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 2002-5,
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 August 29, 2002
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TABLE OF CONTENTS
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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 ............................................................ 3
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 ....................................... 5
Section 3.3 Realization upon Trust Student Loans ............................................ 6
Section 3.4 No Impairment ................................................................... 6
Section 3.5 Purchase of Trust Student Loans; Reimbursement .................................. 6
Section 3.6 Primary Servicing Fee; Carryover Servicing Fee .................................. 9
Section 3.7 Access to Certain Documentation and Information
Regarding Trust Student Loans ................................................... 9
Section 3.8 Servicer Expenses ............................................................... 9
Section 3.9 Appointment of Subservicer ...................................................... 9
Section 3.10 Reports ......................................................................... 10
Section 3.11 Covenants and Agreements of the Issuer, Administrator,
Eligible Lender Trustee and Servicer ............................................ 10
Section 3.12 Special Programs ................................................................ 12
Section 3.13 Financial Statements ............................................................ 12
Section 3.14 Insurance ....................................................................... 12
Section 3.15 Administration Agreement ........................................................ 12
Section 3.16 Lender Identification Number .................................................... 12
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ARTICLE IV
Section 4.1 Representations of Servicer ............................................................ 13
Section 4.2 Indemnities of Servicer ................................................................ 14
Section 4.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer .............. 15
Section 4.4 Limitation on Liability of Servicer .................................................... 15
Section 4.5 Xxxxxx Xxx Servicing L.P. Not to Resign as Servicer .................................... 16
ARTICLE V
Section 5.1 Servicer Default ....................................................................... 16
Section 5.2 Appointment of Successor ............................................................... 17
Section 5.3 Notification to Noteholders ............................................................ 18
Section 5.4 Waiver of Past Defaults ................................................................ 18
ARTICLE VI
Section 6.1 Amendment .............................................................................. 19
Section 6.2 Notices ................................................................................ 20
Section 6.3 Counterparts ........................................................................... 20
Section 6.4 Entire Agreement; Severability ......................................................... 21
Section 6.5 Governing Law .......................................................................... 21
Section 6.6 Relationship of Parties ................................................................ 21
Section 6.7 Captions ............................................................................... 21
Section 6.8 Nonliability of Directors, Officers and Employees of Servicer,
the Eligible Lender Trustee, the Indenture Trustee and the Administrator ............... 21
Section 6.9 Assignment ............................................................................. 21
Section 6.10 Limitation of Liability of Eligible Lender Trustee and Indenture Trustee ............... 21
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 August 1, 2002 between SLM
Funding Corporation 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 August 1, 2002 among SLM Student Loan
Trust 2002-5, Chase Manhattan Bank USA, National Association (the "Eligible
Lender Trustee") and The Bank of New York (the "Indenture Trustee"), as follows:
WHEREAS, 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 August 1, 2002, between SLM Funding Corporation and
Eligible Lender Trustee;
WHEREAS, the Issuer will issue notes (the "Notes") pursuant to an
indenture (the "Indenture"), dated as of August 1, 2002, 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 Servicer to service said education loans held by the Eligible Lender
Trustee on behalf of the Issuer, and 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 evidencing the Trust
Student Loan; and
(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
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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 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. At any time that substantially all remaining
Trust Student Loans are repurchased by SLM Funding Corporation from the Issuer
pursuant to Section 6.1 of the Administration Agreement, the Servicer agrees to
execute, at the request of SLM Funding Corporation, a new servicing agreement
which agreement shall include terms and conditions substantially the same as the
terms and conditions
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of this Agreement; provided, however, the Servicer shall not be required to so
execute a new servicing agreement until it has received all Servicing Fees then
due and payable hereunder. 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 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
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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.
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
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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.
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
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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, 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 Seller, 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 Seller 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:
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(1) status (i.e., in-school, grace, deferment, forbearance or
repayment),
(2) program type (i.e., unsubsidized Xxxxxxxx, subsidized Xxxxxxxx,
Consolidation (pre-1993 vs. post-1993) PLUS or SLS),
(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 Seller 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.
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
8
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 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
9
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
(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
10
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 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
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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 Seller 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.
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
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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 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.
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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
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,
14
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 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.
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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 25% 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 25% 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 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
16
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
18
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.
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 2002-5
c/o Chase Manhattan Bank USA, National Association, Christiana
Center/OPS4, 000 Xxxxxxx Xxxxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxx 00000
Attn: Corporate Trust Dept.
with a copy to: The Chase Manhattan Bank,
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
Attn: Structured Finance Services
If to the Administrator, to: Student Loan Marketing Association
00000 Xxxxxx Xxx Xxxxx, Xxxxxx, Xxxxxxxx 00000
Attn: Director, Corporate Finance Operations
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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: The Chase Manhattan 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, 2 LaSalle, 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.
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.
20
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 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 August 29,
2002.
XXXXXX XXX SERVICING L.P.
By: XXXXXX MAE, INC.
Its general partner
By: /s/ XXXXXXX X. XXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------
Title: Controller
-------------------------
STUDENT LOAN MARKETING ASSOCIATION, as Administrator
By: /s/ XXXXXXX X. XXXXXXX
----------------------------
Name: Xxxxxxx X. Xxxxxxx
-------------------------
Title: Vice President
-------------------------
SLM STUDENT LOAN TRUST 2002-5 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 Trustee under a Trust Agreement, dated August 1, 2002, between SLM
Funding Corporation 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 August 1, 2002, among SLM Student Loan Trust
2002-5, 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/ XXXXXX X. XXXXX
----------------------------
Name: Xxxxxx X. Xxxxx
-------------------------
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 0.90% 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 September 16, 2002 (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 the Primary Servicing
Fee, the Administration Fee, the Class A Noteholders' Distribution Amount, the
Class B Noteholders' Distribution Amount and the amount, if any, necessary to be
deposited in the Reserve Account to reinstate the balance thereof to the
Specified Reserve Account Balance. On the September 16, 2002 Monthly Servicing
Payment Date, the Servicer shall receive a pro rata portion of the Primary
Servicing Fee for the period from the Closing Date to and including August 31,
2002.
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
1
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.
2
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.
