EXHIBIT 99.3
================================================================================
SLM STUDENT LOAN TRUST 2002-7
ADMINISTRATION AGREEMENT SUPPLEMENT
DATED AS OF NOVEMBER 26, 2002
TO
MASTER ADMINISTRATION AGREEMENT
DATED AS OF MAY 1, 1997
BETWEEN
SLM FUNDING CORPORATION
AND
STUDENT LOAN MARKETING ASSOCIATION
================================================================================
SLM Student Loan Trust 2002-7 Administration Agreement Supplement dated
as of November 26, 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 2002-7 (the "Trust"). The provisions of
this Supplement shall be applicable only to SLM Student Loan Trust 2002-7.
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 2002-7
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
purposes of the Trust
The initial deposit into the Collection Account 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 2002-7) 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 (Master) 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 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.
2
5. The Agreement is hereby modified for purposes of SLM Student Loan Trust
2002-7 only as follows:
(a) Section 2.1 is amended by inserting the following:
s. engaging or terminating any Broker-Dealers and taking other
actions with respect to the Auction Rate Note Procedures (Appendix A-2).
(b) 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.
(c) Section 2.2 is amended by inserting the following:
E. The Administrator shall perform the notice obligations in the
event of a default by the Swap Counterparty specified in the Swap Agreement.
(d) Section 2.4 is amended as follows:
(i) In the sentence immediately preceding the proviso the word "Quarterly" is
inserted immediately prior to "Distribution Date"; (ii) 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%."; and (iii) the following sentence is inserted at the end of the
paragraph:
"The Administrator shall also deposit into the Collection Account (a) on
or before the fifteenth calendar day of each month, an amount sufficient to make
the allocations described under Section 2.7E and (b) on or before the Business
Day preceding each Distribution Date that is not a Quarterly Distribution Date
any amounts required to make distributions on such Distribution Date not
previously deposited pursuant to clause (a) above, in each case, to the extent
it has collected such amounts during the related Collection Period."
(e) Section 2.3A is amended by inserting the following subsections:
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.
4. The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Future Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Issuer. The Future Distribution Account will
initially be established as a segregated trust account in the name of
the Indenture Trustee with the corporate trust department of The Bank of
New York.
3
5. The Administrator, for the benefit of the Issuer, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Euro Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of
the Issuer. The Euro Account will initially be established as a
segregated trust account in the name of the Indenture Trustee with the
corporate trust department of the London Paying Agent.
(f) Section 2.3B is amended by including "Capitalized Interest
Account," "Future Distribution Account" and "Euro 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 (other than the Euro
Account) 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 the applicable Distribution Date." Funds on deposit in the Euro
Account shall not be invested.
(g) Section 2.6B is amended by inserting the word "Quarterly"
immediately preceding "Distribution Date" in all instances and by
changing the words "the sum of the Servicing Fee" in the first proviso
to "the Primary Servicing Fee".
(h) Section 2.6 is amended by inserting the following subsection:
D. The Administrator shall cause all payments payable to the Issuer
from the Swap Counterparty to be deposited into the Euro Account.
(i) Section 2.7A is amended by inserting the following after the
first sentence:
On or before the Business Day immediately preceding each Distribution
Date that is not a Quarterly Distribution Date, the Administrator shall
calculate all amounts required to be deposited in the Collection Account
from the Reserve Account and the Capitalized Interest Account and the
amount to be distributed therefrom on the related Distribution Date.
On or before the Business Day immediately preceding each Distribution
Date, the Administrator shall calculate any amounts to be deposited in
the Future Distribution Account from the Collection Account on the
related Distribution Date with respect to each applicable entity and the
amount to be withdrawn from the Future Distribution Account with respect
to each applicable entity.
(j) Section 2.7B is deleted and replaced with the following:
The Administrator shall instruct the Indenture Trustee in writing no
later than the second Business Day preceding each Monthly Servicing
Payment Date that is not a Quarterly Distribution Date (based on the
information contained in the Administrator's Certificate and the related
Servicer's Report delivered pursuant to Section 3.1 (A) and (B)) to
distribute to the Servicer, by 1.00 p.m. (New York time) on such Monthly
Servicing Payment Date, from and to the extent of funds on deposit in
the Future Distribution Account (with respect to funds allocated to the
Servicer) and, if amounts on deposit
4
therein are insufficient, from Available Funds on deposit in the
Collection Account, the Primary Servicing Fee due with respect to the
preceding calendar month, and the Indenture Trustee shall comply with
such instructions.
(k) 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 Quarterly 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 with respect to Notes that have a
Distribution Date on the Quarterly Distribution Date, and in the case of a
Quarterly Distribution Date that is not an Auction Rate Distribution Date for
all of the Auction Rate Notes, allocations to the Future Distribution Account
with respect to these Auction Rate Notes (for principal and Carry-over Amounts),
to the Persons or to the account specified below by 1:00 p.m. (New York time) on
such Quarterly Distribution Date (to the extent that funds are not required to
be distributed pursuant to Section 5.4(b) of the Indenture), 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 March 2004
Distribution Date, amounts transferred from the Capitalized Interest Account
pursuant to Section 2.8.2 with respect to clauses 4(a), 4(c) and 5 below, and,
as applicable, amounts on deposit in the Future Distribution Account, in the
following order of priority, and the Indenture Trustee shall comply with such
instructions:
1. to the Servicer, the Primary Servicing Fee due on such
Distribution Date;
2. to the Administrator, the Administration Fee due on such
Distribution Date and all unpaid Administration Fees from prior
Collection Periods;
3. pro rata, to the Auction Agent, any Auction Agent Fees and to the
Broker-Dealers, any Broker-Dealer Fees;
4. pro rata, based on the aggregate principal balance (and, if the
Swap Agreement is not in effect, the then current U.S. Dollar
equivalent of the aggregate principal balance of the Class A-5
Notes) of the Notes (other than the Class A-5 Notes so long as
the Swap Agreement is in effect) and the amount of any Swap
Termination Payments and Swap Payments due and payable by the
Trust to the Swap Counterparty under this clause (4):
(a) to the Class A Noteholders (other than the Class A-5
Noteholders so long as the Swap Agreement is in effect), the
Class A Noteholders' Interest Distribution Amount, pro rata,
based on the amounts payable as Class A Noteholders'
Interest Distribution Amount;
(b) to the Swap Counterparty, the amount of any Swap Termination
Payment due to the Swap Counterparty due to a Swap
Termination Event resulting from a payment default by the
Trust or the insolvency of the Trust; provided, that if any
amounts allocable to the Class A Notes are not needed to pay
the Class A Noteholders' Interest Distribution Amount as of
such Distribution Date, such amounts will be applied to pay
the portion, if
5
any, of any Swap Termination Payment referred to above
remaining unpaid; and
(c) to the Swap Counterparty, Swap Interest Payments to the Swap
Counterparty by the Trust;
5. to the Class B Noteholders, the Class B Noteholders' Interest
Distribution Amount, pro rata, based on the amounts payable as
Class B Noteholders' Interest Distribution Amount;
6. to the Class A-1 Noteholders until paid in full, the Class A
Noteholders' Principal Distribution Amount;
7. on each Distribution Date after the Class A-1 Notes have been
paid in full, to the Class A-2 Noteholders until paid in full,
the Class A Noteholders' Principal Distribution Amount;
8. on each Distribution Date after the Class A-2 Notes have been
paid in full, to the Class A-3 Noteholders until paid in full,
the Class A Noteholders' Principal Distribution Amount;
9. on each Distribution Date after the Class A-3 Notes have been
paid in full, to the Class A-4 Noteholders until paid in full,
the Class A Noteholders' Principal Distribution Amount;
10. on each Distribution Date after the Class A-4 Notes have been
paid in full, (a) while the Swap Agreement is in effect, to the
Swap Counterparty, the Class A Noteholders' Principal
Distribution Amount until Swap Principal Payments in an amount
equal to the U.S. Dollar equivalent of the initial principal
balance of the Class A-5 Notes (at the Initial Dollar/Euro
Conversion Rate) have been made to the Swap Counterparty and (b)
if the Swap Agreement is not in effect, the Class A-5 Notes until
paid in full, the Class A Noteholders' Principal Distribution
Amount;
11. on each Distribution Date after Swap Principal Payments in an
amount equal to the U.S. Dollar equivalent of the initial
principal balance of the Class A-5 Notes (at the Initial
Dollar/Euro Conversion Rate) have been made to the Swap
Counterparty, to the Class A-6 Notes, the Class A-7 Notes, the
Class A-8 Notes, the Class A-9 Notes, the Class A-10 Notes and
the Class A-11 Notes until paid in full, pro rata, by lots of
$50,000, the Class A Noteholders' Principal Distribution Amount,
subject to the terms of clause G below;
12. on each Distribution Date after all of the Class A Notes have
been paid in full and Swap Principal Payments in an amount equal
to the U.S. Dollar equivalent of the initial principal balance of
the Class A-5 Notes (at the Initial Dollar/Euro Conversion Rate)
have been made to the Swap Counterparty, to the Class B
Noteholders until paid in full, by lots of $50,000, the Class B
Noteholders' Principal Distribution Amount, subject to the terms
of clause G below;
6
13. to the Reserve Account, the amount, if any, necessary to
reinstate the balance of the Reserve Account to the Specified
Reserve Account Balance;
14. to the Servicer, the aggregate unpaid amount of the Carryover
Servicing Fee, if any;
15. to the Class A Auction Rate Noteholders, pro rata, any Carry-Over
Amounts due the Class A Notes;
16. to the Class B Noteholders, any Carry-Over Amounts due the Class
B Notes;
17. to the Swap Counterparty, the amount of any Swap Termination
Payments due to the Swap Counterparty by the Trust and not
payable in clause 4(b) above; and
18. to the Excess Distribution Certificateholder, any remaining
amounts after application of the preceding clauses.
Notwithstanding anything to the contrary herein, amounts that would be
paid to the Swap Counterparty pursuant to clause 4, 10 or 17 above will be
determined on or before the fourth Business Day preceding each Quarterly
Distribution Date and will be paid by the Trust to the Swap Counterparty on the
third Business Day preceding each Quarterly Distribution Date to the same extent
and with the same priority as if they were made on the applicable Quarterly
Distribution Date.
On each Quarterly Distribution Date that is not an Auction Rate
Distribution Date for one or more classes of Auction Rate Notes, in lieu of
making payments on that date of principal and Carry-over Amounts to those
classes of Auction Rate Notes that do not have a Distribution Date on such
Quarterly Distribution Date, the Administrator shall cause those amounts to be
deposited into the Future Distribution Account.
In the event that a Swap Termination Payment is owed by the Trust to the
Swap Counterparty and a replacement swap transaction is procured by the Trust
under which the replacement Swap Counterparty makes a payment to the Trust, the
Administrator shall instruct the Indenture Trustee to pay that amount directly
to the original Swap Counterparty to the extent that a payment is owed by the
Trust to the Swap Counterparty. If after making that payment, the original Swap
Counterparty is still owed a payment, then the remaining amount will be paid as
set forth in clause 17 above.
Notwithstanding the foregoing, (x) if (a) on any Quarterly Distribution
Date following distributions under clauses 1 through 11 above to be made on such
Quarterly 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 minus (iv) the Specified Reserve Account Balance for that
Quarterly Distribution Date, or (b) an Insolvency Event with respect to the
Seller or 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
7
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 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.6 through C.11 until the principal amount of the Class A
Notes is paid in full and reduced to zero, 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.
D. The Administrator shall instruct the applicable Paying Agent in
writing no later than the Business Day preceding each Quarterly Distribution
Date to distribute all amounts on deposit in the Euro Account to the Class A-5
Noteholders on the Quarterly Distribution Date. If the Swap Agreement is not in
effect, the Administrator shall cause U.S. Dollars to be converted into Euros in
amounts sufficient to make the distributions specified in this Agreement and the
Indenture.
E. On or prior to the fifth business day of each month, the
Administrator shall instruct the Indenture Trustee to make the following
allocations on or before the fifteenth calendar day of the same month with funds
on deposit in the Collection Account in the following order of priority:
1. deposit into the Future Distribution Account for the Servicer and
the Administrator, pro rata, the amount of the Servicing Fee and
Administration Fee that will accrue for the related calendar
month plus any previously accrued and unpaid or set aside
Servicing Fee and Administration Fee;
2. deposit into the Future Distribution Account, pro rata, for the
Auction Agent and the Broker-Dealers an amount equal to their
Auction Agent Fees and Broker-Dealer Fees, respectively, expected
to be payable from the fifteenth day of the current calendar
month to the fourteenth day of the subsequent calendar month plus
previously accrued and unpaid or set aside Auction Agent Fees and
Broker-Dealer Fees;
3. deposit into the Future Distribution Account, pro rata, for (a)
each class of the Class A Notes an amount equal to interest
expected to accrue on the Class A Notes from the fifteenth day of
the current calendar month to the fourteenth day of the
subsequent calendar month plus previously accrued and unpaid or
set aside interest and (b) the Swap Counterparty an amount equal
to Swap Interest Payments to the Swap Counterparty expected to
accrue from the fifteenth day of the current calendar month to
the fourteenth day of the subsequent calendar month, plus
previously accrued and unpaid or set aside Swap Interest Payments
plus Swap Termination Payments under Section 2.7C.4(b)); and
4. deposit into the Future Distribution Account for the Class B
Notes, an amount equal to interest expected to accrue on the
Class B Notes from the fifteenth day of
8
the current calendar month to the fourteenth day of the
subsequent calendar month plus previously accrued and unpaid or
set aside interest.
F. On each Auction Rate Distribution Date that is not a Quarterly
Distribution Date, the Administrator shall instruct the Indenture Trustee to
make the following distributions in the following order of priority:
1. from amounts deposited in the Future Distribution Account that
were allocated to the Auction Agent and the Broker- Dealers, and
then from amounts on deposit in the Collection Account, pro rata,
to the Auction Agent and the Broker-Dealers, the Auction Agent
Fees of the Auction Agent and the Broker-Dealer Fees of the
Broker-Dealers;
2. from amounts deposited in the Future Distribution Account for the
benefit of the Class A Notes with a Distribution Date on this
Auction Rate Distribution Date, and then from amounts on deposit
in the Collection Account, pro rata, to the Class A Notes with a
Distribution Date on this Auction Rate Distribution Date, an
amount equal to interest payable on these Class A Notes; and
3. from amounts deposited in the Future Distribution Account that
were allocated to the Class B Notes on account of interest, and
then from amounts on deposit in the Collection Account, to the
Class B Notes if they have a Distribution Date on this Auction
Rate Distribution Date, an amount equal to interest payable on
the Class B Notes.
All amounts deposited in the Future Distribution Account shall be
deposited therein for the benefit of an entity or a class of Notes. Each such
amount shall only be distributable to the entity or the class of Notes for whom
it was so deposited. Amounts on deposit in the Future Distribution Account with
respect to principal and Carry-Over Amounts allocated to the Auction Rate Notes
shall be paid to the Auction Rate Notes on their Auction Rate Distribution
Dates.
G. If less than all of the Class A Auction Rate Notes are to be paid
7or allocated principal sufficient to repay them in full on a Quarterly
Distribution Date, the Administrator shall determine the particular classes of
Class A Auction Rate Notes which will be paid or allocated principal on a
Quarterly Distribution Date. The Administrator shall make such determination as
follows: (1) first, the Administrator shall compute the number of $50,000
increments of principal that are available to be paid or allocated to the Class
A Auction Rate Notes and (2) second, the Administrator shall pay or allocate
such $50,000 increments in a manner that will preserve as nearly as practicable,
the respective original proportions of such Classes that remain outstanding,
with any excess increment that cannot be so paid or allocated being chosen by
random lot.
If less than all of the Auction Rate Notes of a given class are to be
paid or allocated principal on a Quarterly Distribution Date in amount
sufficient to pay such class in full, the particular Auction Rate Notes to be
paid shall be selected by the Administrator by random lots of $50,000. If there
are any amounts available to pay or allocated principal to the Class A Auction
Rate Notes or Class B Auction Rate Notes, as applicable that are not in $50,000
increments, the
9
Administrator shall deposit such amounts to the Future Distribution Account to
pay principal to the Class A Auction Rate Notes or Class B Auction Rate Notes,
as applicable, in the future.
(l) 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.1
on such Monthly Servicing Payment Date or Quarterly Distribution
Date, the Administrator shall instruct the Indenture Trustee in
writing to withdraw from the Reserve Account on such Monthly
Servicing Payment Date or Quarterly 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.
2. In the event that the Available Funds are insufficient to make
the payments described under Sections 2.7C.2 through 2.7C.5
(after giving effect to Section 2.7F), the Administrator shall
instruct the Indenture Trustee in writing to withdraw from the
Reserve Account on each Quarterly 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 amounts in the same order and priority as is set forth in
Sections 2.7C.2 through 2.7C.5.
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.6, 2.7C.7, 2.7C.8, 2.7C.9,
2.7C.10, or 2.7C.11 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.2 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.6 through 2.7C.11.
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.12 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.3 above, and to distribute such amount
to the Class B Noteholders entitled thereto.
10
C. 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.
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, Carry-over Amounts 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, second to pay any
Class A Carry-over Amounts to the Class A Noteholders, third to
pay any Class B Carry-over Amounts to the Class B Noteholders,
and fourth 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[, Swap Termination Payment,
and Carry-over Amounts], 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 March 2004 Distribution
Date exceeds the amounts distributed to the Noteholders pursuant
to Sections 2.7C.4(a), 2.7C.4(c) and 2.7C.5 on a Quarterly
Distribution Date or the Class A Noteholders' Interest
Distribution Amount or the Class B Noteholders' Interest
Distribution Amount on any other 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
11
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.2. After giving effect to Section 2.8.2B.1 on the December 15, 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
Depositor or its assignee, as Holder of the Excess Distribution
Certificate.
(m) 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. [RESERVED];
(n) 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 (other than with respect to the Class A-5 Notes,
which amount shall be expressed as an Euro amount per EURO 1,000 of original
principal balance of the Class A-5 Notes.
(o) The word "Quarterly" shall be inserted in front of "Distribution
Date" in Section 2.12 and Section 3.1.
(p) The last sentence of Section 3.1D is deleted and replaced with
the following:
In connection therewith, the Administrator shall calculate LIBOR and
EURIBOR for the first Accrual Period and One-Month, Three-Month and Four-Month
LIBOR and Three-Month and Four-Month EURIBOR in accordance with the definitions
thereof. In addition, the Administrator hereby accepts the delegation to it of
the obligations of the "Calculation Agent" under any swap agreement to which the
Trust is a party.
(q) The "or" is deleted from subparagraph 4.2 (ii) and the "." is
deleted from subparagraph 4.2 (iii) and is replaced with ";".
(r) A new subparagraph, 4.2 (iv), is inserted as follows:
and
(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).
(s) The "25%" in Section 5.1.B. and in the first clause following
Section 5.1C are deleted and replaced with "50%".
12
(t) Sections 6.1A and B are deleted and replaced with the following:
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 Counterparty and 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 5 business days'
notice from the Indenture Trustee as provided in Section 4.4 of the Indenture.
(u) 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.
6.2 The parties to this Agreement acknowledge and agree that, pursuant to
Section 5(h) of the Schedule to the Swap Agreement the Trust has agreed (a) to
notify the Swap Counterparty of any amendment, modification or supplement to
this Agreement or any other Basic Document that would materially adversely
affect (i) the Swap Counterparty's 's ability to enforce or protect its rights
or remedies under the Swap Agreement, (ii) the ability of the Trust to timely
and fully perform its obligations under the Swap Agreement, or (iii) any of the
terms of the Indenture or this Agreement which relates to payments to or rights
of the Swap Counterparty under the Agreements, and (b) to obtain the written
consent of CSFBi to any such amendment,
13
modification or supplement. any such amendment, modification or supplement
without the written consent of CSFBi shall be void and unenforceable.
Accordingly, the parties to this Agreement acknowledge and agree that
CSFBi is a third party beneficiary of this Agreement to the extent of its rights
under the Swap Agreement in respect of this Agreement and shall be entitled to
enforce such rights under this Agreement. Notices to CSFBi under this Section 6
shall be addressed to CSFBi, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇,
attention ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇), with a copy to ▇▇▇▇ ▇▇▇▇▇▇ (+44
20 7883 6217).
7. 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 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.
14
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: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: Vice President
---------------------------------------
▇▇▇▇▇▇ ▇▇▇ SERVICING L.P.
By: ▇▇▇▇▇▇ MAE, INC.,
Its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------------------
Title: Managing Director
---------------------------------------
SLM STUDENT LOAN TRUST 2002-7
By: CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its individual
capacity but solely as Eligible Lender
Trustee
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: Vice President
---------------------------------------
15
CHASE MANHATTAN BANK USA, NATIONAL
ASSOCIATION, not in its individual capacity
but solely as Eligible Lender Trustee
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
---------------------------------------
The Administrator hereby acknowledges receipt of the foregoing Supplement and
hereby confirms to the Depositor 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: Treasurer
-----------------------------
16