EXHIBIT 99.4
EXECUTION COPY
SUBSERVICING AGREEMENT
This SUBSERVICING AGREEMENT (this "Agreement") is entered into as of March 27,
2002, by and between SunTech, Inc., a Mississippi corporation (the
"Subservicer") and The Student Loan Corporation, a Delaware corporation (the
"Servicer").
WITNESSETH:
WHEREAS, the Servicer provides servicing functions for SLC Student Loan
Trust-I (the "Issuer") that include servicing and holding student loans which
are guaranteed under a guarantee program established pursuant to the
requirements of the Higher Education Act of 1965, as amended (the "Student
Loans"); and
WHEREAS, such services are provided by the Servicer to the Issuer pursuant
to a Servicing Agreement, dated as of March 27, 2002, (the "Servicing
Agreement") between the Issuer and the Servicer, a copy of which has been
provided to the Subservicer; and
WHEREAS, the Subservicer is engaged in the business of providing, among
other things, loan servicing services for Student Loans; and
WHEREAS, the Servicer wishes to retain the Subservicer to service certain
Student Loans owned by the Issuer as beneficial owner and by Bankers Trust
Company as Eligible Lender Trustee which are required to be serviced by the
Servicer under the Servicing Agreement (such Student Loans subject to this
Agreement are the Student Loans referenced from time to time in Exhibit A (the
Loan Transfer Addendum) to the Loan Sale and Contribution Agreement, dated as of
March 27, 2002, by and between the Depositor and the Issuer, as designated
therein as being serviced by the Subservicer, referred to herein as the
"Subserviced Student Loans"), and the Subservicer wishes to undertake the
obligation to service all such Subserviced Student Loans in accordance with the
requirements of the Higher Education Act of 1965, as amended, regulations
promulgated thereunder by the U.S. Department of Education and requirements
issued by any applicable guarantor (collectively, the "Higher Education Act")
and under the terms hereinafter set forth.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Servicer and the Subservicer agree as follows:
1. Definitions. Capitalized terms which are not otherwise defined in this
Agreement shall have the meanings ascribed thereto in Appendix A to that
certain Indenture of Trust, dated as of March 27, 2002, by and between the
Issuer and Bankers Trust Company, as Indenture Trustee (the "Indenture").
2. Servicing Requirement and Engagement of Subservicer
The Servicer hereby authorizes and appoints the Subservicer to act as its agent
for the limited purpose of servicing the Subserviced Student Loans. The
Subservicer agrees to perform such functions in compliance with all requirements
of the Higher Education Act and all other applicable laws and regulations, and
in accordance with the terms and conditions of this Agreement.
The authorization granted by this Agreement includes, but is not limited to,
correspondence and communication with any Guaranty Agency or the U.S. Department
of Education regarding the Subserviced Student Loans, the assignment of claims
to any guarantor or insurer, communication with borrowers and any other
communication, correspondence, signature or other act required to service the
Subserviced Student Loans in accordance with requirements of the Higher
Education Act or regulations promulgated by any Guaranty Agency.
3. Subservicer Compensation
a. The Servicer shall pay compensation to the Subservicer for its
services hereunder as may be reasonably agreed to from time to time
between the Servicer and the Subservicer.
b. The Subservicer shall submit an invoice monthly to the Servicer, and
the Servicer shall remit payment for services performed as shown on
that invoice.
c. Payment is due within thirty (30) days after receipt of the billing
package. The billing package shall consist of an invoice and
supporting documentation.
d. The Subservicer acknowledges that the Issuer shall be entitled to
receive all payments of principal, interest and late charges
received with respect to the Subserviced Student Loans and that the
Subservicer shall have no right to retain such amounts as payment of
any fees due the Subservicer from the Servicer under the terms of
this Agreement. The Servicer hereby authorizes the Subservicer to
assess, collect and retain any charges which the Servicer or the
Issuer is permitted by law or regulation to assess with respect to
not sufficient fund ("NSF") processing or other collection costs.
e. If costs beyond the control of the Subservicer shall increase,
including, without limitation, postal rates, or the imposition of
any tax or assessment not currently being charged against the fees
of the Subservicer, then the Subservicer shall provide the Servicer
with ninety (90) days prior written notice (and including supporting
documentation) of such proposed increased costs and expenses. If the
Servicer accepts such increased costs and expenses, the increased
costs and expenses will go into effect at the end of such ninety
(90) day period. If the Servicer objects to such fee increase and
the Subservicer fails to agree to reduce or eliminate the increase
in a manner satisfactory to the Servicer, then the Servicer may
cause an early termination to occur and the Subserviced Student
Loans will be deconverted at cost within one hundred and eighty
(180) days of receipt of said notice.
f. If the Subservicer's costs and expenses are increased due to changes
in the manner of servicing the Subserviced Student Loans as a result
of changes in the Higher Education Act or the interpretation thereof
or due to changes in Guaranty Agency requirements, then ninety (90)
days after delivery of written notice to the Servicer the
Subservicer may increase servicing fees payable hereunder to
reasonably reflect such costs and expenses. However, no such
increase shall take effect until the Subservicer provides supporting
documentation to the Servicer that justifies such increase. In the
event the parties do not agree on the interpretation of the changes
to the Higher Education Act, then either party may terminate this
Agreement upon ninety (90) days written notice to the other party;
provided, however, that the Subservicer shall not terminate this
Agreement unless and until the Servicer shall have entered into
another agreement similar to this with the Subservicer or another
Subservicer.
If the Servicer believes the cost for services under this Agreement
is lowered by changes in regulations, law or processing, the
Servicer will submit a proposed fee schedule to the Subservicer. If
the Subservicer does not reject the schedule, the fees will go into
effect ninety (90) days thereafter. In the event that the parties do
not agree to the fee schedule, the Servicer may terminate this
Agreement upon ninety (90) days written notice to the Subservicer.
4. Subserviced Student Loan Subservicing
The Subservicer covenants and agrees to service each Subserviced Student Loan in
compliance with all requirements of the Higher Education Act, the Guarantee
Agreements and all other applicable laws and regulations, to perform all
services and duties customary to the servicing of Student Loans, including all
collection practices and to do so in the same manner as the Subservicer has
serviced Student Loans for parties other than the Servicer. Without limiting the
foregoing, in fulfillment of its obligations hereunder, the Subservicer shall:
a. Maintain a complete and separate file for the Subserviced Student
Loans of each borrower, which file shall include all documentation
and correspondence related to the Subserviced Student Loans.
b. Investigate Subserviced Student Loans that became delinquent and
establish and maintain systems for sending out statements, payment
coupons and charging and collecting late payment fees in accordance
with provisions of the Higher Education Act and all other applicable
laws and regulations.
c. Perform the actions necessary to maintain the guarantee and/or
insurance on each Subserviced Student Loan at all times.
d. Exercise "due diligence" as that term is defined in the Higher
Education Act and in Section 5 hereof.
e. Prepare and maintain accounting records with respect to the
Subserviced Student Loans; process refunds and other adjustments;
process address changes and maintain address records.
f. Collect all payments with respect to the Subserviced Student Loans
and deposit all such payments into the Revenue Fund established
under the Indenture, including without limitation guarantee
payments, Interest Subsidy Payments and Special Allowance Payments
with respect to the Subserviced Student Loans. The Subservicer shall
remit collected funds by automated clearing house within one (1)
business day of receipt to the Indenture Trustee. The Subservicer
shall also prepare reports and submit the same to the Servicer and
Issuer or its designee within fifteen (15) business days after the
end of each quarter as required to assure payment by the Secretary
of Education of Interest Subsidy and Special Allowance Payments.
g. Retain summary records of contacts, follow-ups and collection
efforts, and records of written correspondence relating to the
Subserviced Student Loans of each borrower sufficient to ensure
claim payment.
h. Process adjustments including NSF checks, status changes,
forbearances, deferments and Subserviced Student Loans paid in full.
i. Prepare and transmit to the Servicer or its designee reports,
including but not limited to ED Form 799, required by the U. S.
Department of Education or any Guaranty Agency regulations.
j. In the case of deli nquent and defaulted Subserviced Student Loans,
promptly take the actions necessary to investigate, file and prove a
claim for any loss with the Guaranty Agency as required, and assume
responsibility for communication and contact with the Guaranty
Agency to accomplish recovery on such defaulted Subserviced Student
Loans.
k. At all times identify the Issuer and the Issuer's eligible lender
trustee as the owners of the Student Loan and identify the Indenture
Trustee as a party which maintains a security interest in the
Subserviced Student Loan.
l. Maintain a duplicate or copy of the file (which may be in the form
of computer tape, microfilm or other electronic image) for each
borrower at an off-site location.
m. Maintain the original file in fireproof cabinets or in other
fireproof storage sufficient to protect the contents from a
temperature of 1600 degrees Fahrenheit for one hour.
n. (i) Prepare and furnish to the Servicer, Issuer and the Indenture
Trustee, by the 10th business day of each month, reports with
respect to the Subserviced Student Loans substantially in the form
attached hereto as Exhibit A-1; and (ii) prepare and furnish to the
Servicer, Issuer and the Indenture Trustee by March 31 of each year,
commencing March 31, 2003, reports with respect to the Subserviced
Student Loans substantially in the form attached hereto as Exhibit
A-2.
o. Obtain and maintain or cause to be obtained and maintained in force
(i) a fidelity bond in an amount of at least $1,000,000 upon all
personnel of the Subservicer insuring against any loss or damage
which the Servicer, Issuer or the Subservicer might suffer as a
consequence of any fraudulent or dishonest act of such personnel;
and (ii) errors and omissions insurance coverage in an amount equal
to at least $2,000,000 for all its customers.
p. Immediately respond to any communication received which is in the
nature of a complaint. Promptly answer all inquiries from borrowers
or the Servicer or Issuer pertaining to the Subserviced Student
Loans, disbursements, refunds or school status. Such inquiries may,
if necessary, be referred to the educational institution the student
attended or is attending. The Subservicer shall have no
responsibility with respect to any dispute between the student and
the educational institution regarding tuition, fees or refunds.
q. Establish and maintain a method for charging and collecting late
payment fees in accordance with provisions of the Higher Education
Act and all other applicable laws and regulations.
r. The Subservicer shall act as custodian and bailee with respect to
all original documents and shall hold them subject to the lien of
the Indenture in favor of the Indenture Trustee and pursuant to the
Custody Agreement substantially in the form of Exhibit B hereto. The
Subservicer agrees to enter into any reasonable custodian, bailment
or similar agreement reasonably required by the Servicer with
respect to perfecting and protecting the security interests of any
secured party.
s. If any Subserviced Student Loan has lost its guarantee and/or
insurance due to the actions of any prior servicer, or Subservicer,
or holder of the Subserviced Student Loan, the Subservicer will, at
the written request of the Servicer, use its best efforts to
reinstate such guarantee or insurance; provided, however, that the
Subservicer makes no representation that such reinstatement will
occur. Such services shall be provided at the cost agreed upon by
the Servicer and the Subservicer.
t. If requested by the Servicer, the Subservicer shall remit monthly
rebate fees to the U.S. Department of Education with respect to the
Subserviced Student Loans. Upon receipt of satisfactory
documentation, the Servicer shall promptly wire or cause the Issuer
to wire transfer to the Subservicer, from amounts held under the
Indenture, the amount of funds required to pay such fees. The
Subservicer shall provide the Servicer and Issuer, on a monthly
basis, with information needed to determine the monthly rebate fees.
5. Due Diligence
The Subservicer covenants and agrees that in discharging its obligations
hereunder it shall:
a. Exercise due diligence in the servicing and collection of all
Subserviced Student Loans as the term "due diligence" is used in the
Higher Education Act and further defined in the regulations of the
applicable guarantor.
b. Exercise reasonable care and diligence in the administration and
collection of all Subserviced Student Loans utilizing collection
practices in accordance with applicable Federal and State collection
practices, laws and regulations promulgated thereunder.
c. Administer and collect the Subserviced Student Loans in a competent,
diligent and orderly fashion, and in accordance with the
requirements of the Higher Education Act.
d. Exercise reasonable care and diligence in those aspects of the
administration of the Subserviced Student Loan program which are
within its area of responsibility.
6. Right of Inspection; Audits
The Servicer, the Issuer, the Indenture Trustee or any governmental agency
having jurisdiction over any of the same shall have the right from time to time
during normal business hours to examine and audit any of the Subservicer's
records pertaining to any Subserviced Student Loan being serviced, provided,
however, that such activities shall not unreasonably disrupt the Subservicer's
normal business operation.
7. Compliance Report
The Subservicer agrees that it shall permit, not more than once per year, the
Servicer, the Issuer, the Indenture Trustee or its designee to conduct or have
conducted a procedural audit regarding the Subservicer's compliance with the
requirements of the Higher Education Act or the terms of this Agreement. Such
audits shall be at the expense of the Servicer.
8. Representations, Warranties, and Covenants of Subservicer
The Subservicer makes the following representations, warranties and covenants to
the Servicer on the date of this Agreement. The Subservicer shall be deemed to
have repeated the representations and warranties in clauses (a), (b), (g), (h),
(i), (j) and (m) on each date on which a new series of Notes is issued under the
Indenture.:
a. The Subservicer (i) is duly incorporated, validly existing, and in
good standing under the laws of the jurisdiction in which it is
incorporated; (ii) is duly qualified to transact business and is in
good standing as a foreign corporation in each jurisdiction where
the nature and extent of its business and properties require due
qualification and good standing; (iii) possesses all requisite
authority, permits and power to conduct its business as is
contemplated by this Agreement including, without limitation,
eligibility as a third-party servicer under the Higher Education
Act; and (iv) is in compliance with all applicable laws and
regulations.
b. The execution and delivery by the Subservicer of this Agreement and
the performance of its obligations hereunder (i) are within its
corporate power, (ii) have been duly authorized by all necessary
corporate action, (iii) require no action by or filing with any
governmental agency, except for any action or filing that has been
taken or made on or before the date of this Agreement, and (iv) do
not violate any provision of its articles of in corporation or
bylaws.
c. The Subservicer will satisfy all of its obligations relating to the
Subserviced Student Loans, maintain in effect all qualifications
required in order to service the Subserviced Student Loans and
comply in all material respects with all requirements of law if a
failure to comply would have a materially adverse effect on the
interest of the Issuer.
d. The Subservicer will not permit any rescission or cancellation of a
Subserviced Student Loan except as ordered by a court or other
government authority or as consented to by the Eligible Lender
Trustee and the Indenture Trustee, except that it may write off any
delinquent loan if the remaining balance of the borrower's account
is less than $50.
e. The Subservicer will do nothing to impair the rights granted to the
Noteholders under the Indenture, except for such actions as may be
required by the Higher Education Act or other applicable law.
f. The Subservicer will not reschedule, revise, defer or otherwise
compromise payments due on any Subserviced Student Loan except
during any applicable interest only, deferral or forbearance periods
or otherwise in accordance with all applicable standards and
requirements for servicing of the Subserviced Student Loans.
g. All Subservicer financial statements delivered to the Servicer were
prepared according to U.S. generally accepted accounting principles
("GAAP") consistently applied and present fairly, in all material
respects, the financial condition, results of operations and cash
flows of the Subservicer as of, and for the portion of the fiscal
year ending on their date or dates (subject, in the case of
financial statements other than annual ones, only to normal year-end
adjustments).
h. No event which could cause a material adverse effect on the
Subservicer's financial condition has occurred, and if such event
shall occur, the Subservicer shall promptly give the Servicer and
Issuer notice thereof.
i. The Subservicer is not subject to, or aware of the threat of, any
litigation that is reasonably likely to be determined adversely to
it and that, if so adversely determined, would have a material
adverse effect on its financial condition or its ability to meet its
obligations under this Agreement and no outstanding or unpaid
judgments against the Subservicer exist, and if such event shall
occur, the Subservicer shall promptly give the Servicer notice
thereof.
j. The Subservicer's examination process did not disclose or create any
basis upon which to believe that each Subserviced Student Loan for
which a certificate has been delivered under the Custody Agreement,
except as indicated in such certificate, (i) is not in compliance in
all material respects with all laws and rules and regulations with
respect to the guaranty thereof, and (ii) does not conform to the
applicable requirements of eligibility for guaranty.
k. The Subservicer agrees to maintain it's servicing system so that it
will continue to provide all services required under this Agreement.
l. Until all Subserviced Student Loans serviced hereunder have been
repaid in full, or paid as a claim by a guarantor, or transferred to
the Servicer or another Subservicer, the Subservicer agrees as
follows:
(i) The Subservicer shall cause to be furnished to the Servicer
such financial statements as the Servicer may reasonably
request, including quarterly unaudited financial statements
within thirty (30) days after the conclusion of each fiscal
quarter, and annual financial statements within ninety (90)
days after the end of each fiscal year audited by Xxxxx CPA
Group or nationally recognized independent certified public
accounts and such other information with respect to its
business affairs, assets, and liabilities as the Servicer may
reasonably request.
(ii) The Subservicer shall maintain books, records and accounts
necessary to prepare financial statements according to GAAP
and maintain adequate internal financial controls.
(iii) The Subservicer shall maintain all licenses, permits, and
franchises necessary for its business.
m. This Agreement will, upon execution and delivery by all parties
thereto, constitute a legal and binding obligation of the
Subservicer, enforceable against the Subservicer according to its
terms.
9. Representations and Warranties of Servicer
The Servicer represents and warrants to the Subservicer on the date of this
Agreement:
a. The Servicer (i) is duly organized, validly existing, and in good
standing under the laws of the jurisdiction in which it is formed;
(ii) is duly qualified to transact business as a Delaware
corporation; and (iii) possesses all requisite authority, permits
and power to conduct its business as is contemplated by this
Agreement.
b. The execution and delivery by the Servicer of this Agreement and the
performance of its obligations hereunder (i) are within its
organizational power; (ii) have been duly authorized by all
necessary action; (iii) require no action by or filing with any
governmental agency, except for any action or filing that has been
taken or made on or before the date of this Agreement; and (iv) do
not violate any provision of its certificate of incorporation or
by-laws.
c. This Agreement will, upon execution and delivery by all parties
thereto, constitute a legal and binding obligation of the Servicer,
enforceable against the Servicer according to its terms.
d. The Servicer is not subject to, or aware of the threat of, any
litigation that is reasonably likely to be determined adversely to
it and that, if so adversely determined, would have a material
adverse effect on its financial condition relevant to this
Agreement.
10. Subservicer Default
Each of the following constitute a "Subservicer Default" hereunder:
a. any failure by the Subservicer to deliver to the Indenture Trustee
for deposit in any of the Trust Accounts any payment required by the
Basic Documents, which failure continues unremedied for one business
day after written notice of such failure is received by the
Subservicer from the Servicer, the Eligible Lender Trustee, the
Indenture Trustee or the Administrator or after discovery of such
failure by an officer of the Subservicer; or
b. any breach of a representation or warranty of the Subservicer
contained in Section 8 of this Agreement or failure by the
Subservicer duly to observe or to perform in any material respect
any term, covenant or agreement set forth in this Agreement, which
breach or failure shall (i) materially and adversely affect the
rights of Noteholders or any Derivative Product Counterparties and
(ii) continue unremedied for a period of sixty (60) days after the
date of discovery of such failure by an officer of the Subservicer
or on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Subservicer, by the Indenture
Trustee, the Eligible Lender Trustee or the Administrator; or
c. an Event of Bankruptcy occurs with respect to the Subservicer; or
d. any failure by the Subservicer to comply with any requirements under
the Higher Education Act resulting in a loss of its eligibility as a
third-party servicer.
Subservicer Default does not include any failure of the Subservicer to service a
Subserviced Student Loan in accordance with the Higher Education Act, so long as
the Subservicer is in compliance with its obligations under this Agreement and
as long as the Subservicer has deposited the amount of any payments lost as a
result of the Subservicer's actions in the Revenue Fund.
11. Rights Upon Subservicer Default
In each and every case, so long as the Subservicer Default shall not have been
remedied, the Servicer, by notice in writing to the Subservicer may terminate
all the rights and obligations (other than the obligations set forth in Section
19 hereof) of the Subservicer under this Agreement. As of the effective date of
termination of the Subservicer, all authority and power of the Subservicer under
this Agreement, whether with respect to the Notes or the Subserviced Student
Loans or otherwise, shall, without further action, pass to and be vested in the
Servicer or the Indenture Trustee or such successor Subservicer as may be
appointed, and all files shall be disposed of pursuant to the procedures
proscribed by Section 14 hereof.
The Subservicer shall cooperate with the successor Subservicer, the Servicer,
the Indenture Trustee and the Eligible Lender Trustee in effecting the
termination of the responsibilities and rights of the Subservicer under this
Agreement, including the transfer to the successor servicer for administration
by it of all cash amounts that shall at the time be held by the Subservicer for
deposit, or shall thereafter be received by it with respect to a Subserviced
Student Loan. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Subserviced Student Loan files to
the successor servicer and amending this Agreement and any other Basic Documents
to reflect such succession of servicer pursuant to this Section 11 shall be paid
by the Subservicer (other than the Indenture Trustee acting as the servicer
under this Section 11) upon presentation of reasonable documentation of such
costs and expenses.
12. Term
The term shall commence as of the date of this Agreement and shall continue for
an initial period of three (3) years. At the expiration of the initial term, the
term shall automatically extend for one (1) additional year each year
thereafter, unless either party gives ninety (90) days written notice prior to
the end of the initial term or any extension of the term.
13. Termination
This Agreement will terminate upon the occurrence of the earlier of (i) the
termination of the Indenture; (ii) termination of the Servicing Agreement; (iii)
early termination pursuant to Sections 3(e) or 11 hereof; (iv) payment in full
of all of the Subserviced Student Loans being serviced hereunder; and (v)
termination pursuant to Section 12 hereof.
In the event of termination of this Agreement, the Servicer shall remain liable
for all fees due hereunder. Termination shall be made without prejudice to any
other rights or remedies either party may have at law or in equity. The
obligations of the Subservicer under Section 4 hereof, and the representations
and warranties in Section 8 hereof, shall survive any termination of this
Agreement and shall remain in effect for all Subserviced Student Loans while
such Subserviced Student Loans are serviced by the Subservicer. The rights and
obligations of the Subservicer contained in Section 19 hereof shall survive
termination of this Agreement. In the event that servicing on any Subserviced
Student Loan is transferred to a successor subservicer, such successor
subservicer shall be required by the Servicer to engage in reasonable good faith
efforts to obtain payment on any claim initially rejected by a guarantor for
payment including, without limitation, involving the Subservicer in such effort,
where the reason for claim denial relates to the period during which the
Subservicer serviced such Subserviced Student Loan hereunder. However, if the
cause for claim denial is reasonably attributable to the Subservicer actions or
inactions, the Subservicer shall be responsible therefore.
14. Disposition of Files on Termination
Upon termination of this Agreement, all files (physical and electronic) held by
the Subservicer with respect to Subserviced Student Loans shall be promptly
transferred to the Servicer or its designee in such form as the Servicer
reasonably requests. The Servicer shall be responsible for payment of reasonable
expenses related to the transfer of the records unless the Servicer is removing
the Subserviced Student Loans because of a breach by the Subservicer. In such
instance, the Subservicer shall bear the cost of deconverting and transferring
the Subserviced Student Loan documentation.
15. Independent Contractor
The Subservicer is an independent contractor and is not, and shall not hold
itself out to be, the agent of the Servicer except for the limited specific
purposes set forth in this Agreement.
16. Correspondence; Disclosure
The parties hereto acknowledge and agree that the Subservicer will handle all
communication with borrowers necessary to provide its services hereunder. Data
regarding Subserviced Student Loans shall be disclosed only to the Servicer, the
Issuer, the Indenture Trustee, the Administrator or the respective borrower,
unless otherwise required by law or certain financing covenants.
17. Cooperation
Each party covenants and agrees to cooperate fully with the other to facilitate
the transactions contemplated by this Agreement.
18. Amendments
This Agreement may be amended, supplemented or modified only by written
instrument duly executed by the Servicer and the Subservicer.
19. Indemnification and Liability
a. If the Subservicer is required to appear in, or is made a defendant
in any legal action or proceeding commenced by any party other than
Servicer with respect to any matter arising hereunder, the Servicer
shall indemnify and hold the Subservicer harmless from all loss,
liability, or expense (including reasonable attorney's fees) except
for any loss, liability or expense arising out of or relating to the
Subservicer's willful misconduct or negligence with regard to the
performance of services hereunder or breach of its obligations
hereunder or under the Custody Agreement. Subject to the limitations
set forth in paragraph 19(b) hereof, the Subservicer shall indemnify
and hold the Servicer harmless from all loss, liability and expense
(including reasonable attorney's fees) arising out of or relating to
the Subservicer's willful misconduct or negligence with regard to
performance of services hereunder or breach of its obligations
hereunder or under the Custody Agreement, provided that in no event
shall the Subservicer be responsible or liable for any incidental,
special or consequential damages with respect to any matter
whatsoever arising out of this Agreement.
b. If a Subserviced Student Loan is denied the guarantee by the
Guaranty Agency or the loss of federal interest, special allowance,
and/or insurance benefits, the Subservicer shall have the right to
take any action not prohibited by law or regulation to reduce its
losses, if any, hereunder, including but not limited to curing, at
its own expense, any due diligence or other servicing violation. If
any lost guarantee is not reinstated within nine (9) months of the
date the Subservicer learns of the loss of the guarantee on a
Subserviced Student Loan, the Subservicer shall take actions which
make the Servicer and the Issuer whole with respect to the
Subserviced Student Loan while maintaining the eligibility for
future reinstatement of the guarantee; provided, however, the
Subservicer may delay taking such actions by giving written notice
to the Servicer not less often than each ninety (90) days that the
Subservicer has reason to believe that the guarantee will be
reinstated within time frames permitted by regulations. If the
Subservicer gives notice of such delay, the Subservicer agrees to
pay any accrued interest on the Subserviced Student Loan that may be
uninsured. The Servicer agrees to use its best efforts to cause the
repurchase, at par plus insured interest and benefits thereon, of
any Subserviced Student Loan which is cured and is reinsured
subsequent to its sale by the Servicer pursuant to actions taken by
the Subservicer to make the Servicer and the Issuer whole and if the
sale was to an eligible lender, to the extent the Servicer makes
available, funds therefor.
c. The Subservicer shall have no responsibility for any error or
omission (including due diligence violations) which occurred prior
to the date the Subservicer assumed responsibility for servicing the
Subserviced Student Loan, nor shall the Subservicer be responsible
for losses, damages or expenses arising from any change in law or
regulation which retroactively imposes additional requirements for
documentation or servicing actions, provided that the Subservicer
has made best efforts to comply with retroactive additional
requirements.
20. Confidentiality
The contents of this Agreement, together with all supporting documents,
exhibits, schedules, and any amendments thereto which form the basis of the
business relationship between the Servicer and the Subservicer, insofar as the
same relate to the fees charged by the Subservicer, shall be held in confidence
by both parties and shall not be disclosed or otherwise discussed with any third
party (unless required by law or regulation) except outside counsel or
independent accounts or in connection with the offer and sale of securities
issued or to be issued under the Indenture, without the prior written consent of
the other party.
21. Sale or Transfer of Loans; Limitations
The Servicer agrees that if any Subserviced Student Loans are sold under
conditions that result in the Subserviced Student Loans being transferred to
another Subservicer, whether immediately or at some future date, the Servicer
will pay or cause to be paid, at the time such Subserviced Student Loans are
transferred, any applicable deconversion fees.
22. Miscellaneous
a. Any material written communication received at any time by the
Servicer with respect to a Subserviced Student Loan or a borrower
shall be promptly transmitted by the Servicer to the Subservicer.
Such communications include but are not limited to letters, notices
of death or disability, adjudication of bankruptcy and like
documents, and forms requesting deferment of repayment or loan
cancellations.
b. This Agreement shall be governed by the laws of the State of New
York.
c. All covenants contained herein and the benefits, rights and
obligations of the Servicer hereunder, shall be binding upon and
inure to the benefit of the legal representatives, successors and
assigns of the Servicer, including but not limited to, any successor
entity acquiring or succeeding to the assets of the Servicer.
d. The Subservicer may not assign its rights or obligations hereunder
without obtaining the Servicer's prior written consent.
e. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and all of which shall be deemed
to constitute but one and the same instrument.
f. If any provisions of this Agreement shall be held, or deemed to be,
or shall in fact be inoperative or unenforceable as applied in any
particular situation, such circumstance shall not have the effect of
rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to any extent whatsoever. The
invalidity of any one or more phrases, sentences, clauses or
paragraphs herein contained shall have no effect on the remaining
portions of this Agreement or any part hereof.
g. All notices, requests, demands or other instruments which may or are
required to be given by either party to the other, shall be in
writing and each shall be deemed to have been properly given when
delivered personally on an officer of the party to whom such notice
is to be given, upon receipt thereof when mailed postage prepaid by
registered or certified mail, requesting return receipt, or upon
confirmed facsimile transmission, addressed as follows:
If intended for the Servicer:
The Student Loan Corporation
000 Xxxxxxxxxx Xxxxxxxxx
0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax No.: (000) 000-0000
If intended for the Subservicer:
SunTech, Inc.
0000 Xxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: President
Fax No.: (000) 000-0000
Either party may change the address to which subsequent notices are
to be sent to it by written notice to the other given as aforesaid,
but any such notice of change, shall not be effective until the
second business day after it is mailed.
h. This Agreement may not be terminated by any party hereto except in
the manner and with the effect herein provided.
i. When the context of this Agreement so requires or implies,
references to the Servicer include any applicable trustee.
j. If either party cannot fulfill its obligations (other than the
payment of money), in part or in whole, due to a force or event
outside its control, such obligations of that party shall be
suspended and such party shall not be liable to the other party for
any failure to perform hereunder as a result.
k. The parties hereto agree to execute or cause to be executed the
Limited Power of Attorney, attached hereto as Exhibit C.
l. The Subservicer has and agrees to maintain a disaster recovery plan
which, in its reasonable opinion, will permit it to continue
operations without undue interruption in the event of fire,
disaster, labor disruption, or Act of God.
m. EACH PARTY TO THIS AGREEMENT WAIVES ITS RIGHT TO A JURY TRIAL.
IN WITNESS WHEREOF, the parties have hereunto set their hands by their duly
authorized officers as of the day and year first above written.
SUNTECH, INC., as
Subservicer,
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chairman
THE STUDENT LOAN CORPORATION, as
Servicer
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
EXHIBIT A-1
SUBSERVICER REPORTS
-------------------
EXHIBIT A-2
ANNUAL REPORTS
--------------
EXHIBIT B
CUSTODY AGREEMENT
-----------------
EXHIBIT C
LIMITED POWER OF ATTORNEY
-------------------------
WITNESSETH:
WHEREAS, The Student Loan Corporation, a Delaware corporation (the
"Servicer") and SunTech, Inc., a Mississippi corporation ("Subservicer"), are
parties to the SUBSERVICING AGREEMENT, dated as of March 27, 2002 (the
"Subservicing Agreement"); and
WHEREAS, pursuant to the Subservicing Agreement, Subservicer will perform
substantially all of the obligations and duties with regard to servicing of
certain education loans (the "Subserviced Student Loans")as provided therein;
and
WHEREAS, in order to carry out its obligations under the Subservicing
Agreement with respect to the Subserviced Student Loans, Subservicer requires
the power to perform certain acts, including but not limited to execution of
promissory notes, assignment of notes to guarantors and filing of responses to
bankruptcy notices, in the name of Bankers Trust Company, as eligible lender
trustee (the "Eligible Lender Trustee") for SLC Student Loan Trust-I.
NOW THEREFORE, the Subservicer, Issuer and Eligible Lender Trustee agree:
1. That each of the Issuer and Eligible Lender Trustee do hereby make and
appoint Subservicer as its true and lawful attorney-in-fact to do all things
necessary to carry out Subservicer's obligations under the Subservicing
Agreement with respect to the Subserviced Student Loans, including but not
limited to the filing of proof of claim with bankruptcy courts. This
instrument shall be construed and interpreted as a limited power of attorney
(the "Limited Power of Attorney") and is not to be construed as granting any
powers to Subservicer other than those necessary to carry out its obligations
under the Subservicing Agreement with respect to the Subserviced Student
Loans.
2. That this Limited Power of Attorney is effective as of March 27, 2002 and
shall remain in force and effect until revoked in writing by the Issuer or
Eligible Lender Trustee or until the Subservicing Agreement is terminated.
This instrument shall supplement but not replace the powers previously
granted to Subservicer in the Subservicing Agreement.
The undersigned, being duly authorized, has executed this Limited Power of
Attorney s of March 27, 2002.
SLC STUDENT Loan TRUST-I,
as Issuer
By: THE STUDENT LOAN CORPORATION,
as Issuer's Administrator
By:/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Name:Xxxxxx X. Xxxxx
Title: Chief Financial Officer
BANKERS TRUST COMPANY, as Eligible
Lender Trustee
By:/s/ Xxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
The undersigned, being duly authorized, accepts the foregoing Limited
Power of Attorney for and on behalf of Subservicer, as of March 27, 2002.
SunTech, Inc.,
as Subservicer
By:/s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Chairman
