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Exhibit 99.3
SLM STUDENT LOAN TRUST 2001-1
ADMINISTRATION AGREEMENT SUPPLEMENT
Dated as of March 8, 2001
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 2001-1 Administration Agreement Supplement dated as of
March 8, 2000 (the "Supplement") to the Master Administration Agreement dated as
of May 1, 1997 (the "Agreement") between SLM Funding Corporation (the "Seller")
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 2001-1 (the "Trust"). The provisions of this
Supplement shall be applicable only to SLM Student Loan Trust 2001-1.
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.
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 2001-1
The Eligible Lender Trustee: Chase Manhattan Bank USA, National Association
The Interim Eligible Lender Trustee: Chase Manhattan Bank USA, National
Association
The Indenture Trustee: Bankers Trust Company
The initial deposit into the Collection Account on the Closing Date in
accordance with Section 2.6.C of the Agreement shall be: $0.
2. Attached hereto are (i) Appendix A (SLM Student Loan Trust 2001-1)
containing those definitions which 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; and (ii)
a cross-reference table indicating modifications to the articles and sections of
the Basic Documents referred to in the Agreement.
3. Each of the Basic Documents (other than the Agreement) has been executed and
delivered by each of the parties thereto, are being delivered to the
Administrator together with this Supplement and are in substantially the
respective forms attached to the Agreement as Exhibits B through I;
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.
5. The Agreement is hereby modified for purposes of SLM Student Loan Trust
2001-1 only as follows:
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(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 2.7C is deleted and replaced with the following:
C. The Administrator shall instruct the Indenture Trustee in writing no later
than the second 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 3.1 (A) and (C)) 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, 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, from the amount of Available Funds remaining
after the application of clause 1, the Administration Fee due on such
Distribution Date and all unpaid Administration Fees from prior
Collection Periods;
3. to the Swap Counterparties, in proportion to their respective
entitlements under the applicable Swap Agreements without preference
or priority, from the amount of Available Funds remaining after the
application of clauses 1 and 2, the Swap Fees due on such Distribution
Date and all unpaid Swap Fees from prior Distribution Dates;
4. to the Class A Noteholders, from the amount of Available Funds
remaining after the application of clauses 1 through 3, the Class A
Noteholders' Interest Distribution Amount, ratably, without preference
or priority of any kind, according to the amounts payable on the Class
A Notes in respect of Class A Noteholders' Interest Distribution
Amount;
5. to the Class B Noteholders, from the amount of Available Funds
remaining after the application of clauses 1 through 4, the Class B
Noteholders' Interest Distribution Amount, ratably, without preference
or priority of any kind, according to the amounts payable in respect
of Class B Noteholders' Interest Distribution Amount;
6. to the Class A-1 Noteholders, from the amount of Available Funds
remaining after the application of clauses 1 through 5, the Class A
Noteholders' Principal Distribution Amount, ratably, without
preference or priority of any kind, according to the amounts payable
on the Class A-1 Notes for principal;
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7. on each Distribution Date on and after which the Class A-1 Notes have
been paid in full, to the Class A-2 Noteholders, from the amount of
Available Funds remaining after the application of clauses 1 through
6, the Class A Noteholders' Principal Distribution Amount, ratably,
without preference or priority of any kind, according to the amounts
payable on the Class A-2 Notes for principal;
8. on each Distribution Date on and after the date on which the Class A
Notes have been paid in full, to the Class B Noteholders, from the
amount of Available Funds remaining after the application of clauses 1
through 7, the Class B Noteholders' Principal Distribution Amount,
ratably, without preference or priority of any kind, according to the
amounts payable on the Class B Notes for principal;
9. to the Reserve Account, from the amount of Available Funds remaining
after the application of clauses 1 through 8, the amount, if any,
necessary to reinstate the balance of the Reserve Account up to the
Specified Reserve Account Balance;
10. to the Swap Counterparties, in proportion to their respective
entitlements under the applicable Swap Agreement without preference or
priority, from the amount of Available Funds remaining after the
application of clauses 1 through 9, the aggregate unpaid amount of any
Swap Payments owing to such Swap Counterparties;
11. to the Servicer, from the amount of Available Funds remaining after
the application of clauses 1 through 10, the aggregate unpaid amount
of the Carryover Servicing Fee, if any; and
12. to the Reserve Account, the amount of Available Funds remaining after
the application of clauses 1 through 11.
Notwithstanding the foregoing, if (a) on any Distribution Date following
all distributions to be made on such Distribution Date 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
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 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.
(c) Section 2.8 is deleted and replaced with the following:
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Section 2.8 Reserve Account.
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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 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,
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that, except as provided in Sections 2.8C.1(D) and 2.8D, 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 Administration Fee for any Distribution Date
exceeds the amount distributed to the Administrator pursuant to
Section 2.7C.2 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.
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.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
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.
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 Section 2.7C.4 and C.5 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 thereto, in the same order and priority as is set forth in
Sections 2.7C.4 and C.5 subject to the last paragraph of Section 2.7C.
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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 or 2.7C.7 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.6 and
2.7C.7.
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.8 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 2.8B, 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 (A) to pay to the Class A Noteholders out of such excess in the Reserve
Account an amount equal to the Class A Note Principal Shortfall, if any; (B) to
pay to the Class B Noteholders out of such excess in the Reserve Account an
amount equal to the Class B Note Principal Shortfall, if any; (C) to pay the
applicable Swap Counterparties, in proportion to their respective entitlements
under the applicable Swap Agreements without preference or priority, out of such
excess in the Reserve Account an amount equal to the amount described in Section
2.7C.10 for such Distribution Date (to the extent not otherwise paid to the Swap
Counterparties on such Distribution Date); (D) to pay to the Servicer out of
such excess in the Reserve Account an amount equal to the amount described in
Section 2.7C.11 for such Distribution Date (to the extent not otherwise paid to
the Servicer on such Distribution Date); (E) 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 and C.7 until the
principal amount of the Class A Notes is paid in full and then to the Class B
Noteholders until the principal balance of the Class B Notes is reduced to zero,
provided that the amount of such distribution shall not exceed the outstanding
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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; and (F) to distribute the
remaining amount of such excess (i) to the Seller, to the extent of any portion
thereof that is attributable to the reduction from time to time of the Specified
Reserve Account Balance, and (ii) to the Seller or its assignee, as holder of
the Excess Distribution Certificate, any remaining portion thereof. Amounts
properly distributed to the Seller or such holder pursuant to this paragraph C.1
shall be deemed released from the Trust
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Estate and the security interest therein granted to the Indenture Trustee, and
the Seller or such holder shall in no event thereafter be required to refund any
such distributed amounts.
C.2. In the event of a termination of a Swap Agreement that requires the
Trust to make a termination payment to the applicable Swap Counterparty, such
termination payment shall be paid in the same order of priority as the Swap Fee
in Sections 2.7C.3 and 2.8B.3 and the Swap Payment in Sections 2.7C.10 and
2.8C.1(C), as the case may be; provided, however, that in the event that the
Trust is required to make a termination payment to a Swap Counterparty as a
result of (i) an Event of Default (as such term is defined in the Swap
Agreement) where the Swap Counterparty is the Defaulting Party (as such term is
defined in the Swap Agreement) or (ii) a Termination Event (as such term is
defined in the Swap Agreement), 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. In the event of a termination of a Swap Agreement 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 Swap Payments and Carryover
Servicing Fees) owing or to be distributed hereunder or under the Indenture to
Noteholders, the Servicer, the Administrator or the Swap Counterparties, 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 unpaid Swap Payments and second 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 Seller. The Seller shall in no event be
required to refund any amounts properly distributed pursuant to this Section
2.8D.
E. Anything in this Section 2.8 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 Swap Payments and 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.
(d) Section 2.9.e is deleted, 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 Fee and Swap Payments made to the Swap
Counterparties on such Distribution Date;
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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.
(e) The last sentence of Section 3.1D is deleted and replaced with the
following:
In connection therewith, the Administrator shall calculate the Three-Month
LIBOR or LIBOR for the first Accrual Period, as applicable, in accordance with
the definitions thereof and shall also determine the Student Loan Rate with
respect to such Distribution Date. In addition, the Administrator hereby accepts
the delegation to it of the obligations of the "Calculation Agent" under the
Swap Agreements.
(f) 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).
In addition, the "or" is deleted from subparagraph 4.2 (ii) and the "." is
deleted from subparagraph 4.2 (iii) and is replaced with ";".
(g) Sections 6.1A and B are deleted and replaced with the following:
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Section 6.1 Termination.
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A. Optional Purchase of All Trust Student Loans. The Administrator shall
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notify the Seller 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 Seller, or any
other "eligible lender" (within the meaning of the Higher Education Act)
designated by the Seller 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 Seller 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 Seller, the Eligible Lender Trustee and
the Indenture Trustee, and shall succeed to all interests in and to the Trust;
provided, however, that the Seller may not effect such purchase if such
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aggregate Purchase Amounts do not equal or exceed the Minimum Purchase Amount
plus any amounts owing to the Swap Counterparties and any Carryover Servicing
Fees. In the event the Seller 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 Seller intends to exercise its option to purchase the Trust
Estate, the Seller shall be deemed to have waived its option to purchase the
Trust Estate as long as the Seller has received 5 business days' notice from the
Indenture Trustee as provided in Section 4.4 of the Indenture.
B. Insolvency of the Seller. Upon any sale of the assets of the Trust
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pursuant to Section 9.2 of the Trust Agreement, the Administrator shall instruct
the Indenture Trustee in writing to deposit the net proceeds from such sale
after all payments and reserves therefrom (including the expenses of such sale)
have been made (the "Insolvency Proceeds") in the Collection Account. On the
first Distribution Date following the date on which the Insolvency Proceeds are
deposited in the Collection Account, the Administrator shall instruct the
Indenture Trustee to make the following distributions (after the application on
such Distribution Date of the amount of Available Funds and amounts on deposit
in the Reserve Account pursuant to Sections 2.7 and 2.8) from the Insolvency
Proceeds and any funds remaining on deposit in the Reserve Account (including
the proceeds of any sale of investments therein as described in the following
sentence):
a. to the Class A Noteholders, any unpaid Class A Noteholders' Interest
Distribution Amount for such Distribution Date as set forth in
Sections 2.7C.4;
b. to the Class A Noteholders, the outstanding principal balance of the
Class A Notes in the same order and priority as is set forth in
Sections 2.7C.6 and C.7;
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c. to the Class B Noteholders, any unpaid Class B Noteholders' Interest
Distribution Amount for such Distribution Date;
d. to the Class B Noteholders, the outstanding principle balance of the
the Class B Notes;
e. to the applicable Swap Counterparties, in proportion to their
respective entitlements under the applicable Swap Agreements without
preference or priority, any unpaid Swap Payments; and
f. to the Servicer, any unpaid Carryover Servicing Fees.
Any investment on deposit in the Reserve Account that will not mature on or
before such Distribution Date shall be sold by the Indenture Trustee at
such time as will result in the Indenture Trustee receiving the proceeds
from such sale not later than the Business Day preceding such Distribution
Date. Any Insolvency Proceeds remaining after the deposits described above
shall be paid to the Seller.
(h) 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 the Swap
Agreements, (ii) the ability of the Trust to timely and fully perform its
obligations under the Swap Agreements or (iii) any of the Trust's
obligations under the Swap Agreements or any swap transaction under such
agreements. Any such amendment, modification or supplement without the
applicable Swap Counterparty's consent shall not be binding on that 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 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 Seller) 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.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to be
duly executed and delivered as of the date first above written.
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SLM FUNDING CORPORATION
By: /s/ J. XXXXX XXXXXX
_______________________________
Name: J. Xxxxx Xxxxxx
_____________________________
Title: Chief Financial Officer
____________________________
XXXXXX XXX SERVICING CORPORATION
By: /s/ XXXXXXX X. XXXXXX
_______________________________
Name: Xxxxxxx X. Xxxxxx
_____________________________
Title: Vice President and Treasurer
____________________________
SLM STUDENT LOAN TRUST 2001-1
By Chase Manhattan Bank USA, National
Association, not in its individual
capacity but solely as Eligible Lender
Trustee
By: /s/ XXXXX XXXXX
_______________________________
Name: Xxxxx Xxxxx
_____________________________
Title: Assistant 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/ XXXXX XXXXX
____________________________
Name: Xxxxx Xxxxx
___________________________
Title: Assistant Vice President
___________________________
BANKERS TRUST COMPANY
not in its individual capacity but solely
as Indenture Trustee
By: /s/ XXXXXXX X. XXXXXXX
____________________________
Name: Xxxxxxx X. Xxxxxxx
___________________________
Title: Vice President
___________________________
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/ XXXXXXX X. XXXXXXX
_______________________________
Name: Xxxxxxx X. Xxxxxxx
_____________________________
Title: Vice President
____________________________
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