EXHIBIT 99.3
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SLM STUDENT LOAN TRUST 2002-8
ADMINISTRATION AGREEMENT SUPPLEMENT
Dated as of December 18, 2002
to
MASTER ADMINISTRATION AGREEMENT
Dated as of May 1, 1997
Between
SLM FUNDING CORPORATION
and
STUDENT LOAN MARKETING ASSOCIATION
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SLM Student Loan Trust 2002-8 Administration Agreement Supplement dated as
of December 18, 2002 (the "Supplement") to the Master Administration Agreement
dated as of May 1, 1997 (the "Agreement") between SLM Funding Corporation (the
"Depositor") and Student Loan Marketing Association (the "Administrator").
This Supplement is being delivered to the Administrator pursuant to and in
satisfaction of the conditions set forth in Section 1.2(a) of the Agreement with
respect to SLM Student Loan Trust 2002-8 (the "Trust"). The provisions of this
Supplement shall be applicable only to SLM Student Loan Trust 2002-8.
General. The Trust is issuing Class A Notes, Class B Notes and an Excess
Distribution Certificate only. It will not issue Certificates. Accordingly, all
usages of "Certificates" and of terms referring thereto in the Agreement shall
be disregarded. In addition with respect to the Trust only, all references to
the "Seller" in the Agreement shall be deleted and replaced with the
"Depositor".
1. The following entities are hereby designated in accordance with clause 1 of
Section 1.2(a) of the Agreement:
The Trust: SLM Student Loan Trust 2002-8
The Eligible Lender Trustee: Chase Manhattan Bank USA, National Association
The Interim Eligible Lender Trustee: Chase Manhattan Bank USA, National
Association
The Indenture Trustee: The Bank of New York; references to Bankers Trust
Company in the Agreement shall mean The Bank of New York for the purpose of
the Trust.
The Collection Account Initial Deposit on the Closing Date, which ▇▇▇▇▇▇
▇▇▇ shall make on behalf of the Trust in accordance with Section 2.6.C of
the Agreement shall be: $0.00.
2. Attached hereto is Appendix A (SLM Student Loan Trust 2002-8) containing
those definitions that shall be applicable to this Supplement and to the
Agreement in connection with the Trust and this Supplement in place of the
definitions contained in Appendix A attached to the Agreement.
3. Each of the Basic Documents (other than the Agreement) has been executed
and delivered by each of the parties thereto, is being delivered to the
Administrator together with this Supplement and is in substantially the
respective forms attached to the Agreement as Exhibits B through I (to the
extent applicable).
4. Notwithstanding anything to the contrary set forth in Section 2.3C.2 of the
Agreement, the Indenture Trustee shall have no liability or obligation in
respect of any failed Delivery, as
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contemplated therein, other than with respect to a Delivery which fails as a
result of any action or inaction on behalf of the Indenture Trustee.
5. The Agreement is hereby modified for purposes of SLM Student Loan Trust
2002-8 only as follows:
(a) Section 2.2B is deleted and replaced with the following:
B. The Administrator shall be responsible for performance of the
duties of the Eligible Lender Trustee set forth in Section 5.4 of the
Trust Agreement.
(b) Section 2.4 is amended as follows:
The last part of the sentence immediately preceding the proviso is
changed from "a rate equal to the Federal Funds Rate less .20%" to "a
rate equal to no less than the Federal Funds Rate less .20%."
(c) Section 2.3A is amended by inserting the following subsection:
3. The Administrator, for the benefit of the Issuer, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit
Account (the "Capitalized Interest Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Issuer. The Capitalized Interest Account will initially
be established as a segregated trust account in the name of the
Indenture Trustee with the corporate trust department of The Bank of
New York.
(d) Section 2.3B is amended by including "Capitalized Interest Account" in
the definition of "Trust Accounts" Section 2.3B is further amended by
deleting the third sentence in its entirety and replacing it with the
following: "Funds on deposit in the Trust Accounts shall be invested in
Eligible Investments that mature so that such funds will be available on
the Monthly Servicing Payment Date (to the extent necessary to pay the
Primary Servicing Fee payable on such date) or Distribution Date."
(e) Section 2.3C.3 is amended by replacing "Trust Accounts" with
"Collection Account and the Reserve Account."
(f) Section 2.7A is amended by inserting the following sentence after
the first sentence:
On each Determination Date to and including the Determination Date
immediately preceding the December 2003 Distribution Date, the
Administrator shall calculate any amounts to be distributed from the
Capitalized Interest Account, if any, on the related Distribution Date.
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(g) Section 2.7C is deleted and replaced with the following:
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 Section 3.1A and 3.1C) to
make the following 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 transferred from the Reserve Account pursuant to
section 2.8.1 and through the December 2003 Distribution Date, amounts
transferred from the Capitalized Interest Account pursuant to Section 2.8.2
with respect to clauses 5 and 6 below, in the following order of priority,
and the Indenture Trustee shall comply with such instructions:
1. to the Indenture Trustee for amounts due under Section 6.7
of the Indenture;
2. to the Servicer for due and unpaid Primary Servicing Fees;
3. to the Administrator, any due and unpaid Administration
Fees;
4. to the Swap Counterparties, in proportion to their
respective entitlements under the applicable Swap Agreements without
preference or priority, for any due and unpaid Swap Fees;
5. to the Class A Noteholders for amounts due and unpaid on the
Class A Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class A
Notes for such interest;
6. to the Class B Noteholders for amounts due and unpaid on the
Class B Notes for interest;
7. to Class A-1 Noteholders for amounts due and unpaid on the
Class A-1 Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class A-1
Notes for principal;
8. to Class A-2 Noteholders for amounts due and unpaid on the
Class A-2 Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class A-2
Notes for principal;
9. to Class A-3 Noteholders for amounts due and unpaid on the
Class A-3 Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class A-3
Notes for principal;
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10. to Class A-4 Noteholders for amounts due and unpaid on the
Class A-4 Notes for principal, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class A-4
Notes for principal;
11. to the Class B Noteholders for amounts due and unpaid on the
Class B Notes for principal, ratably without preference or priority of
any kind, according to the amounts due and payable on the Class B
Notes for principal;
12. to the Reserve Account, the amount, if any, necessary to
reinstate the balance of the Reserve Account to the Specified Reserve
Account Balance;
13. to the Swap Counterparties, in proportion to their
respective entitlements under the applicable Swap Agreements without
preference or priority, for any due and unpaid Swap Payments;
14. to the Servicer, for any unpaid Carryover Servicing Fees;
and
15. to the Excess Distribution Certificateholder, any remaining
funds after the preceding clauses.
Notwithstanding the foregoing, (x) if (a) on any Distribution Date
following distributions under clauses 1 through 12 above to be made on
such Distribution Date, without giving effect 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 (i) the outstanding
principal balance of the Trust Student Loans plus (ii) any accrued but
unpaid interest on the Trust Student Loans as of the last day of the
related Collection Period plus (iii) the balance of the Reserve
Account on such Distribution Date following such distributions under
clauses 1 through 12 minus (iv) the Specified Reserve Account Balance
for that Distribution Date, or (b) an Event of Default affecting the
Class A Notes has occurred and is continuing, then, until the
conditions described in (a) or (b) 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 6.1A, to pay as
an accelerated payment of the outstanding principal balance of the
Notes, first to the Class A Noteholders in the same order and priority
as is set forth in Sections 2.7C.7 through C.10 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 Section 2.7C.11
provided that the amount of such distribution shall not exceed the
outstanding principal balance 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 date.
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(h) Section 2.8 is deleted and replaced with the following:
SECTION 2.8.1 RESERVE ACCOUNT.
A. On the Closing Date, the Issuer shall deposit the Reserve Account
Initial Deposit into the Reserve Account.
B.1. 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 Sections 2.7B and 2.7C.2 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
2.8.1D, amounts on deposit in the Reserve Account will not be
available to cover any unpaid Carryover Servicing Fees to the
Servicer.
B.2. In the event that the Administration Fee for any Distribution
Date exceeds the amount distributed to the Administrator pursuant to
Section 2.7C.3 on such 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 paragraph
B.1 above, and to distribute such amount to the Administrator.
B.3. In the event that the Swap Fees for any Distribution Date exceed
the amount distributed to the applicable Swap Counterparties pursuant
to Section 2.7C.4 on such 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
paragraphs B.1 and B.2 above, and to distribute such amount in
proportion to their respective entitlements under the applicable Swap
Agreements without preference or priority to the applicable Swap
Counterparties.
B.4. In the event that the Class A Noteholders' Interest Distribution
Amount and the Class B Noteholders' Interest Distribution Amount for a
Distribution Date exceeds the amount distributed to the Noteholders
pursuant to Sections 2.7C.5, 2.7C.5 and 2.8.2B.1 on such Distribution
Date, the Administrator shall instruct the Indenture Trustee in
writing to withdraw from the Reserve Account on such Distribution Date
an amount equal to such excess, to the extent of funds available
therein after giving effect to paragraphs B.1 through B.3 above, and
to distribute such amount to the Class A Noteholders and to the Class
B Noteholders entitled
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thereto, in the same order and priority as is set forth in Sections
2.7C.5 and C.6 subject to the last paragraph of Section 2.7C.
B.5. 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 Section 2.7C.7, 2.7C.8, 2.7C.9 or 2.7C.10 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 paragraphs B.1 through B.4
above, and to distribute such amount to the Class A Noteholders
entitled thereto, in the same order and priority as is set forth in
Sections 2.7C.7 through 2.7C.10.
B.6. 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 Section 2.7C.11 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 B.1 through B.5 above, and to
distribute such amount to the Class B Noteholders entitled thereto.
C.1. After giving effect to Section 2.8.1B, 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 paragraph C.1) 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.
C.2. In the event of a termination of any Swap Agreement that requires
the Trust to make a termination payment to that Swap Counterparty,
such termination payment shall be paid in the same order of priority
as the Swap Fee in Sections 2.7C.4 and 2.8.1B.3 and the Swap Payment
in Sections 2.7C.13, as the case may be; PROVIDED, however, that in
the event that the Trust is required to make a termination payment to
a Student Loan Rate Swap Counterparty as a result of (i) an Event of
Default (as such term is defined in the Swap Confirmation) where the
Swap Counterparty is the Defaulting Party (as such term is defined in
the Swap Confirmation) or (ii) a Termination Event (as such term is
defined in the Swap Confirmation), such termination payment will be
subordinate in priority to the right of the Class A Noteholders to
receive the Class A Noteholders' Distribution Amount and to the Class
B Noteholders to receive the Class B Noteholders' Distribution Amount
and, if necessary, to the reinstatement of the balance of the Reserve
Account up to the Specified Reserve Account Balance.
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In the event of a termination of a Swap Confirmation that requires the
Trust to make a termination payment to the applicable Swap
Counterparty except as described in the proviso above, the
Administrator promptly shall notify the Rating Agencies of such
requirement and, within thirty (30) days of such termination payment,
shall provide to the Rating Agencies cash flows and such other
financial information with respect to the Trust as the Rating Agencies
may reasonably request.
D. On the final Distribution Date upon termination of the Trust and
following the payment in full of the aggregate outstanding principal
balance of the Notes and of all other amounts (other than Carryover
Servicing Fees and Swap Termination Payments) owing or to be
distributed hereunder or under the Indenture to Noteholders, the
Servicer, the Swap Counterparty or the Administrator, to the extent
that Available Funds on such date are insufficient to make the
following payments, amounts remaining in the Reserve Account shall be
used first to pay any Carryover Servicing Fees, and second, to pay any
Swap Termination Payments not previously paid to the Swap
Counterparty. 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 2.8.1D.
E. Anything in this Section 2.8.1 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 unpaid
Carryover Servicing Fee and Swap Termination Payment, 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 2.8.2 CAPITALIZED INTEREST ACCOUNT
A. On the Closing Date, the Issuer shall deposit the Capitalized
Interest Account Initial Deposit into the Capitalized Interest
Account.
B.1. In the event that the Class A Noteholders' Interest Distribution
Amount and the Class B Noteholders' Interest Distribution Amount for
any Distribution Date through the December 2003 Distribution Date
exceeds the amounts distributed to the Noteholders pursuant to
Sections 2.7C.5 and 2.7C.6 on such Distribution Date, 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
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Noteholders until they have received the Class B Noteholders'
Interest Distribution Amount for that Distribution Date.
B.2. After giving effect to Section 2.8.2B.1 on the December 2003
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.
(i) Section 2.9.e is deleted, and Sections 2.9.f-j are redesignated as
Sections 2.9.e-i and the following is inserted as Section 2.9.j:
j. The amount of the Swap Fees and Swap Payments made on such
Distribution Date.
(j) In addition, the first sentence of the first paragraph after Section
2.9.n is deleted and replaced with the following:
Each amount set forth pursuant to clauses (a), (b), (c), (d), (h), (i)
and (l) above shall be expressed as a dollar amount per $1,000 of
original principal balance of a Note.
(k) The last sentence of Section 3.1D is deleted and replaced with the
following:
In connection therewith, the Administrator shall calculate Three-Month
LIBOR in accordance with the definitions thereof and shall also
determine the Student Loan Rate with respect to each Distribution
Date. In addition, the Administrator hereby accepts the delegation to
it of the obligations of the "Calculation Agent" under the Swap
Agreements.
(l) the "or" is deleted from Subparagraph 4.2 (ii) and the "." is deleted
from subparagraph 4.2 (iii) and to replace with ";".
(m) A new Subparagraph 4.2 (iv) is inserted as follows:
"(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)."
(n) the "25%" in Section 5.1.B and in the first clause following Section
5.1C is deleted and replaced with "50%".
(o) Sections 6.1A and B are deleted and replaced with the following:
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SECTION 6.1 TERMINATION.
A. OPTIONAL PURCHASE OF ALL TRUST STUDENT LOANS. The
Administrator shall notify the Servicer, the Depositor 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 in the Collection Account an amount equal to
the aggregate Purchase Amount for the Trust Student Loans and the
related rights with respect thereto, plus the appraised value of any
such other property held by the Trust other than the Trust Accounts,
such value to be determined by an appraiser mutually agreed upon by
the Servicer, the 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 amount owing to the Swap Counterparties and any
Carryover Servicing Fees. In the event the Seevicer 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 5 business days'
notice from the Indenture Trustee as provided in Section 4.4 of the
Indenture.
(p) Section 8.5 is amended by inserting at the end of the first paragraph
the following:
and that such action will not materially adversely affect (i) the
Trust's ability to enforce or protect its rights or remedies under any
swap agreement, (ii) the ability of the Trust to timely and fully
perform its obligations under any Swap Agreement or (iii) any of the
Trust's obligations under any Swap 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.
6. 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
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bound by the terms of the Agreement in connection with the Trust, this
Supplement and the other Basic Documents to the extent reference is made in the
Agreement to such party. The rights and obligations of such parties under the
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.
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.
This Supplement may be executed in counterparts, each of which when so
executed shall together constitute but one and the same instrument.
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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 CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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▇▇▇▇▇▇ ▇▇▇ SERVICING L.P.
By: ▇▇▇▇▇▇ MAE, INC.,
Its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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SLM STUDENT LOAN TRUST 2002-8
By CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Eligible
Lender Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
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CHASE MANHATTAN BANK USA, National
Association, not in its individual
capacity but solely as Eligible
Lender Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: Vice President
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THE BANK OF NEW YORK,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Agent
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The Administrator hereby acknowledges receipt of the foregoing Supplement and
hereby confirms to the Seller and the other signatories to the foregoing
Supplement that the representations of the Administrator contained in Article V
of the Agreement are true and correct as of the date of such Supplement.
STUDENT LOAN MARKETING ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Title: Vice President
-----------------------------
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