EXHIBIT 99.3
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SLM STUDENT LOAN TRUST 2003-8
ADMINISTRATION AGREEMENT
DATED AS OF AUGUST 7, 2003
TO
MASTER ADMINISTRATION AGREEMENT
DATED AS OF MAY 1, 1997
AMONG
SLM FUNDING LLC
SLM STUDENT LOAN TRUST 2003-8
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
AS ELIGIBLE LENDER TRUSTEE
▇▇▇▇▇▇ ▇▇▇ SERVICING, L.P.
THE BANK OF NEW YORK,
AS INDENTURE TRUSTEE
AND
STUDENT LOAN MARKETING ASSOCIATION
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TABLE OF CONTENTS
ARTICLE I
Section 1.1 Definitions and Usage........................................................................ 2
ARTICLE II
Section 2.1 Duties with Respect to the Indenture......................................................... 2
Section 2.2 Duties with Respect to the Issuer............................................................ 4
Section 2.3 Establishment of Trust Accounts.............................................................. 5
Section 2.4 Collections.................................................................................. 7
Section 2.5 Application of Collections................................................................... 8
Section 2.6 Additional Deposits.......................................................................... 8
Section 2.7 Distributions................................................................................ 8
Section 2.8 Priority of Distributions.................................................................... 9
Section 2.9 Reserve Account.............................................................................. 10
Section 2.10 Capitalized Interest Account................................................................. 12
Section 2.11 Statements to Certificateholders and Noteholders............................................. 12
Section 2.12 Non-Ministerial Matters...................................................................... 13
Section 2.13 Exceptions................................................................................... 14
Section 2.14 Compensation................................................................................. 14
Section 2.15 Servicer and Administrator Expenses.......................................................... 14
ARTICLE III
Section 3.1 Administrator's Certificate; Servicer's Report............................................... 14
Section 3.2 Annual Statement as to Compliance; Notice of Default; Financial Statements................... 15
Section 3.3 Annual Independent Certified Public Accountants' Report...................................... 16
ARTICLE IV
Section 4.1 Representations of Administrator............................................................. 17
Section 4.2 Liability of Administrator: Indemnities...................................................... 18
Section 4.3 Merger or Consolidation of, or Assumption of the............................................. 20
Section 4.4 Limitation on Liability of Seller, Administrator and Others.................................. 21
Section 4.5 Administrator May Own Certificates or Notes.................................................. 21
Section 4.6 ▇▇▇▇▇▇ Mae, Inc Not to Resign as Administrator............................................... 21
ARTICLE V
Section 5.1 Administrator Default........................................................................ 22
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Section 5.2 Appointment of Successor..................................................................... 23
Section 5.3 Notification to Noteholders and Certificateholders........................................... 24
Section 5.4 Waiver of Past Defaults...................................................................... 24
ARTICLE VI
Section 6.1 Termination.................................................................................. 24
ARTICLE VII
Section 7.1 Protection of Interests in Trust............................................................. 25
ARTICLE VIII
Section 8.1 Independence of the Administrator............................................................ 27
Section 8.2 No Joint Venture............................................................................. 27
Section 8.3 Other Activities of Administrator............................................................ 28
Section 8.4 Powers of Attorney........................................................................... 28
Section 8.5 Amendment.................................................................................... 28
Section 8.6 Assignment................................................................................... 29
Section 8.7 Limitations on Rights of Others.............................................................. 29
Section 8.8 Assignment to Indenture Trustee.............................................................. 29
Section 8.9 Nonpetition Covenants........................................................................ 30
Section 8.10 Limitation of Liability of Eligible Lender Trustee and Indenture Trustee..................... 30
Section 8.11 Governing Law................................................................................ 30
Section 8.12 Headings..................................................................................... 31
Section 8.13 Counterparts................................................................................. 31
Section 8.14 Severability................................................................................. 31
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ADMINISTRATION AGREEMENT SUPPLEMENT
SLM Student Loan Trust 2003-8 Administration Agreement Supplement,
dated as of August 7, 2003 (this "Supplement"), among SLM Funding LLC (the
"Depositor"), SLM Student Loan Trust ▇▇▇▇-▇ (▇▇▇ "▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Bank
USA, National Association, not in its individual capacity but solely in its
capacity as eligible lender trustee (the "Eligible Lender Trustee"), The Bank of
New York, not in its individual capacity but solely in its capacity as indenture
trustee (the "Indenture Trustee") and ▇▇▇▇▇▇ ▇▇▇ Servicing, L.P. (the
"Servicer"), and accepted and agreed to by Student Loan Marketing Association
(the "Administrator"). The Supplement is being delivered as a supplement to the
Master Administration Agreement, dated as of May 1, 1997 (the "Master
Agreement"), between the Depositor, as successor in interest to SLM Funding
Corporation, and the Student Loan Marketing Association (the "Administrator").
RECITALS
WHEREAS, under the terms of the Master Agreement, the Administrator has
agreed to serve as administrator with respect to trusts formed under trust
agreements entered into from time to time between the Depositor and an Eligible
Lender Trustee, and under Section 1(a) of the Master Agreement, in order for the
Administrator to serve as administrator with respect any such trust, the
Depositor is required to present to the Administrator a supplement designating
the related Trust, the related Eligible Lender Trustee, the related Interim
Eligible Lender Trustee and the related Indenture Trustee, and duly executed by
the Depositor, such Trust, such Eligible Lender Trustee, such Indenture Trustee
and such Servicer;
WHEREAS, pursuant to an Indenture, dated as of August 1, 2003 (the
"Indenture"), among the Issuer, the Indenture Trustee and the Eligible Lender
Trustee, the Issuer (a) is issuing (i) five classes of its Student Loan-Backed
Notes (collectively, the "Notes"), and (ii) an Excess Distribution Certificate
(the "Excess Distribution Certificate") pursuant to a Trust Agreement, dated as
of August 1, 2003 (the "Trust Agreement"), between the Depositor and the
Eligible Lender Trustee, and (b) will not issue any classes of Certificates (the
"Certificates");
WHEREAS, the Issuer has entered into certain agreements in connection
with the issuance of the Notes and the Excess Distribution Certificate,
including the Trust Agreement, the Servicing Agreement, the Sale Agreement, and
the Indenture;
WHEREAS, pursuant to certain Basic Documents, the Issuer and the
Eligible Lender Trustee are required to perform certain duties in connection
with (a) the Notes and the Collateral therefore pledged pursuant to the
Indenture and (b) the Excess Distribution Certificate pursuant to the Trust
Agreement;
WHEREAS, the Issuer and the Eligible Lender Trustee desire to have the
Administrator and the Servicer perform certain of the duties of the Issuer and
the Eligible Lender Trustee referred to in the preceding clause, and to provide
such additional services consistent with the terms of the Master Agreement, the
Master Agreement and the other Basic Documents as the Issuer and the Eligible
Lender Trustee may from time to time request;
WHEREAS, the Administrator and the Servicer have the capacity to
provide the services required hereby and are willing to perform such services
for the Issuer and the Eligible Lender Trustee on the terms set forth herein;
and
WHEREAS, this Supplement is delivered to the Administrator pursuant to
and in satisfaction of the conditions set forth in Section 1.2(a) of the Master
Agreement with respect to SLM Student Loan Trust 2003-8, and is intended to
supplement the terms of, and to modify any terms that are inconsistent with, the
Master Agreement, provided that the provisions of this Supplement shall be
applicable only to SLM Student Loan Trust 2003-8.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Depositor, the Issuer, the Eligible Lender
Trustee, the Indenture Trustee, the Servicer, and the Administrator, hereby
agree as follows:
ARTICLE I
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 Supplement to Master Administration Agreement. Each
of the parties entering into this Supplement acknowledges and agrees that the
provisions of this Supplement shall set forth the terms of, and be applicable
only to, SLM Student Loan Trust 2003-8, and that, to the extent any of the terms
of this Supplement may modify the Master Agreement, the terms of this Supplement
shall govern.
ARTICLE II
Section 2.1 Duties with Respect to the Indenture. The
Administrator agrees to consult with the Eligible Lender Trustee regarding the
duties of the Issuer under the Indenture and the Depository Agreements. The
Administrator shall monitor the performance of the Issuer and shall advise the
Eligible Lender Trustee when action is necessary to comply with the Issuer's
duties under the Indenture and the Depository Agreement. The Administrator shall
prepare for execution by the Issuer or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Issuer to prepare, file
or deliver pursuant to the Indenture and the Depository Agreement. In
furtherance of the foregoing, the Administrator shall take the actions with
respect to the following matters that it is the duty of the Issuer or the
Indenture Trustee to take pursuant to the Indenture:
(a) preparing or obtaining the documents and
instruments required for authentication of the Notes and delivering the
same to the Indenture Trustee (Section 2.2 of the Indenture);
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(b) preparing, obtaining or filing the
instruments, opinions and certificates and other documents required for
the release of collateral (Section 2.9 of the Indenture);
(c) obtaining and preserving the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, the Collateral and each
other instrument and agreement included in the Indenture Trust Estate
(Section 3.4 of the Indenture);
(d) preparing all supplements, amendments,
financing statements, continuation statements, instruments of further
assurance and other instruments, in accordance with Section 3.5 of the
Indenture, necessary to protect the Indenture Trust Estate (Section 3.5
of the Indenture);
(e) delivering the Opinion of Counsel on the
Closing Date and the annual delivery of Opinions of Counsel, in
accordance with Section 3.6 of the Indenture, as to the Indenture Trust
Estate, and the annual delivery of the Officers' Certificate of the
Issuer and certain other statements, in accordance with Section 3.9 of
the Indenture, as to compliance, with the Indenture (Sections 3.6 and
3.9 of the Indenture);
(f) in the event of a Servicer Default, the
taking of all reasonable steps available to enforce the Issuer's rights
under the Basic Documents in respect of such Servicer Default (Section
3.7(d) of the Indenture);
(g) preparing and obtaining of documents and
instruments required for the release of the Issuer from its obligations
under the Indenture (Section 3.10 of the Indenture);
(h) monitoring the Issuer's obligations as to
the satisfaction and discharge of the Indenture and preparation of an
Officers' Certificate of the Issuer and obtaining of the Opinion of
Counsel and the Independent Certificate relating thereto (Section 4.1
of the Indenture);
(i) selling of the Indenture Trust Estate in a
commercially reasonable manner if an Event of Default has occurred and
is continuing (Section 5.4 of the Indenture) or an Insolvency Event
with respect to the Depositor has occurred and is continuing (Section
6.5(b) of the Indenture);
(j) preparing and, after execution by the
Issuer, filing with the Commission, any applicable State agencies and
the Indenture Trustee of documents required to be filed on a periodic
basis with, and summaries thereof as may be required by rules and
regulations prescribed by, the Commission and any applicable State
agencies (Section 7.3 of the Indenture);
(k) the opening of one or more accounts in the
Issuer's name, the preparation of Issuer Orders, Officers' Certificates
of the Issuer and Opinions of Counsel and all other actions necessary
with respect to investment and reinvestment of funds in the Trust
Accounts (Sections 8.2 and 8.3 of the Indenture);
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(l) preparing of an Issuer Request and Officers'
Certificate of the Issuer and the obtaining of an Opinion of Counsel
and Independent Certificates, if necessary, for the release of the
Indenture Trust Estate (Sections 8.4 and 8.5 of the Indenture);
(m) preparing of Issuer Orders and the obtaining
of Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.1, 9.2 and 9.3 of the Indenture);
(n) preparing of or obtaining of the documents
and instruments required for the execution and authentication of new
Notes conforming to any supplemental indenture and the delivery of the
same to the Eligible Lender Trustee and the Indenture Trustee,
respectively (Section 9.6 of the Indenture);
(o) preparing of all Officers' Certificates of
the Issuer, Opinions of Counsel and Independent Certificates with
respect to-any requests by the Issuer to the Indenture Trustee to take
any action under the Indenture (Section 11.1(a) of the Indenture);
(p) preparing and delivering of Officers'
Certificates of the Issuer and the obtaining of Independent
Certificates, if necessary, for the release of property from the lien
of the Indenture (Section 11.1(b) of the Indenture);
(q) preparing and delivering to Noteholders and
the Indenture Trustee of any agreements with respect to alternate
payment and notice provisions (Section 11.6 of the Indenture); and
(r) the recording of the Indenture, if
applicable (Section 11.15 of the Indenture).
Section 2.2 Duties with Respect to the Issuer.
(a) In addition to the duties of the
Administrator set forth above and in the other Basic Documents, the
Administrator shall perform such calculations, including calculating on
each Interest Rate Determination Date for each class of Notes, the
applicable rate of interest using the applicable Index that will be in
effect until the next related Interest Rate Change Date, and shall
prepare for execution by the Issuer or the Eligible Lender Trustee or
shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Issuer or the Eligible Lender Trustee to
prepare, file or deliver pursuant to the Basic Documents, and at the
request of the Eligible Lender Trustee shall take all appropriate
action that it is the duty of the Issuer to take pursuant to the Basic
Documents. Subject to Section 8.1 below, and in accordance with the
directions of the Eligible Lender Trustee, the Administrator shall
administer, perform or supervise the performance of such other
activities in connection with the Collateral (including the Basic
Documents) as are not covered by any of the foregoing provisions and as
are expressly requested by the Eligible Lender Trustee and are
reasonably within the capability of the Administrator.
(b) The Administrator shall be responsible for
performance of the duties of the Eligible Lender Trustee set forth in
Sections 5.4 of the Trust Agreement.
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(c) The Administrator shall perform the duties
of the Administrator specified in Section 10.2 of the Trust Agreement
required to be performed in connection with the resignation or removal
of the Eligible Lender Trustee, and any other duties expressly required
to be performed by the Administrator under the Trust Agreement and the
other Basic Documents.
(d) The Administrator shall be responsible for
preparing and delivering, on behalf of the Issuer, all notices required
by any Clearing Agency or stock exchange upon which the Notes are then
listed.
(e) The Administrator shall be responsible for
serving as Calculation Agent or as successor calculation agent, if
required, and shall be responsible for preparing any notices required
to be delivered by the Issuer to a Swap Counterparty under the Interest
Rate Cap Agreement, as applicable, including any notice obligations
specified in the Interest Rate Cap Agreement in the event of a default
by the Swap Counterparty.
(f) In carrying out the foregoing duties or any
of its other obligations under this Supplement, the Administrator may
enter into transactions with or otherwise deal with any of its
Affiliates; provided, however, that the terms of any such transactions
or dealings shall be, in the Administrator's opinion, no less favorable
to the Issuer than would be available from unaffiliated parties.
Section 2.3 Establishment of Trust Accounts.
(a) The Administrator, for the benefit of the
Issuer, shall establish and maintain in the name of the Indenture Trustee the
following Eligible Deposit Accounts bearing a designation clearly indicating
that the funds deposited in each such account are held for the benefit of the
Issuer which will initially be established as segregated trust accounts the name
of the Indenture Trustee with the corporate trust department of The Bank of New
York:
(i) a "Collection Account";
(ii) a "Reserve Account"; and
(iii) if applicable, a "Capitalized Interest Account"
(as applicable).
(b) Funds on deposit in each account specified
in Section 2.3(a) above (collectively, the "Trust Accounts") shall be invested
by the Indenture Trustee (or any custodian or designated agent with respect to
any amounts on deposit in such accounts) in Eligible Investments (including
Eligible Investments of the Indenture Trustee) pursuant to written instructions
by the Administrator; provided, however, it is understood and agreed that the
Indenture Trustee shall not be liable for the selection of, or any loss arising
from such investment in, Eligible Investments. All such Eligible Investments
shall be held by (or by any custodian on behalf of) the Indenture Trustee for
the benefit of the Issuer; provided, that on the Business Day preceding each
Distribution Date, all interest and other investment income (net of losses and
investment expenses) on funds on deposit therein shall be deposited into the
Collection Account and shall be deemed to constitute a portion of the Available
Funds for such Distribution Date. Other than as described in the following
proviso or as otherwise permitted by the Rating
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Agencies, funds on deposit in the Trust Accounts shall only be invested in
Eligible Investments that will mature so that such funds will be available at
the close of business on the Business Day preceding the following Monthly
Servicing Payment Date (to the extent necessary to pay the Primary Servicing Fee
payable on such date) or the applicable Distribution Date. Funds deposited in a
Trust Account on a Business Day which immediately precedes a Monthly Servicing
Payment Date or Distribution Date upon the maturity of any Eligible Investments
are not required to be invested overnight.
(c) The Depositor and the Issuer pledged to the
Indenture Trustee all of their respective right, title and interest in all funds
on deposit from time to time in the Trust Accounts and in all proceeds thereof
(including all income thereon) and all such funds, investments, proceeds and
income shall be part of the Trust Estate. Subject to the Administrator's power
to instruct the Indenture Trustee pursuant to Section 2.3(b) above and Section
2.3(e) below, the Trust Accounts shall be under the sole dominion and control of
the Indenture Trustee for the benefit of the Noteholders and the Issuer. If, at
any time, any of the Trust Accounts ceases to be an Eligible Deposit Account,
the Indenture Trustee (or the Administrator on its behalf) agrees, by its
acceptance hereto, that it shall within 10 Business Days (or such longer period,
not to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Trust Account as an Eligible Deposit Account and shall transfer
any cash and/or any investments to such new Trust Account. In connection with
the foregoing, the Administrator agrees that, in the event that any of the Trust
Accounts are not accounts with the Indenture Trustee, the Administrator shall
notify the Indenture Trustee in writing promptly upon any of such Trust Accounts
ceasing to be an Eligible Deposit Account.
(d) With respect to the Trust Account Property,
the Indenture Trustee agrees, by its acceptance hereof, that:
(i) any Trust Account Property that is held in
deposit accounts shall be held solely in Eligible Deposit Accounts, subject to
the last sentence of Section 2.3(c) and, subject to Section 2.3(b), each such
Eligible Deposit Account shall be subject to the exclusive custody and control
of the Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
(ii) any Trust Account Property that constitutes
Physical Property shall be Delivered to the Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by the Indenture Trustee or a financial
intermediary (as such term is defined in Section 8-313(4) of the UCC) acting
solely for the Indenture Trustee;
(iii) any Trust Account Property that is a
book-entry security held through the Federal Reserve System pursuant to Federal
book-entry regulations shall be Delivered in accordance with paragraph (b) of
the definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continuous book-entry registration of
such Trust Account Property as described in such paragraph; and
(iv) any Trust Account Property that is an
"uncertificated security" under Article 8 of the UCC and that is not governed by
clause (iii) above shall be Delivered to
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the Indenture Trustee in accordance with paragraph (c) of the definition of
"Delivery" and shall be maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the Indenture Trustee's (or its
nominee's) ownership of such security.
Notwithstanding anything to the contrary set forth in this Section 2.3(d), the
Indenture Trustee shall have no liability or obligation in respect of any failed
Delivery, as contemplated herein, other than with respect to a Delivery which
fails as a result of any action or inaction on behalf of the Indenture Trustee.
(e) The Administrator shall have the power,
revocable for cause or upon the occurrence and during the continuance
of an Administrator Default by the Indenture Trustee or by the Eligible
Lender Trustee with the consent of the Indenture Trustee, to instruct
the Indenture Trustee to make withdrawals and payments from the Trust
Accounts for the purpose of permitting the Servicer, the Administrator
or the Eligible Lender Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties
under the Indenture.
Section 2.4 Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or on
behalf of the Obligors with respect to the Trust Student Loans (other than
Purchased Student Loans), and all Liquidation Proceeds, both as collected during
the Collection Period, and the Eligible Lender Trustee shall remit within two
Business Days of receipt thereof to the Collection Account any Interest Subsidy
Payments and Special Allowance Payments received by it with respect to the Trust
Student Loans during the Collection Period. Notwithstanding the foregoing, for
so long as (a) the senior unsecured obligations of the Administrator (or any
affiliate of the Administrator which guarantees the obligations of the
Administrator hereunder) shall have been assigned a long-term rating of not less
than "AA-" (or an equivalent rating) or a short-term rating of not less than
"A-1" (or an equivalent rating) by each of the Rating Agencies or the remitting
by the Servicer and the Eligible Lender Trustee of the amounts referred to in
this Section 2.4 to the Administrator will not result in a downgrading or
withdrawal of any of the then-current ratings of any of the Notes by any of the
Rating Agencies, and (b) no Administrator Default shall have occurred and be
continuing, the Servicer and the Eligible Lender Trustee shall remit such
collections within two Business Days of receipt thereof to the Administrator,
and the Administrator need not deposit such collections into the Collection
Account until one Business Day immediately prior to the next following Monthly
Servicing Payment Date (in an amount up to the Servicing Fee then due) or
Distribution Date together with interest on such amounts (less Servicing Fees
paid during such period) calculated on a daily basis from the first day of the
month following receipt thereof by the Administrator through the last day of the
related Collection Period at a rate equal to no less than the Federal Funds Rate
less 0.20%; provided, however, that if the Administrator (and each such
Affiliate which guarantees the obligations of the Administrator) is rated below
"AA-" and "A-1+" by Standard & Poor's, the Administrator shall deposit all such
collections into the Collection Account at least as frequently as the next
following Monthly Servicing Payment Date, unless less frequent deposits will not
result in a downgrading or withdrawal of Standard & Poor's then-current ratings
on the Notes. In the event that any of the foregoing conditions for ceasing
daily remittances shall no longer be satisfied, then the Administrator shall
deposit all collections held by it into the Collection Account within two
Business Days thereof.
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Section 2.5 Application of Collections.
(a) With respect to each Trust Student Loan, all
collections (including all Guarantee Payments) with respect thereto for each
Collection Period shall be applied to interest and principal on such Trust
Student Loan by the Servicer in accordance with its customary practice.
(b) All Liquidation Proceeds shall be applied to
the related Trust Student Loan.
Section 2.6 Additional Deposits.
(a) The Servicer shall deposit or cause to be
deposited in the Collection Account the aggregate purchase price with respect to
Purchased Student Loans as determined pursuant to Section 3.5 of the Servicing
Agreement and all other amounts to be paid by the Servicer under Section 3.5 of
the Servicing Agreement when such amounts are due, and the Depositor shall
deposit or cause to be deposited in the Collection Account the aggregate
Purchase Amount with respect to Purchased Student Loans and all other amounts to
be paid by the Depositor under Article VI of the Sale Agreement when such
amounts are due.
(b) Notwithstanding anything to the contrary set
forth in Section 2.6(a) above, if daily deposits to the Collection Account are
not required pursuant to Section 2.4 above, the Depositor and the Servicer shall
pay the amounts referred to in Section 2.6(a) above that would otherwise be
deposited into the Collection Account to the Administrator. The Administrator
shall not be required to deposit such amounts into the Collection Account until
the Business Day preceding each Distribution Date; provided, however, that, on
or before the Business Day preceding each Monthly Servicing Payment Date that is
not a Distribution Date, the Administrator shall deposit into the Collection
Account that portion of such amounts received by it that is equal to the Primary
Servicing Fee payable on such date and provided, further that the Administrator
shall also deposit into the Collection Account on such date interest on such
amounts (less Servicing Fees paid during such period) calculated on a daily
basis from the first day of the month following receipt thereof by the
Administrator through the last day of the related Collection Period at a rate
equal to no less than the Federal Funds Rate less 0.20%.
Section 2.7 Distributions.
(a) On or before the Business Day immediately
preceding each Distribution Date, the Administrator shall calculate all amounts
required to be deposited into the Collection Account from the Trust Accounts, as
applicable, including the amount of all Investment Earnings to be transferred
from the Trust Accounts to the Collection Account, and the amount be distributed
from the Collection Account as Available Funds on the related Distribution Date.
On the fifth Business Day preceding each Monthly Servicing Payment Date that is
not a Distribution Date, the Administrator shall calculate all amounts required
to be deposited into the Collection Account from the Reserve Account and the
amounts to be distributed therefrom on the related Monthly Servicing Payment
Date.
(b) The Administrator shall instruct the
Indenture Trustee in writing no later than the second Business Day preceding
each Monthly Servicing Payment Date that is not a
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Distribution Date (based on the information contained in the Administrator's
Certificate and the related Servicer's Report delivered pursuant to Section
3.1(a) and (b) below) to distribute to the Servicer, by 1:00 p.m. (New York
time) on such Monthly Servicing Payment Date, from and to the extent of the
Available Funds on deposit in the Collection Account the Primary Servicing Fee
due with respect to the preceding calendar month, and the Indenture Trustee
shall comply with such instructions.
(c) The Administrator shall instruct the
Indenture Trustee in writing no later than one Business Day preceding each
Distribution Date (based on the information contained in the Administrator's
Certificate and the related Servicer's Report delivered pursuant to Sections
3.1(a) and 3.1(c) below) to make the deposits and distributions to the Persons
or to the account specified below by 1:00 p.m. (New York time) on such
Distribution Date, to the extent of the amount of Available Funds in the
Collection Account plus amounts from the applicable Trust Accounts pursuant to
the priority of distributions set forth under Section 2.8 below and the
Indenture Trustee shall comply with such instructions.
Section 2.8 Priority of Distributions. The Indenture Trustee
shall first reimburse itself for all amounts due under Section 6.7 of the
Indenture and then shall make the following deposits and distributions in the
amounts and in the order of priority set forth below:
(a) to the Servicer, the Primary Servicing Fee
due on that Distribution Date;
(b) to the Administrator, the Administration Fee
due on that Distribution Date and all prior unpaid Administration Fees;
(c) to the Class A Noteholders, the Class A
Noteholders' Interest Distribution Amount, pro rata, based on the
amounts payable as the Class A Noteholders' Interest Distribution
Amount;
(d) to the Class B Noteholders, the Class B
Noteholders' Interest Distribution Amount, pro rata, based on the
amounts payable as the Class B Noteholders' Interest Distribution
Amount;
(e) to Class A-1 Noteholders, until paid in
full, the Class A Noteholders' Principal Distribution Amount;
(f) to Class A-2 Noteholders, until paid in
full, the Class A Noteholders' Principal Distribution Amount;
(g) to Class A-3 Noteholders, until paid in
full, the Class A Noteholders' Principal Distribution Amount;
(h) to Class A-4 Noteholders, until paid in
full, the Class A Noteholders' Principal Distribution Amount;
(i) to Class B Noteholders, until paid in full,
the Class B Noteholders' Principal Distribution Amount;
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(j) to the Reserve Account, the amount, if any,
necessary to reinstate the balance of the Reserve Account to the
Specified Reserve Account Balance;
(k) to the Servicer, the aggregate amount of any
unpaid Carryover Servicing Fees; and
(l) to the Excess Distribution
Certificateholder, any remaining amounts after application of the
preceding clauses.
Notwithstanding the foregoing:
(x) If (i) on any Distribution Date following
distributions under clauses (a) through (i) above to be made on such
Distribution Date, without giving effect, if applicable, to payments from the
Capitalized Interest Account to the Class B Notes, the Outstanding Amount of the
Class A Notes would be in EXCESS OF (A) the sum of (1) the outstanding principal
balance of the Trust Student Loans, (2) any accrued but unpaid interest on the
Trust Student Loans as of the last day of the related Collection Period and (3)
the balance of the Reserve Account on such Distribution Date following such
distributions, OVER (B) the Specified Reserve Account Balance for that
Distribution Date, or (ii) an Event of Default affecting the Class A Notes has
occurred and is continuing, then, until the conditions described in (i) or (ii)
no longer exist, amounts on deposit in the Collection Account and the Reserve
Account shall be applied on such Distribution Date to the payment of the Class A
Noteholders' Distribution Amount before any amounts are applied to the payment
of the Class B Noteholders' Distribution Amount; and
(y) In the event the Trust Student Loans are not sold
pursuant to Section 6.1(A) or Section 4.4 of the Indenture, the amount that
would otherwise be paid to the Excess Distribution Certificateholder shall be
applied on such Distribution Date to pay as an accelerated payment of principal
on the Notes, first to the Class A Noteholders in the same order and priority as
is set forth in clauses 2.8(e) through (h) until the principal amount of the
Class A Notes is paid in full and reduced to zero, and then to the Class B
Noteholders as set forth in clause 2.8(i) above; provided that the amount of
such distribution shall not exceed the Outstanding Amount of the Class A Notes
or the Class B Notes, as applicable, after giving effect to all other payments
in respect of principal of Class A Notes and Class B Notes to be made on such
Distribution Date.
Section 2.9 Reserve Account. On the Closing Date, the Issuer
shall deposit the Reserve Account Initial Deposit into the Reserve Account.
(a) In the event that the Primary Servicing Fee
for any Monthly Servicing Payment Date or Distribution Date exceeds the amount
distributed to the Servicer pursuant to Section 2.7(b) above and clause 2.8(a)
above on such Monthly Servicing Payment Date or Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing to withdraw from
the Reserve Account on such Monthly Servicing Payment Date or Distribution Date
an amount equal to such excess, to the extent of funds available therein, and to
distribute such amount to the Servicer; provided, however, that, except as
provided in Section 2.9(f) below,
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amounts on deposit in the Reserve Account will not be available to cover any
unpaid Carryover Servicing Fees to the Servicer.
(b) In the event that the Available Funds are
insufficient to make the payments described under clauses 2.8(a) through 2.8(d)
above on any Distribution Date, the Administrator shall instruct the Indenture
Trustee in writing to withdraw from the Reserve Account on each Distribution
Date an amount equal to such excess, to the extent of funds available therein
after giving effect to Section 2.9(a) above, and to distribute such amounts in
the same order and priority as is set forth in clauses 2.8(a) through 2.8(d)
above.
(c) In the event that the Class A Noteholders'
Principal Distribution Amount on the Note Final Maturity Date with respect to
any Class of Class A Notes exceeds the amount distributed to such Class A
Noteholders pursuant to clauses 2.8(e), 2.8(f), 2.8(g) or 2.8(h) above on such
date, the Administrator shall instruct the Indenture Trustee in writing to
withdraw from the Reserve Account on such Note Final Maturity Date an amount
equal to such excess, to the extent of funds available therein after giving
effect to Sections 2.9 (a) and (b) above, and to distribute such amount to the
Class A Noteholders entitled thereto, in the same order and priority as is set
forth in clauses 2.8(e) through 2.8(h) above.
(d) In the event that the Class B Noteholders'
Principal Distribution Amount on the Class B Maturity Date exceeds the amount
distributed to the Class B Noteholders pursuant to clause 2.8(i) on such date,
the Administrator shall instruct the Indenture Trustee in writing to withdraw
from the Reserve Account on the Class B Maturity Date an amount equal to such
excess, to the extent of funds available therein after giving effect to
paragraphs (a) through (c) above, and to distribute such amount to the Class B
Noteholders entitled thereto.
(e) After giving effect to Sections 2.9(a)
through (d) above, if the amount on deposit in the Reserve Account on any
Distribution Date (after giving effect to all deposits or withdrawals therefrom
on such Distribution Date other than pursuant to this Section 2.9(e) is greater
than the Specified Reserve Account Balance for such Distribution Date, the
Administrator shall instruct the Indenture Trustee in writing to withdraw the
amount on deposit in excess of the Specified Reserve Account Balance and deposit
such amount into the Collection Account.
(f) On the final Distribution Date upon
termination of the Trust and following the payment in full of the Outstanding
Amount of the Notes and of all other amounts (other than Carryover Servicing
Fees) owing or to be distributed hereunder or under the Indenture to
Noteholders, the Servicer or the Administrator, to the extent that Available
Funds on such date are insufficient to make the following payments, amounts
remaining in the Reserve Account shall be used to pay any Carryover Servicing
Fees. Any amount remaining on deposit in the Reserve Account after such payments
have been made shall be distributed to the Excess Distribution
Certificateholder. The Excess Distribution Certificateholder shall in no event
be required to refund any amounts properly distributed pursuant to this Section
2.9(f).
(g) Anything in this Section 2.9 to the contrary
notwithstanding, if the market value of securities and cash in the Reserve
Account is on any Distribution Date sufficient to pay the remaining principal
amount of and interest accrued on the Notes, and to pay any
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unpaid Carryover Servicing Fee, such amount will be so applied on such
Distribution Date and the Administrator shall instruct the Eligible Lender
Trustee and the Indenture Trustee to make such payments.
Section 2.10 Capitalized Interest Account. On the Closing Date,
the Issuer shall deposit the Capitalized Interest Account Initial Deposit, if
any, into the Capitalized Interest Account. The parties entering into this
Supplement acknowledge that there shall be no Capitalized Interest Account
established in connection with SLM Student Loan Trust 2003-8.
(a) to the extent funds are deposited into the
Capitalized Interest Account on the Closing Date, such funds shall be used,
through the Capitalized Interest Account Final Distribution Date in the event
that the Class A Noteholders' Interest Distribution Amount and the Class B
Noteholders' Interest Distribution Amount exceeds the amounts distributed to the
related Noteholders pursuant to the priority of interest distributions set forth
in Section 2.8 above on such Distribution Date. If applicable, the Administrator
shall instruct the Indenture Trustee in writing to withdraw from the Capitalized
Interest Account an amount equal to such excess, to the extent of funds
available therein, and to distribute such amount first to the Class A
Noteholders until they have received the Class A Noteholders' Interest
Distribution Amount for that Distribution Date and then to the Class B
Noteholders until they have received the Class B Noteholders' Interest
Distribution Amount for that Distribution Date.
(b) After giving effect to Section 2.10(a) above on the
Capitalized Interest Account Final Distribution Date, the Administrator shall
instruct the Indenture Trustee in writing to withdraw any amounts remaining from
the Capitalized Interest Account and to distribute such amount to the holder of
the Excess Distribution Certificate.
Section 2.11 Statements to Excess Distribution Certificateholders
and Noteholders. On each Determination Date preceding a Distribution Date, the
Administrator shall provide to the Indenture Trustee and the Eligible Lender
Trustee (with a copy to the Rating Agencies) for the Indenture Trustee to
forward on such succeeding Distribution Date to each Noteholder of record and
for the Eligible Lender Trustee to forward on such succeeding Distribution Date
to each Excess Distribution Certificateholder of record a statement, setting
forth at least the following information as to the Notes and the Excess
Distribution Certificate to the extent applicable:
(a) the amount of such distribution allocable to
principal of each class of the Notes;
(b) the amount of the distribution allocable to interest
on each class of the Notes;
(c) the amount of the distribution allocable to the
Excess Distribution Certificate, if any;
(d) [Reserved];
(e) the Pool Balance as of the close of business on the
last day of the preceding Collection Period;
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(f) the aggregate outstanding principal balance of the
Notes, the Note Pool Factor, and as of such Distribution Date, after giving
effect to payments allocated to principal reported under clauses (a) and (c)
above;
(g) the Note Rate for the next period for any class of
Notes;
(h) the amount of the Servicing Fee and any Carryover
Servicing Fee paid to the Servicer on such Distribution Date and on the two
preceding Monthly Servicing Payment Dates, and the amount, if any, of the
Carryover Servicing Fee remaining unpaid after giving effect to any such
payments;
(i) the amount of the Administration Fee paid to the
Administrator on such Distribution Date;
(j) [Reserved];
(k) the amount of the aggregate Realized Losses, if any,
for the related Collection Period and the balance of Trust Student Loans that
are delinquent in each delinquency period as of the end of such Collection
Period;
(l) the amount of any Note Interest Shortfall, if any, in
each case as applicable to each class of Notes, and the change in such amounts
from the preceding statement;
(m) the aggregate Purchase Amounts for Trust Student
Loans, if any, that were repurchased by the Depositor or purchased by the
Servicer from the Issuer in such Collection Period; and
(n) the respective balance of the Reserve Account and the
Capitalized Interest Account, if any, on such Distribution Date, after giving
effect to changes therein on such Distribution Date.
Each amount set forth pursuant to clauses (a), (b), (c), (f), (h), (i)
and (l) above shall be expressed as a dollar amount per $1,000 of original
principal balance of a Note denominated in U.S. Dollars, or if a class of Notes
is then denominated in a currency other than U.S. Dollars, expressed as an
amount in the applicable currency per the applicable currency equivalent
(approximately) of $1,000 of the original principal balance of that Note. A copy
of the statements referred to above may be obtained by any Excess Distribution
Certificateholder or Note Owner by a written request to the Eligible Lender
Trustee or the Indenture Trustee, respectively, addressed to the respective
Corporate Trust Office.
Section 2.12 Non-Ministerial Matters. With respect to matters that
in the reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Eligible
Lender Trustee of the proposed action and the Eligible Lender Trustee shall not
have withheld consent or provided an alternative direction. For the purpose of
the preceding sentence, "non-ministerial matters" shall include:
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(a) the amendment of or any supplement to the Indenture;
(b) the initiation of any claim or lawsuit by the Issuer
and the compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the Trust Student
Loans);
(c) the amendment, change or modification of the Basic
Documents;
(d) the appointment of successor Note Registrars,
successor Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of Successor Administrators or Successor Servicers,
or the consent to the assignment by the Note Registrar, Paying Agent or
Indenture Trustee of its obligations under the Indenture; and
(e) the removal of the Indenture Trustee.
Section 2.13 Exceptions. Notwithstanding anything to the contrary
in this Supplement, except as expressly provided herein or in the other Basic
Documents, the Administrator shall not be obligated to, and shall not, (a) make
any payments to the Noteholders under the Basic Documents, (b) sell the
Indenture Trust Estate pursuant to Section 5.04 of the Indenture, (c) take any
other action that the Issuer directs the Administrator not to take on its
behalf, (d) in connection with its duties hereunder assume any indemnification
obligation of any other Person or (e) service the Trust Student Loans.
Section 2.14 Compensation. As compensation for the performance of
the Administrator's obligations under this Supplement and as reimbursement for
its expenses related thereto, the Administrator shall be entitled to $20,000 for
each Collection Period payable on the related Distribution Date (the
"Administration Fees") payable in arrears which shall be solely an obligation of
the Issuer. Section 2.15 Servicer and Administrator Expenses. Each of the
Servicer and the Administrator shall be severally required to pay all expenses
incurred by it in connection with its activities hereunder, including fees and
disbursements of independent accountants, taxes imposed on the Servicer or the
Administrator, as the case may be, and expenses incurred in connection with
distributions and reports to the Administrator or to the Certificateholders and
the Noteholders, as the case may be.
ARTICLE III
Section 3.1 Administrator's Certificate; Servicer's Report.
(a) On or before the tenth day of each month (or, if any
such day is not a Business Day, on the next succeeding Business Day), the
Servicer shall deliver to the Administrator a Servicer's Report with respect to
the preceding month containing all information necessary for the Administrator
to receive in connection with the preparation of the Administrator's Officers'
Certificate and the Administrator's Certificate covering such calendar month
referred to in Section 3.1(b) below. On or before the tenth day (or, if any such
day is not
14
a Business Day, on the next succeeding Business Day), preceding each
Distribution Date the Servicer shall deliver to the Administrator a Servicer's
Report with respect to the preceding Collection Period containing all
information necessary for the Administrator to receive in connection with the
preparation of the Administrator's Officers' Certificate and the Administrator's
Certificate covering such calendar month referred to in Section 3.1(c) below.
(b) On the second Business Day prior to each Monthly
Servicing Payment Date that is not a Distribution Date, the Administrator shall
deliver to the Eligible Lender Trustee and the Indenture Trustee, an Officer's
Certificate of the Administrator containing all information necessary to pay the
Servicer the Primary Servicing Fee due on such Monthly Servicing Payment Date
pursuant to Section 2.7(b) above.
(c) On each Determination Date prior to a Distribution
Date, the Administrator shall deliver to the Eligible Lender Trustee and the
Indenture Trustee, with a copy to the Rating Agencies, an Administrator's
Certificate containing all information necessary to make the distributions
pursuant to Sections 2.7 and 2.8 above, if applicable, for the Collection Period
preceding the date of such Administrator's Certificate.
(d) Prior to each Determination Date, the Administrator
shall determine the Note Rates and that will be applicable to the Distribution
Date following such Determination Date, in compliance with its obligation to
prepare and deliver an Administrator's Certificate on such Determination Date
pursuant to this Section 3.1. In connection therewith, the Administrator shall
calculate LIBOR applicable for the first Accrual Period and for each subsequent
Accrual Period shall calculate, on each Interest Rate Determination Date during
such Accrual Period, Three-Month LIBOR, and, if applicable to any Class of
Notes: One-Month LIBOR, Two-Month LIBOR, Three-Month LIBOR, EURIBOR, the
Commercial Paper Rate, the CMT Rate, the Federal Funds Rate, the 91-day Treasury
▇▇▇▇ Rate and the Prime Rate (in each case only if applicable to a class Notes
during such Accrual Period), in accordance with the definitions of each such
Index, and, as applicable, the Administrator shall also determine the ARS
Student Loan Rate with respect to each Distribution Date.
(e) The Administrator hereby accepts the delegation to it
of the obligations of the "Calculation Agent" under the Interest Rate Cap
Agreement to which the Issuer is a party, as applicable.
(f) The Administrator shall furnish to the Issuer from
time to time such information regarding the Collateral as the Issuer shall
reasonably request.
Section 3.2 Annual Statement as to Compliance; Notice of Default;
Financial Statements.
(a) Each of the Servicer and the Administrator
shall deliver to the Eligible Lender Trustee and the Indenture Trustee
on or before 120 days after the end of the fiscal year of the Servicer
and the Administrator, an Officer's Certificate of the Servicer or the
Administrator, as the case may be, dated as of December 31 of the
preceding year, stating that (i) a review of the activities of the
Servicer or the Administrator, as the case may be, during the preceding
12-month period (or, in the case of the first such certificate,
15
during the period from the Closing Date to December 31, 2003) and of
its performance under this Supplement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge,
based on such review, the Servicer or the Administrator, as the case
may be, has fulfilled its obligations in all material respects under
this Supplement and, with respect to the Servicer, the Servicing
Agreement throughout such year or, if there has been a material default
in the fulfillment of any such obligation, specifying each such
material default known to such officers and the nature and status
thereof. The Indenture Trustee shall send a copy of each such Officers'
Certificate and each report referred to in Section 3.1 to the Rating
Agencies. A copy of each such Officers' Certificate and each report
referred to in Section 3.1 may be obtained by any Excess Distribution
Certificateholder, Noteholder or Note Owner by a request in writing to
the Eligible Lender Trustee addressed to its Corporate Trust Office,
together with evidence satisfactory to the Eligible Lender Trustee that
such Person is one of the foregoing parties. Upon the telephone request
of the Eligible Lender Trustee, the Indenture Trustee will promptly
furnish the Eligible Lender Trustee a list of Noteholders as of the
date specified by the Eligible Lender Trustee.
(b) The Servicer shall deliver to the Eligible
Lender Trustee, the Indenture Trustee and the Rating Agencies, promptly
after having obtained knowledge thereof, but in no event later than
five Business Days thereafter, written notice in an Officers'
Certificate of the Servicer of any event which with the giving of
notice or lapse of time, or both, would become a Servicer Default under
Section 5.01 of the Servicing Agreement.
(c) The Administrator shall deliver to the
Eligible Lender Trustee, the Indenture Trustee and the Rating Agencies,
promptly after having obtained knowledge thereof, but in no event later
than five Business Days thereafter, written notice in an Officers'
Certificate of the Administrator of any event which with the giving of
notice or lapse of time, or both, would become an Administrator Default
under Sections 5.1(a) or (b) below or would cause ▇▇▇▇▇▇ Mae to fail to
meet the requirement of clause (a) of Section 2.4 above.
(d) The Administrator shall provide to the
Eligible Lender Trustee, the Indenture Trustee and the Rating Agencies
(i) as soon as possible and in no event more than 120 days after the
end of each fiscal year of the Administrator audited financials as at
the end of and for such year and (ii) as soon as possible and in no
event more than 45 days after the end of each quarterly accounting
period of the Administrator unaudited financials as at the end of and
for such period.
Section 3.3 Annual Independent Certified Public Accountants'
Report. Each of the Servicer and the Administrator shall cause a firm of
independent certified public accountants, which may also render other services
to the Servicer or the Administrator, as the case may be, to deliver to the
Eligible Lender Trustee, the Indenture Trustee and the Rating Agencies on or
before March 31 of each year, a report addressed to the Servicer or the
Administrator, as the case may be, the Eligible Lender Trustee and the Indenture
Trustee, to the effect that such firm has examined certain documents and records
relating to the servicing of the Trust Student Loans, or the administration of
the Trust Student Loans and of the Trust, as the case may be, during the
16
preceding calendar year (or, in the case of the first such report, during the
period from the Closing Date to December 31, 2003) and that, on the basis of the
accounting and auditing procedures considered appropriate under the
circumstances, such firm is of the opinion that such servicing or
administration, respectively, was conducted in compliance with those terms of
this Supplement and in the case of the Servicer, the Servicing Agreement,
including any applicable statutory provisions incorporated therein and such
additional terms and statutes as may be specified from time to time by the
Administrator, except for (a) such exceptions as such firm shall believe to be
immaterial and (b) such other exceptions as shall be set forth in such report.
Such report will also indicate that the firm is independent of the
Servicer or the Administrator, as the case may be, within the meaning of the
Code of Professional Ethics of the American Institute of Certified Public
Accountants.
ARTICLE IV
Section 4.1 Representations of Administrator. ▇▇▇▇▇▇ ▇▇▇, as
Administrator, makes the following representations on which the Issuer is deemed
to have relied in acquiring the Trust Student Loans. The representations speak
as of the execution and delivery of this Supplement and as of the Closing Date
and shall survive the sale of the Trust Student Loans to the Eligible Lender
Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Organization and Good Standing. The
Administrator is duly organized and validly existing under the laws of the
United States of America, with the power and authority to own its properties and
to conduct its business as such properties are currently owned and such business
is presently conducted.
(b) Power and Authority. The Administrator has
the corporate power and authority to execute and deliver this Supplement and to
carry out its terms, and the execution, delivery and performance of this
Supplement have been duly authorized by the Administrator by all necessary
corporate action.
(c) Binding Obligation. This Supplement has been
duly authorized, executed and delivered by the Administrator and, assuming that
it is duly executed and delivered by parties hereto, constitutes a valid and
binding agreement of the Administrator, enforceable against the Administrator in
accordance with its terms; except that the enforceability hereof may be subject
to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and (b)
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity) and (c) with respect to rights
to indemnity hereunder, limitations of public policy under applicable securities
laws.
(d) No Violation. The consummation of the
transactions contemplated by this Supplement and the fulfillment of the terms
hereof or thereof do not conflict with, result in any breach of any of the terms
and provisions of, nor constitute (with or without notice or lapse of time or
both) a default under, the charter or By-laws of the Administrator, or any
indenture, agreement or other instrument to which the Administrator is a party
or by which it
17
shall be bound; nor result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or,
to the knowledge of the Administrator, any order, rule or regulation applicable
to the Administrator of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Administrator or its properties.
(e) No Proceedings. (i) Other than as set forth
in SLM Corporation's most recently filed Form 10-K or Form 10-Q or comparable
public disclosure documents, there are no legal or governmental proceedings
pending to which the Administrator or any of its subsidiaries is a party or of
which any property of the Administrator or any of its subsidiaries is the
subject which, if determined adversely to the Issuer or the Administrator or any
of its subsidiaries, would individually or in the aggregate have a material
adverse effect on the consummation of the transactions contemplated hereby or
the ability of the Administrator to perform all of its obligations with respect
to the Trust; and, to the best of the Administrator's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(ii) There are no proceedings or investigations
pending against the Administrator or, to its best knowledge, threatened against
the Administrator, before any court, regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Administrator or
its properties: (A) asserting the invalidity of this Supplement or any of the
other Basic Documents, the Notes or the Excess Distribution Certificate, (B)
seeking to prevent the issuance of the Notes or the Excess Distribution
Certificate or the consummation of any of the transactions contemplated by this
Supplement or any of the other Basic Documents, or (C) seeking to affect
adversely the Federal or state income tax attributes of the Issuer, the Notes or
the Excess Distribution Certificate.
(f) All Consents. All authorizations, consents,
orders or approvals of or registrations or declarations with any court,
regulatory body, administrative agency or other government instrumentality
required to be obtained, effected or given by the Administrator in connection
with the execution and delivery by the Administrator of this Supplement and the
performance by the Administrator of the transactions contemplated by this
Supplement have been duly obtained, effected or given and are in full force and
effect.
Section 4.2 Liability of Administrator: Indemnities.
(a) The Administrator shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the
Administrator under this Supplement.
(b) The Administrator shall indemnify, defend and hold
harmless the Issuer, the Excess Distribution Certificateholder and the
Noteholders and any of the officers, directors, employees and agents of the
Issuer from and against any and all costs, expenses, losses, claims, damages and
liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, or was imposed upon any such Person through, the gross
negligence, willful misfeasance or bad faith of the Administrator in the
performance of its duties under this Supplement or by reason of reckless
disregard of its obligations and duties hereunder or thereunder.
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(c) The Administrator shall indemnify the Indenture
Trustee in its individual capacity and any of its officers, directors, employees
and agents against any and all loss, liability or expense (including attorneys'
fees) incurred by it in connection with the performance of its duties under the
Indenture and the other Basic Documents. The Indenture Trustee shall notify the
Issuer and the Administrator promptly of any claim for which it, may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder and under the other Basic Documents. The Administrator
shall defend the claim and the Administrator shall not be liable for the legal
fees and expenses of the Indenture Trustee after it has assumed such defense;
provided, however, that, in the event that there may be a conflict between the
positions of the Indenture Trustee and the Administrator in conducting the
defense of such claim, the Indenture Trustee shall be entitled to separate
counsel the fees and expenses of which shall be paid by the Administrator on
behalf of the Issuer. Neither the Issuer nor the Administrator need to reimburse
any expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
(d) The Administrator shall indemnify the Eligible Lender
Trustee (including in its capacity as Interim Eligible Lender Trustee) in its
individual capacity and any of its officers, directors, employees and agents
against any and all loss, liability, claims, damages, costs, penalties, taxes
(excluding taxes payable by it on any compensation received by it for its
services as trustee) or expense (including attorneys' fees) incurred by it in
connection with the performance of its duties under the Interim Trust Agreement,
the Trust Agreement and the other Basic Documents.
(e) Without limiting the generality of the foregoing, the
Administrator shall indemnify the Eligible Lender Trustee in its individual
capacity and any of its officers, directors, employees and agents against any
and all liability relating to or resulting from any of the following:
(i) any claim that the Trust Student Loans (or
any guarantee with respect thereto) are delinquent, uncollectable, uninsured,
illegal, invalid or unenforceable;
(ii) any claim that the Trust Student Loans have
not been made, administered, serviced or collected in accordance with applicable
federal and state laws or the requirements of any Guarantor;
(iii) any claim that any original note or other
document evidencing or relating to the Trust Student Loans has been lost,
misplaced or destroyed; or
(iv) any claim for failure to comply with the
provisions of 34 CFR Sec. 682.203(b) (other than for the Eligible Lender
Trustee's failure to qualify as an eligible lender under the Act).
(f) The Eligible Lender Trustee shall notify the
Administrator promptly of any claim for which it may seek indemnity. Failure by
the Eligible Lender Trustee to so notify the Administrator shall not relieve the
Administrator of its obligations hereunder and under the other Basic Documents.
The Administrator shall defend the claim and the Administrator shall
19
not be liable for the legal fees and expenses of the Eligible Lender Trustee
after it has assumed such defense; provided, however, that, in the event that
there may be a conflict between the positions of the Eligible Lender Trustee and
the Administrator in conducting the defense of such claim, the Eligible Lender
Trustee shall be entitled to separate counsel the fees and expenses of which
shall be paid by the Administrator on behalf of the Issuer. Neither the Issuer
nor the Administrator need reimburse any expense or indemnify against any loss,
liability or expense incurred by the Eligible Lender Trustee through the
Eligible Lender Trustee's own willful misconduct, negligence or bad faith.
(g) The Depositor shall pay reasonable compensation to
the Indenture Trustee and the Eligible Lender Trustee and shall reimburse the
Indenture Trustee and the Eligible Lender Trustee for all reasonable expenses,
disbursements and advances.
(h) For purposes of this Section 4.2, in the event of the
termination of the rights and obligations of the Administrator (or any successor
thereto pursuant to Section 4.3 below) as Administrator pursuant to Section 5.1
below, or a resignation by such Administrator pursuant to this Supplement, such
Administrator shall be deemed to be the Administrator pending appointment of a
successor Administrator pursuant to Section 5.2 below.
(i) Indemnification under this Section 4.2 shall survive
the resignation or removal of the Eligible Lender Trustee or the Indenture
Trustee or the termination of this Supplement and shall include reasonable fees
and expenses of counsel and expenses of litigation. If the Administrator shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter collects any of such amounts
from others, such Person shall promptly repay such amounts to the Administrator,
without interest.
Section 4.3 Merger or Consolidation of, or Assumption of the
Obligations of, Administrator. Any Person (a) into which the Administrator may
be merged or consolidated, (b) which may result from any merger or consolidation
to which the Administrator shall be a party or (c) which may succeed to the
properties and assets of the Administrator substantially as a whole, shall be
the successor to the Administrator without the execution or filing of any
document or any further act by any of the parties to this Supplement; provided,
however, that the Administrator hereby covenants that it will not consummate any
of the foregoing transactions except upon satisfaction of the following: (i) the
surviving Administrator, if other than ▇▇▇▇▇▇ ▇▇▇, executes an agreement of
assumption to perform every obligation of the Administrator under this
Supplement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 4.1 shall have been breached
and no Administrator Default, and no event that, after notice or lapse of time,
or both, would become an Administrator Default shall have occurred and be
continuing, (iii) the surviving Administrator, if other than ▇▇▇▇▇▇ Mae, shall
have delivered to the Eligible Lender Trustee and the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 4.3 and that all conditions precedent, if any, provided for in this
Supplement relating to such transaction have been complied with, and that the
Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) unless ▇▇▇▇▇▇ ▇▇▇ is the surviving entity, such transaction
will not result in a material adverse Federal or state tax consequence to the
Issuer, the Noteholders or the
20
Certificateholders and (v) unless ▇▇▇▇▇▇ Mae is the surviving entity, the
Administrator shall have delivered to the Eligible Lender Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the opinion
of such counsel, all financing statements and continuation statements and
amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Eligible Lender Trustee and Indenture
Trustee, respectively, in the Trust Student Loans and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests. Anything in
this Section 4.3 to the contrary notwithstanding, the Administrator may at any
time assign its rights, obligations and duties under this Supplement to an
Affiliate provided that the Rating Agencies confirm that such assignment will
not result in a downgrading or a withdrawal of the ratings then applicable to
the Notes.
Section 4.4 Limitation on Liability of Seller, Administrator and
Others.
(a) Neither the Administrator nor any of its directors,
officers, employees or agents shall be under any liability to the Issuer, the
Noteholders or the Certificateholders, or to the Indenture Trustee or the
Eligible Lender Trustee except as provided under this Supplement for any action
taken or for refraining from the taking of any action pursuant to this
Supplement or for errors in judgment; provided, however, that these provisions
shall not protect the Administrator or any such person against any liability
that would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Supplement. The Administrator and any of its
directors, officers, employees or agents may rely in good faith on the advice of
counsel or on any document of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
(b) Except as provided in this Supplement, the
Administrator shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its duties to administer
the Trust Student Loans and the Trust in accordance with this Supplement and
that in its opinion may involve it in any expense or liability; provided,
however, that the Administrator may undertake any reasonable action that it may
deem necessary or desirable in respect of this Supplement and the other Basic
Documents and the rights and duties of the parties to this Supplement and the
other Basic Documents and the interests of the Certificateholders under this
Supplement and the Noteholders under the Indenture and under this Supplement.
Section 4.5 Administrator May Own Certificates or Notes. The
Administrator and any Affiliate thereof may in its individual or any other
capacity become the owner or pledgee of Certificates or Notes with the same
rights as it would have if it were not the Administrator or an Affiliate
thereof, except as expressly provided herein in any other Basic Document.
Section 4.6 ▇▇▇▇▇▇ ▇▇▇, Inc Not to Resign as Administrator.
Subject to the provisions of Section 4.3 above, ▇▇▇▇▇▇ Mae shall not resign from
the obligations and duties imposed on it as Administrator under this Supplement
except upon determination that the performance of its duties under this
Supplement shall no longer be permissible under applicable law or shall violate
any final order of a court or administrative agency with jurisdiction over
▇▇▇▇▇▇ ▇▇▇ or its properties. Notice of any such determination permitting or
requiring the resignation of ▇▇▇▇▇▇
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Mae, Inc. shall be communicated to the Eligible Lender Trustee and the Indenture
Trustee at the earliest practicable time (and, if such communication is not in
writing, shall be confirmed in writing at the earliest practicable time) and any
such determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently
with or promptly after such notice. No such resignation shall become effective
until the Indenture Trustee or a successor Administrator shall have assumed the
responsibilities and obligations of ▇▇▇▇▇▇ ▇▇▇ in accordance with Section 5.2
below. Anything in this Section 4.6 to the contrary notwithstanding, the
Administrator may resign at any time subsequent to the assignment of its duties
and obligations hereunder pursuant to Section 4.3 above.
ARTICLE V
Section 5.1 Administrator Default. If any one of the following
events (an "Administrator Default") shall occur and be continuing:
(a) (i) in the event that daily deposits into
the Collection Account are not required, any failure by the Administrator to
deliver to the Indenture Trustee for deposit in the Trust Accounts any Available
Funds required to be paid on or before the Business Day immediately preceding
any Monthly Servicing Payment Date or Distribution Date, as applicable, or (ii)
any failure by the Administrator to direct the Indenture Trustee to make any
required distributions from either of the Trust Accounts, which failure in case
of either clause (i) or (ii) continues unremedied for five Business Days after
written notice of such failure is received by the Administrator from the
Indenture Trustee or the Eligible Lender Trustee or after discovery of such
failure by an officer of the Administrator; or
(b) any failure by the Administrator duly to
observe or to perform in any material respect any other term, covenant or
agreement of the Administrator set forth in this Supplement or any other Basic
Document, which failure shall (i) materially and adversely affect the rights of
Noteholders or Certificateholders and (ii) continue unremedied for a period of
60 days after the date on which written notice of such failure, requiring the
same to be remedied, shall have been given (A) to the Administrator by the
Indenture Trustee or the Eligible Lender Trustee or (B) to the Administrator,
the Indenture Trustee and the Eligible Lender Trustee by the Noteholders or
Certificateholders, as applicable, representing not less than 50% of the
Outstanding Amount of the Notes or 50% of the outstanding Certificates
(including any Certificates owned by the Depositor); or
(c) an Insolvency Event occurs with respect to
the Administrator;
then, and in each and every case, so long as the Administrator Default shall not
have been remedied, either the Indenture Trustee or the Noteholders evidencing
not less than 50% of the Outstanding Amount of the Notes, by notice then given
in writing to the Administrator (and to the Indenture Trustee and the Eligible
Lender Trustee if given by the Noteholders) may terminate all the rights and
obligations (other than the obligations set forth in Section 4.2 above) of the
Administrator under this Supplement. On or after the receipt by the
Administrator of such
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written notice, all authority and power of the Administrator under this
Supplement, whether with respect to the Notes, the Certificates, the Trust
Student Loans or otherwise, shall, without further action, pass to and be vested
in the Indenture Trustee or such successor Administrator as may be appointed
under Section 5.2 below; and, without limitation, the Indenture Trustee and the
Eligible Lender Trustee are hereby authorized and empowered to execute and
deliver, for the benefit of the predecessor Administrator, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination. The predecessor Administrator shall
cooperate with the successor Administrator, the Indenture Trustee and the
Eligible Lender Trustee in effecting the termination of the responsibilities and
rights of the predecessor Administrator under this Supplement. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
amending this Supplement to reflect such succession as Administrator pursuant to
this Section shall be paid by the predecessor Administrator (other than the
Indenture Trustee acting as the Administrator under this Section 5.1) upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of an Administrator Default, the Eligible
Lender Trustee shall give notice thereof to the Rating Agencies.
Section 5.2 Appointment of Successor.
(a) Upon receipt by the Administrator of notice of
termination pursuant to Section 5.1 above, or the resignation by the
Administrator in accordance with the terms of this Supplement, the predecessor
Administrator shall continue to perform its functions as Administrator under
this Supplement in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation, until
the later of (i) the date 120 days from the delivery to the Eligible Lender
Trustee and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of this
Supplement and (ii) the date upon which the predecessor Administrator shall
become unable to act as Administrator as specified in the notice of resignation
and accompanying Opinion of Counsel (the "Transfer Date"). In the event of the
termination hereunder of the Administrator the Issuer shall appoint a successor
Administrator acceptable to the Indenture Trustee, and the successor
Administrator shall accept its appointment by a written assumption in form
acceptable to the Indenture Trustee. In the event that a successor Administrator
has not been appointed at the time when the predecessor Administrator has ceased
to act as Administrator in accordance with this Section, the Indenture Trustee
without further action shall automatically be appointed the successor
Administrator and the Indenture Trustee shall be entitled to the Administration
Fee. Notwithstanding the above, the Indenture Trustee shall, if it shall be
unwilling or legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution whose regular business shall
include the servicing of student loans, as the successor to the Administrator
under this Supplement.
(b) Upon appointment, the successor Administrator
(including the Indenture Trustee acting as successor Administrator), shall be
the successor in all respects to the predecessor Administrator and shall be
subject to all the responsibilities, duties and liabilities placed on the
predecessor Administrator that arise thereafter or are related thereto and shall
be entitled to an amount agreed to by such successor Administrator (which shall
not exceed the
23
Administration Fee unless such compensation arrangements will not result in a
downgrading or withdrawal of any rating on the Notes or the Certificates by any
Rating Agency) and all the rights granted to the predecessor Administrator by
the terms and provisions of this Supplement.
(c) The Administrator may not resign unless it is
prohibited from serving as such by law as evidenced by an Opinion of Counsel to
such effect delivered to the Indenture Trustee and the Eligible Lender Trustee.
Notwithstanding the foregoing or anything to the contrary herein or in the other
Basic Documents, the Indenture Trustee, to the extent it is acting as successor
Administrator pursuant hereto and thereto, shall be entitled to resign to the
extent a qualified successor Administrator has been appointed and has assumed
all the obligations of the Administrator in accordance with the terms of this
Supplement and the other Basic Documents.
Section 5.3 Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, the Administrator
pursuant to this Article V, the Eligible Lender Trustee shall give prompt
written notice thereof to Certificateholders and the Indenture Trustee shall
give prompt written notice thereof to Noteholders and the Rating Agencies
(which, in the case of any such appointment of a successor, shall consist of
prior written notice thereof to the Rating Agencies).
Section 5.4 Waiver of Past Defaults. The Noteholders of Notes
evidencing a majority of the Outstanding Amount of the Notes (or the
Certificateholders of Certificates evidencing a majority of the outstanding
Certificates, in the case of any default which does not adversely affect the
Indenture Trustee or the Noteholders) may, on behalf of all Noteholders and
Certificateholders, waive in writing any default by the Administrator in the
performance of its obligations hereunder and any consequences thereof, except a
default in making any required deposits to or payments from any of the Trust
Accounts (or giving instructions regarding the same) in accordance with this
Supplement. Upon any such waiver of a past default, such default shall cease to
exist, and any Administrator Default arising therefrom shall be deemed to have
been remedied for every purpose of this Supplement. No such waiver shall extend
to any subsequent or other default or impair any right consequent thereto.
ARTICLE VI
Section 6.1 Termination.
(a) Optional Purchase of All Trust Student
Loans. The Administrator shall notify the Servicer, the Depositor, the Issuer
and the Indenture Trustee in writing, within 15 days after the last day of any
Collection Period as of which the then outstanding Pool Balance is 12% or less
of the Initial Pool Balance, of the percentage that the then outstanding Pool
Balance bears to the Initial Pool Balance. As of the last day of any Collection
Period immediately preceding a Distribution Date as of which the then
outstanding Pool Balance is 10% or less of the Initial Pool Balance, the
Eligible Lender Trustee on behalf and at the direction of the Servicer, or any
other "eligible lender" (within the meaning of the Higher Education Act)
designated by the Servicer in writing to the Eligible Lender Trustee and the
Indenture Trustee, shall have the option to purchase the Trust Estate, other
than the Trust Accounts. To exercise such option, the Servicer shall deposit,
pursuant to Section 2.6 above, in the Collection Account an amount equal to the
aggregate Purchase Amount for the Trust Student Loans and the related
24
rights with respect thereto, plus the appraised value of any such other property
held by the Trust other than the Trust Accounts, such value to be determined by
an appraiser mutually agreed upon by the Servicer, the Eligible Lender Trustee
and the Indenture Trustee, and shall succeed to all interests in and to the
Trust; provided, however, that the Servicer may not effect such purchase if such
aggregate Purchase Amounts do not equal or exceed the Minimum Purchase Amount
plus any Carryover Servicing Fees. In the event the Servicer fails to notify the
Eligible Lender Trustee and the Indenture Trustee in writing prior to the
acceptance by the Indenture Trustee of a bid to purchase the Trust Estate
pursuant to Section 4.4 of the Indenture that the Servicer intends to exercise
its option to purchase the Trust Estate, the Servicer shall be deemed to have
waived its option to purchase the Trust Estate as long as the Servicer has
received five business days' notice from the Indenture Trustee as provided in
Section 4.4 of the Indenture.
(b) Notice. Notice of any termination of the
Trust shall be given by the Administrator to the Eligible Lender Trustee and the
Indenture Trustee as soon as practicable after the Administrator has received
notice thereof.
(c) Succession. Following the satisfaction and
discharge of the Indenture and the payment in full of the principal of and
interest on the Notes, the Certificateholders shall succeed to the rights of the
Noteholders hereunder and the Eligible Lender Trustee shall succeed to the
rights of, and assume the obligations of, the Indenture Trustee pursuant to this
Supplement and any other Basic Documents.
ARTICLE VII
Section 7.1 Protection of Interests in Trust.
(a) The Administrator, on behalf of the
Depositor, shall execute and file such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in such
places as may be required by law fully to preserve, maintain, and protect the
interest of the Issuer, the Eligible Lender Trustee and the Indenture Trustee in
the Trust Student Loans and in the proceeds thereof. The Administrator shall
deliver (or cause to be delivered) to the Eligible Lender Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither the Depositor nor the Servicer shall
change its name, identity or corporate structure in any manner that would, could
or might make any financing statement or continuation statement filed in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Eligible Lender
Trustee and the Indenture Trustee at least five days' prior written notice
thereof and shall have promptly filed appropriate amendments to all previously
filed financing statements or continuation statements.
(c) Each of the Depositor and the Servicer shall have an
obligation to give the Eligible Lender Trustee and the Indenture Trustee at
least 60 days' prior written notice of any relocation of its principal executive
office if, as a result of such relocation, the applicable provisions of the UCC
would require the filing of any amendment of any previously filed
25
financing or continuation statement or of any new financing statement and shall
promptly file any such amendment. The Servicer shall at all times maintain each
office from which it shall service Trust Student Loans, and its principal
executive office, within the United States of America.
(d) The Servicer shall maintain accounts and
records as to each Trust Student Loan accurately and in sufficient detail to
permit (i) the reader thereof to know at any time the status of such Trust
Student Loan, including payments and recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments or recoveries on (or
with respect to) each Trust Student Loan and the amounts from time to time
deposited by the Servicer in the Collection Account in respect of such Trust
Student Loan.
(e) The Servicer shall maintain its computer
systems so that, from and after the time of sale of the Trust Student Loans to
the Eligible Lender Trustee on behalf of the Issuer, the Servicer's master
computer records (including any backup archives) that refer to a Trust Student
Loan shall indicate clearly the interest of the Issuer, the Eligible Lender
Trustee and the Indenture Trustee in such Trust Student Loan and that such Trust
Student Loan is owned by the Eligible Lender Trustee on behalf of the Issuer and
has been pledged to the Indenture Trustee. Indication of the Issuer's, the
Eligible Lender Trustee's and the Indenture Trustee's interest in a Trust
Student Loan shall be deleted from or modified on the Servicer's computer
systems when, and only when, the related Trust Student Loan shall have been paid
in full or repurchased.
(f) If at any time the Depositor or the
Administrator shall propose to sell, grant a security interest in, or otherwise
transfer any interest in student loans to any prospective purchaser, lender or
other transferee, the Servicer shall give to such prospective purchaser, lender
or other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they refer in any manner whatsoever to any Trust
Student Loan, indicate clearly that such Trust Student Loan has been sold and is
owned by the Eligible Lender Trustee on behalf of the Issuer and has been
pledged to the Indenture Trustee.
(g) Upon reasonable notice, the Servicer shall
permit the Indenture Trustee and its agents at any time during normal business
hours to inspect, audit and make copies of and abstracts from the Servicer's
records regarding any Trust Student Loan.
(h) Upon request, at any time the Eligible
Lender Trustee or the Indenture Trustee have reasonable grounds to believe that
such request would be necessary in connection with its performance of its duties
under the Basic Documents, the Servicer shall furnish to the Eligible Lender
Trustee or to the Indenture Trustee (in each case, with a copy to the
Administrator), within five Business Days, a list of all Trust Student Loans (by
borrower social security number, type of loan and date of issuance) then held as
part of the Trust, and the Administrator shall furnish to the Eligible Lender
Trustee or to the Indenture Trustee, within 20 Business Days thereafter, a
comparison of such list to the list of Initial Trust Student Loans set forth in
Schedule A to the Indenture as of the Closing Date, and, for each Trust Student
Loan that has been removed from the pool of loans held by the Eligible Lender
Trustee on behalf of the Issuer, information as to the date as of which and
circumstances under which each such Trust Student Loan was so removed.
26
(i) The Depositor shall deliver to the Eligible
Lender Trustee and the Indenture Trustee:
(i) promptly after the execution and delivery of
this Supplement and of each amendment thereto and on each Transfer Date, an
Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the Eligible
Lender Trustee and the Indenture Trustee in the Trust Student Loans, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest; and
(ii) within 120 days after the beginning of each
calendar year beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 120-day period, either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Eligible Lender Trustee and the Indenture Trustee in the Trust Student Loans,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interest; provided that a single Opinion of Counsel may be delivered in
satisfaction of the foregoing requirement and that of Section 3.6(b) of the
Indenture.
Each Opinion of Counsel referred to in clause (i) or (ii) above shall specify
(as of the date of such opinion and given all applicable laws as in effect on
such date) any action necessary to be taken in the following year to preserve
and protect such interest.
(j) The Depositor shall, to the extent required
by applicable law, cause the Certificates and the Notes to be registered with
the Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act
within the time periods specified in such sections.
ARTICLE VIII
Section 8.1 Independence of the Administrator. For all purposes
of this Supplement, the Administrator shall be an independent contractor and
shall not be subject to the supervision of the Issuer or the Eligible Lender
Trustee with respect to the manner in which it accomplishes the performance of
its obligations hereunder. Unless expressly authorized by the Issuer, the
Administrator shall have no authority to act for or represent the Issuer or the
Eligible Lender Trustee in any way and shall not otherwise be deemed an agent of
the Issuer or the Eligible Lender Trustee.
Section 8.2 No Joint Venture. Nothing contained in this
Supplement (a) shall constitute the Administrator and either of the Issuer or
the Eligible Lender Trustee as members of any partnership, joint venture,
association, syndicate, unincorporated business or other separate entity, (b)
shall be construed to impose any liability as such on any of them or (c) shall
be deemed to confer on any of them any express, implied or apparent authority to
incur any obligation or liability on behalf of the others.
27
Section 8.3 Other Activities of Administrator. Nothing herein
shall prevent the Administrator or its Affiliates from engaging in other
businesses or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Eligible
Lender Trustee or the Indenture Trustee.
Section 8.4 Powers of Attorney. The Eligible Lender Trustee and
the Indenture Trustee shall upon the written request of the Administrator
furnish the Administrator with any powers of attorney and other documents
reasonably necessary or appropriate to enable the Administrator to carry out its
administrative duties hereunder.
Section 8.5 Amendment.
(a) This Supplement (other than Sections 2.1 and 2.2
above) may be amended by the Issuer, the Depositor, the Servicer, the
Administrator, the Eligible Lender Trustee and the Indenture Trustee, without
the consent of any of the Noteholders or the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions in this Supplement or for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions in this Supplement or of modifying in any manner the rights of
the Noteholders or the Certificateholders; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Eligible
Lender Trustee and the Indenture Trustee, adversely affect in any material
respect the interests of any Noteholder or Certificateholder, and that such
action will not materially adversely affect (i) the Issuer's ability to enforce
or protect its rights or remedies under the Interest Rate Cap Agreement, (ii)
the ability of the Trust to timely and fully perform its obligations under any
Interest Rate Cap Agreement or (iii) any of the Trust's obligations under the
Interest Rate Cap Agreement or any swap transaction under such agreement. Any
such amendment, modification or supplement without the consent of the Swap
Counterparty shall not be binding on the Swap Counterparty.
(b) Sections 2.1 and 2.2 may be amended from time to time
by a written amendment duly executed and delivered by the Issuer, the Depositor,
the Eligible Lender Trustee, the Indenture Trustee and the Administrator,
without the consent of the Noteholders and the Certificateholders, for the
purpose of adding any provision to or changing in any manner or eliminating any
of the provisions of such Article; provided that such amendment will not, in an
Opinion of Counsel obtained on behalf of the Issuer and satisfactory to the
Indenture Trustee and the Eligible Lender Trustee, materially and adversely
affect the interest of any Noteholder or Certificateholder.
(c) This Supplement (other than Sections 2.1 and 2.2
above) may also be amended from time to time by the Issuer, the Depositor, the
Servicer, the Administrator, the Indenture Trustee and the Eligible Lender
Trustee, and Sections 2.1 and 2.2 above may also be amended by the Eligible
Lender Trustee, the Administrator and the Indenture Trustee, with the consent of
the Noteholders of Notes evidencing a majority of the Outstanding Amount of the
Notes and the consent of the Certificateholders evidencing a majority of the
Certificates, as applicable, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Supplement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall
28
(i) increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments with respect to Trust Student Loans or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (ii) reduce the aforesaid percentage of
the Outstanding Amount of the Notes, the Noteholders or the Certificateholders
of which are required to consent to any such amendment, without the consent of
all outstanding Noteholders and Certificateholders.
(d) Promptly after the execution of any such amendment
(or, in the case of the Rating Agencies, fifteen days prior thereto), the
Eligible Lender Trustee shall furnish written notification of the substance of
such amendment to each Certificateholder, the Indenture Trustee and each of the
Rating Agencies.
(e) It shall not be necessary for the consent of
Certificateholders or Noteholders pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof.
(f) Prior to the execution of any amendment to this
Supplement, the Eligible Lender Trustee and the Indenture Trustee shall be
entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Supplement and
the Opinion of Counsel referred to in Section 7.1(i) above. The Eligible Lender
Trustee and the Indenture Trustee may, but shall not be obligated to, enter into
any such amendment which affects the Eligible Lender Trustee's or the Indenture
Trustee's, as applicable, own rights, duties or immunities under this Supplement
or otherwise.
Section 8.6 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Section 4.3 of the Servicing Agreement
and Section 4.3 of this Supplement, this Supplement may not be assigned by the
Depositor, the Administrator or the Servicer. This Supplement may be assigned by
the Eligible Lender Trustee only to its permitted successor pursuant to the
Trust Agreement.
Section 8.7 Limitations on Rights of Others. The provisions of
this Supplement are solely for the benefit of the Depositor, the Servicer, the
Issuer, the Indenture Trustee and the Eligible Lender Trustee and for the
benefit of the Excess Distribution Certificateholders and the Noteholders, as
third party beneficiaries, and nothing in this Supplement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Trust Estate or under or in respect of this
Supplement or any covenants, conditions or provisions contained herein.
Section 8.8 Assignment to Indenture Trustee. The Depositor hereby
acknowledges and consents to any Grant by the Issuer to the Indenture Trustee
pursuant to the Indenture for the benefit of the Noteholders of a security
interest in all right, title and interest of the Issuer in, to and under the
Trust Student Loans and the assignment of any or all of the Issuer's rights and
obligations under this Supplement and the Sale Agreement and the Depositor's
rights under the Purchase Agreement to the Indenture Trustee. The Servicer
hereby acknowledges and consents to the assignment by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders
of any and all of the Issuer's rights and obligations under this Supplement and
under the Servicing Agreement.
29
Section 8.9 Nonpetition Covenants.
(a) Notwithstanding any prior termination of
this Supplement, the Servicer, the Administrator, the Eligible Lender Trustee
and the Depositor shall not, prior to the date which is one year and one day
after the termination of this Supplement, acquiesce, petition or otherwise
invoke or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the Issuer
under any Federal or state bankruptcy, insolvency or similar law or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of
this Supplement, the Servicer, the Administrator, the Issuer and the Eligible
Lender Trustee shall not, prior to the date which is one year and one day after
the termination of this Supplement, acquiesce, petition or otherwise invoke or
cause the Depositor to invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Depositor under
any insolvency or similar law or appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Depositor or
any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Depositor.
Section 8.10 Limitation of Liability of Eligible Lender Trustee
and Indenture Trustee.
(a) Notwithstanding anything contained herein to
the contrary, this Supplement has been executed and delivered by Chase Manhattan
Bank USA, National Association, not in its individual capacity but solely in its
capacity as Eligible Lender Trustee of the Issuer, and in no event shall Chase
Manhattan Bank USA, National Association, in its individual capacity have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer or the Eligible Lender Trustee hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto as to all of
which recourse shall be had solely to the assets of the Issuer.
(b) Notwithstanding anything contained herein to
the contrary, this Supplement has been executed and delivered by The Bank of New
York, not in its individual capacity but solely as Indenture Trustee, and in no
event shall The Bank of New York have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder
or in any of the certificates, notices or agreements delivered pursuant hereto,
as to all of which recourse shall be had solely to the assets of the Issuer.
(c) The rights of and protections of the
Indenture Trustee under the Indenture shall be incorporated as though explicitly
set forth herein.
Section 8.11 Governing Law. THIS SUPPLEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE
CONFLICT OF LAW PROVISIONS THEREOF, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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Section 8.12 Headings. The Section headings hereof have been
inserted for convenience of reference only and shall not be construed to affect
the meaning, construction or effect of this Supplement.
Section 8.13 Counterparts. This Supplement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.
Section 8.14 Severability. Any provision of this Supplement that
is prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Each of the parties named on the signature pages to this Supplement by
execution of this Supplement agrees, for the benefit of the Administrator and
the other signatories hereto, to be bound by the terms of the Master Agreement
in connection with the Trust, this Supplement and the other Basic Documents to
the extent reference is made in the Master Agreement to such party. The rights
and obligations of such parties under the Master Agreement resulting from the
execution of this Supplement (other than the Depositor) shall be applicable only
with respect to the Trust, this Supplement and the other Basic Documents.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed and delivered as of the date first above written.
SLM FUNDING LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
STUDENT LOAN MARKETING ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
32
SLM STUDENT LOAN TRUST 2003-8
By: CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as Eligible Lender
Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Eligible Lender Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇ SERVICING, L.P.
By: ▇▇▇▇▇▇ MAE, INC.
Its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Agent
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The Administrator hereby acknowledges receipt of this Supplement and hereby
confirms to the Depositor and the other signatories to this Supplement that the
representations of the Administrator contained in Article IV of the Master
Agreement are true and correct as of the date of this Supplement.
STUDENT LOAN MARKETING ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
34
