes

 

	
SECTION 2.1  

	
Form

	
3

	
SECTION 2.2  

	
Execution, Authentication and Delivery

	
3

	
SECTION 2.3  

	
Temporary Notes

	
4

	
SECTION 2.4  

	
Registration; Registration of Transfer and Exchange

	
5

	
SECTION 2.5  

	
Mutilated, Destroyed, Lost or Stolen Notes

	
6

	
SECTION 2.6  

	
Persons Deemed Owner

	
7

	
SECTION 2.7  

	
Payment of Principal and Interest; Note Interest Shortfall

	
7

	
SECTION 2.8  

	
Cancellation

	
8

	
SECTION 2.9  

	
Release of Collateral

	
8

	
SECTION 2.10  

	
Book-Entry Notes

	
8

	
SECTION 2.11  

	
Notices to Clearing Agency

	
9

	
SECTION 2.12  

	
Definitive Notes

	
9

	
 

ARTICLE III

Covenants, Representations and Warranties

 

	
SECTION 3.1  

	
Payments to Noteholders

	
10

	
SECTION 3.2  

	
Maintenance of Office or Agency

	
10

	
SECTION 3.3  

	
Money for Payments to be Held in Trust

	
11

	
SECTION 3.4  

	
Existence

	
12

	
SECTION 3.5  

	
Protection of Indenture Trust Estate

	
12

	
SECTION 3.6  

	
Opinions as to Indenture Trust Estate

	
13

	
SECTION 3.7  

	
Performance of Obligations; Servicing of Trust Student Loans.

	
13

	
SECTION 3.8  

	
Negative Covenants

	
16

	
SECTION 3.9  

	
Annual Statement as to Compliance

	
16

	
SECTION 3.10  

	
Issuer May Consolidate, etc., Only on Certain Terms.

	
17

	
SECTION 3.11  

	
Successor or Transferee

	
18

	
SECTION 3.12  

	
No Other Business

	
18

	
SECTION 3.13  

	
No Borrowing

	
19

	
SECTION 3.14  

	
Obligations of Servicer and Administrator

	
19

	
SECTION 3.15  

	
Guarantees, Loans, Advances and Other Liabilities

	
19

	
SECTION 3.16  

	
Capital Expenditures

	
19

	
SECTION 3.17  

	
Restricted Payments

	
19

	
SECTION 3.18  

	
Notice of Events of Default

	
19

 

  

i

  

	
SECTION 3.19  

	
Further Instruments and Acts

	
20

	
SECTION 3.20  

	
Representations and Warranties

	
20

	
 

ARTICLE IV

Satisfaction and Discharge

 

	
SECTION 4.1  

	
Satisfaction and Discharge of Indenture

	
21

	
SECTION 4.2  

	
Application of Trust Money

	
22

	
SECTION 4.3  

	
Repayment of Moneys Held by Paying Agent

	
22

	
SECTION 4.4  

	
Auction of Trust Student Loans

	
22

	
 

ARTICLE V

Remedies

 

	
SECTION 5.1  

	
Events of Default

	
23

	
SECTION 5.2  

	
Acceleration of Maturity; Rescission and Annulment

	
24

	
SECTION 5.3  

	
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee

	
25

	
SECTION 5.4  

	
Remedies; Priorities

	
27

	
SECTION 5.5  

	
Optional Preservation of the Trust Student Loans

	
29

	
SECTION 5.6  

	
Limitation of Suits

	
29

	
SECTION 5.7  

	
Unconditional Rights of Noteholders to Receive Principal and Interest

	
30

	
SECTION 5.8  

	
Restoration of Rights and Remedies

	
30

	
SECTION 5.9  

	
Rights and Remedies Cumulative

	
30

	
SECTION 5.10  

	
Delay or Omission Not a Waiver

	
30

	
SECTION 5.11  

	
Control by Noteholders

	
30

	
SECTION 5.12  

	
Waiver of Past Defaults

	
31

	
SECTION 5.13  

	
Undertaking for Costs

	
31

	
SECTION 5.14  

	
Waiver of Stay or Extension Laws

	
32

	
SECTION 5.15  

	
Action on Notes

	
32

	
SECTION 5.16  

	
Performance and Enforcement of Certain Obligations.

	
32

	
 

ARTICLE VI

The Indenture Trustee

 

	
SECTION 6.1  

	
Duties of Indenture Trustee

	
33

	
SECTION 6.2  

	
Rights of Indenture Trustee

	
35

	
SECTION 6.3  

	
Individual Rights of Indenture Trustee

	
36

	
SECTION 6.4  

	
Indenture Trustee’s Disclaimer

	
36

	
SECTION 6.5  

	
Notice of Defaults

	
36

	
SECTION 6.6  

	
Reports by Indenture Trustee to Noteholders

	
36

	
SECTION 6.7  

	
Compensation and Indemnity

	
36

	
SECTION 6.8  

	
Replacement of Indenture Trustee

	
37

	
SECTION 6.9  

	
Successor Indenture Trustee by Merger

	
38

	
SECTION 6.10  

	
Appointment of Co-Trustee or Separate Trustee.

	
38

	
SECTION 6.11  

	
Eligibility; Disqualification

	
39

	
SECTION 6.12  

	
Preferential Collection of Claims Against the Issuer

	
40

	
SECTION 6.13  

	
Rule 15Ga-1 Information

	
40

 

  

ii

  

	  	  	  
	
 

ARTICLE VII

Noteholders’ Lists and Reports

 

	
SECTION 7.1  

	
Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders

	
41

	
SECTION 7.2  

	
Preservation of Information; Communications to Noteholders

	
41

	
SECTION 7.3  

	
Reports by Issuer.

	
42

	
 

ARTICLE VIII

Accounts, Disbursements and Releases

 

	
SECTION 8.1  

	
Collection of Money

	
42

	
SECTION 8.2  

	
Trust Accounts

	
43

	
SECTION 8.3  

	
General Provisions Regarding Accounts

	
43

	
SECTION 8.4  

	
Release of Indenture Trust Estate

	
44

	
SECTION 8.5  

	
Opinion of Counsel

	
45

	
 

ARTICLE IX

Supplemental Indentures

 

	
SECTION 9.1  

	
Supplemental Indentures Without Consent of Noteholders.

	
46

	
SECTION 9.2  

	
Supplemental Indentures With Consent of Noteholders

	
47

	
SECTION 9.3  

	
Execution of Supplemental Indentures

	
48

	
SECTION 9.4  

	
Effect of Supplemental Indenture

	
48

	
SECTION 9.5  

	
Conformity with Trust Indenture Act

	
49

	
SECTION 9.6  

	
Reference in Notes to Supplemental Indentures

	
49

	
 

ARTICLE X

Redemption of Notes

 

	
SECTION 10.1  

	
Redemption

	
49

	
SECTION 10.2  

	
Form of Redemption Notice

	
49

	
SECTION 10.3  

	
Notes Payable on Redemption Date

	
50

	
 

ARTICLE XI

Miscellaneous

 

	
SECTION 11.1  

	
Compliance Certificates and Opinions, etc

	
50

	
SECTION 11.2  

	
Form of Documents Delivered to Indenture Trustee

	
52

	
SECTION 11.3  

	
Acts of Noteholders

	
52

	
SECTION 11.4  

	
Notices, etc., to Indenture Trustee, Issuer and Rating Agencies

	
53

	
SECTION 11.5  

	
Notices to Noteholders; Waiver

	
54

	
SECTION 11.6  

	
Alternate Payment and Notice Provisions

	
54

	
SECTION 11.7  

	
Conflict with Trust Indenture Act

	
54

	
SECTION 11.8  

	
Effect of Headings and Table of Contents

	
54

	
SECTION 11.9  

	
Successors and Assigns

	
55

	
SECTION 11.10  

	
Separability

	
55

 

  

iii

  

	
SECTION 11.11  

	
Benefits of Indenture

	
55

	
SECTION 11.12  

	
Legal Holidays

	
55

	
SECTION 11.13  

	
Governing Law

	
55

	
SECTION 11.14  

	
Counterparts

	
55

	
SECTION 11.15  

	
Recording of Indenture

	
55

	
SECTION 11.16  

	
Trust Obligations

	
55

	
SECTION 11.17  

	
No Petition

	
56

	
SECTION 11.18  

	
Inspection

	
56

	
SECTION 11.19  

	
Waiver of Jury Trial.

	
55

	
 

ARTICLE XII

Compliance with Regulation AB

 

	
SECTION 12.1  

	
Intent of the Parties; Reasonableness

	
57

	
 

ARTICLE XIII

Tax Considerations

 

	
SECTION 13.1  

	
Acknowledgement of Parties

	
58

  

iv

  

	
APPENDICES, SCHEDULES AND EXHIBITS

 

	
APPENDIX A

	
Definitions and Usage

	  
	  	  	  
	
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

	
Servicing Criteria to be Addressed in Assessment of Compliance

	  
	  	  	  

 

  

v

  

INDENTURE, dated as of June 20, 2013, among SLM STUDENT LOAN TRUST 2013-3, a Delaware statutory trust (the “Issuer”), DEUTSCHE BANK TRUST COMPANY AMERICAS, a New York banking corporation, not in its individual capacity but solely as eligible lender trustee on behalf of the Issuer (in such capacity, the “Eligible Lender Trustee”), and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, not in its individual capacity but solely as indenture trustee (in such 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 and, with respect to the Trust Student Loans, the Eligible Lender Trustee hereby Grant 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, whether now owned or hereafter acquired, 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 applicable Cutoff Date and all guaranties and other rights relating to the Trust Student Loans;

 

(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 related Sale Agreement, including the right of the Issuer to cause the Depositor to repurchase Trust Student Loans from the Issuer under the circumstances described therein and including the rights of the Depositor under the Purchase Agreements;

 

(d)       the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement and the VL Funding Purchase Agreement, to the extent that the rights of the Depositor thereunder have been assigned to the Issuer pursuant to the Sale Agreement, including the right of the Depositor to cause SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding or VL Funding, as the case may be, to repurchase Trust Student Loans from the Depositor under the circumstances described in the applicable Purchase Agreement;

 

(e)       the Administration Agreement and any agreement representing Eligible Repurchase Obligations between the Trust and an Eligible Repo Counterparty to be entered into from time to time;

 

(f)       each Guarantee Agreement, including the right of the Issuer to cause the related Guarantor to make Guarantee Payments in respect of the Trust Student Loans;

 

(g)       the Trust Accounts and all funds on deposit from time to time in the Trust Accounts, including the Reserve Account Initial Deposit, the Supplemental Purchase Account Initial Deposit, the Borrower Benefit Account Initial Deposit, if any, the Floor Income Rebate Account and the Collection Account Initial Deposit, if any, and all investments and proceeds thereof (including all income thereon);

 

  

1

  

(h)       [Reserved];

 

(i)       all present and future claims, demands, causes and choses 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 assets described in clauses (a) through (g); and

 

(j)       all accounts, chattel paper, deposit accounts, financial assets, general intangibles, instruments, investment property, letter-of-credit rights (each as defined in the applicable Uniform Commercial Code) and other supporting obligations relating to the foregoing; and all proceeds (as defined in the applicable Uniform Commercial Code) with respect to the foregoing assets described in clauses (a) through and including (i) (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, to secure compliance with the provisions of 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 1.1   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.

 

SECTION 1.2   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.

 

  

2

  

“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.

 

ARTICLE II

 

The Notes

 

SECTION 2.1   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.

 

The terms of the Notes set forth in Exhibit A are part of the terms of this Indenture.

 

Each class of Notes will be represented by interests in a book-entry note certificate deposited on the Closing Date with Deutsche Bank National Trust Company, as custodian for DTC (the “DTC Custodian”), and registered in the name of Cede & Co. as initial nominee for DTC.

 

SECTION 2.2   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.

 

  

3

  

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 the Notes in an aggregate principal amount of $1,246,000,000, of which $262,000,000 shall be denominated Class A-1 Notes, $315,000,000 shall be denominated Class A-2 Notes, $634,000,000 shall be denominated Class A-3 Notes, and $35,000,000 shall be denominated Class B Notes.  The aggregate principal amount of Notes Outstanding at any time may not exceed $1,246,000,000 except as provided in Section 2.5.

 

Each Note shall be dated the date of its authentication.  The Notes shall be issuable as registered notes in minimum denominations of $100,000 and additional increments of $1,000.

 

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.

 

SECTION 2.3   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 an Authorized 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 3.2, 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.

 

  

4

  

SECTION 2.4   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 3.2, if the requirements of Section 8-401(a) 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.

 

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.

 

  

5

  

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 and 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 2.3 or 9.6 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.

 

Any transfer or assignment of any Note or any interest in any Note that is not effected pursuant to the provisions of this Indenture (including, without limitation, this Section 2.4), such as a transfer or assignment not reflected on the Note Register, shall be null and void and shall not be taken into account by, or be binding upon, the Indenture Trustee or any other party.

 

SECTION 2.5   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, the Eligible Lender Trustee 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.

 

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.

 

  

6

  

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 2.6   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 2.7   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 such interest shall be payable on each applicable Distribution Date as specified therein, subject to Section 3.1.  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 applicable Clearing Agency, for the Notes, 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 3.3.

 

(b)       The principal amount of each class of Notes shall be payable in installments on each applicable Distribution Date as provided in the related form of such Note set forth in Exhibit A.  Notwithstanding the foregoing, the Outstanding Amount of each class of 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 at least a majority of the Outstanding Amount of the Notes have declared the Notes to be immediately due and payable in the manner provided in Section 5.2.  All principal payments on the Notes shall be made pro rata to the specific class of Noteholders entitled thereto.  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 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 10.2.

 

  

7

  

(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 2.8   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 the canceled Notes be returned to it and so long as such Issuer Order is timely and the canceled Notes have not been previously disposed of by the Indenture Trustee.

 

SECTION 2.9   Release of Collateral.   Subject to Section 11.1 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 §§ 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 applicable initial Clearing Agency, by the Issuer, or on behalf of the Issuer.  Such Notes shall initially be registered on the Note Register in the name of the nominee of the related initial Clearing Agency, and no Note Owner shall receive a definitive, fully registered note (a “Definitive Note”) representing such Note Owner’s interest in such Note, except as provided in Section 2.12.  Unless and until 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;

 

(ii)       the Note Registrar and the Indenture Trustee, and their respective directors, officers, employees and agents, may deal with the applicable 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;

 

  

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(iv)       the rights of Note Owners shall be exercised only through the applicable Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the applicable Clearing Agency and/or the applicable Clearing Agency Participants pursuant to the Note Depository Agreement; and unless and until Definitive Notes are issued pursuant to Section 2.12, the applicable initial Clearing Agency will make book-entry transfers among the applicable Clearing Agency Participants and receive and transmit payments of principal of and interest and other amounts on the Notes to such applicable Clearing Agency Participants;

 

(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 applicable 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 applicable 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, a Benefit 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 Benefit Plan subject to Title I 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 Benefit Plan subject to a substantially similar federal, state, local or foreign 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 to be given to Noteholders, 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 communications specified herein to the applicable Clearing Agency.

 

SECTION 2.12   Definitive Notes.  If (i) the Administrator advises the Indenture Trustee in writing that a Clearing Agency (a) is closed for business for a continuous period of 14 days (other than by reason of holiday, statutory or otherwise), (b) announces an intention to cease business permanently (or does so and no alternative clearing system acceptable to the Indenture Trustee is then available), or (c) at any time, is unwilling or unable to continue as, or ceases to be, a clearing agency registered under all applicable laws, and a successor clearing agency which is registered as a clearing agency under all applicable laws is not appointed by the Administrator within 90 days of such event, (ii) the Administrator at its option advises the Indenture Trustee in writing that it elects to terminate the book-entry system through such 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 applicable Notes advise the applicable Clearing Agency (which shall then notify the Indenture Trustee) in writing that the continuation of a book-entry system through such Clearing Agency is no longer in the best interests of such Note Owners, then the Indenture Trustee shall cause such Clearing Agency to notify all Note Owners of Notes cleared through such Clearing Agency, of the occurrence of any such event and of the availability of Definitive Notes to Note Owners requesting the same.

 

  

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Upon surrender to the Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by a 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 such Clearing Agency, which shall include, without limitation, the identity and payment instructions for all Noteholders of the applicable Notes.  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 Benefit Plan, the related 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 Benefit Plan subject to Title I 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 Benefit 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, Representations and Warranties

 

SECTION 3.1   Payments 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 Sections 2.7 and 2.8 of 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 3.1A  [Reserved].

 

SECTION 3.2   Maintenance of Office or Agency.  The Issuer shall maintain in the Borough of Manhattan, The City of New York and in such other international jurisdiction if any of the Notes are listed on a stock exchange of international standing and the rules of such exchange so require, 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 

 

 

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as its agent for the foregoing purposes.  The Issuer shall give prompt written notice to the Indenture Trustee of the location, and of any change in the location, of any such office or agency.  If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

 

SECTION 3.3   Money for Payments to be Held in Trust.  As provided in Section 8.2(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 Section 2.7, or deposited into the Collection Account from the Supplemental Purchase Account, the Borrower Benefit Account, the Floor Income Rebate Account or the Reserve Account, pursuant to Sections 2.7 and 2.8 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 or any other Trust Account for payments to Noteholders 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 payments due under the 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

 

  

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(v)       comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith.

 

The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying 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 holder of the Excess Distribution Certificate at the time the Issuer was terminated 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 and in such other international jurisdiction if any of the Notes are listed on a stock exchange of international standing and the rules of such exchange so require, 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 3.4   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 3.5   Protection of Indenture Trust Estate.  The Issuer will from time to time execute and deliver all such supplements and amendments hereto, all such financing statements and continuation statements and will take such other action necessary or advisable to:

 

  

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(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

 

(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 3.6   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 2013, 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 3.7   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 then rating the Notes of any such contract with any other Person.

 

  

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(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 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 then rating the Notes of any such waiver, amendment, modification, supplement or termination that requires the consent of the Indenture Trustee or the Noteholders of at least a majority of the Outstanding Amount of the Notes.

 

(d)       If an Authorized 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 then rating the Notes 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 5.1 of the Servicing Agreement, or to the Administrator of the Administrator’s rights and powers, pursuant to Section 5.1 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 Successor Servicer or the Successor 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, as the case may be, enters into an agreement with the Issuer as provided below; provided, however, that nothing 

 

 

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herein shall require or permit the Indenture Trustee to act as Servicer, or otherwise service the Trust Student Loans, in violation of the Higher Education Act.  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 (A) that satisfies any requirements of the Higher Education Act applicable to servicers and (B) whose regular business includes the servicing or administration of student loans, as the case may be, 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, as applicable; 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 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 5.2 of the Servicing Agreement and Section 5.2 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 as Administrator 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 then rating the Notes.  As soon as a Successor Servicer or a Successor Administrator is appointed, the Issuer shall notify the Indenture Trustee and each Rating Agency then rating the Notes of such appointment, specifying in such notice the name and address of such Successor Servicer or such Successor Administrator.

 

(g)       [Reserved].

 

(h)       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, supplement, terminate, waive 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 

 

 

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provided in the Basic Documents, or waive timely performance or observance by the Servicer, the Administrator, the Depositor, any Excess Distribution Certificateholder, SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding, the Issuer or the Eligible Lender Trustee 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 then rating the Notes 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.

 

SECTION 3.8   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; or

 

(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.

 

SECTION 3.9   Annual Statement as to Compliance.  The Issuer will deliver to the Indenture Trustee and each Rating Agency then rating the Notes, within 90 days after the end of each fiscal year of the Issuer (commencing with the fiscal year ending December 31, 2013), an Officers’ Certificate of the Issuer stating that:

 

  

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(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 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 or any Noteholder;

 

(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 of 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 

 

 

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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 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 or any Noteholder;

 

(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 Student Loan Trust 2013-3 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 Student Loan Trust 2013-3 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 and the other assets of the Issuer and related proceeds thereof, in the manner contemplated by this Indenture and the other Basic Documents and activities incidental thereto.

 

  

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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.

 

SECTION 3.14   Obligations of Servicer and Administrator.  The Issuer shall cause the Servicer to comply with Sections 3.1, 3.2 and 3.3 of the Administration Agreement and Section 3.7 of the Servicing Agreement and the Administrator to comply with Sections 2.11, 3.1, 3.2 and 3.3 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 Eligible Lender 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 Eligible Lender Trustee, the Indenture Trustee, the Noteholders, the Administrator, the Depositor and the Excess Distribution Certificateholder 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 or any other Trust 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 then rating the Notes prompt written notice of each Event of Default hereunder and each default on the part of (i) the Depositor of its obligations under the Sale Agreement, (ii) SLM ECFC of its obligations under the SLM ECFC Purchase Agreement, (iii) Bluemont Funding of its obligations under the Bluemont Funding Purchase Agreement, (iv) Town Center Funding of its obligations under the Town Center Funding Purchase Agreement, (v) Town Hall Funding of its obligations under the Town Hall Funding Purchase Agreement, (vi) VL Funding of its obligations under the VL Funding Purchase Agreement, (vii) the Servicer of its obligations under the Servicing Agreement and (viii) the Administrator of its obligations under the Administration Agreement.  In addition, the Issuer shall deliver to the Indenture Trustee and each Rating Agency then rating the Notes, 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 5.1(iii), its status and what action the Issuer is taking or proposes to take with respect thereto.

 

  

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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.

 

SECTION 3.20   Representations and Warranties.  The Issuer and, with respect to clause (e) only, the Eligible Lender Trustee represent and warrant to the Indenture Trustee that, as of the Closing Date:

 

(a)       this Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Trust Student Loans in favor of the Indenture Trustee, 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 Issuer and Eligible Lender Trustee;

 

(b)       the Trust Student Loans constitute “Accounts” within the meaning of the applicable UCC and are within the coverage of Section 432(m)(1)(E) and 439(d)(3) of the Higher Education Act;

 

(c)       the Issuer has caused or will have caused, within 30 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 Trust Student Loans granted to the Indenture Trustee hereunder;

 

(d)       the Eligible Lender Trustee owns and has legal title to the Trust Student Loans which, except for the beneficial interest of the Issuer and any obligations created pursuant to this Indenture, are free and clear of any Lien, claim or encumbrance of any Person; and

 

(e)       other than the security interest granted to the Indenture Trustee pursuant to this Agreement, the Eligible Lender Trustee has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any interest in the Trust Student Loans. The Trust has not authorized the filing of and is not aware of any financing statements against the Eligible Lender Trustee that include a description of collateral covering the Trust Student Loans other than any financing statements relating to the beneficial interest of the Issuer and the security interest granted to the Indenture Trustee hereunder or that has been terminated.  The Trust is not aware of any judgment or tax lien filings against the Trust.

 

  

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ARTICLE IV

 

Satisfaction and Discharge

 

SECTION 4.1   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 3.3, 3.4, 3.5, 3.8, 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 6.7 and the obligations of the Indenture Trustee under Section 4.2) 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 (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.5 and (ii) 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 3.3) have been delivered to the Indenture Trustee for cancellation; or

 

(2)     all Notes not theretofore delivered to the Indenture Trustee for cancellation:

 

(i)     have become due and payable,

 

(ii)     will become due and payable at their respective Note Final Maturity Date, within one year, or

 

(iii)      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 related Note Final Maturity Date;

 

(b)       the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer; and

 

  

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(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 Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.1(a) and, subject to Section 11.2, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

SECTION 4.2   Application of Trust Money.  All moneys deposited with the Indenture Trustee pursuant to Section 4.1 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 4.3   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 3.3 and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

 

SECTION 4.4   Auction of Trust Student Loans.  On the date (the “Trust Auction Date”) that is three Business Days prior to the Distribution Date immediately following the end of the first Collection Period when the Pool Balance is equal to 10% or less of the Initial Pool Balance, any Trust Student Loans remaining in the Trust may, and at the written direction of either the Administrator or Noteholders of at least a majority of the Outstanding Amount of all of the Notes 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 6.1(a) of the Administration Agreement with respect to such Distribution Date.  The Servicer will be deemed to have waived such option if it fails to notify the Eligible Lender 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 4.4.  The Indenture Trustee shall provide written notice to the Servicer of any such offer for sale at least five (5) Business Days in advance of the Trust Auction Date.  The Indenture Trustee shall permit the Depositor or any of its Affiliates, including SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding and the Servicer, 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 the auction is conducted and 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 remaining bid if it is equal to or in excess of both (i) the Minimum Purchase Amount (plus any amounts owed to the Servicer for any Carryover Servicing Fees of which the Servicer has advised the Indenture Trustee in writing) and (ii) the fair market value of such Trust Student Loans as of the end of the Collection Period immediately preceding the Trust 

 

 

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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 (i) the Minimum Purchase Amount (plus any amounts owed to the Servicer for any Carryover Servicing Fees of which the Servicer has advised the Indenture Trustee in writing) and (ii) 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 (and at the sole cost and expense) of the Administrator, shall consult, with a financial advisor, including an Underwriter of the Notes or the Administrator, to determine if the fair market value of the Trust Student Loans has been offered.  The proceeds of any such sale will be paid at the time set forth in Section 2.6 of the Administration Agreement and applied in the order of priority set forth in Section 5.4(b).  If the sale is not consummated in accordance with the foregoing, the Indenture Trustee may, and at the written direction of either the Administrator or Noteholders of at least a majority of the Outstanding Amount of the Notes shall, solicit bids for sale of the Trust Student Loans with respect to future 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 6.1(a) of the Administration Agreement with respect to each such future Distribution Date.

 

ARTICLE V

 

Remedies

 

SECTION 5.1   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):

 

(i)       default in the payment of any interest on any Note when the same becomes due and payable, and such default shall continue for a period of five Business Days; provided that, for the avoidance of doubt, failure to pay interest on the Class B Notes due to insufficient Available Funds shall not be an Event of Default so long as the Class A Notes are then Outstanding; or

 

(ii)       default in the payment of the principal of any Note when the same becomes due and payable on the related Note Final Maturity Date; or

 

(iii)       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 representation 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 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; or

 

  

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(iv)       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

 

(v)       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 5.2   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 representing at least a majority of the Outstanding Amount of the 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 5.4 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 at least a majority of the Outstanding Amount of the Notes, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

(i)       the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:

 

(a)     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

 

(b)     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

 

  

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(ii)       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 5.3   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 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 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 2.7 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 5.4, 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:

 

  

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(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;

 

(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 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 the 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.

 

  

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(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 5.4   Remedies; Priorities.  If an Event of Default shall have occurred and be continuing, the Indenture Trustee may, or, upon the written instruction of the Noteholders of 100% of the Outstanding Amount of the Notes, shall, do one or more of the following (subject to Section 5.5):

 

(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;

 

(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 Eligible Lender 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 5.1(i) or (ii) with respect to the Class A Notes, unless (A) the Noteholders of 100% of the Outstanding Amount of the Class A Notes consent thereto, (B) the proceeds of such sale or liquidation distributable to the Class A Noteholders are sufficient to discharge in full all amounts then due and unpaid upon such Class A 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 Class A Notes as would have become due if the Class A 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 5.1(i) or (ii) 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 B Noteholders are sufficient to pay to the Class B Noteholders the Outstanding Amount of the Class B Notes plus 

 

 

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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 B Noteholders would not be sufficient to pay to the Class B Noteholders the Outstanding Amount plus accrued and unpaid interest thereon, the Class B Noteholders of at least a majority of the Outstanding Amount of the Class B 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 2.8 of the Administration Agreement, following the occurrence and during the continuation of an Event of Default which has resulted in an acceleration of the Notes, if the Indenture Trustee collects any money or property, it shall pay out, on each Distribution Date, the money or property (and other amounts including amounts, if any, held on deposit in each of the Trust Accounts) held as Collateral for the benefit of the Noteholders, net of liquidation costs associated with the sale of the assets of the Trust, in the following order:

 

FIRST:         pro rata, to the Indenture Trustee, for annual fees and any other amounts due and owing under Section 6.7, and to the Eligible Lender Trustee and Delaware Trustee, for annual fees and any other amounts due and owing under Sections 8.1 and 8.3 of the Trust Agreement (but, in each case, only to the extent not paid by the Administrator or the Depositor);

 

SECOND:    to the Servicer for due and unpaid Primary Servicing Fees;

 

THIRD:        to the Administrator, any due and unpaid Administration Fees;

 

FOURTH:    to the Class A Noteholders, the Class A Noteholders’ Interest Distribution Amount, pro rata, based on the amounts payable as Class A Noteholders’ Interest Distribution Amount;

 

FIFTH:          to the Class A Noteholders, pro rata, an amount sufficient to reduce the Outstanding Amount of each class of the Class A Notes to zero;

 

SIXTH:         to the Class B Noteholders, the Class B Noteholders’ Interest Distribution Amount;

 

SEVENTH:   to the Class B Noteholders an amount sufficient to reduce the Outstanding Amount of the Class B Notes to zero;

 

EIGHTH:       to the Servicer, for any unpaid Carryover Servicing Fees; and

 

NINTH:         to the Excess Distribution Certificateholder, any remaining funds after application of the preceding clauses.

 

 

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Following liquidation of the Indenture Trust Estate in accordance with Section 5.4(a) above, the Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this subsection (b).  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.

 

(c)      [Reserved].

 

SECTION 5.5   Optional Preservation of the Trust Student Loans.  If the Notes have been declared to be due and payable under Section 5.2 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 5.6   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:

 

(i)       such Noteholder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

 

(ii)       the Noteholders of not less than 25% of the Outstanding Amount of the 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;

 

(iii)       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;

 

(iv)       the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceeding; and

 

(v)       no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Noteholders of at least a majority of the Outstanding Amount of the 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.

 

  

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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 5.7   Unconditional Rights of Noteholders to Receive Principal and Interest.  Notwithstanding any other provisions in this Indenture, each Noteholder shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest on its 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 5.8   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 5.9   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 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 at least a majority of the Outstanding Amount of the 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

 

  

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(i)       such direction shall not be in conflict with any rule of law or with this Indenture;

 

(ii)       subject to the express terms of Section 5.4, 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 Notes;

 

(iii)       if the conditions set forth in Section 5.5 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 Notes to sell or liquidate the Indenture Trust Estate shall be of no force and effect; and

 

(iv)       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 6.1, 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 5.2, the Noteholders of at least a majority of the Outstanding Amount of the 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.

 

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).

 

  

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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 5.4(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 ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding, the Administrator and the Servicer, as applicable, of each of their respective obligations to the Issuer, whether directly or by assignment, under or in connection with the Sale Agreement, the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement, the VL Funding Purchase Agreement, the Administration Agreement and the Servicing Agreement, as the case may be, 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 the Sale Agreement, the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement, the VL Funding Purchase Agreement, the Administration Agreement and the Servicing Agreement, 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 ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding, the Administrator or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Depositor, SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding, the Administrator or the Servicer of each of their obligations under the Sale Agreement, the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement, the VL Funding Purchase Agreement, the Administration Agreement and the Servicing Agreement, as the case may be.

 

  

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(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 Outstanding Amount of the Notes shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Depositor, SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding, the Administrator or the Servicer under or in connection with the Sale Agreement, the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement, the VL Funding Purchase Agreement, the Administration Agreement and the Servicing Agreement, as the case may be, including the right or power to take any action to compel or secure performance or observance by the Depositor, SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding, 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 the Sale Agreement, the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement, the VL Funding Purchase Agreement, the Administration Agreement and the Servicing Agreement, as the case may be, and any right of the Issuer to take such action shall be suspended.

 

ARTICLE VI

 

The Indenture Trustee

 

SECTION 6.1   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 its 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:

 

  

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(i)       this paragraph (c) does not limit the effect of paragraph (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

 

(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 Section 5.11.

 

(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)       For so long as reports are required to be filed with the Commission under the Exchange Act with respect to the Issuer, on or before March 1 of each calendar year, commencing in 2014, the Indenture Trustee shall deliver to the Issuer and the Administrator a report (in form and substance reasonably satisfactory to the Administrator, acting on behalf of the Issuer) regarding the Indenture Trustee’s assessment of compliance with the Applicable Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB.  Such report shall be addressed to the Issuer and signed by a Responsible Officer of the Indenture Trustee, and shall address the Applicable Servicing Criteria specified on a certification substantially in the form of Exhibit C attached hereto.

 

  

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SECTION 6.2   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 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 (each, an “Agent Party”), provided that the Indenture Trustee shall be responsible for any misconduct or negligence on the part of, or for the supervision of, any such Agent Party appointed with due care by it hereunder and shall remain so responsible until such time as (i) the Indenture Trustee shall have received the written consent of each Rating Agency then rating the Notes with respect to the appointment of any such Agent Party prior to the occurrence of an Event of Default under Section 5.1, or (ii) the occurrence of an Event of Default (other than the occurrence of an Event of Default under Section 5.1(iii) which has not resulted in an acceleration of the maturity of the Notes), at which time the Indenture Trustee shall not be responsible for any misconduct or negligence on the part of, or for the supervision of, any such Agent Party appointed with due care by it hereunder.  The Indenture Trustee shall provide prompt notice to the Rating Agencies of the appointment of any Agent Party pursuant to this Section 6.2(c) after the occurrence of any Event of Default under Section 5.1.

 

(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.

 

(f)       Notwithstanding anything in this Indenture or any related documents to the contrary, in no event shall the Indenture Trustee or any of its directors, officers, agents or employees be liable under this Indenture or any related documents for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Indenture Trustee or any of its directors, officers, agents or employees has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

  

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SECTION 6.3   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 6.4   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 6.5   Notice of Defaults.  If a Default occurs and is continuing and if it is either actually known 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 then rating the Notes 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 the Noteholders.  Except as provided in the first sentence of this Section 6.5, in no event shall the Indenture Trustee be deemed to have knowledge of a Default or an Event of Default.

 

SECTION 6.6   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 § 313(a) if required by said section.  The Indenture Trustee shall also comply with TIA § 313(b).  A copy of each such report required pursuant to TIA § 313(a) or (b) shall, at the time of such transaction to 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 6.7   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 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 

 

 

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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.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.1(iv) or (v) 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 6.8   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 6.8.  The Indenture Trustee may resign at any time by so notifying the Issuer.  The Noteholders of at least a majority in Outstanding Amount of the 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;

 

(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.

 

  

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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 at least a majority in Outstanding Amount of the 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 then rating the Notes.

 

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 6.7 shall continue for the benefit of the retiring Indenture Trustee.

 

SECTION 6.9   Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all of 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.  The Indenture Trustee shall provide prior written notice of any such transaction to the Rating Agencies then rating the Notes.

 

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.

 

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 6.8 hereof.

 

  

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(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.

 

(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 of 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 § 310(a), the requirements of an “eligible lender” under 20 USC § 1085(d) and the requirements of Rule 3a-7(a)(4)(i) of the General Rules and Regulations under the Investment Company Act of 1940, as amended.  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 

 

  

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investment grade by each of the Rating Agencies then rating the Notes.  The Indenture Trustee shall comply with TIA § 310(b), including the optional provision permitted by the second sentence of TIA § 310(b)(9); provided, however, that there shall be excluded from the operation of TIA § 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 § 310(b)(1) are met.

 

     (b)     Within ninety (90) days after ascertaining the occurrence of an event under Section 6.8 of this Indenture that would result in the removal of the Indenture Trustee 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 Notes in accordance with Section 6.8 of this Indenture, and the Issuer shall appoint a successor Indenture Trustee for the Notes.

 

SECTION 6.12   Preferential Collection of Claims Against the Issuer.  The Indenture Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  An Indenture Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent indicated.

 

SECTION 6.13   Rule 15Ga-1 Information.  The Indenture Trustee shall provide prompt notice to the Depositor and the Administrator (each, an “SLM Party,” and together, the “SLM Parties”) of all demands or requests received by the Indenture Trustee for the repurchase or replacement of any Trust Student Loan for breach of the representations and warranties concerning such Trust Student Loan.  If any such demand or request is made in non-written form, the Indenture Trustee shall request that such demand be put into writing; provided, however, the Indenture Trustee shall notify the SLM Parties regardless of whether any such demand or request is made in writing.  The obligations of the Indenture Trustee under the first two sentences of this Section 6.13 to notify the SLM Parties of any such demand or request made in non-written form shall not be applicable during such time as the interpretations of the requirements of the Repurchase Rules and Regulations (as defined below) require reporting by the SLM Parties of only demands or requests in written form.  The Indenture Trustee shall, upon written request of either SLM Party, provide notification to the SLM Parties regarding any actions taken by the Indenture Trustee with respect to any such demand or request received by the Indenture Trustee in respect of any Trust Student Loan, such notifications to be provided by the Indenture Trustee as soon as practicable and in any event within five Business Days of receipt by the Indenture Trustee of such written request or demand from an SLM Party or such other time frame as may be mutually agreed to by the Indenture Trustee and the applicable SLM Party.  The Indenture Trustee and the Issuer acknowledge and agree that the purpose of this Section 6.13 is to facilitate compliance by the SLM Parties with Rule 15Ga-1 under the Exchange Act, and Items 1104(e) and 1121(c) of Regulation AB (the “Repurchase Rules and Regulations”).  The Indenture Trustee acknowledges that interpretations of the requirements of the Repurchase Rules and Regulations may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with 

 

  

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reasonable written requests made by the SLM Parties in good faith for delivery of information under these provisions on the basis of evolving interpretations of the Repurchase Rules and Regulations.  The Indenture Trustee shall cooperate with reasonable written requests received from the SLM Parties to deliver any and all records and any other information necessary in the good faith determination of the SLM Parties to permit the SLM Parties to comply with the provisions of the Repurchase Rules and Regulations.  Subject to duties explicitly set forth in the Basic Documents, if any, the Indenture Trustee shall not have any responsibility or liability in connection with the compliance of any SLM Party or securitizer (as defined in the Exchange Act) with the Exchange Act or Regulation AB or any filing required to be made by an SLM Party or securitizer (as defined in the Exchange Act) under the Exchange Act or Regulation AB.

 

ARTICLE VII

 

Noteholders’ Lists and Reports

 

SECTION 7.1   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, and (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 7.2   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 7.1 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 7.1 upon receipt of a new list so furnished.

 

(a)       Noteholders may communicate pursuant to TIA § 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 § 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 § 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 2.11 of the Administration Agreement.

 

(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 Eligible Lender Trustee notice of any amendment of the Administration Agreement pursuant to Section 8.5 of the Administration Agreement.

 

  

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SECTION 7.3   Reports by Issuer.

 

(a)       The Issuer shall:

 

(i)       file with 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)       file with the Indenture Trustee and 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 § 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 7.3(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.

 

ARTICLE VIII

 

Accounts, Disbursements and Releases

 

SECTION 8.1   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 or the Trust 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.

 

  

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SECTION 8.2   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 Trust, the Trust Accounts as provided in Section 2.3 of the Administration Agreement.

 

(b)       On or before the Business Day preceding each Distribution Date, all Available Funds and amounts set forth in paragraph (a)(2) of the definition of Available Funds with respect to the preceding Collection Period will be deposited in the Collection Account as provided in Section 2.4 of the Administration Agreement.  On or before each Distribution Date, the Indenture Trustee (or any other Paying Agent) shall make the required deposits and distributions as provided in Sections 2.7 and 2.8 of the Administration Agreement.

 

(c)       [Reserved].

 

(d)       [Reserved].

 

(e)       On or before each Distribution Date, the Indenture Trustee (or any other Paying Agent) shall make the required deposits and distributions as provided in Section 2.7 of the Administration Agreement.

 

(f)       [Reserved].

 

(g)       During the Supplemental Purchase Period, the Indenture Trustee shall withdraw funds as directed by the Administrator pursuant to Section 2.10(d) of the Administration Agreement for the purchase of Additional Trust Student Loans.

 

(h)       [Reserved].

 

(i)       On the Business Day immediately following the end of the Supplemental Purchase Period, the Indenture Trustee shall transfer any amounts remaining in the Supplemental Purchase Account into the Collection Account, as directed by the Administrator.

 

(j)       [Reserved].

 

(k)       [Reserved].

 

(l)       On or before the Business Day immediately preceding each Distribution Date, if the Issuer has not received payment in full of the amount required to offset any deficiency caused by a Borrower Benefit Yield Reduction for the related Collection Period pursuant to Section 3.12 of the Servicing Agreement, the Indenture Trustee, as directed by the Administrator, shall withdraw from the Borrower Benefit Account on that Distribution Date an amount equal to such deficiency, to the extent of funds available therein, to be included as part of Available Funds for that Distribution Date.

 

(m)       Once the Department has netted all payments (in respect of Interest Subsidy Payments and/or Special Allowance Payments otherwise due to the Issuer), which currently occurs on a quarterly basis, on the next succeeding Distribution Date an amount equal to the applicable Floor Income Rebate Account Release Amount on deposit in the Floor Income Rebate Account at the end of the preceding Collection Period will be withdrawn by the Indenture Trustee, as directed by the Administrator, and be included as part of Available Funds for that Distribution Date.

 

  

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SECTION 8.3   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 2.3(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 6.1(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 Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.

 

(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 5.2, or, if such Notes shall have been declared due and payable following an Event of Default and amounts collected or receivable from the Indenture Trust Estate are being applied in accordance with Section 5.4 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 8.4   Release of Indenture Trust Estate.  (a)  Subject to the payment of its fees and expenses pursuant to Section 6.7, 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.

 

  

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(b)       The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 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 8.4(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 §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.

 

(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 (i) to the Depositor in accordance with Section 6 of the Sale Agreement, (ii) to the Servicer in accordance with Section 3.5 of the Servicing Agreement, (iii) to Bluemont Funding (or the seller from which Bluemont Funding originally purchased such Trust Student Loan), Town Center Funding (or the seller from which Town Center Funding originally purchased such Trust Student Loan), Town Hall Funding (or the seller from which Town Hall Funding originally purchased such Trust Student Loan), VL Funding (or the seller from which VL Funding originally purchased such Trust Student Loan), SLM ECFC or to another Affiliate of SLM Corporation in accordance with Section 3.11F. of the Servicing Agreement, (iv) to another eligible lender holding one or more Serial Loans with respect to such Trust Student Loan, (v) to SLM ECFC in accordance with Section 6 of the SLM ECFC Purchase Agreement, and each Noteholder, by the acceptance of a Note, consents to any such release, (vi) to Bluemont Funding in accordance with Section 6 of the Bluemont Funding Purchase Agreement, (vii) to Town Center Funding in accordance with Section 6 of the Town Center Funding Purchase Agreement, (viii) to Town Hall Funding in accordance with Section 6 of the Town Hall Funding Purchase Agreement, or (ix) to VL Funding in accordance with Section 6 of the VL Funding Purchase Agreement, and each Noteholder, by the acceptance of a Note, consents to any such release.

 

SECTION 8.5   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 8.4(a), accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, except in connection with any action contemplated by Section 8.4(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 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.

 

  

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ARTICLE IX

 

Supplemental Indentures

 

SECTION 9.1   Supplemental Indentures Without Consent of Noteholders.

 

(a)       Without the consent of any Noteholders but with prior notice to the Rating Agencies then rating the Notes, 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;

 

(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; or

 

(viii)       to correct any manifest error in the terms of this Indenture as compared to the terms expressly set forth in the Prospectus.

 

  

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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, also may enter into an indenture or indentures supplemental hereto for the purposes 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, with the consent of each Noteholder whose interests would be adversely affected in any material respect by such action (if any), but without the consent of any other Noteholder, and with prior notice to the Rating Agencies then rating the Notes; provided, however, that the Indenture Trustee shall be entitled to an Opinion of Counsel that such action will not adversely affect in any material respect the interests of any Noteholder whose written consent has not been obtained.

 

SECTION 9.2   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 then rating the Notes and with the consent of the Noteholders of at least a majority of the Outstanding Amount of all 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”;

 

(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 5.4;

 

  

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(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 9.3   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 6.1 and 6.2, 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 9.4   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 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.

 

  

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SECTION 9.5   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 9.6   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 10.1   Redemption.  The Indenture Trustee shall, upon receipt of written notice from the Administrator pursuant to Section 6.1(b) 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 6.1(a) 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 as provided in Sections 2.7 and 2.8 of the Administration Agreement.  If amounts are to be paid to Noteholders pursuant to this Section 10.1, 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 10.2   Form of Redemption Notice.  Notice of redemption under Section 10.1 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

 

(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 3.2).

 

  

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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 10.3   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 11.1   Compliance Certificates and Opinions, etc.  (a)  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 then rating the Notes (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.

 

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

 

(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 11.1(a) or elsewhere in this Indenture, furnish to the Indenture Trustee and the Rating Agencies then rating the Notes 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.

 

  

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(ii)       Whenever the Issuer is required to furnish to the Indenture Trustee and the Rating Agencies then rating the Notes 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 2.9 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 the Trust Student Loans, as and to the extent permitted or required by the Basic Documents, (B) make cash payments out of 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 8.4(c) hereof and Section 6 of the Sale Agreement, Section 3.5 of the Servicing Agreement or Section 3.11E of the Servicing Agreement, respectively, so long as the Issuer shall deliver to the Indenture Trustee every six months, commencing December 31, 2013, 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.

 

  

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SECTION 11.2   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.

 

SECTION 11.3   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 6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.

 

  

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(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 any Noteholder 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 11.4   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 with a copy to the Eligible Lender Trustee at its Corporate Trust Office.

 

(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 Student Loan Trust 2013-3, in care of Deutsche Bank Trust Company Americas, 60 Wall Street, 27th Floor, New York, New York 10005, Attention: Structured Finance Services/Asset Backed Securities; and the Administrator, 2001 Edmund Halley Drive, Reston, Virginia  20191, Attention: ABS Trust Administration, 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 Eligible Lender Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to (i) in the case of Moody’s, at the following addresses: (A) ABS Monitoring Department, 7 World Trade Center, 250 Greenwich Street, New York, New York 10007, and (B) servicereports@moodys.com; and (ii) in the case of Fitch, at the following addresses: (A) One State Street Plaza, New York 10004, Attention: Asset Backed Surveillance Group, and (B) notifications.abs@fitchratings.com; or as to each of the foregoing, at such other address as shall be designated by written notice to the other parties.

 

  

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SECTION 11.5   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 then rating the Notes, 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 11.6   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 11.7   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.

 

The provisions of TIA §§ 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 11.8   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.

 

  

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SECTION 11.9   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.  (a)  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, the Noteholders, 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.

 

(b)       [Reserved].

 

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 §5-1401 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.

 

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 Eligible Lender 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 Eligible Lender 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 Eligible Lender Trustee in its individual capacity, any holder or owner of a beneficial interest in the Issuer, the Eligible Lender Trustee or the Indenture Trustee or of any successor or assign thereof in its individual capacity, except as any such Person may have expressly 

 

  

55

  

agreed (it being understood that the Indenture Trustee and the Eligible Lender 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 Eligible Lender Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles 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.

 

SECTION 11.19   Waiver of Jury Trial.  EACH OF THE PARTIES TO THIS INDENTURE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

SECTION 11.20   Limited Recourse.  The obligations of the Issuer under this Indenture are limited recourse obligations payable solely from the Collateral and, following realization of the Collateral and its application in accordance with the terms hereof, any outstanding obligations of the Issuer hereunder shall be extinguished and shall not thereafter revive.  In addition, no recourse shall be had for any amounts payable or any other obligations arising under this Indenture against any officer, member, director, employee, partner or security holder of the Issuer or any of its successors or assigns.  To the extent a Noteholder is deemed to have a claim to the assets of the Issuer other than the Collateral, the Noteholder hereby releases any such claim.  In the event that a Noteholder is deemed to have a claim against the assets of the Issuer other than the 

 

  

56

  

Collateral and the release is not given effect, each Noteholder hereby agrees to fully subordinate all claims it may have against such assets and that such agreement constitutes a subordination agreement for purposes of Section 510(a) of Title 11 of the U.S. Bankruptcy Code.  The provisions of this Section 11.20 shall survive the termination of this Indenture.

 

SECTION 11.21   Force Majeure.  In no event shall the Indenture Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes, acts of God, or unavailability of the Federal Reserve Bank wire or telex facility; it being understood that the Indenture Trustee shall use reasonable efforts to resume performance of its obligations as soon as practicable under the circumstances.

 

SECTION 11.22   Compliance with Applicable Law.  In order to comply with laws, rules, regulations and executive orders in effect from time to time including but not limited to those relating to the funding of terrorist activities and money laundering (“Applicable Laws”), the Indenture Trustee may be required to obtain, verify and record certain information relating to individuals and entities which maintain a business relationship with the Indenture Trustee.  Accordingly, each of the parties hereto agrees to provide the Indenture Trustee upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Indenture Trustee to comply with Applicable Laws.

 

ARTICLE XII

 

Compliance with Regulation AB

 

SECTION 12.1   Intent of the Parties; Reasonableness.  The Issuer, the Eligible Lender Trustee and the Indenture Trustee acknowledge and agree that the purpose of Article XII of this Agreement is to facilitate compliance by the Issuer with the provisions of Regulation AB and related rules and regulations of the Commission.

 

The Eligible Lender Trustee and the Administrator, on behalf of the Issuer, shall not exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Act, the Exchange Act and the rules and regulations of the Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Act).  The Indenture Trustee acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Administrator, on behalf of the Issuer, in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB.  In connection therewith, the Indenture Trustee shall cooperate fully with the Administrator, on behalf of the Issuer, to deliver to the Administrator, on behalf of the Issuer (including any of its assignees or 

 

  

57

  

designees), any and all statements, reports, certifications, records, attestation, and any other information necessary in the good faith determination of the Administrator, on behalf of the Issuer, to permit the Administrator, on behalf of the Issuer, to comply with the provisions of Regulation AB, together with such disclosures relating to the Indenture Trustee or the servicing of the Trust Student Loans, reasonably believed by the Administrator, on behalf of the Issuer, to be necessary in order to effect such compliance.

 

ARTICLE XIII

 

Tax Considerations

 

SECTION 13.1   Acknowledgement of Parties.  The parties hereto acknowledge and agree that, for federal, state and local income and franchise tax, and financial accounting, purposes (a) the Notes (excluding any Retained Notes, as defined below) will constitute indebtedness and not an ownership interest in the Issuer and (b) the Excess Distribution Certificateholder will be treated as owning all of the assets, and as assuming (but without assuming personal recourse to such Certificateholder) all of the liabilities (including the Notes), of the Issuer, and the parties hereto shall in all events take positions consistent with, and in no event take a position inconsistent with, the positions described in clauses (a) and (b) in the preparation of any returns and reports, and with respect to any audit or controversy, as to which either of the positions described in clauses (a) or (b) above would be relevant.  For purposes of the foregoing, the term “Retained Notes” means any Notes held by the Depositor or any of its Affiliates immediately after the Closing Date.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

  

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IN WITNESS WHEREOF, the Issuer, the Eligible Lender Trustee 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 STUDENT LOAN TRUST 2013-3

 

By: DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as Eligible Lender Trustee

 

By: /s/ Michele H.Y. Voon                                                                          

       Name:   Michele H.Y. Voon

      Title:      Vice President

 

By: /s/ Mark DiGiacomo                                                               

       Name:   Mark DiGiacomo

      Title:      Vice President

 

DEUTSCHE BANK TRUST COMPANY AMERICAS, not in its individual capacity but solely as Eligible Lender Trustee

 

By: /s/ Michele H.Y. Voon                                                                          

       Name:   Michele H.Y. Voon

      Title:      Vice President

 

By: /s/ Mark DiGiacomo                                                               

       Name:   Mark DiGiacomo

      Title:      Vice President

 

  

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DEUTSCHE BANK NATIONAL TRUST COMPANY,

not in its individual capacity but solely

as Indenture Trustee

 

By: /s/ Michele H.Y. Voon                                                                          

       Name:   Michele H.Y. Voon

      Title:      Vice President

 

By: /s/ Mark DiGiacomo                                                               

       Name:   Mark DiGiacomo

      Title:      Vice President

 

 

 

  

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APPENDIX A

TO THE INDENTURE

DEFINITIONS AND USAGE

SLM Student Loan Trust 2013-3

 

 

Usage

 

The following rules of construction and usage shall be applicable to any instrument that is governed by this appendix (this “Appendix A”):

 

(a)           All terms defined in this Appendix A 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 A 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 any agreement or instrument that is governed by this Appendix A 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.

 

(f)           All dollar amounts calculated hereunder shall be rounded to the nearest penny with one half of one cent being rounded up to the next penny.

 

  

Appendix A-1

  

Definitions

 

“Accrual Period” means, with respect to a Distribution Date, the period from and including the immediately preceding Distribution Date for the Notes to, but excluding, the then current Distribution Date, or in the case of the initial accrual period, the period from and including the Closing Date to, and including, August 25, 2013.

 

“Act” means the Securities Act of 1933, as amended.

 

“Act of Noteholders” has the meaning specified in Section 11.3 of the Indenture.

 

“Actual/360” means that interest is calculated on the basis of the actual number of days elapsed in a year of 360 days.

 

“Additional Bill of Sale” has the meaning specified in each of the Purchase Agreements or the Sale Agreement, as applicable.

 

“Additional Purchase Agreement” has the meaning specified in each of the Purchase Agreements, as applicable.

 

“Additional Sale Agreement” has the meaning specified in the Sale Agreement.

 

“Additional Trust Student Loan” means each Eligible Loan purchased by the Trust during the Supplemental Purchase Period from the Depositor pursuant to Section 3.2 of the Sale Agreement and each related Additional Sale Agreement.

 

“Adjusted Pool Balance” means, for any Distribution Date,

 

	
  

	
(a) if the Pool Balance as of the last day of the related Collection Period is greater than 40% of the Initial Pool Balance, then the Adjusted Pool Balance will be the sum of that Pool Balance and the Specified Reserve Account Balance for that Distribution Date, or

 

	
  

	
(b) if the Pool Balance as of the last day of the related Collection Period is less than or equal to 40% of the Initial Pool Balance, then the Adjusted Pool Balance will be the Pool Balance.

 

“Administration Agreement” means the Administration Agreement dated as of June 20, 2013 among the Administrator, the Servicer, the Depositor, the Trust, the Indenture Trustee and the Eligible Lender Trustee.

 

“Administration Fees” has the meaning specified in Section 2.14 of the Administration Agreement.

 

“Administrator” means Sallie Mae, Inc., in its capacity as administrator of the Trust in accordance with the Administration Agreement.

 

  

Appendix A-2

  

“Administrator Default” has the meaning specified in Section 5.1 of the Administration Agreement.

 

“Administrator’s Certificate” means an Officers’ Certificate of the Administrator delivered pursuant to Section 3.1(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.

 

“Authenticating Agent” means Deutsche Bank Trust Company Americas, in respect of the Excess Distribution Certificate.

 

“Authorized Officer” means (i) with respect to the Trust, any officer of the Eligible Lender Trustee who is authorized to act for the Eligible Lender 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 Eligible Lender Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter), (ii) with respect to the Administrator, any officer of the Administrator or any of its Affiliates who is authorized to act for the Administrator in matters relating to itself or to the Trust and to be acted upon by the Administrator pursuant to the Basic Documents and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter), (iii) with respect to the Depositor, any officer of the Depositor or any of its Affiliates who is authorized to act for the Depositor in matters relating to or to be acted upon by the Depositor pursuant to the Basic Documents and who is identified on the list of Authorized Officers delivered by the Depositor to the Indenture Trustee on the Closing Date (as such list 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, as to a Distribution Date, the sum of the following amounts received with respect to the related Collection Period(s):

 

	
(a)  

	
all collections received by the Servicer on the Trust Student Loans, including any Guarantee Payments received on the Trust Student Loans, but net of:

 

	
(1)  

	
any collections in respect of principal on the Trust Student Loans applied by the Trust to repurchase guaranteed loans from the Guarantors under the Guarantee Agreements; and

 

  

Appendix A-3

  

	
(2)  

	
amounts required by the Higher Education Act to be paid to the Department or to be repaid to Obligors, whether or not in the form of a principal reduction of the applicable Trust Student Loan, on the Trust Student Loans for that Collection Period; and

 

	
(3)  

	
amounts deposited into the Floor Income Rebate Account during the related Collection Period;

 

	
(b)  

	
any Interest Subsidy Payments and Special Allowance Payments with respect to the Trust Student Loans during that Collection Period;

 

	
(c)  

	
all Liquidation Proceeds from any Trust Student Loans which became Liquidated Student Loans during that Collection Period in accordance with the Servicer’s customary servicing procedures, net of expenses incurred by the Servicer related to their liquidation and any amounts required by law to be remitted to the Obligors on the Liquidated Student Loans, and all Recoveries on Liquidated Student Loans which were written off in prior Collection Periods or during that Collection Period;

 

	
(d)  

	
the aggregate Purchase Amounts received during that Collection Period for those Trust Student Loans repurchased by the Depositor or purchased by the Servicer, as the case may be, or for Trust Student Loans sold to another eligible lender pursuant to Section 3.11E of the Servicing Agreement;

 

	
(e)  

	
the aggregate Purchase Amounts received during that Collection Period for those Trust Student Loans repurchased by SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding or VL Funding;

 

	
(f)  

	
[Reserved];

 

	
(g)  

	
the aggregate amounts, if any, received from any of SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding, the Depositor or the Servicer, as the case may be, as reimbursement of non-guaranteed interest amounts, or lost Interest Subsidy Payments and Special Allowance Payments, on the Trust Student Loans pursuant to the Sale Agreement, a Purchase Agreement or Section 3.5 of the Servicing Agreement, respectively;

 

	
(h)  

	
amounts received by the Trust pursuant to Sections 3.1 and 3.12 of the Servicing Agreement during that Collection Period as to yield or principal adjustments (other than prepayments to the Borrower Benefit Account);

 

	
(i)  

	
any interest remitted by the Administrator to the Collection Account prior to such Distribution Date;

 

	
(j)  

	
Investment Earnings for that Distribution Date earned on amounts on deposit in each Trust Account (other than the Borrower Benefit Account);

 

  

Appendix A-4

  

	
(k)  

	
amounts transferred from the Reserve Account in excess of the Specified Reserve Account Balance for that Distribution Date;

 

	
(l)  

	
once the Department of Education has netted all payments, any amounts on deposit in the Floor Income Rebate Account that were deposited into such account during the related Collection Periods;

 

	
(m)  

	
[Reserved];

 

	
(n)  

	
on the initial Distribution Date, the Collection Account Initial Deposit and any amounts transferred into the Collection Account from the Supplemental Purchase Account following the end of the Supplemental Purchase Period;

 

	
(o)  

	
[Reserved];

 

	
(p)  

	
[Reserved];

 

	
(q)  

	
[Reserved];

 

	
(r)  

	
on each Distribution Date, any amounts transferred into the Collection Account from the Borrower Benefit Account pursuant to Section 2.10(f) of the Administration Agreement; and

 

	
(s)  

	
amounts required to be transferred from the Borrower Benefit Account for such Distribution Date, to the extent funds are on deposit therein.

 

provided that if on any Distribution Date there would not be sufficient funds, after application of Available Funds, as defined above, and application of amounts available from the Reserve Account to pay any of the items specified in clauses (a), (b), (c) and (d) of Section 2.8 of the Administration Agreement (but excluding clause (d), and including clause (f) thereof, in the event that a condition exists as described in either sub-clause (i) or (ii) of clause (x) of Section 2.8 of the Administration Agreement), as set forth in Section 2.9 of the Administration Agreement, relating to such distributions, then Available Funds for that Distribution Date will 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 on the related Determination Date which would have constituted Available Funds for the Distribution Date succeeding that Distribution Date, up to the amount necessary to pay such items, and the Available Funds for the succeeding Distribution Date will be adjusted accordingly.

 

“Basic Documents” means the Trust Agreement, the Indenture, the Servicing Agreement, the Administration Agreement, the Sale Agreement, the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement, the VL Funding Purchase Agreement, the Guarantee Agreements, the Note Depository Agreement and other documents and certificates delivered in connection with any such documents.

 

  

Appendix A-5

  

“Benefit Plan” means (i) an employee benefit plan (as defined in Section 3(3) of ERISA), whether or not subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Code, whether or not subject to Section 4975 of the Code or (iii) any entity whose underlying assets include plan assets by reason of a plan’s investment in the entity.

 

“Bill of Sale” has the meaning specified in each of the Purchase Agreements or the Sale Agreement, as applicable.

 

“Bluemont Funding” means Bluemont Funding LLC.

 

“Bluemont Funding Eligible Lender Trustee” means Deutsche Bank Trust Company Americas, a New York banking corporation, not in its individual capacity but solely as interim eligible lender trustee for the benefit of Bluemont Funding under the Bluemont Funding Interim Trust Agreement.

 

“Bluemont Funding Interim Trust Agreement” means the Interim Trust Agreement dated as of June 20, 2013, between Bluemont Funding and the Bluemont Funding Eligible Lender Trustee.

 

“Bluemont Funding Purchase Agreement” means the Purchase Agreement Master Securitization Terms Number 1000, dated as of June 20, 2013, among Bluemont Funding, the Bluemont Funding Eligible Lender Trustee, the Interim Eligible Lender Trustee, the Servicer and the Depositor, as well as each purchase agreement entered into thereunder.

 

“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.

 

“Borrower Benefit Account” means the account designated as such, established and maintained pursuant to Section 2.3(m) of the Administration Agreement.

 

“Borrower Benefit Account Initial Deposit” shall mean $0.

 

“Borrower Benefit Yield Reduction” has the meaning specified in Section 3.12 of the Servicing Agreement.

 

“Business Day” means

 

(i)           with respect to calculating LIBOR of a specified maturity, any day on which banks in New York, New York and London, England are open for the transaction of international business; and

 

(ii)           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.

 

  

Appendix A-6

  

“Carryover Servicing Fee” has the meaning specified in Attachment A to the Servicing Agreement.

 

“Class A Maturity Date” means (i) with respect to the Class A-1 Notes, the Class A-1 Maturity Date, (ii) with respect to the Class A-2 Notes, the Class A-2 Maturity Date, and (iii) with respect to the Class A-3 Notes, the Class A-3 Maturity Date.

 

“Class A Note Interest Shortfall” means, for any Distribution Date, the excess of:

 

(i)           the Class A Noteholders’ Interest Distribution Amount on the preceding Distribution Date, over

 

(ii)           the amount of interest actually distributed to the Class A Noteholders 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 related Class A Rate from such preceding Distribution Date to the current Distribution Date.

 

“Class A Noteholder” means the Person in whose name a Class A Note is registered in the Note Register.

 

“Class A Noteholders’ Distribution Amount” means, for any Distribution Date, the sum of the Class A Noteholders’ Interest Distribution Amount and the Class A Noteholders’ Principal Distribution Amount for that Distribution Date.

 

“Class A Noteholders’ Interest Distribution Amount” means, for any Distribution Date, the sum of:

 

(1)  the amount of interest accrued at the related Class A Rate for the related Accrual Period on the Outstanding Amount of the Class A Notes on the immediately preceding Distribution Date (or in the case of the initial Distribution Date, the Closing Date) after giving effect to all principal distributions to the Class A Noteholders on the preceding Distribution Date; and

 

(2)  the Class A Note Interest Shortfall for that Distribution Date.

 

“Class A Noteholders’ Principal Distribution Amount” means, for any Distribution Date, the Principal Distribution Amount for that Distribution Date; provided that the Class A Noteholders’ Principal Distribution Amount shall not exceed the aggregate Outstanding Amount of the Class A Notes for such Distribution Date (before giving effect to any distributions on such Distribution Date).

 

In addition, on the related Class A Maturity Date, the principal required to be distributed to the related Class A Noteholders will include the amount required to reduce the Outstanding Amount of the related Class A Notes to zero.

 

  

Appendix A-7

  

“Class A Notes” means the collective reference to the Class A-1, Class A-2, and Class A-3 Notes.

 

“Class A Rate” means (i) with respect to the Class A-1 Notes, the Class A-1 Rate, (ii) with respect to the Class A-2 Notes, the Class A-2 Rate, and (iii) with respect to the Class A-3 Notes, the Class A-3 Rate.

 

“Class A-1 Maturity Date” means the November 27, 2017 Distribution Date.

 

“Class A-1 Notes” means the $262,000,000 Floating Rate Class A-1 Student Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A thereto.

 

“Class A-1 Rate” means, for any Accrual Period after the initial Accrual Period, One-Month LIBOR, as determined on the related LIBOR Determination Date, plus 0.20% based on an Actual/360 accrual method. For the initial Accrual Period, the Class A-1 Rate shall mean the Initial Accrual Rate plus 0.20% based on an Actual/360 accrual method.

 

“Class A-2 Maturity Date” means the May 26, 2020 Distribution Date.

 

“Class A-2 Notes” means the $315,000,000 Floating Rate Class A-2 Student Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A thereto.

 

“Class A-2 Rate” means, for any Accrual Period after the initial Accrual Period, One-Month LIBOR, as determined on the related LIBOR Determination Date, plus 0.30% based on an Actual/360 accrual method. For the initial Accrual Period, the Class A-2 Rate shall mean the Initial Accrual Rate plus 0.30% based on an Actual/360 accrual method.

 

“Class A-3 Maturity Date” means the April 26, 2027 Distribution Date.

 

“Class A-3 Notes” means the $634,000,000 Floating Rate Class A-3 Student Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A thereto.

 

“Class A-3 Rate” means, for any Accrual Period after the initial Accrual Period, One-Month LIBOR, as determined on the related LIBOR Determination Date, plus 0.50% based on an Actual/360 accrual method. For the initial Accrual Period, the Class A-3 Rate shall mean the Initial Accrual Rate plus 0.50% based on an Actual/360 accrual method.

 

“Class B Maturity Date” means the September 25, 2043 Distribution Date.

 

“Class B Note Interest Shortfall” means, for any Distribution Date, the excess of:

 

(i)           the Class B Noteholders’ Interest Distribution Amount on the preceding Distribution Date, over

 

  

Appendix A-8

  

(ii)           the amount of interest actually distributed to the Class B Noteholders on such preceding Distribution Date,

 

plus interest on the amount of such excess interest due to the Class B Noteholders, to the extent permitted by law, at the Class B Rate from such preceding Distribution Date to the current Distribution Date.

 

“Class B Noteholder” means the Person in whose name a Class B Note is registered in the Note Register.

 

“Class B Noteholders’ Distribution Amount” means, for any Distribution Date, the sum of the Class B Noteholders’ Interest Distribution Amount and the Class B Noteholders’ Principal Distribution Amount for that Distribution Date.

 

“Class B Noteholders’ Interest Distribution Amount” means, for any Distribution Date, the sum of:

 

(1)  the amount of interest accrued at the Class B Rate for the related Accrual Period on the Outstanding Amount of the Class B Notes on the immediately preceding Distribution Date (or, in the case of the initial Distribution Date, the Closing Date) after giving effect to all principal distributions to the Class B Noteholders on the preceding Distribution Dates; and

 

(2)  the Class B Note Interest Shortfall for that Distribution Date.

 

“Class B Noteholders’ Principal Distribution Amount” means, for any Distribution Date, the amount by which (a) the Principal Distribution Amount for such Distribution Date exceeds (b) the Class A Noteholders’ Principal Distribution Amount for such Distribution Date; provided that the Class B Noteholders’ Principal Distribution Amount will not exceed the Outstanding Amount of the Class B Notes for such Distribution Date (before giving effect to any distributions on such Distribution Date).

 

In addition, on the Class B Maturity Date, the principal required to be distributed to the Class B Noteholders will include the amount required to reduce the Outstanding Amount of the Class B Notes to zero.

 

“Class B Notes” means the $35,000,000 Floating Rate Class B Student Loan-Backed Notes issued by the Trust pursuant to the Indenture, substantially in the form of Exhibit A thereto.

 

“Class B Rate” means, for any Accrual Period after the initial Accrual Period, One-Month LIBOR, as determined on the related LIBOR Determination Date, plus 1.50% based on an Actual/360 accrual method.  For the initial Accrual Period, the Class B Rate shall mean the Initial Accrual Rate plus 1.50% based on an Actual/360 accrual method.

 

  

Appendix A-9

  

 “Clearing Agency” means DTC, Euroclear or Clearstream, Luxembourg, as applicable, or another organization registered as a “clearing agency” pursuant to applicable law.  The initial Clearing Agency for each class of Notes shall be DTC and the nominee for such 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.

 

“Clearstream, Luxembourg” means Clearstream Banking, société anonyme, Luxembourg or any successor thereto.

 

“Closing Date” means June 20, 2013.

 

“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 2.3(f) of the Administration Agreement.

 

“Collection Account Initial Deposit” means (i) $7,720,000 plus (ii) $0 (representing the excess, if any, of the Pool Balance as of the Statistical Cutoff Date over the Pool Balance as of the Closing Date, to the extent such excess amount is not deposited into the Supplemental Purchase Account).

 

“Collection Period” means, with respect to the first Distribution Date, the period beginning on the Closing Date and ending on July 31, 2013, and with respect to each subsequent Distribution Date the Collection Period means the calendar month immediately preceding such Distribution Date.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Depository” means DTC, Clearstream, Luxembourg and Euroclear, as applicable.

 

“Consolidation Loans” means Student Loans made in accordance with Section 428C of the Higher Education Act.

 

“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 100 Plaza One, Jersey City, New Jersey 07311, Attention: Structured Finance Services/Asset Backed Securities (telephone: (201) 593-8420; facsimile: (212) 553-2458) 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); (ii) with respect to the Eligible Lender Trustee, the corporate trust office of the Eligible Lender Trustee located at 60 Wall Street, 27th Floor, 

 

 

Appendix A-10

 

New York, New York 10005, Attention: Attn: Structured Finance Services/Asset Backed Securities, telephone: (201) 593-8420, facsimile: (212) 553-2458 or at such other address as the Eligible Lender Trustee may designate by notice to the Depositor, or the principal corporate trust office of any successor Eligible Lender Trustee (the address of which the successor Eligible Lender Trustee will notify the Administrator and the Depositor) and (iii) with respect to the Delaware Trustee, the principal Delaware address located at 1011 Centre Road, Suite 200, Wilmington, Delaware 19805, Attention: Elizabeth Ferry, Vice President, telephone: (302) 636-3392, facsimile: (302) 636-3399 or at such other address as the Delaware Trustee may designate by notice to the Depositor, or the principal Delaware address of any successor Delaware Trustee (the address of which the successor Delaware Trustee will notify the Administrator and the Depositor).

 

“Cutoff Date” means (a) the Initial Cutoff Date with respect to the Initial Trust Student Loans and (b) the applicable Subsequent Cutoff Date with respect to the related Additional Trust Student Loan or Substituted Trust Student Loan.

 

“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.”

 

“Delaware Trustee” means Deutsche Bank Trust Company Delaware, a Delaware banking corporation, not in its individual capacity but solely as Delaware Trustee under the Trust Agreement.  “Delaware Trustee” shall also mean each successor Delaware Trustee as of the qualification of such successor as Delaware Trustee under the Trust Agreement.

 

“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” (as defined in Section 9-102(a)(47) of the UCC) and are susceptible of physical delivery, physical delivery thereof to the Indenture Trustee endorsed to the Indenture Trustee or endorsed in blank, and, with respect to a “certificated security” (as defined in Section 8-102(a)(4) of the UCC) (i) delivery of such certificated security endorsed to, or registered in the name of, the Indenture Trustee “securities  intermediary” (as defined in Section 8-102(a)(14) of the UCC), or endorsed in blank, and, in the case of delivery to a securities intermediary, the making by such securities intermediary of book-entries sufficient to cause the Indenture Trustee to become the “entitlement holder” (as defined in Section 8-102(a)(4) of the UCC with respect to such certificated security, or (ii) 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 book-entries sufficient to cause a securities intermediary become the entitlement holder with respect to such certificated security and the making by such securities intermediary of book-entries sufficient to cause the Indenture Trustee to become the entitlement holder with respect thereto (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, consistent with changes in applicable law or regulations or the interpretation thereof;

 

  

Appendix A-11

  

(b) with respect to any security issued or guaranteed by the U.S. Treasury, the Government National Mortgage Association, the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association that is a book-entry security held at a Federal Reserve Bank pursuant to federal book-entry regulations (collectively, “Federal Book-Entry Securities”), 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 a participant’s book-entry account of the Indenture Trustee or its securities intermediary at a Federal Reserve Bank (a “Participant’s Account”), and, in the case of such Federal Book-Entry Securities credited to a Participant’s Account of a securities intermediary, the making by such securities intermediary of book-entries sufficient to cause the Indenture Trustee to become the entitlement holder with respect thereto; and

 

(c) with respect to any item of Trust Account Property that is an “uncertificated security” (as defined in Section 8-102(a)(18) of the UCC), registration on the books and records of the issuer thereof in the name of the Indenture Trustee or a securities intermediary, and, in the case of registration in the name of a securities intermediary, the making by such securities intermediary of book-entries sufficient to cause the Indenture Trustee to become the entitlement holder with respect thereto.

 

“Department” means the United States Department of Education, an agency of the Federal government.

 

“Depositor” means SLM Funding LLC, a Delaware limited liability company, and its successors and assigns, including, for such purpose, a permitted transferee of all of SLM Funding LLC’s right, title and interest in the Excess Distribution Certificate.

 

“Depository Agreement” means the Note Depository Agreement.

 

“Determination Date” means, with respect to the Collection Period preceding any Distribution Date, the first Business Day preceding such Distribution Date.

 

“Distribution Date” means the 25th day of each calendar month, or, if such day is not a Business Day, the immediately following Business Day, commencing in August 2013.

 

“DTC” means The Depository Trust Company, or any successor thereto.

 

“DTC Custodian” means Deutsche Bank National Trust Company.

 

“Eligible Deposit Account” means either (a) a segregated account with an Eligible Institution or (b) a segregated trust account with the corporate trust department of a depository institution organized under the laws of the United States of America or any one of the States or the District of Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as trustee for funds deposited in such account, so long as any of the securities of such depository institution have a credit rating from Moody’s, S&P, and, if such institution is rated by Fitch, Fitch, in one of their generic rating categories which signifies investment grade.

 

  

Appendix A-12

  

“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 S&P 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) a long-term senior unsecured debt rating of “AA” or a short-term senior unsecured debt rating of “F1+” by Fitch, or any other long-term, short-term or certificate of deposit rating with respect to which the Rating Agency Condition has been satisfied; provided that clauses (A), (B) and (C) shall only apply if the applicable rating agency is then rating the Notes, and (ii) whose deposits are insured by the FDIC.  If so qualified, the Eligible Lender 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, 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 (GNMA), the Federal Home Loan Mortgage Corporation (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae) shall be Eligible Investments only if, at the time of investment, they meet the criteria of each of the Rating Agencies for collateral for securities having ratings equivalent to the respective ratings of the Notes in effect at the Closing Date;

 

(b)  demand deposits, time deposits or certificates of deposit of any depository institution or trust company incorporated under the laws of the United States of America or any state (or any domestic branch of a foreign bank) and subject to supervision and examination by federal or state banking or depository institution authorities (including depository receipts issued by any such institution or trust company as custodian with respect to any obligation referred to in clause (a) above or portion of such obligation for the benefit of the holders of such depository receipts); provided that at the time of the investment or contractual commitment to invest therein (which shall be deemed to be made again each time funds are reinvested following each Distribution Date), the commercial paper or other short-term senior unsecured debt obligations (other than such obligations the rating of which is based on the credit of a Person other than such depository institution or trust company) thereof shall have a credit rating from each of the Rating Agencies in the highest investment category granted thereby;

 

(c)  commercial paper having, at the time of the investment, a rating from each of the Rating Agencies in the highest investment category granted thereby;

 

  

Appendix A-13

  

(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 Eligible Lender 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;

 

(g) Eligible Repurchase Obligations; and

 

(h) any other investment which would not result in the downgrading or withdrawal of any rating of the Notes 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 S&P, “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 shall be considered to be rated by each of the Rating Agencies in the highest investment category granted thereby.

 

“Eligible Lender Trustee” means Deutsche Bank Trust Company Americas, a New York banking corporation, not in its individual capacity but solely as Eligible Lender Trustee under the Trust Agreement.  “Eligible Lender Trustee” shall also mean each successor Eligible Lender Trustee as of the qualification of such successor as Eligible Lender Trustee under the Trust Agreement.

 

“Eligible Loans” has the meaning specified in any of the Purchase Agreements or the Sale Agreement, as applicable.

 

“Eligible Repo Counterparty” means an institution that is an eligible lender (under the Federal Family Education Loan Program) or that holds Student Loans through an eligible lender trustee and whose short-term debt ratings are not less than “P-1” by Moody’s, “A-1” by S&P and “F1” by Fitch, if rated by Fitch; provided that such short-term debt ratings shall only apply if the applicable Rating Agency is then rating the Notes.

 

“Eligible Repurchase Obligations” means repurchase obligations with respect to Student Loans serviced by the Servicer or an Affiliate thereof, entered into with an Eligible Repo Counterparty, provided that the applicable repurchase date shall occur no later than the Business Day prior to the next Distribution Date.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

  

Appendix A-14

  

“Euroclear” means the Euroclear System, or any successor thereto.

 

“European Clearing Systems” means Euroclear or Clearstream, Luxembourg.

 

“Event of Default” has the meaning specified in Section 5.1 of the Indenture.

 

“Excess Distribution Certificate” means the certificate, substantially in the form of Exhibit A to the Trust Agreement, evidencing the right to receive payments thereon as set forth in Sections 2.8(k) and 2.9(f) of the Administration Agreement.

 

“Excess Distribution Certificate Paying Agent” means any paying agent or co-paying agent appointed pursuant to Section 3.3(g) of the Trust Agreement, which paying agent shall initially be the Indenture Trustee.

 

“Excess Distribution Certificate Register” and “Excess Distribution Certificate Registrar” mean the register mentioned and the registrar appointed pursuant to Section 3.3(c) of the Trust Agreement.

 

“Excess Distribution Certificateholder” means the person in whose name an Excess Distribution Certificate is registered in the Excess Distribution Certificate Register.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“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.

 

“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 Eligible Lender 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 Eligible Lender Trustee under the Trust Agreement or the other Basic Documents.

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“Federal Funds Rate” 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.

 

  

Appendix A-15

  

“Fitch” means Fitch Ratings, Inc., also known as Fitch Ratings or any successor Rating Agency.

 

“Floor Income Rebate Account” means the account designated as such, established and maintained pursuant to Section 2.3(n) of the Administration Agreement.

 

“Floor Income Rebate Account Release Amount” means, for each related Distribution Date as described in Section 8.2(m) of the Indenture, all amounts on deposit in the Floor Income Rebate Account at the end of the Collection Period preceding such Distribution Date.

 

“Funding Interim Trust Agreement” means the Interim Trust Agreement, dated as of June 20, 2013, between the Depositor and the Interim Eligible Lender Trustee.

 

“GLB Regulations” means the Joint Banking Agencies’ Privacy of Consumer Financial Information, Final Rule (12 CFR Parts 40, 216, 332 and 573) or the Federal Trade Commission’s Privacy of Consumer Financial Information, Final Rule (16 CFR Part 313), as applicable, implementing Title V of the Gramm-Leach-Bliley Act, Public Law 106-102, as amended.

 

“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.

 

“Guarantee Agreement” means any agreement between any Guarantor and the Eligible Lender Trustee providing for the payment by the related Guarantor of amounts authorized to be paid pursuant to the Higher Education Act to holders of qualifying Student Loans guaranteed in accordance with the Higher Education Act by such Guarantor.

 

“Guarantee Payment” means any payment made by a Guarantor pursuant to a Guarantee Agreement in respect of a Trust Student Loan.

 

“Guarantor” means any entity listed on Attachment B (as amended from time to time) to the Sale Agreement, the Purchase Agreements, any Additional Purchase Agreement or any Additional Sale Agreement, as applicable.

 

“H.15(519)” means the weekly statistical release designated as such, or any successor publication, published by the Board of Governors of the United States Federal Reserve System.

 

“H.15 Daily Update” means the daily update for H.15(519), available through the world wide web site of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/h15/update, or any successor site or publications.

 

  

Appendix A-16

  

“Higher Education Act” means the Higher Education Act of 1965, as amended, together with any rules, regulations and interpretations thereunder.

 

“Indenture” means the Indenture dated as of June 20, 2013, among the Eligible Lender Trustee on behalf of the Trust, 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 Collateral Granted to the Indenture Trustee), including all proceeds thereof.

 

“Indenture Trustee” means Deutsche Bank National Trust Company, a national banking association, not in its individual capacity but solely as indenture trustee under the Indenture.

 

“Independent” means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Trust, any other obligor upon the Notes, the Depositor and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Trust, any such other obligor, the Depositor or any Affiliate of any of the foregoing Persons and (c) is not connected with the Trust, any such other obligor, the Depositor or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, placement agent, trustee, partner, director or person performing similar functions.

 

“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1 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 and/or three months, as applicable, commencing on the first day of that Accrual Period.

 

“Initial Accrual Rate” means, for each class of the Class A Notes and the Class B Notes and any Accrual Period commencing on the Closing Date to, but excluding, the first Distribution Date for that class of Notes, the rate per annum as determined on the related Determination Date, as follows:

 

X + [ (6/31) *  (Y-X) ]

 

where:

 

X = Two-Month LIBOR, and

 

Y = Three-Month LIBOR.

 

“Initial Cutoff Date” means June 20, 2013.

 

  

Appendix A-17

  

“Initial Cutoff Date Pool Balance” means, as of the Initial Cutoff Date and with respect to the Initial Trust Student Loans, $1,249,990,699, representing the estimated Pool Balance as of the Initial Cutoff Date.

 

“Initial Pool Balance” means (1) the Initial Cutoff Date Pool Balance plus (2) the Supplemental Purchase Account Initial Deposit.

 

“Initial Trust Student Loans” means the Trust Student Loans purchased by the Trust on the Closing Date pursuant to the Sale Agreement.

 

“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.

 

“Interest Subsidy Payments” means payments, designated as such, consisting of interest subsidies by the Department in respect of the Trust Student Loans to the Eligible Lender Trustee on behalf of the Trust in accordance with the Higher Education Act.

 

“Interim Eligible Lender Trustee” means Deutsche Bank Trust Company Americas, not in its individual capacity but solely as Interim Eligible Lender Trustee under the Interim Trust Agreement.  “Interim Eligible Lender Trustee” shall also mean each successor Interim Eligible Lender Trustee as of the qualification of such Interim Eligible Lender Trustee under the Interim Trust Agreement.

 

“Interim Trust Agreement” means each of the Funding Interim Trust Agreement, the Bluemont Funding Interim Trust Agreement, the Town Center Funding Interim Trust Agreement, the Town Hall Funding Interim Trust Agreement and the VL Funding Interim Trust Agreement.

 

“Interim Trust Loans” has the meaning set forth in the Interim Trust Agreement.

 

“Investment Earnings” means, with respect to any Distribution Date, the earnings derived from Eligible Investments (net of losses and investment expenses) on amounts on deposit in the Trust Accounts (other than the Borrower Benefit Account) to be deposited into the Collection Account on or prior to such Distribution Date pursuant to Section 2.3(b) of the Administration Agreement.

 

  

Appendix A-18

  

“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.

 

“LIBOR” means One-Month LIBOR, Two-Month LIBOR and/or Three-Month LIBOR, as applicable.

 

“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.

 

“Liquidated Student Loan” means any defaulted Trust Student Loan liquidated by the Servicer (which shall not include any Trust Student Loan on which Guarantee Payments are received) or which the Servicer has, after using all reasonable efforts to realize upon such Trust Student Loan, determined to charge off.

 

“Liquidation Proceeds” means, with respect to any Liquidated Student Loan which became a Liquidated Student Loan during the current Collection Period in accordance with the Servicer’s customary servicing procedures, the moneys collected in respect of the liquidation thereof from whatever source, other than Recoveries, net of the sum of any amounts expended by the Servicer in connection with such liquidation and any amounts required by law to be remitted to the Obligor on such Liquidated Student Loan.

 

“Loan” has the meaning set forth in Section 2 of each of the Purchase Agreements, as applicable, and each Additional Purchase Agreement.

 

“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, and (ii) pay to the respective Noteholders the Class A Noteholders’ Interest Distribution Amount and the Class B Noteholders’ Interest Distribution Amount payable on such Distribution Date.

 

“Moody’s” means Moody’s Investors Service, Inc. or any successor Rating Agency.

 

“Note Depository Agreement” means the Letter of Representations, dated as of June 20, 2013 among the Trust, the Eligible Lender Trustee and the Indenture Trustee in favor of DTC.

 

“Note Final Maturity Date” means the Class A-1 Maturity Date, the Class A-2 Maturity Date, the Class A-3 Maturity Date or the Class B Maturity Date, as applicable.

 

“Note Interest Shortfall” means the Class A Note Interest Shortfall, if any, and/or the Class B Note Interest Shortfall, if any, as applicable.

 

  

Appendix A-19

  

“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 applicable 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” means, as of the close of business on a Distribution Date, a seven-digit decimal figure equal to the Outstanding Amount of a class of Notes divided by the original Outstanding Amount 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 Amount 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 and the Class B Rate for such Accrual Period, collectively.

 

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.4 of the Indenture.

 

“Noteholder” means the Person in whose name a Note is registered in the Note Register.

 

“Note” means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note or a Class B Note.

 

“Notes” means the collective reference to the Class A Notes and the Class B Notes.

 

“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, including the Guarantor thereof and, with respect to any Interest Subsidy Payment or Special Allowance Payment, if any, thereon, the Department.

 

“Officers’ Certificate” means (i) in the case of the Trust, a certificate signed by any two Authorized Officers of the Eligible Lender Trustee, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.1 of the Indenture, and delivered to the Indenture Trustee, and (ii) in the case of the Depositor, the Administrator or the Servicer, a certificate signed by any Authorized Officer of the Depositor, the Administrator or the Servicer, as applicable.

 

“One-Month LIBOR”,  “Two-Month LIBOR” and “Three-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 Reuters Screen LIBOR01 Page as of 11:00 a.m. London time, on the related LIBOR Determination Date, as determined by the Administrator.  If this rate does not appear on Reuters Screen LIBOR01 Page or on such comparable service as is customarily used to quote LIBOR, 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 

 

 

Appendix A-20

 

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, LIBOR in effect for the applicable Accrual Period will be LIBOR for the Index Maturity in effect for the previous Accrual Period.  All percentages resulting from such calculations shall be rounded, if necessary, to the nearest 1/100,000 of 1%, or 0.0000001, with five one-millionths of a percentage point being rounded upward.

 

“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 Eligible Lender 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 11.1 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 Eligible Lender Trustee.

 

“Origination Fee” means any origination fee payable to the Department by the lender with respect to any Trust Student Loan.

 

“Outstanding” means, as of any date of determination, all Notes theretofore authenticated and delivered under the Indenture except:

 

(a)  Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation;

 

(b) Notes or portions thereof, for which payment has been made to the applicable Noteholders in reduction of the outstanding principal balance thereof or 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

 

(c) Notes in exchange for or in lieu of other Notes which have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; provided that in determining whether the Noteholders of the requisite Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any other Basic Document, Notes owned by the Trust, any other obligor upon the Notes, the Depositor or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a 

 

 

Appendix A-21

 

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, as of any date of determination, the aggregate principal balance of all the Notes or the applicable class or classes of Notes, as the case may be, Outstanding at such date of determination.

 

“Paying Agent” means, with respect to the Notes, 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 Eligible Lender 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.

 

“PLUS Loan” means a Loan that was made pursuant to the PLUS Program established under Section 428B of the Higher Education Act (or predecessor provisions).

 

“Pool Balance” for any date means the aggregate principal balance of the Trust Student Loans on that date (including accrued interest that is expected to be capitalized) as such balance has been reduced through such date by:

 

(a) all payments received by the Trust through that date from Obligors, the Guarantors and the Department;

 

(b) all amounts received by the Trust through that date from repurchases of the Trust Student Loans by SLM ECFC, Bluemont Funding, Town Center Funding, Town Hall Funding, VL Funding or the Depositor, as applicable, or purchases by the Servicer;

 

(c) all Liquidation Proceeds and Realized Losses on the Trust Student Loans liquidated through that date;

 

(d) the amount of any adjustments to the outstanding principal balances of the Trust Student Loans that the Servicer makes under the Servicing Agreement through that date; and

 

(e) the amount by which Guarantor reimbursements of principal on defaulted Trust Student Loans through that date are reduced from 100% to 98%, from 99% to 97%, or from and to such other applicable percentages as are required by the risk sharing provisions of the Higher Education Act.

 

  

Appendix A-22

  

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.5 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 Distribution Date has the meaning specified in Attachment A to the Servicing Agreement, and shall include any such fees from prior Distribution Dates that remain unpaid.

 

“Principal Distribution Amount” means, for any Distribution Date, the amount, not less than zero, by which (a) the aggregate Outstanding Amount of the Notes immediately prior to such Distribution Date exceeds (b) the Adjusted Pool Balance for such Distribution Date less the Specified Overcollateralization Amount.  Notwithstanding the foregoing, (i) on or after the related Note Final Maturity Date, the Principal Distribution Amount shall not be less than the amount that is necessary to reduce the Outstanding Amount of the related class of Notes to zero, and (ii) the Principal Distribution Amount shall not exceed the aggregate Outstanding Amount of the Notes as of any Distribution Date (before giving effect to any distributions on such Distribution Date).

 

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

 

“Prospectus” means the collective reference to the Base Prospectus dated April 2, 2013 and the Prospectus Supplement dated June 12, 2013.

 

“Purchase Agreement” means each of the SLM ECFC Purchase Agreement, the Bluemont Funding Purchase Agreement, the Town Center Funding Purchase Agreement, the Town Hall Funding Purchase Agreement or the VL Funding Purchase Agreement each dated as of June 20, 2013.

 

“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 and unpaid 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 3.5A or 3.5H of the Servicing Agreement or repurchased by the Depositor pursuant to Section 6 of the Sale Agreement, purchased by the Servicer pursuant to Section 6.1 of the Administration Agreement, repurchased by SLM ECFC pursuant to Section 6 of the SLM ECFC Purchase Agreement, repurchased by Bluemont Funding pursuant to Section 6 of the Bluemont Funding Purchase Agreement, repurchased by Town Center Funding pursuant to Section 6 of the Town Center Funding Purchase Agreement, repurchased by Town Hall Funding pursuant to Section 6 of the Town Hall Funding Purchase Agreement, repurchased by VL Funding pursuant to Section 6 of the VL Funding Purchase Agreement or sold to another eligible lender holding one or more Serial Loans with respect to such Trust Student Loan pursuant to Section 3.11E of the Servicing Agreement.

 

  

Appendix A-23

  

“Rating Agency” means Moody’s and Fitch, so long as such organization is then rating the Notes.  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, written notice of which designation shall be given to the Indenture Trustee, the Eligible Lender Trustee and the Servicer.

 

“Rating Agency Condition” means, with respect to any intended action, that each Rating Agency then rating a class of Notes, other than S&P, shall have been given 10 days’ prior written notice thereof and that each such Rating Agency shall have notified the Administrator, the Servicer, the Eligible Lender Trustee and the Indenture Trustee in writing that such proposed action will not result in and of itself in the reduction or withdrawal of its then-current rating of any class of Notes.

 

“Realized Loss” means the excess of the principal balance, including any interest that had been or had been expected to be capitalized, of any Liquidated Student Loan over Liquidation Proceeds for that Liquidated Student Loan to the extent allocable to principal, including any interest that had been or had been expected to be capitalized.

 

“Record Date” means, with respect to a Distribution Date or Redemption Date and for each class of Notes, the close of business on the day preceding such Distribution Date or Redemption Date.

 

“Recoveries” means moneys collected from whatever source with respect to any Liquidated Student Loan which was written off in prior Collection Periods or during the current Collection Period, net of the sum of any amounts expended by the Servicer for the account of any Obligor and any amounts required by law to be remitted to any Obligor.

 

“Redemption Date” means in the case of a payment to Noteholders pursuant to Section 10.1 of the Indenture, the Distribution Date specified pursuant to Section 10.1 of the Indenture.

 

“Redemption Price” means an amount equal to the Outstanding Amount of the Notes, plus accrued and unpaid interest thereon at the applicable Note Rate to but excluding the Redemption Date.

 

“Reference Banks” means four major banks in the London interbank market, as selected by the Administrator.

 

“Registrar” means the Excess Distribution Certificate Registrar and/or the Note Registrar, as applicable.

 

“Regulation AB” means  Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.

 

  

Appendix A-24

  

“Reserve Account” means the account designated as such, established and maintained pursuant to Section 2.3(g) of the Administration Agreement.

 

“Reserve Account Initial Deposit” means $6,249,953.

 

“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.

 

“Reuters Screen LIBOR01 Page” means the display page so designated on the Reuters Monitor Money Rates Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices).

 

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, or any successor.

 

“Sale Agreement” means the Sale Agreement Master Securitization Terms Number 1000, dated as of June 20, 2013, among the Eligible Lender Trustee on behalf of the Trust, the Trust, the Interim Eligible Lender Trustee and the Depositor, and the sale agreement or agreements entered into thereunder.

 

“Sarbanes Certification” means the certification required by Rules 13a-14(d) and 15(d)-14(d) under the Exchange Act (pursuant to Section 302 of the Sarbanes Oxley Act of 2002).

 

“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).

 

“Serial Loan” means an additional student loan which is made to a borrower who is also a borrower under at least one Trust Student Loan.

 

“Servicer” means Sallie Mae, Inc., in its capacity as servicer of the Trust Student Loans.

 

“Servicer Default” means an event specified in Section 5.1 of the Servicing Agreement.

 

“Servicer’s Report” means any report of the Servicer delivered pursuant to Section 3.1(a) of the Administration Agreement, substantially in the form acceptable to the Administrator.

 

“Servicing Agreement” means the Servicing Agreement dated as of June 20, 2013, among the Trust, the Eligible Lender Trustee, the Servicer, the Administrator and the Indenture Trustee.

 

  

Appendix A-25

  

“Servicing Criteria” means the “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.

 

“Servicing Fee” has the meaning specified in Attachment A to the Servicing Agreement.

 

“SLM ECFC” means SLM Education Credit Finance Corporation.

 

“SLM ECFC Purchase Agreement” means the Purchase Agreement Master Securitization Terms Number 1000, dated as of June 20, 2013, among SLM ECFC, the Interim Eligible Lender Trustee and the Depositor, as well as each purchase agreement entered into thereunder.

 

“SLS Loan” means a Loan which was made pursuant to the Supplemental Loans for Students Program established under Section 428A of the Higher Education Act (or predecessor provisions), including Loans referred to as ALAS Loans or Student PLUS Loans.

 

“Special Allowance Payments” means payments, designated as such, consisting of effective interest subsidies by the Department in respect of the Trust Student Loans to the Eligible Lender Trustee on behalf of the Trust in accordance with the Higher Education Act.

 

“Specified Overcollateralization Amount” means for any Distribution Date, the greater of:

 

	
(a)  

	
1.0% of the Adjusted Pool Balance for that Distribution Date; and

 

	
(b)  

	
$2,000,000.

 

“Specified Reserve Account Balance” means, for any Distribution Date, the greater of:

 

	
(a)  

	
(i) for any Distribution Date occurring prior to the June 2014 Distribution Date, 0.50% of the Pool Balance as of the end of the related Collection Period, and (ii) for any Distribution Date occurring on or after the June 2014 Distribution Date, 0.25% of the Pool Balance as of the end of the related Collection Period; and

 

	
(b)  

	
$1,249,991;

 

provided that in no event will that balance exceed the Outstanding Amount of the Notes.

 

“Stafford Loan” means a Trust Student Loan designated as such that is made under the Stafford Loan Program in accordance with the Higher Education Act.

 

“State” means any one of the 50 States of the United States of America or the District of Columbia.

 

“Statistical Cutoff Date” means April 17, 2013.

 

“Student Loans” means education loans to students and parents of students under the Federal Family Education Loan Program.

 

  

Appendix A-26

  

“Subcontractor” means any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the student loan-backed securities market) of Trust Student Loans but performs one or more of the discrete functions identified in Item 1122(d) of Regulation AB with respect to the Trust Student Loans under the direction or authority of the Administrator, Servicer or Indenture Trustee (as applicable).

 

“Subsequent Cutoff Date” with respect to each Additional Trust Student Loan or Substituted Trust Student Loan has the meaning set forth in the related Additional Purchase Agreement and Additional Sale Agreement.

 

“Subservicer” shall mean any Person that services the Trust Student Loans on behalf of the Administrator, Servicer or Indenture Trustee (as applicable) and is responsible for the performance (whether directly or through other Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Administrator, Servicer or Indenture Trustee (as applicable) that are identified in Item 1122(d) of Regulation AB.

 

“Substituted Trust Student Loan” means each Eligible Loan substituted by the Depositor pursuant to Section 6(B) of the Sale Agreement and each related Additional Sale Agreement.

 

“Successor Administrator” has the meaning specified in Section 3.7(e) of the Indenture.

 

“Successor Servicer” has the meaning specified in Section 3.7(e) of the Indenture.

 

“Supplemental Purchase Account” means any account designated as such, established and maintained pursuant to Section 2.3(k) of the Administration Agreement.

 

“Supplemental Purchase Account Initial Deposit” means $18,957,985.94, which is equal to the excess, if any, of (x) the Pool Balance as of the Statistical Cutoff Date over (y) the Initial Cutoff Date Pool Balance; provided that such amount is not in excess of 5% of the Pool Balance as of the Statistical Cutoff Date.

“Supplemental Purchase Period” means the period beginning on the Closing Date and ending on July 5, 2013.

 

“Town Center Funding” means Town Center Funding LLC.

 

“Town Center Funding Eligible Lender Trustee” means Deutsche Bank Trust Company Americas, a New York banking corporation, not in its individual capacity but solely as interim eligible lender trustee for the benefit of Town Center Funding under the Town Center Funding Interim Trust Agreement.

 

“Town Center Funding Interim Trust Agreement” means the Interim Trust Agreement dated as of June 20, 2013, between Town Center Funding and the Town Center Funding Eligible Lender Trustee.

 

“Town Center Funding Purchase Agreement” means the Purchase Agreement Master Securitization Terms Number 1000, dated as of June 20, 2013, among Town Center Funding, the Town Center Funding Eligible Lender Trustee, the Interim Eligible Lender Trustee, the Servicer and the Depositor, as well as each purchase agreement entered into thereunder.

 

“Town Hall Funding” means Town Hall Funding LLC.

 

“Town Hall Funding Eligible Lender Trustee” means Deutsche Bank Trust Company Americas, a New York banking corporation, not in its individual capacity but solely as interim eligible lender trustee for the benefit of Town Hall Funding under the Town Hall Funding Interim Trust Agreement.

 

“Town Hall Funding Interim Trust Agreement” means the Interim Trust Agreement dated as of June 20, 2013, between Town Hall Funding and the Town Hall Funding Eligible Lender Trustee.

 

  

Appendix A-27

  

“Town Hall Funding Purchase Agreement” means the Purchase Agreement Master Securitization Terms Number 1000, dated as of June 20, 2013, among Town Hall Funding, the Town Hall Funding Eligible Lender Trustee, the Interim Eligible Lender Trustee, the Servicer and the Depositor, as well as each purchase agreement entered into thereunder.

 

“Transfer” means an offer, sale, pledge, transfer or other disposition of a Note or any interest therein.

 

“Transfer Date” has the meaning specified in Section 5.2(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.

 

“Trust” means SLM Student Loan Trust 2013-3, a Delaware statutory trust established pursuant to the Trust Agreement.

 

“Trust Account Property” means the Trust Accounts, all cash and investments held from time to time in any Trust Account (whether in the form of deposit accounts, Physical Property, book-entry securities, uncertificated securities or otherwise), including the Reserve Account Initial Deposit, the Supplemental Purchase Account Initial Deposit, the Collection Account Initial Deposit, the Borrower Benefit Account Initial Deposit and all earnings on and proceeds of the foregoing.

 

“Trust Accounts” has the meaning specified in Section 2.3(b) of the Administration Agreement.

 

  

Appendix A-28

  

“Trust Agreement” means the short-form trust agreement, dated as of April 24, 2013, as amended and restated pursuant to an Amended and Restated Trust Agreement, dated as of June 20, 2013 among the Depositor, the Eligible Lender Trustee, the Delaware Trustee and the Indenture Trustee.

 

“Trust Auction Date” has the meaning specified in Section 4.4 of the Indenture.

 

“Trust Estate” means all right, title and interest of the Trust (or the Eligible Lender 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 and any Additional 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 Eligible Lender Trustee and the Trust pursuant to the Trust Agreement, the Administration Agreement, the Servicing Agreement and any Eligible Repurchase Obligations.

 

“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 Initial Trust Student Loans on the Closing Date, plus any Additional Trust Student Loan, plus any student loan that is permissibly substituted for a Trust Student Loan by the Depositor pursuant to Section 6 of the Sale Agreement or pursuant to Section 6 of an Additional Sale Agreement or by the Servicer pursuant to Section 3.5 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 or any Liquidated Student Loan following receipt by or on behalf of the Trust of Liquidation Proceeds with respect thereto or following such Liquidated Student Loan having otherwise been written off by the Servicer.

 

“Trust Student Loan Files” means the documents specified in Section 2.1 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.

 

“Underwriter” means each of Barclays Capital Inc., J.P. Morgan Securities LLC and RBC Capital Markets, LLC.

 

“VL Funding” means VL Funding LLC.

 

“VL Funding Eligible Lender Trustee” means Deutsche Bank Trust Company Americas, a New York banking corporation, not in its individual capacity but solely as interim eligible lender trustee for the benefit of VL Funding under the VL Funding Interim Trust Agreement.

 

“VL Funding Interim Trust Agreement” means the Interim Trust Agreement dated as of June 20, 2013, between VL Funding and the VL Funding Eligible Lender Trustee.

 

  

Appendix A-29

  

“VL Funding Purchase Agreement” means the Purchase Agreement Master Securitization Terms Number 1000, dated as of June 20, 2013, among VL Funding, the VL Funding Eligible Lender Trustee, the Interim Eligible Lender Trustee, the Servicer and the Depositor, as well as each purchase agreement entered into thereunder.

 

  

Appendix A-30

  

SCHEDULE A

 

 

Schedule of Trust Student Loans

 

 

[See Schedule A to the Bill of Sale

 

(Attachment B to the Sale Agreement)]

 

  

Schedule A-1

  

SCHEDULE B

 

 

	
Location of  Trust Student Loan Files

 

[See Attachment B to the Servicing Agreement)]

  

Schedule B-1

  

	
EXHIBIT A

 

 

 

[Form of Notes]

 

[See tab 15.1]

  

Exhibit A-1

  

EXHIBIT B

Form of Note Depository Agreement

  

Exhibit B-1

  

 EXHIBIT C

Servicing Criteria To Be Addressed In Assessment Of Compliance

The assessment of compliance to be delivered by Deutsche Bank National Trust Company, as Indenture Trustee, shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:

	
Reference

	
Criteria

	
Applicability

	  	
 

General Servicing Considerations

 

	  
	
1122(d)(1)(i)

	
Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the Basic Documents.

	
N/A

	
1122(d)(1)(ii)

	
If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.

	
N/A

	
1122(d)(1)(iii)

	
Any requirements in the Basic Documents to maintain a back-up servicer for the trust student loans are maintained.

	
N/A

	
1122(d)(1)(iv)

	
A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the Basic Documents.

	
N/A

	  	
 

Cash Collection and Administration

 

	  
	
1122(d)(2)(i)

	
Payments on trust student loans are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days following receipt, or such other number of days specified in the Basic Documents.

	
N/A

	
1122(d)(2)(ii)

	
Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.

	  
	
1122(d)(2)(iii)

	
Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the Basic Documents.

	
N/A

	
1122(d)(2)(iv)

	
The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of overcollateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the Basic Documents.

	
N/A

	
1122(d)(2)(v)

	
Each custodial account is maintained at a federally insured depository institution as set forth in the Basic Documents. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 13k-1(b)(1) of the Securities Exchange Act.

	
N/A

	
1122(d)(2)(vi)

	
Unissued checks are safeguarded so as to prevent unauthorized access.

	
N/A

	
1122(d)(2)(vii)

	
 Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations are (A) mathematically accurate; (B) prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the Basic Documents; (C) reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the Basic Documents.

	
N/A

	  	  	  

 

 

  

Exhibit C-1

  

	
Reference

	
Criteria

	
Applicability

	  	
 

Investor Remittances and Reporting

 

	  
	
1122(d)(3)(i)

	
Reports to investors, including those to be filed with the Commission, are maintained in accordance with the Basic Documents and applicable Commission requirements. Specifically, such reports (A) are prepared in accordance with timeframes and other terms set forth in the Basic Documents; (B) provide information calculated in accordance with the terms specified in the Basic Documents; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of student loans serviced by the Servicer.

	
N/A

	
1122(d)(3)(ii)

	
Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the Basic Documents.

	
N/A

	
1122(d)(3)(iii)

	
Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the Basic Documents.

	
N/A

	
1122(d)(3)(iv)

	
Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.

	
N/A

	  	
 

Pool Asset Administration

 

	  
	
1122(d)(4)(i)

	
Collateral or security on student loans is maintained as required by the Basic Documents or related student loan documents.

	
N/A

	
1122(d)(4)(ii)

	
Student loan and related documents are safeguarded as required by the Basic Documents.

	
N/A

	
1122(d)(4)(iii)

	
Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the Basic Documents.

	
N/A

	
1122(d)(4)(iv)

	
Payments on student loans, including any payoffs, made in accordance with the related student loan documents are posted to the Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the Basic Documents, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related student loan documents.

	
N/A

	
1122(d)(4)(v)

	
The Servicer’s records regarding the student loans agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.

	
N/A

	
1122(d)(4)(vi)

	
Changes with respect to the terms or status of an obligor's student loans (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the Basic Documents and related pool asset documents.

	
N/A

	
1122(d)(4)(vii)

	
Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the Basic Documents.

	
N/A

	
1122(d)(4)(viii)

	
Records documenting collection efforts are maintained during the period a student loan is delinquent in accordance with the Basic Documents. Such records are maintained on at least a monthly basis, or such other period specified in the Basic Documents, and describe the entity’s activities in monitoring delinquent student loans including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).

	
N/A

	
1122(d)(4)(ix)

	
Adjustments to interest rates or rates of return for student loans with variable rates are computed based on the related student loan documents.

	
N/A

	
1122(d)(4)(x)

	
Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s student loan documents, on at least an annual basis, or such other period specified in the Basic Documents; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable student loan documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related student loans, or such other number of days specified in the Basic Documents.

	
N/A

 

 

 

  

Exhibit C-2

  

	
Reference

	
Criteria

	
Applicability

	
1122(d)(4)(xi)

	
Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the Basic Documents.

	
N/A

	
1122(d)(4)(xii)

	
Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.

	
N/A

	
1122(d)(4)(xiii)

	
Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the Basic Documents.

	
N/A

	
1122(d)(4)(xiv)

	
Delinquencies, charge-offs and uncollectible accounts are recognized and recorded in accordance with the Basic Documents.

	
N/A

	
1122(d)(4)(xv)

	
Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, is maintained as set forth in the Basic Documents.

	
N/A

 

Exhibit C-3Exhibit 10.1

 

 

 

$1,000,000,000.00

 

FOUR-YEAR CREDIT AGREEMENT

 

 

 

dated as of

 

June 19, 2013

 

among

 

McGRAW HILL FINANCIAL, INC.

as Borrower

 

STANDARD & POOR’S FINANCIAL SERVICES LLC

as a Loan Guarantor

 

 

 

JPMORGAN CHASE BANK, N.A.

as Administrative Agent

 

 

BANK OF AMERICA, N.A.

as Syndication Agent

 

 

 

CITIBANK, N.A.

DEUTSCHE BANK SECURITIES INC.

MORGAN STANLEY MUFG LOAN PARTNERS, LLC

THE ROYAL BANK OF SCOTLAND PLC

 

as Documentation Agents

 

 

 

J.P. MORGAN SECURITIES LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

CITIGROUP GLOBAL MARKETS INC.

DEUTSCHE BANK SECURITIES INC.

MORGAN STANLEY MUFG LOAN PARTNERS, LLC

RBS SECURITIES INC.

as Joint Lead Arrangers and Joint Bookrunners

 

  

  

 

  

 

TABLE OF CONTENTS

Page

	ARTICLE I Definitions	
6

	 	  	  
	 	
SECTION 1.01

	
Defined Terms

	
6

	 	  	  	  
	 	
SECTION 1.02

	
Classification of Loans and Borrowings

	
23

	 	  	  	  
	 	
SECTION 1.03

	
Terms Generally

	
23

	 	  	  	  
	 	
SECTION 1.04

	
Accounting Terms; GAAP

	
24

	 	  	  	  
	ARTICLE II The Credits	
24

	 	  	  
	 	
SECTION 2.01

	
Commitments

	
24

	 	  	  	  
	 	
SECTION 2.02

	
Loans and Borrowings

	
24

	 	  	  	  
	 	
SECTION 2.03

	
Requests for Revolving Borrowings

	
25

	 	  	  	  
	 	
SECTION 2.04

	
Competitive Bid Procedure

	
26

	 	  	  	  
	 	
SECTION 2.05

	
Swingline Loans

	
28

	 	  	  	  
	 	
SECTION 2.06

	
Funding of Borrowings

	
29

	 	  	  	  
	 	
SECTION 2.07

	
Interest Elections

	
29

	 	  	  	  
	 	
SECTION 2.08

	
Termination and Reduction of Commitments

	
30

	 	  	  	  
	 	
SECTION 2.09

	
Repayment of Loans; Evidence of Debt

	
31

	 	  	  	  
	 	
SECTION 2.10

	
Prepayment of Loans

	
32

	 	  	  	  
	 	
SECTION 2.11

	
Fees

	
32

	 	  	  	  
	 	
SECTION 2.12

	
Interest

	
33

	 	  	  	  
	 	
SECTION 2.13

	
Alternate Rate of Interest

	
34

	 	  	  	  
	 	
SECTION 2.14

	
Increased Costs

	
34

	 	  	  	  
	 	
SECTION 2.15

	
Break Funding Payments

	
36

	 	  	  	  
	 	
SECTION 2.16

	
Taxes

	
36

	 	  	  	  
	 	
SECTION 2.17

	
Payments Generally; Pro Rata Treatment; Sharing of Set-offs

	
39

	 	  	  	  

 

 

  

i

  

 

 

Page

 

	 	
SECTION 2.18

	
Mitigation Obligations; Replacement of Lenders

	
40

	 	  	  	  
	 	
SECTION 2.19

	
Defaulting Lenders

	
41

	 	  	  	  
	 	
SECTION 2.20

	
Proceeds

	
43

	 	  	  	  
	ARTICLE III Letters of Credit	
43

	 	  	  
	 	
SECTION 3.01

	
L/C Commitment

	
43

	 	  	  	  
	 	
SECTION 3.02

	
Procedure for Issuance of Letter of Credit

	
43

	 	  	  	  
	 	
SECTION 3.03

	
Fees and Other Charges

	
44

	 	  	  	  
	 	
SECTION 3.04

	
L/C Participations

	
44

	 	  	  	  
	 	
SECTION 3.05

	
Reimbursement Obligation of the Borrower

	
45

	 	  	  	  
	 	
SECTION 3.06

	
Obligations Absolute

	
46

	 	  	  	  
	 	
SECTION 3.07

	
Letter of Credit Payments

	
46

	 	  	  	  
	 	
SECTION 3.08

	
Applications

	
46

	 	  	  	  
	 	
ARTICLE IV Representations and Warranties

	
46

	 	  	  
	 	
SECTION 4.01

	
Organization, Powers and Good Standing

	
46

	 	  	  	  
	 	
SECTION 4.02

	
Authorization of Borrowing, etc

	
47

	 	 	 	 
	 	
SECTION 4.03

	
Financial Condition

	
48

	 	  	  	  
	 	
SECTION 4.04

	
No Adverse Material Change

	
48

	 	  	  	  
	 	
SECTION 4.05

	
Litigation

	
48

	 	  	  	  
	 	
SECTION 4.06

	
Payment of Taxes

	
48

	 	  	  	  
	 	
SECTION 4.07

	
Governmental Regulation

	
49

	 	  	  	  
	 	
SECTION 4.08

	
Securities Activities

	
49

	 	  	  	  
	 	
SECTION 4.09

	
ERISA

	
49

	 	  	  	  
	 	
SECTION 4.10

	
Disclosure.

	
49

	 	  	  	  
	 	
SECTION 4.11

	
OFAC.

	
49

	 	  	  	  

 

 

  

ii

  

 

 

Page

 

	ARTICLE V Conditions	
50

	 	  	  
	 	
SECTION 5.01

	
Effective Date

	
50

	 	  	  	  
	 	
SECTION 5.02

	
Each Credit Event

	
51

	 	  	  	  
	ARTICLE VI Affirmative Covenants	
51

	 	  	  
	 	
SECTION 6.01

	
Financial Statements and Other Reports

	
51

	 	  	  	  
	 	
SECTION 6.02

	
Corporate Existence

	
53

	 	  	  	  
	 	
SECTION 6.03

	
Payment of Taxes

	
53

	 	  	  	  
	 	
SECTION 6.04

	
Maintenance of Properties; Insurance

	
53

	 	  	  	  
	 	
SECTION 6.05

	
Compliance with Laws

	
54

	 	  	  	  
	 	
SECTION 6.06

	
Notices of ERISA Event

	
54

	 	  	  	  
	 	
SECTION 6.07

	
Inspection Rights.

	
54

	 	  	  	  
	ARTICLE VII Negative Covenants	
54

	 	  	  
	 	
SECTION 7.01

	
Fundamental Changes

	
54

	 	  	  	  
	 	
SECTION 7.02

	
Liens

	
55

	 	  	  	  
	 	
SECTION 7.03

	
Financial Covenants

	
56

	 	  	  	  
	 	
SECTION 7.04

	
Use of Proceeds

	
56

	 	  	  	  
	 	
SECTION 7.05

	
Subsidiary Indebtedness

	
56

	 	  	  	  
	 	
SECTION 7.06

	
Negative Pledge Clauses

	
57

	 	  	  	  
	ARTICLE VIII Events of Default	
59

	 	  	  
	 	
SECTION 8.01

	
Failure to Make Payments When Due

	
59

	 	  	  	  
	 	
SECTION 8.02

	
Default in Other Agreements

	
59

	 	  	  	  
	 	
SECTION 8.03

	
Breach of Certain Covenants

	
60

	 	  	  	  
	 	
SECTION 8.04

	
Breach of Warranty

	
60

	 	  	  	  
	 	
SECTION 8.05

	
Other Defaults Under Agreement

	
60

	 	  	  	  
	 	
SECTION 8.06

	
Change In Control

	
60

	 	  	  	  
	 	
SECTION 8.07

	
Involuntary Bankruptcy; Appointment of Receiver, etc.

	
61

	 	  	  	  

 

 

  

iii

  

 

 

Page

 

	 	
SECTION 8.08

	
Voluntary Bankruptcy; Appointment of Receiver, etc.

	
61

	 	  	  	  
	 	
SECTION 8.09

	
Judgments and Attachments

	
61

	 	  	  	  
	 	
SECTION 8.10

	
Involuntary Dissolution

	
62

	 	  	  	  
	 	
SECTION 8.11

	
ERISA Event

	
62

	 	  	  	  
	ARTICLE IX The Administrative Agent	
63

	 	  	  
	ARTICLE X Miscellaneous	
65

	 	  	  
	 	
SECTION 10.01

	
Notices

	
65

	 	  	  	  
	 	
SECTION 10.02

	
Waivers; Amendments

	
66

	 	  	  	  
	 	
SECTION 10.03

	
Expenses; Indemnity; Damage Waiver; No Fiduciary Duty

	
67

	 	  	  	  
	 	
SECTION 10.04

	
Successors and Assigns

	
69

	 	  	  	  
	 	
SECTION 10.05

	
Survival

	
71

	 	  	  	  
	 	
SECTION 10.06

	
Counterparts; Integration; Effectiveness

	
72

	 	  	  	  
	 	
SECTION 10.07

	
Severability

	
72

	 	  	  	  
	 	
SECTION 10.08

	
Adjustments; Right of Setoff

	
72

	 	  	  	  
	 	
SECTION 10.09

	
Governing Law; Jurisdiction; Consent to Service of Process

	
73

	 	  	  	  
	 	
SECTION 10.10

	
WAIVER OF JURY TRIAL

	
74

	 	  	  	  
	 	
SECTION 10.11

	
Headings

	
74

	 	  	  	  
	 	
SECTION 10.12

	
Confidentiality

	
74

	 	  	  	  
	 	
SECTION 10.13

	
USA PATRIOT Act

	
75

	 	  	  	  
	ARTICLE XI Loan Guaranty	
75

	 	  	  
	 	
SECTION 11.01

	
Guaranty

	
75

	 	  	  	  
	 	
SECTION 11.02

	
Guaranty of Payment

	
75

	 	  	  	  
	 	
SECTION 11.03

	
No Discharge or Diminishment of Loan Guaranty

	
76

	 	  	  	  
	 	
SECTION 11.04

	
Rights of Subrogation

	
76

	 	  	  	  
	 	
SECTION 11.05

	
Reinstatement; Stay of Acceleration

	
76

	 	  	  	  
	 	
SECTION 11.06

	
Maximum Liability

	
77

 

  

iv

  

 

SCHEDULES:

Schedule 2.01 – Commitments

Schedule 4.01 -- Material Subsidiaries

Schedule 4.05 -- Material Litigation

Schedule 7.02 -- Existing Liens

Schedule 7.05 -- Existing Indebtedness

Schedule 7.06 – Restrictive Agreements

 

EXHIBITS:

Exhibit A -- Form of Assignment and Assumption

Exhibit B -- Form of U.S. Tax Compliance Certificate

Exhibit C -- Form of Opinion of General Counsel of Borrower

Exhibit D -- Form of Joinder Agreement

 

 

 

 

  

v

  

FOUR-YEAR CREDIT AGREEMENT dated as of June 19, 2013, among MCGRAW HILL FINANCIAL, INC. (the “Borrower”), STANDARD & POOR’S FINANCIAL SERVICES LLC (“S&P”) and the certain other subsidiaries of the Borrower parties hereto from time to time as Loan Guarantors (as defined herein), the several banks and other financial institutions from time to time parties hereto (the “Lenders”), BANK OF AMERICA, N.A., as syndication agent (in such capacity, the “Syndication Agent”), CITIBANK, N.A., DEUTSCHE BANK SECURITIES INC., MORGAN STANLEY MUFG LOAN PARNTERS, LLC, and THE ROYAL BANK OF SCOTLAND PLC, as documentation agents (in such capacity, the “Documentation Agents”), and JPMORGAN CHASE BANK, N.A., as administrative agent (in such capacity, the “Administrative Agent”).

 

The parties hereto hereby agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01     Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans comprising such Borrowing are, bearing interest at a rate determined by reference to the Alternate Base Rate.

 

“Administrative Agent” has the meaning set forth in the preamble to this Agreement.

 

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“Agreement” means this Credit Agreement, as amended, supplemented or otherwise modified from time to time.

 

“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the LIBO Rate on such day for a LIBOR Loan with a one-month interest period (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the LIBO Rate, respectively.

 

“Applicable ABR Spread” has the meaning set forth in the definition of “Applicable Rate” in this Section 1.01.

 

 

  

  

  

 

“Applicable LIBOR Spread” has the meaning set forth in the definition of “Applicable Rate” in this Section 1.01.

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the total Commitments represented by such Lender’s Commitment; provided, that in the case of Section 2.19 when a Defaulting Lender shall exist, Applicable Percentage shall mean the percentage of the total Commitments (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s Commitment.  If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments and to any Lender’s status as a Defaulting Lender at the time of determination.

 

“Applicable Pricing Grid” has the meaning set forth in the definition of “Applicable Rate” in this Section 1.01.

 

“Applicable Rate” means, for any day, with respect to (a) any ABR Revolving Loan, the Applicable LIBOR Spread less 1% per annum (the “Applicable ABR Spread”); provided that, the Applicable ABR Spread shall not be less than 0%, (b) any LIBOR Revolving Loan, the applicable rate per annum set forth below under the caption “Applicable LIBOR Spread” (the “Applicable LIBOR Spread”), or (c) commitment fees payable hereunder, the applicable rate per annum set forth below under the caption “Commitment Fee Rate”, based upon the applicable Category set forth in the grid below (the “Applicable Pricing Grid”):

 

	
Indebtedness to Cash Flow Ratio:

	
Applicable LIBOR Spread

	
Commitment Fee

Rate

	
Category 1:  Less than 0.5 to 1.0

	
1.25%

	
0.20%

	
Category 2:  Equal to or greater than 0.5 to 1.0 but less than 1.5 to 1.0.

	
1.50%

	
0.25%

	
Category 3:  Equal to or greater than 1.5 to 1.0 but less than 2.5 to 1.0.

	
2.00%

	
0.35%

	
Category 4:  Equal to or greater than 2.5 to 1.0.

	
2.25%

	
0.45%

 

For purposes of determining any Applicable Rate, (i) until the delivery of the Compliance Certificate relating to the financial statements required to be delivered pursuant to Section 6.01(a)(i) for the first full Fiscal Quarter ended after the Effective Date, the Applicable Rate described in Category 2 shall be in effect and (ii) thereafter, the Applicable Rate shall be determined by the Indebtedness to Cash Flow Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.01(b)(i). Any changes in the Applicable Rate resulting from changes in the Indebtedness to Cash Flow Ratio shall become effective on the date that is three Business Days after the date on which financial statements and the related Compliance Certificate are delivered to the Administrative Agent pursuant to Section 6.01 and shall remain in effect until the next change to be effected pursuant to this paragraph.  If any financial statements and related Compliance Certificate referred to above are not delivered within the time periods specified in Section 6.01, then, until the date that is three Business Days after the date on which such financial statements and Compliance Certificate are delivered, the highest Applicable Rate set forth in the Applicable Pricing Grid shall apply.  In addition, at all times while an Event of Default shall have occurred and be continuing, the highest Applicable Rate set forth in the Applicable Pricing Grid shall apply.

 

 

  

7

  

 

“Application” means an application, in such form as the Issuing Lender may specify from time to time, requesting the Issuing Lender to open a Letter of Credit.

“Approved Fund” means, with respect to any Lender that is a fund that invests in commercial loans, any other fund that invests in commercial loans and is managed or advised by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

 

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

 

“Available Commitment” means, as to any Lender at any time, an amount equal to the excess, if any, of (a) such Lender’s Commitment then in effect minus (b) such Lender’s Revolving Credit Exposure then outstanding; provided that, in calculating any Lender’s Available Commitment for the purpose of determining such Lender’s Available Commitment pursuant to Section 2.11(a), the aggregate principal amount of Swingline Loans then outstanding shall be deemed to be zero.

 

“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any of the control of, an ownership interest in, or the acquisition of any ownership interest in, such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

 

 

  

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“Borrower” has the meaning set forth in the preamble to this Agreement.

 

“Borrowing” means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of LIBOR Loans, as to which a single Interest Period is in effect, (b) a Competitive Loan or group of Competitive Loans of the same Type made on the same date and as to which a single Interest Period is in effect or (c) a Swingline Loan.

 

“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.03.

 

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a LIBOR Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

“Capitalized Lease” means any lease which is or should be capitalized on the balance sheet of the lessee in accordance with GAAP existing on the date hereof and Topic 840 of the Financial Accounting Standards Board Accounting Standards Codification.

 

“Capitalized Lease Obligations” means the amount of the liability reflecting the aggregate discounted amount of future payments under all Capitalized Leases calculated in accordance with GAAP existing on the date hereof and Topic 840 of the Financial Accounting Standards Board Accounting Standards Codification.

 

“Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or, for purposes of Section 2.14(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. Notwithstanding anything herein to the contrary, (a) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by United States or foreign regulatory authorities, in each case pursuant to Basel III, and (b) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof, shall in each case be deemed to be a Change in Law, regardless of the date enacted, adopted, issued or implemented.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans, Competitive Loans or Swingline Loans.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

 

  

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“Commitment” means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Swingline Loans and Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.04.  The initial amount of each Lender’s Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.

 

“Competitive Bid” means an offer by a Lender to make a Competitive Loan in accordance with Section 2.04.

 

“Competitive Bid Rate” means, with respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making such Competitive Bid.

 

“Competitive Bid Request” means a request by the Borrower for Competitive Bids in accordance with Section 2.04.

 

“Competitive Loan” means a Loan made pursuant to Section 2.04.

 

“Compliance Certificate” has the meaning assigned to that term in Section 6.01(b)(i) hereof.

 

“Consolidated Cash Flow” of the Borrower and the Subsidiaries for any period (the “Determination Period”) means the sum of (i) Consolidated Net Income for the Determination Period, plus (ii) all amounts deducted in the determination of such Consolidated Net Income in respect of (a) depreciation and amortization (including without limitation amortization of assets held under Capitalized Leases) excluding amortization relating to prepublication costs, (b) Consolidated Interest Expense, (c) provisions for taxes based on or measured by income and (d) non-recurring non-cash losses or charges and minus (iii) all amounts added in the determination of such Consolidated Net Income in respect of non-recurring non-cash gains; provided, however, that (1) when and to the extent that non-cash losses or charges described in clause (ii)(d) above become cash paid items, such amounts shall be deducted from Consolidated Cash Flow for the period when paid and (2) when and to the extent that non-cash gains described in clause (iii) above become cash received items, such amounts shall be added to Consolidated Cash Flow for the period when received; provided, further, that (A) if during the Determination Period the Borrower disposes of any asset and such disposition constitutes a Material Disposition, the sum of (x) the net income (loss) produced by such asset, before extraordinary items, during the portion of the Determination Period prior to the date on which such asset was disposed of, plus (y) all amounts deducted in determining such net income (loss) for such period in respect of depreciation and amortization (including without limitation amortization of assets held under Capitalized Leases), interest on Indebtedness, and provisions for taxes based on or measured by income shall be excluded on a pro forma adjusted and consolidated basis in Consolidated Cash Flow for the Determination Period (to the extent they would otherwise have been included thereto), and (B) if during the Determination Period the Borrower makes an investment in any asset and such investment constitutes a Material Investment, the sum of (x) the net income (loss) produced by such asset, before extraordinary items,

 

 

  

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during the portion of the Determination Period prior to the date on which such investment in such asset was made, plus (y) all amounts deducted in determining such net income (loss) for such period in respect of depreciation and amortization (including, without limitation, amortization of assets held under Capitalized Leases), interest on Indebtedness, and provisions for taxes based on or measured by income shall be included on a pro forma adjusted and consolidated basis in Consolidated Cash Flow for the Determination Period (to the extent they would have otherwise been excluded therefrom).  As used in this definition, “Material Disposition” means any disposition of assets or series of related dispositions of assets that yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $100,000,000, provided that such proceeds, together with the proceeds received by the Borrower or such Subsidiary in any other such disposition of assets that yields gross proceeds to the Borrower or such Subsidiary in excess of $100,000,000 during the Determination Period, exceeds $200,000,000; and “Material Investment” means any acquisition of assets or series of related acquisitions of assets by the Borrower or any of its Subsidiaries that (a) constitutes assets comprising all or substantially all of an operating unit of a business or constitutes all or substantially all of the common stock of a Person and (b) involves the payment of consideration by the Borrower or such Subsidiary in excess of $100,000,000, provided that such consideration, together with the consideration paid in any other such acquisitions of assets that involves the payment of consideration by the Borrower or such Subsidiary in excess of $100,000,000 during the Determination Period, exceeds $200,000,000.

 

“Consolidated Interest Expense” means, for any period, the interest expense of the Borrower and its Subsidiaries determined on a consolidated basis in conformity with GAAP existing on the date hereof including, without limitation, (i) the amortization of debt discount, (ii) the amortization of all fees payable in connection with the incurrence of Indebtedness to the extent included in interest expense and (iii) the portion of any obligation with respect to a Capitalized Lease allocable to interest expense.

 

“Consolidated Net Income” for any period means the net income (or loss) of the Borrower and its Subsidiaries for such period before extraordinary items, determined in accordance with GAAP existing on the date hereof on a consolidated basis, after eliminating all intercompany items, provided that there shall be excluded (i) income (or loss) of any Person (other than a consolidated Subsidiary of such Person) in which any other Person (other than such Person or any of its consolidated Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to such Person or any of its consolidated Subsidiaries by such other Person during such Period, (ii) except for purposes of Consolidated Cash Flow to the extent provided in clause (B) of the definition thereof, the income (or loss) of any Person accrued prior to the date it becomes a consolidated Subsidiary of such Person or is merged into or consolidated with such Person or any of its consolidated Subsidiaries, (iii) the income of any consolidated Subsidiary of such Person to the extent that the declaration or payment of dividends or similar distributions by that consolidated Subsidiary of the income is not at the time permitted, (iv) any after-tax gains (but not pre-tax losses) attributable to sales of assets out of the ordinary course of business and any after-tax gains on pension reversions received by such Person and its consolidated Subsidiaries and (v) any income (or loss) attributable to any lease of property (whether real, personal or mixed) under which the Borrower or any of its Subsidiaries is the lessor; provided, however, there shall be excluded from any calculation pursuant to any of clauses (ii)-(iv) any income or loss attributable to assets purchased or sold, as the case may be, having an individual or aggregate (for any consecutive twelve month period) fair market value of less than $50,000,000.

 

 

  

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“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

“Credit Party” means the Administrative Agent, the Issuing Lender, the Swingline Lender or any other Lender.

 

“CRISIL Limited” means CRISIL Limited, a company organized under the laws of India, and each of its Subsidiaries.

 

“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

 

“Defaulting Lender” means any Lender that (a) has failed, within three Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by the Administrative Agent, the Issuing Lender or the Swingline Lender, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Person’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event.

 

“Determination Date” means, as used in connection with any certificate, report or calculation delivered hereunder, the date (which shall be specified in such certificate, report or calculation) as of which the determinations set forth in such certificate, report or calculation are made.

 

“Disposition” means any transaction or series of related transactions (whether by sale of stock, assets or merger) pursuant to which the MHE Business is sold transferred, divested or otherwise disposed of to another Person.

 

 

  

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“Documentation Agents” has the meaning set forth in the preamble to this Agreement.

 

“dollars” or “$” refers to lawful money of the United States of America.

 

“Effective Date” means the date on which the conditions specified in Section 5.01 are satisfied (or waived in accordance with Section 10.02).

 

“Environmental Laws” means federal, state, local and foreign laws or regulations, codes, orders, decrees, judgments or injunctions issued, promulgated, approved or entered thereunder relating to pollution or protection of the environment, including, without limitation, laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment (including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(m) of the Code.

 

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of a non-exempt Prohibited Transaction; (c) any failure by any Pension Plan to satisfy the minimum funding standards (within the meaning of Sections 412 or 430 of the Code or Section 302 of ERISA) applicable to such Pension Plan, whether or not waived; (d) the filing pursuant to Section 412 of the Code or Section 302 of ERISA of an application for a waiver of the minimum funding standard with respect to any Pension Plan or the failure by the Borrower or any of its ERISA Affiliates to make any required contribution to a Multiemployer Plan; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Pension Plan, including but not limited to the imposition of any Lien in favor of the PBGC or any Pension Plan; (f) a determination that any Pension Plan is, or is reasonably expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA); (g) the receipt by the Borrower or any of its ERISA Affiliates from the PBGC or a plan administrator of any notice relating to an intention to terminate any Pension Plan or to appoint a trustee to administer any Pension Plan under Section 4042 of ERISA; (h) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Pension Plan or Multiemployer Plan; or (i) the receipt by the Borrower or any of its ERISA Affiliates of any notice, or the receipt by any Multiemployer Plan from the Borrower or any of its ERISA Affiliates of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in reorganization or in endangered or critical status (within the meaning of Section 432 of the Code or Section 305 or Title IV of ERISA).

 

 

  

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“Event of Default” has the meaning assigned to such term in Article VIII.

 

“Exchange Act” means the Securities Exchange Act of 1934, as from time to time amended, and any successor statutes.

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income (including branch profits taxes) by a jurisdiction as a result of a present or former connection between such recipient and the jurisdiction imposing such tax (other than any such connection arising solely from the execution and delivery of this Agreement, the performance of the rights and obligations herein, the receipt of any payment hereunder or the enforcement of this Agreement), (b) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.18(b)), any United States withholding tax resulting from any law in effect on the date such Foreign Lender becomes a party to this Agreement or at the time such Lender changes its applicable lending office, except to the extent that such Foreign Lender’s assignor (if any) or such Foreign Lender, in the case of a Lender that changes its applicable lending office, was entitled, at the time of assignment or at the time of the change in applicable lending office, to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 2.16(a), (c) Taxes attributable to a Lender’s (or a recipient’s) failure to comply with Section 2.16(f) or (h) and (d) Taxes imposed pursuant to FATCA.

 

“Existing Facility” means the existing $1,200,000,000.00 syndicated three-year credit facility under the Three-Year Credit Agreement, dated as of July 30, 2010, as amended, among the Borrower, the lenders parties thereto and JPMorgan Chase Bank, as administrative agent.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date hereof (or any amended or successor version), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b) of the Code.

 

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

 

“Fee Payment Date” means (a) the third Business Day following the last day of each March, June, September and December and (b) the day upon which the Commitments terminate.

 

 

  

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“Fiscal Quarter” means a quarterly period beginning on the first day of January, April, July and October in each Fiscal Year.

 

“Fiscal Year” means an annual period beginning on January 1 in each year and ending on December 31 of such year.

 

“Fixed Rate” means, with respect to any Competitive Loan (other than a LIBOR Competitive Loan), the fixed rate of interest per annum specified by the Lender making such Competitive Loan in its related Competitive Bid.

 

“Fixed Rate Loan” means a Competitive Loan bearing interest at a Fixed Rate.

 

“Foreign Benefit Arrangement” means any employee benefit arrangement mandated by non-U.S. law that is maintained or contributed to by the Borrower or any ERISA Affiliate.

 

“Foreign Lender” means any Lender that is not a “United States Person” as defined by Section 7701(a)(30) of the Code.

 

“Foreign Plan” means each employee benefit plan (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that is not subject to U.S. law and is maintained or contributed to by the Borrower or any ERISA Affiliate.

 

“Form 10” means MHE’s Form 10 filed with the Securities and Exchange Commission on July 11, 2012 (as amended on September 20, 2012, and as further amended, modified or supplemented; provided that any such further amendment, modification or supplement that, taken as a whole, is materially adverse to the interests of the Lenders must be reasonably satisfactory to the Lenders, as reasonably determined by the Administrative Agent.

 

 “GAAP” means generally accepted accounting principles in the United States of America in effect from time to time except as specifically noted.

 

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

“Guarantee” means, with respect to any Person, (i) any guarantee, reimbursement agreement or similar contingent obligation made by such Person in respect of any Indebtedness of any other Person, (ii) any other arrangement whereby credit is extended to any other Person on the basis of any promise or undertaking of such Person, (a) to pay the Indebtedness of such other Person, (b) to purchase an obligation owed by such other Person, (c) to purchase or lease assets under circumstances that would enable such other Person to discharge such credit of its obligations or (d) to maintain the capital, working capital, solvency or general financial condition of such other Person, in each case whether or not such arrangement is disclosed in the balance sheet of such other Person or is referred to in a footnote thereto, and (iii) any liability (other than Indebtedness which is recourse to a Subsidiary of the Borrower, 

 

 

  

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the only asset of which is its interest in the partnership of which the Subsidiary is the general partner, and which Indebtedness is non-recourse to the Borrower) as a general partner of a partnership in respect of Indebtedness of such partnership; provided, however, that the term Guarantee shall not include (1) endorsements for collection or deposit in the ordinary course of business or (2) obligations of the Borrower and its Subsidiaries which would constitute Guarantees solely by virtue of the continuing liability of any such Person which has sold assets subject to liabilities for liabilities which were assumed by another Person acquiring the assets which were sold, unless such liability is required to be carried on the balance sheet of the Borrower and its Subsidiaries in accordance with GAAP.  The amount of any Guarantee and the amount of Indebtedness resulting from such Guarantee shall be the amount which would have to be carried on the balance sheet of the guarantor in respect of such Guarantee in accordance with GAAP.

 

“Guaranteed Obligations” has the meaning set forth in Section 11.01.

 

“Indebtedness” means, with respect to any Person, all obligations, for the repayment of borrowed money, which in accordance with GAAP in effect on the date hereof should be classified upon such Person’s balance sheet as liabilities, but in any event including (i) liabilities for the repayment of borrowed money to the extent secured by any Lien existing on property owned or acquired by such Person or a Subsidiary thereof, whether or not the liability secured thereby shall have been assumed by such Person and (ii) all Guarantees of such Person for the repayment of borrowed money.

 

“Indebtedness to Cash Flow Ratio” means the ratio of (i) Indebtedness of the Borrower at the Determination Date to (ii) the Consolidated Cash Flow for the four consecutive Fiscal Quarters ending immediately prior to the Determination Date.

 

“Indemnified Taxes” means Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under this Agreement.

 

“Independent Public Accountant” means any of the firms of public accountants (or their survivors in any merger therewith) currently referred to as the “Big Four” or any other firm of public accountants of nationally recognized stature which is (i) independent (as such term is defined in the rules and regulations promulgated by the Securities and Exchange Commission under the Exchange Act) from the Person the financial statements of which are being reported on, (ii) selected by such Person and (iii) reasonably acceptable to the Required Lenders.

 

“Interest Election Request” means a request by the Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.07.

 

“Index Joint Venture” means the joint venture among the Borrower, CME Group Inc. and CME Group Index Services LLC pursuant to that certain Contribution Agreement, dated as of November 4, 2011.

 

“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September and December, (b) with respect to any LIBOR Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a LIBOR Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period, 

 

 

  

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(c) with respect to any Fixed Rate Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Fixed Rate Borrowing with an Interest Period of more than 90 days’ duration (unless otherwise specified in the applicable Competitive Bid Request), each day prior to the last day of such Interest Period that occurs at intervals of 90 days’ duration after the first day of such Interest Period, and any other dates that are specified in the applicable Competitive Bid Request as Interest Payment Dates with respect to such Borrowing and (d) with respect to any Swingline Loan, the day that such Loan is, or is required to be, repaid.

 

“Interest Period” means (a) with respect to any LIBOR Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months (or, with the consent of each Lender, twelve months) thereafter, as the Borrower may elect, (b) with respect to any Fixed Rate Borrowing, the period (which shall not be less than 7 days or more than 360 days) commencing on the date of such Borrowing and ending on the date specified in the applicable Competitive Bid Request; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a LIBOR Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period pertaining to a LIBOR Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (iii) no Interest Period shall extend beyond the Maturity Date.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

 

“Issuing Lender” means each of JPMorgan Chase Bank and any other Lender approved by the Administrative Agent (such approval not to be unreasonably withheld, conditioned or delayed) and the Borrower that has agreed in its sole discretion to act as an “Issuing Lender” hereunder, or any of their respective affiliates, in each case in its capacity as issuer of any Letter of Credit and with respect to all or a portion of the L/C Commitment (as agreed separately in writing with the Borrower).  Each reference herein to “the Issuing Lender” shall be deemed to be a reference to the relevant Issuing Lender.

 

“JPMorgan Chase Bank” means JPMorgan Chase Bank, N.A.

 

“L/C Commitment” means  $50,000,000.00.

 

“L/C Exposure” means, at any time, the total L/C Obligations. The L/C Exposure of any Lender at any time shall be its Applicable Percentage of the total L/C Exposure at such time.

 

“L/C Obligations” means, at any time, an amount equal to the sum of (a) the aggregate then undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.05.

 

 

  

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“L/C Participants” means the collective reference to all the Lenders other than the Issuing Lender.

 

“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

 

“Letters of Credit” has the meaning set forth in Section 3.01.

 

“LIBO Rate” means, with respect to any LIBOR Loan for any Interest Period, the London interbank offered rate as administered by the British Bankers Association (or any other person which takes over the administration of that rate) for dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters Screen that displays such rate (or, in the event that such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case, the “Screen Rate”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided, that, if the Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall be the Interpolated  Rate.  “Interpolated  Rate” means the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate for the longest period for which the Screen Rate is available that is shorter than the Impacted Interest Period; and (b) the Screen Rate for the shortest period for which that Screen Rate is available that exceeds the Impacted Interest Period, in each case, at such time.

 

“LIBOR”, when used in reference to any Loan or Borrowing, refers to whether such Loan is, or the Loans comprising such Borrowing are, bearing interest at a rate determined by reference to the LIBO Rate.

 

“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof) or any sale of receivables with recourse against the seller.

 

“Loan Guarantors” means, collectively, S&P and each other Subsidiary of the Borrower that has executed a Joinder Agreement substantially in the form of Exhibit D and has not been released from the Loan Guaranty, and their successors and assigns.

 

“Loan Guaranty” means Article XI of this Agreement.

 

“Loan Parties” means the Borrower and the Loan Guarantors.

 

 

  

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“Loans” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

 

“Margin” means, with respect to any Competitive Loan bearing interest at a rate based on the LIBO Rate, the marginal rate of interest, if any, to be added to or subtracted from the LIBO Rate to determine the rate of interest applicable to such Loan, as specified by the Lender making such Loan in its related Competitive Bid.

 

“Margin Stock” has the meaning assigned to that term in Regulation U of the Board as in effect from time to time.

 

“Material Adverse Effect” means a material adverse effect on the business, operations, properties, assets or financial condition of the Borrower and its Subsidiaries, taken as a whole.

 

“Material Subsidiary” means each Subsidiary of the Borrower that is a “significant subsidiary” as defined in Regulation § 230.405 promulgated pursuant to the Securities Act, as such Regulation is in effect on the date hereof.

 

“Maturity Date” means June 19, 2017.

 

“MH Brand License Agreement” has the meaning set forth in the Contribution Agreement referred to in the definition of “Index Joint Venture”.

 

“MHE” means McGraw-Hill Education, Inc.

 

“MHE Business” means the business or assets of MHE as described in the Form 10.

 

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“Notes” means the Revolving Notes and the Swingline Note.

 

“Obligated Party” has the meaning set forth in Section 11.02.

 

“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations (including Reimbursement Obligations) of the Borrower to the Lenders or to any Lender, the Administrative Agent, the Letter of Credit Issuer or any indemnified party arising under this Agreement or the Letters of Credit.

 

“Officer’s Certificate” means, as applied to any Loan Party, a certificate executed on behalf of such Loan Party by its Chairman of the Board (if an officer), its President, its Chief Financial Officer or its Treasurer.

 

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement, except any such Taxes that are imposed with respect to an assignment as a result of a present or former connection between a Lender (or other recipient of a payment) and the jurisdiction imposing such Tax (other than any such connection arising solely from the execution and delivery of this Agreement, the performance of the rights and obligations herein, the receipt of any payment hereunder or the enforcement of this Agreement).

 

 

  

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“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a Subsidiary.

 

“Participant” has the meaning set forth in Section 10.04.

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

 

“Pension Plan” means any Plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such Plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Permitted Liens” means:

 

(a)           Liens for taxes, assessments or governmental charges or levies (including any Lien imposed by ERISA arising out of an ERISA Event), either not yet delinquent or so long as the amount, applicability or validity of the same is being contested in good faith provided that any proceedings commenced for the foreclosure on such Liens have been duly suspended and adequate reserves, if any, have been established therefor in accordance with GAAP;

 

(b)           Statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and other Liens imposed by law incurred in the ordinary course of business for sums not delinquent for a period of more than 45 days or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP, shall have been made therefor;

 

(c)           Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

 

(d)           Any attachment or judgment Lien unless the attachment or judgment it secures shall remain undischarged and execution thereof shall remain unstayed pending appeal for a period of 60 days;

 

(e)           Easements, rights-of-way, restrictions, minor defects or irregularities in title and other similar charges or encumbrances not interfering in any material respect with the ordinary conduct of the business of the Borrower or any of its Subsidiaries;

 

 

  

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(f)           Any interest or title of a lessor under any lease;

 

(g)           Liens arising from equipment leases entered into in the ordinary course of business; and

 

(h)           Liens in favor of the Index Joint Venture granted pursuant to the Trademark Security Agreement as in effect on the date thereof to secure the obligations of the Loan Guarantor under the MH Brand License Agreement.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

 “Plan” means any employee benefit plan as defined in Section 3(3) of ERISA, including any employee welfare benefit plan (as defined in Section 3(1) of ERISA), any employee pension benefit plan (as defined in Section 3(2) of ERISA), and any plan which is both an employee welfare benefit plan and an employee pension benefit plan, and in respect of which the Borrower or any ERISA Affiliate is an “employer” as defined in Section 3(5) of ERISA.

 

“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

 

“Prohibited Transaction” has the meaning assigned to such term in Section 406 of ERISA and Section 4975(c)(1) of the Code.

 

“Register” has the meaning set forth in Section 10.04.

 

“Reimbursement Obligation” means the obligation of the Borrower to reimburse the Issuing Lender pursuant to Section 3.05 for amounts drawn under Letters of Credit.

 

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

 

“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing at least 51% of the sum of the total Revolving Credit Exposures and unused Commitments at such time; provided that, for purposes of declaring the Loans to be due and payable pursuant to Article VIII, and for all purposes after the Loans become due and payable pursuant to Article VIII or the Commitments expire or terminate, the outstanding Competitive Loans of the Lenders shall be included in their respective Revolving Credit Exposures in determining the Required Lenders.

 

“Requirement of Law” means, as to any Person, any law, treaty, rule or regulation or determination of any arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

 

 

  

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“Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of (a) the outstanding principal amount of such Lender’s Revolving Loans at such time, (b) such Lender’s Swingline Exposure at such time and (c) such Lender’s L/C Exposure at such time.

 

“Revolving Loan” means a Loan made pursuant to Section 2.03.

 

“Revolving Note” means a promissory note executed and delivered pursuant to Section 2.09(e) evidencing the Revolving Loans made by a Lender.

 

“S&P” has the meaning set forth in the preamble to this Agreement.

 

“Securities Act” means the Securities Act of 1933, as from time to time amended, and any successor statutes.

 

“Separation” means the Spin-Off or the Disposition, as the case may be.

 

“Spin-Off” means the disposition of 100% of the shares of common stock of MHE, substantially as described in the Form 10.

 

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the applicable Lender is subject for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

“Subsidiary” means, with respect to any Person, a corporation of which shares of stock having ordinary voting power (other than stock having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation are at the time owned, directly or indirectly through one or more intermediaries, or both, by such Person.

 

“Swingline Commitment” means the commitment of the Swingline Lender made in Section 2.05(a).

 

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

 

“Swingline Lender” means JPMorgan Chase Bank, in its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made pursuant to Section 2.05.

 

 

  

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“Swingline Note” means a promissory note executed and delivered pursuant to Section 2.09(e) evidencing the Swingline Loans made by the Swingline Lender.

 

“Syndication Agent” has the meaning set forth in the preamble to this Agreement.

 

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Trademark Security Agreement” means the Trademark Security Agreement entered into between the Loan Guarantor and the Index Joint Venture.

 

“Transactions” means the execution, delivery and performance by each Loan Party of this Agreement (including by execution and delivery of a Joinder Agreement), any request for and the issuance of any Letter of Credit, and, in the case of the Borrower, the borrowing of Loans and the use of the proceeds thereof.

 

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the LIBO Rate, the Alternate Base Rate or, in the case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.

 

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

 

SECTION 1.02     Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “LIBOR Loan”) or by Class and Type (e.g., a “LIBOR Revolving Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “LIBOR Borrowing”) or by Class and Type (e.g., a “LIBOR Revolving Borrowing”).

 

SECTION 1.03     Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

 

  

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SECTION 1.04     Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

ARTICLE II

 

The Credits

 

SECTION 2.01     Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s Commitment or (b) the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans exceeding the total Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

 

SECTION 2.02     Loans and Borrowings.  (a)  Each Revolving Loan shall be made as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their respective Commitments.  Each Competitive Loan shall be made in accordance with the procedures set forth in Section 2.04.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments and Competitive Bids of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

 

(b)           Subject to Section 2.13, (i) each Revolving Borrowing shall be comprised entirely of ABR Loans or LIBOR Loans as the Borrower may request in accordance herewith, and (ii) each Competitive Borrowing shall be comprised entirely of LIBOR Loans or Fixed Rate Loans as the Borrower may request in accordance herewith.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may make any LIBOR Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement and shall not cause the Borrower to incur as of the date of the exercise of such option any greater liability than it shall then have under Sections 2.14 and 2.16.

 

 

  

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(c)           At the commencement of each Interest Period for any LIBOR Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $5,000,000 and not less than $10,000,000.  At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $5,000,000 and not less than $10,000,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments.  Each Competitive Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $5,000,000.  Each Swingline Loan shall be in an amount that is an integral multiple of $1,000,000 and shall be in an aggregate minimum amount of $1,000,000. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of 10 LIBOR Revolving Borrowings outstanding.

 

(d)           Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.

 

SECTION 2.03     Requests for Revolving Borrowings.  To request a Revolving Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of a LIBOR Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on the day of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

 

(i)           the aggregate amount of the requested Borrowing;

 

(ii)           the date of such Borrowing, which shall be a Business Day;

 

(iii)           whether such Borrowing is to be an ABR Borrowing or a LIBOR Borrowing;

 

(iv)           in the case of a LIBOR Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; and

 

(v)           the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.

 

If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested LIBOR Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

 

 

  

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SECTION 2.04      Competitive Bid Procedure.  (a)  Subject to the terms and conditions set forth herein, from time to time during the Availability Period the Borrower may request Competitive Bids and may (but shall not have any obligation to) accept Competitive Bids and borrow Competitive Loans; provided that the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans at any time shall not exceed the total Commitments.  To request Competitive Bids, the Borrower shall notify the Administrative Agent of such request by telephone, in the case of a LIBOR Borrowing, not later than 11:00 a.m., New York City time, four Business Days before the date of the proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later than 10:00 a.m., New York City time, one Business Day before the date of the proposed Borrowing; provided that the Borrower may submit up to (but not more than) three Competitive Bid Requests on the same day, but a Competitive Bid Request shall not be made within five Business Days after the date of any previous Competitive Bid Request, unless any and all such previous Competitive Bid Requests shall have been withdrawn or all Competitive Bids received in response thereto rejected.  Each such telephonic Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Competitive Bid Request in a form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Competitive Bid Request shall specify the following information in compliance with Section 2.02:

 

(i)       the aggregate amount of the requested Borrowing;

 

(ii)       the date of such Borrowing, which shall be a Business Day;

 

(iii)       whether such Borrowing is to be a LIBOR Borrowing or a Fixed Rate Borrowing;

 

(iv)       the Interest Period to be applicable to such Borrowing, which shall be a period contemplated by the definition of the term “Interest Period”;

 

(v)       the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06; and

 

(vi)      the maturity date of such Borrowing, which shall be a date between 7 and 360 days after the date of such Borrowing.

Promptly following receipt of a Competitive Bid Request in accordance with this Section, the Administrative Agent shall notify the Lenders of the details thereof by telecopy, inviting the Lenders to submit Competitive Bids.

 

(b)           Each Lender may (but shall not have any obligation to) make one or more Competitive Bids to the Borrower in response to a Competitive Bid Request.  Each Competitive Bid by a Lender must be in a form approved by the Administrative Agent and must be received by the Administrative Agent by telecopy, in the case of a LIBOR Competitive Borrowing, not later than 9:30 a.m., New York City time, three Business Days before the proposed date of such Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 9:30 a.m., New York City time, on the proposed date of such Competitive Borrowing.  Competitive Bids that do not conform substantially to the form approved by the Administrative Agent may be rejected by the Administrative Agent, and the Administrative Agent shall notify the applicable Lender as promptly as practicable.  Each Competitive Bid shall specify (i) the principal amount (which shall be a minimum of $5,000,000 and an integral multiple of $1,000,000 and which may equal the entire principal amount of the Competitive Borrowing requested by the Borrower) of the Competitive Loan or Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates at which the Lender is prepared to make such Loan or Loans (expressed as a percentage rate per annum in the form of a decimal to no more than four decimal places) and (iii) the Interest Period applicable to each such Loan and the last day thereof.

 

 

  

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(c)           The Administrative Agent shall promptly notify the Borrower by telecopy of the Competitive Bid Rate and the principal amount specified in each Competitive Bid and the identity of the Lender that shall have made such Competitive Bid.

 

(d)           Subject only to the provisions of this paragraph, the Borrower may accept or reject any Competitive Bid.  The Borrower shall notify the Administrative Agent by telephone, confirmed by telecopy in a form approved by the Administrative Agent, whether and to what extent it has decided to accept or reject each Competitive Bid, in the case of a LIBOR Competitive Borrowing, not later than 10:30 a.m., New York City time, three Business Days before the date of the proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the proposed date of the Competitive Borrowing; provided that (i) the failure of the Borrower to give such notice shall be deemed to be a rejection of each Competitive Bid, (ii) the Borrower shall not accept a Competitive Bid made at a particular Competitive Bid Rate for a particular Interest Period if the Borrower rejects a Competitive Bid made at a lower Competitive Bid Rate for the same Interest Period, (iii) the aggregate amount of the Competitive Bids accepted by the Borrower shall not exceed the aggregate amount of the requested Competitive Borrowing specified in the related Competitive Bid Request, (iv) to the extent necessary to comply with clause (iii) above, the Borrower may accept Competitive Bids at the same Competitive Bid Rate in part, which acceptance, in the case of multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata in accordance with the amount of each such Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000 and an integral multiple of $1,000,000; provided, further, that if a Competitive Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in a manner determined by the Borrower.  A notice given by the Borrower pursuant to this paragraph shall be irrevocable.

 

(e)           The Administrative Agent shall promptly notify each bidding Lender by telecopy whether or not its Competitive Bid has been accepted (and, if so, the amount and Competitive Bid Rate so accepted), and each successful bidder will thereupon become bound, subject to the terms and conditions hereof, to make the Competitive Loan in respect of which its Competitive Bid has been accepted.

 

 

  

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(f)           If the Administrative Agent shall elect to submit a Competitive Bid in its capacity as a Lender, it shall submit such Competitive Bid directly to the Borrower at least one quarter of an hour earlier than the time by which the other Lenders are required to submit their Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this Section.

 

SECTION 2.05     Swingline Loans.  (a)  Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $100,000,000 or (ii) the sum of the total Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans exceeding the total Commitments; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.

 

(b)           To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 12:00 noon, New York City time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make each Swingline Loan available to the Borrower by means of a credit to the general deposit account of the Borrower with the Swingline Lender by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.

 

(c)           The Swingline Lender may, by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day, require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.

 

 

  

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SECTION 2.06     Funding of Borrowings.  (a)  Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.05.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City and designated by the Borrower in the applicable Borrowing Request or Competitive Bid Request.

 

(b)           Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing (in the case of a LIBOR Borrowing) or the proposed time of any Borrowing (in the case of an ABR Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

 

SECTION 2.07     Interest Elections.  (a)  Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a LIBOR Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a LIBOR Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Competitive Borrowings or Swingline Borrowings, which may not be converted or continued.

 

(b)           To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower.

 

 

  

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(c)           Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

 

(i)       the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

 

(ii)       the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

 

(iii)       whether the resulting Borrowing is to be an ABR Borrowing or a LIBOR Borrowing; and

 

(iv)       if the resulting Borrowing is a LIBOR Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

 

If any such Interest Election Request requests a LIBOR Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

 

(d)           Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

 

(e)           If the Borrower fails to deliver a timely Interest Election Request with respect to a LIBOR Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, (a) if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a LIBOR Borrowing and (ii) unless repaid, each LIBOR Revolving Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto and (b) no Revolving Loan may be converted into or continued as a LIBOR Borrowing after the date that is one month prior to the Maturity Date .

 

SECTION 2.08     Termination and Reduction of Commitments.  (a)  Unless previously terminated, the Commitments shall terminate on the Maturity Date.

 

 

  

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(b)           The Borrower may at any time terminate, or from time to time reduce, the Commitments; provided that, (i) each reduction of the Commitments shall be in minimum aggregate amounts of $10,000,000 (unless the total Commitment at such time is less than $10,000,000, in which case, in an amount equal to the total Commitment at such time) and, if such reduction is greater than $10,000,000, in integral multiples of $5,000,000 in excess of such amount (unless the total Commitment is being terminated) and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.10, the sum of the Revolving Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans would exceed the total Commitments.

 

(c)           The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that, a notice of termination of the Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Commitments shall be permanent.  Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.

 

SECTION 2.09     Repayment of Loans; Evidence of Debt.  (a)  The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan on the Maturity Date, (ii) to the Administrative Agent for the account of each Lender with an outstanding Competitive Loan the then unpaid principal amount of such Competitive Loan on the last day of the Interest Period applicable to such Loan and (iii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least 5 Business Days after such Swingline Loan is made.

 

(b)           Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

 

(c)           The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

 

 

  

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(d)           The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that, the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.  If there is a conflict in entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section, the entries made in the accounts maintained by the Administrative Agent shall be such prima facie evidence of the existence and amounts of the obligations.

 

(e)           Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.

 

SECTION 2.10     Prepayment of Loans.  (a)  The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (b) of this Section; provided that the Borrower shall not have the right to prepay any Competitive Loan without the prior consent of the Lender thereof.

 

(b)           The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a LIBOR Revolving Borrowing, not later than 11:00 a.m., New York City time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, on the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08.  Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.  Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.12 and shall be subject to Section 2.15.

 

SECTION 2.11     Fees.  (a)  The Borrower agrees to pay to the Administrative Agent, for the account of each Lender, a commitment fee, which shall accrue at the Applicable Rate on the daily amount of the Available Commitment of such Lender during the period from and including the Effective Date to the last day of the Availability Period.  Accrued commitment fees shall be payable in arrears on each Fee Payment Date, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

 

 

  

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(b)           The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

 

(c)           All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, in the case of commitment fees, to the Lenders.  Fees paid shall not be refundable under any circumstances.

 

SECTION 2.12     Interest.  (a)  The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at a rate per annum equal to the Alternate Base Rate plus the Applicable ABR Spread then in effect for such Borrowing.

 

(b)           The Loans comprising each LIBOR Borrowing shall bear interest at a rate per annum equal to (i) in the case of a LIBOR Revolving Loan, the LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable LIBOR Spread then in effect for such Borrowing, or (ii) in the case of a LIBOR Competitive Loan, the LIBO Rate for the Interest Period in effect for such Borrowing plus (or minus, as applicable) the Margin applicable to such Loan.

 

(c)           Each Fixed Rate Loan shall bear interest at a rate per annum equal to the Fixed Rate applicable to such Loan.

 

(d)           Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount (including Reimbursement Obligations) payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the case of any other amount (including Reimbursement Obligations), 2% plus the rate applicable to ABR Loans as provided above.

 

(e)           Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) in the event of any conversion of any LIBOR Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion and (iv) all accrued interest shall be payable upon termination of the Commitments.

 

(f)           All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

 

 

  

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SECTION 2.13     Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a LIBOR Borrowing:

 

(a)           the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including, without limitation, by means of an Interpolated Rate) do not exist for ascertaining the LIBO Rate for such Interest Period; or

 

(b)           the Administrative Agent is advised by the Required Lenders (or, in the case of a LIBOR Competitive Loan, the Lender that is required to make such Loan) that the LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

 

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a LIBOR Borrowing shall be ineffective, (ii) if any Borrowing Request requests a LIBOR Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any request by the Borrower for a LIBOR Competitive Borrowing shall be ineffective; provided that (A) if the circumstances giving rise to such notice do not affect all the Lenders, then requests by the Borrower for LIBOR Competitive Borrowings may be made to Lenders that are not affected thereby and (B) if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.

 

SECTION 2.14     Increased Costs.  (a)  If any Change in Law shall:

 

(i)           impose, modify or deem applicable any reserve, special deposit, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement as is covered by Section 2.14(c));

 

(ii)           subject any Lender to any Tax (other than Indemnified Taxes and Excluded Taxes) on its assets or deposits; or

 

(iii)           impose on any Lender or the London interbank market any other condition affecting this Agreement or LIBOR Loans or Fixed Rate Loans made by such Lender therein (other than Taxes);

 

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any LIBOR Loan or Fixed Rate Loan (or of maintaining its obligation to make any such Loan) or issuing or participating in Letters of Credit, or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will, upon notice by such Lender, pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered; provided that such Lender is generally seeking compensation from similarly situated borrowers under similar credit facilities (to the extent such Lender has the right under such similar credit facilities to do so) with respect to such Change in Law.

 

 

  

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(b)           If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender or any Letter of Credit issued by it to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower, upon notice by such Lender, will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered to the extent allocable to this Agreement; provided that such Lender is generally seeking compensation from similarly situated borrowers under similar credit facilities (to the extent such Lender has the right under such similar credit facilities to do so) with respect to such Change in Law regarding capital or liquidity requirements.

 

(c)           The Borrower shall pay to each Lender at any time when such Lender is required to maintain reserves for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board), additional interest on the unpaid principal amount of each LIBOR Loan of such Lender from the date of such requirement until such principal amount is paid in full or such requirement ceases at the rate per annum equal to (i) the LIBO Rate for the relevant Interest Period multiplied by (ii) the Statutory Reserve Rate for such Lender minus (iii) such LIBO Rate, payable upon notice by such Lender on each Interest Payment Date for such LIBOR Loan.

 

(d)           A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a), (b) or (c) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

(e)           Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than six months prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof.

 

(f)           Notwithstanding the foregoing provisions of this Section, a Lender shall not be entitled to compensation pursuant to this Section in respect of any Competitive Loan if the Change in Law that would otherwise entitle it to such compensation shall have been publicly announced prior to submission of the Competitive Bid pursuant to which such Loan was made.

 

 

  

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(g)           For purposes of this Section 2.14, the term “Lender” includes the Issuing Lender and the Swingline Lender.

 

SECTION 2.15     Break Funding Payments.  In the event of (a) the payment of any principal of any LIBOR Loan or Fixed Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any LIBOR Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any LIBOR Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.10(b) and is revoked in accordance therewith), (d) the failure to borrow any Competitive Loan after accepting the Competitive Bid to make such Loan, or (e) the assignment of any LIBOR Loan or Fixed Rate Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.18, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event (excluding any loss of anticipated profits).  In the case of a LIBOR Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the LIBO Rate for such Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for dollar deposits from other banks in the eurodollar market at the commencement of such period.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

SECTION 2.16     Taxes.  (a)  Any and all payments by or on account of any obligation of any Loan Party hereunder to, or for the account of, the Administrative Agent or any Lender or any recipient of any payment to be made by or on account of any obligation of any Loan Party under this Agreement shall be made free and clear of and without withholdings or deductions for any Indemnified Taxes or Other Taxes; provided that, if any Loan Party or other withholding agent shall be required to withhold or deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable by the Borrower or such Loan Guarantor, as applicable, shall be increased as necessary so that after making all required withholdings and deductions (including any applicable to additional sums payable under this Section), the Administrative Agent or such Lender receives an amount equal to the sum it would have received had no such withholdings or deductions been made, (ii) such Loan Party shall make such withholdings or deductions and (iii) such Loan Party shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)           In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

 

 

  

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(c)           The Borrower shall indemnify the Administrative Agent, and each Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent or such Lender and any penalties, interest and reasonable expenses arising therefrom or with respect thereto.

 

(d)           Each Lender shall indemnify the Administrative Agent, within 10 days after demand therefor, for the full amount of any Taxes attributable to such Lender that are payable or paid by the Administrative Agent  in connection with the Credit Agreement (but only to the extent that the Borrower has not already indemnified the Administrative Agent for such Taxes and without limiting the obligation of the Borrower to do so), and reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.

 

(e)           As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(f)           Any Lender that is entitled to an exemption from or reduction of any applicable withholding tax with respect to payments under this Agreement shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable law, or otherwise reasonably requested by the Borrower or the Administrative Agent, as will permit such payments to be made without withholding or at a reduced rate of withholding.  All reasonable out-of-pocket expenses incurred by such Lender in connection with the completion of such forms or documentation (other than with respect to forms applicable to U.S. withholding tax) shall be borne by the Borrower.  In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 2.16 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent of its inability to do so. Without limiting the generality of the foregoing, each Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement or changes its lending office (and from time to time thereafter upon the request of the Borrower or the Administrative Agent), whichever of the following is applicable:

 

 

  

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(i)         duly completed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States of America is a party,

 

(ii)         duly completed copies of Internal Revenue Service Form W-8ECI,

 

(iii)         in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit B to the effect (1) that such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (2) that the interest payments in question are not effectively connected with the United States trade or business conducted by such Lender (a “U.S. Tax Compliance Certificate”) and (y) duly completed copies of  Internal Revenue Service Form W-8BEN,

 

(iv)         to the extent a Foreign Lender is not the beneficial owner (for example, where the Foreign Lender is a partnership or participating Lender granting a typical participation), an Internal Revenue Service Form W-8IMY, accompanied by a Form W-8ECI, W-8BEN, U.S. Tax Compliance Certificate, Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that, if the Foreign Lender is a partnership (and not a participating Lender) and one or more beneficial owners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such beneficial owner, or

 

(v)         any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in United States federal withholding tax duly completed together with such supplementary documentation as may be prescribed by applicable law to permit the Borrower to determine the withholding or deduction required to be made.

 

Each Lender agrees that if any form or certification previously delivered by it expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

 

(g)           If any Lender or the Administrative Agent determines, in its reasonable discretion, that it has received a refund attributable to any Indemnified Taxes or Other Taxes paid by the Borrower or for which such Lender or the Administrative Agent has received payment from the Borrower hereunder, such Lender or the Administrative Agent, within 30 days of such receipt, shall deliver to the Borrower the amount of such refund (but only to the extent of indemnity payments made under this Section with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses of such Lender or the Administrative Agent and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided however, that the Borrower, upon the request of such Lender or Administrative Agent, agrees to repay the amount paid over pursuant to this Section 2.16(g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Lender or the Administrative Agent in the event that such Lender or the Administrative Agent is required to repay such refund to such Governmental Authority.  

 

 

  

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Notwithstanding anything to the contrary in this paragraph (g), in no event will any Lender be required to pay any amount to the Borrower the payment of which would place such Lender or the Administrative Agent in a less favorable net after-Tax position than such Lender or the Administrative Agent would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This paragraph shall not be construed to require any Lender or the Administrative Agent to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person.

 

(h)         Each Lender that is a “United States person” as defined in Section 7701(a)(30) of the Code shall, on or prior to the date on which such Lender becomes a Lender under this Agreement or changes its lending office (and from time to time thereafter at the reasonable request of the Borrower or the Administrative Agent) to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent two U.S. Internal Revenue Service Form W-9s (or substitute or successor form), properly completed and duly executed, certifying that such Lender is exempt from the United States backup withholding.

 

(i)         If a payment made to a Lender under this Agreement would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.

 

(j)         For purposes of this Section 2.16, the term “Lender” includes the Issuing Lender and the Swingline Lender.

 

SECTION 2.17     Payments Generally; Pro Rata Treatment; Sharing of Set-offs.  (a)  The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, or fees, or under Section 2.14, 2.15 or 2.16, or otherwise) prior to 2:00 p.m., New York City time, on the date when due, in immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 383 Madison Avenue, New York, New York, except payments to be made directly to the Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.14, 2.15, 2.16 and 10.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.

 

 

  

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(b)           If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

 

(c)           Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Federal Funds Effective Rate.

 

(d)           If and for so long as any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(b), 2.17(c) or 10.03(c), then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent, the Swingline Lender or the Issuing Lender to satisfy such Lender’s obligations to it under such Section until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion (provided that any such amounts so held shall be returned to such Lender upon its payment of the aforementioned previously unpaid amounts then due and owing).

 

SECTION 2.18     Mitigation Obligations; Replacement of Lenders.  (a)  If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous in any material respect to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

 

  

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(b)           If any Lender requests compensation under Section 2.14, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.16, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.04), all its interests, rights and obligations under this Agreement (other than any outstanding Competitive Loans held by it) to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and, if a Commitment is being assigned, the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans (other than Competitive Loans), accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.14 or payments required to be made pursuant to Section 2.16, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

SECTION 2.19     Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

 

(a)           fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting Lender pursuant to Section 2.11;

 

(b)           the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be included in determining whether all Lenders or the Required Lenders have taken or may take any action hereunder (including any consent to any amendment or waiver pursuant to Section 10.02), provided, that this clause (b) shall not apply in the case of an amendment, waiver or other modification requiring the consent of such Defaulting Lender as “such Lender” or “each Lender affected thereby”, as such terms are used in Sections 10.02(b)(i), (ii) or (iii);

 

(c)           any amount payable to such Defaulting Lender hereunder (whether on account of principal, interest, fees or otherwise and including any amount that would otherwise be payable to such Defaulting Lender pursuant to Section 2.17 but excluding Section 2.18) may, in lieu of being distributed to such Defaulting Lender, be applied by the Administrative Agent (i) first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder, (ii) second, to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement and (iii) third, to such Defaulting Lender; provided that if such payment is (x) a prepayment of the principal amount of any Loans and (y) made at a time when the conditions set forth in Section 5.02 are satisfied, such payment shall be applied solely to prepay the Loans of all non-Defaulting Lenders pro rata prior to being applied to the prepayment of any Loans of any Defaulting Lender;

 

 

  

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(d)           if any Swingline Exposure or L/C Exposure exists at the time such Lender becomes a Defaulting Lender, then all or any part of the Swingline Exposure and L/C Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages, but only to the extent (i) the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline Exposure and L/C Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments and (ii) no Default shall have occurred and be continuing; provided, however, that if such reallocation cannot, or can only partially, be effected, the Borrower shall, within one Business Day following notice by the Administrative Agent, (x) first, prepay such Swingline Exposure and (y) second, cash collateralize for the benefit of the Issuing Lender only the Borrower’s obligations corresponding to such Defaulting Lender’s L/C Exposure (after giving effect to any partial reallocation pursuant to this clause (d)) in accordance with the procedures set forth in Article VIII for so long as such L/C Exposure is outstanding.

 

(e)           If the Borrower cash collateralizes any portion of such Defaulting Lender’s L/C Exposure pursuant to the proviso to Section 2.19(d), the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 3.03(a) with respect to such Defaulting Lender’s L/C Exposure during the period such Defaulting Lender’s L/C Exposure is cash collateralized. If the L/C Exposure of the non-Defaulting Lenders is reallocated pursuant to Section 2.19(d), then the fees payable to the Lenders pursuant to Section 2.11(a) and Section 3.03(a) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages. If all or any portion of such Defaulting Lender’s L/C Exposure is neither reallocated nor cash collateralized pursuant to Section 2.19(d), then, without prejudice to any rights or remedies of the Issuing Lender or any other Lender hereunder, all fees payable under Section 3.03(a) with respect to such Defaulting Lender’s L/C Exposure shall be payable to the Issuing Lender until and to the extent that such L/C Exposure is reallocated and/or cash collateralized.

 

(f)           so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure and the Defaulting Lender’s then-outstanding L/C Exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.19(d), and participating interests in any newly made Swingline Loan or any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.19(d) (and such Defaulting Lender shall not participate therein).

 

If (i) a Bankruptcy Event with respect to a Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Lender has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Lender shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Lender, as the case may be, (A) shall be satisfied that if such Lender were subsequently to become a Defaulting Lender, the relevant exposure would be 100% covered by the Commitments of the non-Defaulting Lenders or cash collateralized, in each case in a manner consistent with Section 2.19(d) or (B) shall have entered into other arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Lender, as the case may be, to defease any risk to it in respect of such Lender hereunder.

 

 

  

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In the event that the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Lender each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and L/C Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall purchase at par such of the Revolving Loans of the other Lenders as the Administrative shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

 

SECTION 2.20     Proceeds.  The proceeds of the Loans made by the Lenders to the Borrower shall be used for acquisitions, repurchases of capital stock of the Borrower, the funding of dividends payable to shareholders of the Borrower and for general corporate purposes of the Borrower; provided, however, that after the application of the proceeds of any Loan, not more than 25% of the value of the assets of the Borrower will be represented by Margin Stock. The proceeds of the Letters of Credit shall be used for general corporate purposes of the Borrower.

 

ARTICLE III

 

Letters of Credit

 

SECTION 3.01     L/C Commitment.

 

(a)           Subject to the terms and conditions hereof, the Issuing Lender, in reliance on the agreements of the other Lenders set forth in Section 3.04(a), agrees to issue, amend, renew or extend letters of credit (“Letters of Credit”) for the account of the Borrower on any Business Day during the Availability Period in such form as may be approved from time to time by the Issuing Lender; provided that the Issuing Lender shall have no obligation to issue, amend, renew or extend any Letter of Credit if, after giving effect thereto, (i) the L/C Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the Available Commitments would be less than zero.  Each Letter of Credit shall (i) be denominated in dollars and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and (y) the date that is five Business Days prior to the Maturity Date, provided that any Letter of Credit with a one-year term may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (y) above). From time to time and upon reasonable request therefor, the Issuing Lender shall confirm to the Administrative Agent the L/C Exposure and the Administrative Agent shall confirm to the Issuing Lender the aggregate amount of Available Commitments.

 

(b)           The Issuing Lender shall not at any time be obligated to issue, amend, renew or extend any Letter of Credit if doing so would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any limits imposed by, any applicable Requirement of Law.

 

SECTION 3.02     Procedure for Issuance of Letter of Credit.  The Borrower may from time to time request that an Issuing Lender issue, amend, renew (other than by automatic renewal) or extend a Letter of Credit by delivering to the applicable Issuing Lender at its address for notices specified herein an Application therefor, completed to the reasonable satisfaction of the Issuing Lender, and such other certificates, documents and other papers and information as the Issuing Lender may reasonably request.  

 

 

  

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Upon receipt of any Application, the Issuing Lender will process such Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall promptly issue, amend, renew or extend (as applicable) the Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue, amend, renew or extend any Letter of Credit earlier than three Business Days after its receipt of the Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed to by the Issuing Lender and the Borrower.  The Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower promptly following the issuance thereof.  The Issuing Lender shall promptly furnish to the Administrative Agent, which shall in turn promptly furnish to the Lenders, notice of the issuance of each Letter of Credit (including the amount thereof).

 

SECTION 3.03     Fees and Other Charges.

 

(a)           The Borrower will pay a fee on the face amount of all outstanding Letters of Credit at a per annum rate equal to the Applicable Rate then in effect with respect to LIBOR Revolving Loans, shared ratably among the Lenders and payable in arrears on each Fee Payment Date after the issuance date.  In addition, the Borrower shall pay to the Issuing Lender for its own account a fronting fee of 0.125% per annum on the undrawn and unexpired amount of each Letter of Credit, payable quarterly in arrears on each Fee Payment Date after the issuance date.

 

(b)            In addition (but without duplication) to the foregoing fees, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting payment under, amending or otherwise administering any Letter of Credit.

 

SECTION 3.04     L/C Participations.

 

(a)           The Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from the Issuing Lender, on the terms and conditions set forth below, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Applicable Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of Credit and the amount of each draft paid by the Issuing Lender thereunder.  Each L/C Participant agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this Agreement (or in the event that any reimbursement received by the Issuing Lender shall be required to be returned by it at any time), such L/C Participant shall pay to the Issuing Lender upon demand at the Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Applicable Percentage of the amount that is not so reimbursed (or is so returned).  Each L/C Participant’s obligation to pay such amount shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C Participant may have against the Issuing Lender, the Borrower or any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure to satisfy any of the other conditions specified in Article V, (iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement by the Borrower, any other Loan Party or any other L/C Participant or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing

 

 

  

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(b)           If any amount required to be paid by any L/C Participant to the Issuing Lender pursuant to Section 3.04(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender under any Letter of Credit is paid to the Issuing Lender within three Business Days after the date such payment is due, such L/C Participant shall pay to the Issuing Lender on demand an amount equal to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate during the period from and including the date such payment is required to the date on which such payment is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360.  If any such amount required to be paid by any L/C Participant pursuant to Section 3.04(a) is not made available to the Issuing Lender by such L/C Participant within three Business Days after the date such payment is due, the Issuing Lender shall be entitled to recover from such L/C Participant, on demand, such amount with interest thereon calculated from such due date at the rate per annum applicable to ABR Loans.  A certificate of the Issuing Lender submitted to any L/C Participant with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error.

 

(c)           Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit and has received from any L/C Participant its pro rata share of such payment in accordance with Section 3.04(a), the Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied thereto by the Issuing Lender), or any payment of interest on account thereof, the Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided, however, that in the event that any such payment received by the Issuing Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.

 

SECTION 3.05     Reimbursement Obligation of the Borrower.  If any draft is paid under any Letter of Credit, the Borrower shall reimburse the Issuing Lender for the amount of (a) the draft so paid and (b) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender in connection with such payment, not later than 12:00 Noon, New York City time, on (i) the Business Day that the Borrower receives notice of such draft, if such notice is received on such day prior to 10:00 A.M., New York City time, or (ii) if clause (i) above does not apply, the Business Day immediately following the day that the Borrower receives such notice.  Each such payment shall be made to the Issuing Lender at its address for notices referred to herein in dollars and in immediately available funds.  Interest shall be payable on any such amounts from the date on which the relevant draft is paid until payment in full at the rate set forth in (x) until the Business Day next succeeding the date of the relevant notice, Section 2.12(a) and (y) thereafter, Section 2.12(d).

 

 

  

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SECTION 3.06     Obligations Absolute.  The Borrower’s obligations under this Article III shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Issuing Lender, any beneficiary of a Letter of Credit or any other Person.  The Borrower also agrees with the Issuing Lender that the Issuing Lender shall not (absent a finding of gross negligence or willful misconduct by the Issuing Lender as determined by a final and nonappealable decision of a court of competent jurisdiction) be responsible for, and the Borrower’s Reimbursement Obligations under Section 3.05 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee.  The Issuing Lender shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions found by a final and nonappealable decision of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the Issuing Lender.  The Borrower agrees that any action taken or omitted by the Issuing Lender under or in connection with any Letter of Credit or the related drafts or documents, if done in the absence of gross negligence or willful misconduct, shall be binding on the Borrower and shall not result in any liability of the Issuing Lender to the Borrower.

 

SECTION 3.07     Letter of Credit Payments.  If any draft shall be presented for payment under any Letter of Credit, the Issuing Lender shall promptly notify the Borrower of the date and amount thereof.  The responsibility of the Issuing Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are substantially in conformity with such Letter of Credit.

 

SECTION 3.08     Applications.  To the extent that any provision of any Application related to any Letter of Credit is inconsistent with the provisions of this Article III, the provisions of this Article III shall apply.

 

ARTICLE IV

 

Representations and Warranties

 

The Borrower represents and warrants to the Lenders that the following statements are true, correct and complete:

 

SECTION 4.01     Organization, Powers and Good Standing.  (a)  Each Loan Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.  Each Loan Party has all requisite power and authority (i) to own and operate its properties and to carry on its business as now conducted and proposed to be conducted, except where the lack of power and authority would not have a Material Adverse Effect and (ii) to enter into this Agreement and to carry out the transactions contemplated hereby, and, in the case of the Borrower, to issue the Notes.

 

 

  

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(b)           Each Loan Party is in good standing wherever necessary to carry on its present business and operations, except in jurisdictions in which the failure to be in good standing would not have a Material Adverse Effect.

 

(c)           All of the Material Subsidiaries of the Borrower, as of the Effective Date, are identified in Schedule 4.01 annexed hereto.  Each Material Subsidiary of the Borrower is validly existing and in good standing under the laws of its respective jurisdiction of organization and has all requisite power and authority to own and operate its properties and to carry on its business as now conducted except where failure to be in good standing or a lack of power and authority would not have a Material Adverse Effect.

 

SECTION 4.02     Authorization of Borrowing, etc.  (a)  The execution, delivery and performance of this Agreement by each Loan Party (including by execution and delivery of a Joinder Agreement), and, in the case of the Borrower, the issuance, delivery and payment of the Notes and the obtaining of extensions of credit hereunder, have been duly authorized by all necessary action of such Loan Party.

 

(b)           The execution, delivery and performance of this Agreement by each Loan Party (including by execution and delivery of a Joinder Agreement) and, in the case of the Borrower, the issuance, delivery and payment of the Notes, the issuance of Letters of Credit and the borrowing of the Loans, do not and will not (i) violate any provision of law applicable to the such Loan Party or any of its Material Subsidiaries, (ii) violate the certificate of organization or bylaws of such Loan Party or any of its Material Subsidiaries, (iii) violate any order, judgment or decree of any court or other agency of government binding on such Loan Party or any of its Material Subsidiaries, conflict with, result in a breach of or constitute (with due notice or lapse of time or both) a default under any contractual obligation of such Loan Party or any of its Material Subsidiaries, result in or require the creation or imposition of any Lien upon any of the material properties or assets of such Loan Party or any of its Material Subsidiaries or require any approval of stockholders or any approval or consent of any Person under any contractual obligation of such Loan Party or any of its Material Subsidiaries other than such approvals and consents which have been or will be obtained on or before the Effective Date; except for any violation, conflict, default, breach, lien or lack of approval the existence of which would not have a Material Adverse Effect.

 

(c)           The execution, delivery and performance of this Agreement by each Loan Party (including by execution and delivery of a Joinder Agreement) and, in the case of the Borrower, the issuance, delivery and payment of the Notes, the issuance of Letters of Credit and the borrowing of the Loans, will not require on the part of such Loan Party any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body other than any such registration, consent, approval, notice or other action which has been duly made, given or taken.

 

(d)           This Agreement is, and each of the Notes when executed and delivered by the Borrower will be, a legally valid and binding obligation of each Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

 

 

  

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SECTION 4.03     Financial Condition.  The Borrower has delivered to the Administrative Agent the following materials:  (i) audited consolidated financial statements of the Borrower and its Subsidiaries for the year ended December 31, 2012 and (ii) unaudited consolidated financial statements of the Borrower and its Subsidiaries for the Fiscal Quarter ended March 31, 2013 (collectively, the “Financial Statements”).  All such Financial Statements were prepared in accordance with GAAP except for the preparation of footnote disclosures for the unaudited statements.  All such Financial Statements fairly present the consolidated financial position of the Borrower and its Subsidiaries as at the respective dates thereof and the consolidated statements of income and changes in financial position of the Borrower and its Subsidiaries for each of the periods covered thereby, subject, in the case of any unaudited interim financial statements, to changes resulting from normal year-end adjustments.

 

SECTION 4.04     No Adverse Material Change.  Since December 31, 2012, there has been no change in the business, operations, properties, assets or financial condition of the Borrower or any of its Subsidiaries, which has been, either in any case or in the aggregate, materially adverse to the Borrower and its Subsidiaries taken as a whole.

 

SECTION 4.05     Litigation.  Except as disclosed in the Borrower’s Report on Form 10-K for the year ended December 31, 2012 and the Borrower’s Report on Form 10-Q for the Fiscal Quarter ended March 31, 2013 or in Schedule 4.05 to this Agreement, there is no action, suit, proceeding, governmental investigation (including, without limitation, any of the foregoing relating to laws, rules and regulations relating to the protection of the environment, health and safety) of which the Borrower has knowledge or arbitration (whether or not purportedly on behalf of the Borrower or any of its Subsidiaries) at law or in equity or before or by any Governmental Authority, domestic or foreign, pending or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries or affecting any property of the Borrower or any of its Subsidiaries which (i) challenges the validity of this Agreement or any Note or (ii) could reasonably be expected to have a Material Adverse Effect.

 

SECTION 4.06     Payment of Taxes.  Except to the extent permitted by Section 6.03 hereof, the Borrower has paid or caused to be paid all taxes, assessments, fees and other governmental charges upon the Borrower and each of its Subsidiaries and upon their respective properties, assets, income and franchises, except for any taxes the failure of which to pay would not have a Material Adverse Effect (provided that no Tax Lien has been filed, and, to the knowledge of the Borrower, no claim is being asserted with respect to any such Tax, fee or other charge) or which are not yet due and payable or which are being contested in good faith.  The Borrower does not know of any proposed tax assessment against the Borrower or such Subsidiary that would have a Material Adverse Effect, which is not being contested in good faith by the Borrower or such Subsidiary; provided that such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor.

 

 

  

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SECTION 4.07     Governmental Regulation.  The Borrower is not an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

SECTION 4.08     Securities Activities.  The Borrower is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.

 

SECTION 4.09     ERISA.  (a)  Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect: (i) the Borrower and each of its ERISA Affiliates is in compliance with the applicable provisions of ERISA and the provisions of the Code relating to Plans and the regulations and published interpretations thereunder; (ii) no ERISA Event has occurred or is reasonably expected to occur; and (iii) all amounts required by applicable law with respect to, or by the terms of, any retiree welfare benefit arrangement maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate has an obligation to contribute have been accrued in accordance with Topic 715-60 of the Financial Accounting Standards Board Accounting Standards Codification.

 

(b)           Except as, in the aggregate, could not reasonably be expected to have a Material Adverse Effect: (i) all employer and employee contributions required by applicable law or by the terms of any Foreign Benefit Arrangement or Foreign Plan have been made, or, if applicable, accrued in accordance with normal accounting practices; (ii) the accrued benefit obligations of each Foreign Plan (based on those assumptions used to fund such Foreign Plan) with respect to all current and former participants do not exceed the assets of such Foreign Plan; (iii) each Foreign Plan that is required to be registered has been registered and has been maintained in good standing with applicable regulatory authorities; and (iv) each Foreign Benefit Arrangement and Foreign Plan is in compliance (A) with all material provisions of applicable law and all material applicable regulations and published interpretations thereunder with respect to such Foreign Benefit Arrangement or Foreign Plan and (B) with the terms of such arrangement or plan.

 

SECTION 4.10     Disclosure.  As of the Effective Date, none of the reports, financial statements, certificates or other information furnished by or on behalf of the Borrower to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

SECTION 4.11     OFAC.  Neither Borrower nor any of its Subsidiaries is (a) a Person whose property or interest in property is blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Party and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (b) a Person who engages in any dealings or transactions prohibited by Section 2 of such executive order, or, to its knowledge, is otherwise associated with any such Person in any manner violative of Section 2 of such executive order, or (c) a Person on the list of Specially Designated Nationals and Blocked Persons or in violation of any U.S. Department of Treasury’s Office of Foreign Assets Control regulation or executive order.

 

 

  

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ARTICLE V

 

Conditions

 

SECTION 5.01     Effective Date.  The obligations of the Lenders to make extensions of credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 10.02):

 

(a)           The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or e-mail transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

 

(b)           The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Kenneth M. Vittor, General Counsel to the Borrower, substantially in the form of Exhibit C, and covering such other matters relating to the Loan Parties, this Agreement or the Transactions as the Required Lenders shall reasonably request.

 

(c)           The Administrative Agent shall have received such documents and certificates as the Administrative Agent, any Lender or their counsel may reasonably request relating to the organization, existence and good standing of the Loan Parties, the authorization of the Transactions and any other legal matters relating to the Loan Parties, this Agreement or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.

 

(d)           The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a financial officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 5.02.

 

(e)           The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable and actual out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.

 

(f)           The Administrative Agent shall have received evidence satisfactory to it that the Existing Facility has been terminated and all amounts, if any, owing by the Borrower thereunder have been paid in full.

 

The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.

 

 

  

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SECTION 5.02     Each Credit Event.  The obligation of each Lender to make any extension of credit hereunder is subject to the satisfaction of the following conditions:

 

(a)           The representations and warranties of the Borrower set forth in this Agreement (other than in Section 4.04 and Section 4.05(ii) for any extension of credit made after the Effective Date) shall be true and correct in all material respects on and as of the date of such extension of credit, except to the extent that such representations and warranties specifically relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date.

 

(b)           At the time of and immediately after giving effect to such extension of credit, no Default shall have occurred and be continuing.

 

Each request for an extension of credit shall be deemed to constitute a representation and warranty by the Borrower on the date of such extension of credit as to the matters specified in paragraphs (a) and (b) of this Section.

 

ARTICLE VI

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, and no Letter of Credit remains outstanding, the Borrower covenants and agrees with the Lenders that:

 

SECTION 6.01     Financial Statements and Other Reports.  The Borrower and each of its Subsidiaries will maintain a system of accounting established and administered in accordance with sound business practices to permit preparation of consolidated financial statements in conformity with GAAP and the Borrower will deliver to the Administrative Agent (which will deliver copies thereof to the Lenders) (except to the extent otherwise expressly provided below in subsection 6.01(b)(ii)):

 

(a)

 

(i)           as soon as practicable and in any event within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year ending after the Effective Date the consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such period, and the related consolidated statements of income and shareholders’ equity and cash flows of the Borrower and its consolidated Subsidiaries in each case certified by the chief financial officer or controller of the Borrower that they fairly present the financial condition of the Borrower and its consolidated Subsidiaries as at the dates indicated and the results of their operations and changes in their financial position, subject to changes resulting from audit and normal year-end adjustments, based on the Borrower’s normal accounting procedures applied on a consistent basis (except as noted therein);

 

 

  

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(ii)           as soon as practicable and in any event within 90 days after the end of each Fiscal Year the consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end of such year and the related consolidated statements of income and shareholders’ equity and cash flows of the Borrower and its consolidated Subsidiaries for such Fiscal Year, accompanied by a report thereon of an Independent Public Accountant which report shall be unqualified as to (w) the accuracy of all numbers or amounts set forth in such financial statements, (x) the inclusion or reflection in such financial statements of all amounts pertaining to contingencies required to be included or reflected therein in accordance with GAAP, (y) going concern and (z) scope of audit, and shall state that such consolidated financial statements present fairly the financial position of the Borrower and its consolidated Subsidiaries as at the dates indicated and the results of their operations and changes in their financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years (except as noted in such report and approved by such Independent Public Accountant) and that the examination by such Independent Public Accountant in connection with such consolidated financial statements has been made in accordance with generally accepted auditing standards;

 

The Borrower will be deemed to have complied with the requirements of Section 6.01(a)(i) hereof if within 45 days after the end of each Fiscal Quarter (other than the final Fiscal Quarter) of each of its Fiscal Years, a copy of the Borrower’s Form 10-Q as filed with the Securities and Exchange Commission with respect to such Fiscal Quarter is furnished to the Administrative Agent, and the Borrower will be deemed to have complied with the requirements of Section 6.01(a)(ii) hereof if within 90 days after the end of each of its Fiscal Years, a copy of the Borrower’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission with respect to such Fiscal Year is furnished to the Administrative Agent:

 

(b)

 

(i)           together with each delivery of financial statements of the Borrower and its consolidated Subsidiaries pursuant to subdivisions (a)(i) and (a)(ii) above, (x) an Officer’s Certificate of the Borrower stating that the signer has reviewed the terms of this Agreement and has made, or caused to be made under such signer’s supervision, a review in reasonable detail of the transactions and condition of the Borrower and its consolidated Subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed the existence during or at the end of such accounting period, and that the signer does not have knowledge of the existence as at the date of the Officers’ Certificate, of any condition or event which constitutes an Event of Default or Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action the Borrower has taken, is taking and proposes to take with respect thereto; and (y) an Officer’s Certificate demonstrating in reasonable detail compliance with the restrictions contained in Section 7.03 hereof as of the last day of the accounting period covered by such financial statements (a “Compliance Certificate”) and, in addition, a written statement of the chief accounting officer, chief financial officer, any vice president or the treasurer or any assistant treasurer of the Borrower describing in reasonable detail the differences between the financial information contained in such financial statements and the information contained in the Officer’s Certificate relating to compliance with Section 7.03 hereof (it being understood that, from and after the consummation of the Separation, with respect to any accounting period which includes one or more Fiscal Quarters prior to the Separation or the Fiscal Quarter in which the Separation occurred, the compliance calculations required by this clause (y) shall be performed on a pro forma basis and presented in a form reasonably satisfactory to the Administrative Agent and certified as complete and correct in all material respects);

 

 

  

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(ii)           promptly upon their becoming available but only to the extent requested by the Administrative Agent, copies of all publicly available financial statements, reports, notices and proxy statements sent by the Borrower to its security holders, all regular and periodic reports and all registration statements and prospectuses, if any, filed by the Borrower with any securities exchange or with the Securities and Exchange Commission;

 

(iii)           promptly upon (and in no event later than three days after) any of the chairman of the board, the chief executive officer, the president, the chief accounting officer, the chief financial officer or the treasurer of the Borrower obtaining actual knowledge (x) of any condition or event which constitutes an Event of Default or Default, or (y) of a Material Adverse Effect, an Officer’s Certificate specifying the nature and period of existence of any such condition or event, or specifying the notice given or action taken by such holder or Person and the nature of such claimed Default, Event of Default, event or condition, and what action, if any, the Borrower has taken, is taking and proposes to take with respect thereto; and

 

(iv)           with reasonable promptness, such other information and data with respect to the Borrower or any of its Subsidiaries as from time to time may be reasonably requested by any Lender.

 

SECTION 6.02     Corporate Existence.  Except as may result from a transaction permitted by Section 7.01 hereof, the Borrower will, and will cause each other Loan Party to, maintain its corporate existence in good standing and qualify and remain qualified to do business as a foreign corporation in each jurisdiction in which the character of the properties owned or leased by it therein or in which the transaction of its business is such that the failure to qualify would have a Material Adverse Effect.

 

SECTION 6.03     Payment of Taxes.  The Borrower will, and will cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its franchises, business, income or property when due which are material to the Borrower and its Subsidiaries, taken as a whole, provided, that no such amount need be paid if being contested in good faith by appropriate proceedings diligently conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor.

 

SECTION 6.04     Maintenance of Properties; Insurance.  The Borrower will maintain or cause to be maintained in good repair, working order and condition (ordinary wear and tear excepted) all material properties and equipment used or useful in its business.  The foregoing sentence shall not be construed as to prohibit or restrict the sale or disposition of any assets of the Borrower or any of its Subsidiaries.  The Borrower will maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its material properties and business and the material properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar businesses and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations.

 

 

  

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SECTION 6.05     Compliance with Laws.  The Borrower and its Subsidiaries shall exercise all due diligence in order to comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any Governmental Authority (including, without limitation, laws, rules and regulations relating to the disposal of hazardous wastes and asbestos in the environment), noncompliance with which would have a Material Adverse Effect.

 

SECTION 6.06     Notices of ERISA Event.  The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $50,000,000.

 

SECTION 6.07     Inspection Rights.  The Borrower will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice and at reasonable times, to visit and inspect its properties, to examine and make extracts from its books, and to discuss its affairs, finances and condition with its officers and, in the presence of its officers, its independent accountants.

 

ARTICLE VII

 

Negative Covenants

 

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, and no Letter of Credit remains outstanding, the Borrower covenants and agrees with the Lenders that:

 

SECTION 7.01     Fundamental Changes.  The Borrower will not consolidate with or merge with or into, or transfer all or substantially all, or any substantial portion, of its properties and assets to one or more Persons in one or a series of related transactions unless (i) if the Borrower is the surviving entity in any such consolidation or merger, after giving effect to such transaction, there would not exist any Default or Event of Default hereunder, (ii) if the Borrower is not the surviving entity in any such consolidation or merger, each of the Lenders (or in the case of any such consolidation or merger which is in the nature of an internal corporate reorganization of only the Borrower and its Subsidiaries and does not, in the reasonable judgment of the Required Lenders, affect, in any material respect, the creditworthiness of the Borrower, the Required Lenders) consents to such consolidation or merger in advance or (iii) if the Borrower transfers all or substantially all, or any substantial portion, of its properties and assets, the transferee or transferees thereto are wholly owned Subsidiaries (except the transferee or transferees of any substantial portion of its properties and assets, but not all or substantially all of its properties and assets, 

 

 

  

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shall not be required to be wholly owned Subsidiaries if the transfer is for fair consideration as reasonably determined by the Borrower) and any such transferee that is a domestic Subsidiary becomes a Loan Guarantor hereunder pursuant to a Joinder Agreement substantially in the form of Exhibit D (it being understood that the Borrower and the Administrative Agent, on behalf of the Lenders, may agree to amendments hereto solely to provide for such guarantor arrangements as they may reasonably determine are necessary or useful).  For the purposes of this Section, “Subsidiary” of the Borrower shall include any partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers thereof are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by the Borrower.

 

SECTION 7.02     Liens.  The Borrower will not, and will not permit any of its Subsidiaries (other than CRISIL Limited) to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset (including any document or instrument in respect of goods or accounts receivable) of the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, except:

 

 

 

  

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(a)      Liens set forth on Schedule 7.02 hereto;

 

(b)      Permitted Liens;

 

(c)      Purchase money security interests (including mortgages, conditional sales, Capitalized Leases and any other title retention or deferred purchase devices) in real or personal property of the Borrower or any of its Subsidiaries existing or created at the time of acquisition thereof or within 90 days thereafter, and the renewal, extension or refunding of any such security interest in an amount not exceeding the amount thereof remaining unpaid immediately prior to such renewal, extension or refunding; provided, however, that the principal amount of Indebtedness and Capitalized Lease Obligations secured by each such security interest in each item of property shall not exceed the cost (including all such Indebtedness secured thereby, whether or not assumed) of the item subject thereto and that such security interests shall attach solely to the particular item of property so acquired;

 

(d)      Liens on property of a Person existing at the time such Person is merged into or consolidated with the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of the Borrower; provided that such Liens were not created in contemplation of such merger, consolidation or acquisition and do not extend to any assets other than those of the Person so merged into or consolidated with the Borrower or such Subsidiary or acquired by the Borrower or such Subsidiary;

 

(e)      Liens on assets of Subsidiaries (other than any Loan Guarantor) securing Indebtedness of such Subsidiaries permitted under Section 7.05; and

 

(f)      In addition to Liens permitted by clauses (a) through (e), the Borrower and its Subsidiaries may have attachment or judgment Liens and Liens securing the payment of Indebtedness, which Liens secure in the aggregate not more than $300,000,000 (less any Indebtedness outstanding under clause (f) of Section 7.05); provided that no Lien shall be counted against the basket in this clause (f) if such Lien ranks junior to, or equally with, a Lien securing the obligations in respect of this Agreement.

 

SECTION 7.03     Financial Covenants.  The Borrower shall not permit the Indebtedness to Cash Flow Ratio for each Determination Date, which is the last day of a Fiscal Quarter of the Borrower, to be greater than 3.25:1.00 at any time.

 

SECTION 7.04     Use of Proceeds.  No portion of the proceeds of any borrowing under this Agreement shall be used by the Borrower in any manner which would cause the borrowing or the application of such proceeds to violate Regulation U, Regulation T, or Regulation X of the Board or any other regulation of the Board or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and such use of proceeds.

 

SECTION 7.05     Subsidiary Indebtedness.  The Borrower will not permit any Subsidiary (other than the Loan Guarantors and CRISIL Limited) to create, incur, assume or suffer to exist any Indebtedness, except:

 

 

  

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(a)           Indebtedness in existence on the date hereof and set forth on Schedule 7.05 hereto (which Schedule shall, if applicable, also set forth the aggregate amount of commitments with respect to such Indebtedness and the amount of such commitments that are utilized on the Effective Date), and any modifications, extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the aggregate principal amount thereof outstanding at the time of any such modification, extension, renewal, refinancing or replacement except by an amount equal to (i) unpaid accrued interest and premiums thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with any such modification, extension, renewal, refinancing or replacement and (ii) if applicable, the amount of then-unutilized commitments with respect to such Indebtedness;

 

(b)           Indebtedness of any Subsidiary to the Borrower or any other Subsidiary;

 

(c)           Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary;

 

(d)           Indebtedness of any Subsidiary as an account party in respect of letters of credit entered into in the ordinary course of business;

 

(e)           Indebtedness incurred to finance the acquisition, construction or improvement of any non-current asset; provided that (i) the aggregate principal amount of such Indebtedness does not exceed the cost of acquiring, constructing or improving any such property or asset and (ii) such Indebtedness is incurred within 180 days of the date of acquisition, construction or improvement of any such property or asset; and

 

(f)           other Indebtedness in an aggregate principal amount, together with outstanding obligations secured by Liens permitted under clause (f) of Section 7.02, not to exceed $300,000,000 at any time outstanding.

 

SECTION 7.06     Negative Pledge Clauses.  The Borrower will not, and will not permit any Subsidiary (other than CRISIL Limited) to, enter into any agreement or instrument that by its terms restricts the ability of the Borrower or any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its assets or properties to secure the obligations under this Agreement, in each case other than those arising under this Agreement, except, in each case:

 

 

  

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(a)      restrictions imposed by applicable law;

 

(b)      contractual encumbrances or restrictions contained in (i) the Indenture, dated as of November 2, 2007, among the Borrower, as issuer, and The Bank of New York Mellon, as trustee (as in effect on the Effective Date) and the other agreements in effect on the Effective Date set forth on Schedule 7.06 hereto or (ii) any agreements relating to any Indebtedness issued after the Effective Date (other than those otherwise permitted under this Section 7.06) so long as such encumbrances or restrictions are customary for similar issuances of Indebtedness by comparable issuers (as determined in good faith by the Borrower) and, in the case of each of clauses (i) and (ii), the agreements relating to any refinancing of any such Indebtedness permitted hereunder so long as the scope of such encumbrance or restriction is no more expansive in any material respect than any such encumbrance or restriction in effect on the Effective Date or the date of issuance of such Indebtedness, as the case may be; provided that an encumbrance or restriction shall be permitted under clause (ii) hereof only if such encumbrance or restriction permits the obligations under this Agreement to be secured by Liens on the assets of the Borrower and its Subsidiaries that are senior to or secured equally and ratably with such Indebtedness;

 

(c)      any restriction on a Subsidiary imposed pursuant to an agreement entered into for the disposition of all or substantially all the equity or assets of such Subsidiary pending the closing of such sale or disposition;

 

(d)      provisions in joint venture agreements and other similar agreements applicable to any joint venture which restrict the ability to pledge the equity or assets of such joint venture;

 

(e)      any restrictions imposed by any agreement relating to purchase money Indebtedness permitted by this Agreement to the extent that such restrictions apply only to the property or assets the purchase of which is financed by such Indebtedness;

 

(f)      provisions contained in leases, subleases, licenses or sublicenses of intellectual property and other similar agreements entered into in the ordinary course of business (including, without limitation, provisions which require the Borrower or any Subsidiary to deposit source code with an escrow agent);

 

(g)      provisions restricting subletting or assignment of any lease governing a leasehold interest;

 

(h)      provisions restricting assignment or transfer of any agreement (or any obligation thereunder) entered into in the ordinary course of business;

 

(i)      restrictions and conditions contained in any agreement relating to any disposition permitted or not restricted under this Agreement pending the consummation of such disposition;

 

 

  

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(j)      restrictions and conditions contained in the document relating to any Lien, so long as (i) such Lien is permitted under Section 7.02 and such restrictions or conditions relate only to the specific asset subject to such Lien and the proceeds and products thereof, and (ii) such restrictions and conditions are not created for the purpose of avoiding the restrictions imposed by this Section 7.06;

 

(k)      any agreement in effect at the time such person becomes a Subsidiary, so long as such agreement was not entered into in contemplation of such person becoming a Subsidiary, or any agreement in effect at the time an asset is acquired to the extent such agreement restricts pledges of such asset and was not entered into in contemplation of the acquisition of such asset; and

 

(l)      encumbrances or restrictions in (i) any agreement relating to Indebtedness of a Subsidiary (other than any Loan Guarantor) issued after the Effective Date (other than those otherwise permitted under this Section 7.06) so long as such encumbrances or restrictions are customary for similar issuances of Indebtedness by comparable issuers (as determined in good faith by the Borrower), and (ii) the agreements relating to any refinancing of any such Indebtedness permitted hereunder so long as the scope of such encumbrance or restriction is no more expansive in any material respect than any such encumbrance or restriction in effect on the date of issuance of such Indebtedness; provided that an encumbrance or restriction shall be permitted under this clause (l) only if such encumbrance or restriction does not prohibit a Lien on the assets of such Subsidiary to secure the obligations under this Agreement that is junior to any Lien created to secure such Indebtedness.

 

ARTICLE VIII

 

Events of Default

 

If any of the following conditions or events (“Events of Default”) shall occur and be continuing:

 

SECTION 8.01     Failure to Make Payments When Due.  Failure to pay any installment of principal of any Loan or Reimbursement Obligation when due, whether at stated maturity, by acceleration, by notice of prepayment or otherwise; or failure to pay any other amount due under this Agreement (including, without limitation, the fees described in Section 2.11 hereof) or to pay interest on any Loan or Reimbursement Obligation, in either case within three Business Days after the date when due.

 

SECTION 8.02     Default in Other Agreements.  (a)  Failure of the Borrower or any of its Material Subsidiaries to pay when due, after giving effect to any applicable grace period and to any waiver or extension granted thereunder, any principal or interest on any Indebtedness of the Borrower or any Material Subsidiary (other than Indebtedness referred to in Section 8.01) and Capital Lease Obligations in a principal amount (individually or in the aggregate) of $75,000,000 or more.

 

(b)      The breach or default of the Borrower or any of its Subsidiaries with respect to any other term of any Indebtedness or Capital Lease Obligations in a principal amount (individually or in the aggregate) of $75,000,000 or more or any loan agreement, mortgage, indenture or other agreement relating thereto, if such failure, default or breach results in such Indebtedness or Capital Lease Obligations in a principal amount (individually or in the aggregate) of $75,000,000 or more becoming or being declared by the holders thereof to be due and payable prior to its stated maturity;

 

 

  

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provided that if the Borrower or any of its Material Subsidiaries enters into or is a party to (as a borrower, guarantor or other obligor) any such loan agreement, mortgage, indenture or other agreement and such instrument contains a provision in the nature of a “cross-default” clause (whether as a default provision, a covenant or otherwise), such provision is hereby incorporated by reference in this Agreement, mutatis mutandis, for the benefit of the Lenders and the Administrative Agent (and without giving effect to any amendment, modification or waiver unless such amendment, modification or waiver is intended solely to cure any ambiguity, omission, defect or inconsistency (which intention shall be determined in good faith by the Chief Financial Officer of the Borrower)); provided, further, that notwithstanding anything contained in this Agreement to the contrary, this Section 8.02 shall not be applicable to any Indebtedness of, or Capitalized Lease Obligation (or loan agreement, mortgage, indenture or other agreement relating thereto) entered into by, a partnership (a “Partnership”) of which any Subsidiary of the Borrower is a general partner (a “General Partner”) provided that (i) such General Partner’s only asset is its interest in the Partnership and (ii) such Indebtedness and/or Capitalized Lease Obligation, as the case may be, (A) is with recourse only to such asset, the assets of the Partnership and any asset or assets of any general partner or other entity that is not an Affiliate of the General Partner and (B) is without recourse to the Borrower and any of its other Subsidiaries.

 

SECTION 8.03     Breach of Certain Covenants.  Failure of the Borrower to perform or comply with any term or condition contained in Section 6.02 or Article 7 of this Agreement.

 

SECTION 8.04     Breach of Warranty.  Any material representation or warranty made by the Borrower in this Agreement or in any statement or certificate at any time given by the Borrower in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect on the date as of which made or deemed to be made.

 

SECTION 8.05     Other Defaults Under Agreement.  The Borrower shall default in the performance of or compliance with any term contained in this Agreement (other than any default described in any other provision of Section 8 hereof) and such default shall not have been remedied or waived within 30 days after receipt by the Borrower of notice from the Administrative Agent or any Lender of such default.

 

SECTION 8.06     Change In Control.  (a)  The acquisition (other than from the Borrower) by any Person or any “group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the Borrower or its Subsidiaries or any employee benefit plan of the Borrower or its Subsidiaries) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of either the then outstanding shares of common stock or the combined voting power of the Borrower’s then outstanding voting securities entitled to vote generally in the election of directors; or (b) individuals who, as of the date hereof, constitute the board of directors of the Borrower (the “Incumbent Board”) cease for any reason to constitute at least a majority of the board, provided that any person becoming a director subsequent to the date hereof, whose election, or nomination for election by the Borrower’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Borrower, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this provision, considered a member of the Incumbent Board.

 

 

  

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SECTION 8.07     Involuntary Bankruptcy; Appointment of Receiver, etc.  (a)  A court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Borrower or any of its Material Subsidiaries in an involuntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law and is not stayed.

 

(b)           An involuntary case is commenced against the Borrower or any of its Material Subsidiaries under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, liquidator, sequestrator, trustee, custodian or other officer having similar powers over the Borrower or any of its Material Subsidiaries, or over all or a substantial part of its property, shall have been entered; or an interim receiver, trustee or other custodian of the Borrower or any of its Material Subsidiaries for all or a substantial part of the property of the Borrower or any of its Material Subsidiaries is involuntarily appointed; or a warrant of attachment, execution or similar process is issued against any substantial part of the property of the Borrower or any of its Material Subsidiaries; and the continuance of any such events in subpart (b) for 90 days unless dismissed, bonded or discharged.

 

SECTION 8.08     Voluntary Bankruptcy; Appointment of Receiver, etc.  The Borrower or any of its Material Subsidiaries shall have an order for relief entered with respect to it or commence a voluntary case under the Bankruptcy Code or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, trustee or other custodian for all or a substantial part of its property; the making by the Borrower or any of its Material Subsidiaries of any assignment for the benefit of creditors generally; or the inability or failure of the Borrower or any of its Material Subsidiaries, or the admission by the Borrower or any of its Material Subsidiaries in writing of its inability to pay its debts as such debts become due; or the Board of Directors of the Borrower or any Material Subsidiary (or any committee thereof) adopts any resolution or otherwise authorizes action to approve any of the foregoing; or

 

SECTION 8.09     Judgments and Attachments.  Any money judgment, writ or warrant of attachment, or similar process involving individually or at any one time in the aggregate an amount in excess of $200,000,000 (calculated net of insurance coverage, so long as such coverage has been accepted by the relevant insurance company or companies) shall be entered or filed against the Borrower or any of its Subsidiaries or any of its assets and shall remain undischarged, unvacated, unbonded or unstayed, as the case may be, for a period of 90 days or in any event later than five days prior to the date of any announced sale thereunder; or

 

 

  

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SECTION 8.10     Involuntary Dissolution.  Any order, judgment or decree shall be entered against the Borrower or any of its Material Subsidiaries decreeing the dissolution or split up of the Borrower or any of its Material Subsidiaries and such order shall remain undischarged or unstayed for a period in excess of 60 days; or

 

SECTION 8.11     ERISA Event.  An ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

 

THEN (i) upon the occurrence of any Event of Default described in the foregoing subsection 8.07 or 8.08, the unpaid principal amount of and accrued interest on the Loans and any fees and other amounts owing by the Borrower under this Agreement and the Notes (including all Reimbursement Obligations) shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by the Borrower and the obligation of each Lender to make any Loans shall thereupon terminate, and (ii) upon the occurrence of any other Event of Default, the Administrative Agent, as directed by the Required Lenders, may, by written notice to the Borrower, declare all of the unpaid principal amount of and accrued interest on the Loans and any fees and other amounts owing by the Borrower under this Agreement and the Notes (including all Reimbursement Obligations) to be, and the same shall forthwith become immediately, due and payable, together with accrued interest thereon, and the obligation of each Lender to make any Loan and of the Issuing Lender to issue, amend or increase any Letter of Credit hereunder shall thereupon terminate.  With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at such time deposit in a cash collateral account opened by the Administrative Agent an amount equal to the aggregate L/C Exposure.  Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the Borrower hereunder and under the Notes.  After all such Letters of Credit shall have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and all other obligations of the Borrower hereunder and under Notes shall have been paid in full, the balance, if any, in such cash collateral account shall be returned to the Borrower (or such other Person as may be lawfully entitled thereto).  Except as expressly provided above in this Section, presentment, demand, protest and all other notices of any kind are hereby expressly waived by the Borrower.

 

Notwithstanding the foregoing, if at any time within 60 days after acceleration of the maturity of the Loans the Borrower shall pay all arrears of interest and all payments on account of the principal which shall have become due otherwise than by acceleration (with interest on principal and, to the extent permitted by law, on overdue interest, at the rates specified in this Agreement or the Notes) and all other fees or expenses then owed hereunder (including all amounts of L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the documents required thereunder) and all Events of Default and Defaults (other than non-payment of principal of and accrued interest on the Loans and the Notes due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to Section 10.02 hereof, then the Required Lenders by written notice to the Borrower may (in their sole discretion) rescind and annul the acceleration and its consequences; but such action shall not affect any subsequent Event of Default or Default or impair any right consequent thereon.

 

 

  

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ARTICLE IX

 

The Administrative Agent

 

Each of the Lenders hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto.

 

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have any duties or obligations except those expressly set forth herein.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing by the Required Lenders, and (c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or, if so specified by this Agreement, all Lenders) or in the absence of its own gross negligence or willful misconduct (as determined in a final and nonappealable decision of a court of competent jurisdiction).  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

 

  

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The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

 

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

 

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Borrower.  Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor.  If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as Administrative Agent.

 

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any related agreement or any document furnished hereunder or thereunder.

 

 

  

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It is agreed that neither the Syndication Agent nor any Documentation Agent shall have any duties, responsibilities or liabilities hereunder in its capacity as such.

 

ARTICLE X

 

Miscellaneous

 

SECTION 10.01      Notices.  Except in the case of notices and other communications expressly permitted to be given by telephone or as contemplated below, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:

 

(a)      if to any Loan Party, to the Borrower at:

 

McGraw Hill Financial, Inc.

1221 Avenue of the Americas

New York, New York 10020

Attention:  Elizabeth O’Melia

Treasurer

(Telecopy No. (212) 512-6052)

with a copy to:

 

1221 Avenue of the Americas

New York, New York 10020

Attention:  Kenneth M. Vittor

Executive Vice President and General Counsel

(Telecopy No. (212) 512-4827)

 

(b)      if to the Administrative Agent, to:

 

JPMorgan Chase Bank, N.A.

500 Stanton Christiana Rd.

Newark, Delaware 19713

Attention: Brian Lunger

Telephone: (302) 634-3103

Telecopy: (302) 634-3301

with a copy to:

 

JPMorgan Chase Bank, N.A.

383 Madison Avenue, 24th Floor

New York, New York 10179

Attention:  Goh Siew Tan & Fei-Fei Zhang

Telecopy: (212) 270-5127

E-mail: gohsiew.tan@jpmorgan.com; fei-fei.zhang@jpmorgan.com

 

 

  

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(c)      if to the Swingline Lender, to:

 

JPMorgan Chase Bank, N.A.

500 Stanton Christiana Rd.

Newark, Delaware 19713

Attention: Brian Lunger

Telephone: (302) 634-3103

Telecopy: (302) 634-3301

(d)      if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

 

Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II or to certificates delivered pursuant to Section 6.01(b) unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.  All such notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient.  All other notices and communications given to any party hereto in accordance with the provisions of this Agreement and delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy shall be deemed to have been given on the date of receipt, provided that if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient.  Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.

 

SECTION 10.02     Waivers; Amendments.  (a)  No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

 

 

  

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(b)      Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.17(b) or Section 10.08(a) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of Section 2.19 without the written consent of the Administrative Agent and the Swingline Lender, or (vi) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; provided, further, that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or the Issuing Lender hereunder without the prior written consent of the Administrative Agent, the Swingline Lender or the Issuing Lender, as the case may be (it being understood that any amendment, modification or waiver of any provision of Article III shall require the prior written consent of the Issuing Lender).

 

SECTION 10.03     Expenses; Indemnity; Damage Waiver; No Fiduciary Duty.  (a)  The Borrower shall pay (i) all reasonable and actual out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable and actual fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all reasonable and actual out-of-pocket expenses incurred by the Administrative Agent, any Lender or the Issuing Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the Issuing Lender, in connection with the enforcement or protection of their respective rights in connection with this Agreement, including their respective rights under this Section, or in connection with the Loans made or the Letters of Credit issued hereunder, including in connection with any workout, restructuring or negotiations in respect thereof.

 

(b)      The Borrower shall indemnify the Administrative Agent, each Lender, the Issuing Lender and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the Transactions or any other transactions contemplated hereby, 

 

 

  

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(ii) any actual or alleged presence or release of hazardous materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any environmental liability related in any way to the Borrower or any of its Subsidiaries, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or willful misconduct of such Indemnitee or any of its Affiliates (as determined in a final and nonappealable decision of a court of competent jurisdiction). This Section shall not apply with respect to Taxes (other than Taxes arising from a non-Tax claim).

 

(c)      To the extent that the Borrower fails to pay any amount required to be paid by it to the Administrative Agent, the Issuing Lender or the Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Lender or the Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the Issuing Lender or the Swingline Lender in its capacity as such.

 

(d)      To the extent permitted by applicable law, each of the Loan Parties, the Lenders, the Issuing Lender and the Administrative Agent shall not assert, and hereby waives, any claim against any Indemnitee or any other party hereto, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions or the use of the proceeds thereof.

 

(e)      The Borrower shall not be liable for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements which may be imposed on, incurred by or asserted against an Indemnitee that is a Lender by another Lender or any entity which has purchased or otherwise acquired a participation in any Loan, Commitment or interest herein or in a Note of such Indemnitee to the extent such relate solely to or arise solely out of actions taken or not taken by the Indemnitee Lender in connection with matters that are of an “interbank nature”.  To the extent that the undertaking to indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy or otherwise, the Borrower shall contribute the maximum portion which it is permitted to pay and satisfy under applicable law, to the payment and satisfaction of all indemnified liabilities incurred by the Indemnitees or any of them.

 

(f)      All amounts due under this Section shall be payable promptly after written demand therefor.

 

(g)      Each Loan Party agrees that neither the Administrative Agent nor any Lender has any fiduciary relationship with or duty to such Loan Party arising out of or in connection with this Agreement, and the relationship between the Administrative Agent and the Lenders, on the one hand, and the Loan Parties on the other hand, in connection herewith or therewith is solely that of debtor and creditor.

 

 

  

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SECTION 10.04     Successors and Assigns.  (a)  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Lender that issues any Letter of Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants (to the extent provided in paragraphs (e) and (f) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)      (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of (A) the Borrower; provided that (i) no consent of the Borrower shall be required for an assignment to a Lender, Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee and (ii) the consent of the Borrower shall be deemed granted if the Borrower does not object to a proposed assignment within ten Business Days of a request for its consent; (B) the Administrative Agent, provided that no consent of the Administrative Agent shall be required for an assignment of all or any portion of a Competitive Loan to a Lender, an Affiliate of a Lender or an Approved Fund; (C) in the case of an assignment of all or a portion of a Commitment or any Lender’s obligations in respect of its Swingline Exposure, the Swingline Lender; and (D) in the case of an assignment of all or a portion of a Commitment or any Lender’s obligations in respect of its L/C Exposure, the Issuing Lender, (ii) Assignments shall be subject to the following additional conditions: except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $10,000,000 or, in the case of a Competitive Loan, $1,000,000, unless each of the Borrower and the Administrative Agent otherwise consent provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing; (iii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, except that this clause (iii) shall not apply to rights in respect of outstanding Competitive Loans, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its related parties) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including Federal and state securities laws.  

 

 

  

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Upon acceptance and recording pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.03).  Without the prior written consent of the Administrative Agent, no assignment shall be made to any Person that bears a relationship to the Borrower described in Section 108(e)(4) of the Code; provided that consent shall not be required to the extent the Borrower is able to establish to the reasonable satisfaction of the Administrative Agent that, as a result of such assignment, the assigned portion of such Loan will not have original issue discount for U.S. federal income tax purposes, or will have an amount of original issue discount for U.S. federal income tax purposes that is exactly equal to the amount of original issue discount, if any, on the remaining Loans.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section.

 

(c)      The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive absent manifest error, and the Borrower, the Administrative Agent, the Issuing Lender and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time, upon reasonable prior notice.

 

(d)      Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

 

(e)      Any Lender may, without the consent of the Borrower, the Administrative Agent or the Swingline Lender, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, 

 

 

  

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(ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) the Borrower, the Administrative Agent, the Issuing Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement and (iv) without the prior written consent of the Administrative Agent, no participation shall be sold to any Person that bears a relationship to the Borrower described in Section 108(e)(4) of the Code; provided that consent shall not be required to the extent the Borrower is able to establish to the reasonable satisfaction of the Administrative Agent that, as a result of such assignment, the assigned portion of such Loan will not have original issue discount for U.S. federal income tax purposes, or will have an amount of original issue discount for U.S. federal income tax purposes that is exactly equal to the amount of original issue discount, if any, on the remaining Loans.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.02(b) that affects such Participant.  Subject to paragraph (f) of this Section, the Borrower agrees that each Lender shall be entitled to the benefits of Sections 2.14, 2.15 and 2.16 for the account of any Participant from such Lender to the extent that (i) such Lender would have been entitled to such benefits had it not sold a participation to such Participant and (ii) such Participant has suffered the same disadvantage as such Lender would have suffered had it not sold such participation.  Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”).  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

 

(f)      A Participant shall not be entitled to receive any greater payment under Section 2.14, 2.15 or 2.16 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless (solely with respect to Sections 2.14 and 2.15) the sale of the participation to such Participant is made with the Borrower’s prior written consent.  A Participant shall not be entitled to the benefits of Section 2.16 unless such Participant complies with Section 2.16(f) and (h) as though it were a Lender (it being understood that any forms required to be completed by such Participant under Section 2.16(f) or (h) shall be delivered to the participating Lender).

 

(g)      Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Notes, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or any other central banking authority; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

 

SECTION 10.05     Survival.  All covenants, agreements, representations and warranties made by the Loan Parties herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans, 

 

 

  

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regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.14, 2.15, 2.16 and 10.03 and Article IX shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

 

SECTION 10.06     Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy or e-mail shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 10.07     Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

SECTION 10.08     Adjustments; Right of Setoff.  (a)  Except to the extent that this Agreement or a court order expressly provides for payments to be allocated to a particular Lender, if any Lender (a “Benefitted Lender”) shall receive any payment of all or part of the Obligations owing to it (other than in connection with an assignment made pursuant to Section 10.04), or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in Section 8.07 or 8.08, or otherwise), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations owing to such other Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating interest in such portion of the Obligations owing to each such other Lender, or shall provide such other Lenders with the benefits of any such collateral, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest.

 

 

  

72

  

 

(b)      In addition to any rights and remedies of the Lenders provided by law, each Lender shall have the right, without notice to the Borrower, any such notice being expressly waived by the Borrower to the extent permitted by applicable law, upon any Obligations becoming due and payable by the Borrower (whether at the stated maturity, by acceleration or otherwise), to apply to the payment of such Obligations, by setoff or otherwise, any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, any affiliate thereof or any of their respective branches or agencies to or for the credit or the account of the Borrower;  provided that if any Defaulting Lender shall exercise any such right of setoff, (i) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of this Agreement and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lender, the Swingline Lender and the Lenders and (ii) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the obligations owing to such Defaulting Lender as to which it exercised such right of set-off.  Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such application made by such Lender, provided that the failure to give such notice shall not affect the validity of such application.

 

SECTION 10.09     Governing Law; Jurisdiction; Consent to Service of Process.  (a)  This Agreement shall be construed in accordance with and governed by the law of the State of New York.

 

(b)      Each Loan Party hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement against any Loan Party or its properties in the courts of any jurisdiction.

 

(c)      Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

 

  

73

  

 

(d)      Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01.  Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

SECTION 10.10      WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 10.11     Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

SECTION 10.12     Confidentiality.

 

(a)           The Lenders shall hold all non-public information obtained pursuant to this Agreement which has been identified as such by the Borrower in accordance with their customary procedures for handling confidential information of this nature and in accordance with safe and sound banking practices and in any event may make disclosure reasonably required by any bona fide transferee or participant, or relevant credit default or swap counterparty, in connection with the contemplated transfer of any Note, Loan or Commitment or participation therein, to its employees, directors, agents, attorneys, accountants and other professional advisors or those of any of its affiliates on a confidential basis or as required or requested by any governmental agency or representative thereof or pursuant to legal process, or to any credit insurance provider relating to the Borrower and its obligations hereunder; provided that, unless specifically prohibited by applicable law or court order, each Lender shall notify the Borrower of any request by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of such Lender by such governmental agency) or request pursuant to legal process for disclosure of any such non-public information prior to disclosure of such information so that either or both of them may seek an appropriate protective order; and further, provided that in no event shall any Lender be obligated or required to return any materials furnished by the Borrower or any of its Subsidiaries.

 

(b)      EACH LENDER ACKNOWLEDGES THAT INFORMATION FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER AND ITS RELATED PARTIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

 

  

74

  

 

(c)      ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER AND ITS RELATED PARTIES.  ACCORDINGLY, EACH LENDER ACKNOWLEDGES TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW.

 

SECTION 10.13     USA PATRIOT Act.  Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with the Act.

 

ARTICLE XI

 

Loan Guaranty

 

SECTION 11.01     Guaranty.  Each Loan Guarantor hereby agrees that it is jointly and severally liable for, and, as primary obligor and not merely as surety, absolutely and unconditionally guarantees to the Lenders and other holders of Obligations from time to time the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Obligations and all costs and expenses including, without limitation, all court costs and attorneys’ fees and expenses paid or incurred by the Administrative Agent and the Lenders and such other holders in endeavoring to collect all or any part of the Obligations from, or in prosecuting any action against, the Borrower, any Loan Guarantor or any other guarantor of all or any part of the Obligations (such costs and expenses, together with the Obligations, collectively the “Guaranteed Obligations”). Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal.

 

SECTION 11.02     Guaranty of Payment.  This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent or any Lender or other holder of obligations to sue the Borrower, any Loan Guarantor, any other guarantor, or any other Person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

 

 

  

75

  

 

SECTION 11.03     No Discharge or Diminishment of Loan Guaranty.

 

(a)           Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment, discharge, termination, or otherwise affected by for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including:  (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any amendment, waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any change in the corporate existence, structure or ownership of the Borrower or any other guarantor of or other person liable for any of the Guaranteed Obligations; (iv) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; (v) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the Borrower for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations; (vi) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, any Lender, or any other person, whether in connection herewith or in any unrelated transactions; (vii) the failure of the Administrative Agent or any Lender or other holder of Obligations to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (viii) any action or failure to act by the Administrative Agent or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (ix) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).

 

(b)      The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Loan Guarantor, of the Guaranteed Obligations or any part thereof.

 

SECTION 11.04     Rights of Subrogation.  No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent and the Lenders.

 

SECTION 11.05     Reinstatement; Stay of Acceleration.  If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy, or reorganization of the Borrower or otherwise, each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Lender.

 

 

  

76

  

 

SECTION 11.06     Maximum Liability.  The provisions of this Loan Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the contrary, the amount of such liability shall, without any further action by the Loan Guarantors or the Lenders, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”.  Each Loan Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and remedies of the Lenders hereunder, provided that, nothing in this sentence shall be construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.

 

 

 

  

77

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

 

	 	
MCGRAW HILL FINANCIAL, INC.,

as Borrower

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	 /s/ Jack Callahan	 
	 	 	Name: 	Jack Callahan	 
	 	 	Title: 	
Executive Vice President and 

Chief Financial Officer

	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

 

	 	
STANDARD & POOR’S FINANCIAL SERVICES LLC, as Loan Guarantor

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	 /s/ Douglas Peterson	 
	 	 	Name: 	Douglas Peterson	 
	 	 	Title: 	Chairman and President	 
	 	 	 	 	 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

 

 

	 	
JPMORGAN CHASE BANK, N.A.,

as Administrative Agent, Swingline Lender, Issuing Lender and a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	 /s/ Goh Siew Tan	 
	 	 	Name: 	Goh Siew Tan 	 
	 	 	Title: 	Vice President	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

 

	 	
BANK OF AMERICA, N.A.,

as Syndication Agent and as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	 /s/ Prayes Majmudar	 
	 	 	Name: 	Prayes Majmudar 	 
	 	 	Title: 	Vice President 	 
	 	 	 	 	 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

                  

	 	
CITIBANK, N.A., 

  as a Documentation Agent and a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	 /s/ Elizabeth Minnella Gonzalez	 
	 	 	Name: 	Elizabeth Minnella Gonzalez 	 
	 	 	Title: 	Vice President	 
	 	 	 	 	 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

       

	 	
DEUTSCHE BANK SECURITIES INC., 

  as a Documentation Agent

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Yvonne Tilden	 
	 	 	Name: 	Yvonne Tilden 	 
	 	 	Title: 	Director	 
	 	 	 	 	 
	 	By:	/s/ Virginia Cosenza	 
	 	 	Name:	Virginia Cosenza 	 
	 	 	Title:	Vice President	 
	 	 	 	 	 
	 	 	 	 	 

	 	
DEUTSCHE BANK AG NEW YORK BRANCH, 

  as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Yvonne Tilden	 
	 	 	Name: 	Yvonne Tilden 	 
	 	 	Title: 	Director	 
	 	 	 	 	 
	 	By:	/s/ Virginia Cosenza	 
	 	 	Name:	Virginia Cosenza 	 
	 	 	Title:	Vice President	 
	 	 	 	 	 
	 	 	 	 	 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

 

	 	THE ROYAL BANK OF SCOTLAND PLC,

as a Documentation Agent and as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Matthew Pennachio	 
	 	 	Name: 	Matthew Pennachio	 
	 	 	Title: 	Director	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

     

  

	 	BNP PARIBAS,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Duane Helkowski	 
	 	 	Name: 	Duane Helkowski	 
	 	 	Title: 	Managing Director	 
	 	 	 	 	 
	 	By:	 /s/ Pawel Zelezik	 
	 	 	Name: 	Pawel Zelezik	 
	 	 	Title:	Vice President	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

     

  

	 	GOLDMAN SACHS BANK USA,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Mark Walton	 
	 	 	Name: 	Mark Walton	 
	 	 	Title: 	Authorized Signatory	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

     

	 	U.S. BANK NATIONAL ASSOCIATION,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Susan Bader	 
	 	 	Name: 	Susan Bader	 
	 	 	Title: 	Vice President	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

     

  

	 	THE NORTHERN TRUST COMPANY,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Daniel J. Boote	 
	 	 	Name: 	Daniel J. Boote	 
	 	 	Title: 	Senior Vice President	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

             

	 	MORGAN STANLEY BANK, N.A.,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Michael King	 
	 	 	Name: 	Michael King	 
	 	 	Title: 	Authorized Signatory	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

          

	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Ola Anderssen	 
	 	 	Name: 	Ola Anderssen	 
	 	 	Title: 	Director	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

       

	 	BANK OF MONTREAL, CHICAGO BRANCH,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Elizabeth Armstrong	 
	 	 	Name: 	Elizabeth Armstrong	 
	 	 	Title: 	Director	 
	 	 	 	 	 

 

 

 

 

 

 

 

 

 

 

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

                   

	 	THE BANK OF NOVA SCOTIA,

as a Lender

	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	/s/ Paula J. Czach	 
	 	 	Name: 	Paula J. Czach	 
	 	 	Title: 	Managing Director & Execution Head	 
	 	 	 	 	 

  

 

 

 

  

[Signature Page to McGraw-Hill Four-Year Credit Agreement]

  

  

  

 

Schedule 2.01

COMMITMENTS

	
Name of Lender

	
Commitment

	
JPMORGAN CHASE BANK, N.A.

	
$112,500,000.00

	
BANK OF AMERICA, N.A.

	
$112,500,000.00

	
CITIBANK, N.A.

	
$112,500,000.00

	
DEUTSCHE BANK AG NEW YORK BRANCH

	
$112,500,000.00

	
THE ROYAL BANK OF SCOTLAND PLC

	
$112,500,000.00

	
BNP PARIBAS

	
$65,000,000.00

	
GOLDMAN SACHS BANK USA

	
$65,000,000.00

	
U.S. BANK NATIONAL ASSOCIATION

	
$65,000,000.00

	
THE NORTHERN TRUST COMPANY

	
$60,000,000.00

	
MORGAN STANLEY BANK, N.A.

	
$56,250,000.00

	
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH

	
$56,250,000.00

	
BANK OF MONTREAL, CHICAGO BRANCH

	
$45,000,000.00

	
THE BANK OF NOVA SCOTIA

	
$25,000,000.00

	
Total

	
$1,000,000,000.00

 

 

  

  

  

 

Schedule 4.01

MATERIAL SUBSIDIARIES

Standard & Poor’s Financial Services LLC

McGraw-Hill International Holdings LLC

 

 

 

 

 

  

  

  

 

Schedule 4.05

MATERIAL LITIGATION

None.

 

 

 

  

  

  

 

Schedule 7.02

EXISTING LIENS

Liens relating to the escrow arrangements entered into by the Borrower in relation to the voluntary open offer made on June 3, 2013 by the Borrower to acquire approximately 22.23% of the outstanding shares of CRISIL Limited, a publicly traded company in India, in order to ensure that the Borrower has sufficient cash available to complete such offer.

 

 

 

 

  

  

  

 

Schedule 7.05

EXISTING INDEBTEDNESS

None.

 

 

 

 

  

  

  

 

Schedule 7.06

RESTRICTIVE AGREEMENTS

Trademark Coexistence Agreement, dated as of March 22, 2013, between the Borrower and McGraw-Hill Global Education Holdings, LLC, a Delaware limited liability company.

 

 

 

 

 

 

 

  

  

  

EXHIBIT A

 

[FORM OF]

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below  (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

	
1.

	
Assignor:

	
______________________________

 

	
2.

	
Assignee:

	
______________________________

 

	
  

	
[and is an Affiliate/Approved Fund of [identify Lender]1]

 

	
3.

	
Borrower:

	
McGraw Hill Financial, Inc.

 

	
4.

	
Administrative Agent:

	
JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement

 

	
5.

	
Credit Agreement:

	
The Four-Year Credit Agreement, dated as of June 19, 2013, among McGraw Hill Financial, Inc., the Loan Guarantors party thereto, the Lenders party thereto, Bank of America, N.A., as Syndication Agent, and JPMorgan Chase Bank, N.A., as Administrative Agent.

 

1 Select as applicable.

 

  

  

  

 

	
6.

	
Assigned Interest:

       

	
Facility Assigned

	
Aggregate Amount of Commitment/Loans for all Lenders

	
Principal Amount Assigned (and identifying information as to individual Competitive Loans)

	
Percentage Assigned of Facility/Commitment (set forth, to at least 9 decimals, as a percentage of the Facility and the aggregate Commitments of all Lenders thereunder)

	
Commitment Assigned:

	
$

	
$

	
%

	
Revolving Loans:

	
$

	
$

	
%

	
Competitive Loans:

	
$

	
$

	
%

 

Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

If the Assignee is not already a Lender under the Credit Agreement, the Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more Credit Contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower and its Related Parties) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including federal and state securities laws.

 

The [Assignee/Assignor] shall pay the fee payable to the Administrative Agent pursuant to Section 10.04(b) of the Credit Agreement.

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
ASSIGNOR

	  	 	
ASSIGNEE

	  	 
	  	  	  	 	  	  	  	 
	
[NAME OF ASSIGNOR]

	 	
[NAME OF ASSIGNEE]

	 
	  	  	  	 	  	  	  	 
	  	  	  	 	  	  	  	 
	
By:

	  	 	
By:

	  	 
	  	
Name:

	  	 	  	
Name:

	  	 
	  	
Title:

	  	 	  	
Title:

	  	 

 

  

A-2

  

                    

	Consented to and Accepted:	 
	 	 
	JPMORGAN CHASE BANK, N.A., as Administrative Agent2
	 	 	 	 
	 	 	 	 
	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 

  
 

	[Consented to:]3	 
	 	 
	MCGRAW HILL FINANCIAL, INC., as 
 
Borrower

	 
	 	 	 	 
	 	 	 	 
	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 

 

 

	[NAME OF ANY OTHER RELEVANT PARTY]	 
	 	 	 	 
	 	 	 	 
	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 

 

 

 

 

2 To be added only if the consent of the Administrative Agent is required by Section 10.04(b) of the Credit Agreement.

     
3 To be added only if the consent of the Borrower and/or other parties (e.g. Swingline Lender, Issuing Lender) is required by Section 10.04(b) of the Credit Agreement.

 

 

  

A-3

  

 

ANNEX 1

to EXHIBIT A

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.             Representations and Warranties.

 

1.1           Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any collateral thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of the Credit Agreement or (iv) the performance or observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under the Credit Agreement.

 

1.2.           Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of Section 2.16(f) of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

2.           Payments.  From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

 

3.           General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy or e-mail shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

  

  

  

                         

EXHIBIT B

 

 

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Four-Year Credit Agreement, dated as of June 19, 2013 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among McGraw Hill Financial, Inc. (the “Borrower”), the Loan Guarantors party thereto, the Lenders party thereto, Bank of America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”).  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.  ______________________ (the “Non-U.S. Lender”) is providing this certificate pursuant to Section 2.16(f) of the Credit Agreement.

 

Pursuant to the provisions of Section 2.16(f) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iii) it is not a “10-percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

 

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. person status on Internal Revenue Service Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

  

	[NAME OF LENDER]	 
	 	 	 	 
	 	 	 	 
	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 

   

Date:  _______, ___, 20[ ]

 

 

  

  

  

       

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Four-Year Credit Agreement, dated as of June 19, 2013 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among McGraw Hill Financial, Inc. (the “Borrower”), the Loan Guarantors party thereto, the Lenders party thereto, Bank of America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”).  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.  ______________________ (the “Non-U.S. Lender”) is providing this certificate pursuant to Section 2.16(f) of the Credit Agreement.

 

Pursuant to the provisions of Section 2.16(f) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iv) none of its partners/members is a “10-percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

 

The undersigned has furnished the Administrative Agent and the Borrower with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN (or other applicable form) from each of its partners/members claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

  

	[NAME OF LENDER]	 
	 	 	 	 
	 	 	 	 
	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 

        

Date: _______, ___, 20[ ]

 

 

 

B-2

 

      

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Four-Year Credit Agreement, dated as of June 19, 2013 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among McGraw Hill Financial, Inc. (the “Borrower”), the Loan Guarantors party thereto, the Lenders party thereto, Bank of America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”).  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.  ______________________ (the “Non-U.S. Lender”) is providing this certificate pursuant to Section 2.16(f) of the Credit Agreement.

 

Pursuant to the provisions of Section 2.16(f)  of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iii) it is not a “10-percent shareholder” of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

 

The undersigned has furnished its participating Lender with a certificate of its non-U.S. person status on Internal Revenue Service Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

         

  

	[NAME OF PARTICIPANT]	 
	 	 	 	 
	 	 	 	 
	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 

         

Date: _______, ___, 20[ ]

  

 

 

  

B-3

  

     

[FORM OF]

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Four-Year Credit Agreement, dated as of June 19, 2013 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among McGraw Hill Financial, Inc. (the “Borrower”), the Loan Guarantors party thereto, the Lenders party thereto, Bank of America, N.A., as syndication agent, and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”).  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.  ______________________ (the “Non-U.S. Lender”) is providing this certificate pursuant to Section 2.16(f) of the Credit Agreement.

 

Pursuant to the provisions of Section 2.16(f) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such participation, (iii) with respect to such participation, neither the undersigned nor any of its partners/members is a “bank” extending credit pursuant to a loan agreement entered into in the ordinary course of its business within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (iv) none of its partners/members is a “10-percent shareholder” of the Borrower within the meaning of  Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a “controlled foreign corporation” related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

 

The undersigned has furnished its participating Lender with Internal Revenue Service Form W-8IMY accompanied by an Internal Revenue Service Form W-8BEN (or other applicable form) from each of its partners/members claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

	[NAME OF PARTICIPANT]	 
	 	 	 	 
	 	 	 	 
	By: 	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 

   

Date: _______, ___, 20[ ]

 

 

  

B-4

  

    

EXHIBIT C

 

FORM OF OPINION OF GENERAL COUNSEL OF BORROWER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

C-1

  

 

EXHIBIT D

 

[FORM OF]

JOINDER AGREEMENT

 

THIS JOINDER AGREEMENT (this “Agreement”), dated as of __________, ____, 20__, is entered into between ________________________________, a _________________ (the "New Subsidiary") and JPMORGAN CHASE BANK, N.A., in its capacity as administrative agent (the “Administrative Agent”) under that certain Four-Year Credit Agreement, dated as of June 19, 2013 among McGraw Hill Financial, Inc. (the “Borrower”), the Loan Guarantors party thereto, the Lenders party thereto, Bank of America, N.A., as syndication agent, and the Administrative Agent (as the same may be amended, modified, extended or restated from time to time, the “Credit Agreement”).  All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Credit Agreement.

 

The New Subsidiary and the Administrative Agent, for the benefit of the Lenders, hereby agree as follows:

 

1.           The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a “Loan Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a Loan Guarantor thereunder as if it had executed the Credit Agreement.  The New Subsidiary hereby agrees to be bound by all of the guaranty obligations set forth in Article XI of the Credit Agreement.  Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in Section 11.06 of the Credit Agreement, hereby guarantees, jointly and severally with any other Loan Guarantor, to the Administrative Agent and the Lenders, as provided in Article XI of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and severally together with any other Loan Guarantor, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

2.           If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such other documents and instruments as requested by the Administrative Agent in accordance with the Credit Agreement.

 

3.           The address of the New Subsidiary for purposes of Section 10.01 of the Credit Agreement is as follows:

 

________________________________________________

________________________________________________

________________________________________________

________________________________________________

 

4.           The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.

 

 

  

D-1

  

           

5.           This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument.

 

6.           THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the same to be accepted by its authorized officer, as of the day and year first above written.

    

    

	 	[NEW SUBSIDIARY]	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	 	 
	 	Name:	 	 
	 	Title: 	 	 
	 	 	 	 	 

 

 

	 	Acknowledged and accepted:	 
	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as Administrative Agent	 
	 	 	 	 	 
	 	 	 	 	 
	 	By: 	 	 
	 	Name:	 	 
	 	Title: 	 	 
	 	 	 	 	 

 

 

                                                       

 

 

D-2

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