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EXHIBIT 99.4
SERVICING AGREEMENT
Xxxxxx Xxx Servicing Corporation ("Servicer"), a corporation organized
under the laws of the State of Delaware, 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 November 1, 1997 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 Bankers Trust Company, a New York banking corporation,
not in its individual capacity but in its capacity as Indenture Trustee under
an Indenture dated November 1, 1997 between SLM Student Loan Trust 1997-4 and
Bankers Trust Company (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 November 1, 1997, 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 November 1, 1997, between the Issuer
and the Indenture Trustee and trust certificates (the "Certificates") pursuant
to the Trust Agreement, which Notes and Certificates 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
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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,
Certificateholders 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.
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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 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
Corporation'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 Corporation shall remain the Servicer hereunder. If Xxxxxx Xxx
Servicing
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Corporation 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 Corporation or any such successor Servicer shall have been
terminated under Section 5.1, the appointment of Xxxxxx Xxx Servicing
Corporation 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 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
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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, the Certificateholders 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
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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, the
Certificateholders 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.
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.
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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, the
Certificateholders 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
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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
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(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:
(1) status (i.e., in-school, grace, deferment, forbearance or
repayment),
(2) program type (i.e., unsubsidized Xxxxxxxx, subsidized
Xxxxxxxx, 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
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Servicer shall make a reasonable determination that the Student Loans to be
substituted will not have a material adverse effect on the Noteholders and the
Certificateholders.
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, the Certificateholders 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.
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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.
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, the
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Certificateholders 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, the Certificateholders 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,
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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 Rewards(sm), Great
Returns(sm) and Direct Repay), 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
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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 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
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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 corporation chartered 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
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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 charter or by-laws 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 or the
Certificates.
SECTION 4.2 Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the
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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 Corporation (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
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(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, 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 Certificateholders, 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 Certificateholders and the Noteholders. To the extent that the Servicer is
required to appear in or is made a defendant in
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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 Corporation Not To Resign as Servicer.
Subject to the provisions of Section 4.3, Xxxxxx Mae Servicing Corporation
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 Corporation 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 Corporation 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 or
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Certificateholders 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 or Certificateholders, as
applicable, representing not less than 25% of the Outstanding
Amount of the Notes or not less than 25% of the outstanding
Certificate Balance 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, the Certificates 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)
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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
Corporation. 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 and Certificateholders. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article V, the Eligible Lender Trustee shall give prompt written notice thereof
to Certificateholders and 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 (or the Certificateholders of
Certificates evidencing not less than a majority of the outstanding Certificate
Balance, in the case of any default which does not adversely affect the
Indenture Trustee or the Noteholders) may, on behalf of all Noteholders and
Certificateholders, 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 or the Certificateholders, 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,
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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 or
Certificateholder.
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 and the consent of the
Certificateholders of Certificates (including any Certificates owned by the
Seller) evidencing a majority of the Certificate Balance, 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 or the Certificateholders; 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 the Certificateholders or (b) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance, the Noteholders or the Certificateholders of which are required to
consent to any such amendment, without the consent of all outstanding
Noteholders and Certificateholders.
It shall not be necessary for the consent of Certificateholders or
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 each Certificateholder, 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
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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 Servicer, to: Xxxxxx Xxx Servicing Corporation
00000 Xxxxxx Xxx Xxxxx, Xxxxxx, Xxxxxxxx 00000
Director of ABS Administration
If to Issuer, to: SLM Student Loan Trust 0000-0
x/x Xxxxx Xxxxxxxxx Xxxx XXX, National Association, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxxx, 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
If to the Eligible Lender Trustee, to: Chase Manhattan Bank
USA, National Association, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx,
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: Bankers Trust Company,
Four Albany Street, 10th Floor, New York, New York 10006,
Attn: Corporate Trust and Agency Group, Facsimile No.:
(000) 000-0000
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,
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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.
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.
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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 Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall Bankers Trust
Company 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on their behalf by their duly authorized officers as of
November 12, 1997.
XXXXXX XXX SERVICING CORPORATION
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Name:
----------------------------
Title:
---------------------------
STUDENT LOAN MARKETING ASSOCIATION, as Administrator
By Xxxxxx Xxx, Inc., Authorized Agent for the Student Loan
Marketing Association
By: /s/ J. XXXXX XXXXXX
------------------------------
Name:
----------------------------
Title:
---------------------------
SLM STUDENT LOAN TRUST 1997-4 by Chase Manhattan Bank USA,
National Association not in its individual capacity but solely as
Eligible Lender Trustee
By: /s/ X.X. XXXXXX
------------------------------
Name:
----------------------------
Title:
---------------------------
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION not in its
individual capacity but solely as Trustee under a Trust Agreement
dated November 1, 1997 between SLM Funding Corporation and Chase
Manhattan Bank USA, National Association
By: /s/ X.X. XXXXXX
------------------------------
Name:
----------------------------
Title:
---------------------------
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BANKERS TRUST COMPANY, not in its individual capacity but solely as Indenture
Trustee under an Indenture dated November 1, 1997 between SLM Student Loan
Trust 1997-4 and Bankers Trust Company.
By: /s/ XXXXX XXXXXXXX
------------------------------
Name:
----------------------------
Title:
---------------------------
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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 to and including October 2001 (except for the period from the Closing
Date to and including November 30, 1997) is an amount equal to 1/12th of 0.85%
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" for
any month after October 2001 is an amount equal to the lesser of (i) the Unit
Amount and (ii) 1/12th of 0.85% of the outstanding principal amount of the
Trust Student Loans, in each case as of the last day of the preceding calendar
month, plus any such amounts from prior Monthly Servicing Payment Dates that
remain unpaid. The "Unit Amount" for any month is equal to $4.06 times the
number of accounts in the Trust during such month. The Primary Servicing Fee
will be payable out of Available Funds and amounts on deposit in the Reserve
Account on the 25th day of each month (or, if any such date is not a business
day, on the next succeeding business day), commencing December 26, 1997 (each,
a "Monthly Servicing Payment Date"). The "Carryover Servicing Fee" is the sum
of (a) the amount, if any, as of any Monthly Servicing Payment Date after the
October 2001 Monthly Servicing Payment Date by which (i) 1/12th of 0.85% of the
outstanding principal amount of the Trust Student Loans exceeds (ii) the Unit
Amount, in each case as of the last day of the preceding calendar month, (b)
the amount of increases in the costs incurred by the Servicer which are agreed
to pursuant to Section 3.8 of the Servicing Agreement, (c) any Conversion Fees,
Transfer Fees and Removal Fees (as defined below) incurred since the last
Distribution Date and (d) any amounts described in (a), (b) and (c) 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 Noteholders'
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Distribution Amount, the Certificateholders' 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 December
26, 1997 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 November 30, 1997.
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.
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ATTACHMENT B
Loan Servicing Center/Florida
X.X. Xxx 0000
Xxxxxx Xxxx, Xxxxxxx 00000-0000
(000) 000-0000
Loan Servicing Center/Kansas
X.X. Xxx 000
Xxxxxxxx, Xxxxxx 00000
(000) 000-0000
Loan Servicing Center/New England
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 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
Loan Servicing Center/Washington
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
(000) 000-0000
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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.
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TABLE OF CONTENTS
Page
----
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 . . . . . . . . . . . . . . . . . . . . 3
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.2 Collection of Trust Student Loan Payments . . . . . . . . . . . . . . . . . . 6
Section 3.3 Realization upon Trust Student Loans . . . . . . . . . . . . . . . . . . . . 7
Section 3.4 No Impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.5 Purchase of Trust Student Loans; Reimbursement . . . . . . . . . . . . . . . 7
Section 3.6 Primary Servicing Fee; Carryover Servicing Fee . . . . . . . . . . . . . . . 10
Section 3.7 Access to Certain Documentation and
Information Regarding Trust Student Loans . . . . . . . . . . . . . . . . 11
Section 3.8 Servicer Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.9 Appointment of Subservicer . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3.10 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.11 Covenants and Agreements of the Issuer, Administrator, Eligible Lender
Trustee and Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 3.12 Special Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3.13 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.14 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.15 Administration Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.16 Lender Identification Number . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV
Section 4.1 Representations of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.2 Indemnities of Servicer . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.3 Merger or Consolidation of, or Assumption of the Obligations of, Servicer . 17
Section 4.4 Limitation on Liability of Servicer . . . . . . . . . . . . . . . . . . . . . 18
Section 4.5 Xxxxxx Xxx Servicing Corporation Not to Resign as Servicer . . . . . . . . 19
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ARTICLE V
Section 5.1 Servicer Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 5.2 Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.3 Notification to Noteholders and Certificateholders . . . . . . . . . . . . . 22
Section 5.4 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE VI
Section 6.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 6.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6.3 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.4 Entire Agreement; Severability . . . . . . . . . . . . . . . . . . . . . . . 24
Section 6.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.6 Relationship of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.7 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.8 Nonliability of Directors, Officers and Employees of Servicer, the Eligible
Lender Trustee, the Indenture Trustee and the Administrator . . . . . . . 25
Section 6.9 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 6.10 Limitation of Liability of Eligible Lender Trustee and Indenture Trustee . . 25
Attachment A Schedule of Fees
Attachment B Servicer Locations
Attachment C Reports
Appendix A
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================================================================================
SERVICING AGREEMENT
among
XXXXXX MAE SERVICING CORPORATION,
STUDENT LOAN MARKETING ASSOCIATION,
as Administrator
SLM STUDENT LOAN TRUST 1997-4,
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION
not in its individual capacity
but solely as Eligible Lender Trustee
and
BANKERS TRUST COMPANY
not in its individual capacity
but solely as Indenture Trustee
Dated as of November 12, 1997
================================================================================
