EXHIBIT 99.4
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SERVICING AGREEMENT
among
XXXXXX XXX SERVICING L.P.,
STUDENT LOAN MARKETING ASSOCIATION,
as Administrator
SLM STUDENT LOAN TRUST 2003-1,
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Eligible Lender Trustee
and
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Indenture Trustee
Dated as of January 31, 2003
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TABLE OF CONTENTS
Page
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ARTICLE I
Section 1.1 Definitions and Usage.......................................................1
ARTICLE II
Section 2.1 Custody of Trust Student Loan Files.........................................1
Section 2.2 Duties of Servicer as Custodian.............................................2
Section 2.3 Maintenance of and Access to Records........................................2
Section 2.4 Release of Documents........................................................2
Section 2.5 Instructions; Authority To Act..............................................3
Section 2.6 [RESERVED]..................................................................3
Section 2.7 Effective Period and Termination............................................3
ARTICLE III
Section 3.1 Duties of Servicer..........................................................3
Section 3.2 Collection of Trust Student Loan Payments...................................4
Section 3.3 Realization upon Trust Student Loans........................................5
Section 3.4 No Impairment...............................................................5
Section 3.5 Purchase of Trust Student Loans; Reimbursement..............................6
Section 3.6 Primary Servicing Fee; Carryover Servicing Fee..............................8
Section 3.7 Access to Certain Documentation and Information
Regarding Trust Student Loans..............................................8
Section 3.8 Servicer Expenses...........................................................8
Section 3.9 Appointment of Subservicer..................................................9
Section 3.10 Reports.....................................................................9
Section 3.11 Covenants and Agreements of the Issuer, Administrator,
Eligible Lender Trustee and Servicer......................................10
Section 3.12 Special Programs...........................................................10
Section 3.13 Financial Statements.......................................................11
Section 3.14 Insurance..................................................................11
Section 3.15 Administration Agreement...................................................11
Section 3.16 Lender Identification Number...............................................11
ARTICLE IV
Section 4.1 Representations of Servicer................................................12
Section 4.2 Indemnities of Servicer....................................................13
Section 4.3 Merger or Consolidation of, or Assumption of
the Obligations of, Servicer..............................................13
Section 4.4 Limitation on Liability of Servicer........................................14
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Section 4.5 Xxxxxx Xxx Servicing L.P. Not To Resign as Servicer........................14
ARTICLE V
Section 5.1 Servicer Default...........................................................15
Section 5.2 Appointment of Successor...................................................16
Section 5.3 Notification to Noteholders................................................17
Section 5.4 Waiver of Past Defaults....................................................17
ARTICLE VI
Section 6.1 Amendment..................................................................17
Section 6.2 Notices....................................................................18
Section 6.3 Counterparts...............................................................19
Section 6.4 Entire Agreement; Severability.............................................19
Section 6.5 Governing Law..............................................................20
Section 6.6 Relationship of Parties....................................................20
Section 6.7 Captions...................................................................20
Section 6.8 Nonliability of Directors, Officers and Employees
of Servicer, the Eligible Lender Trustee,
the Indenture Trustee and the Administrator..............................20
Section 6.9 Assignment.................................................................20
Section 6.10 Limitation of Liability of Eligible Lender
Trustee and Indenture Trustee.............................................20
Attachment A Schedule of Fees
Attachment B Servicer Locations
Attachment C Reports
Appendix
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SERVICING AGREEMENT
Xxxxxx Mae Servicing L.P. ("Servicer"), a Delaware limited partnership,
hereby agrees with SLM Student Loan Trust 0000-0 (xxx "Xxxxxx"), Xxxxx Xxxxxxxxx
Bank USA, National Association, not in its individual capacity but in its
capacity as trustee under a trust agreement dated January 1, 2003 between
SLM
Funding LLC and Chase Manhattan Bank USA, National Association ("Eligible Lender
Trustee"), the Student Loan Marketing Association, a federally chartered
corporation ("Administrator") and The Bank of
New York, a
New York banking
corporation, not in its individual capacity but in its capacity as Indenture
Trustee under an Indenture dated January 1, 2003 among SLM Student Loan Trust
2003-1, Chase Manhattan Bank USA, National Association (the "Eligible Lender
Trustee") and The Bank of
New York (the "Indenture Trustee"), as follows:
WHEREAS, the Eligible Lender Trustee will acquire certain education loans
to be held in the Trust formed pursuant to a trust agreement (the "Trust
Agreement"), dated as of January 1, 2003, between
SLM Funding LLC and Eligible
Lender Trustee;
WHEREAS, the Issuer will issue notes (the "Notes") pursuant to an indenture
(the "Indenture"), dated as of January 1, 2003, between the Issuer and the
Indenture Trustee, which Notes are payable from the assets of the Issuer;
WHEREAS, the Issuer, the Administrator and the Eligible Lender Trustee
desire the Servicer to service said education loans held by the Eligible Lender
Trustee on behalf of the Issuer, and the Servicer is willing to service said
education loans for the Issuer, the Administrator, the Eligible Lender Trustee
and the Indenture Trustee;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
SECTION 1.1 DEFINITIONS AND USAGE. Except as otherwise specified herein or
as the context may otherwise require, capitalized terms used but not otherwise
defined herein are defined in Appendix A hereto, which also contains rules as to
usage that shall be applicable herein.
ARTICLE II
SECTION 2.1 CUSTODY OF TRUST STUDENT LOAN FILES. To assure uniform quality
in servicing the Trust Student Loans and to reduce administrative costs, the
Issuer hereby revocably appoints the Servicer, and the Servicer hereby accepts
such appointment, to act for the benefit of the Issuer and the Indenture Trustee
as custodian of the following documents or instruments (collectively the "Trust
Student Loan Files") which are hereby constructively delivered to the Indenture
Trustee, as pledgee of the Issuer with respect to each Trust Student Loan:
(a) the original fully executed copy of the note (or all
electronic records evidencing the same) evidencing the Trust
Student Loan; and
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(b) any and all other documents and computerized records that the
Servicer shall keep on file, in accordance with its customary
procedures, relating to such Trust Student Loan or any
obligor with respect thereto.
SECTION 2.2 DUTIES OF SERVICER AS CUSTODIAN. The Servicer shall hold the
Trust Student Loan Files for the benefit of the Issuer and the Indenture Trustee
and maintain such accurate and complete accounts, records and computer systems
pertaining to each Trust Student Loan File as shall enable the Issuer to comply
with this Agreement. In performing its duties as custodian the Servicer shall
act with reasonable care, using that degree of skill and attention that the
Servicer exercises with respect to the student loan files relating to comparable
student loans that the Servicer services on behalf of the Student Loan Marketing
Association and shall ensure that it fully complies with all applicable Federal
and state laws, including the Higher Education Act, with respect thereto. The
Servicer shall take all actions necessary with respect to the Trust Student Loan
Files held by it under this Agreement and of the related accounts, records and
computer systems, in order to enable the Issuer or the Indenture Trustee to
verify the accuracy of the Servicer's record keeping with respect to the
Servicer's obligations as custodian hereunder. The Servicer shall promptly
report to the Issuer, the Administrator and the Indenture Trustee any material
failure on its part to hold the Trust Student Loan Files and maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be deemed to
require an initial review or any periodic review by the Issuer, the Eligible
Lender Trustee or the Indenture Trustee of the Trust Student Loan Files. If in
the reasonable judgment of the Eligible Lender Trustee it is necessary to
preserve the interests of the Noteholders and the Trust in the Trust Student
Loans or at the request of the Administrator, the Servicer shall transfer
physical possession of the notes evidencing the Trust Student Loans to the
Eligible Lender Trustee, the Indenture Trustee or any other custodian for either
of them designated by the Eligible Lender Trustee.
SECTION 2.3 MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
each Trust Student Loan File at one of its offices specified in Attachment B to
this Agreement or at such other office as shall be consented to by the Issuer
and the Indenture Trustee upon written notice to the Issuer and the Indenture
Trustee. Upon reasonable prior notice, the Servicer shall make available to the
Issuer and the Indenture Trustee or their respective duly authorized
representatives, attorneys or auditors a list of locations of the Trust Student
Loan Files and the related accounts, records and computer systems maintained by
the Servicer at such times during normal business hours as the Issuer or the
Indenture Trustee shall instruct.
SECTION 2.4 RELEASE OF DOCUMENTS. Upon written instruction from the Indenture
Trustee, the Servicer shall release any Trust Student Loan File to the Indenture
Trustee, the Indenture Trustee's agent, or the Indenture Trustee's designee, as
the case may be, at such place or places as the Indenture Trustee may reasonably
designate, as soon as practicable. The Indenture Trustee shall cooperate with
the Servicer to provide the Servicer with access to the Trust Student Loan Files
in order for the Servicer to continue to service the Trust Student Loans after
the release of the Trust Student Loan Files. In the event the Servicer is not
provided access to the Trust Student Loan Files, the Servicer shall not be
deemed to have breached its obligations pursuant to Section 3.1, 3.2, 3.3 or 3.4
if it is unable to perform such obligations due to its inability to have access
to the Trust Student Loans Files. The Servicer shall not be liable for any
losses with respect to the servicing of such Trust Student Loans arising after
the release of the
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related Trust Student Loan Files to the extent the losses are attributable to
the Servicer's inability to have access to the related Trust Student Loan Files.
SECTION 2.5 INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be deemed
to have received proper instructions with respect to the Trust Student Loan
Files upon its receipt of written instructions signed by a Responsible Officer
of the Indenture Trustee.
SECTION 2.6 [RESERVED].
SECTION 2.7 EFFECTIVE PERIOD AND TERMINATION. Xxxxxx Xxx Servicing L.P.'s
appointment as custodian shall become effective as of the Closing Date and shall
continue in full force and effect for so long as Xxxxxx Mae Servicing L.P. shall
remain the Servicer hereunder. If Xxxxxx Xxx Servicing L.P. or any successor
Servicer shall resign as Servicer in accordance with the provisions of this
Agreement or if all the rights and obligations of Xxxxxx Mae Servicing L.P. or
any such successor Servicer shall have been terminated under Section 5.1, the
appointment of Xxxxxx Xxx Servicing L.P. or such successor Servicer as custodian
shall be terminated simultaneously with the effectiveness of such resignation or
termination. On or prior to the effective date of any resignation or termination
of such appointment, the Servicer shall deliver the Trust Student Loan Files to
the successor Servicer, the Indenture Trustee or the Indenture Trustee's agent,
at the direction of the Indenture Trustee, at such place or places as the
Indenture Trustee may reasonably designate. In establishing an effective date
for the termination of the Servicer as custodian of the Trust Student Loan
Files, the parties shall provide for a reasonable period for the Servicer to
deliver the Trust Student Loan Files to its designated successor.
ARTICLE III
SECTION 3.1 DUTIES OF SERVICER. The Servicer, for the benefit of the Issuer
(to the extent provided herein), shall manage, service, administer and make
collections on the Trust Student Loans with reasonable care, using that degree
of skill and attention that the Servicer exercises with respect to comparable
student loans that it services on behalf of the Student Loan Marketing
Association from the Closing Date (or with respect to Trust Student Loans which
are sold to the Issuer following the Closing Date, such later date as the Trust
Student Loans are delivered to Servicer for servicing hereunder) until the Trust
Student Loans are paid in full. Without limiting the generality of the foregoing
or of any other provision set forth in this Agreement and notwithstanding any
other provision to the contrary set forth herein, the Servicer shall manage,
service, administer and make collections with respect to the Trust Student Loans
(including collection of any Interest Subsidy Payments and Special Allowance
Payments on behalf of the Eligible Lender Trustee) in accordance with, and
otherwise comply with, all applicable Federal and state laws, including all
applicable rules, regulations and other requirements of the Higher Education Act
and the applicable Guarantee Agreement, the failure to comply with which would
adversely affect the eligibility of one or more of the Trust Student Loans for
Federal reinsurance or Interest Subsidy Payments or Special Allowance Payments
or one or more of the Trust Student Loans for receipt of Guarantee Payments.
The Servicer's duties shall include, but shall not be limited to,
collection and posting of all payments, responding to inquiries of borrowers on
such Trust Student Loans, monitoring borrowers' status, making required
disclosures to borrowers, performing due diligence with
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respect to borrower delinquencies, sending payment coupons to borrowers and
otherwise establishing repayment terms, reporting tax information to borrowers,
if applicable, accounting for collections and furnishing monthly statements with
respect thereto to the Administrator. The Servicer shall follow its customary
standards, policies and procedures in performing its duties as Servicer. Without
limiting the generality of the foregoing, the Servicer is authorized and
empowered to execute and deliver, on behalf of itself, the Issuer, the Eligible
Lender Trustee, the Indenture Trustee, and the Noteholders or any of them,
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to such Trust
Student Loans; PROVIDED, HOWEVER, that the Servicer agrees that it will not (a)
permit any rescission or cancellation of a Trust Student Loan except as ordered
by a court of competent jurisdiction or governmental authority or as otherwise
consented to in writing by the Eligible Lender Trustee and the Indenture Trustee
PROVIDED, HOWEVER, that the Servicer may write off any delinquent Trust Student
Loan if the remaining balance of the borrower's account is less than $50 or (b)
reschedule, revise, defer or otherwise compromise with respect to payments due
on any Trust Student Loan except pursuant to any applicable interest only,
deferral or forbearance periods or otherwise in accordance with all applicable
standards, guidelines and requirements with respect to the servicing of Student
Loans; PROVIDED FURTHER, HOWEVER, that the Servicer shall not agree to any
reduction of yield with respect to any Trust Student Loan (either by reducing
borrower payments or reducing principal balance) except as permitted in
accordance with Section 3.12 or otherwise if, and to the extent, the Servicer or
the Administrator reimburses the Issuer in an amount sufficient to offset any
such effective yield reduction made by the Servicer consistent with such
customary servicing procedures as it follows with respect to comparable Student
Loans which it services on behalf of the Student Loan Marketing Association. The
Eligible Lender Trustee on behalf of the Issuer hereby grants a power of
attorney and all necessary authorization to the Servicer to maintain any and all
collection procedures with respect to the Trust Student Loans, including filing,
pursuing and recovering claims with the Guarantors for Guarantee Payments and
with the Department for Interest Benefit Payments and Special Allowance Payments
and taking any steps to enforce such Trust Student Loans such as commencing a
legal proceeding to enforce a Trust Student Loan in the names of the Issuer, the
Eligible Lender Trustee, the Indenture Trustee, and the Noteholders. The
Eligible Lender Trustee shall upon the written request of the Servicer furnish
the Servicer with any other powers of attorney and other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder.
SECTION 3.2 COLLECTION OF TRUST STUDENT LOAN PAYMENTS.
A. The Servicer shall make reasonable efforts (including all efforts
that may be specified under the Higher Education Act or any Guarantee Agreement)
to collect all payments called for under the terms and provisions of the Trust
Student Loans as and when the same shall become due and shall follow such
collection procedures as it follows with respect to comparable student loans
that it services on behalf of the Student Loan Marketing Association. The
Servicer shall allocate collections with respect to the Trust Student Loans
between principal and interest in accordance with Section 2.5 of the
Administration Agreement. The Servicer may in its discretion waive any late
payment charge or any other fees that may be collected in the ordinary course of
servicing a Trust Student Loan. The Servicer may, at its option, retain any late
payment charges which it collects.
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B. The Servicer shall make reasonable efforts to claim, pursue and
collect all Guarantee Payments from the Guarantors pursuant to the Guarantee
Agreements with respect to any of the Trust Student Loans as and when the same
shall become due and payable, shall comply with all applicable laws and
agreements with respect to claiming, pursuing and collecting such payments and
shall follow such practices and procedures as it follows with respect to
comparable guarantee agreements and student loans that it services on behalf of
the Student Loan Marketing Association. In connection therewith, the Servicer is
hereby authorized and empowered to convey to any Guarantor the note and the
related Trust Student Loan File representing any Trust Student Loan in
connection with submitting a claim to such Guarantor for a Guarantee Payment in
accordance with the terms of the applicable Guarantee Agreement. All amounts so
collected by the Servicer shall constitute Available Funds for the applicable
Collection Period and shall be deposited into the Collection Account or
transferred to the Administrator in accordance with Section 2.4 of the
Administration Agreement. The Eligible Lender Trustee shall, upon the written
request of the Servicer, furnish the Servicer with any power of attorney and
other documents necessary or appropriate to enable the Servicer to convey such
documents to any Guarantor and to make such claims.
C. The Servicer on behalf of the Eligible Lender Trustee shall, on
behalf of the Issuer, make reasonable efforts to claim, pursue and collect all
Interest Subsidy Payments and Special Allowance Payments from the Department
with respect to any of the Trust Student Loans as and when the same shall become
due and payable, shall comply with all applicable laws and agreements with
respect to claiming, pursuing and collecting such payments and shall follow such
practices and procedures as the Servicer follows with respect to comparable
student loans that it services on behalf of the Student Loan Marketing
Association. All amounts so collected by the Servicer shall constitute Available
Funds for the applicable Collection Period and shall be deposited into the
Collection Account or transferred to the Administrator in accordance with
Section 2.4 of the Administration Agreement. In connection therewith, the
Servicer shall prepare and file with the Department on a timely basis all claims
forms and other documents and filings necessary or appropriate in connection
with the claiming of Interest Subsidy Payments and Special Allowance Payments on
behalf of the Eligible Lender Trustee and shall otherwise assist the Eligible
Lender Trustee in pursuing and collecting such Interest Subsidy Payments and
Special Allowance Payments from the Department. The Eligible Lender Trustee
shall upon the written request of the Servicer furnish the Servicer with any
power of attorney and other documents reasonably necessary or appropriate to
enable the Servicer to prepare and file such claims forms and other documents
and filings.
SECTION 3.3 REALIZATION UPON TRUST STUDENT LOANS. For the benefit of the
Issuer, the Servicer shall use reasonable efforts consistent with its servicing
practices and procedures that it utilizes with respect to comparable student
loans that it services on behalf of the Student Loan Marketing Association and
including all efforts that may be specified under the Higher Education Act or
any Guarantee Agreement in its servicing of any delinquent Trust Student Loans.
SECTION 3.4 NO IMPAIRMENT. The Servicer shall not impair the rights of the
Issuer, the Eligible Lender Trustee, the Indenture Trustee, or Noteholders in
such Trust Student Loans.
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SECTION 3.5 PURCHASE OF TRUST STUDENT LOANS; REIMBURSEMENT.
A. The Servicer, the Administrator, the Eligible Lender Trustee and
the Indenture Trustee shall give notice to the other parties promptly, in
writing, upon the discovery of any breach of the provisions of Section 3.1, 3.2,
3.3 or 3.4 which has a materially adverse effect on the interest of the Issuer.
In the event of such a material breach which is not curable by reinstatement of
the Guarantor's guarantee of such Trust Student Loan, the Servicer shall
purchase the affected Trust Student Loan not later than 120 days following the
earlier of the date of discovery of such material breach and the date of receipt
of the Guarantor reject transmittal form with respect to such Trust Student
Loan. In the event of a material breach with respect to such Trust Student Loan
which is curable by reinstatement of the Guarantor's guarantee of such Trust
Student Loan, unless the material breach shall have been cured within 360 days
following the earlier of the date of discovery of such material breach and the
date of receipt of the Guarantor reject transmittal form with respect to such
Trust Student Loan, the Servicer shall purchase such Trust Student Loan not
later than the sixtieth day following the end of such 360-day period. The
purchase price hereunder will be the unpaid principal amount of such Trust
Student Loan plus accrued interest (calculated using the applicable percentage
that would have been insured pursuant to Section 428(b)(1)(G) of the Higher
Education Act) plus an amount equal to all forfeited Interest Subsidy Payments
and Special Allowance Payments with respect to such Trust Student Loan. The
Servicer shall remit the purchase price to the Administrator as provided in
Section 2.6 of the Administration Agreement on the date of purchase of any Trust
Student Loan pursuant to this Section 3.5. In consideration of the purchase of
any such Trust Student Loan pursuant to this Section 3.5, the Servicer shall
remit the Purchase Amount in the manner specified in Section 2.6 of the
Administration Agreement. Any breach that relates to compliance with the
requirements of the Higher Education Act or of the applicable Guarantor but that
does not affect such Guarantor's obligation to guarantee payments of a Trust
Student Loan will not be considered to have a material adverse effect for
purposes of this Section 3.5A.
B. In addition, if any breach of Section 3.1, 3.2, 3.3 or 3.4 by the
Servicer does not trigger such purchase obligation but does result in the
refusal by a Guarantor to guarantee all or a portion of the accrued interest (or
any obligation of the Issuer to repay such interest to a Guarantor), or the loss
(including any obligation of the Issuer to repay to the Department) of Interest
Subsidy Payments and Special Allowance Payments, with respect to any Trust
Student Loan affected by such breach, then the Servicer shall reimburse the
Issuer in an amount equal to the sum of all such nonguaranteed interest amounts
that would have been owed to the Issuer by the Guarantor but for such breach by
the Servicer and such forfeited Interest Subsidy Payments or Special Allowance
Payments by netting such sum against the Servicing Fee payable to the Servicer
for such period and remitting any additional amounts owed in the manner
specified in Section 2.6 of the Administration Agreement not later than (i) the
last day of the next Collection Period ending not less than 60 days from the
date of the Guarantor's refusal to guarantee all or a portion of accrued
interest or loss of Interest Subsidy Payments or Special Allowance Payments, or
(ii) in the case where the Servicer reasonably believes such amounts are likely
to be collected, not later than the last day of the next Collection Period
ending not less than 360 days from the date of the Guarantor's refusal to
guarantee all or a portion of accrued interest or loss of Interest Subsidy
Payments or Special Allowance Payments. At the time such payment is made, the
Servicer shall not be required to reimburse the Issuer for interest that is then
capitalized,
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however, such amounts shall be reimbursed if the borrower subsequently defaults
and such capitalized interest is not paid by the Guarantor.
C. Anything in this Section 3.5 to the contrary notwithstanding, if
as of the last Business Day of any month the aggregate outstanding principal
amount of Trust Student Loans with respect to which claims have been filed with
and rejected by a Guarantor or with respect to which the Servicer determines
that claims cannot be filed pursuant to the Higher Education Act as a result of
a breach by the Servicer or the Depositor, exceeds 1% of the Pool Balance, the
Servicer or the Seller, as appropriate, shall purchase, within 30 days of a
written request of the Eligible Lender Trustee or Indenture Trustee, such
affected Trust Student Loans in an aggregate principal amount such that after
such purchase the aggregate principal amount of such affected Trust Student
Loans is less than 1% of the Pool Balance. The Trust Student Loans to be
purchased by the Servicer or the Depositor pursuant to the preceding sentence
shall be based on the date of claim rejection (or date of notice referred to in
the first sentence of this Section 3.5) with the Trust Student Loans with the
earliest such date to be purchased first.
D. In lieu of repurchasing Trust Student Loans pursuant to this
Section 3.5, the Servicer may, at its option, with the prior consent of the
Administrator, substitute Student Loans or arrange for the substitution of
Student Loans which are substantially similar as of the date of substitution on
an aggregate basis to the Trust Student Loans for which they are being
substituted with respect to the following characteristics:
(1) status (i.e., in-school, grace, deferment, forbearance or
repayment),
(2) program type (i.e., unsubsidized or subsidized Consolidation
(pre-1993 vs. post-1993)),
(3) school type,
(4) total return,
(5) principal balance, and
(6) remaining term to maturity.
In addition, each substituted Student Loan shall comply, as of the date of
substitution, with the representations and warranties made by the Depositor in
the Sale Agreement. In choosing Student Loans to be substituted pursuant to this
subsection D, the Servicer shall make a reasonable determination that the
Student Loans to be substituted will not have a material adverse effect on the
Noteholders.
In the event the Servicer elects to substitute Student Loans pursuant to
this Section 3.5 and the Administrator consents to such substitution, the
Servicer will remit to the Administrator the amount of any shortfall between the
Purchase Amount of the substituted Student Loans and the Purchase Amount of the
Trust Student Loans for which they are being substituted. The Servicer shall
also remit to the Administrator an amount equal to all nonguaranteed interest
amounts that would have been owed to the Issuer by the Guarantor but for the
breach of the Servicer and forfeited Interest Subsidy Payments and Special
Allowance Payments with respect to the Trust Student Loans in the manner
provided in Section 2.6 of the Administration Agreement.
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E. The sole remedy of the Issuer, the Eligible Lender Trustee, the
Indenture Trustee and the Noteholders with respect to a breach pursuant to
Section 3.1, 3.2, 3.3 or 3.4 shall be to require the Servicer to purchase Trust
Student Loans, to reimburse the Issuer as provided above or to substitute
Student Loans pursuant to this Section.
F. The Eligible Lender Trustee shall have no duty to conduct any
affirmative investigation as to the occurrence of any condition requiring the
purchase of any Trust Student Loan or the reimbursement for any interest penalty
pursuant to this Section 3.5.
G. The Servicer shall not be deemed to have breached its obligations
pursuant to Section 3.1, 3.2, 3.3 or 3.4 if it is rendered unable to perform
such obligations, in whole or in part, by a force outside the control of the
parties hereto (including acts of God, acts of war, fires, earthquakes,
hurricanes, floods and other disasters). The Servicer shall diligently perform
its duties under this Agreement as soon as practicable following the termination
of such interruption of business.
SECTION 3.6 PRIMARY SERVICING FEE; CARRYOVER SERVICING FEE. The Primary
Servicing Fee for each calendar month and any Carryover Servicing Fees payable
on any Distribution Date in arrears by the Issuer shall be equal to the amounts
determined by reference to the schedule of fees attached hereto as Attachment A.
Notwithstanding anything to the contrary contained herein or in any other Basic
Document, the Servicer shall be entitled to receive any Carryover Servicing Fee
on any Distribution Date only if and to the extent that sufficient funds are
available pursuant to Section 2.7.C of the Administration Agreement.
SECTION 3.7 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
TRUST STUDENT LOANS. Upon reasonable prior notice, the Servicer shall provide to
the Administrator and its agents access to the Trust Student Loan Files and
shall permit the Administrator to examine and make copies of, and abstracts
from, the records and books of account of the Servicer relating to the Trust
Student Loans and shall permit the Administrator to undertake periodic site
reviews of the Servicer's operations relating to the servicing of the Trust
Student Loans (including on the premises of any agent of the Servicer).
Reasonable access shall be afforded to the Administrator without charge, but
only upon reasonable request and during the normal business hours at the
respective offices of the Servicer. Nothing in this Section shall affect the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Obligors and the failure of the Servicer to provide
access to information as a result of such obligation shall not constitute a
breach of this Section.
SECTION 3.8 SERVICER EXPENSES. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of independent accountants, taxes imposed on the Servicer
and expenses incurred in connection with distributions and reports to the
Administrator PROVIDED, HOWEVER, the Carryover Servicing Fee will be subject to
increase agreed to by the Administrator, the Eligible Lender Trustee and the
Servicer to the extent that a demonstrable and significant increase occurs in
the costs incurred by the Servicer in providing the services to be provided
hereunder, whether due to changes in applicable governmental regulations,
Guarantor program requirements or regulations or postal rates. Notwithstanding
anything to the contrary contained herein, the Servicer may, at its option,
collect fees from the Borrowers in connection with sending payment histories and
amortization
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schedules to Borrowers, faxing documents to Borrowers, providing credit
reference letters to Borrowers, providing a "speed pay" payment option to
Borrowers and for other similar optional services requested by a Borrower and
may retain such fees. The Servicer may also, at its option, collect fees from
Borrowers for returned check processing or other insufficient fund transactions
and may assess such fees from the Borrower's Trust Student Loan payment and
retain such fees.
SECTION 3.9 APPOINTMENT OF SUBSERVICER. The Servicer may at any time, upon
the written consent of the Administrator, appoint a subservicer to perform all
or any portion of its obligations as Servicer hereunder; PROVIDED, HOWEVER, that
any applicable Rating Agency Condition shall have been satisfied in connection
therewith; PROVIDED FURTHER that the Servicer shall remain obligated and be
liable to the Issuer, the Eligible Lender Trustee, the Indenture Trustee and the
Noteholders for the servicing and administering of the Trust Student Loans in
accordance with the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such subservicer and to the same
extent and under the same terms and conditions as if the Servicer alone were
servicing and administering the Trust Student Loans. The fees and expenses of
the subservicer shall be as agreed between the Servicer and its subservicer from
time to time and none of the Issuer, the Eligible Lender Trustee, the Indenture
Trustee or the Noteholders shall have any responsibility therefor. With respect
to satisfying the Rating Agency Condition referred to above, the term
"subservicer" shall be deemed not to include systems providers, systems
developers or systems maintenance contractors, collection agencies, credit
bureaus, lock box providers, mail service providers and other similar types of
service providers.
SECTION 3.10 REPORTS. With respect to Trust Student Loans, Servicer shall
prepare reports and data and furnish the following information to the Issuer,
the Administrator, the Eligible Lender Trustee and the Indenture Trustee, unless
otherwise noted, at the specified times:
(a) The reports and data listed in Attachment C, at the times
indicated in the attachment;
(b) Within 30 days following the end of each calendar quarter, to
the Department, owner's request for interest and Special
Allowance Payments (ED 799);
(c) To credit bureaus selected by Servicer, credit bureau
reporting in accordance with the Higher Education Act;
(d) At any time the Eligible Lender Trustee or the Indenture
Trustee, as the case may be, shall have reasonable grounds to
believe that such request would be necessary in connection
with its performance of its duties under related documents,
and within five (5) business days of receipt of a request
therefor, the Servicer shall furnish to the Eligible Lender
Trustee or to the Indenture Trustee a list of all Trust
Student Loans (by borrower social security number, type and
outstanding principal balance) and any additional information
requested relating to the Trust Student Loans; and
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(e) From time to time as may be reasonably requested, reports and
data providing additional information on the Trust Student
Loans.
SECTION 3.11 COVENANTS AND AGREEMENTS OF THE ISSUER, ADMINISTRATOR,
ELIGIBLE LENDER TRUSTEE AND SERVICER. The Issuer, the Administrator, the
Servicer and the Eligible Lender Trustee each agree that:
A. Any payment and any communications received at any time by the
Issuer, Administrator and the Eligible Lender Trustee with respect to a Trust
Student Loan shall be immediately transmitted to the Servicer. Such
communications shall include, but not be limited to, requests or notices of loan
cancellation, notices of borrower disqualification, letters, changes in address
or status, notices of death or disability, notices of bankruptcy and forms
requesting deferment of repayment or forbearance.
B. The Servicer may change any part or all of its equipment, data
processing programs and any procedures and forms in connection with the services
performed hereunder so long as Servicer continues to service the Trust Student
Loans in conformance with the requirements herein. The Servicer shall not make
any material change in its servicing system and operations with respect to the
Trust Student Loans without the prior written consent of the Administrator which
consent will not be unreasonably withheld. Each written request for consent by
the Servicer shall be acted upon promptly by the Administrator. Anything in this
paragraph B. to the contrary notwithstanding, the Servicer will not be required
to request the consent of the Administrator with respect to any changes in the
Servicer's servicing system and operations which the Servicer reasonably
determines are required due to changes in the Higher Education Act or Guarantor
program requirements.
C. The Eligible Lender Trustee will furnish Servicer with a copy of
any and all Guarantee Agreements relating to the Trust Student Loans serviced
hereunder.
D. The Servicer may and, at the direction of the Administrator, shall
include marketing or informational material generally provided to borrowers of
loans owned by the Student Loan Marketing Association with communications sent
to a borrower.
E. The Servicer may, in its discretion, if requested by a borrower of
a Trust Student Loan, arrange for the sale of such Trust Student Loan to another
lender which holds another student loan of such borrower at a price not less
than the Purchase Amount.
F. The Servicer shall arrange for the sale of a Trust Student Loan to
the Student Loan Marketing Association upon receipt of notice from the Student
Loan Marketing Association that it has received an executed consolidation loan
application from the borrower of such Trust Student Loan. The sale price for
such Trust Student Loan shall equal the Purchase Amount.
SECTION 3.12 SPECIAL PROGRAMS. The Servicer shall offer borrowers of the
Trust Student Loans all special programs (e.g., Great Returns(SM) and Direct
Repay(SM)), whether or not in existence as of the date of this Agreement,
generally offered to the obligors of comparable loans owned by the Student Loan
Marketing Association and serviced by the Servicer; PROVIDED, HOWEVER, to the
extent any such program is not required by the Higher Education Act and
effectively reduces
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borrower interest rate or principal balances on the Trust Student Loans, such
special program shall be applied to the Trust Student Loans only if and to the
extent the Issuer receives payment from the Student Loan Marketing Association
(and the Servicer receives notice of such payment) in an amount sufficient to
offset such effective yield reductions. The Student Loan Marketing Association
shall be deemed to be a third party beneficiary of this Section 3.12 and shall
make appropriate arrangements to compensate the Servicer for increased costs
associated with material changes to existing special programs or the
implementation and support of any new special programs.
SECTION 3.13 FINANCIAL STATEMENTS. The Servicer shall provide to the
Administrator at any time that the Servicer is not an Affiliate of the
Administrator (a) as soon as possible and in no event more than 120 days after
the end of each fiscal year of the Servicer audited financials as at the end of
and for such year and (b) as soon as possible and in no event more than 30 days
after the end of each quarterly accounting period of the Servicer unaudited
financials as at the end of and for such period.
SECTION 3.14 INSURANCE. The Servicer shall maintain or cause to be
maintained insurance with respect to its property and business against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of institutions of the same type and size.
SECTION 3.15 ADMINISTRATION AGREEMENT. The Servicer agrees to perform all
duties required of the Servicer under the Administration Agreement using that
degree of skill and attention that the Servicer exercises with respect to its
comparable business activities.
SECTION 3.16 LENDER IDENTIFICATION NUMBER. The Eligible Lender Trustee may
permit trusts, other than the Issuer, established by the Depositor to securitize
student loans, to use the Department lender identification number applicable to
the Issuer if the
servicing agreements with respect to such other trusts include
provisions substantially similar to this paragraph. In such event, the Servicer
may claim and collect Interest Subsidy Payments and Special Allowance Payments
with respect to Trust Student Loans and student loans in such other trusts using
such common lender identification number. Notwithstanding anything herein or in
the Basic Documents to the contrary, any amounts assessed against payments
(including, but not limited to, Interest Subsidy Payments and Special Allowance
Payments) due from the Department to any such other trust using such common
lender identification number as a result of amounts owing to the Department from
the Issuer will be deemed for all purposes hereof and of the Basic Documents
(including for purposes of determining amounts paid by the Department with
respect to the student loans in the Trust and such other trust) to have been
assessed against the Issuer and shall be deducted by the Administrator or the
Servicer and paid to such other trust from any collections made by them which
would otherwise have been payable to the Collection Account for the Issuer. Any
amounts assessed against payments due from the Department to the Issuer as a
result of amounts owing to the Department from such other trust using such
common lender identification number will be deemed to have been assessed against
such other trust and will be deducted by the Administrator or the Servicer from
any collections made by them which would otherwise be payable to the collection
account for such other trust and paid to the Issuer.
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ARTICLE IV
SECTION 4.1 REPRESENTATIONS OF SERVICER. The Servicer makes the following
representations on which the Issuer is deemed to have relied in acquiring
(through the Eligible Lender Trustee) the Trust Student Loans and appointing the
Servicer as servicer hereunder. The representations speak as of the execution
and delivery of this Agreement and as of the Closing Date, but shall survive the
sale, transfer and assignment of the Trust Student Loans to the Eligible Lender
Trustee on behalf of the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
A. ORGANIZATION AND GOOD STANDING. The Servicer is duly organized and
validly existing as a limited partnership formed under the laws of the State of
Delaware and in good standing under the laws of the State of Delaware, with the
power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted, and had
at all relevant times, and has, the power, authority and legal right to service
the Trust Student Loans and to hold the Trust Student Loan Files as custodian.
B. DUE QUALIFICATION. The Servicer is duly qualified to do business
and has obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of property or the conduct of its business
(including the servicing of the Trust Student Loans as required by this
Agreement) shall require such qualifications.
C. POWER AND AUTHORITY. The Servicer has the power and authority to
execute and deliver this Agreement and to carry out its terms; and the
execution, delivery and performance of this Agreement have been duly authorized
by the Servicer by all necessary action. No registration with or approval of any
governmental agency is required for the due execution and delivery by, and
enforceability against, the Servicer of this Agreement.
D. BINDING OBLIGATION. This Agreement constitutes a legal, valid and
binding obligation of the Servicer enforceable in accordance with its terms
subject to bankruptcy, insolvency and other similar laws affecting creditors
rights generally and subject to equitable principles.
E. NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof will not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the limited
partnership agreement of the Servicer, or any indenture, agreement or other
instrument to which the Servicer is a party or by which it shall be bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than this Agreement and the other Basic Documents); nor violate any law
or, to the best of the Servicer's knowledge, any order, rule or regulation
applicable to the Servicer of any court or of any Federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
F. NO PROCEEDINGS. There are no proceedings or investigations
pending, or, to the Servicer's best knowledge, threatened, before any court,
regulatory body, administrative agency
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or other governmental instrumentality having jurisdiction over the Servicer or
its properties: (i) asserting the invalidity of this Agreement or any of the
other Basic Documents to which the Servicer is a party, (ii) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or
any of the other Basic Documents to which the Servicer is a party, (iii) seeking
any determination or ruling that could reasonably be expected to have a material
and adverse effect on the performance by the Servicer of its obligations under,
or the validity or enforceability of, this Agreement or any of the other Basic
Documents to which the Servicer is a party, or (iv) relating to the Servicer and
which might adversely affect the Federal or state income tax attributes of the
Notes.
SECTION 4.2 INDEMNITIES OF SERVICER. The Servicer shall be liable in accordance
herewith only to the extent of the obligations specifically undertaken by the
Servicer under this Agreement.
The Servicer shall pay for any loss, liability or expense, including
reasonable attorneys' fees, that may be imposed on, incurred by or asserted
against the Issuer or the Eligible Lender Trustee by the Department pursuant to
the Higher Education Act, to the extent that such loss, liability or expense
arose out of, or was imposed upon the Issuer through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its obligations
and duties under this Agreement or by reason of the reckless disregard of its
obligations and duties under this Agreement, where the final determination that
any such loss, liability or expense arose out of, or was imposed upon the Issuer
or the Eligible Lender Trustee through, any such negligence, willful
misfeasance, bad faith or recklessness on the part of the Servicer is
established by a court of law, by an arbitrator or by way of settlement agreed
to by the Servicer. Notwithstanding the foregoing, if the Servicer is rendered
unable, in whole or in part, by a force outside the control of the parties
hereto (including acts of God, acts of war, fires, earthquakes, hurricanes,
floods and other disasters) to satisfy its obligations under this Agreement, the
Servicer shall not be deemed to have breached any such obligation upon delivery
of written notice of such event to the other parties hereto, for so long as the
Servicer remains unable to perform such obligation as a result of such event.
For purposes of this Section, in the event of the termination of the rights
and obligations of Xxxxxx Xxx Servicing L.P. (or any successor thereto pursuant
to Section 4.3) as Servicer pursuant to Section 5.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer pursuant to Section 5.2.
Liability of the Servicer under this Section shall survive the resignation
or removal of the Eligible Lender Trustee or the Indenture Trustee or the
termination of this Agreement. If the Servicer shall have made any payments
pursuant to this Section and the Person to or on behalf of whom such payments
are made thereafter collects any of such amounts from others, such Person shall
promptly repay such amounts to the Servicer, without interest.
SECTION 4.3 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, SERVICER. The Servicer hereby agrees that, upon (a) any merger or
consolidation of the Servicer into another Person, (b) any merger or
consolidation to which the Servicer shall be a party resulting in the creation
of another Person or (c) any Person succeeding to the properties and assets of
the Servicer substantially as a whole, the Servicer shall (i) cause such Person
(if other than the
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Servicer) to execute an agreement of assumption to perform every obligation of
the Servicer hereunder, (ii) deliver to the Eligible Lender Trustee and
Indenture Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such consolidation, merger or succession and such agreement of
assumption comply with this Section and that all conditions precedent provided
for in this Agreement relating to such transaction have been complied with,
(iii) cause the Rating Agency Condition to have been satisfied with respect to
such transaction and (iv) cure any existing Servicer Default or any continuing
event which, after notice or lapse of time or both, would become a Servicer
Default. Upon compliance with the foregoing requirements, such Person shall be
the successor to the Servicer under this Agreement without further act on the
part of any of the parties to this Agreement.
SECTION 4.4 LIMITATION ON LIABILITY OF SERVICER. The Servicer shall not be
under any liability to the Issuer, the Noteholders, the Administrator, the
Eligible Lender Trustee or the Indenture Trustee except as provided under this
Agreement, for any action taken or for refraining from the taking of any action
pursuant to this Agreement, for errors in judgment, for any incorrect or
incomplete information provided by schools, borrowers, Guarantors and the
Department, for the failure of any party to this
Servicing Agreement or any
other Basic Document to comply with its respective obligations hereunder or
under any other Basic Document or for any losses attributable to the insolvency
of any Guarantor; PROVIDED, HOWEVER, that this provision shall not protect the
Servicer against its obligation to purchase Student Loans from the Trust
pursuant to Section 3.5 hereof or to pay to the Trust amounts required pursuant
to Section 3.5 hereof or against any liability that would otherwise be imposed
by reason of willful misfeasance, bad faith or negligence in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement. The Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any person respecting any matters
arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action where it is not
named as a party; PROVIDED, HOWEVER, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the other Basic Documents and the rights and duties of the parties
to this Agreement and the other Basic Documents and the interests of the
Noteholders. To the extent that the Servicer is required to appear in or is made
a defendant in any legal action or other proceeding relating to the servicing of
the Trust Student Loans, the Issuer shall indemnify and hold the Servicer
harmless from all cost, liability or expense of the Servicer not arising out of
or relating to the failure of the Servicer to comply with the terms of this
Agreement.
SECTION 4.5 XXXXXX XXX SERVICING L.P. NOT TO RESIGN AS SERVICER. Subject
to the provisions of Section 4.3, Xxxxxx Mae Servicing L.P. shall not resign
from the obligations and duties hereby imposed on it as Servicer under this
Agreement except upon determination that the performance of its duties under
this Agreement are no longer permissible under applicable law. Notice of any
such determination permitting the resignation of Xxxxxx Xxx Servicing L.P. shall
be communicated to the Eligible Lender Trustee and the Indenture Trustee at the
earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such
determination shall be evidenced by an Opinion of Counsel to such effect
delivered to the Eligible Lender Trustee and the Indenture Trustee concurrently
with
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or promptly after such notice. No such resignation shall become effective until
the Indenture Trustee or a successor Servicer shall have assumed the
responsibilities and obligations of Xxxxxx Mae Servicing L.P. in accordance with
Section 5.2.
ARTICLE V
SECTION 5.1 SERVICER DEFAULT. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(1) any failure by the Servicer (i) to deliver to the Indenture
Trustee for deposit in the Trust Accounts any payment
required by the Basic Documents to which the Servicer is a
signatory or (ii) in the event that daily deposits into the
Collection Account are not required, to deliver to the
Administrator any payment required by the Basic Documents,
which failure in case of either clause (i) or (ii) continues
unremedied for five Business Days after written notice of
such failure is received by the Servicer from the Eligible
Lender Trustee, the Indenture Trustee or the Administrator or
five Business Days after discovery of such failure by an
officer of the Servicer; or
(2) any failure by the Servicer duly to observe or to perform in
any material respect any other covenant or agreement of the
Servicer set forth in this Agreement or any other Basic
Document to which the Servicer is a signatory, which failure
shall (i) materially and adversely affect the rights of
Noteholders and (ii) continues unremedied for a period of 60
days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (A)
to the Servicer by the Indenture Trustee, the Eligible Lender
Trustee or the Administrator or (B) to the Servicer, and to
the Indenture Trustee and the Eligible Lender Trustee by the
Noteholders representing not less than 50% of the Outstanding
Amount of the Notes provided, however, any breach of Sections
3.1, 3.2, 3.3 or 3.4 shall not be deemed a Servicer Default
so long as the Servicer is in compliance with its repurchase
and reimbursement obligations under Section 3.5; or
(3) an Insolvency Event occurs with respect to the Servicer; or
(4) any failure by the Servicer to comply with any requirements
under the Higher Education Act resulting in a loss of its
eligibility as a third-party servicer;
then, and in each and every case, so long as the Servicer Default shall not have
been remedied, either the Indenture Trustee, or the Noteholders of Notes
evidencing not less than 50% of the Outstanding Amount of the Notes, by notice
then given in writing to the Servicer (and to the Indenture Trustee and the
Eligible Lender Trustee if given by the Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 3.5 and
Section 4.2) of the Servicer under this Agreement. As of the effective date of
termination of the Servicer, all
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authority and power of the Servicer under this Agreement, whether with respect
to the Notes or the Trust Student Loans or otherwise, shall, without further
action, pass to and be vested in the Indenture Trustee or such successor
Servicer as may be appointed under Section 5.2. The predecessor Servicer shall
cooperate with the successor Servicer, the Indenture Trustee and the Eligible
Lender Trustee in effecting the termination of the responsibilities and rights
of the predecessor Servicer 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 predecessor Servicer for deposit, or shall thereafter be
received by it with respect to a Trust Student Loan. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with transferring
the Trust Student Loan Files to the successor Servicer and amending this
Agreement and any other Basic Documents to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer (other than
the Indenture Trustee acting as the Servicer under this Section 5.1) upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Eligible Lender
Trustee shall give notice thereof to the Rating Agencies.
SECTION 5.2 APPOINTMENT OF SUCCESSOR.
A. Upon receipt by the Servicer of notice of termination pursuant to
Section 5.1, or the resignation by the Servicer in accordance with the terms of
this Agreement, the predecessor Servicer shall continue to perform its functions
as Servicer under this Agreement, in the case of termination, only until the
date specified in such termination notice or, if no such date is specified in a
notice of termination, until receipt of such notice and, in the case of
resignation, until the Indenture Trustee or a successor Servicer shall have
assumed the responsibilities and duties of Xxxxxx Xxx Servicing L.P. In the
event of the termination hereunder of the Servicer, the Issuer shall appoint a
successor Servicer acceptable to the Indenture Trustee, and the successor
Servicer shall accept its appointment by a written assumption in form acceptable
to the Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without further
action shall automatically be appointed the successor Servicer and the Indenture
Trustee shall be entitled to the Servicing Fee and any Carryover Servicing Fees.
Notwithstanding the above, the Indenture Trustee shall, if it shall be unwilling
or legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution whose regular business shall
include the servicing of student loans, as the successor to the Servicer under
this Agreement; PROVIDED, HOWEVER, that such right to appoint or to petition for
the appointment of any such successor Servicer shall in no event relieve the
Indenture Trustee from any obligations otherwise imposed on it under the Basic
Documents until such successor has in fact assumed such appointment.
B. Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall be the successor in all respects to
the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities placed on the predecessor Servicer that arise thereafter
or are related thereto and shall be entitled to an amount agreed to by such
successor Servicer (which shall not exceed the Servicing Fee unless the Rating
Agency Condition is satisfied with respect to such compensation arrangements)
and all the rights granted to the predecessor Servicer by the terms and
provisions of this Agreement.
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C. The Servicer may not resign unless it is prohibited from serving
as such by law as evidenced by an Opinion of Counsel to such effect delivered to
the Indenture Trustee and the Eligible Lender Trustee. Notwithstanding the
foregoing or anything to the contrary herein or in the other Basic Documents,
the Indenture Trustee, to the extent it is acting as successor Servicer pursuant
hereto and thereto, shall be entitled to resign to the extent a qualified
successor Servicer has been appointed and has assumed all the obligations of the
Servicer in accordance with the terms of this Agreement and the other Basic
Documents.
SECTION 5.3 NOTIFICATION TO NOTEHOLDERS. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article V, the
Indenture Trustee shall give prompt written notice thereof to Noteholders and
the Rating Agencies (which, in the case of any such appointment of a successor,
shall consist of prior written notice thereof to the Rating Agencies).
SECTION 5.4 WAIVER OF PAST DEFAULTS. The Noteholders of Notes evidencing a
majority of the Outstanding Amount of the Notes may, on behalf of all
Noteholders, waive in writing any default by the Servicer in the performance of
its obligations hereunder and any consequences thereof, except a default in
making any required deposits to or payments from any of the Trust Accounts (or
giving instructions regarding the same) in accordance with this Agreement. Upon
any such waiver of a past default, such default shall cease to exist, and any
Servicer Default arising therefrom shall be deemed to have been remedied for
every purpose of this Agreement and the Administration Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereto.
ARTICLE VI
SECTION 6.1 AMENDMENT.
A. This Agreement may be amended by the Servicer, the Issuer, the
Administrator, the Eligible Lender Trustee and the Indenture Trustee, without
the consent of any of the Noteholders, to comply with any change in any
applicable federal or state law, to cure any ambiguity, to correct or supplement
any provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Eligible Lender Trustee and the Indenture
Trustee, adversely affect in any material respect the interests of any
Noteholder.
B. This Agreement may also be amended from time to time by the
Servicer, the Issuer, the Administrator, the Eligible Lender Trustee and the
Indenture Trustee, with the consent of the Noteholders of Notes evidencing a
majority of the Outstanding Amount of the Notes, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders;
PROVIDED, HOWEVER, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments with respect to Trust Student Loans or distributions that shall be
required to be made for the benefit of the Noteholders or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes, the Noteholders of
which are required to consent to any such amendment, without the consent of all
outstanding Noteholders.
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It shall not be necessary for the consent of Noteholders pursuant to
paragraph B. to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof.
Promptly after the execution of any amendment to this Agreement (or, in the
case of the Rating Agencies, fifteen days prior thereto), the Eligible Lender
Trustee shall furnish written notification of the substance of such amendment to
the Indenture Trustee and each of the Rating Agencies.
Prior to the execution of any amendment to this Agreement, the Eligible
Lender Trustee and the Indenture Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Indenture Trustee may, but shall
not be obligated to, execute and deliver such amendment which affects its
rights, powers, duties or immunities hereunder.
SECTION 6.2 NOTICES. All notices hereunder shall be given by United States
certified or registered mail, by telegram or by other telecommunication device
capable of creating written record of such notice and its receipt. Notices
hereunder shall be effective when received and shall be addressed to the
respective parties hereto at the addresses set forth below, or at such other
address as shall be designated by any party hereto in a written notice to each
other party pursuant to this section.
If to the Servicer, to:
Xxxxxx Xxx Servicing L.P.
00000 Xxxxxx Xxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Director of ABS Administration
If to the Issuer, to:
SLM Student Loan Trust 0000-0
x/x Xxxxx Xxxxxxxxx Xxxx XXX, National Association
Christiana Center/OPS4
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Dept.
with a copy to:
XX Xxxxxx Chase Bank,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Structured Finance Services
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If to the Administrator, to:
Student Loan Marketing Association
00000 Xxxxxx Xxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Director, Corporate Finance Operations
If to the Eligible Lender Trustee, to:
Chase Manhattan Bank USA, National Association
Christiana Center/OPS4
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Dept.
with a copy to:
XX Xxxxxx Chase Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Structured Finance Services.
If to the Indenture Trustee, to:
The Bank of
New York
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust- Structured Finance
telephone: (000) 000-0000
facsimile: (000) 000-0000)
with copies to:
The Bank Of
New York
0 Xxxxx XxXxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx, 00000
Attn: Corporate Trust - Structured Finance.
SECTION 6.3 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, and such counterparts shall
constitute one (1) and the same instrument.
SECTION 6.4 ENTIRE AGREEMENT; SEVERABILITY. This Agreement constitutes the
entire agreement between the Issuer, the Administrator, the Eligible Lender
Trustee, the Indenture Trustee and Servicer. All prior representations,
statements, negotiations and undertakings with regard to the subject matter
hereof are superseded hereby.
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If any term or provision of this Agreement or the application thereof to
any person or circumstance shall, to any extent, be invalid or unenforceable,
the remaining terms and provisions of this Agreement, or the application of such
terms or provisions to persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected thereby, and each term
and provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
SECTION 6.5 GOVERNING LAW. The terms of this Agreement shall be subject to
all applicable provisions of the Higher Education Act and shall be construed in
accordance with and governed by the laws of the State of
New York without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties, hereunder shall be determined in accordance with such
laws.
SECTION 6.6 RELATIONSHIP OF PARTIES. Servicer is an independent contractor
and, except for the services which it agrees to perform hereunder, the Servicer
does not hold itself out as an agent of any other party hereto. Nothing herein
contained shall create or imply an agency relationship among Servicer and any
other party hereto, nor shall this Agreement be deemed to constitute a joint
venture or partnership between the parties.
SECTION 6.7 CAPTIONS. The captions used herein are for the convenience of
reference only and not part of this Agreement, and shall in no way be deemed to
define, limit, describe or modify the meanings of any provision of this
Agreement.
SECTION 6.8 NONLIABILITY OF DIRECTORS, OFFICERS AND EMPLOYEES OF SERVICER,
THE ELIGIBLE LENDER TRUSTEE, THE INDENTURE TRUSTEE AND THE ADMINISTRATOR. No
member of the board of directors or any officer, employee or agent of Servicer,
the Administrator, the Eligible Lender Trustee or the Indenture Trustee (or any
Affiliate of any such party) shall be personally liable for any obligation
incurred under this Agreement.
SECTION 6.9 ASSIGNMENT. This Agreement may not be assigned by the Servicer
except as permitted under Sections 4.3, 4.5 and 5.2 hereof. This Agreement may
not be assigned by the Administrator except as permitted under Sections 4.3 and
4.6 of the Administration Agreement.
SECTION 6.10 LIMITATION OF LIABILITY OF ELIGIBLE LENDER TRUSTEE AND
INDENTURE TRUSTEE.
A. Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by Chase Manhattan Bank USA, National Association, not
in its individual capacity but solely in its capacity as Eligible Lender Trustee
of the Issuer and in no event shall Chase Manhattan Bank USA, National
Association in its individual capacity or, except as expressly provided in the
Trust Agreement, as Eligible Lender Trustee have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer or the Eligible Lender Trustee hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto as to all of which recourse
shall be had solely to the assets of the Issuer.
B. Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by The Bank of
New York not in its individual capacity
but solely as Indenture Trustee and in no event shall The Bank of
New York have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the
-20-
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf by their duly authorized officers as of January
31, 2003.
XXXXXX XXX SERVICING L.P.
BY: XXXXXX MAE, INC.
Its general partner
By: //s// XXXXXXX X. XXXXXX
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Controller
STUDENT LOAN MARKETING ASSOCIATION, as Administrator
By: //s// XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
SLM STUDENT LOAN TRUST 2003-1
By: CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual
capacity but solely as Eligible Lender Trustee
By: //s// XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: Vice President
22
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, not in its individual capacity
but solely as Eligible Lender Trustee under a Trust Agreement, dated January 1,
2003, between
SLM Funding LLC and Chase Manhattan Bank USA, National Association
By: //s// XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: Vice President
THE BANK OF
NEW YORK, not in its individual capacity but solely as Indenture
Trustee under an Indenture, dated January 1, 2003, among SLM Student Loan Trust
2003-1, Chase Manhattan Bank, USA, National Association, not in its individual
capacity but solely as the Eligible Lender Trustee and The Bank of New York
By: //s// XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: Agent
23
ATTACHMENT A
SCHEDULE OF FEES
The Servicer will receive a Primary Servicing Fee and a Carryover Servicing
Fee (together, the "Servicing Fee"). The "Primary Servicing Fee" for any month
is an amount equal to the sum of 1/12th of 0.50% of the outstanding principal
amount of the Trust Student Loans as of the last day of the preceding calendar
month, plus any such amounts from prior Monthly Servicing Payment Dates that
remain unpaid. The Primary Servicing Fee will be payable out of Available Funds
and amounts on deposit in the Reserve Account on the 15th day of each month (or,
if any such date is not a business day, on the next succeeding business day),
commencing on February 17, 2003 (each, a "Monthly Servicing Payment Date"). The
"Carryover Servicing Fee" is the sum of (a) the amount of certain increases in
the costs incurred by the Servicer which are agreed to pursuant to Section 3.8
of the
Servicing Agreement, (b) any Conversion Fees, Transfer Fees and Removal
Fees (as defined below) incurred since the last Distribution Date and (c) any
amounts described in (a) and (b) above that remain unpaid from prior
Distribution Dates plus interest on such amounts for the period from the
Distribution Date on which such amounts become due to the date such amounts are
paid in full at a rate per annum for each Interest Period (as defined below)
equal to the sum of (a) the average accepted auction price (expressed on a bond
equivalent basis) for 91-day Treasury Bills sold at the most recent 91-day
Treasury Xxxx auction prior to the Interest Period as reported by the U.S.
Treasury Department and (b) 2.00%.
"Interest Period" shall mean the period from each Distribution Date through
the day before the next Distribution Date. The Carryover Servicing Fee will be
payable to the Servicer on each succeeding Distribution Date out of Available
Funds after payment on such Distribution Date of all senior amounts payable
prior to clause 10 of Section 2.7.C of the Administration Agreement. On the
February 2003 Monthly Servicing Payment Date, the Servicer shall receive a pro
rata portion of the Primary Servicing Fee for the Closing Date.
Servicer will be paid a fee ("Conversion Fee") for any Student Loan added
to the Trust Estate which Student Loan is not serviced on the Servicer's system
unless such Student Loan is being substituted into the Trust Estate by the
Servicer pursuant to Section 3.5 of this Agreement. The Conversion Fee is equal
to the greater of $17.00 per account or the Servicer's verifiable costs plus
15%.
Servicer will be paid a fee ("Transfer Fee") for any Student Loan
transferred in or out of the Trust Estate which is at the time of transfer being
serviced on the Servicer's system (regardless of the owner) unless such Student
Loans are being removed or added to the Trust in order to comply with the
Servicer's purchase/substitution obligation under Section 3.5 of this Agreement.
The Transfer Fee is equal to $4.00 per account transaction.
Servicer will be paid a fee ("Removal Fee") for performing all activities
required to remove a Trust Student Loan from the Servicer's system to another
servicer unless such Trust Student Loan is being removed due to the termination
of the Servicer pursuant to Section 5.1 of this Agreement. The Removal Fee is
equal to $10.00 per account plus any verifiable direct expenses incurred for
shipping such Trust Student Loan to the new servicer.
-1-
ATTACHMENT B
Loan Servicing Center/Florida
X.X. Xxx 0000
Xxxxxx Xxxx, Xxxxxxx 00000-0000
(000) 000-0000
Loan Servicing Center/Indianapolis
00000 XXX Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
(000) 000-0000
Loan Servicing Center/Pennsylvania
000 Xxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxxx Xxxxxxx
Xxxxxx-Xxxxx, Xxxxxxxxxxxx 00000
(000) 000-0000
Loan Servicing Center/Texas
000 Xxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
(000) 000-0000
Western Regional Center (Nevada)
00000 X. Xxxxxxxxxx Xxxx.
Xxx Xxxxx, Xxxxxx 00000
(000) 000-0000
ATTACHMENT C
REPORTS
1. CLASS Report 800 - Monthly activity summary report
2. CLASS Report 801 - Monthly average/ending balance report
3. CLASS Report 802 - Monthly activity detail
4. CLASS Report 803 - Monthly conversion/removal summary
5. CLASS Report 807 - Monthly delinquency aging report
6. CLASS Report 810 - Monthly characteristics summary
7. CLASS Report 866 - Monthly average/ending balance offset fee report
8. CLASS Report 882 - Great Rewards/Direct Repay Report
9. Monthly Cash Reconciliation Report
10. Quarterly ED799 billing (prepared from CLASS Reports 824, 825, 827,
828 and 829; supporting detail CLASS Reports 865, 868, 870 and 871;
and the OE799 SAS library)
11. Portfolio Characteristics, Financial Activity, Quarterly calculation
of Accrued Interest to be capitalized, Delinquency Detail and Claims
extracts.
